10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2011

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                 

Commission File No. 0-5965

NORTHERN TRUST CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	36-2723087
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
50 South La Salle Street Chicago, Illinois	60603
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (312) 630-6000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange On Which Registered
Common Stock, $1.66 2/3 Par Value	The Nasdaq Stock Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  ¨    No  x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “accelerated filer”, large “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

(Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).    Yes  ¨    No  x

The aggregate market value of the Common Stock as of June 30, 2011 (the last business day of the registrant’s most recently completed second quarter), based upon the last sale price of the Common Stock at June 30, 2011 as reported by The Nasdaq Stock Market, held by non-affiliates was approximately $10,768,957,505. Determination of stock ownership by non-affiliates was made solely for the purpose of responding to this requirement and the registrant is not bound by this determination for any other purpose.

At February 17, 2012, 241,114,976 shares of Common Stock, $1.66 2/3 par value, were outstanding.

Portions of the following documents are incorporated by reference:

Annual Report to Stockholders for the Fiscal Year Ended December 31, 2011—Part I and Part II

2012 Notice and Proxy Statement for the Annual Meeting of Stockholders to be held on April 17, 2012—Part III

Northern Trust Corporation

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

	Page
PART I
Item 1 Business	1
Supplemental Item—Executive Officers of the Registrant	27
Item 1A Risk Factors	28
Item 1B Unresolved Staff Comments	37
Item 2 Properties	38
Item 3 Legal Proceedings	38
Item 4 Removed and Reserved	38
PART II
Item  5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	39
Item 6 Selected Financial Data	39
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 7A Quantitative and Qualitative Disclosures About Market Risk	39
Item 8 Financial Statements and Supplementary Data	40
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	41
Item 9A Controls and Procedures	41
Item 9B Other Information	41
PART III
Item 10 Directors, Executive Officers and Corporate Governance	41
Item 11 Executive Compensation	42
Item  12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	42
Item 13 Certain Relationships and Related Transactions, and Director Independence	42
Item 14 Principal Accountant Fees and Services	42
PART IV
Item 15 Exhibits and Financial Statement Schedules	42
Item  15(a)(1) and (2) Northern Trust Corporation and Subsidiaries List of Financial Statements and Financial Statement Schedules	42
Item 15(a)(3) Exhibits		43
Signatures	44
Exhibit Index	45

PART I

Item 1—Business

NORTHERN TRUST CORPORATION

Northern Trust Corporation (Corporation) is a financial holding company that is a leading provider of asset servicing, fund administration, asset management, fiduciary and banking solutions for corporations, institutions, families and individuals worldwide. The Corporation conducts business through various U.S. and non-U.S. subsidiaries, including The Northern Trust Company (Bank). The Corporation was originally formed as a holding company for the Bank in 1971. The Corporation has a network of offices in 18 U.S. states, Washington, D.C., and 16 international locations in North America, Europe, the Middle East, and the Asia Pacific region. At December 31, 2011, the Corporation had consolidated total assets of $100.2 billion and stockholders’ equity of $7.1 billion.

The Bank is an Illinois banking corporation headquartered in the Chicago financial district and the Corporation’s principal subsidiary. Founded in 1889, the Bank conducts its business through its U.S. operations and its various U.S. and non-U.S. branches and subsidiaries. At December 31, 2011, the Bank had consolidated assets of $99.8 billion and common equity capital of $6.9 billion.

The Corporation expects that, although the operations of other banking and non-banking subsidiaries will continue to be of increasing significance, the Bank will in the foreseeable future continue to be the major source of the Corporation’s consolidated assets, revenues, and net income. Except where the context otherwise requires, the term “Northern Trust” refers to Northern Trust Corporation and its subsidiaries on a consolidated basis. A complete list of the Corporation’s direct and indirect subsidiaries is filed as Exhibit 21 to this Annual Report on Form 10-K and incorporated into this Item by reference.

SIGNIFICANT DEVELOPMENTS

On June 1, 2011, Northern Trust acquired the fund administration, investment operations outsourcing and custody business of the Bank of Ireland Securities Services (BoISS) from the Bank of Ireland Group. With this acquisition, Northern Trust’s combined assets under custody and administration in Ireland increased by approximately $80 billion as of the closing. BoISS, now known as Northern Trust Securities Services (Ireland) Limited, provides specialized services to a broad range of funds, including money-market, multi-manager, exchange-traded funds, and property funds, serving both the on-shore and off-shore markets.

On July 29, 2011, Northern Trust acquired Omnium LLC (Omnium), a leading hedge fund administrator with approximately $73 billion in assets under administration as of the closing. Omnium, now known as Northern Trust Hedge Fund Services LLC, provides world-class, scalable technology and dedicated expertise to serve hedge funds and large institutional investors with complex portfolios. The business provides comprehensive administrative and middle-office services including trade processing, valuation, real-time reporting, cash management, accounting, collateral management and investor servicing.

On October 1, 2011, Northern Trust merged two of its bank subsidiaries, Northern Trust, NA and Northern Trust Bank, FSB, into The Northern Trust Company. Refer to the “Regulation and Supervision” section (page 3) of this Annual Report on Form 10-K.

BUSINESS UNITS

Under the leadership of Frederick H. Waddell, the Chairman of the Board and Chief Executive Officer of the Corporation, Northern Trust organizes its services globally around its two client-focused principal business units: Corporate and Institutional Services (C&IS) and Personal Financial Services (PFS). Two other business units provide services to the two principal business units: Northern Trust Global Investments (NTGI), which provides investment management, and Operations and Technology (O&T), which provides operating and systems support.

Financial information regarding the Corporation and its business units is included in the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011. In particular, for a discussion of significant developments in the business of the Corporation, and the impact on the financial results of the Corporation and its business units for the fiscal year ended December 31, 2011, you are urged to review the section entitled “Consolidated Results of Operations” on pages 20 through 29 of Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011, which is incorporated herein by reference.

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The following is a brief summary of each business unit’s activities and the activities of the Corporate Financial Management Group and the Corporate Risk Management Group.

Corporate & Institutional Services

C&IS is a leading global provider of asset servicing, securities lending, brokerage, banking and related services to corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth and government funds. Asset servicing and related services encompass a full range of industry leading capabilities including but not limited to: global master trust and custody, trade settlement, and reporting; fund administration; cash management; investment risk and performance analytical services; investment operations outsourcing; and transition management and commission recapture. Client relationships are managed through the Bank and the Bank’s and the Corporation’s other subsidiaries, including support from international locations in North America, Europe, the Middle East, and the Asia Pacific region. C&IS also executes related foreign exchange transactions from offices located in the United States, United Kingdom, and Singapore. During 2011, C&IS completed the acquisitions of BoISS and Omnium, which further strengthen C&IS’ competitive position and client franchises in the offshore fund and hedge fund administration marketplaces. At December 31, 2011, total C&IS assets under custody were $3.9 trillion and assets under management were $489.2 billion.

Personal Financial Services

PFS provides personal trust, investment management, custody, and philanthropic services; financial consulting; guardianship and estate administration; brokerage services; and private and business banking. PFS focuses on high net worth individuals and families, business owners, executives, professionals, retirees, and established privately held businesses in its target markets. PFS also includes the Wealth Management Group, which provides customized products and services to meet the complex financial needs of individuals and family offices in the United States and throughout the world with assets typically exceeding $200 million. The merger of the Corporation’s bank subsidiaries described in the “Regulation and Supervision” section of this Annual Report on Form 10-K will benefit our clients by enabling them to bank in any Northern Trust location and will allow Northern Trust to realize operational efficiencies.

PFS is one of the largest providers of personal trust services in the United States, with $385.2 billion in assets under custody and $173.7 billion in assets under management at December 31, 2011. PFS services are delivered through a network of offices in 18 U.S. states and Washington, D.C., as well as offices in London and Guernsey.

Northern Trust Global Investments

NTGI, through various subsidiaries of the Corporation, provides a broad range of asset management and related services and other products to clients around the world, including clients of C&IS and PFS. Clients include institutional and individual separately managed accounts, bank common and collective funds, registered investment companies, exchange traded funds, non-U.S. collective investment funds, and unregistered private investment funds. NTGI offers both active and passive equity and fixed income portfolio management, as well as alternative asset classes (such as private equity and hedge funds of funds) and multi-manager products and advisory services. NTGI’s activities also include overlay services and other risk management services. NTGI’s business operates internationally through subsidiaries, joint ventures, alliances, and distribution arrangements.

Operations and Technology

O&T supports all of Northern Trust’s business activities, including the processing and product management activities of C&IS, PFS, and NTGI. These activities are conducted principally in the operations and technology centers in Chicago, London, and Bangalore.

Corporate Financial Management Group

The Corporate Financial Management Group includes the Chief Financial Officer, Controller, Treasurer, and Investor Relations functions. The Group is responsible for Northern Trust’s accounting and financial infrastructure and for managing the Corporation’s financial position.

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Corporate Risk Management Group

The Corporate Risk Management Group includes the Credit Policy and other Corporate Risk Management functions. The Credit Policy function is described in the “Loans and Other Extensions of Credit” section of the Annual Report to Stockholders for the year ended December 31, 2011 on pages 50-55. The Corporate Risk Management Group monitors, measures, and facilitates the management of risks across the businesses of the Corporation and its subsidiaries.

GOVERNMENT MONETARY AND FISCAL POLICIES

The earnings of Northern Trust are affected by numerous external influences. Chief among these are general economic conditions, both domestic and international, and actions that governments and their central banks take in managing their economies. These general conditions affect all of Northern Trust’s businesses, as well as the quality, value, and profitability of their loan and investment portfolios.

The Board of Governors of the Federal Reserve System (Federal Reserve Board) is an important regulator of U.S. economic conditions and has the general objective of promoting orderly economic growth in the United States. Implementation of this objective is accomplished by the Federal Reserve Board’s open market operations in United States Government securities, its setting of the discount rate at which member banks may borrow from Federal Reserve Banks, and its changes in the reserve requirements for deposits. The policies adopted by the Federal Reserve Board may strongly influence interest rates and hence what banks earn on their loans and investments and what they pay on their savings and time deposits and other purchased funds. Fiscal policies in the United States and abroad also affect the composition and use of Northern Trust’s resources.

COMPETITION

The businesses in which Northern Trust operates are very competitive. Competition is provided by both unregulated and regulated financial services organizations, whose products and services span the local, national, and global markets in which Northern Trust conducts operations.

Northern Trust’s principal business strategy is to provide quality financial services to targeted market segments in which it believes it has a competitive advantage and favorable growth prospects. As part of this strategy, Northern Trust seeks to deliver a level of service that distinguishes it from its competitors. In addition, Northern Trust emphasizes the development and growth of recurring sources of fee-based income and is one of a select group of major bank holding companies in the United States that generates more revenues from fee-based services than from net interest income. Northern Trust seeks to develop and expand its recurring fee-based revenue by identifying selected markets with good growth characteristics and providing a high level of individualized service to clients in those markets. Northern Trust also seeks to preserve its asset quality through established credit review procedures and to maintain a conservative balance sheet. Finally, Northern Trust seeks to operate with a strong management team that includes senior officers having broad experience and long tenures.

Commercial banks, savings banks, savings and loan associations, and credit unions actively compete for deposits, and money market funds and investment banking firms offer deposit-like services. These institutions, as well as consumer and commercial finance companies, national retail chains, factors, insurance companies, and pension trusts, are important competitors for various types of loans. Issuers of commercial paper compete actively for funds and reduce demand for bank loans. For personal and corporate trust services and investment counseling services, trust companies, investment banking firms, insurance companies, investment counseling firms, and others offer active competition.

REGULATION AND SUPERVISION

Financial Holding Company Regulation

Under U.S. law, the Corporation is a bank holding company that has elected to be a financial holding company under the Bank Holding Company Act of 1956, as amended (BHCA). Consequently, the Corporation and its business activities throughout the world are subject to the supervision, examination, and regulation of the Federal Reserve Board. The BHCA and other federal laws subject bank and financial holding companies to particular restrictions on the types of activities in which they may engage and to a range of supervisory requirements, including regulatory enforcement actions for violations of laws and regulations. Supervision and regulation of bank holding companies, financial holding companies, and their subsidiaries are intended primarily for the protection of depositors and other clients of banking subsidiaries, the Deposit Insurance Fund (DIF) of the Federal Deposit Insurance Corporation (FDIC), and the banking system as a whole, not for the protection of stockholders or other non-depository creditors.

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Under the BHCA, bank holding companies and their banking subsidiaries are generally limited to the business of banking and activities closely related or incidental to banking. As a financial holding company, the Corporation is permitted to engage in other activities that the Federal Reserve Board, working with the Secretary of the Treasury, determines to be financial in nature, incidental to an activity that is financial in nature, or complementary to a financial activity and that do not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally, or to acquire shares of companies engaged in such activities. Activities defined to be financial in nature include: providing financial or investment advice; securities underwriting and dealing; insurance underwriting; and making merchant banking investments in commercial and financial companies, subject to significant limitations. They also include activities previously determined by the Federal Reserve Board to be so closely related to banking or managing or controlling banks as to be a proper incident thereto. The Corporation may not, however, directly or indirectly acquire the ownership or control of more than 5% of any class of voting shares, or substantially all of the assets, of a bank holding company or a bank, without the prior approval of the Federal Reserve Board.

In order to maintain the Corporation’s status as a financial holding company, the Corporation’s insured depository institution subsidiary, the Bank, must remain “well capitalized” and “well managed” under applicable regulations, and must have received at least a “satisfactory” rating in its most recent examination under the Community Reinvestment Act (CRA). In addition, the Corporation must also be and remain “well-capitalized” and “well managed” in order to retain its status as a financial holding company. Failure to meet one or more of these requirements would mean, depending on the requirements not met, that the Corporation could not undertake new activities, continue certain activities, or make acquisitions other than those permitted generally for bank holding companies.

Subsidiary Regulation

The Bank is a member of the Federal Reserve System, its deposits are insured by the FDIC up to the maximum authorized limit, and it is subject to regulation by both these agencies. The Bank, as an Illinois banking corporation, is also subject to Illinois state laws and regulations and to examination and supervision by the Division of Banking of the Illinois Department of Financial and Professional Regulation. The Bank is registered as a government securities dealer in accordance with the Government Securities Act of 1986. As a government securities dealer, its activities are subject to the rules and regulations of the Department of the Treasury. The Bank is also registered as a transfer agent with the Federal Reserve Board and is therefore subject to the rules and regulations of the Federal Reserve Board in this area. In addition, the Corporation, the Bank and the Corporation’s New York trust company subsidiary are subject to regulation by the Banking Department of the State of New York.

On October 1, 2011, the Corporation merged its national bank subsidiary, Northern Trust, NA, and federal savings bank, Northern Trust Bank, FSB, with and into the Bank, in order to simplify the Corporation’s organization, reduce costs, consolidate capital, and enhance client experience.

The Corporation’s nonbanking affiliates are all subject to examination by the Federal Reserve Board. Its broker-dealer subsidiary is registered with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority, subject to the rules and regulations of both of these bodies. Several subsidiaries of the Corporation are registered with the SEC under the Investment Advisers Act of 1940 and are subject to that act and the rules and regulations promulgated thereunder. Other subsidiaries are regulated by state banking departments in Connecticut, Delaware and California. Two families of mutual funds for which the Bank acts as investment adviser and one registered closed-end hedge fund of funds for which another subsidiary serves as investment adviser are subject to regulation by the SEC under the Investment Company Act of 1940.

Functional Regulation

Federal banking law has established a system of federal and state supervision and regulation based on functional regulation, meaning that primary regulatory oversight for a particular activity generally resides with the federal or state regulator designated as having the principal responsibility for that activity. Banking is supervised by federal and state banking regulators, insurance by state insurance regulators, and securities activities by the SEC and state securities regulators.

A significant component of the functional regulation relates to the application of federal securities laws and SEC oversight of some bank securities activities. Generally, banks may conduct securities activities without broker-dealer

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registration only if the activities fall within a set of activity-based exemptions designed to allow banks to conduct only those activities traditionally considered to be primarily banking or trust activities. Securities activities outside these exemptions, as a practical matter, need to be conducted by a registered broker-dealer affiliate. The Investment Advisers Act of 1940 requires the registration of any bank or separately identifiable division of the bank that acts as investment adviser for mutual funds. The Corporation believes that it has taken the necessary actions to comply with these requirements of federal law.

Non-U.S. Regulation

The increasingly important activities of the Corporation’s subsidiaries outside the U.S. are subject to regulation and supervision by a number of non-U.S. regulatory agencies. Subsidiaries conducting banking, fund administration and asset servicing businesses in the United Kingdom, for example, are subject to regulation by and supervision of the Financial Services Authority (FSA), and are authorized to conduct such activities pursuant to the U.K. Financial Services and Markets Act of 2000. The FSA exercises broad supervisory and disciplinary powers that include the power to temporarily or permanently revoke authorization to conduct a regulated business upon breach of the relevant regulations, suspend registered employees, and impose censures and fines on both regulated businesses and their registered employees. The non-U.S. subsidiaries of the Corporation and branches of the Bank outside the U.S. are subject to the laws and regulatory authorities of the jurisdictions in which they operate. Additionally, the Corporation’s subsidiary banks located outside the U.S. are subject to regulatory capital requirements in the jurisdictions in which they operate. As of December 31, 2011, each of the Corporation’s non-U.S. banking subsidiaries had capital ratios above their specified minimum requirements. As is the case in the U.S., European regulatory authorities are introducing regulatory change in a wide variety of areas. For example, European regulators have introduced through the Undertaking for Collective Investment in Transferable Securities (“UCITS”) IV Directive new requirements that directly and indirectly affect depositary, fund management, and fund administration businesses. European authorities have begun the process of implementing the Alternative Investment Fund Managers Directive which will affect the duties of depositaries, European Union (“EU”) and non-EU fund managers and non-UCITS funds. European regulatory authorities are also putting forward proposals through the Markets in Financial Instruments Directive 2, European Market Infrastructure Regulation and Market Abuse Regulation proposals which deal with derivatives trading and clearing, pre and post trade transparency, investor protection issues and overall market orderliness. These actual and proposed regulatory changes have impacted, and will impact, the business that the Bank’s and its non-U.S. subsidiaries’ conduct in the European Union.

The Dodd-Frank Act

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) was signed into law. The Dodd-Frank Act is having a broad impact on the financial services industry and imposes significant new regulatory and compliance requirements, including the designation of certain financial companies as “systemically important financial institutions” (SIFIs), the imposition of increased capital, leverage, and liquidity requirements, and numerous other provisions designed to improve supervision and oversight of, and strengthen safety and soundness within, the financial services sector. Additionally, the Dodd-Frank Act establishes a new framework of authority to conduct systemic risk oversight within the financial system to be distributed among new and existing federal regulatory agencies, including the Financial Stability Oversight Council (FSOC), the Federal Reserve Board, the Office of the Comptroller of the Currency (OCC), and the FDIC.

The following items provide a brief description of certain provisions of the Dodd-Frank Act that are most relevant to the Corporation and its banking subsidiaries.

• Heightened Prudential Requirements. The Dodd-Frank Act imposes heightened prudential requirements on U.S. bank holding companies with at least $50 billion in total consolidated assets, including the Corporation, and on large financial companies and nonbank financial companies that the FSOC determines should be subject to Federal Reserve Board supervision. These companies are referred to as systemically important financial institutions, or SIFIs. The heightened prudential standards include more stringent risk-based capital, leverage, liquidity and risk-management requirements than those applied to other bank holding companies or other financial companies. The Federal Reserve Board and the FSOC will also have the discretion to require these companies to limit their short-term debt, to issue contingent capital instruments, and to provide enhanced public disclosures. SIFIs will also be subject to periodic stress tests to evaluate capital adequacy and liquidity in adverse economic conditions. Heightened prudential standards may be applied on a graduated basis using the factors included in the FSOC systemic determination standards. On December 20, 2011, the Federal Reserve Board requested public comments on proposed rules that would implement the enhanced prudential standards required to be established under section 165 of the Dodd-Frank Act and the early remediation requirements established under section 166 of the Dodd-Frank Act. In addition, covered companies, including the Corporation, must prepare and file credit exposure reports and limit

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their aggregate credit exposures (broadly defined) to any unaffiliated company to 25 percent of the capital stock and surplus of the covered company. On October 17, 2011, the Federal Reserve Board approved a final joint rule, implementing the requirement of the Dodd-Frank Act that SIFIs periodically report “the plan of such company for rapid and orderly resolution in the event of material financial distress or failure” to the Federal Reserve Board, the FDIC and the FSOC. The final rule became effective on November 30, 2011. Under the rules, a SIFI will be required to prepare a so-called “living will,” or resolution plan, for resolving its affairs under the U.S. Bankruptcy Code in the event that it experiences material financial distress. If a SIFI is in danger of becoming insolvent, the FDIC may be appointed receiver pursuant to the Dodd-Frank Act’s orderly liquidation authority (discussed below). In such case, the Secretary of the Treasury will use the SIFI’s “living will” to determine whether resolution of the institution’s affairs is best achieved under the U.S. Bankruptcy Code or the orderly liquidation authority. These requirements, depending upon how they are implemented, could increase capital requirements and compliance costs, and could adversely affect certain activities, of covered companies, including the Corporation.

• Mortgage Loan Origination and Risk Retention. The Dodd-Frank Act imposes new standards for mortgage loan originations on all lenders, including banks and thrifts. Most significantly, the new standards prohibit the Corporation’s subsidiaries from making a residential mortgage loan without verifying a borrower’s ability to repay, limit the total points and fees that the Corporation’s subsidiaries and/or a mortgage broker may charge on conforming and jumbo loans to 3% of the total loan amount, and prohibit certain prepayment penalty practices. Also, the Dodd-Frank Act, in conjunction with the Federal Reserve Board’s final rule on loan originator compensation issued August 16, 2010 and effective April 1, 2011, prohibits certain compensation payments to loan originators and steering consumers to loans not in their interest because it will result in greater compensation for a loan originator. These standards will result in a myriad of new system, pricing, and compensation controls in order to ensure compliance and to decrease repurchase requests and foreclosure defenses.

• Proprietary Trading and Certain Relationships with Hedge Funds and Private Equity Funds. The Dodd-Frank Act adopts the so-called “Volcker Rule” which, subject to a transition period and certain exceptions, will become effective on July 21, 2012 and prohibits a banking entity from engaging in “proprietary trading,” which is defined as engaging as principal for the “trading account” of the banking entity in securities or other instruments, as determined by federal regulators. Certain forms of proprietary trading may qualify as “permitted activities,” and thus not be subject to the ban on proprietary trading, such as “market-making-related activities”, “risk-mitigating hedging activities”, and trading in U.S. government or agency obligations, certain other U.S., state or municipal obligations, and the obligations of Fannie Mae, Freddie Mac or Ginnie Mae. Additionally, subject to a transition period and certain exceptions, the rule restricts a banking entity from sponsoring or investing in certain private funds. While a banking entity may “organize and offer” certain private funds if certain conditions are met, it may not acquire or retain an equity partnership or other ownership interest in such private funds except for certain limited investments. A banking entity that sponsors or invests in certain private funds is also restricted from providing credit or other support to the fund or permitting the fund to use the name of the bank. After the conformance period commencing July 21, 2012, the Volcker Rule prohibitions and restrictions will apply to banking entities, including the Corporation, the Bank and their affiliates, unless an exception applies. In October 2011, the OCC, Federal Reserve Board, the FDIC, and the SEC, in consultation with the Commodity Futures Trading Commission (CFTC), jointly released a notice of proposed rulemaking implementing the Volcker Rule limitations of the Dodd-Frank Act. In light of the complexity of the proposed regulation and the likelihood that a substantial number of comments will be submitted, the Corporation cannot fully assess the impact of the Volcker Rule on its business until final rules and regulations are adopted.

• Swaps and Other Derivatives. Title VII of the Dodd-Frank Act (Title VII) imposes a new regulatory structure on the over-the-counter derivatives market, including requirements for clearing, exchange trading, capital, margin, reporting, and recordkeeping. In addition, certain swaps and other derivatives activities are required to be “pushed out” of insured depository institutions and conducted in separately capitalized non-bank affiliates. Title VII also will require certain persons to register as a “major swap participant” or a “swap dealer.” The CFTC, SEC and other U.S. regulators are in the process of adopting regulations to implement Title VII. It is anticipated that this rulemaking process will further clarify, among other things, reporting and recordkeeping obligations, margin and capital requirements, the scope of registration requirements, and what swaps are required to be centrally cleared and exchange-traded. Rules will also be issued to enhance the oversight of clearing and trading entities.

• Expanded FDIC Resolution Authority. While insured depository institutions have long been subject to the FDIC’s resolution process, the Dodd-Frank Act creates a new mechanism for the FDIC to conduct the orderly liquidation of systematically important financial institutions, including the Corporation. Upon certain findings being made, the FDIC may be appointed receiver for a covered financial company, and would conduct an orderly liquidation of the

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entity. The FDIC liquidation process is modeled on the existing Federal Deposit Insurance Act (FDIA) bank resolution process, and generally gives the FDIC more discretion than in the traditional non-bank bankruptcy context. On July 6, 2011, the FDIC approved a final rule, which became effective on August 15, 2011, implementing the orderly liquidation authority.

• Consumer Financial Protection. The Dodd-Frank Act establishes a new independent Consumer Financial Protection Bureau (CFPB) within the Federal Reserve System. The CFPB is tasked with establishing and implementing rules and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer financial products and services. The CFPB has rulemaking authority over many of the statutes governing financial products and services offered to consumers. For banking organizations with assets of $10 billion or more, including the Bank, the CFPB has exclusive rule making and examination, and primary enforcement, authority under federal consumer financial laws. In addition, the Dodd-Frank Act permits states to adopt consumer protection laws and regulations that are stricter than those regulations promulgated by the CFPB. This new federal and state regulatory framework may result in significant new regulatory requirements applicable to the Corporation and its bank subsidiaries in respect of consumer financial products and services, with potentially significant increases in compliance costs.

• Incentive Compensation Arrangements. The Dodd-Frank Act requires federal regulators to prescribe regulations or guidelines regarding incentive-based compensation practices at certain large financial institutions. On April 14, 2011, federal regulators including the FDIC, the Federal Reserve Board and the SEC, issued a proposed rule which, among other things, would require certain executive officers of covered financial institutions with total consolidated assets of $50 billion or more, including the Corporation, to defer at least 50% of their annual incentive-based compensation for a minimum of three years. The comment period on the proposed rule closed May 31, 2011, no final rule has been issued to date.

The requirements of the Dodd-Frank Act will be implemented pursuant to regulations over the course of several months or years. Given the uncertainty associated with future regulatory actions, the full impact such requirements will have on the Corporation’s operations is unclear. The changes resulting from the Dodd-Frank Act may impact the profitability of the Corporation’s banking subsidiaries, require changes to certain of the Corporation’s business practices, impose upon the Corporation more stringent capital, liquidity and leverage requirements, and could adversely affect certain of the Corporation’s business activities. These changes may also require the Corporation and its subsidiaries to invest significant management attention and resources to evaluate and make any changes necessary to comply with new requirements.

Holding Company Support and Cross-Guarantees under the FDIA

Under the FDIA, when two or more insured depository institutions are under common control, each of those depository institutions may be liable for any loss incurred, or expected to be incurred, by the FDIC in connection with the default of any of the others. Each also may be liable for any assistance the FDIC provides to the other institutions. “Default” means the appointment of a conservator or receiver for the institution.

The Dodd-Frank Act amends the FDIA to obligate the Federal Reserve Board to require bank holding companies and savings and loan holding companies to serve as a source of financial strength for any subsidiary depository institution. The appropriate federal banking agency for such a depository institution may require reports from companies that own the insured depository institution to assess their ability to serve as a source of strength and to enforce compliance with the source-of-strength requirements. The term “source of financial strength” is defined as the ability of a company to provide financial assistance to its insured depository institution subsidiaries in the event of financial distress at such subsidiaries. Under this requirement, the Corporation in the future could be required to provide financial assistance to the Bank should the Bank experience financial distress. The Dodd-Frank Act statutory requirements became effective on July 21, 2011. Although the appropriate federal banking agencies were required by the Dodd-Frank Act to jointly adopt implementing regulations by July 21, 2011, to date no final regulations have been adopted.

This cross-guarantee liability for a loss at a commonly controlled institution would be subordinated in right of payment to deposit liabilities, secured obligations, any other general or senior liability, and any obligation subordinated to depositors or other general creditors, other than obligations owed to any affiliate of the depository institution (with certain exceptions).

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Payment of Dividends

The Corporation is a legal entity separate and distinct from its subsidiaries. The principal source of funds for the Corporation is dividends from the Bank. As a result, the Corporation’s ability to pay dividends on its common stock will depend primarily on the ability of the Bank to pay dividends to the Corporation in amounts sufficient to service its obligations. Dividend payments from the Bank are subject to Illinois law and to regulatory limitations, generally based on capital levels and current and retained earnings, imposed by various regulatory agencies with authority over the Bank. The ability of the Bank to pay dividends is also subject to regulatory restrictions if paying dividends would impair its profitability, financial condition or cash flow requirements.

The Federal Reserve Board has issued a policy statement with regard to the payment of cash dividends by bank holding companies. The policy statement provides that, as a matter of prudent banking, a bank holding company should not maintain a rate of cash dividends unless its net income available to common stockholders has been sufficient to fully fund the dividends, and the prospective rate of earnings retention appears to be consistent with the holding company’s capital needs, asset quality, and overall financial condition. Accordingly, without Federal Reserve Board approval, a bank holding company cannot pay cash dividends that exceed its net income, and cash dividends cannot be funded in ways that weaken the bank holding company’s financial health, such as by borrowing.

Various federal and state statutory provisions limit the amount of dividends the Bank can pay to the Corporation without regulatory approval. Approval of the Federal Reserve Board is required for payment of any dividend by a state chartered bank that is a member of the Federal Reserve System if the total of all dividends declared by the bank in any calendar year would exceed the total of its retained net income (as defined by regulatory agencies) for that year combined with its retained net income for the preceding two years. In addition, a state member bank may not pay a dividend in an amount greater than its “undivided profits,” as defined, without regulatory and stockholder approval.

The Bank is also prohibited under federal law from paying any dividends if the Bank is undercapitalized or if the payment of the dividends would cause the Bank to become undercapitalized. In addition, the federal regulatory agencies are authorized to prohibit a bank or bank holding company from engaging in an unsafe or unsound banking practice. The payment of dividends could, depending on the financial condition of the Bank, be deemed to constitute an unsafe or unsound practice. The Dodd-Frank Act and Basel III (as described below) impose additional restrictions on the ability of banking institutions to pay dividends.

On November 22, 2011, the Federal Reserve Board issued a final rule implementing the requirement of the Dodd-Frank Act that bank holding companies domiciled in the U.S. with total consolidated assets of $50 billion or more, including the Corporation, submit annual capital plans to the Federal Reserve Board for review. Under the final rule, the Federal Reserve Board will annually evaluate institutions’ capital adequacy, internal capital adequacy assessment processes, and their plans to make capital distributions, such as dividend payments or stock repurchases. The Federal Reserve Board will approve dividend increases or other capital distributions only for companies whose capital plans are approved by supervisors and are able to demonstrate sufficient financial strength to operate as successful financial intermediaries under stressed macroeconomic and financial market scenarios, after making the desired capital distributions. In addition to issuing the final rule, the Federal Reserve Board launched the 2012 review by issuing instructions outlining the information the Federal Reserve Board is seeking from the covered firms, including the Corporation, and the analysis the Federal Reserve Board will do on the capital plans. The level of detail and analysis expected in each institution’s capital plan will vary based on the company’s size, complexity, risk profile, and scope of operations. In January 2012, the Corporation submitted its first capital plan to the Federal Reserve Board.

Capital Adequacy Requirements

The regulators view capital levels as important indicators of an institution’s financial soundness. As a general matter, FDIC-insured depository institutions and their holding companies (including the Bank and the Corporation) are required to maintain minimum capital relative to the amount and types of assets they hold. The final supervisory determination on an institution’s capital adequacy is based on the regulator’s assessment of numerous factors.

The Federal Reserve Board has established risk-based and leverage capital guidelines for bank holding companies, including the Corporation. The current risk-based capital guidelines that apply to the Corporation and the Bank, commonly referred to as Basel I, are based upon the 1988 capital accord of the International Basel Committee on Banking Supervision (Basel Committee), a committee of central banks and bank supervisors, as implemented by the Federal Reserve Board. As discussed further below, the federal bank regulatory agencies have adopted new risk-based capital guidelines for “core banks,” including the Corporation, based upon the Revised Framework for the International Convergence of Capital Measurement and Capital Standards (Basel II) issued by the Basel Committee in November 2005.

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Basel I

Under the existing Basel I-based guidelines, the minimum ratio of total capital to risk-weighted assets (which are primarily the credit risk equivalents of balance sheet assets and certain off-balance sheet items such as standby letters of credit, but also include a nominal market risk equivalent balance related to foreign exchange and debt/equity trading activities) is eight percent. At least half of the total capital must be composed of tier 1 capital, which includes common stockholders’ equity (including retained earnings), qualifying non-cumulative perpetual preferred stock (and, for bank holding companies only, a limited amount of qualifying cumulative perpetual preferred stock and a limited amount of trust preferred securities), and minority interests in the equity accounts of consolidated subsidiaries, less goodwill, other disallowed intangibles, and disallowed deferred tax assets, among other items. The Federal Reserve Board also has adopted a minimum leverage ratio for bank holding companies, requiring tier 1 capital of at least three percent of average quarterly total consolidated assets (as defined for regulatory purposes), net of goodwill and certain other intangible assets.

The federal banking regulators have also established risk-based and leverage capital guidelines that FDIC- insured depository institutions are required to meet. These regulations are generally similar to those established by the Federal Reserve Board for bank holding companies. The risk-based and leverage capital ratios for the Corporation and the Bank, together with the regulatory minimum ratios and the ratios required for classification as “well-capitalized,” are provided in the following chart.

	Risk-Based and Leverage Ratios as of December 31, 2011
	Tier 1 Capital			Total Capital			Leverage Ratio
Northern Trust Corporation		12.5	%		14.2	%		7.3	%
The Northern Trust Company		11.7			13.8			6.8
Minimum required ratio		4.0			8.0			3.0
“Well capitalized” minimum ratio		6.0			10.0			5.0

Basel II

As mentioned above, the Corporation also is subject to the Basel II framework for risk-based capital adequacy. The U.S. bank regulatory agencies have issued final rules with respect to implementation of the Basel II framework. Under the final Basel II rules, the Corporation is one of a small number of “core” banking organizations. As a result, the Corporation and the Bank will be required to use the advanced approaches under Basel II for calculating risk-based capital related to credit risk and operational risk, instead of the methodology reflected in the regulations effective prior to adoption of Basel II. The rules also require core banking organizations to have rigorous processes for assessing overall capital adequacy in relation to their total risk profiles, and to publicly disclose certain information about their risk profiles and capital adequacy.

The Corporation has for several years been preparing to comply with the advanced approaches of the Basel II framework. In order to implement the rules, a core banking organization, such as the Corporation, was required to adopt (and the Corporation did adopt) an implementation plan and satisfactorily complete a parallel run, in which it calculated capital requirements under both the Basel II rules and regulations effective prior to the adoption of Basel II. In the U.S., the Corporation entered the parallel run in April 2010. The Dodd-Frank Act requires the U.S. banking regulatory agencies to amend their capital rules to provide that minimum capital required under the Basel I-based rules will act as a floor for minimum capital requirements calculated in accordance with the U.S. Basel II rules. Accordingly, the transition for “core” banks to calculations only under the Basel II-based requirements is being eliminated.

The Corporation is also addressing issues related to implementation timing differences between the U.S. and other jurisdictions, to ensure that the Corporation and its depository institution subsidiaries comply with regulatory requirements and expectations in all jurisdictions where they operate. The Corporation’s U.K., Guernsey and Canadian entities subject to Basel II rules have already adopted the standardized approach for credit risk and the basic indicator approach for operational risk in calculating minimum regulatory capital requirements.

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Basel III

On December 16, 2010, the Basel Committee released its final framework for strengthening international capital and liquidity regulation, known as Basel III. The Basel III calibration and phase-in arrangements were previously endorsed by the Seoul G20 Leaders Summit in November 2010, and will be subject to individual adoption by member nations, including the U.S. Under these standards, when fully phased-in on January 1, 2019, banking institutions will be required to satisfy three risk-based capital ratios:

• A tier 1 common equity ratio of at least 7.0%, inclusive of 4.5% minimum tier 1 common equity ratio, net of regulatory deductions, and the new 2.5% “capital conservation buffer” of common equity to risk-weighted assets;

• A tier 1 capital ratio of at least 8.5%, inclusive of the 2.5% capital conservation buffer; and

• A total capital ratio of at least 10.5%, inclusive of the 2.5% capital conservation buffer.

The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a tier 1 common equity ratio above the minimum but below the conservation buffer may face constraints on dividends, equity repurchases, and compensation based on the amount of such shortfall. The Basel Committee also announced that a “countercyclical buffer” of 0% to 2.5% of common equity or other loss-absorbing capital “will be implemented according to national circumstances” as an “extension” of the conservation buffer during periods of excess credit growth.

Basel I and Basel II do not include a leverage requirement as an international standard. However, Basel III introduces a non-risk adjusted tier 1 leverage ratio of 3%, based on a measure of total exposure rather than total assets and new liquidity standards.

The increases to the minimum common equity and tier 1 capital ratios will be phased-in over two years beginning on January 1, 2013, with the full increases taking effect on January 1, 2015. This will be followed by a three-year phase-in, beginning on January 1, 2016, of the capital conservation buffer, with the full 2.5% buffer requirement taking effect on January 1, 2019.

Basel III also provides for the deduction of certain assets from capital (deferred tax assets, mortgage servicing rights, investments in financial firms and pension assets, among others, within prescribed limitations), the inclusion of other comprehensive income in capital, and increased capital for counterparty credit risk. The phase-in period for the capital deductions is proposed to occur in 20 percent increments starting January 1, 2014, with full implementation by January 1, 2018.

On November 4, 2011 the Basel Committee issued its final rule setting forth proposals to apply a new tier 1 common equity surcharge to certain designated global systemically important banks (GSIBs). GSIBs subject to the surcharge would be identified by application of a quantitative “indicator-based approach” for evaluating systemic risk that weights both categories and indicators of size, substitutability, interconnectedness, cross-jurisdictional activity, and complexity. Also on November 4, 2011, using the Basel Committee’s methodology, the Financial Stability Board (FSB) and the Basel Committee identified an initial group of 29 financial institutions determined to be GSIBs. Although the Corporation was not included on the list, the group of GSIBs will be updated annually and published by the FSB each November. The GSIBs equity surcharge provisions, like the rest of Basel III, are subject to interpretation and implementation by U.S. regulatory authorities.

Under the Dodd-Frank Act, for SIFIs, including the Corporation, the Federal Reserve Board may increase the capital buffer. The purpose of these new capital requirements is to ensure financial institutions are better capitalized to withstand periods of unfavorable financial and economic conditions. The Dodd-Frank Act also requires the establishment of more stringent prudential standards by requiring the federal banking agencies to adopt capital and liquidity requirements which address the risks that the activities of an institution pose to the institution and the public and private stakeholders, including risks arising from certain enumerated activities. In particular, the Dodd-Frank Act excludes trust preferred securities issued on or after May 19, 2010 from tier 1 capital. For depository institution holding companies with total consolidated assets of more than $15 billion at December 31, 2009, trust preferred securities issued before May 19, 2010 will be phased-out of tier 1 capital over a three-year period.

The federal banking agencies will likely implement changes to the current capital adequacy standards applicable to the Corporation and the Bank in light of Basel III. If adopted by federal banking agencies, Basel III could lead to significantly higher capital requirements and more restrictive leverage and liquidity ratios. The ultimate impact of the new capital and liquidity standards on the Corporation and the Bank is currently being reviewed and will depend on a number of

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factors, including the rulemaking and implementation by the U.S. banking regulators. The Corporation cannot determine the ultimate effect that potential legislation, or subsequent regulations, if enacted, would have upon the Corporation’s earnings or financial position. In addition, significant questions remain as to how the capital and liquidity mandates of the Dodd-Frank Act will be integrated with the requirements of Basel III. However, as the Corporation currently understands Basel III, it believes its capital strength, balance sheet and business model leave it well positioned for Basel III.

Prompt Corrective Action

Under the FDIA, the federal banking agencies must take “prompt corrective action” against undercapitalized U.S. depository institutions. U.S. depository institutions are assigned one of five capital categories: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized,” and are subjected to differential regulation corresponding to the capital category within which the institution falls. A depository institution is deemed to be “well capitalized” if the banking institution has a total risk-based capital ratio of 10.0% or greater, a tier 1 risk-based capital ratio of 6.0% or greater, and a leverage ratio of 5.0% or greater, and the institution is not subject to an order, written agreement, capital directive, or prompt corrective action directive to meet and maintain a specific level for any capital measure. Under certain circumstances, a well capitalized, adequately capitalized or undercapitalized institution may be treated as if the institution were in the next lower capital category. A banking institution that is undercapitalized is required to submit a capital restoration plan. Failure to meet capital guidelines could subject the Bank to a variety of enforcement remedies by federal bank regulatory agencies, including: termination of deposit insurance by the FDIC, restrictions on certain business activities, and appointment of the FDIC as conservator or receiver. As of December 31, 2011, the Corporation and the Bank exceeded the required capital ratios for classification as “well capitalized.”

Examination and Enforcement Powers of the Federal Banking Agencies

A principal objective of the U.S. bank regulatory system is to protect depositors by ensuring the financial safety and soundness of banks. To that end, the banking regulators have broad regulatory, examination, and enforcement powers, including the power to issue cease and desist orders, impose substantial fines and other civil and criminal penalties, terminate deposit insurance and appoint a conservator or receiver. Failure to comply with applicable laws, regulations, and supervisory agreements could subject the Corporation and its banking subsidiaries, as well as officers, directors, and other institution-affiliated parties of these organizations, to administrative sanctions and potentially substantial civil money penalties. The appropriate federal banking agency may appoint the FDIC as conservator or receiver for a banking institution (or the FDIC may appoint itself, under certain circumstances) if any one or more of a number of circumstances exist, including, without limitation, the fact that the banking institution:

• is undercapitalized and has no reasonable prospect of becoming adequately capitalized;

• fails to become adequately capitalized when required to do so;

• fails to submit a timely and acceptable capital restoration plan;

• materially fails to implement an accepted capital restoration plan; or

• fails to submit an acceptable resolution plan.

The FDIC may terminate a depository institution’s deposit insurance upon a finding that the institution’s financial condition is unsafe or unsound or that the institution has engaged in unsafe or unsound practices or has violated any applicable rule, regulation, order or condition enacted or imposed by the institution’s regulatory agency. Engaging in unsafe or unsound practices or failing to comply with applicable laws, regulations and supervisory agreements could subject the Bank, the Corporation, and other subsidiaries of the Corporation, or their officers, directors, and institution-affiliated parties to the remedies described above and other sanctions.

Restrictions on Transactions with Affiliates and Insiders

FDIC-insured banks, including the Corporation’s bank subsidiaries, are subject to restrictions under Sections 23A and 23B of the Federal Reserve Act (as implemented by Regulation W), which govern transactions between FDIC-insured banks and any affiliated entity, whether that entity is the bank’s parent holding company, a holding company affiliate of the bank or a subsidiary of the bank. Regulation W restrictions apply to certain “covered transactions,” including extensions of credit, issuance of guarantees, investments or asset purchases. In general, these restrictions require that any extensions of credit must be fully secured with qualifying collateral and are limited, as to any one of the Corporation or such non-bank affiliates, to 10% of the lending bank’s capital stock and surplus, and, as to the Corporation and all such non-bank affiliates in

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the aggregate, to 20% of such lending bank’s capital stock and surplus. These restrictions, other than the 10% of capital limit on covered transactions with any one affiliate, are also applied to transactions between banks and their financial subsidiaries. Furthermore, these transactions must be on terms and conditions that are, or in good faith would be, offered to nonaffiliated companies (i.e., at arm’s length).

The Dodd-Frank Act generally enhances the restrictions on transactions with affiliates under Sections 23A and 23B of the Federal Reserve Act, including an expansion of the definition of “covered transactions” to include credit exposures related to derivatives, repurchase agreements and securities lending arrangements, and an increase in the amount of time for which collateral requirements regarding covered credit transactions must be satisfied. The definition of “affiliate” was expanded to include any investment fund to which the Corporation or an affiliate serves as an investment adviser. The ability of the Federal Reserve Board to grant exemptions from these restrictions was also narrowed, including by requiring coordination with other bank regulators. In addition, the provision in Section 23A that permits a bank to engage in covered transactions with a financial subsidiary of the bank in an amount greater than 10% (but less than 20%) of the bank’s capital and surplus has been eliminated.

The restrictions on loans to directors, executive officers, principal stockholders and their related interests (collectively referred to herein as “insiders”) contained in the Federal Reserve Act and Regulation O apply to all federally insured institutions. These restrictions include limits on loans to one borrower and conditions that must be met before such a loan can be made. There is also an aggregate limitation on all loans (including credit exposures related to derivatives, repurchase agreements and securities lending arrangements) to insiders and their related interests. These loans cannot exceed the institution’s total unimpaired capital and surplus, and the FDIC may determine that a lesser amount is appropriate. Insiders are subject to enforcement actions for knowingly accepting loans in violation of applicable restrictions. The Dodd-Frank Act enhanced these restrictions and also imposed restrictions on the purchase or sale of assets between banking institutions and insiders.

Anti-Money Laundering, Anti-Terrorism Legislation, and Office of Foreign Assets Control

Under federal law, including the Bank Secrecy Act, the USA PATRIOT Act, and the International Money Laundering Abatement and Anti-Terrorist Financing Act, financial institutions (including insured depository institutions, broker-dealers and certain other financial institutions) must maintain anti-money laundering programs that include established internal policies, procedures, and controls; a designated compliance officer; an ongoing employee training program; and testing of the program by an independent audit function. Financial institutions are prohibited from entering into specified financial transactions and account relationships and must meet enhanced standards for due diligence and customer identification in their dealings with non-U.S. financial institutions and non-U.S. customers. Financial institutions must take reasonable steps to conduct enhanced scrutiny of account relationships to guard against money laundering and to report any suspicious transactions, and law enforcement authorities have been granted increased access to financial information maintained by financial institutions. Bank regulators routinely examine institutions for compliance with these obligations and they must consider an institution’s compliance in connection with the regulatory review of applications, including applications for banking mergers and acquisitions. The regulatory authorities have imposed “cease and desist” orders and civil money penalty sanctions against institutions found to be violating these obligations.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is responsible for requiring that U.S. entities do not engage in transactions with certain prohibited parties, as defined by various Executive Orders and Acts of Congress. OFAC publishes lists of persons, organizations and countries suspected of aiding, harboring or engaging in terrorist acts, known as Specially Designated Nationals and Blocked Persons. If the Corporation or the Bank finds a name on any transaction, account or wire transfer that is on an OFAC list, the Corporation or the Bank must freeze or block such account or transaction, file a suspicious activity report and notify the appropriate authorities.

Many other countries have imposed similar laws and regulations that apply to the Corporation’s non-U.S. offices. The Corporation has established policies and procedures to comply with these laws and the related regulations in all relevant jurisdictions.

Deposit Insurance and Assessments

FDIC-insured depository institutions are required to pay deposit insurance assessments to the FDIC. The amount of a particular institution’s deposit insurance assessment is based on that institution’s risk classification under an FDIC risk-based assessment system. An institution’s risk classification is assigned based on the level of supervisory concern the institution poses to the regulators, and the institution’s capital levels and other risk measures. The FDIC recently raised assessment rates to increase funding for the DIF, which is currently under-funded.

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The Dodd-Frank Act makes permanent the general $250,000 deposit insurance limit for insured deposits. In addition, federal deposit insurance for the full net amount of deposits in noninterest bearing transaction accounts was extended to January 1, 2013 for all insured banks.

The Dodd-Frank Act increased the minimum designated reserve ratio of the DIF from 1.15% to 1.35% of the estimated amount of total insured deposits effective September 30, 2020, eliminated the upper limit for the reserve ratio designated by the FDIC each year, and eliminated the requirement that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds. On December 14, 2010, the FDIC raised the minimum designated reserve ratio of the DIF to 2%. The ratio is higher than the minimum reserve ratio of 1.35% as set by the Dodd-Frank Act.

Effective April 1, 2011, the FDIC implemented a rule on Assessments, Dividends, Assessment Base and Large Bank Pricing. The final rule, mandated by the Dodd-Frank Act, changes the deposit insurance assessment system from one that is based on domestic deposits to one that is based on average consolidated total assets minus average tangible equity. Because the new assessment base under the Dodd-Frank Act is larger than the current assessment base, the final rule’s assessment rates are lower than the current rates, which achieves the FDIC’s goal of not significantly altering the total amount of revenue collected from the industry. In addition, the final rule adopts a “scorecard” assessment scheme for larger banks and suspends dividend payments if the DIF reserve ratio exceeds 1.5% but provides for decreasing assessment rates when the DIF reserve ratio reaches certain thresholds. The final rule further reduces the assessment base for custodial banks by the daily or weekly average of a certain amount of low-risk assets (i.e., assets with a Basel risk weighting of 0%, regardless of maturity, plus 50% of assets with a Basel risk weighting of 20%, again regardless of maturity) subject to the limitation that the daily or weekly average value of these assets cannot exceed the daily or weekly average value of those deposits classified as transaction accounts and identified by the institution as being directly linked to a fiduciary or custodial and safekeeping account. The final rule identifies custodial banks as insured depository institutions with previous calendar year-end trust assets (i.e., fiduciary and custody and safekeeping assets) of at least $50 billion or those insured depository institutions that derived more than 50% of their revenue (interest income plus non-interest income) from trust activity over the previous calendar year. Under the final rule, the Bank will pay slightly lower assessments to the DIF than under the old system.

Continued action by the FDIC to replenish the DIF as well as the changes contained in the Dodd-Frank Act may result in higher assessment rates, which could reduce the profitability of or otherwise negatively impact the Bank.

Interstate Banking and Branching

The Dodd-Frank Act amends the BHCA to require a bank holding company seeking approval to acquire shares of a bank located outside of the bank holding company’s home state to be well-capitalized and well-managed. Similarly, the Dodd-Frank Act amends the Bank Merger Act to require that the surviving bank in an interstate merger transaction be well-capitalized and well-managed. These requirements became effective on July 21, 2011.

In addition, national banks and state banks with different home states are permitted to merge across state lines, with the approval of the appropriate federal banking agency, unless the home state of a participating banking institution passed legislation prior to June 1, 1997 that expressly prohibits interstate mergers. The Dodd-Frank Act permits a national bank or a state bank, with the approval of its regulator, to open a branch in any state if the law of the state in which the branch is to be located would permit the establishment of the branch if the bank were a bank chartered in that state. On October 1, 2011, the Corporation merged its national bank subsidiary, Northern Trust, NA, and federal savings bank, Northern Trust Bank, FSB, with and into the Bank.

Community Reinvestment Act

The Corporation’s banking subsidiaries are subject to the CRA. The CRA and the regulations issued thereunder are intended to encourage banks to help meet the credit needs of their service areas, including low and moderate income neighborhoods, consistent with the safe and sound operations of the banks. These regulations also provide for regulatory assessment of a bank’s record in meeting the needs of its service area when considering applications to establish branches, merger applications, and applications to acquire the assets and assume the liabilities of another bank. Federal banking agencies are required to make public the rating of a bank’s performance under the CRA. In the case of a bank holding company, the CRA performance record of its bank subsidiaries is reviewed by federal banking agencies in connection with the filing of an application to acquire ownership or control of shares or assets of a bank or thrift or to merge with any other bank holding company. An unsatisfactory record can substantially delay or block the transaction. The Bank in its most recent CRA examination received an outstanding CRA rating from its regulator.

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In addition, federal law requires the disclosure of agreements reached with community groups that relate to the CRA, and contains various other provisions designed to improve the delivery of financial services to consumers while maintaining an appropriate level of safety in the financial services industry.

Privacy and Security

Federal law establishes a minimum federal standard of financial privacy by, among other provisions, requiring banks to adopt and disclose privacy policies with respect to consumer information and setting forth certain rules with respect to the disclosure to third parties of consumer information. The Corporation has adopted and disseminated its privacy policies pursuant to law. Regulations adopted under the federal law set standards for protecting the security, confidentiality and integrity of customer information, and require notice to regulators, and in some cases, to customers, in the event of security breaches. A number of states have adopted their own statutes concerning financial privacy and requiring notification of security breaches.

Consumer Laws and Regulations

In addition to the laws and regulations discussed above, the Corporation’s banking subsidiaries are also subject to certain consumer laws and regulations that are designed to protect consumers in transactions with banks.

Many states and local jurisdictions have consumer protection laws analogous, and in addition to, those listed above. These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with customers and monitor account activity when taking deposits, making loans to or engaging in other types of transactions with such customers. Failure to comply with these laws and regulations could lead to substantial penalties, operating restrictions and reputational damage to the financial institution. The creation of the CFPB by the Dodd-Frank Act is likely to lead to enhanced and strengthened enforcement of consumer financial protection laws.

Future Legislation

Federal, state, local and non-U.S. legislators and regulators regularly introduce measures or take actions that would modify the regulatory requirements applicable to banks, thrifts, their holding companies and their affiliates. Such legislation may change the banking statutes and the operating environment of the Corporation and its subsidiaries in substantial and unpredictable ways. The Corporation cannot determine the ultimate effect that future legislation or implementing regulations might have upon the financial condition or results of operations of the Corporation or its subsidiaries.

STAFF

Northern Trust employed approximately 14,100 full-time equivalent officers and staff members as of December 31, 2011.

STATISTICAL DISCLOSURES

The following statistical disclosures, included in the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011, are incorporated herein by reference.

Schedule	2011 Annual Report Page(s)
Ratios		18
Non-U.S. Outstandings		52-53
Nonperforming Assets and 90 Day Past Due Loans		54
Average Statement of Condition with Analysis of Net Interest Income		128-129

Additional statistical information on a consolidated basis is set forth below. Certain reclassifications have been made to prior periods’ financial information to conform to the current year’s presentation.

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Remaining Maturity and Average Yield of Securities Held to Maturity and Available for Sale

(Yield calculated on amortized cost and presented on a taxable equivalent basis giving effect to the applicable federal and state tax rates)

	December 31, 2011
	One Year or Less					One to Five Years					Five to Ten Years					Over Ten Years					Average Maturity
($ in Millions)	Book		Yield			Book		Yield			Book		Yield			Book		Yield
Securities Held to Maturity
Obligations of States and Political Subdivisions	$	114.5		6.72	%	$	224.0		6.56	%	$	189.5		7.01	%	$	1.4		8.10	%		45 mos.
Government Sponsored Agency		39.3		3.17			106.9		3.17			8.9		3.17			1.7		3.17			28 mos.
Other —Fixed		44.4		1.07			24.5		3.00			17.1		3.64			25.7		3.64			80 mos.
—Floating		1.3		1.54			—		—			—		—			—		—			9 mos.
Total Securities Held to Maturity	$	199.5		4.73	%	$	355.4		5.29	%	$	215.5		6.58	%	$	28.8		3.84	%		46 mos.
Securities Available for Sale
U.S. Government	$	—		—	%	$	4,029.4		.87	%	$	—		—	%	$	—		—	%		33 mos.
Obligations of States and Political Subdivisions		.8		2.32			14.8		6.20			—		—			.2		7.58			47 mos.
Government Sponsored Agency		3,463.0		.90			11,901.1		.84			776.5		1.83			630.8		2.18			28 mos.
Asset-Backed—Fixed		842.7		1.07			18.0		5.63			10.5		5.54			15.0		5.57			11 mos.
Asset-Backed—Floating		386.1		.67			194.8		.81			175.5		.89			126.0		.75			20 mos.
Auction Rate Securities		—		—			178.3		1.43			—		—			—		—			54 mos.
Other —Fixed		2,884.7		.79			1,455.0		1.86			—		—			—		—			14 mos.
—Floating		1,892.3		.73			763.7		.59			371.2		.66			62.1		—			15 mos.
Total Securities Available for Sale	$	9,469.6		.84	%	$	18,555.1		.93	%	$	1,333.7		1.41	%	$	834.1		1.91	%		25 mos.

	December 31, 2010
	One Year or Less					One to Five Years					Five to Ten Years					Over Ten Years					Average Maturity
($ in Millions)	Book		Yield			Book		Yield			Book		Yield			Book		Yield
Securities Held to Maturity
Obligations of States and Political Subdivisions	$	76.5		6.96	%	$	263.8		6.62	%	$	288.5		6.91	%	$	6.2		7.93	%		53 mos.
Government Sponsored Agency		30.9		3.36			129.7		3.27			6.5		3.50			2.2		3.49			32 mos.
Other —Fixed		97.4		2.98			152.9		4.96			102.7		4.78			29.0		3.83			69 mos.
—Floating		—		—			1.3		1.35			—		—			—		—			21 mos.
Total Securities Held to Maturity	$	204.8		4.52	%	$	547.7		5.35	%	$	397.7		6.30	%	$	37.4		4.49	%		55 mos.
Securities Available for Sale
U.S. Government	$	26.3		.12	%	$	632.1		1.73	%	$	—		—	%	$	—		—	%		56 mos.
Obligations of States and Political Subdivisions		20.7		5.28			15.1		6.77			—		—			.5		7.58			31 mos.
Government Sponsored Agency		4,823.8		.95			6,526.0		.77			465.9		1.27			155.0		1.29			23 mos.
Asset-Backed—Fixed		641.2		1.61			19.9		5.66			13.4		5.63			15.8		5.65			12 mos.
Asset-Backed—Floating		670.2		.67			448.3		.74			45.1		.75			6.4		.48			14 mos.
Auction Rate Securities		—		—			367.8		1.48			—		—			—		—			46 mos.
Other —Fixed		1,911.5		.63			501.5		1.99			—		—			42.6		6.00			10 mos.
—Floating		1,007.2		.53			1,544.5		.59			43.7		.71			143.0		—			25 mos.
Total Securities Available for Sale	$	9,100.9		.87	%	$	10,055.2		.91	%	$	568.1		1.29	%	$	363.3		1.52	%		22 mos.

15

Securities Held to Maturity and Available for Sale

	December 31
(In Millions)	2011		2010		2009		2008		2007
Securities Held to Maturity
Obligations of States and Political Subdivisions	$	529.4	$	635.0	$	692.6	$	791.2	$	848.8
Government Sponsored Agency		156.8		169.3		114.6		55.0		13.3
Other		113.0		117.9		103.1		92.9		90.4
Total Securities Held to Maturity	$	799.2	$	922.2	$	910.3	$	939.1	$	952.5
Securities Available for Sale
U.S. Government	$	4,029.4	$	658.4	$	74.0	$	19.9	$	5.1
Obligations of States and Political Subdivisions		15.8		36.3		47.0		31.6		32.1
Government Sponsored Agency		16,771.4		11,970.7		12,325.4		11,261.4		5,466.5
Asset-Backed		1,768.6		1,860.3		1,495.3		1,572.6		1,902.9
Auction Rate		178.3		367.8		427.7		453.1		—
Other		7,429.0		5,008.4		2,903.1		904.1		182.8
Total Securities Available for Sale	$	30,192.5	$	19,901.9	$	17,272.5	$	14,242.7	$	7,589.4
Average Total Securities	$	26,406.4	$	19,859.2	$	17,357.8	$	12,287.0	$	12,459.4
Total Securities at Year-End	$	30,999.7	$	20,830.9	$	18,192.7	$	15,184.1	$	8,545.0

16

Loans and Leases by Type

	December 31
(In Millions)	2011		2010		2009		2008		2007
Commercial
Commercial and Institutional	$	6,918.7	$	5,914.5	$	6,312.1	$	8,293.4	$	5,556.4
Commercial Real Estate		2,981.7		3,242.4		3,213.2		3,014.0		2,350.3
Lease Financing, net		978.8		1,063.7		1,004.4		1,143.8		1,168.4
Non-U.S.		1,057.5		1,046.2		728.5		1,791.7		2,274.1
Other		417.6		346.6		457.5		909.6		438.8
Total Commercial		12,354.3		11,613.4		11,715.7		15,152.5		11,788.0
Personal
Residential Real Estate		10,708.9		10,854.9		10,807.7		10,381.4		9,171.0
Private Client		5,651.4		5,423.7		5,004.4		4,832.2		4,016.6
Other		349.3		240.0		277.9		389.3		364.5
Total Personal		16,709.6		16,518.6		16,090.0		15,602.9		13,552.1
Total Loans and Leases	$	29,063.9	$	28,132.0	$	27,805.7	$	30,755.4	$	25,340.1
Total U.S.	$	28,006.4	$	27,085.8	$	27,077.2	$	28,963.7	$	23,066.0

Remaining Maturity of Selected Loans and Leases

	December 31, 2011
(In Millions)	Total		One Year or Less		One to Five Years		Over Five Years
U.S. (Excluding Residential Real Estate and Private Client Loans)
Commercial and Institutional	$	6,918.7	$	3,957.4	$	2,052.4	$	908.9
Commercial Real Estate		2,981.7		591.0		1,867.3		523.4
Lease Financing, net		978.8		28.1		309.1		641.6
Other-Commercial		417.6		417.6		—		—
Other-Personal		349.3		254.2		95.1		—
Total U.S.		11,646.1		5,248.3		4,323.9		2,073.9
Non-U.S.		1,057.5		1,037.0		20.5		—
Total Selected Loans and Leases	$	12,703.6	$	6,285.3	$	4,344.4	$	2,073.9
Interest Rate Sensitivity of Loans and Leases
Fixed Rate	$	8,547.5	$	4,992.9	$	2,221.4	$	1,333.2
Variable Rate		4,156.1		1,292.4		2,123.0		740.7
Total	$	12,703.6	$	6,285.3	$	4,344.4	$	2,073.9

17

Average Deposits by Type

(In Millions)	2011		2010		2009		2008		2007
U.S. Offices
Demand and Noninterest-Bearing
Individuals, Partnerships and Corporations	$	10,937.7	$	862.2	$	778.6	$	912.5	$	864.4
Correspondent Banks		101.2		86.5		80.5		44.2		30.9
Other Noninterest-Bearing		115.7		5,643.6		7,589.7		4,493.6		3,789.3
Total Demand and Noninterest-Bearing		11,154.6		6,592.3		8,448.8		5,450.3		4,684.6
Interest-Bearing
Savings and Money Market		14,297.6		13,049.5		11,162.4		7,786.5		7,016.4
Savings Certificates less than $100,000		343.0		401.3		478.6		454.8		483.8
Savings Certificates $100,000 and more		1,352.5		1,706.5		2,298.7		1,669.5		1,536.0
Other		1,909.9		1,596.8		1,101.8		615.3		518.1
Total Interest-Bearing		17,903.0		16,754.1		15,041.5		10,526.1		9,554.3
Total U.S. Offices		29,057.6		23,346.4		23,490.3		15,976.4		14,238.9
Non-U.S. Offices
Non Interest-Bearing		3,415.3		2,268.3		2,578.1		3,364.5		2,963.8
Interest-Bearing		39,973.5		29,968.4		27,157.6		35,958.2		28,587.8
Total Non-U.S. Offices		43,388.8		32,236.7		29,735.7		39,322.7		31,551.6
Total Deposits	$	72,446.4	$	55,583.1	$	53,226.0	$	55,299.1	$	45,790.5

Average Rates Paid on Interest-Related Deposits by Type

	2011			2010			2009			2008			2007
Interest-Related Deposits—U.S. Offices
Savings and Money Market		.18	%		.27	%		.48	%		1.77	%		3.37	%
Savings Certificates less than $100,000		.88			1.23			2.05			3.21			4.42
Savings Certificates $100,000 and more		1.03			1.34			2.05			3.44			4.83
Other Time		.56			.80			1.48			3.28			4.74
Total U.S. Offices Interest-Related Deposits		.30			.45			.84			2.19			3.73
Total Non-U.S. Offices Interest-Related Deposits		.44			.42			.29			2.46			4.22
Total Interest-Related Deposits		.40	%		.43	%		.49	%		2.40	%		4.10	%

Remaining Maturity of Time Deposits $100,000 or More

	December 31, 2011						December 31, 2010
	U.S. Offices				U.S. Offices		U.S. Offices				U.S. Offices
(In Millions)	Certificates of Deposit		Other Time		Non-U.S. Offices		Certificates of Deposit		Other Time		Non-U.S. Offices
3 Months or Less	$	776.0	$	—	$	7,234.8	$	1,008.1	$	792.4	$	12,406.7
Over 3 through 6 Months		530.5		—		49.5		502.7		—		41.4
Over 6 through 12 Months		1,062.4		—		31.4		1,709.4		—		32.7
Over 12 Months		368.7		—		1.1		296.6		—		4.6
Total	$	2,737.6	$	—	$	7,316.8	$	3,516.8	$	792.4	$	12,485.4

18

Purchased Funds

Federal Funds Purchased

(Overnight Borrowings)

($ in Millions)	2011			2010			2009
Balance on December 31	$	815.3		$	3,691.7		$	6,649.8
Highest Month-End Balance		4,690.2			5,716.6			7,735.6
Year – Average Balance		2,250.4			3,779.7			4,902.0
– Average Rate		.08	%		.13	%		.12	%
Average Rate at Year-End		.06	%		.05	%		.02	%

Securities Sold under Agreements to Repurchase

($ in Millions)	2011			2010			2009
Balance on December 31	$	1,198.8		$	954.4		$	1,037.5
Highest Month-End Balance		1,479.3			954.4			1,037.5
Year – Average Balance		815.8			626.8			737.7
– Average Rate		.08	%		.17	%		.16	%
Average Rate at Year-End		.02	%		.07	%		.03	%

Other Borrowings

(Includes Treasury Investment Program Balances, Term Federal Funds Purchased and Other Short-Term Borrowings)

($ in Millions)	2011			2010			2009
Balance on December 31	$	931.5		$	347.7		$	2,078.3
Highest Month-End Balance		2,415.5			2,174.1			2,202.6
Year – Average Balance		1,400.6			1,443.0			1,109.0
– Average Rate		.39	%		.38	%		.38	%
Average Rate at Year-End		.02	%		.03	%		.09	%

Total Purchased Funds

($ in Millions)	2011			2010			2009
Balance on December 31	$	2,945.6		$	4,993.8		$	9,765.6
Year – Average Balance		4,466.8			5,849.5			6,748.7
– Average Rate		.18	%		.19	%		16	%

19

Changes in Net Interest Income

	2011/2010									2010/2009
	Change Due To									Change Due To
(Interest on a Taxable Equivalent Basis) (In Millions)	Average Balance			Rate			Total			Average Balance			Rate			Total
Increase (Decrease) in Interest Income
Money Market Assets
Federal Funds Sold and Resell Agreements	$	(.1	)	$	(.2	)	$	(.3	)	$	(.1	)	$	(.1	)	$	(.2	)
Time Deposits with Banks		23.2			35.0			58.2			(10.4	)		(64.6	)		(75.0	)
Other Interest-Bearing		12.0			2.8			14.8			1.9			—			1.9
Securities
U.S. Government		10.8			11.5			22.3			.6			.3			.9
Obligations of States and Political Subdivisions		(7.9	)		.9			(7.0	)		(5.9	)		(.2	)		(6.1	)
Government Sponsored Agency		24.6			(38.8	)		(14.2	)		(1.2	)		(29.9	)		(31.1	)
Other		30.4			2.7			33.1			42.5			(33.8	)		8.7
Loans and Leases		28.4			(22.3	)		6.1			(39.0	)		29.5			(9.5	)
Total		121.4			(8.4	)		113.0			(11.6	)		(98.8	)		(110.4	)
Increase (Decrease) in Interest Expense
Deposits
Savings and Money Market	$	3.4			(12.3	)		(8.9	)	$	9.1			(27.9	)	$	(18.8	)
Savings Certificates and Other Time		(1.1	)		(11.5	)		(12.6	)		(3.3	)		(29.5	)		(32.8	)
Non-U.S. Offices Time		42.0			8.4			50.4			8.3			37.3			45.6
Short-Term Borrowings		(2.6	)		(0.4	)		(3.0	)		(1.5	)		1.7			.2
Senior Notes		15.3			0.5			15.8			3.8			.8			4.6
Long-Term Debt		(15.3	)		(4.9	)		(20.2	)		(10.8	)		(14.3	)		(25.1	)
Floating Rate Capital Debt		—			—			—			—			(1.9	)		(1.9	)
Total	$	41.7		$	(20.2	)	$	21.5		$	2.5		$	(30.7	)	$	(28.2	)
Increase (Decrease) in Net Interest Income	$	79.7		$	11.8		$	91.5		$	(14.1	)	$	(68.1	)	$	(82.2	)

Note: Changes not due solely to average balance changes or rate changes are included in the change due to rate column.

20

Analysis of Allowance for Credit Losses

($ in Millions)	2011			2010			2009			2008			2007
Balance at Beginning of Year	$	357.3		$	340.6		$	251.1		$	160.2		$	151.0
Charge-Offs
Commercial
Commercial and Institutional		22.0			13.3			30.6			7.6			4.5
Commercial Real Estate		34.3			62.9			22.5			5.1			—
Lease Financing, net		—			—			—			—			—
Non-U.S.		—			—			—			—			—
Other		—			—			—			—			—
Total Commercial		56.3			76.2			53.1			12.7			4.5
Personal
Residential Real Estate		55.0			63.7			57.7			8.9			1.1
Private Client		5.0			10.2			21.5			4.1			4.1
Other		—			—			—			—			—
Total Personal		60.0			73.9			79.2			13.0			5.2
Total Charge-Offs		116.3			150.1			132.3			25.7			9.7
Recoveries
Commercial
Commercial and Institutional		15.0			.8			2.9			1.8			.3
Commercial Real Estate		6.5			2.8			.2			.1			—
Lease Financing, net		—			—			—			—			—
Non-U.S.		—			—			—			—			.3
Other		—			—			—			—			—
Total Commercial		21.5			3.6			3.1			1.9			.6
Personal
Residential Real Estate		7.8			2.3			1.3			.3			.1
Private Client		3.6			1.0			2.1			.3			.2
Other		—			—			—			—			—
Total Personal		11.4			3.3			3.4			.6			.3
Total Recoveries		32.9			6.9			6.5			2.5			.9
Net Charge-Offs		83.4			143.2			125.8			23.2			8.8
Provision for Credit Losses		55.0			160.0			215.0			115.0			18.0
Effect of Foreign Exchange Rates		—			(.1	)		.3			(.9	)		—
Net Change in Allowance		(28.4	)		16.7			89.5			90.9			9.2
Balance at End of Year	$	328.9		$	357.3		$	340.6		$	251.1		$	160.2
Allowance Assigned To:
Loans and Leases	$	294.8		$	319.6		$	309.2		$	229.1		$	148.1
Unfunded Commitments and Standby Letters of Credit		34.1			37.7			31.4			22.0			12.1
Total Allowance for Credit Losses	$	328.9		$	357.3		$	340.6		$	251.1		$	160.2
Loans and Leases at Year-End	$	29,063.9		$	28,132.0		$	27,805.7		$	30,755.4		$	25,340.1
Average Total Loans and Leases	$	28,346.7		$	27,514.4		$	28,697.2		$	27,402.7		$	22,817.8
As a Percent of Year-End Loans and Leases
Net Loan Charge-Offs		.29	%		.51	%		.45	%		.08	%		.03	%
Provision for Credit Losses		.19			.57			.77			.37			.07
Allowance at Year-End Assigned to Loans and Leases		1.01			1.14			1.11			.74			.58
As a Percent of Average Loans and Leases
Net Loan Charge-Offs		.29	%		.52	%		.44	%		.08	%		.04	%
Allowance at Year-End Assigned to Loans and Leases		1.04			1.16			1.08			.84			.65

21

Non-U.S. Operations (Based on Obligor’s Domicile)

See also Note 31 – Business Units and Related Information in the Notes to Consolidated Financial Statements on pages 121-123 of the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011, which is incorporated herein by reference.

Selected Average Assets and Liabilities Attributable to Non-U.S. Operations

		$000,000		$000,000		$000,000		$000,000		$000,000
(In Millions)	2011		2010		2009		2008		2007
Total Assets	$	29,201.2	$	22,664.0	$	21,876.1	$	27,321.0	$	21,483.2
Time Deposits with Banks		16,906.5		14,592.4		15,357.0		20,547.9		16,028.9
Loans		1,301.7		692.9		951.5		1,641.7		1,709.8
Customers’ Acceptance Liability		.3		.5		.3		.2		.3
Non-U.S. Investments		5,370.2		2,688.8		977.7		205.7		101.8
Total Liabilities	$	45,757.5	$	36,196.0	$	33,310.6	$	44,022.1	$	34,469.5
Deposits	$	43,370.3	$	33,479.3	$	30,888.3	$	40,825.6	$	32,200.2
Liability on Acceptances		.3		.5		.3		.2		.3

Percent of Non-U.S.-Related Average Assets and Liabilities to Total Consolidated Average Assets

		$00,000			$00,000			$00,000			$00,000			$00,000
	2011			2010			2009			2008			2007
Assets		32	%		30	%		29	%		37	%		35	%
Liabilities		50	%		48	%		45	%		60	%		57	%

Allowance for Credit Losses Relating to Non-U.S. Operations

		$000,000		$000,000			$000,000			$000,000			$000,000
(In Millions)	2011		2010			2009			2008			2007
Balance at Beginning of Year	$	3.8	$	4.9		$	7.4		$	8.8		$	9.3
Charge-Offs		—		—			—			—			—
Recoveries		—		—			—			—			—
Provision for Credit Losses		.9		(1.1	)		(2.5	)		(1.4	)		(.5	)
Balance at End of Year	$	4.7	$	3.8		$	4.9		$	7.4		$	8.8

The SEC requires the disclosure of the allowance for credit losses that is applicable to international operations. The above table has been prepared in compliance with this disclosure requirement and is used in determining non-U.S. operating performance. The amounts shown in the table should not be construed as being the only amounts that are available for non-U.S. loan charge-offs, since the entire allowance for credit losses assigned to loans and leases is available to absorb losses on both U.S. and non-U.S. loans. In addition, these amounts are not intended to be indicative of future charge-off trends.

22

Distribution of Non-U.S. Loans and Deposits by Type

	December 31
Loans (In Millions)	2011		2010		2009		2008		2007
Commercial	$	335.9	$	874.0	$	626.3	$	351.1	$	482.5
Non-U.S. Governments and Official Institutions		197.8		110.3		59.7		14.8		17.0
Banks		13.3		9.3		2.1		32.4		14.9
Other *		510.5		52.6		40.4		1,393.4		1,759.7
Total	$	1,057.5	$	1,046.2	$	728.5	$	1,791.7	$	2,274.1

* Other loans include short duration advances primarily related to the processing of custodied client investments.

	December 31
Deposits (In Millions)	2011		2010		2009
Commercial	$	34,824.1	$	34,835.1	$	27,143.7
Non-U.S. Governments and Official Institutions		3,405.6		2,724.1		2,905.3
Banks		1,018.4		1,406.5		939.8
Other Time		48.3		377.1		407.8
Other Demand		38.2		159.9		149.9
Total		39,334.6	$	39,502.7	$	31,546.5

CREDIT RISK MANAGEMENT

For the discussion of Credit Risk Management, see the following information that is incorporated herein by reference to the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011:

Notes to Consolidated Financial Statements		2011 Annual Report Page(s)
1.	Accounting Policies
	G. Derivative Financial Instruments	71-72
	H. Loans and Leases	72-73
	I. Allowance for Credit Losses	73-74
	L. Other Real Estate Owned	74
6.	Loans and Leases	87-92
7.	Allowance for Credit Losses	92-93
8.	Concentrations of Credit Risk	93-94
25.	Contingent Liabilities	111-112
26.	Derivative Financial Instruments	112-117
27.	Off-Balance Sheet Financial Instruments	117-118
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Asset Quality and Credit Risk Management		49-57

In addition, the following schedules on pages 21 through 23 of this Form 10-K should be read in conjunction with the “Credit Risk Management” section:

Analysis of Allowance for Credit Losses

Allowance for Credit Losses Relating to Non-U.S. Operations

Distribution of Non-U.S. Loans and Deposits by Type

23

INTEREST RATE SENSITIVITY ANALYSIS

For the discussion of interest rate sensitivity, see the section entitled “Market Risk Management” on pages 57 through 60 of Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011, which is incorporated herein by reference.

The following unaudited Consolidated Balance Sheet and Consolidated Statement of Income for The Northern Trust Company were prepared in accordance with generally accepted accounting principles and are provided here for informational purposes. These consolidated financial statements should be read in conjunction with the footnotes accompanying the consolidated financial statements included in the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011 and incorporated herein by reference on page 40 of this Form 10-K.

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The Northern Trust Company

Consolidated Balance Sheet (unaudited)

	December 31
(In Millions)	2011			2010
Assets
Cash and Due from Banks	$	4,299.2		$	2,806.8
Federal Funds Sold and Securities Purchased under Agreements to Resell		121.3			161.0
Time Deposits with Banks		16,685.4			15,338.7
Federal Reserve Deposits and Other Interest-Bearing		13,442.7			10,919.2
Securities
Available for Sale		30,095.4			19,785.0
Held to Maturity (Fair Value—$804.2 in 2011 and $906.8 in 2010)		799.2			922.2
Total Securities		30,894.6			20,707.2
Loans and Leases
Commercial		12,362.3			11,613.4
Personal		16,704.0			16,513.3
Total Loans and Leases (Net of unearned income—$374.1 in 2011 and $456.8 in 2010)		29,066.3			28,126.7
Allowance for Credit Losses Assigned to Loans and Leases		(294.8	)		(319.6	)
Buildings and Equipment		486.5			495.7
Client Security Settlement Receivables		778.3			701.9
Goodwill		493.2			357.6
Other Assets		3,858.5			4,105.9
Total Assets	$	99,831.2		$	83,401.1
Liabilities
Deposits
Demand and Other Noninterest-Bearing	$	22,885.6		$	7,242.3
Savings and Money Market		17,472.1			13,887.6
Savings Certificates		3,058.3			3,550.4
Other Time		—			1,128.7
Non-U.S. Offices — Noninterest-Bearing		3,488.6			2,943.4
— Interest-Bearing		37,137.2			37,033.8
Total Deposits		84,041.8			65,786.2
Federal Funds Purchased		815.3			3,691.7
Securities Sold under Agreements to Repurchase		1,198.8			955.3
Other Borrowings		955.2			366.1
Senior Notes		750.0			—
Long-Term Debt		2,425.9			3,021.9
Other Liabilities		2,752.7			2,725.9
Total Liabilities		92,939.7			76,547.1
Stockholder’s Equity
Capital Stock—Par Value $1		3.6			3.6
Surplus		2,656.7			2,656.7
Undivided Profits		4,540.1			4,472.2
Accumulated Other Comprehensive Loss		(309.0	)		(278.5	)
Total Stockholder’s Equity		6,891.5			6,854.0
Total Liabilities and Stockholder’s Equity	$	99,831.2		$	83,401.1

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The Northern Trust Company

Consolidated Statement of Income (unaudited)

	For the Year Ended December 31
(In Millions)	2011			2010			2009
Noninterest Income
Trust, Investment and Other Servicing Fees	$	2,034.6		$	1,898.2		$	1,956.0
Foreign Exchange Trading Income		324.5			382.2			451.2
Treasury Management Fees		72.1			78.1			76.4
Security Commissions and Trading Income		8.3			9.7			5.7
Other Operating Income		87.3			138.2			126.2
Investment Security Gains (Losses), net		(23.9	)		(20.4	)		(23.4	)
Total Noninterest Income		2,502.9			2,486.0			2,592.1
Interest Income
Loans and Leases		938.7			933.3			942.2
Securities
—Available for Sale		203.5			172.5			198.3
—Held to Maturity		33.7			40.9			38.4
Total Securities		237.2			213.4			236.7
Time Deposits with Banks		192.7			134.5			187.8
Federal Funds Sold, Securities Purchased under Agreements to Resell and Other		31.4			14.0			39.4
Total Interest Income		1,400.0			1,295.2			1,406.1
Interest Expense
Deposits		233.2			204.8			211.6
Federal Funds Purchased		1.9			2.4			2.3
Securities Sold under Agreements to Repurchase		.7			1.1			1.4
Other Borrowings		5.5			7.7			9.1
Senior Notes		16.5			2.4			2.7
Long-Term Debt		94.6			121.8			144.5
Total Interest Expense		352.4			340.2			371.6
Net Interest Income		1,047.6			955.0			1,034.5
Provision for Credit Losses		55.0			160.0			215.4
Net Interest Income after Provision for Credit Losses		992.6			795.0			819.1
Income before Noninterest Expense		3,495.5			3,281.0			3,411.2
Noninterest Expense
Compensation		1,221.5			1,060.3			1,052.4
Employee Benefits		249.5			229.2			234.1
Outside Services		460.9			386.5			353.7
Equipment and Software Expense		327.3			286.3			260.2
Occupancy Expense		176.2			164.2			166.5
Visa Indemnification Benefits		(23.1	)		(33.0	)		(17.8	)
Other Operating Expense		237.3			236.8			173.4
Total Noninterest Expense		2,649.6			2,330.3			2,222.5
Income before Income Taxes		845.9			950.7			1,188.7
Provision for Income Taxes		274.9			313.3			342.6
Net Income		571.0		$	637.4		$	846.1
Dividends Paid to the Corporation	$	500.0		$	—		$	350.0

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AVAILABLE INFORMATION

The Corporation’s Internet address is www.northerntrust.com. We make available free of charge through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (Exchange Act) as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC. Additionally, the Corporation’s corporate governance guidelines, its code of business conduct and ethics applicable to directors, officers and employees, and the charters for its audit, business risk, business strategy, corporate governance, compensation and benefits, and executive committees are all available on the Corporation’s Internet website. Information contained on the Corporation’s website is not part of this report.

Supplemental Item—Executive Officers of the Registrant

The following table sets forth certain information with regard to each executive officer of the Corporation.

Name and Age	Current Position Held with the Corporation and Effective Date First Elected to Office Indicated
Frederick H. Waddell (58)	Chairman of the Board (11/11/09), President (2/21/06-9/30/11), and Chief Executive Officer (1/1/08)
Sherry S. Barrat (62)	Executive Vice President and President—PFS (1/1/06-2/28/11), Vice Chairman (3/1/11)
Aileen B. Blake (44)	Executive Vice President and Controller (3/31/05)
Jeffrey D. Cohodes (51)	Executive Vice President of the Bank (11/14/06) and Executive Vice President and Head of Corporate Risk Management (3/1/11)
Steve L. Fradkin (50)	Executive Vice President (1/21/03) and President—C&IS (9/18/09)
Timothy P. Moen (59)	Executive Vice President and Head of Human Resources and Administration (4/16/02)
William L. Morrison (61)	Chief Financial Officer (9/18/09-9/30/11), Executive Vice President (5/21/02-9/30/11) and President and Chief Operating Officer (10/1/11)
Michael G. O’Grady (46)	Executive Vice President (8/15/11) and Chief Financial Officer (10/1/11)
Stephen N. Potter (55)	Executive Vice President (10/17/06) and President—NTGI (3/28/08)
Jana R. Schreuder (53)	Executive Vice President (6/30/05), President—O&T (10/17/06-2/28/11), and President—PFS (3/1/11)
Joyce St. Clair (53)	Executive Vice President (4/1/07), Head of Corporate Risk Management (4/1/07-2/28/11), and President—O&T (3/1/11)
Kelly R. Welsh (59)	Executive Vice President, General Counsel, and Assistant Secretary (7/18/00)

All of the executive officers except Michael G. O’Grady have been officers of the Corporation, or a subsidiary of the Corporation, for more than five years. Mr. O’Grady served as Managing Director of the Financial Institutions Group of Investment Banking of Bank of America Merrill Lynch from 2000 until joining the Corporation.

The positions of Chairman of the Board, Chief Executive Officer and President are elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of stockholders. The other officers are appointed annually by the Board. Officers continue to hold office until their successors are duly elected or until their death, resignation or removal by the Board.

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Item 1A—Risk Factors

From an investor’s standpoint, public companies in general and financial institutions in particular share many of the same risks. However, each company’s unique combination of strategies, markets served, product and service offerings, processes and systems, and other internal and external factors cause it to have its own set of principal risks. Following is a description of some of the principal risks inherent in Northern Trust’s business.

We explain below that many of the risks we discuss can reduce our earnings, as a result of recognizing losses or otherwise. You should understand that significant reductions in earnings can have further negative effects on us in addition to reducing the price of our common stock and other securities, such as: reducing our capital, which can have regulatory and other consequences; affecting the confidence that clients and counterparties have in us, with a resulting negative effect on our ability to conduct and grow our businesses; and reducing the attractiveness of our securities to rating agencies and potential purchasers and so affecting our ability to raise capital and secure other funding or the prices at which we are able to do so.

This list is not necessarily complete because we may have failed to appreciate the potential impact on us of risks not described here. We identify and manage risk through our business strategies and plans and our risk management practices and controls. If we fail to continue to successfully identify and manage significant risks, we could incur financial loss. We may also suffer damage to our reputation that would restrict our ability to grow or conduct business profitably, or become subject to regulatory penalties or constraints that would limit some of our activities or make them significantly more expensive.

Economic, Market, and Monetary Policy Risks

Northern Trust carries on a global business. Changes in conditions in the global financial markets and general economic conditions could adversely affect Northern Trust’s businesses. Factors such as the level and volatility of equity and futures prices, the overall pace of capital markets activities, interest rates, currency exchange rates, investor sentiment and inflation or deflation can affect our results.

• A downturn in economic conditions, such as the recent severe global economic downturn, can negatively affect our earnings.

• Economic weakness can affect the ability of borrowers to repay loans, causing credit quality to deteriorate and resulting in increased cost of credit, a higher level of charge-offs, and higher provision for credit losses, all of which reduce our earnings.

• Economic weakness can also reduce the fees we earn for managing and servicing our clients’ assets. For example, the recent downturn in equity markets and the decrease in the value of some debt-related investments as a result of market disruption or illiquidity reduce the valuations of the assets we manage or service for others. This reduces our earnings since a significant part of the fees we earn is based on asset values.

• Weak economic conditions also affect wealth creation, investment preferences, trading activities, and savings patterns, which impact demand for our trust and investment products and services. Reduced transaction volumes would also negatively impact our earnings.

• A slowing of the globalization of investment activity or pension reform could limit our revenue growth. We believe we have profited from the increasing globalization of investment activity and from pension reform in many nations that has generated new pools of assets that require management and servicing. Any slowing or reversal of this globalization of financial activity and markets or other such trends would adversely affect factors that have been important in Northern Trust’s recent growth.

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• Uncertainty about the financial stability of several countries in the EU, the increasing risk that those countries may default on their sovereign debt and related stresses on financial markets could have a significant adverse effect on our earnings. Risks and ongoing concerns about the debt crisis in Europe could have a detrimental impact on the global economic recovery, sovereign and non-sovereign debt in these countries and the financial condition of European financial institutions. European market and economic disruptions have affected, and may continue to affect, consumer confidence levels and spending, personal bankruptcy rates, levels of incurrence and default on consumer debt and home prices, among other factors. Continuing economic challenges in Europe and the related disruptions may negatively impact our earnings. See the section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” captioned “Asset Quality and Credit Risk Management” in the 2011 Annual Report to Stockholders (pages 49-57).

• Instability, disruption or a lack of confidence in the political, economic, legal or regulatory systems of the emerging markets in which we operate could expose us to liability or loss. Northern Trust’s expanding business activities in emerging markets, including investments made for clients in those markets, present risks inherent in conducting these activities in less mature and often less regulated business and investment environments. Changes in interest rates can negatively affect our earnings. The direction and level of interest rates are important factors in our earnings. Falling rates or rates that remain low may reduce our net interest margin, which is the difference between what we earn on our assets and the interest rates we pay for deposits and other sources of funding. A low interest rate environment can also reduce fees earned on certain of our products. For example, in 2009, 2010, and 2011, we waived certain fees associated with money market mutual funds due to the low level of short-term interest rates. Lower net interest margins and fee waivers negatively impact our earnings.

• Volatility levels and fluctuations in foreign currency exchange rates can affect our earnings. Periods of lower foreign currency volatility can result in reduced foreign exchange trading income. We hold various non-U.S. dollar denominated assets and liabilities and maintain investments in non-U.S. subsidiaries. We also provide foreign exchange services to our clients, primarily in connection with our global custody business, and effect other transactions in non-U.S. dollar currencies. Foreign currency volatility and fluctuations in exchange rates may impact the value of non-U.S. dollar denominated assets, investments, and cash flows and raise the potential for losses resulting from foreign currency trading positions, where aggregate obligations to purchase and sell a currency other than the U.S. dollar do not offset each other, or offset each other in different time periods. If the policies and procedures we have in place to assess and mitigate potential impacts of foreign exchange volatility, including hedging-related strategies, are not followed or are not effective to mitigate such risks, our results and earnings may be negatively affected. See the section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” captioned “Market Risk Management” in the 2011 Annual Report to Stockholders (pages 57-60).

• Declines in the value of securities held in our investment portfolio can negatively affect our earnings. The value of securities available for sale and held to maturity within our investment portfolio may fluctuate as a result of market volatility and economic or financial market conditions. Generally, the fair value of those securities is determined based upon market values available from third party sources. The recent period of economic turmoil and financial market disruption has negatively affected the liquidity and pricing of securities generally and asset-backed and auction rate securities in particular. To the extent that any portion of the unrealized losses in our portfolio of investment securities results from declines in securities values that management determines to be other-than-temporary, the book value of those securities will be adjusted to their estimated recovery value and we will recognize a charge to earnings in the quarter during which we make that determination. See the section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” captioned “Risk Management – Asset Quality and Credit Risk Management – Securities Portfolio” in the 2011 Annual Report to Stockholders (pages 49 and 50) and the section of the “Notes to Consolidated Financial Statements” in the 2011 Annual Report to Stockholders captioned “Note 4 – Securities” (pages 83-87) for additional information.

• Changes in a number of particular market conditions can negatively affect our earnings. In past periods, reductions in the volatility of currency trading markets, the level of cross-border investing activity, or the demand for borrowing securities or willingness to lend such securities have negatively affected our earnings from activities such as foreign exchange trading and securities lending. If these conditions occur in the future, our earnings from these activities may be negatively affected. In a few of our businesses, such as securities lending, our fee is calculated as a percentage of our client’s earnings, so that market and other factors that reduce our clients’ earnings from investments or trading activities also reduce our revenues. The recent extraordinary market conditions have produced losses in some securities lending programs. Such market conditions also have reduced borrower demand

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and led some clients to withdraw from these programs. A persistence or worsening of these conditions could result in additional withdrawals and decreased activity. See the section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” captioned “Off-Balance Sheet Arrangements – Variable Interests” in the 2011 Annual Report to Stockholders (page 42) and the section of the “Notes to Consolidated Financial Statements” in the 2011 Annual Report to Stockholders captioned “Note 28 – Variable Interest Entities” (pages 118-120) for additional information.

• Changes in the monetary and other policies of the various regulatory authorities or central banks of the United States, non-U.S. governments and international agencies can reduce our earnings and negatively affect our growth prospects. For example, the Board of Governors of the Federal Reserve System regulates the supply of money and credit in the United States, and its policies determine in large part the level of interest rates and our cost of funds for lending and investing. Changes in interest rates and our cost of funds can negatively affect earnings. The actions of the Federal Reserve Board can reduce the value of financial instruments we hold. Its policies also can affect our borrowers by increasing interest rates or making sources of funding less available. This can increase the risk that they may fail to repay their loans from us.

• Failure to develop and implement contingency plans to address market disruptions could adversely affect us. Our success in the area of highly complex asset servicing relationships depends, in part, on our development and successful implementation of contingency plans to address significant market disruptions caused by bankruptcy, insolvency or illiquidity. If we fail to develop or successfully implement contingency plans for these market disruptions, our results and business may be negatively affected.

• Governmental action to combat recent economic weakness and financial market disruption may not succeed, with various adverse effects on us. Since mid-2008, there have been unprecedented disruptions in global financial markets, including volatility in asset values and constraints on the availability of credit. In response to these developments, the U.S. and other governments have taken steps designed to stabilize markets generally and strengthen financial institutions in particular. The recent upheaval in global financial markets has accentuated each of the risks identified above and magnified their potential effect on Northern Trust. To the extent that these governmental stabilization and mitigation activities are not successful or adversely change the competitive structure of the financial services industry, these developments could have an adverse impact on Northern Trust’s revenues, costs, credit losses, access to capital, and liquidity. They also may impose additional limitations or costs on Northern Trust’s business.

Operational Risks

• Errors, breakdowns in controls or other mistakes in the provision of services to clients or in carrying out transactions for our own account can subject us to liability, result in losses or negatively affect our earnings in other ways. In our asset servicing, investment management, fiduciary administration, and other business activities, Northern Trust effects or processes transactions for clients and for itself that involve very large amounts of money. Failure to properly manage or mitigate operational risks can have adverse consequences, and increased volatility in the financial markets may increase the magnitude of resulting losses.

• Many types of operational risks can negatively affect our earnings. Many factors can impact operations and expose us to risks that may vary in size, scale and scope, including:

• Human errors or omissions, including failures to comply with applicable laws or corporate policies and procedures;

• Theft, fraud or misappropriation of assets, whether arising from the intentional actions of internal personnel or external third parties;

• Defects or interruptions in computer or communications systems;

• Breakdowns in processes, including manual processes, which are inherently more prone to error than automated processes, and over-reliance on manual processes, breakdowns in internal controls or failures of the technology and facilities that support our operations;

• Unsuccessful or difficult implementation of computer systems upgrades;

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• Defects in product design or delivery;

• Difficulty in accurately pricing assets, which can be aggravated by increased asset coverage, market volatility and illiquidity, and lack of reliable pricing from vendors;

• Negative developments in relationships with key counterparties, vendors, employees, or associates in our day-to-day operations; and

• External events that are wholly or partially beyond our control, such as natural disasters, epidemics, computer viruses, geopolitical events, political unrest or terrorist events.

• Our dependence on technology exposes us to risks that also can result in losses. Automated systems to record and process transactions, as well as to monitor positions and price assets, reduce the risk of human error, but our necessary dependence on such systems also increases the risk that system flaws or manipulation of those systems will result in losses. The failure to upgrade systems as necessary to support growth and changing business needs also could have a material adverse effect on our operations. Additionally, failure to ensure adequate review and consideration of critical business changes prior to and during introduction and deployment of key technological systems or failure to adequately align evolving client commitments and expectations with operational capabilities can have a negative impact on our operations.

• Breaches of our security measures can result in losses. Our systems involve the use of customers’ proprietary information and security breaches, including cyber attacks, could expose us to a risk of loss of this information, litigation, and potential liability. Our security measures may be breached due to the actions of outside parties, employee error, malfeasance, or otherwise, and, as a result, an unauthorized party may obtain access to our data or our customers’ data. Additionally, outside parties may attempt to fraudulently induce employees or customers to disclose sensitive information. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived breach of our security occurs, the market perception of the effectiveness of our security measures could be harmed and we could lose customers.

• We may fail to detect errors resulting in losses that continue until the problems are detected and fixed. Given the high volume of transactions we process, errors that affect earnings may be repeated or compounded before they are discovered and corrected.

• Our business continuity plans may not work and thus fail to prevent losses from operational failures. Our business continuity plans address many of these risks, but may not operate successfully to mitigate them. If they do not, we could incur losses, liability to clients or others and reduced earnings.

• Inability of our internal controls to keep pace with our expansion may result in losses. In recent years, we have expanded the operational support located in certain jurisdictions where the electricity, communications, new personnel, and other systems necessary to support our activities may not be as strong as in the U.S. and established Northern Trust Hedge Fund Services LLC, a unit created in connection with the Omnium acquisition, which serves hedge funds and large institutional investors with complex portfolios. These expansions increase the risk that problems with our systems may occur and disrupt our operations, resulting in losses. Our internal controls might not keep up with the rate of growth resulting in losses.

• Our expense management initiatives may strain personnel as they acclimate to new responsibilities. Our plans to streamline our operations and make more efficient use of our personnel could decrease efficiency initially. Retiring employees take their expertise with them. As existing employees take on new and unfamiliar tasks and new employees learn the business, the initial learning curve can result in operational risks.

• Failure of any of our third party vendors to perform can result in losses. Third party vendors provide key components of our business operations such as data processing, recording and monitoring transactions, online banking interfaces and services, Internet connections and network access. While we have established risk management processes and continuity plans, any disruptions in service from a key vendor for any reason or poor performance of services could negatively affect our ability to deliver products and services to our clients and conduct our business. Replacing these third party vendors could also create significant delay and expense.

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• Northern Trust’s reputation and business may be harmed and we may be subject to legal claims if there is loss or disclosure of our customers’ or our own information. Northern Trust makes extensive use of online services and centralized data processing, including through third party service providers. The secure maintenance and transmission of customer information is a critical element of our operations. Our information technology and other systems that maintain and transmit customer information, or those of service providers or business partners, may be impacted by advertent or inadvertent actions or inactions by our employees, or those of a third party service provider or business partner. As a result, Northern Trust’s customers’ information may be lost, disclosed, accessed or taken without the customers’ consent. Any such loss, disclosure or access to, customers’ information can result in legal claims or legal proceedings, including regulatory investigations and actions, may have a serious impact on our reputation and may adversely affect our businesses, operating results and financial condition.

These risks are magnified as client requirements become more complex, and as our increasingly international business requires end-to-end management of operational and other processes across multiple time zones and many inter-related products and services.

Investment Performance, Fiduciary and Asset Servicing Risks

Revenues from our investment management, fiduciary, and asset servicing businesses are significant to our earnings.

• Failure to produce adequate and competitive returns can negatively affect our earnings and growth prospects. If we do not generate competitive risk-adjusted returns that satisfy clients in a variety of asset classes, we will have greater difficulty maintaining existing business and attracting new business, which would negatively affect our earnings and prospects.

• If we fail to comply with legal standards, we could incur liability to our clients or lose clients, which could negatively affect our earnings. Managing or servicing assets with reasonable prudence in accordance with the terms of governing documents and applicable laws is important to client satisfaction, which in turn is important to the earnings and growth of our investment businesses. Failure to comply with these standards, adequately manage these risks, or manage the differing interests often involved in the exercise of fiduciary responsibilities could also result in liability.

• We may take actions to maintain client satisfaction that result in losses or reduced earnings. We may find it appropriate to take action or incur expenses in order to maintain client satisfaction or preserve the usefulness of investments or investment vehicles we manage in light of changes in security ratings, liquidity or valuation issues or other developments, even though we are not required to do so by law or the terms of governing instruments. The risk that we will decide to take actions to maintain client satisfaction that result in losses or reduced earnings is greater in periods when credit or equity markets are deteriorating in value or are particularly volatile and liquidity in markets is disrupted.

Credit Risks

A number of Northern Trust’s product offerings involve credit risk, which is the risk that other parties will not fulfill their financial obligations to us. These product offerings include loans, leases, derivatives, foreign exchange and other credit commitments.

• Failure to evaluate accurately the prospects for repayment when we extend credit or maintain an adequate allowance for credit losses can result in losses or the need to make additional provisions for credit losses, both of which reduce our earnings. We evaluate credit commitments before we make them and then provide for credit risks based on our assessment of the credit losses inherent in our loan portfolio, including unfunded credit commitments. This process requires us to make difficult and complex judgments. Challenges associated with our credit risk assessments include identifying the proper factors to be used in assessment and accurately estimating the impacts of those factors. Allowances that prove to be inadequate can directly and negatively affect earnings.

• Weakened economic conditions can result in losses or the need for additional provisions for credit losses, both of which reduce our earnings. Credit risk levels and our earnings can also be affected by the strength of the economy in general and in the particular locales in which we extend credit, a deterioration in credit quality or a reduced demand for credit and adverse changes in the financial performance or condition of our borrowers which could impact the borrowers’ abilities to repay outstanding loans. Our provisions for credit losses were significantly

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higher in 2009 and 2010 than in prior periods due to prolonged weakness in the economic environment. For a fuller discussion of the allowance and provision for credit losses for 2011, 2010, and 2009, see the section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” captioned “Asset Quality and Credit Risk Management” in the 2011 Annual Report to Stockholders (pages 49-57).

• The failure or instability of any of our significant counterparties could expose us to loss. The financial markets are characterized by extensive interconnections among financial institutions, including banks, broker/dealers, collective investment funds and insurance companies. As a result of these interconnections, we and many of our clients have significant counterparty exposure to other financial institutions. This counterparty exposure presents significant risks to us and to our clients because the failure or perceived weakness of any of our counterparties (or in some cases of our clients’ counterparties) has the potential to expose us to risk of loss. The recent instability of the financial markets has resulted in many financial institutions becoming significantly less creditworthy, and as a result we are exposed to increased counterparty risks, both as principal and in our capacity as agent for our clients. Changes in market perception of the financial strength of particular financial institutions can occur rapidly, is often based upon a variety of factors and is difficult to predict. In addition, as U.S. and non-U.S. governments have addressed the financial crisis in an evolving manner, the criteria for and manner of governmental support of financial institutions and other economically important sectors remain uncertain. If a significant individual counterparty defaults on an obligation to us, we could incur financial losses that materially adversely affect our business, our financial condition and our results of operations. Given the limited number of strong counterparties in the current market, we are not able to mitigate all of our and our clients’ counterparty credit risk. The consolidation of financial service firms and the failures of other financial institutions have increased the concentration of our counterparty risk.

Liquidity Risks

Northern Trust depends on access to capital markets to provide sufficient capital resources and other funds to meet our commitments and business needs and to accommodate the transaction and cash management needs of our clients.

• Many events or circumstances could adversely affect our capital costs, our ability to raise capital and, in turn, our ability to meet our commitments. Inadequate capital or the inability to meet our commitments could cause us to incur liability, restrict our ability to grow, or require us to take actions that would negatively affect our earnings. Among the developments that could have this effect are:

• A loss of confidence of debt purchasers, depositors or counterparties participating in the capital markets generally or in transactions with Northern Trust;

• Disruption in the market for debt-related securities; and

• A significant downgrade of any of our debt ratings. Credit agencies’ ratings are volatile and they often change their methodology. Credit ratings and outlooks are opinions on our creditworthiness and that of our obligations or securities, including long-term debt, short-term borrowings, preferred stock and other securities, including asset securitizations. Our credit ratings are subject to ongoing review by the ratings agencies and thus may change from time to time based on a number of factors, including our own financial strength, performance, prospects and operations as well as factors not under our control, such as ratings agency-specific criteria or frameworks for our industry or certain security types, which are subject to revision from time to time, and conditions affecting the financial services industry generally.

See the section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” captioned “Liquidity and Capital Resources” in the 2011 Annual Report to Stockholders (pages 43-46).

• Our success with large, complex clients can put strains on our balance sheet and impose substantial liquidity requirements. Our failure to successfully manage these balance sheet and liquidity issues would have a negative impact on our ability to meet client needs and grow.

• If the Bank or the other subsidiaries of the Corporation were unable to supply the Corporation with funds over time, the Corporation could be unable to meet its various obligations. The Corporation is a legal entity separate and distinct from the Bank and its other subsidiaries. It relies primarily on dividends paid to it by these subsidiaries to meet its obligations and to pay dividends to stockholders of the Corporation. There are various legal limitations on the extent to which the Bank and the other subsidiaries can supply funds to the Corporation by dividend or otherwise. See “Regulation and Supervision” in Item 1 of this Annual Report on Form 10-K.

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Regulation Risks

Virtually every aspect of Northern Trust’s business around the world is regulated, generally by governmental agencies that have broad supervisory powers and the ability to impose sanctions. In the United States, the Corporation, the Bank, and many of the Corporation’s other subsidiaries are heavily regulated by bank regulatory agencies at the federal and state levels. These regulations cover a variety of matters ranging from required capital levels to prohibited activities. They are specifically directed at protecting depositors, the federal deposit insurance fund and the banking system as a whole, not security holders. The Corporation and its subsidiaries are also heavily regulated by bank, securities and other regulators globally.

• Failure to comply with regulations can result in penalties and regulatory constraints that restrict our ability to grow or even conduct our business, or that reduce earnings. Regulatory violations or failure to meet formal or informal commitments made to regulators could generate penalties, require corrective actions that increase costs of conducting business, result in limitations on our ability to conduct business, restrict our ability to expand, or adversely impact our reputation. Failure to obtain necessary approvals from regulatory agencies on a timely basis could adversely affect proposed business opportunities and results of operations.

• Changes in regulatory capital requirements could result in reduced earnings. The Dodd-Frank Act, the implementation of Basel II and, if adopted by regulators, the implementation of Basel III, could lead to significantly higher capital requirements, higher capital charges and more restrictive leverage and liquidity ratios, and could impact the capital allocations to various business activities. The ultimate impact of the evolving capital and liquidity standards on us will depend on a number of factors, including the interpretation and implementation of capital and leverage requirements by the U.S. banking regulators.

• Compliance with evolving laws and regulations applicable to banks and other financial services companies may impact us in ways that are difficult to predict. Laws, regulations, economic sanctions, and their interpretation by regulatory agencies may change or generate enhanced scrutiny of particular activities. Those changes or enhanced emphasis can impose costs or otherwise affect our ability to compete successfully. The Dodd-Frank Act will impose many new regulatory requirements on banking institutions, the full impact of which are difficult to determine at this time. It is possible that additional legislative or regulatory requirements could be imposed or that the existing legislative or regulatory requirements could be reinterpreted in the U.S. or in other countries that could have an adverse impact on our business activities, our costs of compliance, and our revenues and earnings. Additionally, our understanding of legislative or regulatory requirements might be different than the enforcers’ understanding of the regulations, leading to breaches. Moreover, many regulatory initiatives, including anti-money laundering rules, anti-bribery laws, home mortgage lending and loan modification requirements, and other regulatory requirements or priorities, could increase compliance costs and legal risks, and could lead to financial and reputational damage in the event of a violation. The full scope and impact of possible enhanced regulatory and enforcement scrutiny and evolving legislation and regulation is uncertain and difficult to predict.

See “Regulation and Supervision” in Item 1 of this Annual Report on Form 10-K.

Litigation Risks

Our businesses involve the risk that clients or others may sue us, claiming that we have failed to perform under a contract or otherwise failed to carry out a duty owed to them. Our trust, custody and investment management businesses are particularly subject to this risk. This risk may be heightened during periods when credit, equity or other financial markets are deteriorating in value or are particularly volatile, or when clients or investors are experiencing losses. In addition, as a publicly-held company, we are subject to the risk of claims under the federal securities laws, and volatility in the stock prices of Northern Trust and other financial institutions increases this risk.

• These claims can result in significant liability or damage to our reputation, which could result in a loss. Even where we defend them successfully, these matters are often expensive to defend. These claims may also cause damage to our reputation among existing and prospective clients, or negatively impact the confidence of counterparties, rating agencies, and stockholders, and so negatively affect our earnings.

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• We may fail to set aside adequate reserves or otherwise underestimate our liability, with a negative effect on our earnings. We estimate our potential liability for pending and threatened claims, and record reserves when appropriate pursuant to U.S. GAAP, by evaluating the facts of particular claims under current judicial decisions and legislative and regulatory interpretations. This process is subject to the risk that a judge or jury could decide a case contrary to our evaluation of the law or the facts, and to the risk that a court could change or modify existing law on a particular issue important to the case. Earnings will be adversely affected to the extent that our reserves are not adequate.

Tax Risks

In the course of its business, Northern Trust is sometimes subject to challenges from U.S. and non-U.S. tax authorities regarding the amount of taxes due.

• These challenges can result in reduced earnings in a number of ways. These challenges may result in adjustments to the timing or amount of taxable income or deductions or the allocation of income among tax jurisdictions, all of which can require a greater provision for taxes or otherwise negatively affect earnings.

• Changes in tax laws and interpretations can negatively affect our earnings. Both U.S. and non-U.S. tax authorities from time to time issue new, or modify existing, tax laws and regulations. These authorities may also issue new, or modify existing, interpretations of those laws and regulations. These new laws, regulations or interpretations, and the Corporation’s actions taken in response to, or reliance upon, such changes in the tax laws may impact the Corporation’s tax position in a manner that results in lower earnings.

Strategic and Competitive Risks

We have grown through a combination of internal expansion and the acquisition of selected businesses or capabilities, and we intend to continue to do so. A variety of risks could interfere with these plans.

• Intervention of the U.S. and other governments in the financial services industry may heighten the challenges we face. In response to the recent disruptions in global financial markets, the U.S. government and other governments around the world have taken, and may take further, unprecedented actions designed to stabilize markets generally and strengthen financial institutions in particular. For example, the Dodd-Frank Act, among other things, created a Consumer Financial Protection Bureau with broad powers to regulate consumer financial services and products and a Financial Stability Oversight Council with regulatory authority over certain financial companies and activities. Governments also may take actions to significantly change the way financial institutions are regulated, either through new legislation, new regulations, new applications of existing regulations or a combination of all of these methods. These actions may involve increased intervention by such governments and regulators in the normal operation of our businesses and the businesses of our competitors in the financial services industry. Such intervention may impact the nature and level of competition in the industry in unpredictable ways. The nature, pace and volume of this government intervention, and our ability to react in a timely manner to regulatory developments, may adversely impact our ability to compete successfully and, in turn, negatively affect our earnings.

• If we do not successfully execute expansion plans, we will not grow as we have planned and our earnings growth will be negatively impacted. Failure to integrate a substantial acquisition would have an adverse effect on our business, as would the failure to execute successfully a significant internal expansion. The challenges arising from the integration of an acquired business or significant expansion of an existing business may include preserving valuable relationships with employees, clients, suppliers, and other business partners, as well as combining accounting, data processing and internal control systems.

• Failure to execute our other strategies could also negatively affect our prospects. Our growth also depends upon successful, consistent execution of our business strategies in each business unit. Recruiting and maintaining skilled personnel, and deploying such key talent in a manner that allows execution of these strategies is important, particularly in highly complex and rapidly growing areas of our business. A failure to do so, or to otherwise successfully carry out our plans, could negatively impact growth.

• We face a variety of competitive challenges that could negatively affect our ability to maintain satisfactory prices and grow our earnings. We provide a broad range of financial products and services in highly competitive markets, in which pricing can be a key competitive factor. Merger activity in the financial services industry,

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including mergers resulting from government intervention and the overall disruption in the financial services industry, continues to produce large, in some cases well-capitalized, and geographically-diverse companies that are capable of offering a wide array of financial products and services at competitive prices. In certain businesses, such as foreign exchange trading, electronic networks present a competitive challenge. Additionally, technological advances and the growth of internet-based commerce have made it possible for non-depository institutions to offer a variety of products and services competitive with certain areas of our business. Many of these non-traditional service providers have fewer regulatory constraints, and some have lower cost structures. These competitive pressures can negatively affect earnings and our ability to grow.

• Failure to attract and retain skilled people could negatively affect our prospects. Our success depends, in large part, on our ability to attract and retain key talent. Competition for the best people in most of our activities can be intense and we may not be able to hire and retain key personnel, including as a result of any restrictions on our compensation practices that may be imposed by governments or regulators. The unexpected loss of services of one or more of our key personnel could have a material adverse impact on our business because of their skills, knowledge of our market, years of industry experience and the difficulty of promptly finding qualified replacement personnel.

• We need to constantly invest in innovation, and the inability or failure to do so will negatively affect our businesses and earnings. Our success in this competitive environment requires consistent investment of capital and human resources in innovation. This investment is directed at generating new products and services, and adapting existing products and services to the evolving standards and demands of the marketplace. Among other things, investing in innovation helps us maintain a mix of products and services that keeps pace with our competitors and achieve acceptable margins. This investment also focuses on enhancing the delivery of our products and services in order to compete successfully for new clients or gain additional business from existing clients, and includes investment in technological innovation as well. Effectively identifying gaps or weaknesses in our product offerings also is important. Falling behind our competition in any of these areas could adversely affect our business opportunities, growth and earnings.

• Failure to understand or fully appreciate the risks associated with development or delivery of new product and service offerings will negatively affect our businesses and earnings. Our success in capitalizing on innovation depends, in part, on successful implementation of new product and service initiatives. Not only must we keep pace with competitors in the development of these new offerings, but we must accurately price them (as well as existing products) on a risk-adjusted basis and effectively deliver them to clients. Our identification of risks arising from new products and services, both in their design and implementation, and effective responses to those identified risks, including pricing, is key to our capitalizing on innovation and investment in new product and service offerings.

• Failure to adequately control our costs could negatively affect our ability to compete and thus reduce our earnings. Our success in controlling the costs and expenses of our business operations also impacts operating results. Another goal of innovation, as a part of our business strategy, is to produce efficiencies in operations that help reduce and control costs and expenses, including the costs of losses associated with operating risks attributable to servicing and managing financial assets.

• Our success with large, complex clients requires understanding of the market and legal, regulatory and accounting standards in new jurisdictions. Any failure to understand and deal with those appropriately could affect our growth prospects or negatively affect our reputation.

Reputation Risks

An important reason that clients bring their business to Northern Trust is that they believe we will serve them with high standards of ethics, performance, accuracy and compliance.

• Damage to our reputation can have a direct and negative effect on our ability to compete, grow and generate revenue. Damage to our reputation for delivery of a high level of service undermines the confidence of clients and prospects in our ability to serve them and so negatively affects our earnings.

• Maintaining our reputation is important in other key relationships that affect our businesses and our earnings. Damage to our reputation also could affect the confidence of clients, rating agencies, regulators,

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stockholders and the other parties in a wide range of transactions that are important to our business. Failure to maintain our reputation would ultimately have an adverse effect on our ability to manage our balance sheet or grow our business.

• Reputation risk has many facets that could negatively affect our businesses and earnings. Reputational risk is particularly significant in the current environment resulting from the financial crisis. The maintenance of our reputation depends not only on our success in controlling or mitigating the various risks described above, but also on our success in identifying and appropriately addressing issues that may arise in a broad range of areas. These issues include potential conflicts of interest and other ethical issues; anti-money laundering and anti-terrorist financing procedures; client personal information and privacy issues; effective evaluation of talent and deployment to adequately address complex and rapid growing areas of our businesses; efficiently integrating current staff with their new responsibilities and new staff that are not as familiar with the organization as retiring staff as seamlessly as possible; data security; record-keeping; regulatory investigations of Northern Trust or within the banking industry; and any litigation that arises from the failure or perceived failure of Northern Trust to comply with legal and regulatory requirements.

Many of the risks described above are discussed in more detail in the section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” captioned “Risk Management” in the 2011 Annual Report to Stockholders (pages 49-61), in the section of the “Notes to Consolidated Financial Statements” in the 2011 Annual Report to Stockholders captioned “Note 25 – Contingent Liabilities” (pages 111 and 112), and in the sections of “Item 1 – Business” of this Annual Report on Form 10-K captioned “Government Monetary and Fiscal Policies,” “Competition” and “Regulation and Supervision” (pages 3-14).

Additionally, the risks described above may cause actual results to differ from the Corporation’s current expectations of future events or future results indicated in what are considered “forward-looking statements” of the Corporation. Forward-looking statements and factors that may affect future results are also discussed in the section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” captioned “Factors Affecting Future Results” in the 2011 Annual Report to Stockholders (pages 62 and 63).

Item 1B—Unresolved Staff Comments

None.

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Item 2—Properties

The executive offices of the Corporation and the Bank are located at 50 South LaSalle Street in Chicago. This Bank-owned building is occupied by various divisions of Northern Trust’s business units. Adjacent to this building are two office buildings in which the Bank leases approximately 530,000 square feet of space principally for staff divisions of the business units. Financial services are provided by the Bank and other subsidiaries of the Corporation through a network of offices in 18 U.S. states, Washington D.C., and 16 international locations. The majority of those offices are leased. The Bank’s primary U.S. operations are located in four facilities: a 555,000 square foot leased facility at 801 South Canal Street in Chicago; 240,000 square feet at 231 South LaSalle Street in Chicago in a sublease arrangement that commenced in first quarter 2011; and two Bank-owned supplementary operations/data center buildings of 65,000 and 73,000 square feet located in the western suburbs of Chicago. A majority of the Bank’s London-based staff is located at Canary Wharf in London, where 188,000 square feet of office space is leased. Additional support and operations activity originates from Bangalore, where we lease approximately 330,000 square feet in two facilities. The Bank and the Corporation’s other subsidiaries operate from various other facilities in North America, Europe, the Asia Pacific region, and the Middle East, most of which are leased. In addition to the above-referenced properties, subsidiaries of the Corporation maintain a number of small operations classified as retirement home/limited access banking locations, back offices, or executive suites.

The Corporation believes that its owned and leased facilities are suitable and adequate for its business needs. For additional information relating to properties and lease commitments, refer to Note 9 – Buildings and Equipment and Note 10 – Lease Commitments on pages 94 and 95 of the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011, which information is incorporated herein by reference.

Item 3—Legal Proceedings

The information presented in Note 25 – Contingent Liabilities on pages 111 and 112 of the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011 is incorporated herein by reference.

Item 4—Removed and Reserved

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PART II

Item 5—Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The information called for by Item 5(a) relating to market price, dividend and related stockholder information is incorporated herein by reference to the section of the Consolidated Financial Statistics titled “Common Stock Dividend and Market Price” on page 130 of the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011.

Information regarding dividend restrictions of the Corporation’s banking subsidiaries is incorporated herein by reference to Note 30 – Restrictions on Subsidiary Dividends and Loans or Advances on pages 120 and 121 of the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011.

The following table shows certain information relating to the Corporation’s purchases of common stock for the three months ended December 31, 2011 pursuant to the Corporation’s share buyback program:

Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Plan (2)		Maximum Number of Shares That May Yet Be Purchased Under the Plan
October 1 – 31, 2011		3,804		38.94		3,804
November 1 – 30, 2011		—		—		—
December 1 – 31, 2011		27,973		40.29		27,973
Total (Fourth Quarter)		31,777		40.13		31,777		5,579,709

(1) Includes shares purchased from employees in connection with equity plan transactions such as the surrender of shares to pay an option exercise price or tax withholding.

(2) The Corporation’s current stock buyback program, announced October 27, 2006, authorizes the purchase of up to 12.0 million shares of the Corporation’s common stock. The program has no fixed expiration date.

Item 6—Selected Financial Data

The information called for by this item is incorporated herein by reference to the table titled “Summary of Selected Consolidated Financial Data” on page 18 of the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011.

Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information called for by this item is incorporated herein by reference to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 19 through 63 of the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011.

Item 7A— Quantitative and Qualitative Disclosures About Market Risk

The information called for by this item is incorporated herein by reference to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 57 through 60 of the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011.

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Item 8—Financial Statements and Supplementary Data

The following financial statements of the Corporation and its subsidiaries included in the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011, are incorporated herein by reference.

For Northern Trust Corporation and Subsidiaries:	2011 Annual Report Page(s)
Consolidated Balance Sheet—December 31, 2011 and 2010		66
Consolidated Statement of Income—Years Ended December 31, 2011, 2010, and 2009		67
Consolidated Statement of Comprehensive Income—Years Ended December 31, 2011, 2010, and 2009		67
Consolidated Statement of Changes in Stockholders’ Equity—Years Ended December  31, 2011, 2010, and 2009		68
Consolidated Statement of Cash Flows—Years Ended December 31, 2011, 2010, and 2009		69
For Northern Trust Corporation (Corporation only):
Condensed Balance Sheet—December 31, 2011 and 2010		125
Condensed Statement of Income—Years Ended December 31, 2011, 2010, and 2009		125
Consolidated Statement of Comprehensive Income—Years Ended December 31, 2011, 2010, and 2009		67
Consolidated Statement of Changes in Stockholders’ Equity—Years Ended December  31, 2011, 2010, and 2009		68
Condensed Statement of Cash Flows—Years Ended December 31, 2011, 2010, and 2009		126
Notes to Consolidated Financial Statements		70-126
Report of Independent Registered Public Accounting Firm		127

The section titled “Quarterly Financial Data” on page 130 of the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011, is incorporated herein by reference.

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Item 9—Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A—Controls and Procedures

The Corporation’s management, with the participation of the Corporation’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Corporation’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, such officers have concluded that, as of the end of the period covered by this report, the Corporation’s disclosure controls and procedures are effective in bringing to their attention on a timely basis material information relating to the Corporation (including its consolidated subsidiaries) required to be included in the Corporation’s periodic filings under the Exchange Act. There have been no changes in the Corporation’s internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15 and 15d-15 under the Exchange Act during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

The information called for by Item 9A relating to the report of management on the Corporation’s internal control over financial reporting and the attestation report of the Corporation’s independent registered public accounting firm is incorporated herein by reference to pages 64 and 65 of the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011.

Item 9B—Other Information

Not applicable.

PART III

Item 10—Directors, Executive Officers and Corporate Governance

The information called for by Item 10 relating to Directors and Nominees for election to the Board of Directors is incorporated herein by reference to the “Election of Directors” and “Information about the Nominees for Director” sections of the Corporation’s definitive 2012 Notice and Proxy Statement for the Annual Meeting of Stockholders to be held April 17, 2012. The information called for by Item 10 relating to Executive Officers is set forth in Part I of this Annual Report on Form 10-K.

The information called for by Item 10 relating to Regulation S-K, Item 405 disclosure of delinquent Form 3, 4 or 5 filers is incorporated by reference to the “Security Ownership of the Board and Management – Section 16(a) Beneficial Ownership Reporting Compliance” section of the Corporation’s definitive 2012 Notice and Proxy Statement for the Annual Meeting of Stockholders to be held April 17, 2012.

The information called for by Item 10 relating to Regulation S-K, Item 406 disclosure regarding the Corporation’s code of ethics applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions is incorporated by reference to the “Corporate Governance – Code of Business Conduct and Ethics” section of the Corporation’s definitive 2012 Notice and Proxy Statement for the Annual Meeting of Stockholders to be held April 17, 2012.

The information called for by Item 10 relating to Regulation S-K, Item 407(c)(3) disclosure of procedures by which security holders may recommend nominees to the Corporation’s board of directors is incorporated by reference to the “Corporate Governance – Director Nominations and Qualifications” section of the Corporation’s definitive 2012 Notice and Proxy Statement for the Annual Meeting of Stockholders to be held April 17, 2012. The information called for by Item 10 relating to Regulation S-K, Item 407(d)(4) and (d)(5) disclosure of the Corporation’s audit committee financial experts and identification of the Corporation’s audit committee is incorporated by reference to the “Board and Board Committee Information – Audit Committee” section of the Corporation’s definitive 2012 Notice and Proxy Statement for the Annual Meeting of Stockholders to be held April 17, 2012.

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Item 11—Executive Compensation

The information called for by this item is incorporated herein by reference to the following sections of the Corporation’s definitive 2012 Notice and Proxy Statement for the Annual Meeting of Stockholders to be held April 17, 2012: (a) the “Executive Compensation – Compensation and Benefits Committee Report” section, (b) the “Corporate Governance – Compensation Committee Interlocks and Insider Participation” section, and (c) the “Summary Compensation Table,” “Grants of Plan-Based Awards,” “Outstanding Equity Awards at Fiscal Year-End,” “Option Exercises and Stock Vested,” “Pension Benefits,” “Potential Payments upon Termination of Employment or a Change in Control,” and “Director Compensation” subsections of the “Compensation and Discussion Analysis” section.

Item 12—Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information called for by this item is incorporated herein by reference to the “Security Ownership of the Board and Management,” “Security Ownership of Certain Beneficial Owners,” and “Equity Compensation Plan Information” sections of the Corporation’s definitive 2012 Notice and Proxy Statement for the Annual Meeting of Stockholders to be held April 17, 2012. From time to time members of senior management and other executives of the Corporation may enter into stock trading plans under Rule 10b5-1, including plans that provide for the sale of Corporation stock. The Corporation undertakes no obligation to disclose the existence of any particular plan or any change, termination or expiration of any Rule 10b5-1 plan.

Item 13—Certain Relationships and Related Transactions, and Director Independence

The information called for by this item is incorporated herein by reference to the “Corporate Governance – Director Independence” and the “Corporate Governance – Related Person Transaction Policy” sections of the Corporation’s definitive 2012 Notice and Proxy Statement for the Annual Meeting of Stockholders to be held April 17, 2012.

Item 14—Principal Accountant Fees and Services

The information called for by this item is incorporated herein by reference to the “Ratification of Independent Registered Public Accounting Firm – Fees of Independent Public Accounting Firm” and “Ratification of Independent Registered Public Accounting Firm – Pre-Approval Policies and Procedures of the Audit Committee” sections of the Corporation’s definitive 2012 Notice and Proxy Statement for the Annual Meeting of Stockholders to be held April 17, 2012.

PART IV

Item 15—Exhibits and Financial Statement Schedules

Item 15(a)(1) and (2)—Northern Trust Corporation and Subsidiaries List of Financial Statements and Financial Statement Schedules

The following financial information is set forth in Item 1 for informational purposes only:

Financial Information of The Northern Trust Company (Bank only):

Unaudited Consolidated Balance Sheet—December 31, 2011 and 2010.

Unaudited Consolidated Statement of Income—Years Ended December 31, 2011, 2010, and 2009.

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The following consolidated financial statements of the Corporation and its subsidiaries are incorporated by reference into Item 8 from the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011:

Consolidated Financial Statements of Northern Trust Corporation and Subsidiaries:

Consolidated Balance Sheet—December 31, 2011 and 2010.

Consolidated Statement of Income—Years Ended December 31, 2011, 2010, and 2009.

Consolidated Statement of Comprehensive Income—Years Ended December 31, 2011, 2010, and 2009.

Consolidated Statement of Changes in Stockholders’ Equity—Years Ended December 31, 2011, 2010, and 2009.

Consolidated Statement of Cash Flows—Years Ended December 31, 2011, 2010, and 2009.

The following financial information is incorporated by reference into Item 8 from the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011:

Financial Statements of Northern Trust Corporation (Corporation only):

Condensed Balance Sheet—December 31, 2011 and 2010.

Condensed Statement of Income—Years Ended December 31, 2011, 2010, and 2009.

Consolidated Statement of Comprehensive Income—Years Ended December 31, 2011, 2010, and 2009.

Consolidated Statement of Changes in Stockholders’ Equity—Years Ended December 31, 2011, 2010, and 2009.

Condensed Statement of Cash Flows—Years Ended December 31, 2011, 2010, and 2009.

The Notes to Consolidated Financial Statements as of December 31, 2011 incorporated by reference into Item 8 from the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011, pertain to the Bank only information, consolidated financial statements and Corporation only information listed above.

The Report of Independent Registered Public Accounting Firm incorporated by reference into Item 8 from the Corporation’s Annual Report to Stockholders for the year ended December 31, 2011 pertains to the consolidated financial statements listed above.

Financial statement schedules have been omitted for the reason that they are not required or are not applicable.

Item 15(a)(3)—Exhibits

The exhibits listed on the Exhibit Index beginning on page 45 of this Annual Report on Form 10-K are filed herewith or are incorporated herein by reference to other filings.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 24, 2012

Northern Trust Corporation (Registrant)
By:	/s/ Frederick H. Waddell
	Frederick H. Waddell Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

Signature	Title
/s/    Frederick H. Waddell Frederick H. Waddell	Chairman and Chief Executive Officer
/s/    Michael G. O’Grady Michael G. O’Grady	Executive Vice President and Chief Financial Officer
/s/    Aileen B. Blake Aileen B. Blake	Executive Vice President and Controller (Chief Accounting Officer)

Frederick H. Waddell	Chairman and Director	)
Linda Walker Bynoe	Director	)
Nicholas D. Chabraja	Director	)
Susan Crown	Director	)
Dipak C. Jain	Director	)	/s/ Kelly R. Welsh
Robert W. Lane	Director	)	Kelly R. Welsh
Robert C. McCormack	Director	)	Attorney-in-Fact
Edward J. Mooney	Director	)
John W. Rowe	Director	)
Martin P. Slark	Director	)
David H. B. Smith, Jr.	Director	)
Enrique J. Sosa	Director	)
Charles A. Tribbett III	Director	)
			Date: February 24, 2012

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EXHIBIT INDEX

Exhibit Number	Description
3.1	Restated Certificate of Incorporation of Northern Trust Corporation, as amended to date (incorporated herein by reference to Exhibit 3.1 to the Corporation’s Current Report on Form 8-K dated April 18, 2006).
3.2	By-laws, as amended to date (incorporated herein by reference to Exhibit 3.1 to the Corporation’s Current Report on Form 8-K dated February 17, 2010).
4.1	Form of The Northern Trust Company’s Global Senior Bank Note (Fixed Rate) (incorporated herein by reference to Exhibit (4)(iii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011).
4.2	Form of The Northern Trust Company’s Global Senior Bank Note (Floating Rate) (incorporated herein by reference to Exhibit 4(iv) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011).
4.3	Form of The Northern Trust Company’s Global Subordinated Bank Note (Fixed Rate) (incorporated herein by reference to Exhibit (10)(i) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011).
4.4	Form of The Northern Trust Company’s Global Subordinated Bank Note (Floating Rate) (incorporated herein by reference to Exhibit 10(ii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011).
4.5	Junior Subordinated Indenture, dated as of January 1, 1997, between Northern Trust Corporation and The First National Bank of Chicago, as Debenture Trustee (incorporated herein by reference to Exhibit 4(a) to the Corporation’s Current Report on Form 8-K dated January 16, 1997).
4.6	Amended Certificate of Designations of Series A Junior Participating Preferred Stock, dated October 29, 1999 (incorporated herein by reference to Exhibit 4(vi) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999).
4.7	Fiscal Agency Agreement, dated March 11, 2005, by and among The Northern Trust Company as Issuer, Kredietbank S.A. Luxembourgeoise as Fiscal Agent, and Kredietbank S.A. Luxembourgeoise and Brown Shipley & Co. Limited as Paying Agents (incorporated herein by reference to Exhibit 4(i) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005).
4.8	Indenture, dated as of August 15, 2006, between Northern Trust Corporation and JPMorgan Chase Bank, N.A., as Trustee (incorporated herein by reference to Exhibit 4.1 to the Corporation’s Current Report on Form 8-K dated August 23, 2006).
4.9	Form of 5.30% Note due 2011 (incorporated herein by reference to Exhibit 4.2 to the Corporation’s Current Report on Form 8-K dated August 23, 2006).
4.10	Form of 5.20% Note due 2012 (incorporated herein by reference to Exhibit 4.1 to the Corporation’s Current Report on Form 8-K dated November 6, 2007).
4.11	Form of 5.50% Note due 2013 (incorporated herein by reference to Exhibit 4.1 to the Corporation’s Current Report on Form 8-K dated August 6, 2008).
4.12	Form of 4.625% Note due 2014 (incorporated herein by reference to Exhibit 4 to the Corporation’s Current Report on Form 8-K dated August 28, 2009).

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Exhibit Number	Description
4.13	Form of 3.450% Note due 2020 (incorporated herein by reference to Exhibit 4 to the Corporation’s Current Report on Form 8-K dated November 4, 2010).
4.14	Form of 3.375% Note due 2021 (incorporated herein by reference to Exhibit 4.1 to the Corporation’s Current Report on Form 8-K dated August 17, 2011).
10.1**	Deferred Compensation Plans Trust Agreement, dated May 11, 1998, between Northern Trust Corporation and Harris Trust and Savings Bank as Trustee (which, effective August 31, 1999, was succeeded by U.S. Trust Company, N.A. and effective June 1, 2009, was succeeded by Evercore Trust Company, N.A.) regarding the Supplemental Employee Stock Ownership Plan for Employees of The Northern Trust Company, the Supplemental Thrift-Incentive Plan for Employees of The Northern Trust Company, the Supplemental Pension Plan for Employees of The Northern Trust Company, and the Northern Trust Corporation Deferred Compensation Plan (incorporated herein by reference to Exhibit 10(iv) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998).
(i)**	Amendment, dated August 31, 1999 (incorporated herein by reference to Exhibit 10(iv) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999).
(ii)**	Amendment, dated as of May 16, 2000 (incorporated herein by reference to Exhibit 10(v) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000).
10.2**	Northern Trust Corporation Supplemental Employee Stock Ownership Plan, as amended and restated effective as of January 1, 2008 (incorporated herein by reference to Exhibit 10(vi) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
10.3**	Northern Trust Corporation Supplemental Thrift-Incentive Plan, as amended and restated effective as of January 1, 2008 (incorporated herein by reference to Exhibit 10(vii) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
(i)**	Amendment Number One, dated October 29, 2009 and effective January 1, 2010 (incorporated herein by reference to Exhibit (10)(vi)(1) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009).
10.4**	Northern Trust Corporation Supplemental Pension Plan, as amended and restated effective January 1, 2009 (incorporated herein by reference to Exhibit 10(viii) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
10.5**	Northern Trust Corporation Deferred Compensation Plan, as amended and restated effective as of January 1, 2008 (incorporated herein by reference to Exhibit 10(ix) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
10.6**	Amended 1992 Incentive Stock Plan (incorporated herein by reference to Exhibit (10)(iii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1997).
(i)**	Amendment, dated January 20, 1998 (incorporated herein by reference to Exhibit 10(i) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999).
(ii)**	Amendment, dated September 15, 1998 (incorporated herein by reference to Exhibit 10(ii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999).
(iii)**	Amendment, dated May 18, 1999 (incorporated herein by reference to Exhibit 10(iii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999).
(iv)**	Amendment, dated September 25, 2001 (incorporated herein by reference to Exhibit (10)(iii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001).

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Exhibit Number	Description
10.7**	Amended and Restated Northern Trust Corporation 2002 Stock Plan, effective as of January 1, 2008 (incorporated herein by reference to Exhibit 10(xiv) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
(i)**	Form of Stock Option Terms and Conditions (incorporated herein by reference to Exhibit 10(i) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009).
(ii)**	Form of Stock Award Agreement (incorporated herein by reference to Exhibit 10.2 to the Corporation’s Current Report on Form 8-K dated February 15, 2005).
(iii)**	Form of Stock Unit Award Terms and Conditions (incorporated herein by reference to Exhibit 10(ii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009).
(iv)**	Form of Addendum to Award Agreement (incorporated herein by reference to Exhibit 10.4 to the Corporation’s Current Report on Form 8-K dated February 15, 2005).
(v)**	Form of Non-Solicitation Agreement and Confidentiality Agreement (incorporated herein by reference to Exhibit 10(iii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009).
(vi)**	Form of Director Stock Agreement (incorporated herein by reference to Exhibit 10(i) to the Corporation’s Quarterly Report on Form 10-Q for the quarter year ended March 31, 2011).
(vii)**	Form of New Director Stock Agreement (incorporated herein by reference to Exhibit 10(iii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter year ended March 31, 2011).
(viii)**	Form of Advisory Director Cash-Settled Stock Unit Agreement (incorporated herein by reference to Exhibit 10(ii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter year ended March 31, 2011).
(ix)**	Form of Director Prorated Stock Agreement (incorporated herein by reference to Exhibit 10(iv) to the Corporation’s Quarterly Report on Form 10-Q for the quarter year ended March 31, 2011).
(x)**	Form of Performance Stock Unit Award (incorporated herein by reference to Exhibit 10(xiv)(8) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007).
(xi)**	2010 Form of Stock Option Terms and Conditions (incorporated herein by reference to Exhibit 10(x)(9) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009).
(xii)**	2010 Form of Restricted Stock Unit Terms and Conditions (incorporated herein by reference to Exhibit 10(x)(10) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009).
(xiii)**	2010 Form of Cash-Settled Stock Unit Award (incorporated herein by reference to Exhibit (10)(x)(11) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009).
(xiv)**	2010 Form of Cash-Settled Stock Unit Award (incorporated herein by reference to Exhibit (10)(x)(11) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009).
(xv)**	2010 Form of Director Stock Agreement (incorporated herein by reference to Exhibit 10(i) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010).

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Exhibit Number	Description
(xvi)**	2010 Form of Prorated Director Stock Agreement (incorporated herein by reference to Exhibit (10)(x)(13) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009).
(xvii)**	2010 Form of New Director Stock Agreement (incorporated herein by reference to Exhibit 10(ii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010).
(xviii)**	2011 Executive Stock Option Terms and Conditions (incorporated herein by reference to Exhibit 10(v) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011).
(xviii)**	2011 Stock Unit Award Terms and Conditions (incorporated herein by reference to Exhibit 10(vi) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011).
(xviii)**	2011 Cash-Settled Stock Unit Award Terms and Conditions (incorporated herein by reference to Exhibit 10(vii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011).
(xix)**	Form of 2012 Executive Stock Option Agreement – (1 of 3)
(xx)**	Form of 2012 Executive Stock Option Agreement – (2 of 3)
(xxi)**	Form of 2012 Executive Stock Option Agreement – (3 of 3)
(xxii)**	Form of 2012 Performance Stock Unit Agreement
(xxiii)**	Form of 2012 Restricted Stock Unit Agreement – (1 of 3)
(xxiv)**	Form of 2012 Restricted Stock Unit Agreement – (2 of 3)
(xxv)**	Form of 2012 Restricted Stock Unit Agreement – (3 of 3)
10.8**	Northern Trust Corporation Management Performance Plan, as amended and restated effective July 15, 2008 (incorporated herein by reference to Exhibit 10(i) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008).
10.9**	Northern Trust Corporation 1997 Stock Plan for Non-Employee Directors (incorporated herein by reference to Exhibit (10)(xix) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998).
10.10**	Northern Trust Corporation 1997 Deferred Compensation Plan for Non-Employee Directors, as amended and restated effective as of January 1, 2008 (incorporated herein by reference to Exhibit 10(xvii) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
(i)**	First Amendment, dated October 20, 2009 (incorporated herein by reference to Exhibit (10)(xiii)(1) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009).
10.11**	Form of Employment Security Agreement (Tier 1) (incorporated herein by reference to Exhibit (10)(ii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007).
10.11**	Revised Form of Employment Security Agreement (Tier 1) (incorporated herein by reference to Exhibit (10)(i) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011).

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Exhibit Number	Description
10.12**	Form of Employment Security Agreement (Tier 2) (incorporated herein by reference to Exhibit 10.I to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010).
10.13	Amended and Restated Trust Agreement of NTC Capital I, dated as of January 16, 1997, among Northern Trust Corporation, as Depositor, The First National Bank of Chicago, as Property Trustee, First Chicago Delaware, Inc., as Delaware Trustee, and the Administrative Trustees named therein (incorporated herein by reference to Exhibit 4(h) to the Corporation’s Current Report on Form 8-K dated January 16, 1997).
10.14	Guarantee Agreement, dated as of January 16, 1997, relating to NTC Capital I, by and between Northern Trust Corporation, as Guarantor, and The First National Bank of Chicago, as Guarantee Trustee (incorporated herein by reference to Exhibit 4(j) to the Corporation’s Current Report on Form 8-K dated January 16, 1997).
10.15	Amended and Restated Trust Agreement of NTC Capital II, dated as of April 25, 1997, among Northern Trust Corporation, as Depositor, The First National Bank of Chicago, as Property Trustee, First Chicago Delaware, Inc., as Delaware Trustee, and the Administrative Trustees named therein (incorporated herein by reference to Exhibit (4)(i) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1997).
10.16	Guarantee Agreement, dated as of April 25, 1997, relating to NTC Capital II, by and between Northern Trust Corporation, as Guarantor, and The First National Bank of Chicago, as Guarantee Trustee (incorporated herein by reference to Exhibit (4)(ii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1997).
10.17**	Northern Partners Incentive Plans
(i)**	North American Plan, as amended and restated effective as of November 1, 2010 (incorporated herein by reference to Exhibit (10)(xviii)(1) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010)
(ii)**	EMEA Plan, as amended and restated effective as of November 1, 2010 (incorporated herein by reference to Exhibit (10)(xviii)(2) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010)
(iii)**	APAC Plan, as amended and restated effective as of November 1, 2010 (incorporated herein by reference to Exhibit (10)(xviii)(3) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010).
10.18	Northern Trust Corporation Executive Financial Consulting and Tax Preparation Services Plan, as amended and restated effective January 1, 2008 (incorporated herein by reference to Exhibit 10 (xxxiii) to the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007).
10.19**	Form of Terms and Conditions – 2012 Long-Term Cash Incentive Award under the Long-Term Cash Incentive Plan
13	2011 Annual Report to Stockholders.
14	Code of Business Conduct and Ethics (incorporated herein by reverence to Exhibit 14.1 to the Corporation’s Current Report on Form 8-K dated July 19, 2011).
21	Subsidiaries of the Registrant.
23	Consent of Independent Registered Public Accounting Firm.

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Exhibit Number	Description
24	Powers of Attorney.
31	Rule 13a-14(a)/15d-14(a) Certification of CEO and CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99	Corporate Governance Guidelines (incorporated herein by reference to Exhibit 99.1 to the Corporation’s Current Report on Form 8-K dated February 17, 2010).
101	The following financial and related information from the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2011 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheet, (ii) the Consolidated Statement of Income, (iii) the Consolidated Statement of Comprehensive Income, (iv) the Consolidated Statement of Changes in Stockholders’ Equity, (v) the Consolidated Statement of Cash Flows, and (vi) Notes to Consolidated Financial Statements.

** Indicates a management contract or a compensatory plan or agreement

Upon written request to Rose A. Ellis, Secretary, Northern Trust Corporation, 50 South LaSalle Street, Chicago, Illinois 60603, copies of exhibits listed above are available to Northern Trust Corporation stockholders by specifically identifying each exhibit desired in the request. In addition, prior filings in which the exhibits listed above are included are available free of charge through our website www.northerntrust.com, if the filings were made on or after May 1, 1996. Information contained on the web site is not part of this report.

Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the Corporation hereby agrees to furnish the SEC, upon request, any instrument defining the rights of holders of long-term debt of the Corporation not filed as an exhibit herein. No such instrument authorizes long-term debt securities in excess of 10% of the total assets of the Corporation and its subsidiaries on a consolidated basis.

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Northern Trust Corporation

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EX-10.7.(XIX)

Exhibit 10.7 (xix)

TERMS AND CONDITIONS

2012 EXECUTIVE STOCK OPTION

UNDER THE AMENDED AND RESTATED

NORTHERN TRUST CORPORATION 2002 STOCK PLAN

1. Governing Documents. Your stock option grant is subject to the provisions of the Amended and Restated Northern Trust Corporation 2002 Stock Plan (the “Plan”), the stock option notice (the “Option Notice”) and this Terms and Conditions document (“Terms and Conditions”). The Option Notice and these Terms and Conditions constitute the “Stock Option Agreement” as defined in the Plan. If there is any conflict between the information in the Stock Option Agreement and the Plan, the Plan will govern. These Terms and Conditions apply to non-qualified stock options and incentive stock options issued under the Plan. Capitalized terms not defined in Stock Option Agreement shall have the meanings assigned to them in the Plan.

2. Amendments. The Committee may amend the terms of the Stock Option Agreement at any time, except that any amendment that adversely affects your rights in any material way requires your written consent. Notwithstanding anything in the Stock Option Agreement to the contrary, including without limitation the preceding sentence, in the event that the Committee determines that your stock option grant, or the performance by the Corporation of any of its obligations under the Stock Option Agreement, would violate any applicable law, your stock options shall be forfeited to the Corporation and cancelled, and the Corporation shall have no obligation to honor the exercise of your stock options by you or your Beneficiary.

3. Exercise Limitations. Your stock option is exercisable from and after the vesting date(s) set forth on the Option Notice until the ten (10)-year anniversary of the date the option was granted (the “Expiration Date”), except as provided below:

• Change in Control. Your stock option (whether vested or unvested) becomes vested and exercisable from and after the date of a Change in Control of the Corporation. Please see “Other Termination of Employment” below for additional provisions relating to a Change in Control.

• Death. If you die while employed, your stock option (whether vested or unvested) becomes vested and exercisable as of the date of your death and may be exercised by your beneficiary at any time until the earlier of (a) five (5) years following your death and (b) the Expiration Date. If you do not name a beneficiary (or your beneficiary dies before you), your stock option will pass to the following persons in the order indicated:

– Your spouse; if none, then,

– Your children (in equal amounts); if none, then,

Management Group

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– Your parents (in equal amounts); if none, then,

– Your brothers and sisters (in equal amounts); if none, then,

– Your estate.

• Retirement. If you retire, your stock option continues to vest in accordance with its terms, and, once vested, it may be exercised at any time until the earlier of (a) five (5) years following the effective date of your retirement and (b) the Expiration Date. The terms “retire” and “retirement” mean retirement occurring by reason of your having qualified for a Normal, Early, or Postponed Retirement Pension under The Northern Trust Company Pension Plan. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination of employment due to retirement pursuant to the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”) relating to incentive stock options.

• Special Circumstances. If (a) on the date of grant, you are a Management Group member, and (b) on the date of your termination of employment, you are age 55 or older and have a minimum of 10 years of employment with the Corporation and its Subsidiaries, then your stock option continues to vest in accordance with its terms, and, once vested, it may be exercised at any time until the earlier of (i) five (5) years following the date of your termination of employment and (ii) the Expiration Date. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination of employment under the described circumstances pursuant to the applicable provisions of the Code relating to incentive stock options.

• Disability. If, while employed, you incur a “disability” that continues for a period of 12 months in accordance with The Northern Trust Company’s Managed Disability Program you are deemed “Disabled” on the last day of such 12-month period, at which date you are terminated from the Plan. Your stock option (whether vested or unvested) becomes vested and exercisable upon the date you are deemed Disabled and may be exercised at any time until the earlier of (a) five (5) years following the date you are deemed Disabled and (b) the Expiration Date. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination from the Plan, pursuant to the applicable provisions of the Code relating to incentive stock options.

• Severance. If your employment is terminated under circumstances that entitle you to severance benefits under the Northern Trust Corporation Severance Plan (the “Severance Plan”), and you have timely executed and not revoked a settlement agreement, waiver and release under the Severance Plan (a “Release”), your stock option (whether vested or unvested) becomes vested and exercisable as of the date of your termination of employment and may be exercised at any time until the earlier of (a) one-hundred and eighty (180) days following your

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termination of employment under the Severance Plan and (b) the Expiration Date. If you are eligible for a Normal, Early, or Postponed Retirement Pension upon termination of employment under the Severance Plan, your stock option (whether vested or unvested) becomes vested and exercisable as of the date of your termination of employment and may be exercised at any time until the earlier of (a) five (5) years following the effective date of your retirement and (b) the Expiration Date. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination of employment in these circumstances pursuant to the applicable provisions of the Code relating to incentive stock options.

• Government Employment. If (i) your employment with the Corporation and its Subsidiaries terminates prior to a vesting date, and (A) you are eligible to “retire,” as defined above, at the time of your termination of employment, or (B) you are a Management Group member on the date of the grant of the stock options and on your date of termination of employment you are 55 years or older with a minimum of 10 years of employment with the Corporation and its Subsidiaries; and (ii) if (A) such termination of employment constitutes a Government Service Termination, or (B) after your termination of employment and prior to a vesting date, you accept Government Employment; then (iii) on your Government Service Termination date or the date of commencement of your Government Employment, as applicable, you will be 100% vested in your then outstanding stock options, provided that you meet the following conditions: (A) you provide the Committee with satisfactory evidence that, as a result of your Government Employment, the divestiture of any continued equity interest in the Corporation is reasonably necessary (I) for you as a Federal officer or employee in the executive branch to comply with an ethics agreement with the Federal government, or (II) for you to avoid the violation of U.S. federal, state or local or non-U.S. ethics law or conflicts of interest law applicable to you in your Government Employment, and (B) you execute and return no later than your Government Service Termination date or the date of commencement of your Government Employment, as applicable, an agreement satisfactory to the Committee acknowledging the Corporation’s right to recover (and your obligation to repay) under Paragraph 8 of the Terms and Conditions, any gain realized in connection with the stock options in the event that you are determined to have engaged in conduct or activity described in Paragraph 8. If you become vested in your stock options under this paragraph, all of your outstanding stock options will be exercisable for (x) the 90 day period after the earlier of your Government Service Termination or the commencement of your Government Employment, as applicable, or (y) the Expiration Date, if earlier. Thereafter, your unexercised stock options, if any, shall be forfeited.

For purposes of these Terms and Conditions, “Government Service Termination” means your termination of employment with the Corporation and its Subsidiaries due to or in connection with your immediate commencement of Government Employment.

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For purposes of these Terms and Conditions, “Government Employment” refers to employment at any U.S. Federal, state or local government, any non-U.S. government, any supranational or international organization, any self-regulatory organization, or any agency or instrumentality of any such government or organization, or any other employer determined to be a Government Employer by the Committee.

• Other Termination of Employment. Except as set forth below, if (a) your employment by the Corporation and its Subsidiaries terminates for any reason other than death, retirement or a severance under the Severance Plan for which you have executed and not revoked a Release, (b) you are not terminated from the Plan due to disability pursuant to the “Disability” provisions described above, and (c) you were not both a Management Group member on the date of grant and age 55 with 10 years of employment with the Corporation and its Subsidiaries on your date of termination, your stock option, if and to the extent vested as of the date of your termination of employment, may be exercised at any time until the earlier of (i) three (3) months following the date of your termination of employment and (ii) the Expiration Date. Your stock option, if and to the extent unvested as of the date of your termination of employment, expires as of the date of your termination of employment. A termination of employment shall not be deemed to occur by reason of your transfer between the Corporation and a Subsidiary of the Corporation or between two Subsidiaries of the Corporation. If you meet the criteria of each of clauses (a), (b), and (c), above, the post-termination exercise provision of this sub-paragraph shall apply to you if you become a consultant to the Corporation or a Subsidiary of the Corporation upon termination of your employment from the Corporation or a Subsidiary of the Corporation. Notwithstanding the foregoing, if, within the two-year period following a Change in Control, you meet the criteria of each of clauses (a), (b), and (c) above, then (except as may otherwise be specified in an Employment Security Agreement between you and the Corporation), your stock option, to the extent vested, may be exercised at any time until the earlier of (I) six (6) months following the date of your termination of employment, and (II) the Expiration Date; provided, however, you should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination of employment in connection with a Change of Control pursuant to the applicable provisions of the Code relating to incentive stock options.

4. Re-Employment. If, after your termination of employment, you are re-employed by the Corporation or one of its Subsidiaries, upon your return you will be considered a new hire for purposes of the Plan. Options that previously expired upon your termination of employment remain expired and are not reinstated.

5. Exercise of Options.

• How to Exercise. You may exercise your stock option, in any manner described in Section 6(e) of the Plan, through the H. R. Service Center at (800) 807-0302 or online through My Place. Inquiry and modeling capabilities are also available online.

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• Black-out Period. Due to federal securities law concerns, the Corporation has a “black-out” policy which restricts any exercise of your stock option around quarterly corporate earnings announcements. Please refer to the “Statement of Confidential Information and Securities Trading” for further information about the Corporation’s black-out policy. You may access this document online through My Passport. From the homepage click on Corporate-wide Services, and then Corporate Policies.

6. Nontransferability. Your stock option is not transferable other than as provided in these Terms and Conditions. Your stock option (whether a non-qualified stock option or an incentive stock option) is exercisable, during your lifetime, only by you or your personal representative.

7. Withholding/Delivery of Shares. Delivery of shares of Common Stock upon exercise of your stock option is subject to the withholding of all applicable federal, state, and local taxes. At your election, subject to such rules and limitations as may be established by the Committee, such withholding obligations shall be satisfied: (i) by cash payment by you; (ii) through the surrender of shares of Common Stock which you already own that are acceptable to the Committee; or (iii) through surrender of shares of Common Stock to which you are otherwise entitled under the Plan, provided, however, that such shares under this clause (iii) may be used to satisfy not more than the Corporation’s minimum statutory withholding obligation (based on minimum statutory withholding rates for Federal and state tax purposes, including payroll taxes, that are applicable to such taxable income). Payment of federal income taxes may be accomplished through a combination of withholding of shares and delivery of previously acquired shares. The Corporation may delay the issuance or delivery of shares of Common Stock if the Corporation reasonably anticipates that such issuance or delivery will violate federal securities laws or other applicable law, provided that the issuance or delivery is made at the earliest date at which the Corporation reasonably anticipates that such issuance or delivery will not cause such violation. As an option holder, you have no interest in the shares covered by the option until the shares are actually issued.

8. Forfeitures and Recoupments.

(a) Engaging in Restricted Activity Without Written Consent of the Corporation. Notwithstanding anything to the contrary in these Terms and Conditions, if you, without the written consent of the Corporation:

(i) at any time after the date of these Terms and Conditions, have divulged, directly or indirectly, or used, for your own or another’s benefit, any Confidential Information;

(ii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after you cease to be employed by the

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Corporation and its Subsidiaries for any reason, have Solicited, or assisted in the Solicitation of, any Client or Prospective Client (provided, however, that this clause (ii) shall not apply to your Solicitation of any Client or Prospective Client with whom you had a business relationship prior to the start of your employment with the Corporation and its Subsidiaries, provided no Confidential Information, directly or indirectly, is used in such Solicitation); or

(iii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after you cease to be employed by the Corporation and its Subsidiaries for any reason, have solicited, encouraged, advised, induced or caused any employee of the Corporation or any of its Subsidiaries to terminate his or her employment with the Corporation or any of its Subsidiaries, or provided any assistance, encouragement, information, or suggestion to any person or entity regarding the solicitation or hiring of any employee of the Corporation or any of its Subsidiaries;

your then outstanding stock options (whether vested or unvested) shall be forfeited to the Corporation by notice from the Committee in writing to you within a reasonable period of time after the Committee acquires knowledge of your violation of this Paragraph 8(a). In the event that your stock options are forfeited pursuant to the preceding sentence or the provisions of Paragraph 8(b), below, the Corporation shall have no obligation to honor the exercise of such stock options by you or your beneficiary.

In addition, in the event of any action by you to which clauses (i), (ii) or (iii), above, apply, the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any exercise by you or payment or delivery to you with respect to any stock options occurring within twelve (12) months prior to, or at any time following, the date of your termination of employment for any reason (including but not limited to termination of employment due to Retirement or Disability), and recoup any “gain realized” in connection with such stock options as described in Paragraph 8(c) below.

(b) Misconduct and Restatement of Financials. Consistent with the Corporation’s risk-mitigation strategies for its compensation programs, and notwithstanding any other provision in these Terms and Conditions, in the event that:

(i) the Corporation is required to restate its financial statements filed with the U.S. Securities and Exchange Commission on Form 10-Q or Form 10-K or re-file quarterly financial data with the U.S. Federal Reserve due to any reason other than changes in accounting policy or applicable law (a “Restatement”), and the Committee determines that such Restatement resulted, in whole or in material part, from your (A) intentionally engaging in conduct that resulted in a material weakness in internal control over

6

financial reporting and was inconsistent with the standards of conduct of the business judgment rule, as defined below, or (B) personally and knowingly engaging in practices that materially contributed to circumstances that resulted in a material weakness in internal control over financial reporting and that were inconsistent with the standards of conduct of the business judgment rule; or

(ii) the Committee determines that you have engaged in conduct that is grounds for termination for Cause and is inconsistent with the standards of conduct of the business judgment rule (“Misconduct”);

then the Committee shall review all of your then outstanding stock options (whether vested or unvested), and all stock options with respect to which there has been an exercise by you or payment or delivery to you within the 36-month period immediately preceding the date of the Restatement, or during the period after the date of the Misconduct, as applicable.

In the event of a Restatement described in clause (i), the Committee shall declare your then outstanding, vested stock options that would not have become vested based on accurate financial data or restated results to be forfeited to the Corporation by notice in writing to you within a reasonable period of time after the date of the Restatement, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any exercise by you or payment or delivery to you with respect to any stock options occurring within 36 months prior to the date of the Restatement that would not have become vested or been paid based on accurate financial data or restated results, and recoup any gain realized in connection with such stock options as described in Paragraph 8(c), below. In the event of Misconduct described in clause (ii) (other than any actions included in Paragraph 8(a) or clause (i) of this Paragraph 8(b)), the Committee shall declare your then outstanding stock options (whether vested or unvested) to be forfeited to the Corporation by notice in writing to you within a reasonable period of time after the date of the discovery of the Misconduct, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation and as permitted by applicable law, rescind any exercise by you or payment or delivery to you with respect to any stock options occurring after the date such Misconduct occurred and recoup any gain realized in connection with such stock options as described in Paragraph 8(c), below

Your actions satisfy the “business judgment rule” if such actions were taken in good faith, in a manner that an ordinarily prudent person would act under similar circumstances, and in the interests of the Corporation. In interpreting and applying the preceding sentence, the Committee shall use as a guide the principles of the business judgment rule as construed by the Delaware courts in applying the Delaware Corporation Act.

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(c) Rescission and Recoupment. Upon the rescission, pursuant to the provisions of Paragraph 8(a) or 8(b), of any exercise by you or payment or delivery to you with respect to any stock options, the Corporation shall be entitled to recoup any “gains realized” in connection with such stock options, in such manner and on such terms and conditions as the Committee shall require. “Gains realized” shall include (i) the amount of any cash distributed to you with respect to, (ii) any cash or shares of the Corporation’s Common Stock (or proceeds attributable to the sale thereof ) paid or delivered in settlement of, and (iii) any other amounts determined by the Committee to have been realized in connection with, such rescinded stock options. If you fail to repay any such amounts to the Corporation within 60 days after receipt of written demand, the Corporation shall be entitled, subject to applicable law and the requirements of Internal Revenue Code Section 409A, to deduct from any amounts the Corporation owes you from time to time the amount of all gains realized, or to sue for repayment of such amounts, or to pursue both remedies.

9. No Contract of Employment. The option grant shall not be deemed to obligate the Corporation or any of its Subsidiaries to continue your employment for any particular period, nor is employment guaranteed for the length of the vesting schedule set forth in the Option Notice.

10. Taxes. Please refer to the “Summary Description of the Amended and Restated Northern Trust Corporation 2002 Stock Plan” for a description of the U.S. federal income tax consequences affecting non-qualified stock options and incentive stock options.

11. Interpretation and Applicable Law. Any interpretation by the Committee of the terms and conditions of the Plan, the Stock Option Agreement or any guidelines shall be final. All questions pertaining to the validity, construction and administration of the Plan or the Stock Option Agreement, and all claims or causes of action arising under, relating to, or in connection with, the Plan or the Stock Option Agreement shall be determined in conformity with the laws of the State of Delaware, without regard to the conflict of law provisions of any state.

12. Definitions. As provided above, Capitalized terms not defined in the Stock Option Agreement shall have the meanings assigned to them in the Plan. For purposes of the Stock Option Agreement:

(a) “Cause” means (i) your conviction of or no contest plea with respect to bribery, extortion, embezzlement, fraud, grand larceny, or any felony involving abuse or misuse of your position to seek or obtain an illegal or personal gain at the expense of the Corporation, or similar crime, or conspiracy to commit any such crimes or attempt to commit any such crimes; or (ii) your misconduct that causes material harm to the Corporation.

(b) “Client” means any person or entity with which the Corporation, or any of its Subsidiaries, did business and with which you had contact, or about which you had access to Confidential Information, during the last twelve (12) months of your employment.

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(c) “Competitive Service or Product” means any service or product: (i) that is substantially similar to or competitive with any service or product that you created or provided, or of which you assisted in the creation or provision, during your employment by the Corporation or any of its Subsidiaries; or (ii) about which you had access to Confidential Information during your employment by the Corporation or any of its Subsidiaries.

(d) “Confidential Information” means any trade secrets or other significant proprietary information, including, but not limited to, any client information (for example, client lists, information about client accounts, borrowings, and current or proposed transactions), any internal analysis of clients, marketing strategies, financial reports or projections, business or other plans, data, procedures, methods, computer data or system program or design, devices, lists, tools, or compilation, which relate to the present or planned business of the Corporation or any of its Subsidiaries and which has not been made generally known to the public by authorized representatives of the Corporation.

(e) “Prospective Client” means any person or entity to which the Corporation, or any of its Subsidiaries, provided, or from which the Corporation, or any of its Subsidiaries received, a proposal, bid, or written inquiry (general advertising or promotional materials and mass mailings excepted) and with which you had contact, or about which you had access to Confidential Information, during the last twelve (12) months of your employment.

(f) “Solicit” and “Solicitation” (with respect to Clients or Prospective Clients) mean directly or indirectly, and without the Corporation’s written authorization, to invite, encourage, request, or induce (or to assist another to invite, encourage, request or induce) any Client or Prospective Client of the Corporation, or any of its Subsidiaries, to: (i) surrender, redeem or terminate a product, service or relationship with the Corporation, or any of its Subsidiaries; (ii) obtain any Competitive Service or Product from you or any third party; or (iii) transfer a product, service or relationship from the Corporation, or any of its Subsidiaries, to you or any third party.

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EX-10.7.(XX)

Exhibit 10.7 (xx)

TERMS AND CONDITIONS

2012 EXECUTIVE STOCK OPTION

UNDER THE AMENDED AND RESTATED

NORTHERN TRUST CORPORATION 2002 STOCK PLAN

1. Governing Documents. Your stock option grant is subject to the provisions of the Amended and Restated Northern Trust Corporation 2002 Stock Plan (the “Plan”), the stock option notice (the “Option Notice”) and this Terms and Conditions document (“Terms and Conditions”). The Option Notice and these Terms and Conditions constitute the “Stock Option Agreement” as defined in the Plan. If there is any conflict between the information in the Stock Option Agreement and the Plan, the Plan will govern. These Terms and Conditions apply to non-qualified stock options and incentive stock options issued under the Plan. Capitalized terms not defined in Stock Option Agreement shall have the meanings assigned to them in the Plan.

2. Amendments. The Committee may amend the terms of the Stock Option Agreement at any time, except that any amendment that adversely affects your rights in any material way requires your written consent. Notwithstanding anything in the Stock Option Agreement to the contrary, including without limitation the preceding sentence, in the event that the Committee determines that your stock option grant, or the performance by the Corporation of any of its obligations under the Stock Option Agreement, would violate any applicable law, your stock options shall be forfeited to the Corporation and cancelled, and the Corporation shall have no obligation to honor the exercise of your stock options by you or your Beneficiary.

3. Exercise Limitations. Your stock option is exercisable from and after the vesting date(s) set forth on the Option Notice until the ten (10)-year anniversary of the date the option was granted (the “Expiration Date”), except as provided below:

• Change in Control. Your stock option (whether vested or unvested) becomes vested and exercisable from and after the date of a Change in Control of the Corporation. Please see “Other Termination of Employment” below for additional provisions relating to a Change in Control.

• Death. If you die while employed, your stock option (whether vested or unvested) becomes vested and exercisable as of the date of your death and may be exercised by your beneficiary at any time until the earlier of (a) five (5) years following your death and (b) the Expiration Date. If you do not name a beneficiary (or your beneficiary dies before you), your stock option will pass to the following persons in the order indicated:

– Your spouse; if none, then,

– Your children (in equal amounts); if none, then,

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– Your parents (in equal amounts); if none, then,

– Your brothers and sisters (in equal amounts); if none, then,

– Your estate.

• Retirement. If you retire, your stock option continues to vest in accordance with its terms, and, once vested, it may be exercised at any time until the earlier of (a) five (5) years following the effective date of your retirement and (b) the Expiration Date. The terms “retire” and “retirement” mean retirement occurring by reason of your having qualified for a Normal, Early, or Postponed Retirement Pension under The Northern Trust Company Pension Plan. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination of employment due to retirement pursuant to the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”) relating to incentive stock options.

• Special Circumstances. If (a) on the date of grant, you are a Management Group member, and (b) on the date of your termination of employment, you are age 55 or older and have a minimum of 10 years of employment with the Corporation and its Subsidiaries, then your stock option continues to vest in accordance with its terms, and, once vested, it may be exercised at any time until the earlier of (i) five (5) years following the date of your termination of employment and (ii) the Expiration Date. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination of employment under the described circumstances pursuant to the applicable provisions of the Code relating to incentive stock options.

• Disability. If, while employed, you incur a “disability” that continues for a period of 12 months in accordance with The Northern Trust Company’s Managed Disability Program you are deemed “Disabled” on the last day of such 12-month period, at which date you are terminated from the Plan. Your stock option (whether vested or unvested) becomes vested and exercisable upon the date you are deemed Disabled and may be exercised at any time until the earlier of (a) five (5) years following the date you are deemed Disabled and (b) the Expiration Date. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination from the Plan, pursuant to the applicable provisions of the Code relating to incentive stock options.

• Severance. If your employment is terminated under circumstances that entitle you to severance benefits under the Northern Trust Corporation Severance Plan (the “Severance Plan”), and you have timely executed and not revoked a settlement agreement, waiver and release under the Severance Plan (a “Release”), your stock option (whether vested or unvested) becomes vested and exercisable as of the date of your termination of employment and may be exercised at any time until the earlier of (a) one-hundred and eighty (180) days following your

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termination of employment under the Severance Plan and (b) the Expiration Date. If you are eligible for a Normal, Early, or Postponed Retirement Pension upon termination of employment under the Severance Plan, your stock option (whether vested or unvested) becomes vested and exercisable as of the date of your termination of employment and may be exercised at any time until the earlier of (a) five (5) years following the effective date of your retirement and (b) the Expiration Date. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination of employment in these circumstances pursuant to the applicable provisions of the Code relating to incentive stock options.

• Other Termination of Employment. Except as set forth below, if (a) your employment by the Corporation and its Subsidiaries terminates for any reason other than death, retirement or a severance under the Severance Plan for which you have executed and not revoked a Release, (b) you are not terminated from the Plan due to disability pursuant to the “Disability” provisions described above, and (c) you were not both a Management Group member on the date of grant and age 55 with 10 years of employment with the Corporation and its Subsidiaries on your date of termination, your stock option, if and to the extent vested as of the date of your termination of employment, may be exercised at any time until the earlier of (i) three (3) months following the date of your termination of employment and (ii) the Expiration Date. Your stock option, if and to the extent unvested as of the date of your termination of employment, expires as of the date of your termination of employment. A termination of employment shall not be deemed to occur by reason of your transfer between the Corporation and a Subsidiary of the Corporation or between two Subsidiaries of the Corporation. If you meet the criteria of each of clauses (a), (b), and (c), above, the post-termination exercise provision of this sub-paragraph shall apply to you if you become a consultant to the Corporation or a Subsidiary of the Corporation upon termination of your employment from the Corporation or a Subsidiary of the Corporation. Notwithstanding the foregoing, if, within the two-year period following a Change in Control, you meet the criteria of each of clauses (a), (b), and (c) above, then (except as may otherwise be specified in an Employment Security Agreement between you and the Corporation), your stock option, to the extent vested, may be exercised at any time until the earlier of (I) six (6) months following the date of your termination of employment, and (II) the Expiration Date; provided, however, you should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination of employment in connection with a Change of Control pursuant to the applicable provisions of the Code relating to incentive stock options.

4. Re-Employment. If, after your termination of employment, you are re-employed by the Corporation or one of its Subsidiaries, upon your return you will be considered a new hire for purposes of the Plan. Options that previously expired upon your termination of employment remain expired and are not reinstated.

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5. Exercise of Options.

• How to Exercise. You may exercise your stock option, in any manner described in Section 6(e) of the Plan, through the H. R. Service Center at (800) 807-0302 or online through My Place. Inquiry and modeling capabilities are also available online.

• Black-out Period. Due to federal securities law concerns, the Corporation has a “black-out” policy which restricts any exercise of your stock option around quarterly corporate earnings announcements. Please refer to the “Statement of Confidential Information and Securities Trading” for further information about the Corporation’s black-out policy. You may access this document online through My Passport. From the homepage click on Corporate-wide Services, and then Corporate Policies.

6. Nontransferability. Your stock option is not transferable other than as provided in these Terms and Conditions. Your stock option (whether a non-qualified stock option or an incentive stock option) is exercisable, during your lifetime, only by you or your personal representative.

7. Withholding/Delivery of Shares. Delivery of shares of Common Stock upon exercise of your stock option is subject to the withholding of all applicable federal, state, and local taxes. At your election, subject to such rules and limitations as may be established by the Committee, such withholding obligations shall be satisfied: (i) by cash payment by you; (ii) through the surrender of shares of Common Stock which you already own that are acceptable to the Committee; or (iii) through surrender of shares of Common Stock to which you are otherwise entitled under the Plan, provided, however, that such shares under this clause (iii) may be used to satisfy not more than the Corporation’s minimum statutory withholding obligation (based on minimum statutory withholding rates for Federal and state tax purposes, including payroll taxes, that are applicable to such taxable income). Payment of federal income taxes may be accomplished through a combination of withholding of shares and delivery of previously acquired shares. The Corporation may delay the issuance or delivery of shares of Common Stock if the Corporation reasonably anticipates that such issuance or delivery will violate federal securities laws or other applicable law, provided that the issuance or delivery is made at the earliest date at which the Corporation reasonably anticipates that such issuance or delivery will not cause such violation. As an option holder, you have no interest in the shares covered by the option until the shares are actually issued.

8. Forfeitures and Recoupments.

(a) Engaging in Restricted Activity Without Written Consent of the Corporation. Notwithstanding anything to the contrary in these Terms and Conditions, if you, without the written consent of the Corporation:

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(i) at any time after the date of these Terms and Conditions, have divulged, directly or indirectly, or used, for your own or another’s benefit, any Confidential Information;

(ii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after you cease to be employed by the Corporation and its Subsidiaries for any reason, have Solicited, or assisted in the Solicitation of, any Client or Prospective Client (provided, however, that this clause (ii) shall not apply to your Solicitation of any Client or Prospective Client with whom you had a business relationship prior to the start of your employment with the Corporation and its Subsidiaries, provided no Confidential Information, directly or indirectly, is used in such Solicitation); or

(iii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after you cease to be employed by the Corporation and its Subsidiaries for any reason, have solicited, encouraged, advised, induced or caused any employee of the Corporation or any of its Subsidiaries to terminate his or her employment with the Corporation or any of its Subsidiaries, or provided any assistance, encouragement, information, or suggestion to any person or entity regarding the solicitation or hiring of any employee of the Corporation or any of its Subsidiaries;

your then outstanding stock options (whether vested or unvested) shall be forfeited to the Corporation by notice from the Committee in writing to you within a reasonable period of time after the Committee acquires knowledge of your violation of this Paragraph 8(a). In the event that your stock options are forfeited pursuant to the preceding sentence or the provisions of Paragraph 8(b), below, the Corporation shall have no obligation to honor the exercise of such stock options by you or your beneficiary.

In addition, in the event of any action by you to which clauses (i), (ii) or (iii), above, apply, the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any exercise by you or payment or delivery to you with respect to any stock options occurring within twelve (12) months prior to, or at any time following, the date of your termination of employment for any reason (including but not limited to termination of employment due to Retirement or Disability), and recoup any “gain realized” in connection with such stock options as described in Paragraph 8(c) below.

(b) Misconduct and Restatement of Financials. Consistent with the Corporation’s risk-mitigation strategies for its compensation programs, and notwithstanding any other provision in these Terms and Conditions, in the event that:

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(i) the Corporation is required to restate its financial statements filed with the U.S. Securities and Exchange Commission on Form 10-Q or Form 10-K or re-file quarterly financial data with the U.S. Federal Reserve due to any reason other than changes in accounting policy or applicable law (a “Restatement”), and the Committee determines that such Restatement resulted, in whole or in material part, from your (A) intentionally engaging in conduct that resulted in a material weakness in internal control over financial reporting and was inconsistent with the standards of conduct of the business judgment rule, as defined below, or (B) personally and knowingly engaging in practices that materially contributed to circumstances that resulted in a material weakness in internal control over financial reporting and that were inconsistent with the standards of conduct of the business judgment rule; or

(ii) the Committee determines that you have engaged in conduct that is grounds for termination for Cause and is inconsistent with the standards of conduct of the business judgment rule (“Misconduct”);

then the Committee shall review all of your then outstanding stock options (whether vested or unvested), and all stock options with respect to which there has been an exercise by you or payment or delivery to you within the 36-month period immediately preceding the date of the Restatement, or during the period after the date of the Misconduct, as applicable.

In the event of a Restatement described in clause (i), the Committee shall declare your then outstanding, vested stock options that would not have become vested based on accurate financial data or restated results to be forfeited to the Corporation by notice in writing to you within a reasonable period of time after the date of the Restatement, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any exercise by you or payment or delivery to you with respect to any stock options occurring within 36 months prior to the date of the Restatement that would not have become vested or been paid based on accurate financial data or restated results, and recoup any gain realized in connection with such stock options as described in Paragraph 8(c), below. In the event of Misconduct described in clause (ii) (other than any actions included in Paragraph 8(a) or clause (i) of this Paragraph 8(b)), the Committee shall declare your then outstanding stock options (whether vested or unvested) to be forfeited to the Corporation by notice in writing to you within a reasonable period of time after the date of the discovery of the Misconduct, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation and as permitted by applicable law, rescind any exercise by you or payment or delivery to you with respect to any stock options occurring after the date such Misconduct occurred and recoup any gain realized in connection with such stock options as described in Paragraph 8(c), below

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Your actions satisfy the “business judgment rule” if such actions were taken in good faith, in a manner that an ordinarily prudent person would act under similar circumstances, and in the interests of the Corporation. In interpreting and applying the preceding sentence, the Committee shall use as a guide the principles of the business judgment rule as construed by the Delaware courts in applying the Delaware Corporation Act.

(c) Rescission and Recoupment. Upon the rescission, pursuant to the provisions of Paragraph 8(a) or 8(b), of any exercise by you or payment or delivery to you with respect to any stock options, the Corporation shall be entitled to recoup any “gains realized” in connection with such stock options, in such manner and on such terms and conditions as the Committee shall require. “Gains realized” shall include (i) the amount of any cash distributed to you with respect to, (ii) any cash or shares of the Corporation’s Common Stock (or proceeds attributable to the sale thereof ) paid or delivered in settlement of, and (iii) any other amounts determined by the Committee to have been realized in connection with, such rescinded stock options. If you fail to repay any such amounts to the Corporation within 60 days after receipt of written demand, the Corporation shall be entitled, subject to applicable law and the requirements of Internal Revenue Code Section 409A, to deduct from any amounts the Corporation owes you from time to time the amount of all gains realized, or to sue for repayment of such amounts, or to pursue both remedies.

9. No Contract of Employment. The option grant shall not be deemed to obligate the Corporation or any of its Subsidiaries to continue your employment for any particular period, nor is employment guaranteed for the length of the vesting schedule set forth in the Option Notice.

10. Taxes. Please refer to the “Summary Description of the Amended and Restated Northern Trust Corporation 2002 Stock Plan” for a description of the U.S. federal income tax consequences affecting non-qualified stock options and incentive stock options.

11. Interpretation and Applicable Law. Any interpretation by the Committee of the terms and conditions of the Plan, the Stock Option Agreement or any guidelines shall be final. All questions pertaining to the validity, construction and administration of the Plan or the Stock Option Agreement, and all claims or causes of action arising under, relating to, or in connection with, the Plan or the Stock Option Agreement shall be determined in conformity with the laws of the State of Delaware, without regard to the conflict of law provisions of any state.

12. Definitions. As provided above, Capitalized terms not defined in the Stock Option Agreement shall have the meanings assigned to them in the Plan. For purposes of the Stock Option Agreement:

(a) “Cause” means (i) your conviction of or no contest plea with respect to bribery, extortion, embezzlement, fraud, grand larceny, or any felony involving abuse or misuse of your position to seek or obtain an illegal or personal gain at the expense of the Corporation, or similar crime, or conspiracy to commit any such crimes or attempt to commit any such crimes; or (ii) your misconduct that causes material harm to the Corporation.

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(b) “Client” means any person or entity with which the Corporation, or any of its Subsidiaries, did business and with which you had contact, or about which you had access to Confidential Information, during the last twelve (12) months of your employment.

(c) “Competitive Service or Product” means any service or product: (i) that is substantially similar to or competitive with any service or product that you created or provided, or of which you assisted in the creation or provision, during your employment by the Corporation or any of its Subsidiaries; or (ii) about which you had access to Confidential Information during your employment by the Corporation or any of its Subsidiaries.

(d) “Confidential Information” means any trade secrets or other significant proprietary information, including, but not limited to, any client information (for example, client lists, information about client accounts, borrowings, and current or proposed transactions), any internal analysis of clients, marketing strategies, financial reports or projections, business or other plans, data, procedures, methods, computer data or system program or design, devices, lists, tools, or compilation, which relate to the present or planned business of the Corporation or any of its Subsidiaries and which has not been made generally known to the public by authorized representatives of the Corporation.

(e) “Prospective Client” means any person or entity to which the Corporation, or any of its Subsidiaries, provided, or from which the Corporation, or any of its Subsidiaries received, a proposal, bid, or written inquiry (general advertising or promotional materials and mass mailings excepted) and with which you had contact, or about which you had access to Confidential Information, during the last twelve (12) months of your employment.

(f) “Solicit” and “Solicitation” (with respect to Clients or Prospective Clients) mean directly or indirectly, and without the Corporation’s written authorization, to invite, encourage, request, or induce (or to assist another to invite, encourage, request or induce) any Client or Prospective Client of the Corporation, or any of its Subsidiaries, to: (i) surrender, redeem or terminate a product, service or relationship with the Corporation, or any of its Subsidiaries; (ii) obtain any Competitive Service or Product from you or any third party; or (iii) transfer a product, service or relationship from the Corporation, or any of its Subsidiaries, to you or any third party.

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EX-10.7.(XXI)

Exhibit 10.7 (xxi)

TERMS AND CONDITIONS

2012 EXECUTIVE STOCK OPTION

UNDER THE AMENDED AND RESTATED

NORTHERN TRUST CORPORATION 2002 STOCK PLAN

1. Governing Documents. Your stock option grant is subject to the provisions of the Amended and Restated Northern Trust Corporation 2002 Stock Plan (the “Plan”), the stock option notice (the “Option Notice”) and this Terms and Conditions document (“Terms and Conditions”). The Option Notice and these Terms and Conditions constitute the “Stock Option Agreement” as defined in the Plan. If there is any conflict between the information in the Stock Option Agreement and the Plan, the Plan will govern. These Terms and Conditions apply to non-qualified stock options and incentive stock options issued under the Plan. Capitalized terms not defined in Stock Option Agreement shall have the meanings assigned to them in the Plan.

2. Amendments. The Committee may amend the terms of the Stock Option Agreement at any time, except that any amendment that adversely affects your rights in any material way requires your written consent. Notwithstanding anything in the Stock Option Agreement to the contrary, including without limitation the preceding sentence, in the event that the Committee determines that your stock option grant, or the performance by the Corporation of any of its obligations under the Stock Option Agreement, would violate any applicable law, your stock options shall be forfeited to the Corporation and cancelled, and the Corporation shall have no obligation to honor the exercise of your stock options by you or your Beneficiary.

3. Exercise Limitations.

(a) Exercisability. Your stock option is exercisable from and after the vesting date(s) set forth on the Option Notice until the ten (10)-year anniversary of the date the option was granted (the “Expiration Date”), except as provided below:

• Change in Control. Your stock option (whether vested or unvested) becomes vested and exercisable from and after the date of a Change in Control of the Corporation. Please see “Other Termination of Employment” below for additional provisions relating to a Change in Control.

• Death. If you die while employed, your stock option (whether vested or unvested) becomes vested and exercisable as of the date of your death and may be exercised by your beneficiary at any time until the earlier of (a) five (5) years following your death and (b) the Expiration Date. If you do not name a beneficiary (or your beneficiary dies before you), your stock option will pass to the following persons in the order indicated:

   – Your spouse; if none, then,

US Code Staff

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   – Your children (in equal amounts); if none, then,

   – Your parents (in equal amounts); if none, then,

   – Your brothers and sisters (in equal amounts); if none, then,

   – Your estate.

• Retirement. If you retire, your stock option continues to vest in accordance with its terms, and, once vested, it may be exercised at any time until the earlier of (a) five (5) years following the effective date of your retirement and (b) the Expiration Date. The terms “retire” and “retirement” mean retirement occurring by reason of your having qualified for a Normal, Early, or Postponed Retirement Pension under The Northern Trust Company Pension Plan. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination of employment due to retirement pursuant to the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”) relating to incentive stock options.

• Special Circumstances. If (a) on the date of grant, you are a Management Group member, and (b) on the date of your termination of employment, you are age 55 or older and have a minimum of 10 years of employment with the Corporation and its Subsidiaries, then your stock option continues to vest in accordance with its terms, and, once vested, it may be exercised at any time until the earlier of (i) five (5) years following the date of your termination of employment and (ii) the Expiration Date. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination of employment under the described circumstances pursuant to the applicable provisions of the Code relating to incentive stock options.

• Disability. If, while employed, you incur a “disability” that continues for a period of 12 months in accordance with The Northern Trust Company’s Managed Disability Program you are deemed “Disabled” on the last day of such 12-month period, at which date you are terminated from the Plan. Your stock option (whether vested or unvested) becomes vested and exercisable upon the date you are deemed Disabled and may be exercised at any time until the earlier of (a) five (5) years following the date you are deemed Disabled and (b) the Expiration Date. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination from the Plan, pursuant to the applicable provisions of the Code relating to incentive stock options.

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• Severance. If your employment is terminated under circumstances that entitle you to severance benefits under the Northern Trust Corporation Severance Plan (the “Severance Plan”), and you have timely executed and not revoked a settlement agreement, waiver and release under the Severance Plan (a “Release”), your stock option (whether vested or unvested) becomes vested and exercisable as of the date of your termination of employment and may be exercised at any time until the earlier of (a) one-hundred and eighty (180) days following your termination of employment under the Severance Plan and (b) the Expiration Date. If you are eligible for a Normal, Early, or Postponed Retirement Pension upon termination of employment under the Severance Plan, your stock option (whether vested or unvested) becomes vested and exercisable as of the date of your termination of employment and may be exercised at any time until the earlier of (a) five (5) years following the effective date of your retirement and (b) the Expiration Date. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination of employment in these circumstances pursuant to the applicable provisions of the Code relating to incentive stock options.

• Other Termination of Employment. Except as set forth below, if (a) your employment by the Corporation and its Subsidiaries terminates for any reason other than death, retirement or a severance under the Severance Plan for which you have executed and not revoked a Release, (b) you are not terminated from the Plan due to disability pursuant to the “Disability” provisions described above, and (c) you were not both a Management Group member on the date of grant and age 55 with 10 years of employment with the Corporation and its Subsidiaries on your date of termination, your stock option, if and to the extent vested as of the date of your termination of employment, may be exercised at any time until the earlier of (i) three (3) months following the date of your termination of employment and (ii) the Expiration Date. Your stock option, if and to the extent unvested as of the date of your termination of employment, expires as of the date of your termination of employment. A termination of employment shall not be deemed to occur by reason of your transfer between the Corporation and a Subsidiary of the Corporation or between two Subsidiaries of the Corporation. If you meet the criteria of each of clauses (a), (b), and (c), above, the post-termination exercise provision of this sub-paragraph shall apply to you if you become a consultant to the Corporation or a Subsidiary of the Corporation upon termination of your employment from the Corporation or a Subsidiary of the Corporation. Notwithstanding the foregoing, if, within the two-year period following a Change in Control, you meet the criteria of each of clauses (a), (b), and (c) above, then (except as may otherwise be specified in an Employment Security Agreement between you and the Corporation), your stock option, to the extent vested, may be exercised at any time until the earlier of (I) six

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(6) months following the date of your termination of employment, and (II) the Expiration Date; provided, however, you should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination of employment in connection with a Change of Control pursuant to the applicable provisions of the Code relating to incentive stock options.

(b) Six-Month Hold Requirement. Pursuant to regulations promulgated by the Financial Services Authority in the United Kingdom, you are required to hold and not sell any shares that you acquire from the exercise of this option, or portion thereof, during the 6-month period immediately following the date on which your option, or portion thereof, vests. Accordingly, during the 6-month period immediately following the date on which your option, or portion thereof, vests (i) the payment of the applicable exercise price and the satisfaction of tax withholding obligations may not be accomplished by withholding shares otherwise deliverable to you upon the exercise and (ii) you are required to hold and not sell, other than sales for tax withholding purposes, shares that you receive upon the exercise of such option or portion thereof.

4. Re-Employment. If, after your termination of employment, you are re-employed by the Corporation or one of its Subsidiaries, upon your return you will be considered a new hire for purposes of the Plan. Options that previously expired upon your termination of employment remain expired and are not reinstated.

5. Exercise of Options.

• How to Exercise. You may exercise your stock option, in any manner described in Section 6(e) of the Plan, through the H. R. Service Center at (800) 807-0302 or online through My Place. Inquiry and modeling capabilities are also available online.

• Black-out Period. Due to federal securities law concerns, the Corporation has a “black-out” policy which restricts any exercise of your stock option around quarterly corporate earnings announcements. Please refer to the “Statement of Confidential Information and Securities Trading” for further information about the Corporation’s black-out policy. You may access this document online through My Passport. From the homepage click on Corporate-wide Services, and then Corporate Policies.

6. Nontransferability. Your stock option is not transferable other than as provided in these Terms and Conditions. Your stock option (whether a non-qualified stock option or an incentive stock option) is exercisable, during your lifetime, only by you or your personal representative.

7. Withholding/Delivery of Shares. Delivery of shares of Common Stock upon exercise of your stock option is subject to the withholding of all applicable federal, state, and local taxes. At your election, subject to such rules and limitations as may be established by the

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Committee, such withholding obligations shall be satisfied: (i) by cash payment by you; (ii) through the surrender of shares of Common Stock which you already own that are acceptable to the Committee; or (iii) through surrender of shares of Common Stock to which you are otherwise entitled under the Plan, provided, however, that such shares under this clause (iii) may be used to satisfy not more than the Corporation’s minimum statutory withholding obligation (based on minimum statutory withholding rates for Federal and state tax purposes, including payroll taxes, that are applicable to such taxable income). Payment of federal income taxes may be accomplished through a combination of withholding of shares and delivery of previously acquired shares. The Corporation may delay the issuance or delivery of shares of Common Stock if the Corporation reasonably anticipates that such issuance or delivery will violate federal securities laws or other applicable law, provided that the issuance or delivery is made at the earliest date at which the Corporation reasonably anticipates that such issuance or delivery will not cause such violation. As an option holder, you have no interest in the shares covered by the option until the shares are actually issued.

8. Forfeitures and Recoupments.

(a) Engaging in Restricted Activity Without Written Consent of the Corporation. Notwithstanding anything to the contrary in these Terms and Conditions, if you, without the written consent of the Corporation:

(i) at any time after the date of these Terms and Conditions, have divulged, directly or indirectly, or used, for your own or another’s benefit, any Confidential Information;

(ii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after you cease to be employed by the Corporation and its Subsidiaries for any reason, have Solicited, or assisted in the Solicitation of, any Client or Prospective Client (provided, however, that this clause (ii) shall not apply to your Solicitation of any Client or Prospective Client with whom you had a business relationship prior to the start of your employment with the Corporation and its Subsidiaries, provided no Confidential Information, directly or indirectly, is used in such Solicitation); or

(iii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after you cease to be employed by the Corporation and its Subsidiaries for any reason, have solicited, encouraged, advised, induced or caused any employee of the Corporation or any of its Subsidiaries to terminate his or her employment with the Corporation or any of its Subsidiaries, or provided any assistance, encouragement, information, or suggestion to any person or entity regarding the solicitation or hiring of any employee of the Corporation or any of its Subsidiaries;

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your then outstanding stock options (whether vested or unvested) shall be forfeited to the Corporation by notice from the Committee in writing to you within a reasonable period of time after the Committee acquires knowledge of your violation of this Paragraph 8(a). In the event that your stock options are forfeited pursuant to the preceding sentence or the provisions of Paragraph 8(b), below, the Corporation shall have no obligation to honor the exercise of such stock options by you or your beneficiary.

In addition, in the event of any action by you to which clauses (i), (ii) or (iii), above, apply, the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any exercise by you or payment or delivery to you with respect to any stock options occurring within twelve (12) months prior to, or at any time following, the date of your termination of employment for any reason (including but not limited to termination of employment due to Retirement or Disability), and recoup any “gain realized” in connection with such stock options as described in Paragraph 8(c) below.

(b) Misconduct and Restatement of Financials. Consistent with the Corporation’s risk-mitigation strategies for its compensation programs, and notwithstanding any other provision in these Terms and Conditions, in the event that:

(i) the Corporation is required to restate its financial statements filed with the U.S. Securities and Exchange Commission on Form 10-Q or Form 10-K or re-file quarterly financial data with the U.S. Federal Reserve due to any reason other than changes in accounting policy or applicable law (a “Restatement”), and the Committee determines that such Restatement resulted, in whole or in material part, from your (A) intentionally engaging in conduct that resulted in a material weakness in internal control over financial reporting and was inconsistent with the standards of conduct of the business judgment rule, as defined below, or (B) personally and knowingly engaging in practices that materially contributed to circumstances that resulted in a material weakness in internal control over financial reporting and that were inconsistent with the standards of conduct of the business judgment rule; or

(ii) the Committee determines that you have engaged in conduct that is grounds for termination for Cause and is inconsistent with the standards of conduct of the business judgment rule (“Misconduct”);

then the Committee shall review all of your then outstanding stock options (whether vested or unvested), and all stock options with respect to which there has been an exercise by you or payment or delivery to you within the 36-month period immediately preceding the date of the Restatement, or during the period after the date of the Misconduct, as applicable.

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In the event of a Restatement described in clause (i), the Committee shall declare your then outstanding, vested stock options that would not have become vested based on accurate financial data or restated results to be forfeited to the Corporation by notice in writing to you within a reasonable period of time after the date of the Restatement, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any exercise by you or payment or delivery to you with respect to any stock options occurring within 36 months prior to the date of the Restatement that would not have become vested or been paid based on accurate financial data or restated results, and recoup any gain realized in connection with such stock options as described in Paragraph 8(c), below. In the event of Misconduct described in clause (ii) (other than any actions included in Paragraph 8(a) or clause (i) of this Paragraph 8(b)), the Committee shall declare your then outstanding stock options (whether vested or unvested) to be forfeited to the Corporation by notice in writing to you within a reasonable period of time after the date of the discovery of the Misconduct, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation and as permitted by applicable law, rescind any exercise by you or payment or delivery to you with respect to any stock options occurring after the date such Misconduct occurred and recoup any gain realized in connection with such stock options as described in Paragraph 8(c), below

Your actions satisfy the “business judgment rule” if such actions were taken in good faith, in a manner that an ordinarily prudent person would act under similar circumstances, and in the interests of the Corporation. In interpreting and applying the preceding sentence, the Committee shall use as a guide the principles of the business judgment rule as construed by the Delaware courts in applying the Delaware Corporation Act.

(c) Rescission and Recoupment. Upon the rescission, pursuant to the provisions of Paragraph 8(a) or 8(b), of any exercise by you or payment or delivery to you with respect to any stock options, the Corporation shall be entitled to recoup any “gains realized” in connection with such stock options, in such manner and on such terms and conditions as the Committee shall require. “Gains realized” shall include (i) the amount of any cash distributed to you with respect to, (ii) any cash or shares of the Corporation’s Common Stock (or proceeds attributable to the sale thereof ) paid or delivered in settlement of, and (iii) any other amounts determined by the Committee to have been realized in connection with, such rescinded stock options. If you fail to repay any such amounts to the Corporation within 60 days after receipt of written demand, the Corporation shall be entitled, subject to applicable law and the requirements of Internal Revenue Code Section 409A, to deduct from any amounts the Corporation owes you from time to time the amount of all gains realized, or to sue for repayment of such amounts, or to pursue both remedies.

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9. Cancellation by the Committee. The Committee will consider cancelling and may cancel all or a portion of your unvested stock options when (a) there is reasonable evidence of material employee misbehavior or error, (b) the Corporation or the relevant business unit of the Corporation suffers a material downturn in its financial performance, attributable to a prior period and materially greater than was previously anticipated in risk adjusting incentive compensation, or (c) the Corporation or the relevant business unit of the Corporation suffers a material failure of risk management. In the event that any of your unvested stock options are cancelled pursuant to the preceding sentence, the Corporation shall have no obligation to honor the exercise of such stock options by you or your beneficiary.

10. No Contract of Employment. The option grant shall not be deemed to obligate the Corporation or any of its Subsidiaries to continue your employment for any particular period, nor is employment guaranteed for the length of the vesting schedule set forth in the Option Notice.

11. Taxes. Please refer to the “Summary Description of the Amended and Restated Northern Trust Corporation 2002 Stock Plan” for a description of the U.S. federal income tax consequences affecting non-qualified stock options and incentive stock options.

12. Interpretation and Applicable Law. Any interpretation by the Committee of the terms and conditions of the Plan, the Stock Option Agreement or any guidelines shall be final. All questions pertaining to the validity, construction and administration of the Plan or the Stock Option Agreement, and all claims or causes of action arising under, relating to, or in connection with, the Plan or the Stock Option Agreement shall be determined in conformity with the laws of the State of Delaware, without regard to the conflict of law provisions of any state.

13. Definitions. As provided above, Capitalized terms not defined in the Stock Option Agreement shall have the meanings assigned to them in the Plan. For purposes of the Stock Option Agreement:

(a) “Cause” means (i) your conviction of or no contest plea with respect to bribery, extortion, embezzlement, fraud, grand larceny, or any felony involving abuse or misuse of your position to seek or obtain an illegal or personal gain at the expense of the Corporation, or similar crime, or conspiracy to commit any such crimes or attempt to commit any such crimes; or (ii) your misconduct that causes material harm to the Corporation.

(b) “Client” means any person or entity with which the Corporation, or any of its Subsidiaries, did business and with which you had contact, or about which you had access to Confidential Information, during the last twelve (12) months of your employment.

(c) “Competitive Service or Product” means any service or product: (i) that is substantially similar to or competitive with any service or product that you created or provided, or of which you assisted in the creation or provision, during your employment by the Corporation or any of its Subsidiaries; or (ii) about which you had access to Confidential Information during your employment by the Corporation or any of its Subsidiaries.

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(d) “Confidential Information” means any trade secrets or other significant proprietary information, including, but not limited to, any client information (for example, client lists, information about client accounts, borrowings, and current or proposed transactions), any internal analysis of clients, marketing strategies, financial reports or projections, business or other plans, data, procedures, methods, computer data or system program or design, devices, lists, tools, or compilation, which relate to the present or planned business of the Corporation or any of its Subsidiaries and which has not been made generally known to the public by authorized representatives of the Corporation.

(e) “Prospective Client” means any person or entity to which the Corporation, or any of its Subsidiaries, provided, or from which the Corporation, or any of its Subsidiaries received, a proposal, bid, or written inquiry (general advertising or promotional materials and mass mailings excepted) and with which you had contact, or about which you had access to Confidential Information, during the last twelve (12) months of your employment.

(f) “Solicit” and “Solicitation” (with respect to Clients or Prospective Clients) mean directly or indirectly, and without the Corporation’s written authorization, to invite, encourage, request, or induce (or to assist another to invite, encourage, request or induce) any Client or Prospective Client of the Corporation, or any of its Subsidiaries, to: (i) surrender, redeem or terminate a product, service or relationship with the Corporation, or any of its Subsidiaries; (ii) obtain any Competitive Service or Product from you or any third party; or (iii) transfer a product, service or relationship from the Corporation, or any of its Subsidiaries, to you or any third party.

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EX-10.7.(XXII)

Exhibit 10.7 (xxii)

TERMS AND CONDITIONS

2012 PERFORMANCE STOCK UNIT AWARD

UNDER THE AMENDED AND RESTATED

NORTHERN TRUST CORPORATION 2002 STOCK PLAN

Your performance stock unit Award (“Stock Unit Award”) is subject to the provisions of the Amended and Restated Northern Trust Corporation 2002 Stock Plan (the “Plan”), the Stock Unit Award notice (the “Award Notice”), and this Terms and Conditions document (“Terms and Conditions”). The Award Notice and these Terms and Condition constitute the “Stock Unit Agreement” as defined in the Plan. If there is any conflict between the information in the Stock Unit Agreement and the Plan, the Plan will govern. Capitalized terms not defined in the Stock Unit Agreement shall have the meanings assigned to them in the Plan.

1. Grant. The Corporation hereby grants to the Participant an Award of Stock Units, as set forth in the Award Notice, subject to the terms and conditions of the Plan and the Stock Unit Agreement, and subject further to increase or decrease as set forth in the Award Notice. This award of Stock Units is intended to qualify as “performance based compensation” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). A Stock Unit is the right, subject to the terms and conditions of the Plan and the Stock Unit Agreement, to receive a distribution of a share of Common Stock pursuant to Paragraph 8 of these Terms and Conditions.

2. Stock Unit Account. The Corporation shall maintain an account (“Stock Unit Account”) on its books in the name of the Participant which shall reflect the number of Stock Units awarded to the Participant that the Participant is eligible to receive in distribution pursuant to Paragraph 8 of these Terms and Conditions.

3. Dividend Equivalents. Upon the payment of any dividend on Common Stock occurring during the period preceding the distribution of the Participant’s Stock Unit award pursuant to Paragraph 8 of these Terms and Conditions, the Corporation shall promptly (and in any event no later than March 15 of the calendar year following the calendar year in which the dividend is declared) pay to the Participant an amount in cash equal in value to the dividends that the Participant would have received had the Participant been the actual owner of the number of shares of Common Stock represented by the Stock Units in the Participant’s Stock Unit Account on that date (“Dividend Equivalents”).

4. Forfeiture. The Stock Units granted to the Participant pursuant to the Stock Unit Agreement shall be forfeited and revert to the Corporation (a) in accordance with Paragraph 9, if the Participant engages in conduct or activity described in Paragraph 9 of these Terms and Conditions, or (b) except as described in Paragraphs 5, 6 and 7of these Terms and Conditions, if the Participant’s employment with the Corporation and all of its Subsidiaries terminates prior to the last day of the “Performance Period” as defined in Exhibit A hereto.

5. Vesting. Subject to all of the provisions of the Stock Unit Agreement, including without limitation the provisions of Paragraphs 4, 6, 7 and 9 of these Terms and Conditions, upon the last day of the Performance Period (as defined in Exhibit A), the Participant shall become vested in such number of Stock Units, if any, as determined under the Schedule in Exhibit A, based on the average annual rate of return on equity attained by the Corporation (as determined by the Committee in its sole discretion) for the Performance Period, but only if the Participant remains continuously employed by the Corporation or one of its Subsidiaries through the last day of the Performance Period. If the Participant’s employment with the Corporation and its Subsidiaries terminates for any reason prior to the end of the Performance Period, the Stock Units in the Participant’s Stock Unit Account that have not yet vested and do not become vested under Paragraph 6 or have not become vested under Paragraph 7, shall be forfeited and revert to the Corporation on such termination date, and the Corporation shall have no further obligation after such date to pay Dividend Equivalents pursuant to Paragraph 3 of these Terms and Conditions with respect to such forfeited Stock Units. The Corporation shall have no further obligation to the Participant under these Terms and Conditions following the Participant’s forfeiture of the Stock Units.

6. Prorated Vesting.

(a) The Participant shall cease to participate in the Plan under these Terms and Conditions as of the date of the Participant’s termination of employment with the Corporation and all of its Subsidiaries, subject to the following:

(b) If (i) the Participant’s termination of employment is on account of death, Retirement or Disability and occurs prior to the end of the Performance Period, or if prior to the end of the Performance Period, the Participant’s employment with the Corporation and its Subsidiaries is terminated under circumstances that entitle the Participant to severance benefits under the Northern Trust Corporation Severance Plan (the “Severance Plan”), and the Participant has timely executed and not revoked a settlement agreement, waiver and release under the Severance Plan (a “Release”), and (ii) the Participant does not engage in conduct or activity described in Paragraph 9 of these Terms and Conditions during the Performance Period, then, subject to clause (f) below, on the last day of the Performance Period, the Participant shall have credited, and become vested in, a pro-rated number of unvested Stock Units as determined by multiplying the number of Stock Units, if any, that would have otherwise been vested (in accordance with the Schedule in Exhibit A) and distributable to the Participant if the Participant had participated in the Plan for the full Performance Period, by a fraction, the numerator of which is the number of full calendar months of the Participant’s actual participation in the Plan under these Terms and Conditions during the Performance Period, and the denominator of which is the number of full calendar months in the Performance Period, in all cases as determined by the Committee or the Executive Vice President of Human Resources.

(c) If, prior to the end of the Performance Period, the Participant’s employment with the Corporation and its Subsidiaries terminates, and (i) the Participant is a Management Group member on the date of the grant of the Stock Units; (ii) the Participant is 55 years or older on the date of such termination of employment;

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and (iii) the Participant does not engage in conduct or activity described in Paragraph 9 of these Terms and Conditions during the Performance Period, then, subject to clause (f) below, on the last day of the Performance Period, the Participant shall have credited, and become vested in, a pro-rated number of unvested Stock Units as determined by multiplying the number of Stock Units, if any, that would have otherwise been vested (in accordance with the Schedule in Exhibit A) and distributable to the Participant if the Participant had participated in the Plan through the last day of the Performance Period, by a fraction, the numerator of which is the number of full calendar months of the Participant’s actual participation in the Plan under these Terms and Conditions during the Performance Period, and the denominator of which is the number of full calendar months in the Performance Period, in all cases as determined by the Committee or the Executive Vice President of Human Resources.

(d) If, (i) prior to the end of the Performance Period, the Participant incurs a Government Service Termination, and (A) the Participant also meets the conditions for Retirement at the time of such termination of employment, (B) the Participant is a Management Group member on the date of the grant of the Stock Units and is 55 years or older on the date of such termination of employment, or (C) the Participant’s termination of employment occurs in circumstances described in Paragraph 6(b) that entitle the Participant to severance benefits and the Participant has satisfied all conditions for such benefits; (ii) the Participant provides the Committee with satisfactory evidence that as a result of Participant’s Government Employment, the divestiture of the Participant’s continued interest in any Stock Units is (A) necessary for the Participant as a Federal officer or employee in the executive branch to comply with an ethics agreement with the Federal government, or (B) reasonably necessary for the Participant to avoid the violation of U.S. federal, state or local or non-U.S. ethics law or conflicts of interest law applicable to the Participant in the Participant’s Government Employment; (iii) the Participant executes and returns, no later than the date of his or her Government Service Termination, an agreement satisfactory to the Committee acknowledging the Corporation’s right to recover (and the Participant’s obligation to repay) under Paragraph 9 of the Terms and Conditions, any gain realized in connection with the Stock Units paid to the Participant in the event that the Participant is determined to have engaged in conduct or activity described in Paragraph 9; then, subject to clause (f) below, upon the later of December 31, 2012 and the Participant’s Government Service Termination date, the Participant shall have credited and become vested in a pro-rated number of unvested Stock Units as determined by multiplying (A) the number of Stock Units, if any, that would have otherwise been vested (in accordance with the Schedule in Exhibit A) applied as if the Performance Period ended on the later of December 31, 2012, and the last day of the last calendar quarter ending prior to the Participant’s Government Service Termination date, by (B) a fraction, the numerator of which is the number of full calendar months of the Participant’s actual participation in the Plan under these Terms and Conditions during the Performance Period, and the denominator of which is the number of full calendar months in the Performance Period, in all cases as determined by the Committee or the Executive Vice President of Human Resources.

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(e) In the case of a Participant whose employment with the Corporation and its Subsidiaries terminates prior to the end of the Performance Period in circumstances described in Paragraph 6(d)(i)(A),(B) or (C), then, if (i) the Participant prior to the expiration of the Performance Period, accepts Government Employment; (ii) the Participant provides the Committee with satisfactory evidence that as a result of Participant’s Government Employment, the divestiture of the Participant’s continued interest in any Stock Units is (A) necessary for the Participant as a Federal officer or employee in the executive branch to comply with an with ethics agreement with the Federal government, or (B) reasonably necessary for the Participant to avoid the violation of U.S. federal, state or local or non-U.S. ethics law or conflicts of interest law applicable to the Participant in the Participant’s Government Employment; and (iii) the Participant executes and returns no later than the date of commencement of his Government Employment, an agreement satisfactory to the Committee acknowledging the Corporation’s right to recover (and the Participant’s obligation to repay) under Paragraph 9 of the Terms and Conditions, any gain realized in connection with the Stock Units paid to the Participant in the event that the Participant is determined to have engaged in conduct or activity described in Paragraph 9; then, subject to clause (f) below, upon the later of December 31, 2012, and the date of commencement of the Participant’s Government Employment, the Participant shall have credited and become vested in a pro-rated number of unvested Stock Units as determined by multiplying (A) the number of Stock Units, if any, that would have otherwise been vested (in accordance with the Schedule in Exhibit A) applied as if the Performance Period ended on the later of December 31, 2012, and the last day of the last calendar quarter ending prior to the date that the Participant’s Government Employment commences, by (B) a fraction, the numerator of which is the number of full calendar months of the Participant’s actual participation in the Plan under these Terms and Conditions during the Performance Period, and the denominator of which is the number of full calendar months in the Performance Period, in all cases as determined by the Committee or the Executive Vice President of Human Resources.

(f) Notwithstanding any provision of these Terms and Conditions, there shall be no vesting of any Stock Units and no proration of any Stock Units prior to the expiration of the Performance Period, and vesting shall only obtain to the extent it is determined by the Committee that the Corporation has satisfied the performance criteria for the Performance Period in accordance with the Schedule in Exhibit A, provided that for purposes of the preceding clause, in the case of a Participant subject to clause (d) or (e) of this Paragraph 6, the Performance Period shall be treated as ending on the special end-date specified in clause (d)(iii)(A) or (e)(iii)(A), as applicable, and is referred to herein and in Exhibit A as a “modified Performance Period” described in Paragraph 6(d) or 6(e), as applicable. If the Participant’s employment terminates for a reason described in clause (b), (c), (d), or (e) of this Paragraph 6, any such Stock Units that do not become vested at the

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end of the Performance Period pursuant to Paragraph 6(b) or 6(c), or on the vesting date specified in Paragraph 6(d), or 6(e), as applicable, shall be immediately forfeited and revert to the Corporation and the Corporation shall have no further obligations after such date to pay Dividend Equivalents pursuant to Paragraph 3 of these Terms and Conditions. The Corporation shall have no further obligation to the Participant under these Terms and Conditions following the Participant’s forfeiture of Stock Units.

(g) For purposes of these Terms and Conditions, “Disability” means a disability that continues for a period of six (6) months in accordance with The Northern Trust Company’s Managed Disability Program. For purposes of determining the date, if any, on which a Participant becomes vested under Paragraph 6(b) on account of Disability, the date of Disability shall be the last day of the six-month period described in the preceding sentence.

For purposes of these Terms and Conditions, “Government Service Termination” means the Participant’s termination of employment with the Corporation and its Subsidiaries due to or in connection with the Participant’s immediate commencement of Government Employment.

For purposes of these Terms and Conditions, “Government Employment” refers to employment at any U.S. Federal, state or local government, any non-U.S. government, any supranational or international organization, any self-regulatory organization, or any agency or instrumentality of any such government or organization, or any other employer determined to be a Government Employer by the Committee.

For purposes of these Terms and Conditions, “Retirement” means retirement occurring by reason of the Participant having qualified for a Normal, Early, or Postponed Retirement under The Northern Trust Company Pension Plan.

(h) The provisions of Paragraphs 6(d)(ii) and 6(e)(ii) shall be construed in accordance with Treasury Regulation Section 1.409A-3(j)(4)(iii)

7. Vesting Upon a Change in Control. A Participant who is employed by the Corporation or any of its Subsidiaries upon the date of a Change in Control shall become 100% vested in his Stock Units upon the date of such Change in Control, in accordance with the terms of Exhibit A.

8. Distribution.

(a) In the case of Stock Units that become vested pursuant to Paragraph 5 or Paragraph 6 on the last day of the Performance Period, such Stock Units shall be distributed on such vesting date, provided that such Stock Units shall be treated as distributed on such vesting date if they are distributed no later than the 15^th day of the third calendar month after the calendar year in which the Performance Period ends.

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(b) In the case of Stock Units that become vested in circumstances described in Paragraph 6(d) or 6(e), distribution shall be made on the date such amounts become vested under Paragraph 6(d) or 6(e), as applicable, provided that all of the requirements of Paragraph 6(d) and 6(e) are satisfied, including without limitation Paragraph 6(d)(ii) and 6(e)(ii).

(c) In the event of the Participant’s death during the Performance Period or thereafter but prior to full distribution to the Participant pursuant to these Terms and Conditions, the Participant’s Stock Units, if any, that become vested on the last day of the Performance Period pursuant to Paragraph 6(b) shall be distributed to the Participant’s beneficiary on such date in accordance with the clause (a), and such distribution shall be made to such beneficiary and in such proportions as the Participant may designate in writing, and in the absence of a designation, to the following persons in the order indicated below:

– The Participant’s spouse; if none, then,

– The Participant’s children (in equal amounts); if none, then,

– The Participant’s parents (in equal amounts); if none, then,

– The Participant’s brothers and sisters (in equal amounts); if none, then,

– The Participant’s estate.

(d) In the case of Stock Units that become vested in accordance with Exhibit A as a result of a Change in Control, the Participant shall be entitled to a distribution of such Stock Units upon the date of such Change in Control.

(e) Stock Units shall be distributed only in shares of Common Stock so that, pursuant to Paragraph 1 of these Terms and Conditions and this Paragraph 8, a Participant shall be entitled to receive one share of Common Stock for each Stock Unit in the Participant’s Stock Unit Account.

(f) Notwithstanding anything herein to the contrary, the provisions of this Award Agreement, including without limitation this Paragraph 8, shall be subject to the provisions of the Plan, including without limitation Section 14 of the Plan.

9. Forfeitures and Recoupments.

(a) Engaging in Restricted Activity Without Written Consent of the Corporation. Notwithstanding anything to the contrary in these Terms and Conditions, if the Participant, without the written consent of the Corporation:

(i) at any time after the date of these Terms and Conditions, has divulged, directly or indirectly, or used, for the Participant’s own or another’s benefit, any Confidential Information;

(ii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after the Participant ceases to be employed by the Corporation and its Subsidiaries for any reason, has Solicited, or assisted in the Solicitation of, any Client or Prospective Client (provided,

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however, that this clause (ii) shall not apply to the Participant’s Solicitation of any Client or Prospective Client with whom he or she had a business relationship prior to the start of his or her employment with the Corporation and its Subsidiaries, provided no Confidential Information, directly or indirectly, is used in such Solicitation); or

(iii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after the Participant ceases to be employed by the Corporation and its Subsidiaries for any reason, has solicited, encouraged, advised, induced or caused any employee of the Corporation or any of its Subsidiaries to terminate his or her employment with the Corporation or any of its Subsidiaries, or provided any assistance, encouragement, information, or suggestion to any person or entity regarding the solicitation or hiring of any employee of the Corporation or any of its Subsidiaries;

then the Participant’s then outstanding Stock Units (whether vested or unvested) shall be forfeited to the Corporation by notice from the Committee in writing to the Participant within a reasonable period of time after the Committee acquires knowledge of the Participant’s violation of this Paragraph 9(a). In the event that a Participant’s Stock Units are forfeited pursuant to the preceding sentence or the provisions of Paragraph 9(b), below, the Corporation shall not distribute the Stock Units to the Participant (or the Participant’s beneficiary) pursuant to Paragraph 8, or pay any Dividend Equivalents pursuant to Paragraph 3 with respect to such Stock Units.

In addition, in the event of any action by the Participant to which clauses (i), (ii) or (iii), above, apply, the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any payment or delivery to the Participant with respect to any Stock Units occurring within twelve (12) months prior to, or at any time following, the date of the Participant’s termination of employment for any reason (including but not limited to termination of employment due to Retirement or Disability), and recoup any “gain realized” in connection with such Stock Units as described in Paragraph 9(c) below.

(b) Misconduct and Restatement of Financials. Consistent with the Corporation’s risk-mitigation strategies for its compensation programs, and notwithstanding any other provision in these Terms and Conditions, in the event that:

(i) the Corporation is required to restate its financial statements filed with the U.S. Securities and Exchange Commission on Form 10-Q or Form 10-K or re-file quarterly financial data with the U.S. Federal Reserve due to any reason other than changes in accounting policy or applicable law (a “Restatement”), and the Committee determines that such Restatement resulted, in whole or in material part, from the Participant (A) intentionally engaging in conduct that resulted in a material weakness in

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internal control over financial reporting and was inconsistent with the standards of conduct of the business judgment rule, as defined below, or (B) personally and knowingly engaging in practices that materially contributed to circumstances that resulted in a material weakness in internal control over financial reporting and that were inconsistent with the standards of conduct of the business judgment rule; or

(ii) the Committee determines that the Participant has engaged in conduct that is grounds for termination for Cause and is inconsistent with the standards of conduct of the business judgment rule (“Misconduct”);

then the Committee shall review all then outstanding Stock Units (whether vested or unvested) of the Participant, and all Stock Units with respect to which there has been payment or delivery to the Participant within the 36-month period immediately preceding the date of the Restatement, or during the period after the date of the Misconduct, as applicable.

In the event of a Restatement described in clause (i), the Committee shall declare the Participant’s then outstanding, vested Stock Units that would not have become vested based on accurate financial data or restated results to be forfeited to the Corporation by notice in writing to the Participant within a reasonable period of time after the date of the Restatement, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any payment or delivery with respect to any Stock Units occurring within 36 months prior to the date of the Restatement that would not have become vested or been paid based on accurate financial data or restated results, and recoup any gain realized in connection with such Stock Units as described in Paragraph 9(c), below. In the event of Misconduct described in clause (ii) (other than any actions included in Paragraph 9(a) or clause (i) of this Paragraph 9(b)), the Committee shall declare the Participant’s then outstanding Stock Units (whether vested or unvested) to be forfeited to the Corporation by notice in writing to the Participant within a reasonable period of time after the date of the discovery of the Misconduct, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation and as permitted by applicable law, rescind any payment or delivery with respect to any Stock Units occurring after the date such Misconduct occurred and recoup any gain realized in connection with such Stock Units as described in Paragraph 9(c), below

A Participant’s actions satisfy the “business judgment rule” if such actions were taken in good faith, in a manner that an ordinarily prudent person would act under similar circumstances, and in the interests of the Corporation. In interpreting and applying the preceding sentence, the Committee shall use as a guide the principles of the business judgment rule as construed by the Delaware courts in applying the Delaware Corporation Act.

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(c) Rescission and Recoupment. Upon the rescission, pursuant to the provisions of Paragraph 9(a) or 9(b), of any payment or delivery with respect to any Stock Units, the Corporation shall be entitled to recoup any “gains realized” in connection with such Stock Units, in such manner and on such terms and conditions as the Committee shall require. “Gains realized” shall include (i) the amount of any cash (including Dividend Equivalents) distributed to the Participant with respect to, (ii) any cash or shares of the Corporation’s Common Stock (or proceeds attributable to the sale thereof ) paid or delivered in settlement of, and (iii) any other amounts determined by the Committee to have been realized in connection with, such rescinded Stock Units. If the Participant fails to repay any such amounts to the Corporation within 60 days after receipt of written demand, the Corporation shall be entitled, subject to applicable law and the requirements of Internal Revenue Code Section 409A, to deduct from any amounts the Corporation owes the Participant from time to time the amount of all gains realized, or to sue for repayment of such amounts, or to pursue both remedies.

10. Delivery of Shares. The Corporation may delay the issuance or delivery of shares of Common Stock if the Corporation reasonably anticipates that such issuance or delivery will violate federal securities laws or other applicable law, provided that the issuance or delivery is made at the earliest date at which the Corporation reasonably anticipates that such issuance or delivery will not cause such violation.

11. Adjustment. The Stock Units provided herein are subject to adjustment in accordance with the provisions of Section 11 of the Plan.

12. No Right to Employment. Nothing in the Plan or the Stock Unit Agreement shall be construed as creating any right in the Participant to continued employment or as altering or amending the existing terms and conditions of employment of the Participant except as otherwise specifically provided in the Stock Unit Agreement.

13. Nontransferability. No interest hereunder of the Participant is transferable except as provided in the Stock Unit Agreement.

14. Withholding/Delivery of Shares. All distributions hereunder are subject to withholding by the Corporation for all applicable federal, state or local taxes. With respect to distributions in shares of Common Stock, subject to such rules and limitations as may be established by the Committee from time to time, such withholding obligations shall be satisfied through the withholding of shares of Common Stock to which the Participant is otherwise entitled under the Stock Unit Award, provided, however, that such shares may be used to satisfy not more than the Corporation’s minimum statutory withholding obligation (based on minimum statutory withholding rates for Federal and state tax purposes, including payroll taxes, that are applicable to such taxable income).

15. Administration. The Plan is administered by the Committee. The rights of the Participant hereunder are expressly subject to the terms and conditions of the Plan (including continued shareholder approval of the Plan), together with such guidelines as have been or may be adopted from time to time by the Committee. The Participant hereby acknowledges receipt of a copy of the Plan.

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16. No Rights as Shareholder. Except as provided herein, the Participant will have no rights as a shareholder with respect to the Stock Units.

17. Interpretation and Applicable Law. Any interpretation by the Committee of the terms and conditions of the Plan, the Stock Unit Agreement or any guidelines shall be final. All questions pertaining to the validity, construction and administration of the Plan or the Stock Unit Agreement, and all claims or causes of action arising under, relating to, or in connection with, the Plan or the Stock Unit Agreement shall be determined in conformity with the laws of the State of Delaware, without regard to the conflict of law provisions of any state.

18. Sole Agreement. The Stock Unit Agreement, together with the Plan, is the entire Agreement between the parties hereto, all prior oral and written representations being merged herein. No amendment or modification of the terms of the Stock Unit Agreement shall be binding on either party unless reduced to writing and signed by the party to be bound. The Stock Unit Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors. Notwithstanding anything in the Stock Unit Agreement to the contrary, including without limitation the foregoing provisions of this Paragraph 18, in the event that the Committee determines that the Stock Unit Award, or the performance by the Corporation of any of its obligations under the Stock Unit Agreement, would violate any applicable law, the Stock Units shall be forfeited to the Corporation and cancelled, and the Corporation shall have no obligation to distribute the Stock Units to the Participant or the Participant’s Beneficiary or to pay any Dividend Equivalents.

19. Definitions. As provided above, capitalized terms not defined in the Stock Unit Agreement shall have the meanings assigned to them in the Plan. For purposes of the Stock Unit Agreement:

(a) “Cause” means (i) a Participant’s conviction of or no contest plea with respect to bribery, extortion, embezzlement, fraud, grand larceny, or any felony involving abuse or misuse of the Participant’s position to seek or obtain an illegal or personal gain at the expense of the Corporation, or similar crime, or conspiracy to commit any such crimes or attempt to commit any such crimes; or (ii) misconduct that causes material harm to the Corporation.

(b) “Client” means any person or entity with which the Corporation, or any of its Subsidiaries, did business and with which the Participant had contact, or about which the Participant had access to Confidential Information, during the last twelve (12) months of his or her employment.

(c) “Competitive Service or Product” means any service or product: (i) that is substantially similar to or competitive with any service or product that the Participant created or provided, or of which the Participant assisted in the creation or provision, during his or her employment by the Corporation or any of its Subsidiaries; or (ii) about which the Participant had access to Confidential Information during his or her employment by the Corporation or any of its Subsidiaries.

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(d) “Confidential Information” means any trade secrets or other significant proprietary information, including, but not limited to, any client information (for example, client lists, information about client accounts, borrowings, and current or proposed transactions), any internal analysis of clients, marketing strategies, financial reports or projections, business or other plans, data, procedures, methods, computer data or system program or design, devices, lists, tools, or compilation, which relate to the present or planned business of the Corporation or any of its Subsidiaries and which has not been made generally known to the public by authorized representatives of the Corporation.

(e) “Prospective Client” means any person or entity to which the Corporation, or any of its Subsidiaries, provided, or from which the Corporation, or any of its Subsidiaries received, a proposal, bid, or written inquiry (general advertising or promotional materials and mass mailings excepted) and with which the Participant had contact, or about which the Participant had access to Confidential Information, during the last twelve (12) months of his or her employment.

(f) “Solicit” and “Solicitation” (with respect to Clients or Prospective Clients) mean directly or indirectly, and without the Corporation’s written authorization, to invite, encourage, request, or induce (or to assist another to invite, encourage, request or induce) any Client or Prospective Client of the Corporation, or any of its Subsidiaries, to: (i) surrender, redeem or terminate a product, service or relationship with the Corporation, or any of its Subsidiaries; (ii) obtain any Competitive Service or Product from the Participant or any third party; or (iii) transfer a product, service or relationship from the Corporation, or any of its Subsidiaries, to the Participant or any third party.

Dated:                     , 2012

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Exhibit A

Subject to all of the provisions of these Terms and Conditions, including without limitation Paragraphs 4, 5, 6, 7 and 9, upon the last day of the three-year performance period beginning on January 1, 2012 and ending on December 31, 2014 (the “Performance Period”) the Stock Units under your Stock Unit Agreement will vest in accordance with the following table based on the average annual rate of return on equity for the Performance Period attained by the Corporation:

Average Rate of Return on Equity	Percentage of Stock Units Vested
Less than 6%	0%
³ 6% and < 8%	50%
³ 8% and < 10%	100%
³ 10% and < 11%	110%
³ 11% and < 12%	115%
³ 12% and < 13%	120%
³ 13%	125%

The average annual rate of return on equity for the Performance Period attained by the Corporation shall be determined by the Committee in its sole discretion.

For purposes of this Exhibit A, the average annual rate of return on equity shall be calculated as the simple average annual rate of return on equity for the three-year Performance Period referenced above, measured across the Corporation as a whole (or in the case of a Participant to which Paragraph 6(d) or 6(e) of the Stock Unit Award Agreement applies, for the modified Performance Period described in Paragraph 6(d) or 6(e), as applicable, treating any fractional year as a full year.)

In the event of a Change in Control, as required by Paragraph 7 of the Terms and Conditions, 100% of the Stock Units shall vest.

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EX-10.7.(XXIII)

Exhibit 10.7 (xxiii)

TERMS AND CONDITIONS

2012 STOCK UNIT AWARD

UNDER THE AMENDED AND RESTATED

NORTHERN TRUST CORPORATION 2002 STOCK PLAN

Your Stock Unit Award is subject to the provisions of the Amended and Restated Northern Trust Corporation 2002 Stock Plan (the “Plan”), the Stock Unit Award notice (the “Award Notice”), and this Terms and Conditions document (“Terms and Conditions”). The Award Notice and these Terms and Condition constitute the “Stock Unit Agreement” as defined in the Plan. If there is any conflict between the information in the Stock Unit Agreement and the Plan, the Plan will govern. Capitalized terms not defined in the Stock Unit Agreement shall have the meanings assigned to them in the Plan.

1. Grant. The Corporation hereby grants to the Participant an Award of Stock Units, as set forth in the Award Notice, subject to the terms and conditions of the Plan and the Stock Unit Agreement. A Stock Unit is the right, subject to the terms and conditions of the Plan and the Stock Unit Agreement, to receive a distribution of a share of Common Stock pursuant to Paragraph 8 of these Terms and Conditions.

2. Stock Unit Account. The Corporation shall maintain an account (“Stock Unit Account”) on its books in the name of the Participant which shall reflect the number of Stock Units awarded to the Participant that the Participant is eligible to receive in distribution pursuant to Paragraph 8 of these Terms and Conditions.

3. Dividend Equivalents. Upon the payment of any dividend on Common Stock occurring during the period preceding the distribution of the Participant’s Stock Unit Award pursuant to Paragraph 8 of these Terms and Conditions, the Corporation shall promptly (and in any event no later than March 15 of the calendar year following the calendar year in which the dividend is declared) pay to the Participant an amount in cash equal in value to the dividends that the Participant would have received had the Participant been the actual owner of the number of shares of Common Stock represented by the Stock Units in the Participant’s Stock Unit Account on that date (“Dividend Equivalents”).

4. Forfeiture. The Stock Units granted to the Participant pursuant to the Stock Unit Agreement shall be forfeited and revert to the Corporation (a) in accordance with Paragraph 9, if the Participant engages in conduct or activity described in Paragraph 9 of these Terms and Conditions, or (b) except as described in Paragraphs 5, 6, and 7 and of these Terms and Conditions, if the Participant’s employment with the Corporation and all of its Subsidiaries terminates prior to the expiration of the Vesting Period described in Paragraph 5.

5. Vesting. Subject to all of the provisions of the Stock Unit Agreement, including, without limitation, the provisions of Paragraphs 4, 6, 7 and 9 of these Terms and Conditions, the Participant shall become vested in the Stock Units upon the vesting dates specified, and in accordance with the vesting schedule set forth, in the Award Notice. If the

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Participant’s employment with the Corporation and its Subsidiaries terminates for any reason prior to the end of the period ending on the latest vesting date set forth in the Award Notice (“Vesting Period”), the Stock Units in the Participant’s Stock Unit Account that have not yet vested and do not become vested under Paragraph 6 or have not become vested under Paragraph 7, shall be forfeited and revert to the Corporation on such termination date, and the Corporation shall have no further obligation after such date to pay Dividend Equivalents pursuant to Paragraph 3 of these Terms and Conditions with respect to such forfeited Stock Units. The Corporation shall have no further obligation to the Participant under these Terms and Conditions following the Participant’s forfeiture of Stock Units.

6. Prorated Vesting.

(a) The Participant shall cease to participate in the Plan under these Terms and Conditions as of the date of the Participant’s termination of employment with the Corporation and all of its Subsidiaries, subject to the following:

(b) If the Participant’s termination of employment is on account of death, Retirement or Disability and occurs prior to the end of the Vesting Period, or, if prior to the end of the Vesting Period, the Participant’s employment with the Corporation and its Subsidiaries is terminated under circumstances that entitle the Participant to severance benefits under the Northern Trust Corporation Severance Plan (the “Severance Plan”) and the Participant has timely executed and not revoked a settlement agreement, waiver and release under the Severance Plan (a “Release”) then, on such date of death, Retirement, Disability or termination of employment, the Participant shall have credited and become vested in a pro-rated number of unvested Stock Units, determined by multiplying the number of the Participant’s Stock Units that were unvested immediately prior to the date of the Participant’s death, Retirement, Disability or termination of employment and that would have become vested and distributable to the Participant if the Participant had participated in the Plan for the full Vesting Period, by a fraction, the numerator of which is the number of full calendar months of the Participant’s actual participation in the Plan under these Terms and Conditions during the Vesting Period, and the denominator of which is the number of full calendar months in the Vesting Period, in all cases as determined by the Committee or the Executive Vice President of Human Resources.

(c) If, prior to the end of the Vesting Period, the Participant’s employment with the Corporation and its Subsidiaries terminates and (i) the Participant is a Management Group member on the date of the grant of the Stock Units, (ii) the Participant is 55 years or older on the date of such termination of employment, and (iii) the Participant does not engage in conduct or activity described in Paragraph 9 of these Terms and Conditions during the Vesting Period, then, upon each remaining vesting date in the Vesting Period set forth in the Award Notice, the Participant shall have credited and become vested in a pro-rated number of unvested Stock Units, determined by multiplying the number of Stock Units that would have become vested and distributable to the Participant on such vesting

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date if the Participant had participated in the Plan for the full Vesting Period, by a fraction, the numerator of which is the number of full calendar months of the Participant’s actual participation in the Plan under these Terms and Conditions during the Vesting Period, and the denominator of which is the number of full calendar months in the Vesting Period, in all cases as determined by the Committee or the Executive Vice President of Human Resources.

(d) For purposes of these Terms and Conditions, “Retirement” means retirement occurring by reason of the Participant having qualified for a Normal, Early, or Postponed Retirement under The Northern Trust Company Pension Plan.

For purposes of these Terms and Conditions, “Disability” means a disability that continues for a period of six (6) months in accordance with The Northern Trust Company’s Managed Disability Program. For purposes of determining the date, if any, on which a Participant becomes vested under Paragraph 6(b) on account of Disability, the date of Disability shall be the last day of the six-month period described in the preceding sentence.

7. Vesting Upon a Change in Control. A Participant who is employed by the Corporation or any of its Subsidiaries upon the date of a Change in Control shall become 100% vested in his Stock Units upon the date of such Change in Control.

8. Distribution.

(a) In the case of Stock Units that become vested upon a vesting date within the Vesting Period pursuant to Paragraph 5 or Paragraph 6(c), such Stock Units shall be distributed on such vesting date, provided that such Stock Units shall be treated as distributed on such vesting date if they are distributed no later than the last day of the calendar year in which such vesting date occurs, or, if later, by the 15^th day of the third calendar month after such vesting date occurs, subject to and in accordance with the provisions of Treasury Regulation Section 1.409A-3(d), including without limitation the requirement that the employee shall in no event have the right directly or indirectly to designate the taxable year of payment.

(b) In the case of Stock Units that become vested prior to the expiration of the Vesting Period upon an individual’s Retirement, Disability or termination of employment in the circumstances described in Paragraph 6(b) (“distribution event”), with the number of unvested Stock Units that become vested on such distribution event determined in accordance with Paragraph 6 of these Terms and Conditions, distribution shall be made, as soon as practicable, but no later than 90 days, after such distribution event, subject to and in accordance with the provisions of, Treasury Regulation Section 1.409A-3(b), including without limitation the requirement that the employee shall in no event have the right directly or indirectly to designate the taxable year of payment.

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(c) In the case of Stock Units that become vested prior to the expiration of the Vesting Period upon a Participant’s death pursuant to Paragraph 6(b), with the number of unvested Stock Units that become vested on death determined in accordance with Paragraph 6 of these Terms and Conditions, distribution shall be made to the Participant’s beneficiary as soon as practicable, but no later than 90 days, after the Participant’s death, subject to and in accordance with the provisions of Treasury Regulation Section 1.409A-3(b), including without limitation the requirement that the beneficiary shall in no event have the right directly or indirectly to designate the taxable year of payment. Such distribution shall be made to such beneficiary and in such proportions as the Participant may designate in writing, and in the absence of a designation, the Participant’s beneficiary shall be one of the following persons determined in the order provided below:

– The Participant’s spouse; if none, then,

– The Participant’s children (in equal amounts); if none, then,

– The Participant’s parents (in equal amounts); if none, then,

– The Participant’s brothers and sisters (in equal amounts); if none, then,

– The Participant’s estate.

In the event of the Participant’s death after the expiration of the Vesting Period but prior to full distribution of the Stock Units pursuant to these Terms and Conditions, the Participant’s Stock Units shall be distributed, within the period described in clause (a) above, to the Participant’s beneficiary determined in accordance with the foregoing provisions of this clause (c) of Paragraph 8.

(d) In the case of Stock Units that become vested as a result of a Change in Control, the Participant shall not be entitled to a distribution of such Stock Units upon such Change in Control. Instead, any Stock Units that become vested as a result of a Change in Control shall be distributed only upon the date, or the occurrence of the event upon which, distribution would have been made in the absence of such Change in Control.

(e) Stock Units shall be distributed only in shares of Common Stock so that, pursuant to Paragraph 1 of these Terms and Conditions and this Paragraph 8, a Participant shall be entitled to receive one share of Common Stock for each Stock Unit in the Participant’s Stock Unit Account.

(f) Notwithstanding anything herein to the contrary, the provisions of this Stock Unit Award, including without limitation this Paragraph 8, shall be subject to the provisions of the Plan, including without limitation Sections 14(a), (b), (c), and (d) of the Plan. Pursuant to and not by way of limitation of the preceding sentence, notwithstanding anything herein to the contrary, “termination of employment” as used herein shall mean “Separation from Service” as defined in the Plan, a Participant shall in no event be eligible for a distribution on account of Retirement, Disability or termination of employment unless the Participant incurs a “Separation from Service”, as defined in the Plan, and any distribution described herein shall be delayed as necessary to meet the requirements of Section 14(d) of the Plan.

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9. Forfeitures and Recoupments.

(a) Engaging in Restricted Activity Without Written Consent of the Corporation. Notwithstanding anything to the contrary in these Terms and Conditions, if the Participant, without the written consent of the Corporation:

(i) at any time after the date of these Terms and Conditions, has divulged, directly or indirectly, or used, for the Participant’s own or another’s benefit, any Confidential Information;

(ii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after the Participant ceases to be employed by the Corporation and its Subsidiaries for any reason, has Solicited, or assisted in the Solicitation of, any Client or Prospective Client (provided, however, that this clause (ii) shall not apply to the Participant’s Solicitation of any Client or Prospective Client with whom he or she had a business relationship prior to the start of his or her employment with the Corporation and its Subsidiaries, provided no Confidential Information, directly or indirectly, is used in such Solicitation); or

(iii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after the Participant ceases to be employed by the Corporation and its Subsidiaries for any reason, has solicited, encouraged, advised, induced or caused any employee of the Corporation or any of its Subsidiaries to terminate his or her employment with the Corporation or any of its Subsidiaries, or provided any assistance, encouragement, information, or suggestion to any person or entity regarding the solicitation or hiring of any employee of the Corporation or any of its Subsidiaries;

then the Participant’s then outstanding Stock Units (whether vested or unvested) shall be forfeited to the Corporation by notice from the Committee in writing to the Participant within a reasonable period of time after the Committee acquires knowledge of the Participant’s violation of this Paragraph 9(a). In the event that a Participant’s Stock Units are forfeited pursuant to the preceding sentence or the provisions of Paragraph 9(b), below, the Corporation shall not distribute the Stock Units to the Participant (or the Participant’s beneficiary) pursuant to Paragraph 8, or pay any Dividend Equivalents pursuant to Paragraph 3 with respect to such Stock Units.

In addition, in the event of any action by the Participant to which clauses (i), (ii) or (iii), above, apply, the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any payment or delivery to the Participant with respect to any Stock Units occurring within twelve (12) months prior to, or at any time following, the date of the Participant’s termination of employment for any reason (including but not limited to termination of employment due to Retirement or Disability), and recoup any “gain realized” in connection with such Stock Units as described in Paragraph 9(c) below.

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(b) Misconduct and Restatement of Financials. Consistent with the Corporation’s risk-mitigation strategies for its compensation programs, and notwithstanding any other provision in these Terms and Conditions, in the event that:

(i) the Corporation is required to restate its financial statements filed with the U.S. Securities and Exchange Commission on Form 10-Q or Form 10-K or re-file quarterly financial data with the U.S. Federal Reserve due to any reason other than changes in accounting policy or applicable law (a “Restatement”), and the Committee determines that such Restatement resulted, in whole or in material part, from the Participant (A) intentionally engaging in conduct that resulted in a material weakness in internal control over financial reporting and was inconsistent with the standards of conduct of the business judgment rule, as defined below, or (B) personally and knowingly engaging in practices that materially contributed to circumstances that resulted in a material weakness in internal control over financial reporting and that were inconsistent with the standards of conduct of the business judgment rule; or

(ii) the Committee determines that the Participant has engaged in conduct that is grounds for termination for Cause and is inconsistent with the standards of conduct of the business judgment rule (“Misconduct”);

then the Committee shall review all then outstanding Stock Units (whether vested or unvested) of the Participant, and all Stock Units with respect to which there has been payment or delivery to the Participant within the 36-month period immediately preceding the date of the Restatement, or during the period after the date of the Misconduct, as applicable.

In the event of a Restatement described in clause (i), the Committee shall declare the Participant’s then outstanding, vested Stock Units that would not have become vested based on accurate financial data or restated results to be forfeited to the Corporation by notice in writing to the Participant within a reasonable period of time after the date of the Restatement, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any payment or delivery with respect to any Stock Units occurring within 36 months prior to the date of the Restatement that would not have become vested or been paid based on accurate financial data or restated results, and recoup any gain realized in connection with such Stock Units as described in Paragraph 9(c), below. In the event of Misconduct described in clause (ii) (other than any actions included in Paragraph 9(a) or clause (i) of this Paragraph 9(b)), the Committee shall declare the Participant’s then outstanding Stock Units (whether vested or unvested) to be forfeited to the Corporation by notice in writing to the Participant within a reasonable period of time after the date of the discovery of the Misconduct, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation and as permitted by applicable law, rescind any payment or delivery with respect to any Stock Units occurring after the date such Misconduct occurred and recoup any gain realized in connection with such Stock Units as described in Paragraph 9(c), below

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A Participant’s actions satisfy the “business judgment rule” if such actions were taken in good faith, in a manner that an ordinarily prudent person would act under similar circumstances, and in the interests of the Corporation. In interpreting and applying the preceding sentence, the Committee shall use as a guide the principles of the business judgment rule as construed by the Delaware courts in applying the Delaware Corporation Act.

(c) Rescission and Recoupment. Upon the rescission, pursuant to the provisions of Paragraph 9(a) or 9(b), of any payment or delivery with respect to any Stock Units, the Corporation shall be entitled to recoup any “gains realized” in connection with such Stock Units, in such manner and on such terms and conditions as the Committee shall require. “Gains realized” shall include (i) the amount of any cash (including Dividend Equivalents) distributed to the Participant with respect to, (ii) any cash or shares of the Corporation’s Common Stock (or proceeds attributable to the sale thereof ) paid or delivered in settlement of, and (iii) any other amounts determined by the Committee to have been realized in connection with, such rescinded Stock Units. If the Participant fails to repay any such amounts to the Corporation within 60 days after receipt of written demand, the Corporation shall be entitled, subject to applicable law and the requirements of Internal Revenue Code Section 409A, to deduct from any amounts the Corporation owes the Participant from time to time the amount of all gains realized, or to sue for repayment of such amounts, or to pursue both remedies.

10. Delivery of Shares. The Corporation may delay the issuance or delivery of shares of Common Stock if the Corporation reasonably anticipates that such issuance or delivery will violate federal securities laws or other applicable law, provided that the issuance or delivery is made at the earliest date at which the Corporation reasonably anticipates that such issuance or delivery will not cause such violation.

11. Adjustment. The Stock Units provided herein are subject to adjustment in accordance with the provisions of Section 11 of the Plan.

12. No Right to Employment. Nothing in the Plan or the Stock Unit Agreement shall be construed as creating any right in the Participant to continued employment or as altering or amending the existing terms and conditions of employment of the Participant except as otherwise specifically provided in the Stock Unit Agreement.

13. Nontransferability. No interest hereunder of the Participant is transferable except as provided in the Stock Unit Agreement.

14. Withholding/Delivery of Shares. All distributions hereunder are subject to withholding by the Corporation for all applicable federal, state or local taxes. With respect to distributions in shares of Common Stock, subject to such rules and limitations as may be established by the Committee from time to time, such withholding obligations shall be satisfied through the withholding of shares of Common Stock to which the Participant is otherwise entitled under the Stock Unit Award, provided, however, that such shares may be used to satisfy not more than the Corporation’s minimum statutory withholding obligation (based on minimum statutory withholding rates for Federal and state tax purposes, including payroll taxes, that are applicable to such taxable income).

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15. Administration. The Plan is administered by the Committee. The rights of the Participant hereunder are expressly subject to the terms and conditions of the Plan (including continued shareholder approval of the Plan), together with such guidelines as have been or may be adopted from time to time by the Committee. The Participant hereby acknowledges receipt of a copy of the Plan.

16. No Rights as Shareholder. Except as provided herein, the Participant will have no rights as a shareholder with respect to the Stock Units.

17. Interpretation and Applicable Law. Any interpretation by the Committee of the terms and conditions of the Plan, the Stock Unit Agreement or any guidelines shall be final. All questions pertaining to the validity, construction and administration of the Plan or the Stock Unit Agreement, and all claims or causes of action arising under, relating to, or in connection with, the Plan or the Stock Unit Agreement shall be determined in conformity with the laws of the State of Delaware, without regard to the conflict of law provisions of any state.

18. Sole Agreement. The Stock Unit Agreement, together with the Plan, is the entire Agreement between the parties hereto, all prior oral and written representations being merged herein. No amendment or modification of the terms of the Stock Unit Agreement shall be binding on either party unless reduced to writing and signed by the party to be bound. The Stock Unit Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors. Notwithstanding anything in the Stock Unit Agreement to the contrary, including without limitation the foregoing provisions of this Paragraph 18, in the event that the Committee determines that the Stock Unit Award, or the performance by the Corporation of any of its obligations under the Stock Unit Agreement, would violate any applicable law, the Stock Units shall be forfeited to the Corporation and cancelled, and the Corporation shall have no obligation to distribute the Stock Units to the Participant or the Participant’s Beneficiary or to pay any Dividend Equivalents.

19. Definitions. As provided above, capitalized terms not defined in the Stock Unit Agreement shall have the meanings assigned to them in the Plan. For purposes of the Stock Unit Agreement:

(a) “Cause” means (i) a Participant’s conviction of or no contest plea with respect to bribery, extortion, embezzlement, fraud, grand larceny, or any felony involving abuse or misuse of the Participant’s position to seek or obtain an illegal or personal gain at the expense of the Corporation, or similar crime, or conspiracy to commit any such crimes or attempt to commit any such crimes; or (ii) misconduct that causes material harm to the Corporation.

(b) “Client” means any person or entity with which the Corporation, or any of its Subsidiaries, did business and with which the Participant had contact, or about which the Participant had access to Confidential Information, during the last twelve (12) months of his or her employment.

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(c) “Competitive Service or Product” means any service or product: (i) that is substantially similar to or competitive with any service or product that the Participant created or provided, or of which the Participant assisted in the creation or provision, during his or her employment by the Corporation or any of its Subsidiaries; or (ii) about which the Participant had access to Confidential Information during his or her employment by the Corporation or any of its Subsidiaries.

(d) “Confidential Information” means any trade secrets or other significant proprietary information, including, but not limited to, any client information (for example, client lists, information about client accounts, borrowings, and current or proposed transactions), any internal analysis of clients, marketing strategies, financial reports or projections, business or other plans, data, procedures, methods, computer data or system program or design, devices, lists, tools, or compilation, which relate to the present or planned business of the Corporation or any of its Subsidiaries and which has not been made generally known to the public by authorized representatives of the Corporation.

(e) “Prospective Client” means any person or entity to which the Corporation, or any of its Subsidiaries, provided, or from which the Corporation, or any of its Subsidiaries received, a proposal, bid, or written inquiry (general advertising or promotional materials and mass mailings excepted) and with which the Participant had contact, or about which the Participant had access to Confidential Information, during the last twelve (12) months of his or her employment.

(f) “Solicit” and “Solicitation” (with respect to Clients or Prospective Clients) mean directly or indirectly, and without the Corporation’s written authorization, to invite, encourage, request, or induce (or to assist another to invite, encourage, request or induce) any Client or Prospective Client of the Corporation, or any of its Subsidiaries, to: (i) surrender, redeem or terminate a product, service or relationship with the Corporation, or any of its Subsidiaries; (ii) obtain any Competitive Service or Product from the Participant or any third party; or (iii) transfer a product, service or relationship from the Corporation, or any of its Subsidiaries, to the Participant or any third party.

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EX-10.7.(XXIV)

Exhibit 10.7 (xxiv)

TERMS AND CONDITIONS

2012 STOCK UNIT AWARD

UNDER THE AMENDED AND RESTATED

NORTHERN TRUST CORPORATION 2002 STOCK PLAN

Your Stock Unit Award is subject to the provisions of the Amended and Restated Northern Trust Corporation 2002 Stock Plan (the “Plan”), the Stock Unit Award notice (the “Award Notice”), and this Terms and Conditions document (“Terms and Conditions”). The Award Notice and these Terms and Condition constitute the “Stock Unit Agreement” as defined in the Plan. If there is any conflict between the information in the Stock Unit Agreement and the Plan, the Plan will govern. Capitalized terms not defined in the Stock Unit Agreement shall have the meanings assigned to them in the Plan.

1. Grant. The Corporation hereby grants to the Participant an Award of Stock Units, as set forth in the Award Notice, subject to the terms and conditions of the Plan and the Stock Unit Agreement. A Stock Unit is the right, subject to the terms and conditions of the Plan and the Stock Unit Agreement, to receive a distribution of a share of Common Stock pursuant to Paragraph 8 of these Terms and Conditions.

2. Stock Unit Account. The Corporation shall maintain an account (“Stock Unit Account”) on its books in the name of the Participant which shall reflect the number of Stock Units awarded to the Participant that the Participant is eligible to receive in distribution pursuant to Paragraph 8 of these Terms and Conditions.

3. Dividend Equivalents. Upon the payment of any dividend on Common Stock occurring during the period preceding the distribution of the Participant’s Stock Unit Award pursuant to Paragraph 8 of these Terms and Conditions, the Corporation shall promptly (and in any event no later than March 15 of the calendar year following the calendar year in which the dividend is declared) pay to the Participant an amount in cash equal in value to the dividends that the Participant would have received had the Participant been the actual owner of the number of shares of Common Stock represented by the Stock Units in the Participant’s Stock Unit Account on that date (“Dividend Equivalents”).

4. Forfeiture. The Stock Units granted to the Participant pursuant to the Stock Unit Agreement shall be forfeited and revert to the Corporation (a) in accordance with Paragraph 9, if the Participant engages in conduct or activity described in Paragraph 9 of these Terms and Conditions, or (b) except as described in Paragraphs 5, 6, and 7 and of these Terms and Conditions, if the Participant’s employment with the Corporation and all of its Subsidiaries terminates prior to the expiration of the Vesting Period described in Paragraph 5.

5. Vesting. Subject to all of the provisions of the Stock Unit Agreement, including, without limitation, the provisions of Paragraphs 4, 6, 7 and 9 of these Terms and Conditions, the Participant shall become vested in the Stock Units upon the vesting dates specified, and in accordance with the vesting schedule set forth, in the Award Notice. If the

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Participant’s employment with the Corporation and its Subsidiaries terminates for any reason prior to the end of the period ending on the latest vesting date set forth in the Award Notice (“Vesting Period”), the Stock Units in the Participant’s Stock Unit Account that have not yet vested and do not become vested under Paragraph 6 or have not become vested under Paragraph 7, shall be forfeited and revert to the Corporation on such termination date, and the Corporation shall have no further obligation after such date to pay Dividend Equivalents pursuant to Paragraph 3 of these Terms and Conditions with respect to such forfeited Stock Units. The Corporation shall have no further obligation to the Participant under these Terms and Conditions following the Participant’s forfeiture of Stock Units.

6. Prorated Vesting.

(a) The Participant shall cease to participate in the Plan under these Terms and Conditions as of the date of the Participant’s termination of employment with the Corporation and all of its Subsidiaries, subject to the following:

(b) If the Participant’s termination of employment is on account of death, Retirement or Disability and occurs prior to the end of the Vesting Period, or, if prior to the end of the Vesting Period, the Participant’s employment with the Corporation and its Subsidiaries is terminated under circumstances that entitle the Participant to severance benefits under the Northern Trust Corporation Severance Plan (the “Severance Plan”) and the Participant has timely executed and not revoked a settlement agreement, waiver and release under the Severance Plan (a “Release”) then, on such date of death, Retirement, Disability or termination of employment, the Participant shall have credited and become vested in a pro-rated number of unvested Stock Units, determined by multiplying the number of the Participant’s Stock Units that were unvested immediately prior to the date of the Participant’s death, Retirement, Disability or termination of employment and that would have become vested and distributable to the Participant if the Participant had participated in the Plan for the full Vesting Period, by a fraction, the numerator of which is the number of full calendar months of the Participant’s actual participation in the Plan under these Terms and Conditions during the Vesting Period, and the denominator of which is the number of full calendar months in the Vesting Period, in all cases as determined by the Committee or the Executive Vice President of Human Resources.

(c) If, prior to the end of the Vesting Period, the Participant’s employment with the Corporation and its Subsidiaries terminates and (i) the Participant is a Management Group member on the date of the grant of the Stock Units, (ii) the Participant is 55 years or older on the date of such termination of employment, and (iii) the Participant does not engage in conduct or activity described in Paragraph 9 of these Terms and Conditions during the Vesting Period, then, upon each remaining vesting date in the Vesting Period set forth in the Award Notice, the Participant shall have credited and become vested in a pro-rated number of unvested Stock Units, determined by multiplying the number of Stock Units that would have become vested and distributable to the Participant on such vesting

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date if the Participant had participated in the Plan for the full Vesting Period, by a fraction, the numerator of which is the number of full calendar months of the Participant’s actual participation in the Plan under these Terms and Conditions during the Vesting Period, and the denominator of which is the number of full calendar months in the Vesting Period, in all cases as determined by the Committee or the Executive Vice President of Human Resources.

(d) For purposes of these Terms and Conditions, “Retirement” means retirement occurring by reason of the Participant having qualified for a Normal, Early, or Postponed Retirement under The Northern Trust Company Pension Plan.

For purposes of these Terms and Conditions, “Disability” means a disability that continues for a period of six (6) months in accordance with The Northern Trust Company’s Managed Disability Program. For purposes of determining the date, if any, on which a Participant becomes vested under Paragraph 6(b) on account of Disability, the date of Disability shall be the last day of the six-month period described in the preceding sentence.

7. Vesting Upon a Change in Control. A Participant who is employed by the Corporation or any of its Subsidiaries upon the date of a Change in Control shall become 100% vested in his Stock Units upon the date of such Change in Control.

8. Distribution.

(a) In the case of Stock Units that become vested upon a vesting date within the Vesting Period pursuant to Paragraph 5 or Paragraph 6(c), such Stock Units shall be distributed on the first day following the expiration of the six-month period beginning on such vesting date.

(b) In the case of Stock Units that become vested prior to the expiration of the Vesting Period upon an individual’s Retirement, Disability or termination of employment in the circumstances described in Paragraph 6(b) (“separation event”), with the number of unvested Stock Units that become vested on such separation event determined in accordance with Paragraph 6 of these Terms and Conditions, distribution shall be made on the first day following the expiration of the six-month period beginning on such separation event.

(c) In the case of Stock Units that become vested prior to the expiration of the Vesting Period upon a Participant’s death pursuant to Paragraph 6(b), with the number of unvested Stock Units that become vested on death determined in accordance with Paragraph 6 of these Terms and Conditions, distribution shall be made to the Participant’s beneficiary on the first day following the expiration of the six-month period beginning on the date of death. Such distribution shall be made to such beneficiary and in such proportions as the Participant may designate in writing, and in the absence of a designation, the Participant’s beneficiary shall be one of the following persons determined in the order provided below:

– The Participant’s spouse; if none, then,

– The Participant’s children (in equal amounts); if none, then,

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– The Participant’s parents (in equal amounts); if none, then,

– The Participant’s brothers and sisters (in equal amounts); if none, then,

– The Participant’s estate.

In the event of the Participant’s death after the expiration of the Vesting Period but prior to full distribution of the Stock Units pursuant to these Terms and Conditions, the Participant’s Stock Units shall be distributed, on the first day following the expiration of the six-month period beginning on the Participant’s date of death, to the Participant’s beneficiary determined in accordance with the foregoing provisions of this clause (c) of Paragraph 8.

(d) In the case of Stock Units that become vested as a result of a Change in Control, the Participant shall not be entitled to a distribution of such Stock Units upon such Change in Control. Instead, any Stock Units that become vested as a result of a Change in Control shall be distributed only upon the date, or the occurrence of the event upon which, distribution would have been made in the absence of such Change in Control or, if later, upon the first day following the expiration of the six-month period beginning on the date of such Change in Control.

(e) Stock Units shall be treated as distributed on the applicable distribution date specified in Paragraphs 8(a), (b), (c), and (d), above, if they are distributed no later than the last day of the calendar year in which such distribution date occurs, or, if later, by the 15th day of the third calendar month after such distribution date occurs, subject to and in accordance with the provisions of Treasury Regulation Section 1.409A-3(d), including without limitation the requirement that the employee shall in no event have the right directly or indirectly to designate the taxable year of payment.

(f) Stock Units shall be distributed only in shares of Common Stock so that, pursuant to Paragraph 1 of these Terms and Conditions and this Paragraph 8, a Participant shall be entitled to receive one share of Common Stock for each Stock Unit in the Participant’s Stock Unit Account.

(g) Notwithstanding anything herein to the contrary, the provisions of this Stock Unit Award, including without limitation this Paragraph 8, shall be subject to the provisions of the Plan, including without limitation Sections 14(a), (b), (c), and (d) of the Plan. Pursuant to and not by way of limitation of the preceding sentence, notwithstanding anything herein to the contrary, “termination of employment” as used herein shall mean “Separation from Service” as defined in the Plan, a Participant shall in no event be eligible for a distribution on account of Retirement, Disability or termination of employment unless the Participant incurs a “Separation from Service”, as defined in the Plan, and any distribution described herein shall be delayed as necessary to meet the requirements of Section 14(d) of the Plan.

9. Forfeitures and Recoupments.

(a) Engaging in Restricted Activity Without Written Consent of the Corporation. Notwithstanding anything to the contrary in these Terms and Conditions, if the Participant, without the written consent of the Corporation:

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(i) at any time after the date of these Terms and Conditions, has divulged, directly or indirectly, or used, for the Participant’s own or another’s benefit, any Confidential Information;

(ii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after the Participant ceases to be employed by the Corporation and its Subsidiaries for any reason, has Solicited, or assisted in the Solicitation of, any Client or Prospective Client (provided, however, that this clause (ii) shall not apply to the Participant’s Solicitation of any Client or Prospective Client with whom he or she had a business relationship prior to the start of his or her employment with the Corporation and its Subsidiaries, provided no Confidential Information, directly or indirectly, is used in such Solicitation); or

(iii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after the Participant ceases to be employed by the Corporation and its Subsidiaries for any reason, has solicited, encouraged, advised, induced or caused any employee of the Corporation or any of its Subsidiaries to terminate his or her employment with the Corporation or any of its Subsidiaries, or provided any assistance, encouragement, information, or suggestion to any person or entity regarding the solicitation or hiring of any employee of the Corporation or any of its Subsidiaries;

then the Participant’s then outstanding Stock Units (whether vested or unvested) shall be forfeited to the Corporation by notice from the Committee in writing to the Participant within a reasonable period of time after the Committee acquires knowledge of the Participant’s violation of this Paragraph 9(a). In the event that a Participant’s Stock Units are forfeited pursuant to the preceding sentence or the provisions of Paragraph 9(b), below, the Corporation shall not distribute the Stock Units to the Participant (or the Participant’s beneficiary) pursuant to Paragraph 8, or pay any Dividend Equivalents pursuant to Paragraph 3 with respect to such Stock Units.

In addition, in the event of any action by the Participant to which clauses (i), (ii) or (iii), above, apply, the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any payment or delivery to the Participant with respect to any Stock Units occurring within twelve (12) months prior to, or at any time following, the date of the Participant’s termination of employment for any reason (including but not limited to termination of employment due to Retirement or Disability), and recoup any “gain realized” in connection with such Stock Units as described in Paragraph 9(c) below.

(b) Misconduct and Restatement of Financials. Consistent with the Corporation’s risk-mitigation strategies for its compensation programs, and notwithstanding any other provision in these Terms and Conditions, in the event that:

(i) the Corporation is required to restate its financial statements filed with the U.S. Securities and Exchange Commission on Form 10-Q or Form 10-K

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or re-file quarterly financial data with the U.S. Federal Reserve due to any reason other than changes in accounting policy or applicable law (a “Restatement”), and the Committee determines that such Restatement resulted, in whole or in material part, from the Participant (A) intentionally engaging in conduct that resulted in a material weakness in internal control over financial reporting and was inconsistent with the standards of conduct of the business judgment rule, as defined below, or (B) personally and knowingly engaging in practices that materially contributed to circumstances that resulted in a material weakness in internal control over financial reporting and that were inconsistent with the standards of conduct of the business judgment rule; or

(ii) the Committee determines that the Participant has engaged in conduct that is grounds for termination for Cause and is inconsistent with the standards of conduct of the business judgment rule (“Misconduct”);

then the Committee shall review all then outstanding Stock Units (whether vested or unvested) of the Participant, and all Stock Units with respect to which there has been payment or delivery to the Participant within the 36-month period immediately preceding the date of the Restatement, or during the period after the date of the Misconduct, as applicable.

In the event of a Restatement described in clause (i), the Committee shall declare the Participant’s then outstanding, vested Stock Units that would not have become vested based on accurate financial data or restated results to be forfeited to the Corporation by notice in writing to the Participant within a reasonable period of time after the date of the Restatement, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any payment or delivery with respect to any Stock Units occurring within 36 months prior to the date of the Restatement that would not have become vested or been paid based on accurate financial data or restated results, and recoup any gain realized in connection with such Stock Units as described in Paragraph 9(c), below. In the event of Misconduct described in clause (ii) (other than any actions included in Paragraph 9(a) or clause (i) of this Paragraph 9(b)), the Committee shall declare the Participant’s then outstanding Stock Units (whether vested or unvested) to be forfeited to the Corporation by notice in writing to the Participant within a reasonable period of time after the date of the discovery of the Misconduct, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation and as permitted by applicable law, rescind any payment or delivery with respect to any Stock Units occurring after the date such Misconduct occurred and recoup any gain realized in connection with such Stock Units as described in Paragraph 9(c), below

A Participant’s actions satisfy the “business judgment rule” if such actions were taken in good faith, in a manner that an ordinarily prudent person would act under similar circumstances, and in the interests of the Corporation. In interpreting and applying the preceding sentence, the Committee shall use as a guide the principles of the business judgment rule as construed by the Delaware courts in applying the Delaware Corporation Act.

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(c) Rescission and Recoupment. Upon the rescission, pursuant to the provisions of Paragraph 9(a) or 9(b), of any payment or delivery with respect to any Stock Units, the Corporation shall be entitled to recoup any “gains realized” in connection with such Stock Units, in such manner and on such terms and conditions as the Committee shall require. “Gains realized” shall include (i) the amount of any cash (including Dividend Equivalents) distributed to the Participant with respect to, (ii) any cash or shares of the Corporation’s Common Stock (or proceeds attributable to the sale thereof ) paid or delivered in settlement of, and (iii) any other amounts determined by the Committee to have been realized in connection with, such rescinded Stock Units. If the Participant fails to repay any such amounts to the Corporation within 60 days after receipt of written demand, the Corporation shall be entitled, subject to applicable law and the requirements of Internal Revenue Code Section 409A, to deduct from any amounts the Corporation owes the Participant from time to time the amount of all gains realized, or to sue for repayment of such amounts, or to pursue both remedies.

10. Cancellation by the Committee. The Committee will consider cancelling and may cancel all or a portion of the Participant’s unvested Stock Units when (a) there is reasonable evidence of material employee misbehavior or error, (b) the Corporation or the relevant business unit of the Corporation suffers a material downturn in its financial performance, attributable to a prior period and materially greater than was previously anticipated in risk adjusting incentive compensation, or (c) the Corporation or the relevant business unit of the Corporation suffers a material failure of risk management. In the event that any of the Participant’s unvested Stock Units are cancelled pursuant to the preceding sentence, the Corporation shall have no obligation to distribute the Stock Units to the Participant (or the Participant’s beneficiary) pursuant to Paragraph 8 or to pay any Dividend Equivalents pursuant to Paragraph 3 with respect to such Stock Units.

11. Delivery of Shares. The Corporation may delay the issuance or delivery of shares of Common Stock if the Corporation reasonably anticipates that such issuance or delivery will violate federal securities laws or other applicable law, provided that the issuance or delivery is made at the earliest date at which the Corporation reasonably anticipates that such issuance or delivery will not cause such violation.

12. Adjustment. The Stock Units provided herein are subject to adjustment in accordance with the provisions of Section 11 of the Plan.

13. No Right to Employment. Nothing in the Plan or the Stock Unit Agreement shall be construed as creating any right in the Participant to continued employment or as altering or amending the existing terms and conditions of employment of the Participant except as otherwise specifically provided in the Stock Unit Agreement.

14. Nontransferability. No interest hereunder of the Participant is transferable except as provided in the Stock Unit Agreement.

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15. Withholding/Delivery of Shares. All distributions hereunder are subject to withholding by the Corporation for all applicable federal, state or local taxes. With respect to distributions in shares of Common Stock, subject to such rules and limitations as may be established by the Committee from time to time, such withholding obligations shall be satisfied through the withholding of shares of Common Stock to which the Participant is otherwise entitled under the Stock Unit Award, provided, however, that such shares may be used to satisfy not more than the Corporation’s minimum statutory withholding obligation (based on minimum statutory withholding rates for Federal and state tax purposes, including payroll taxes, that are applicable to such taxable income).

16. Administration. The Plan is administered by the Committee. The rights of the Participant hereunder are expressly subject to the terms and conditions of the Plan (including continued shareholder approval of the Plan), together with such guidelines as have been or may be adopted from time to time by the Committee. The Participant hereby acknowledges receipt of a copy of the Plan.

17. No Rights as Shareholder. Except as provided herein, the Participant will have no rights as a shareholder with respect to the Stock Units.

18. Interpretation and Applicable Law. Any interpretation by the Committee of the terms and conditions of the Plan, the Stock Unit Agreement or any guidelines shall be final. All questions pertaining to the validity, construction and administration of the Plan or the Stock Unit Agreement, and all claims or causes of action arising under, relating to, or in connection with, the Plan or the Stock Unit Agreement shall be determined in conformity with the laws of the State of Delaware, without regard to the conflict of law provisions of any state.

19. Sole Agreement. The Stock Unit Agreement, together with the Plan, is the entire Agreement between the parties hereto, all prior oral and written representations being merged herein. No amendment or modification of the terms of the Stock Unit Agreement shall be binding on either party unless reduced to writing and signed by the party to be bound. The Stock Unit Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors. Notwithstanding anything in the Stock Unit Agreement to the contrary, including without limitation the foregoing provisions of this Paragraph 19, in the event that the Committee determines that the Stock Unit Award, or the performance by the Corporation of any of its obligations under the Stock Unit Agreement, would violate any applicable law, the Stock Units shall be forfeited to the Corporation and cancelled, and the Corporation shall have no obligation to distribute the Stock Units to the Participant or the Participant’s Beneficiary or to pay any Dividend Equivalents.

20. Definitions. As provided above, capitalized terms not defined in the Stock Unit Agreement shall have the meanings assigned to them in the Plan. For purposes of the Stock Unit Agreement:

(a) “Cause” means (i) a Participant’s conviction of or no contest plea with respect to bribery, extortion, embezzlement, fraud, grand larceny, or any felony involving abuse or misuse of the Participant’s position to seek or obtain an illegal or personal gain at the expense of the Corporation, or similar crime, or conspiracy to commit any such crimes or attempt to commit any such crimes; or (ii) misconduct that causes material harm to the Corporation.

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(b) “Client” means any person or entity with which the Corporation, or any of its Subsidiaries, did business and with which the Participant had contact, or about which the Participant had access to Confidential Information, during the last twelve (12) months of his or her employment.

(c) “Competitive Service or Product” means any service or product: (i) that is substantially similar to or competitive with any service or product that the Participant created or provided, or of which the Participant assisted in the creation or provision, during his or her employment by the Corporation or any of its Subsidiaries; or (ii) about which the Participant had access to Confidential Information during his or her employment by the Corporation or any of its Subsidiaries.

(d) “Confidential Information” means any trade secrets or other significant proprietary information, including, but not limited to, any client information (for example, client lists, information about client accounts, borrowings, and current or proposed transactions), any internal analysis of clients, marketing strategies, financial reports or projections, business or other plans, data, procedures, methods, computer data or system program or design, devices, lists, tools, or compilation, which relate to the present or planned business of the Corporation or any of its Subsidiaries and which has not been made generally known to the public by authorized representatives of the Corporation.

(e) “Prospective Client” means any person or entity to which the Corporation, or any of its Subsidiaries, provided, or from which the Corporation, or any of its Subsidiaries received, a proposal, bid, or written inquiry (general advertising or promotional materials and mass mailings excepted) and with which the Participant had contact, or about which the Participant had access to Confidential Information, during the last twelve (12) months of his or her employment.

(f) “Solicit” and “Solicitation” (with respect to Clients or Prospective Clients) mean directly or indirectly, and without the Corporation’s written authorization, to invite, encourage, request, or induce (or to assist another to invite, encourage, request or induce) any Client or Prospective Client of the Corporation, or any of its Subsidiaries, to: (i) surrender, redeem or terminate a product, service or relationship with the Corporation, or any of its Subsidiaries; (ii) obtain any Competitive Service or Product from the Participant or any third party; or (iii) transfer a product, service or relationship from the Corporation, or any of its Subsidiaries, to the Participant or any third party.

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EX-10.7.(XXV)

Exhibit 10.7 (xxv)

TERMS AND CONDITIONS

2012 STOCK UNIT AWARD

UNDER THE AMENDED AND RESTATED

NORTHERN TRUST CORPORATION 2002 STOCK PLAN

Your Stock Unit Award is subject to the provisions of the Amended and Restated Northern Trust Corporation 2002 Stock Plan (the “Plan”), the Stock Unit Award notice (the “Award Notice”), and this Terms and Conditions document (“Terms and Conditions”). The Award Notice and these Terms and Condition constitute the “Stock Unit Agreement” as defined in the Plan. If there is any conflict between the information in the Stock Unit Agreement and the Plan, the Plan will govern. Capitalized terms not defined in the Stock Unit Agreement shall have the meanings assigned to them in the Plan.

1. Grant. The Corporation hereby grants to the Participant an Award of Stock Units, as set forth in the Award Notice, subject to the terms and conditions of the Plan and the Stock Unit Agreement. A Stock Unit is the right, subject to the terms and conditions of the Plan and the Stock Unit Agreement, to receive a distribution of a share of Common Stock pursuant to Paragraph 8 of these Terms and Conditions.

2. Stock Unit Account. The Corporation shall maintain an account (“Stock Unit Account”) on its books in the name of the Participant which shall reflect the number of Stock Units awarded to the Participant that the Participant is eligible to receive in distribution pursuant to Paragraph 8 of these Terms and Conditions.

3. Dividend Equivalents. Upon the payment of any dividend on Common Stock occurring during the period preceding the distribution of the Participant’s Stock Unit Award pursuant to Paragraph 8 of these Terms and Conditions, the Corporation shall promptly (and in any event no later than March 15 of the calendar year following the calendar year in which the dividend is declared) pay to the Participant an amount in cash equal in value to the dividends that the Participant would have received had the Participant been the actual owner of the number of shares of Common Stock represented by the Stock Units in the Participant’s Stock Unit Account on that date (“Dividend Equivalents”).

4. Forfeiture. The Stock Units granted to the Participant pursuant to the Stock Unit Agreement shall be forfeited and revert to the Corporation (a) in accordance with Paragraph 9, if the Participant engages in conduct or activity described in Paragraph 9 of these Terms and Conditions, or (b) except as described in Paragraphs 5, 6, and 7 and of these Terms and Conditions, if the Participant’s employment with the Corporation and all of its Subsidiaries terminates prior to the expiration of the Vesting Period described in Paragraph 5.

5. Vesting. Subject to all of the provisions of the Stock Unit Agreement, including, without limitation, the provisions of Paragraphs 4, 6, 7 and 9 of these Terms and Conditions, the Participant shall become vested in the Stock Units upon the vesting dates specified, and in accordance with the vesting schedule set forth, in the Award Notice. If the

US Code Staff - Mandatory

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Participant’s employment with the Corporation and its Subsidiaries terminates for any reason prior to the end of the period ending on the latest vesting date set forth in the Award Notice (“Vesting Period”), the Stock Units in the Participant’s Stock Unit Account that have not yet vested and do not become vested under Paragraph 6 or have not become vested under Paragraph 7, shall be forfeited and revert to the Corporation on such termination date, and the Corporation shall have no further obligation after such date to pay Dividend Equivalents pursuant to Paragraph 3 of these Terms and Conditions with respect to such forfeited Stock Units. The Corporation shall have no further obligation to the Participant under these Terms and Conditions following the Participant’s forfeiture of Stock Units.

6. Prorated Vesting.

(a) The Participant shall cease to participate in the Plan under these Terms and Conditions as of the date of the Participant’s termination of employment with the Corporation and all of its Subsidiaries, subject to the following:

(b) If the Participant’s termination of employment is on account of death, Retirement or Disability and occurs prior to the end of the Vesting Period, or, if prior to the end of the Vesting Period, the Participant’s employment with the Corporation and its Subsidiaries is terminated under circumstances that entitle the Participant to severance benefits under the Northern Trust Corporation Severance Plan (the “Severance Plan”) and the Participant has timely executed and not revoked a settlement agreement, waiver and release under the Severance Plan (a “Release”) then, on such date of death, Retirement, Disability or termination of employment, the Participant shall have credited and become vested in a pro-rated number of unvested Stock Units, determined by multiplying the number of the Participant’s Stock Units that were unvested immediately prior to the date of the Participant’s death, Retirement, Disability or termination of employment and that would have become vested and distributable to the Participant if the Participant had participated in the Plan for the full Vesting Period, by a fraction, the numerator of which is the number of full calendar months of the Participant’s actual participation in the Plan under these Terms and Conditions during the Vesting Period, and the denominator of which is the number of full calendar months in the Vesting Period, in all cases as determined by the Committee or the Executive Vice President of Human Resources.

(c) If, prior to the end of the Vesting Period, the Participant’s employment with the Corporation and its Subsidiaries terminates and (i) the Participant is a Management Group member on the date of the grant of the Stock Units, (ii) the Participant is 55 years or older on the date of such termination of employment, and (iii) the Participant does not engage in conduct or activity described in Paragraph 9 of these Terms and Conditions during the Vesting Period, then, upon each remaining vesting date in the Vesting Period set forth in the Award Notice, the Participant shall have credited and become vested in a pro-rated number of unvested Stock Units, determined by multiplying the number of Stock Units that would have become vested and distributable to the Participant on such vesting

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date if the Participant had participated in the Plan for the full Vesting Period, by a fraction, the numerator of which is the number of full calendar months of the Participant’s actual participation in the Plan under these Terms and Conditions during the Vesting Period, and the denominator of which is the number of full calendar months in the Vesting Period, in all cases as determined by the Committee or the Executive Vice President of Human Resources.

(d) For purposes of these Terms and Conditions, “Retirement” means retirement occurring by reason of the Participant having qualified for a Normal, Early, or Postponed Retirement under The Northern Trust Company Pension Plan.

For purposes of these Terms and Conditions, “Disability” means a disability that continues for a period of six (6) months in accordance with The Northern Trust Company’s Managed Disability Program. For purposes of determining the date, if any, on which a Participant becomes vested under Paragraph 6(b) on account of Disability, the date of Disability shall be the last day of the six-month period described in the preceding sentence.

7. Vesting Upon a Change in Control. A Participant who is employed by the Corporation or any of its Subsidiaries upon the date of a Change in Control shall become 100% vested in his Stock Units upon the date of such Change in Control.

8. Distribution.

(a) In the case of Stock Units that become vested upon a vesting date within the Vesting Period pursuant to Paragraph 5 or Paragraph 6(c), such Stock Units shall be distributed on the first day following the expiration of the six-month period beginning on such vesting date.

(b) In the case of Stock Units that become vested prior to the expiration of the Vesting Period upon an individual’s Retirement, Disability or termination of employment in the circumstances described in Paragraph 6(b) (“separation event”), with the number of unvested Stock Units that become vested on such separation event determined in accordance with Paragraph 6 of these Terms and Conditions, distribution shall be made on the first day following the expiration of the six-month period beginning on such separation event.

(c) In the case of Stock Units that become vested prior to the expiration of the Vesting Period upon a Participant’s death pursuant to Paragraph 6(b), with the number of unvested Stock Units that become vested on death determined in accordance with Paragraph 6 of these Terms and Conditions, distribution shall be made to the Participant’s beneficiary on the first day following the expiration of the six-month period beginning on the date of death. Such distribution shall be made to such beneficiary and in such proportions as the Participant may designate in writing, and in the absence of a designation, the Participant’s beneficiary shall be one of the following persons determined in the order provided below:

– The Participant’s spouse; if none, then,

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– The Participant’s children (in equal amounts); if none, then,

– The Participant’s parents (in equal amounts); if none, then,

– The Participant’s brothers and sisters (in equal amounts); if none, then,

– The Participant’s estate.

In the event of the Participant’s death after the expiration of the Vesting Period but prior to full distribution of the Stock Units pursuant to these Terms and Conditions, the Participant’s Stock Units shall be distributed, on the first day following the expiration of the six-month period beginning on the Participant’s date of death, to the Participant’s beneficiary determined in accordance with the foregoing provisions of this clause (c) of Paragraph 8.

(d) In the case of Stock Units that become vested as a result of a Change in Control, the Participant shall not be entitled to a distribution of such Stock Units upon such Change in Control. Instead, any Stock Units that become vested as a result of a Change in Control shall be distributed only upon the date, or the occurrence of the event upon which, distribution would have been made in the absence of such Change in Control or, if later, upon the first day following the expiration of the six-month period beginning on the date of such Change in Control.

(e) Stock Units shall be treated as distributed on the applicable distribution date specified in Paragraphs 8(a), (b), (c), and (d), above, if they are distributed no later than the last day of the calendar year in which such distribution date occurs, or, if later, by the 15th day of the third calendar month after such distribution date occurs, subject to and in accordance with the provisions of Treasury Regulation Section 1.409A-3(d), including without limitation the requirement that the employee shall in no event have the right directly or indirectly to designate the taxable year of payment.

(f) Stock Units shall be distributed only in shares of Common Stock so that, pursuant to Paragraph 1 of these Terms and Conditions and this Paragraph 8, a Participant shall be entitled to receive one share of Common Stock for each Stock Unit in the Participant’s Stock Unit Account.

(g) Notwithstanding anything herein to the contrary, the provisions of this Stock Unit Award, including without limitation this Paragraph 8, shall be subject to the provisions of the Plan, including without limitation Sections 14(a), (b), (c), and (d) of the Plan. Pursuant to and not by way of limitation of the preceding sentence, notwithstanding anything herein to the contrary, “termination of employment” as used herein shall mean “Separation from Service” as defined in the Plan, a Participant shall in no event be eligible for a distribution on account of Retirement, Disability or termination of employment unless the Participant incurs a “Separation from Service”, as defined in the Plan, and any distribution described herein shall be delayed as necessary to meet the requirements of Section 14(d) of the Plan.

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9. Forfeitures and Recoupments.

(a) Engaging in Restricted Activity Without Written Consent of the Corporation. Notwithstanding anything to the contrary in these Terms and Conditions, if the Participant, without the written consent of the Corporation:

(i) at any time after the date of these Terms and Conditions, has divulged, directly or indirectly, or used, for the Participant’s own or another’s benefit, any Confidential Information;

(ii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after the Participant ceases to be employed by the Corporation and its Subsidiaries for any reason, has Solicited, or assisted in the Solicitation of, any Client or Prospective Client (provided, however, that this clause (ii) shall not apply to the Participant’s Solicitation of any Client or Prospective Client with whom he or she had a business relationship prior to the start of his or her employment with the Corporation and its Subsidiaries, provided no Confidential Information, directly or indirectly, is used in such Solicitation); or

(iii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after the Participant ceases to be employed by the Corporation and its Subsidiaries for any reason, has solicited, encouraged, advised, induced or caused any employee of the Corporation or any of its Subsidiaries to terminate his or her employment with the Corporation or any of its Subsidiaries, or provided any assistance, encouragement, information, or suggestion to any person or entity regarding the solicitation or hiring of any employee of the Corporation or any of its Subsidiaries;

then the Participant’s then outstanding Stock Units (whether vested or unvested) shall be forfeited to the Corporation by notice from the Committee in writing to the Participant within a reasonable period of time after the Committee acquires knowledge of the Participant’s violation of this Paragraph 9(a). In the event that a Participant’s Stock Units are forfeited pursuant to the preceding sentence or the provisions of Paragraph 9(b), below, the Corporation shall not distribute the Stock Units to the Participant (or the Participant’s beneficiary) pursuant to Paragraph 8, or pay any Dividend Equivalents pursuant to Paragraph 3 with respect to such Stock Units.

In addition, in the event of any action by the Participant to which clauses (i), (ii) or (iii), above, apply, the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any payment or delivery to the Participant with respect to any Stock Units occurring within twelve (12) months prior to, or at any time following, the date of the Participant’s termination of employment for any reason (including but not limited to termination of employment due to Retirement or Disability), and recoup any “gain realized” in connection with such Stock Units as described in Paragraph 9(c) below.

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(b) Misconduct and Restatement of Financials. Consistent with the Corporation’s risk-mitigation strategies for its compensation programs, and notwithstanding any other provision in these Terms and Conditions, in the event that:

(i) the Corporation is required to restate its financial statements filed with the U.S. Securities and Exchange Commission on Form 10-Q or Form 10-K or re-file quarterly financial data with the U.S. Federal Reserve due to any reason other than changes in accounting policy or applicable law (a “Restatement”), and the Committee determines that such Restatement resulted, in whole or in material part, from the Participant (A) intentionally engaging in conduct that resulted in a material weakness in internal control over financial reporting and was inconsistent with the standards of conduct of the business judgment rule, as defined below, or (B) personally and knowingly engaging in practices that materially contributed to circumstances that resulted in a material weakness in internal control over financial reporting and that were inconsistent with the standards of conduct of the business judgment rule; or

(ii) the Committee determines that the Participant has engaged in conduct that is grounds for termination for Cause and is inconsistent with the standards of conduct of the business judgment rule (“Misconduct”);

then the Committee shall review all then outstanding Stock Units (whether vested or unvested) of the Participant, and all Stock Units with respect to which there has been payment or delivery to the Participant within the 36-month period immediately preceding the date of the Restatement, or during the period after the date of the Misconduct, as applicable.

In the event of a Restatement described in clause (i), the Committee shall declare the Participant’s then outstanding, vested Stock Units that would not have become vested based on accurate financial data or restated results to be forfeited to the Corporation by notice in writing to the Participant within a reasonable period of time after the date of the Restatement, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any payment or delivery with respect to any Stock Units occurring within 36 months prior to the date of the Restatement that would not have become vested or been paid based on accurate financial data or restated results, and recoup any gain realized in connection with such Stock Units as described in Paragraph 9(c), below. In the event of Misconduct described in clause (ii) (other than any actions included in Paragraph 9(a) or clause (i) of this Paragraph 9(b)), the Committee shall declare the Participant’s then outstanding Stock Units (whether vested or unvested) to be forfeited to the Corporation by notice in writing to the Participant within a reasonable period of time after the date of the discovery of the Misconduct, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation and as permitted by applicable law, rescind any payment or delivery with respect to any Stock Units occurring after the date such Misconduct occurred and recoup any gain realized in connection with such Stock Units as described in Paragraph 9(c), below

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A Participant’s actions satisfy the “business judgment rule” if such actions were taken in good faith, in a manner that an ordinarily prudent person would act under similar circumstances, and in the interests of the Corporation. In interpreting and applying the preceding sentence, the Committee shall use as a guide the principles of the business judgment rule as construed by the Delaware courts in applying the Delaware Corporation Act.

(c) Rescission and Recoupment. Upon the rescission, pursuant to the provisions of Paragraph 9(a) or 9(b), of any payment or delivery with respect to any Stock Units, the Corporation shall be entitled to recoup any “gains realized” in connection with such Stock Units, in such manner and on such terms and conditions as the Committee shall require. “Gains realized” shall include (i) the amount of any cash (including Dividend Equivalents) distributed to the Participant with respect to, (ii) any cash or shares of the Corporation’s Common Stock (or proceeds attributable to the sale thereof ) paid or delivered in settlement of, and (iii) any other amounts determined by the Committee to have been realized in connection with, such rescinded Stock Units. If the Participant fails to repay any such amounts to the Corporation within 60 days after receipt of written demand, the Corporation shall be entitled, subject to applicable law and the requirements of Internal Revenue Code Section 409A, to deduct from any amounts the Corporation owes the Participant from time to time the amount of all gains realized, or to sue for repayment of such amounts, or to pursue both remedies.

10. Delivery of Shares. The Corporation may delay the issuance or delivery of shares of Common Stock if the Corporation reasonably anticipates that such issuance or delivery will violate federal securities laws or other applicable law, provided that the issuance or delivery is made at the earliest date at which the Corporation reasonably anticipates that such issuance or delivery will not cause such violation.

11. Adjustment. The Stock Units provided herein are subject to adjustment in accordance with the provisions of Section 11 of the Plan.

12. No Right to Employment. Nothing in the Plan or the Stock Unit Agreement shall be construed as creating any right in the Participant to continued employment or as altering or amending the existing terms and conditions of employment of the Participant except as otherwise specifically provided in the Stock Unit Agreement.

13. Nontransferability. No interest hereunder of the Participant is transferable except as provided in the Stock Unit Agreement.

14. Withholding/Delivery of Shares. All distributions hereunder are subject to withholding by the Corporation for all applicable federal, state or local taxes. With respect to distributions in shares of Common Stock, subject to such rules and limitations as may be established by the Committee from time to time, such withholding obligations shall be satisfied through the withholding of shares of Common Stock to which the Participant is otherwise entitled under the Stock Unit Award, provided, however, that such shares may be used to satisfy not more than the Corporation’s minimum statutory withholding obligation (based on minimum statutory withholding rates for Federal and state tax purposes, including payroll taxes, that are applicable to such taxable income).

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15. Administration. The Plan is administered by the Committee. The rights of the Participant hereunder are expressly subject to the terms and conditions of the Plan (including continued shareholder approval of the Plan), together with such guidelines as have been or may be adopted from time to time by the Committee. The Participant hereby acknowledges receipt of a copy of the Plan.

16. No Rights as Shareholder. Except as provided herein, the Participant will have no rights as a shareholder with respect to the Stock Units.

17. Interpretation and Applicable Law. Any interpretation by the Committee of the terms and conditions of the Plan, the Stock Unit Agreement or any guidelines shall be final. All questions pertaining to the validity, construction and administration of the Plan or the Stock Unit Agreement, and all claims or causes of action arising under, relating to, or in connection with, the Plan or the Stock Unit Agreement shall be determined in conformity with the laws of the State of Delaware, without regard to the conflict of law provisions of any state.

18. Sole Agreement. The Stock Unit Agreement, together with the Plan, is the entire Agreement between the parties hereto, all prior oral and written representations being merged herein. No amendment or modification of the terms of the Stock Unit Agreement shall be binding on either party unless reduced to writing and signed by the party to be bound. The Stock Unit Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors. Notwithstanding anything in the Stock Unit Agreement to the contrary, including without limitation the foregoing provisions of this Paragraph 18, in the event that the Committee determines that the Stock Unit Award, or the performance by the Corporation of any of its obligations under the Stock Unit Agreement, would violate any applicable law, the Stock Units shall be forfeited to the Corporation and cancelled, and the Corporation shall have no obligation to distribute the Stock Units to the Participant or the Participant’s Beneficiary or to pay any Dividend Equivalents.

19. Definitions. As provided above, capitalized terms not defined in the Stock Unit Agreement shall have the meanings assigned to them in the Plan. For purposes of the Stock Unit Agreement:

(a) “Cause” means (i) a Participant’s conviction of or no contest plea with respect to bribery, extortion, embezzlement, fraud, grand larceny, or any felony involving abuse or misuse of the Participant’s position to seek or obtain an illegal or personal gain at the expense of the Corporation, or similar crime, or conspiracy to commit any such crimes or attempt to commit any such crimes; or (ii) misconduct that causes material harm to the Corporation.

(b) “Client” means any person or entity with which the Corporation, or any of its Subsidiaries, did business and with which the Participant had contact, or about which the Participant had access to Confidential Information, during the last twelve (12) months of his or her employment.

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(c) “Competitive Service or Product” means any service or product: (i) that is substantially similar to or competitive with any service or product that the Participant created or provided, or of which the Participant assisted in the creation or provision, during his or her employment by the Corporation or any of its Subsidiaries; or (ii) about which the Participant had access to Confidential Information during his or her employment by the Corporation or any of its Subsidiaries.

(d) “Confidential Information” means any trade secrets or other significant proprietary information, including, but not limited to, any client information (for example, client lists, information about client accounts, borrowings, and current or proposed transactions), any internal analysis of clients, marketing strategies, financial reports or projections, business or other plans, data, procedures, methods, computer data or system program or design, devices, lists, tools, or compilation, which relate to the present or planned business of the Corporation or any of its Subsidiaries and which has not been made generally known to the public by authorized representatives of the Corporation.

(e) “Prospective Client” means any person or entity to which the Corporation, or any of its Subsidiaries, provided, or from which the Corporation, or any of its Subsidiaries received, a proposal, bid, or written inquiry (general advertising or promotional materials and mass mailings excepted) and with which the Participant had contact, or about which the Participant had access to Confidential Information, during the last twelve (12) months of his or her employment.

(f) “Solicit” and “Solicitation” (with respect to Clients or Prospective Clients) mean directly or indirectly, and without the Corporation’s written authorization, to invite, encourage, request, or induce (or to assist another to invite, encourage, request or induce) any Client or Prospective Client of the Corporation, or any of its Subsidiaries, to: (i) surrender, redeem or terminate a product, service or relationship with the Corporation, or any of its Subsidiaries; (ii) obtain any Competitive Service or Product from the Participant or any third party; or (iii) transfer a product, service or relationship from the Corporation, or any of its Subsidiaries, to the Participant or any third party.

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EX-10.19

Exhibit 10.19

TERMS AND CONDITIONS

2012 LONG TERM CASH INCENTIVE AWARD

UNDER THE NORTHERN TRUST CORPORATION

LONG TERM CASH INCENTIVE PLAN

Your Long Term Cash Incentive Award is subject to the provisions of the Northern Trust Corporation Long Term Cash Incentive Plan (the “Plan”), the Long Term Cash Incentive Award notice (the “Award Notice”), and this Terms and Conditions document (“Terms and Conditions”). The Award Notice and these Terms and Condition constitute the “Long Term Cash Incentive Award Agreement” or “Award Agreement” as defined in the Plan. If there is any conflict between the information in the Award Agreement and the Plan, the Plan will govern. Capitalized terms not defined in the Award Agreement shall have the meanings assigned to them in the Plan.

1. Grant. The Corporation hereby grants to the Participant a Long Term Cash Incentive Award (the “Award”), as set forth in the Award Notice, subject to the terms and conditions of the Plan and the Award Agreement. The Award is the right, subject to the terms and conditions of the Plan and the Award Agreement, to receive a distribution, on the date described in Paragraph 7, of the amount credited to the Participant’s Long Cash Incentive Account as of that date.

2. Long Term Cash Incentive Account. The Corporation shall maintain a Long-Term Cash Incentive Account (the “Account”) on its books in the name of the Participant which shall reflect the Award Amount specified in the Award Notice. Such Account shall be credited with interest, from the date of grant through the date immediately preceding the date of distribution under Paragraph 7, at a per-annum rate equal to the mid-term applicable federal rate for the month of February 2012, compounded annually.

3. Forfeiture. The Award granted to the Participant pursuant to the Award Agreement shall be forfeited and revert to the Corporation (a) in accordance with Paragraph 8, if the Participant engages in conduct or activity described in Paragraph 8 of these Terms and Conditions, or (b) except as described in Paragraphs 4, 5, and 6 of these Terms and Conditions, if the Participant’s employment with the Corporation and all of its Subsidiaries terminates prior to the Vesting Date, as defined in Paragraph 4.

4. Vesting. Subject to all of the provisions of the Award Agreement, including, without limitation, the provisions of Paragraphs 3, 5, 6, and 8 of these Terms and Conditions, the Participant shall become vested in the Award upon the date (referred to herein as the “Vesting Date”) that is the third anniversary of the date of grant of this Award, as specified in, and in accordance with, the vesting schedule set forth in the Award Notice. If the Participant’s employment with the Corporation and its Subsidiaries terminates for any reason prior to the end of the three-year period ending on the Vesting Date (the “Vesting Period”), any portion of the Award that has not yet vested and does not become vested under Paragraph 5 or has not become vested under Paragraph 6, shall be forfeited and revert to the Corporation on such termination date, and the Corporation shall have no further obligation after such date with respect to such amount. The Corporation shall have no further obligation to the Participant under these Terms and Conditions following the Participant’s forfeiture of the Award.

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5. Special Vesting.

(a) The Participant shall cease to participate in the Plan under these Terms and Conditions as of the date of the Participant’s termination of employment with the Corporation and all of its Subsidiaries, subject to the following:

(b) If the Participant’s termination of employment is on account of Retirement and occurs prior to the end of the Vesting Period, and the Participant does not engage in conduct or activity described in Paragraph 8 of these Terms and Conditions during the Vesting Period, and executes and returns an agreement, prior to the date of his or her termination, with such additional terms and conditions as the Committee deems necessary or advisable, including without limitation additional covenants not to compete and to be accessible to the Corporation for consulting for the remainder of the Vesting Period, then, upon the Vesting Date, the Participant shall become 100% vested in the entire amount of the Participant’s Award.

(c) If the Participant’s termination of employment is on account of death or Disability and occurs prior to the end of the Vesting Period, or, if prior to the end of the Vesting Period, the Participant’s employment with the Corporation and its Subsidiaries is terminated under circumstances that entitle the Participant to severance benefits under the Northern Trust Corporation Severance Plan (the “Severance Plan”) and the Participant has timely executed and not revoked a settlement agreement, waiver and release under the Severance Plan (a “Release”), then, upon the Vesting Date, the Participant shall become 100% vested in the entire amount of the Participant’s Award.

(d) If, prior to the end of the Vesting Period, the Participant’s employment with the Corporation and its Subsidiaries terminates and (i) the Participant is a Management Group member on the date of the grant of the Award, (ii) the Participant is 55 years or older on the date of such termination of employment, and (iii) the Participant does not engage in conduct or activity described in Paragraph 8 of these Terms and Conditions during the Vesting Period and executes and returns an agreement, prior to the date of his or her termination, with such additional terms and conditions as the Committee deems necessary or advisable, including without limitation additional covenants not to compete and to be accessible to the Corporation for consulting for the remainder of the Vesting Period, then, upon the Vesting Date, the Participant shall become 100% vested in the entire amount of the Participant’s Award.

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(e) If, (i) prior to the end of the Vesting Period the Participant incurs a Government Service Termination, and (A) the Participant also meets the conditions for Retirement at the time of termination of employment, (B) the Participant is a Management Group member on the date of the grant of the Award, and is 55 years or older on the date of such termination of employment, or (C) the Participant’s termination of employment occurs in circumstances described in Paragraph 5(c) that entitle the Participant to severance benefits and the Participant has satisfied all conditions for such benefits; (ii) the Participant provides the Committee with satisfactory evidence that as a result of the Participant’s Government Employment, the divestiture of the Participant’s continued interest in the Award is (A) necessary for the Participant as a Federal officer or employee in the executive branch to comply with an ethics agreement with the Federal government, or (B) reasonably necessary for the Participant to avoid the violation of U.S. federal, state or local or non-U.S. ethics law or conflicts of interest law applicable to the Participant in the Participant’s Government Employment; and (iii) the Participant executes and returns, prior to the date of his or her Government Service Termination, an agreement satisfactory to the Committee acknowledging the Corporation’s right to recover (and the Participant’s obligation to repay) under Paragraph 8 of the Terms and Conditions, the Award paid to the Participant in the event that the Participant is determined to have engaged in conduct or activity described in Paragraph 8, then, upon the date of his or her Government Service Termination, the Participant shall become 100% vested in the entire amount of the Participant’s Award and be eligible for distribution under Paragraph 7(c).

(f) For purposes of these Terms and Conditions, “Disability” means a disability that continues for a period of six (6) months in accordance with The Northern Trust Company’s Managed Disability Program. For purposes of determining the date, if any, on which a Participant becomes vested under Paragraph 5(c) on account of Disability, the date of Disability shall be the last day of the six-month period described in the preceding sentence.

For purposes of these Terms and Conditions, “Government Service Termination” means the Participant’s termination of employment with the Corporation and its Subsidiaries due to, or in connection with, the Participant’s immediate commencement of Government Employment.

For purposes of these Terms and Conditions, “Government Employment” refers to employment at any U.S. Federal, state or local government, any non-U.S. government, any supranational or international organization, any self-regulatory organization, or any agency or instrumentality of any such government or organization, or any other employer determined to be a Government Employer by the Committee.

For purposes of these Terms and Conditions, “Retirement” means retirement occurring by reason of the Participant having qualified for a Normal, Early, or Postponed Retirement under The Northern Trust Company Pension Plan.

(g) The provisions of Paragraph 6(e)(ii), and Paragraph 7(c)(ii), below, shall be construed in accordance with Treasury Regulation Section 1.409A-3(j)(4)(iii)

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6. Vesting Upon a Change in Control. A Participant who is employed by the Corporation or any of its Subsidiaries upon the date of a Change in Control shall become 100% vested in his or her Award upon the date of such Change in Control.

7. Distribution.

(a) Subject to Paragraphs 7(b), 7(c) and 7(d), below, in the case of an Award which becomes vested on the Vesting Date pursuant to Paragraph 4, Paragraph 5(b), 5(c) or 5(d), such Award shall be distributed on the Vesting Date, provided that such Award shall be treated as distributed on such Vesting Date if it is distributed no later than the last day of the calendar year in which such Vesting Date occurs, or, if later, by the 15^th day of the third calendar month after such Vesting Date occurs, subject to and in accordance with the provisions of Treasury Regulation Section 1.409A-3(d), including without limitation the requirement that the employee shall in no event have the right directly or indirectly to designate the taxable year of payment.

(b) In the case of an Award that becomes vested on the Vesting Date on account of the Participant’s death pursuant to Paragraph 5(c), distribution shall be made to the Participant’s beneficiary on the Vesting Date, provided that such Award shall be treated as distributed on such Vesting Date if it is distributed no later than the last day of the calendar year in which such Vesting Date occurs, or, if later, by the 15^th day of the third calendar month after such Vesting Date occurs, subject to and in accordance with the provisions of Treasury Regulation Section 1.409A-3(d), including without limitation the requirement that the beneficiary shall in no event have the right directly or indirectly to designate the taxable year of payment. Such distribution shall be made to such beneficiary and in such proportions as the Participant may designate in writing, and in the absence of a designation, the Participant’s beneficiary shall be one of the following persons determined in the order provided below:

– The Participant’s spouse; if none, then,

– The Participant’s children (in equal amounts); if none, then,

– The Participant’s parents (in equal amounts); if none, then,

– The Participant’s brothers and sisters (in equal amounts); if none, then,

– The Participant’s estate.

In the event of the Participant’s death after the expiration of the Vesting Period but prior to full distribution of the Award pursuant to these Terms and Conditions, the Participant’s Award shall be distributed, within the period described in clause (a) above, to the Participant’s beneficiary determined in accordance with the foregoing provisions of this clause (b).

(c) In the case of an Award that becomes vested in circumstances described in Paragraph 5(e), distribution shall be made on the Participant’s Government Service Termination, subject to and consistent with the requirements of Treasury Regulation Section 1.409A-3(j)(4)(iii).

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In the case of a Participant whose employment with the Corporation and its Subsidiaries terminates prior to the end of the Vesting Period, in circumstances described in Paragraph 5(b), 5(c) or 5(d), other than death, and who satisfies all of the conditions for 100% vesting under Paragraph 5(b), 5(c), 5(d), as applicable, if (i) the Participant thereafter and prior to the expiration of the Vesting Period accepts Government Employment, (ii) the Participant provides the Committee with satisfactory evidence that as a result of the Participant’s Government Employment, the divestiture of the Participant’s continued interest in the Award is (A) necessary for the Participant as a Federal officer or employee in the executive branch to comply with an ethics agreement with the Federal government, or (B) reasonably necessary for the Participant to avoid the violation of U.S. federal, state or local or non-U.S. ethics law or conflicts of interest law applicable to the Participant in such Government Employment, (iii) the Participant has, for the period up until the date the Participant’s Government Employment commences, satisfied the conditions of paragraph 5(b), 5(c) or 5(d), as applicable, and any agreement signed pursuant thereto, and (iv) the Participant executes and returns, no later than the date of commencement of his Government Employment, an agreement satisfactory to the Committee acknowledging the Corporation’s right to recover (and the Participant’s obligation to repay) under Paragraph 8 of the Terms and Conditions, the Award paid to the Participant in the event that the Participant engages in conduct or activity described in Paragraph 8, then the Participant shall receive a distribution of the vested portion of the Participant’s Award on the date of commencement of his Government Employment, subject to and consistent with the requirements of Treasury Regulation Section 1.409A-3(j)(4)(iii).

(d) In the case of an Award that becomes vested as a result of a Change in Control, the Participant shall not be entitled to a distribution of such Award upon the date of such Change in Control. Instead, an Award that becomes vested upon the date of a Change in Control shall be distributed only upon the date, or the occurrence of the event upon which, distribution would have been made in the absence of such Change in Control.

(e) The Award may be settled, in the discretion of the Committee, in cash or shares of Common Stock in accordance with the terms of the Plan.

Notwithstanding anything herein to the contrary, the provisions of this Award Agreement, including without limitation this Paragraph 7, shall be subject to the provisions of the Plan, including without limitation Section 8 of the Plan.

8. Forfeitures and Recoupments.

(a) Engaging in Restricted Activity Without Written Consent of the Corporation. Notwithstanding anything to the contrary in these Terms and Conditions, if the Participant, without the written consent of the Corporation:

(i) at any time after the date of these Terms and Conditions, has divulged, directly or indirectly, or used, for the Participant’s own or another’s benefit, any Confidential Information;

5

(ii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after the Participant ceases to be employed by the Corporation and its Subsidiaries for any reason, has Solicited, or assisted in the Solicitation of, any Client or Prospective Client (provided, however, that this clause (ii) shall not apply to the Participant’s Solicitation of any Client or Prospective Client with whom he or she had a business relationship prior to the start of his or her employment with the Corporation and its Subsidiaries, provided no Confidential Information, directly or indirectly, is used in such Solicitation); or

(iii) at any time after the date of these Terms and Conditions and through a period of twelve (12) months after the Participant ceases to be employed by the Corporation and its Subsidiaries for any reason, has solicited, encouraged, advised, induced or caused any employee of the Corporation or any of its Subsidiaries to terminate his or her employment with the Corporation or any of its Subsidiaries, or provided any assistance, encouragement, information, or suggestion to any person or entity regarding the solicitation or hiring of any employee of the Corporation or any of its Subsidiaries;

then the Participant’s then outstanding Award (whether vested or unvested) shall be forfeited to the Corporation by notice from the Committee in writing to the Participant within a reasonable period of time after the Committee acquires knowledge of the Participant’s violation of this Paragraph 8(a). In the event that a Participant’s Award is forfeited pursuant to the preceding sentence or the provisions of Paragraph 8(b), below, the Corporation shall not distribute the Award to the Participant (or the Participant’s beneficiary) pursuant to Paragraph 7.

In addition, in the event of any action by the Participant to which clauses (i), (ii) or (iii), above, apply, the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any payment or delivery to the Participant with respect to any Award occurring within twelve (12) months prior to, or at any time following, the date of the Participant’s termination of employment for any reason (including but not limited to termination of employment due to Retirement or Disability), and recoup any “gain realized” in connection with such Awards as described in Paragraph 8(c) below.

(b) Misconduct and Restatement of Financials. Consistent with the Corporation’s risk-mitigation strategies for its compensation programs, and notwithstanding any other provision in these Terms and Conditions, in the event that:

(i) the Corporation is required to restate its financial statements filed with the U.S. Securities and Exchange Commission on Form 10-Q or Form 10-K or re-file quarterly financial data with the U.S. Federal Reserve due to any reason other than changes in accounting policy or applicable law (a “Restatement”), and the Committee determines that such Restatement

6

resulted, in whole or in material part, from the Participant (A) intentionally engaging in conduct that resulted in a material weakness in internal control over financial reporting and was inconsistent with the standards of conduct of the business judgment rule, as defined below, or (B) personally and knowingly engaging in practices that materially contributed to circumstances that resulted in a material weakness in internal control over financial reporting and that were inconsistent with the standards of conduct of the business judgment rule; or

(ii) the Committee determines that the Participant has engaged in conduct that is grounds for termination for Cause and is inconsistent with the standards of conduct of the business judgment rule (“Misconduct”); or

(iii) the Corporation incurs material losses that the Committee determines are the direct and proximate result of excessively risky behavior by the Participant that was inconsistent with the standards of conduct of the business judgment rule;

then the Committee shall review all then outstanding Awards of the Participant (whether vested or unvested), and all amounts previously paid to the Participant with respect to any Award within the 36-month period immediately preceding the date of the Restatement, or during the period after the date of the Misconduct, as applicable.

In the event of a Restatement described in clause (i), the Committee shall declare the Participant’s then outstanding, vested Awards that would not have become vested based on accurate financial data or restated results to be forfeited to the Corporation by notice in writing to the Participant within a reasonable period of time after the date of the Restatement, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any payment of an Award to the Participant occurring within 36 months prior to the date of the Restatement that would not have become vested or been paid based on accurate financial data or restated results and recoup any such payment as described in Paragraph 8(c), below. In the event of Misconduct described in clause (ii) (other than any actions included in Paragraph 8(a) or clause (i) of this Paragraph 8(b)), the Committee shall declare the Participant’s then outstanding Awards (whether vested or unvested) to be forfeited to the Corporation by notice in writing to the Participant within a reasonable period of time after the date of the discovery of the Misconduct, and the Corporation shall, to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind any payment of any Award occurring after the date such Misconduct occurred and recoup any such payment as described in Paragraph 8(c), below. In the case of an event described in clause (iii), the Corporation shall to the extent the Committee determines it practicable and in the best interests of the Corporation, and as permitted by applicable law, rescind all or a portion of any payment of an Award occurring after the date of the Participant’s actions described in clause (iii), and recoup any such payment as described in Paragraph 8(c), below.

7

A Participant’s actions satisfy the “business judgment rule” if such actions were taken in good faith, in a manner that an ordinarily prudent person would act under similar circumstances, and in the interests of the Corporation. In interpreting and applying the preceding sentence, the Committee shall use as a guide the principles of the business judgment rule as construed by the Delaware courts in applying the Delaware Corporation Act.

(c) Rescission and Recoupment. The Corporation shall be entitled to recoup any payment that is rescinded pursuant to the provisions of Paragraph 8(a) or 8(b) of the Plan in such manner and on such terms as the Committee shall require. If the Participant fails to repay any such amounts to the Corporation within 60 days after receipt of written demand, the Corporation shall be entitled, subject to applicable law and the requirements of Internal Revenue Code Section 409A, to deduct from any amounts the Corporation owes the Participant from time to time the amount required to be repaid pursuant to this Paragraph 8(c), or to sue for repayment of such amounts, or to pursue both remedies.

9. Adjustment. The Awards provided herein are subject to adjustment in accordance with the provisions of Section 5 of the Plan.

10. No Right to Employment. Nothing in the Plan or the Award Agreement shall be construed as creating any right in the Participant to continued employment or as altering or amending the existing terms and conditions of employment of the Participant except as otherwise specifically provided in the Award Agreement.

11. Nontransferability. No interest hereunder of the Participant is transferable except as provided in the Award Agreement.

12. Withholding/Delivery of Shares. All distributions hereunder are subject to withholding by the Corporation for all applicable federal, state or local taxes. With respect to distributions in shares of Common Stock, subject to such rules and limitations as may be established by the Committee from time to time, such withholding obligations shall be satisfied through the withholding of shares of Common Stock which would otherwise be distributed to the Participant under the Award, provided, however, that such shares may be used to satisfy not more than the Corporation’s minimum statutory withholding obligation (based on minimum statutory withholding rates for Federal and state tax purposes, including payroll taxes, that are applicable to such taxable income).

13. Administration. The Plan is administered by the Committee. The rights of the Participant hereunder are expressly subject to the terms and conditions of the Plan (including continued shareholder approval of the Plan), together with such guidelines as have been or may be adopted from time to time by the Committee. The Participant hereby acknowledges receipt of a copy of the Plan.

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14. No Rights as Shareholder. Except as provided herein, the Participant will have no rights as a shareholder with respect to the Award.

15. Interpretation and Applicable Law. Any interpretation by the Committee of the terms and conditions of the Plan, the Award Agreement or any guidelines shall be final. All questions pertaining to the validity, construction and administration of the Plan or the Award Agreement, and all claims or causes of action arising under, relating to, or in connection with, the Plan or the Award Agreement shall be determined in conformity with the laws of the State of Delaware, without regard to the conflict of law provisions of any state.

16. Sole Agreement. The Award Agreement, together with the Plan, is the entire Agreement between the parties hereto, all prior oral and written representations being merged herein. No amendment or modification of the terms of the Award Agreement shall be binding on either party unless reduced to writing and signed by the party to be bound. The Award Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors. Notwithstanding anything in the Award Agreement to the contrary, including without limitation the foregoing provisions of this Paragraph 16, in the event that the Committee determines that the Award, or the performance by the Corporation of any of its obligations under the Award Agreement, would violate any applicable law, the Award shall be forfeited to the Corporation and cancelled, and the Corporation shall have no obligation to distribute the Award to the Participant or the Participant’s Beneficiary.

17. Definitions. As provided above, capitalized terms not defined in the Award Agreement shall have the meanings assigned to them in the Plan. For purposes of the Award Agreement:

(a) “Cause” means (i) a Participant’s conviction of or no contest plea with respect to bribery, extortion, embezzlement, fraud, grand larceny, or any felony involving abuse or misuse of the Participant’s position to seek or obtain an illegal or personal gain at the expense of the Corporation, or similar crime, or conspiracy to commit any such crimes or attempt to commit any such crimes; or (ii) misconduct that causes material harm to the Corporation.

(b) “Client” means any person or entity with which the Corporation, or any of its Subsidiaries, did business and with which the Participant had contact, or about which the Participant had access to Confidential Information, during the last twelve (12) months of his or her employment.

(c) “Competitive Service or Product” means any service or product: (i) that is substantially similar to or competitive with any service or product that the Participant created or provided, or of which the Participant assisted in the creation or provision, during his or her employment by the Corporation or any of its Subsidiaries; or (ii) about which the Participant had access to Confidential Information during his or her employment by the Corporation or any of its Subsidiaries.

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(d) “Confidential Information” means any trade secrets or other significant proprietary information, including, but not limited to, any client information (for example, client lists, information about client accounts, borrowings, and current or proposed transactions), any internal analysis of clients, marketing strategies, financial reports or projections, business or other plans, data, procedures, methods, computer data or system program or design, devices, lists, tools, or compilation, which relate to the present or planned business of the Corporation or any of its Subsidiaries and which has not been made generally known to the public by authorized representatives of the Corporation.

(e) “Prospective Client” means any person or entity to which the Corporation, or any of its Subsidiaries, provided, or from which the Corporation, or any of its Subsidiaries received, a proposal, bid, or written inquiry (general advertising or promotional materials and mass mailings excepted) and with which the Participant had contact, or about which the Participant had access to Confidential Information, during the last twelve (12) months of his or her employment.

(f) “Solicit” and “Solicitation” (with respect to Clients or Prospective Clients) mean directly or indirectly, and without the Corporation’s written authorization, to invite, encourage, request, or induce (or to assist another to invite, encourage, request or induce) any Client or Prospective Client of the Corporation, or any of its Subsidiaries, to: (i) surrender, redeem or terminate a product, service or relationship with the Corporation, or any of its Subsidiaries; (ii) obtain any Competitive Service or Product from the Participant or any third party; or (iii) transfer a product, service or relationship from the Corporation, or any of its Subsidiaries, to the Participant or any third party.

10

EX-13

Exhibit 13

FINANCIAL REVIEW

18

19

64

65

66

70

127

128

131

132

133

CONSOLIDATED HIGHLIGHTS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SUMMARY OF SELECTED CONSOLIDATED FINANCIAL DATA

($ In Millions Except Per Share Information)	2011			2010			2009			2008			2007
FOR THE YEAR ENDED DECEMBER 31
Noninterest Income
Trust, Investment and Other Servicing Fees	$	2,169.5		$	2,081.9		$	2,083.8		$	2,134.9		$	2,077.6
Foreign Exchange Trading Income		324.5			382.2			445.7			616.2			351.3
Treasury Management Fees		72.1			78.1			81.8			72.8			65.3
Security Commissions and Trading Income		60.5			60.9			62.4			77.0			67.6
Gain on Visa Share Redemption		–			–			–			167.9			–
Other Operating Income		158.1			146.3			136.8			186.9			95.3
Investment Security Gains (Losses), net		(23.9	)		(20.4	)		(23.4	)		(56.3	)		6.5
Total Noninterest Income		2,760.8			2,729.0			2,787.1			3,199.4			2,663.6
Net Interest Income		1,009.1			918.7			999.8			1,079.1			845.4
Provision for Credit Losses		55.0			160.0			215.0			115.0			18.0
Income before Noninterest Expense		3,714.9			3,487.7			3,571.9			4,163.5			3,491.0
Noninterest Expense
Compensation		1,267.2			1,108.0			1,099.7			1,133.1			1,038.2
Employee Benefits		258.2			237.6			242.1			223.4			234.9
Outside Services		552.8			460.4			424.5			413.8			386.2
Equipment and Software		328.1			287.1			261.1			241.2			219.3
Occupancy		180.9			167.8			170.8			166.1			156.5
Visa Indemnification (Benefits) Charges		(23.1	)		(33.0	)		(17.8	)		(76.1	)		150.0
Other Operating Expense		267.1			270.0			136.3			786.3			245.1
Total Noninterest Expense		2,831.2			2,497.9			2,316.7			2,887.8			2,430.2
Income before Income Taxes		883.7			989.8			1,255.2			1,275.7			1,060.8
Provision for Income Taxes		280.1			320.3			391.0			480.9			333.9
Net Income	$	603.6		$	669.5		$	864.2		$	794.8		$	726.9
Net Income Applicable to Common Stock	$	603.6		$	669.5		$	753.1		$	782.8		$	726.9
Average Total Assets	$	91,948		$	76,008		$	74,314		$	73,029		$	60,588
PER COMMON SHARE
Net Income – Basic	$	2.47		$	2.74		$	3.18		$	3.51		$	3.28
– Diluted		2.47			2.74			3.16			3.47			3.23
Cash Dividends Declared		1.12			1.12			1.12			1.12			1.03
Book Value – End of Period (EOP)		29.53			28.19			26.12			21.89			20.44
Market Price – EOP		39.66			55.41			52.40			52.14			76.58
AT YEAR END
Senior Notes	$	2,127		$	1,896		$	1,552		$	1,053		$	654
Long-Term Debt		2,133			2,729			2,838			3,293			2,682
Floating Rate Capital Debt		277			277			277			277			277
RATIOS
Return on Average Common Equity		8.59	%		10.09	%		12.73	%		15.98	%		17.46	%
Return on Average Assets		.66			.88			1.16			1.09			1.20
Dividend Payout Ratio		45.4			40.8			35.2			32.0			31.4
Tier 1 Capital to Risk-Weighted Assets – EOP		12.5			13.6			13.4			13.1			9.7
Total Capital to Risk-Weighted Assets – EOP		14.2			15.6			15.8			15.4			11.9
Tier 1 Leverage Ratio		7.3			8.8			8.8			8.5			6.8
Average Stockholders’ Equity to Average Assets		7.6			8.7			8.9			7.0			6.9

OPERATING RESULTS – A NON-GAAP FINANCIAL MEASURE WHICH EXCLUDES VISA RELATED ADJUSTMENTS

($ In Millions Except Per Share Information)	2011			2010			2009			2008			2007
Operating Earnings	$	589.2		$	648.6		$	853.0		$	641.3		$	821.1
Operating Earnings per Common Share – Basic	$	2.41		$	2.66		$	3.13		$	2.82		$	3.71
– Diluted		2.41			2.65			3.11			2.79			3.65
Operating Return on Average Common Equity		8.50	%		9.89	%		12.68	%		12.89	%		19.72	%

Operating results for the years presented above exclude adjustments relating to Visa Inc. (Visa). Excluded for 2011, 2010, 2009 and 2008 are Visa indemnification related benefits totaling $23.1 million, $33.0 million, $17.8 million and $244.0 million, respectively. The 2008 benefits included a gain on the mandatory partial redemption of Northern Trust’s Visa shares totaling $167.9 million and a $76.1 million offset of Visa indemnification related charges recorded in 2007. Excluded for 2007 are Visa indemnification related charges totaling $150.0 million. Visa related adjustments are discussed in further detail in Note 25 to the consolidated financial statements.

2011 ANNUAL REPORT TO SHAREHOLDERS 18 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW OF CORPORATION

Focused Business Strategy

Northern Trust Corporation (the Corporation) and its subsidiaries is a leading provider of asset servicing, fund administration, asset management, fiduciary and banking solutions for corporations, institutions, families, and individuals worldwide. Northern Trust focuses on servicing and managing client assets in two target market segments: individuals, families, and privately held businesses through its Personal Financial Services (PFS) business unit; and corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth and government funds through its Corporate & Institutional Services (C&IS) business unit. An important element of this strategy is to provide an array of asset management and related services to PFS and C&IS clients, which are provided primarily by a third business unit, Northern Trust Global Investments (NTGI). In executing this strategy, Northern Trust emphasizes quality through a high level of service complemented by the effective use of technology, delivered by a fourth business unit, Operations & Technology (O&T).

Business Structure

A financial holding company, Northern Trust conducts business through various U.S. and non-U.S. subsidiaries, including The Northern Trust Company (Bank). The Corporation has a network of offices in 18 U.S. states; Washington, D.C.; and 16 international locations in North America, Europe, the Middle East and the Asia Pacific region.

Except where the context otherwise requires, the term “Northern Trust” refers to Northern Trust Corporation and its subsidiaries on a consolidated basis.

FINANCIAL OVERVIEW

Net income in 2011 totaled $603.6 million and earnings per common share totaled $2.47. This compares with net income of $669.5 million and earnings per common share of $2.74 in 2010. 2011 results reflect restructuring, acquisition and integration related charges of $91.6 million ($59.8 million after tax, or $.25 per common share). Restructuring charges include severance expense, consulting expense, charges related to software write-offs, and reductions in office space. These charges are outlined below:

_Ÿ Severance related charges of $54.5 million recorded in connection with acquisition related integration activities and initiatives to reduce staff levels ($50.2 million recorded within Compensation and $4.3 million within Employee Benefits);

_Ÿ Consulting expense and technical services of $16.8 million recorded within Outside Services;

_Ÿ Charges totaling $10.9 million related to software write-offs recorded within Equipment and Software;

_Ÿ Charges totaling $6.4 million related to reductions in office space recorded within Occupancy; and

_Ÿ Other miscellaneous restructuring, acquisition and integration related charges totaling $3.0 million recorded within Other Operating Expense.

Net income in both 2011 and 2010 benefited from reductions of a liability related to potential losses from indemnified litigation involving Visa, as further described in Note 25 to the consolidated financial statements. Visa indemnification benefits totaled $23.1 million and $33.0 million in 2011 and 2010, respectively.

Revenues equaled $3.81 billion on a fully taxable equivalent (FTE) basis in 2011, an increase of 3% from 2010. Trust, investment and other servicing fees, which represents the largest component of consolidated revenues, increased by 4% to $2.17 billion, from $2.08 billion in 2010. The benefits of strong new business, higher market valuations, and acquisitions were partially offset by a decrease in securities lending revenue due to lower recoveries of previously recorded unrealized asset valuation losses in a mark-to-market investment fund, and by money market mutual fund fee waivers, which increased to $102.1 million from $62.5 million in 2010, due to the prolonged low interest rate environment. Net interest income of $1.05 billion (FTE) grew by $91.5 million, or 10%, primarily due to higher average earning assets, funded primarily by increased demand deposits and non-U.S. office interest-bearing deposits. Northern Trust’s benefit from higher deposits was limited as yields on high quality investments declined due to the persistent low interest rate environment, resulting in a decline in the net interest margin from 1.41% in 2010 to 1.27% in 2011. Foreign exchange trading income totaled $324.5 million, a decrease of $57.7 million, or 15%, from 2010 as a result of reduced volatility and client volumes.

Total noninterest expense on an operating basis, which excludes Visa indemnification benefits, equaled $2.85 billion, up 13% from 2010, primarily reflecting the $91.6 million of charges associated with the restructuring, acquisition and integration initiatives and $78.9 million of total operating costs from the 2011 acquisitions. Excluding the impact of costs attributable to the 2011 acquisitions and the restructuring,

2011 ANNUAL REPORT TO SHAREHOLDERS 19 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

acquisition and integration charges, operating noninterest expense increased 6% from 2010. A reconciliation of operating earnings, a non-GAAP financial measure which excludes Visa related adjustments, to reported earnings prepared in accordance with U.S. generally accepted accounting principles (GAAP) is provided on page 61.

Credit loss provisions of $55.0 million declined $105 million, or 66%, from $160.0 million in 2010. The decreased provision reflects improvement in the credit quality of commercial and institutional loans, while weakness persisted in residential real estate loans. Nonperforming assets decreased $63.6 million, or 17%, and net charge-offs decreased $59.8 million, or 42%, from 2010. The allowance for credit losses assigned to loans and leases at December 31, 2011 of $294.8 million was lower by $24.8 million, or 8%, than at December 31, 2010, and represented 1.01% and 1.14% of total loans and leases in 2011 and 2010, respectively. Loans and leases equaled $29.1 billion at year end, an increase of 3% from $28.1 billion at the end of 2010.

Client assets under custody and management both grew during 2011. Client assets under custody grew 4% from $4.1 trillion in 2010 to $4.3 trillion, and included $2.4 trillion of global custody assets, also up 4% from 2010. Client assets under management increased 3% to $662.9 billion from $643.6 billion in 2010. These increases reflect new business won from both existing and new clients. Increased assets under custody also reflect strategic growth through select acquisitions. In June of 2011, Northern Trust acquired the fund administration, investment operations outsourcing and custody business of the Bank of Ireland, now known as Northern Trust Securities Services (Ireland) Limited, and in July of 2011, Northern Trust acquired Omnium LLC, a leading hedge fund administrator, now known as Northern Trust Hedge Fund Services LLC. Northern Trust Securities Services (Ireland) Limited provides specialized, client-driven services to a broad range of funds, including money-market, multi-manager, exchange-traded funds, and property funds, serving both the on-shore and off-shore markets. Northern Trust Hedge Fund Services LLC provides world-class, scalable technology and dedicated expertise to serve hedge funds and large institutional investors with complex portfolios, through the provision of comprehensive administrative and middle-office services including trade processing, valuation, real-time reporting, cash management, accounting, collateral management, and investor servicing. These targeted acquisitions provide Northern Trust with new capabilities that position us to better serve our clients and enter new markets to fuel future growth.

Northern Trust continues to maintain its strong capital position, exceeding “well capitalized” levels under federal bank regulatory capital requirements, with tier 1 capital and tier 1 common ratios of 12.5% and 12.1% respectively. At year end, total stockholders’ equity equaled $7.1 billion, up 4%, from $6.8 billion a year earlier. The return on common equity achieved in 2011 was 8.59%. Northern Trust declared dividends of $273.4 million in 2011, representing a dividend payout ratio of 45%, and repurchased approximately 1.6 million shares in 2011 at a cost of $79.4 million. Dividends and share repurchases combined, Northern Trust’s total 2011 payout ratio was 58%.

CONSOLIDATED RESULTS OF OPERATIONS

REVENUE

Northern Trust generates the majority of its revenue from noninterest income that primarily consists of trust, investment and other servicing fees. Net interest income comprises the remainder of revenues and consists of interest income generated by earning assets, net of interest expense on deposits and borrowed funds.

Revenue for 2011 was $3.77 billion and included $76.6 million attributable to 2011 acquisitions. Revenue increased 3% from $3.65 billion in 2010, which was down 4% from 2009 revenue of $3.79 billion. Noninterest income represented 73% of total revenue in 2011 and totaled $2.76 billion, up 1% from $2.73 billion in 2010. Noninterest income represented 75% of total revenue in 2010 and was lower by 2% from $2.79 billion in 2009. Net interest income on an FTE basis for 2011 was $1.05 billion, up 10% from $957.8 million in 2010, which was down 8% from $1.04 billion in 2009. Net interest income stated on an FTE basis is a non-GAAP financial measure that facilitates the analysis of asset yields. When adjusted to an FTE basis, yields on taxable, nontaxable, and partially taxable assets are comparable; however, the adjustment to an FTE basis has no impact on net income. A reconciliation of net interest income on a GAAP basis to net interest income on an FTE basis is provided on page 61.

The current year increase in revenue primarily reflects increased trust, investment and other servicing fees and net interest income, partially offset by a decline in foreign exchange trading revenue. Trust, investment and other servicing fees – the largest component of noninterest income – totaled $2.17 billion in 2011 compared with $2.08 billion in 2010. Strong new business, revenue from 2011 acquisitions, and improved markets were partially offset by lower securities lending revenue and by higher waived fees in money market

2011 ANNUAL REPORT TO SHAREHOLDERS 20 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

mutual funds attributable to the prolonged low interest rate environment. Securities lending revenue in 2011 totaled $87.9 million compared with $195.2 million in 2010. The current year decrease reflects recoveries in 2010 of approximately $114 million of previously recorded unrealized asset valuation losses in a mark-to-market investment fund used in our securities lending activities. As of September 30, 2010, securities in the mark-to-market fund had been sold with the proceeds reinvested into a short duration fund, eliminating the mark-to-market impact on securities lending revenue in periods subsequent to the date of sale. Excluding the impact of the asset valuation recoveries, securities lending fees increased approximately $6.7 million, primarily reflecting widened spreads on the investment of collateral, partially offset by decreased average volumes.

The increase in net interest income is attributable to higher levels of average earning assets, partially offset by a decline in the net interest margin. Average earning assets increased $14.9 billion, or 22%, in 2011, while the net interest margin declined to 1.27% from 1.41% in 2010. During 2011, increased demand and other non-interest bearing deposits and non-U.S. office interest-bearing deposits were primarily invested in U.S. government sponsored agency securities, interest-bearing deposits with banks, U.S. government securities and other securities.

Foreign exchange trading income in 2011 totaled $324.5 million, down 15% compared with $382.2 million in 2010, reflecting reduced volatility and client volumes from 2010 levels. Additional information regarding Northern Trust’s revenue by type is provided below.

2011 TOTAL REVENUE OF $3.77 BILLION

2011 NONINTEREST INCOME

Noninterest Income

The components of noninterest income, and a discussion of significant changes during 2011 and 2010, are provided below.

NONINTEREST INCOME										CHANGE
(In Millions)	2011			2010			2009			2011 / 2010			2010 / 2009
Trust, Investment and Other Servicing Fees	$	2,169.5		$	2,081.9		$	2,083.8			4	%		N/M
Foreign Exchange Trading Income		324.5			382.2			445.7			(15	)		(14	)%
Treasury Management Fees		72.1			78.1			81.8			(8	)		(5	)
Security Commissions and Trading Income		60.5			60.9			62.4			(1	)		(2	)
Other Operating Income		158.1			146.3			136.8			8			7
Investment Security Gains (Losses), net		(23.9	)		(20.4	)		(23.4	)		17			(13	)
Total Noninterest Income	$	2,760.8		$	2,729.0		$	2,787.1			1	%		(2	)%

2011 ANNUAL REPORT TO SHAREHOLDERS 21 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Trust, Investment and Other Servicing Fees

Trust, investment and other servicing fees accounted for 58% of total revenue in 2011. These fees were $2.17 billion in 2011 compared with $2.08 billion in 2010. For a more detailed discussion of 2011 trust, investment and other servicing fees, refer to the “Business Unit Reporting” section.

Trust, investment and other servicing fees are based generally on the market value of assets held in custody, managed and serviced; the volume of transactions; securities lending volume and spreads; and fees for other services rendered. Certain market value calculations on which fees are based are performed on a monthly or quarterly basis in arrears. Certain investment management fee arrangements also may provide for performance fees, based on client portfolio returns that exceed predetermined levels. Based on an analysis of historical trends and current asset and product mix, management estimates that a 10% rise or fall in overall equity markets would cause a corresponding increase or decrease in Northern Trust’s trust, investment and other servicing fees of approximately 3% and in total revenues of approximately 2%.

The following table presents selected average month-end, average quarter-end, and year-end equity market indices and the percentage changes year over year.

MARKET INDICES	AVERAGE OF MONTH-END							AVERAGE OF QUARTER-END							YEAR-END
	2011		2010		CHANGE			2011		2010		CHANGE			2011		2010		CHANGE
S&P 500 ®		1,281		1,131		13	%		1,259		1,150		9	%		1,258		1,258		–	%
MSCI EAFE ® (in U.S. dollars)		1,609		1,511		7			1,549		1,538		1			1,413		1,658		(15	)

Custody related deposits maintained with bank subsidiaries and foreign branches are primarily interest-bearing and averaged $37.8 billion in 2011, $30.0 billion in 2010, and $30.4 billion in 2009. Assets under custody and assets under management form the primary basis of our trust, investment and other servicing fees. At December 31, 2011, assets under custody were $4.3 trillion, up 4% from $4.1 trillion a year ago. Assets under custody included $2.4 trillion of global custody assets. Managed assets totaled $662.9 billion, up 3% from $643.6 billion at the end of 2010.

ASSETS UNDER CUSTODY	DECEMBER 31										CHANGE						FIVE-YEAR COMPOUND GROWTH RATE
($ In Billions)	2011		2010		2009		2008		2007		2011 / 2010			2010 / 2009
Corporate & Institutional	$	3,877.6	$	3,711.1	$	3,325.9	$	2,719.2	$	3,802.9		4	%		12	%		4	%
Personal		385.2		370.2		331.1		288.3		332.3		4			12			6
Total Assets Under Custody	$	4,262.8	$	4,081.3	$	3,657.0	$	3,007.5	$	4,135.2		4	%		12	%		4	%

C&IS ASSETS UNDER CUSTODY ($ in Billions)	PFS ASSETS UNDER CUSTODY ($ in Billions)

2011 ANNUAL REPORT TO SHAREHOLDERS 22 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ASSETS UNDER MANAGEMENT	DECEMBER 31										CHANGE						FIVE-YEAR COMPOUND GROWTH RATE
($ In Billions)	2011		2010		2009		2008		2007		2011 / 2010			2010 / 2009
Corporate & Institutional	$	489.2	$	489.2	$	482.0	$	426.4	$	608.9		–	%		1	%		(3	)%
Personal		173.7		154.4		145.2		132.4		148.3		13			6			5
Total Managed Assets	$	662.9	$	643.6	$	627.2	$	558.8	$	757.2		3	%		3	%		(1	)%

C&IS ASSETS UNDER MANAGEMENT ($ in Billions)	PFS ASSETS UNDER MANAGEMENT ($ in Billions)

Custodied and managed assets were invested as follows:

ASSETS UNDER CUSTODY	DECEMBER 31
	2011									2010
($ In Billions)	C&IS			PFS			CONSOLIDATED			C&IS			PFS			CONSOLIDATED
Equities		43	%		43	%		43	%		48	%		46	%		48	%
Fixed Income Securities		37			28			37			35			26			34
Cash and Other Assets		20			29			20			17			28			18
ASSETS UNDER MANAGEMENT	DECEMBER 31
	2011									2010
($ In Billions)	C&IS			PFS			CONSOLIDATED			C&IS			PFS			CONSOLIDATED
Equities		47	%		34	%		44	%		48	%		36	%		45	%
Fixed Income Securities		14			32			19			15			33			19
Cash and Other Assets		39			34			37			37			31			36

Foreign Exchange Trading Income

Northern Trust provides foreign exchange services in the normal course of business as an integral part of its global custody services. Active management of currency positions, within conservative limits, also contributes to trading income. Foreign exchange trading income decreased 15%, or $57.7 million, and totaled $324.5 million in 2011 compared with $382.2 million last year. The decrease from the prior year primarily reflects reduced volatility and client volumes.

Treasury Management Fees

The fee portion of treasury management revenues decreased to $72.1 million from $78.1 million in 2010. Treasury management revenues in 2011 were impacted by lower transaction volumes.

Security Commissions and Trading Income

Security commissions and trading income is generated primarily from securities brokerage services provided by Northern Trust Securities, Inc. The current year decline to $60.5 million from $60.9 million in 2010 principally reflects lower revenues from interest rate protection products, while core brokerage revenues remained stable.

2011 ANNUAL REPORT TO SHAREHOLDERS 23 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Other Operating Income

The components of other operating income include:

							CHANGE
(In Millions)	2011		2010		2009		2011 / 2010			2010 / 2009
Loan Service Fees	$	68.9	$	60.3	$	52.1		14	%		16	%
Banking Service Fees		54.9		57.3		53.1		(4	)		8
Other Income		34.3		28.7		31.6		19			(9	)
Total Other Operating Income	$	158.1	$	146.3	$	136.8		8	%		7	%

The increase in loan service fees is primarily attributable to growth in loan-related commitment fees. The decrease in banking service fees primarily reflects lower letter of credit revenue. The other income increase is attributable to increases in various miscellaneous income categories.

Investment Security Gains (Losses), Net

Net investment security losses were $23.9 million in 2011 compared to $20.4 million in 2010. The current and prior year included $23.3 million and $21.2 million, respectively, of pre-tax charges for the credit-related other-than-temporary impairment of residential mortgage backed securities held within Northern Trust’s balance sheet investment securities portfolio.

NONINTEREST INCOME – 2010 COMPARED WITH 2009

Trust, investment and other servicing fees for 2010 accounted for 76% of total noninterest income and 57% of total revenue. These fees were $2.08 billion in both 2010 and 2009. Higher market valuations and new business in 2010 were offset by a decrease in securities lending revenues. Foreign exchange trading income decreased 14% in 2010 to $382.2 million from $445.7 million in 2009. The decrease reflected reduced currency volatility, partially offset by increased client volumes.

Revenues from security commissions and trading income totaled $60.9 million in 2010, compared with $62.4 million in 2009. The decrease primarily reflected decreased revenue from core brokerage services.

Treasury management fees were $78.1 million in 2010, down 5% from the $81.8 million reported in 2009. The 2009 fees reflect the pass through of a higher level of Federal Deposit Insurance Corporation (FDIC) premium charges. Treasury management revenues in 2010 were impacted by lower transaction volumes.

Other operating income totaled $146.3 million in 2010, an increase of 7% from $136.8 million in 2009. The increase primarily reflected increased revenues from loan service fees and banking service fees and reduced losses from credit default swaps, partially offset by increased currency translation losses and decreases in other income.

Net investment security losses of $20.4 million in 2010 and $23.4 million in 2009 included $21.2 million and $26.7 million, respectively, of pre-tax charges for the credit-related other-than-temporary impairment of residential mortgage backed securities.

2011 ANNUAL REPORT TO SHAREHOLDERS 24 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Net Interest Income

An analysis of net interest income on an FTE basis, major balance sheet components impacting net interest income, and related ratios are provided below.

ANALYSIS OF NET INTEREST INCOME (FTE)										CHANGE
($ In Millions)	2011			2010			2009			2011 / 2010			2010 / 2009
Interest Income – GAAP	$	1,408.6		$	1,296.7		$	1,406.0			9	%		(8	)%
FTE Adjustment		40.2			39.1			40.2			3			(3	)
Interest Income – FTE		1,448.8			1,335.8			1,446.2			9			(8	)
Interest Expense		399.5			378.0			406.2			6			(7	)
Net Interest Income – FTE Adjusted		1,049.3			957.8			1,040.0			10	%		(8	)%
Net Interest Income – GAAP	$	1,009.1		$	918.7		$	999.8			10	%		(8	)%
AVERAGE BALANCE
Earning Assets	$	82,748.8		$	67,865.4		$	66,670.8			22	%		2	%
Interest-Related Funds		67,049.8			57,179.4			53,671.6			17			8
Net Noninterest-Related Funds		15,699.0			10,686.0			12,999.2			47			(24	)
										CHANGE IN PERCENTAGE
AVERAGE RATE
Earning Assets		1.75	%		1.97	%		2.17	%		(.22	)		(.20	)
Interest-Related Funds		.60			.66			.76			(.06	)		(.10	)
Interest Rate Spread		1.15			1.31			1.41			(.16	)		(.10	)
Total Source of Funds		.48			.56			.61			(.08	)		(.05	)
Net Interest Margin		1.27	%		1.41	%		1.56	%		(.14	)		(.15	)

Refer to pages 128 and 129 for additional analysis of net interest income.

Net interest income is defined as the total of interest income and amortized fees on earning assets, less interest expense on deposits and borrowed funds, adjusted for the impact of interest-related hedging activity. Earning assets – federal funds sold; securities purchased under agreements to resell; interest-bearing deposits with banks; Federal Reserve deposits; other interest-bearing deposits; securities; and loans and leases – are financed by a large base of interest-bearing funds that include deposits; short-term borrowings; senior notes and long-term debt. Earning assets also are funded by net noninterest-related funds, which include demand deposits; the allowance for credit losses; and stockholders’ equity, reduced by nonearning assets such as cash and due from banks; items in process of collection; and buildings and equipment. The dominant factors that affect net interest income are variations in the level and mix of earning assets; interest-bearing funds; net noninterest-related funds; and their relative sensitivity to interest rate movements. In addition, the levels of nonperforming assets and client compensating deposit balances used to pay for services impact net interest income.

Net interest income in 2011 was $1.01 billion, up 10% from $918.7 million in 2010. Net interest income on an FTE basis for 2011 was $1.05 billion, an increase of 10% from $957.8 million in 2010. The increase primarily reflects higher levels of average earning assets, partially offset by a decline in the net interest margin. Average earning assets increased $14.9 billion, or 22%, to $82.7 billion from $67.9 billion in 2010, while the net interest margin was 1.27%, down from 1.41% in 2010. Growth in earning assets primarily reflects a $6.5 billion increase in securities, a $5.0 billion increase in Federal Reserve and other interest-bearing deposits, and a $2.5 billion increase in interest-bearing deposits with banks.

Loans and leases averaged $28.3 billion, 3% higher than the $27.5 billion in 2010. The increase is primarily due to a higher average balance of short duration advances related to the processing of custodied client investments.

Securities averaged $26.4 billion, up $6.5 billion, or 33% from 2010, with the growth primarily in U.S. government sponsored agency, other securities, and U.S. government securities.

The increase in average earning assets of $14.9 billion was funded by higher levels of both non-interest and interest-related funds. The growth in interest-related funds was primarily attributable to higher average client balances in non-U.S. office interest-bearing deposits and increased savings and money market deposits, partially offset by lower average short-term borrowings. Average noninterest-related funding sources in 2011 increased $5.7 billion from 2010, primarily due to an increase in average demand and other noninterest-

2011 ANNUAL REPORT TO SHAREHOLDERS 25 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

bearing deposits. In August 2011, Northern Trust issued $500 million of 3.375% fixed-rate senior notes of the Corporation due on August 23, 2021. The senior notes are non-callable and unsecured, and were issued at a .437% discount.

Stockholders’ equity averaged $7.0 billion in 2011 compared with $6.6 billion in 2010. The increase of $389.8 million, or 6%, principally reflects the retention of earnings, partially offset by the payment of dividends and the repurchase of common stock pursuant to Northern Trust’s share buyback program. During 2011, Northern Trust repurchased 1,599,572 shares at a cost of $79.4 million ($43.63 average price per share). An additional 5.6 million shares are authorized for repurchase after December 31, 2011 under the current share buyback program.

For additional analysis of average balances and interest rate changes affecting net interest income, refer to the Average Statement of Condition with Analysis of Net Interest Income on pages 128 and 129.

NET INTEREST INCOME – 2010 COMPARED WITH 2009

Net interest income decreased in 2010 as compared to 2009 primarily as a result of a significant reduction in the net interest margin, partially offset by an increase in average earning assets. The net interest margin decreased to 1.41% from 1.56% in 2009, reflecting the prolonged low interest rate environment which resulted in reduced yields on the securities portfolio as maturing investments were replaced by lower yielding assets. In addition, due to continuing weakness in loan demand, balance sheet growth in 2010 was concentrated in lower yielding assets, while a larger percentage of funding was generated from interest-bearing sources.

Earning assets averaged $67.9 billion in 2010, up 2% from $66.7 billion in 2009. The growth reflected a $2.5 billion increase in average securities balances, partially offset by a $1.2 billion decrease in average loans and leases and a $.1 billion decrease in money market assets. The increase in average earning assets of $1.2 billion was funded primarily by higher levels of interest-related funds. The growth in interest-related funds was attributable to higher average client balances in non-U.S. office interest-bearing deposits, partially offset by lower average short-term borrowings. Average noninterest-related funding sources in 2010 declined $2.3 billion from 2009, primarily due to a decrease in average demand and other noninterest-bearing deposits. In November 2010, $500 million of 3.450% fixed-rate senior notes of the Corporation were issued that are due on November 4, 2020.

Stockholders’ equity averaged $6.6 billion in 2010 and 2009. In April 2009, 17,250,000 common shares were issued in connection with a public offering for which $834.1 million of cash proceeds were received.

Provision for Credit Losses

The provision for credit losses was $55.0 million in 2011 compared with $160.0 million in 2010 and a $215.0 million provision in 2009. The current year provision reflects improvement from the prior year in commercial and institutional and commercial real estate loans, but continued weakness in residential real estate loans. For a fuller discussion of the allowance and provision for credit losses for 2011, 2010, and 2009, refer to pages 56 and 57.

2011 ANNUAL REPORT TO SHAREHOLDERS 26 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Noninterest Expense

Noninterest expense for 2011 totaled $2.83 billion, up $333.3 million, or 13%, from $2.50 billion in 2010. Noninterest expense in 2011 reflects the $91.6 million of charges ($59.8 million after tax) associated with restructuring, acquisition and integration related activities and $78.9 million of operating costs attributable to the 2011 acquisitions. Noninterest expense also includes Visa indemnification related benefits of $23.1 million in 2011 and $33.0 million in 2010. Excluding the 2011 restructuring, acquisition and integration related charges, operating costs attributable to the 2011 acquisitions, and the 2010 and 2011 Visa indemnification benefits, noninterest expense increased $152.9 million, or 6%. The components of noninterest expense and a discussion of significant changes during 2011 and 2010 are provided below.

NONINTEREST EXPENSE										CHANGE
(In Millions)	2011			2010			2009			2011 / 2010			2010 / 2009
Compensation	$	1,267.2		$	1,108.0		$	1,099.7			14	%		1	%
Employee Benefits		258.2			237.6			242.1			9			(2	)
Outside Services		552.8			460.4			424.5			20			8
Equipment and Software		328.1			287.1			261.1			14			10
Occupancy		180.9			167.8			170.8			8			(2	)
Visa Indemnification Benefits		(23.1	)		(33.0	)		(17.8	)		(30	)		85
Other Operating Expense		267.1			270.0			136.3			(1	)		98
Total Noninterest Expense	$	2,831.2		$	2,497.9		$	2,316.7			13	%		8	%

2011 RESTRUCTURING, ACQUISITION AND INTEGRATION CHARGES AND OPERATING COSTS ATTRIBUTABLE TO 2011 ACQUISITIONS

(In Millions)	RESTRUCTURING, ACQUISITION AND INTEGRATION CHARGES		OPERATING COSTS OF 2011 ACQUISITIONS
Compensation	$	50.2	$	27.7
Employee Benefits		4.3		7.8
Outside Services		16.8		22.1
Equipment and Software		10.9		5.2
Occupancy		6.4		3.5
Other Operating Expense		3.0		12.6
Total	$	91.6	$	78.9

Compensation

Compensation costs, the largest component of noninterest expense, increased $159.2 million from 2010 and included $50.2 million of severance charges related to the planned elimination of approximately 700 positions in connection with the current year’s restructuring, acquisition and integration activities and $27.7 million of operating costs attributable to the 2011 acquisitions. Excluding these charges and operating costs, the $81.3 million, or 7%, increase from the prior year primarily reflects higher full-time equivalent staff levels and annual salary increases exclusive of the acquisitions. Staff on a full-time equivalent basis totaled approximately 14,100 at December 31, 2011 compared with approximately 12,800 at December 31, 2010, and averaged 13,500 in 2011, up 7% compared with 12,600 in 2010.

Employee Benefits

The increase in employee benefit costs for 2011 reflects $7.8 million of operating costs associated with the 2011 acquisitions and the $4.3 million of severance related accruals. The remaining increase in employee benefit costs for 2011 is primarily due to higher full-time equivalent staff levels, federal and unemployment insurance, and pension expense, partially offset by the reversal in 2011 of an employee benefit related accrual of $9.7 million for which the 2010 goal was not met.

Outside Services

Outside services expense increased $92.4 million from 2010. The increase reflects the restructuring, acquisition and integration charges of $16.8 million related to consulting and technical services expense, and $22.1 million of operating costs attributable to the 2011 acquisitions. Excluding the current year’s restructuring, acquisition and integration charges and the operating costs of the 2011 acquisitions, outside services expense increased $53.5 million, or 12%, from the prior year, primarily reflecting higher expense associated with technical services due primarily to increased market data volumes and usage, as well as higher investment manager sub-advisor fees reflecting increased market values of assets under management. Technical services includes expense for systems and application support; the provision of market and research data; and outsourced check processing and lockbox

2011 ANNUAL REPORT TO SHAREHOLDERS 27 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

services, among other services. Investment manager sub-advisor fees are those paid to external investment managers for services provided to certain funds Northern Trust manages and those relating to custom client programs.

Equipment and Software

Equipment and software expense, comprised of depreciation and amortization; rental; and maintenance costs, increased $41.0 million in 2011 compared to 2010. The increase reflects $10.9 million of restructuring charges related to software write-offs and $5.2 million of operating costs attributable to the current year acquisitions. Excluding the restructuring charges and operating costs from the current year acquisitions, equipment and software expense increased $24.9 million, or 9%, primarily reflecting higher software costs attributable to increased investment in capital assets.

Occupancy

Occupancy expense totaled $180.9 million in 2011 compared to $167.8 million in 2010, reflecting $6.4 million of restructuring charges related to reductions in office space as well as $3.5 million of operating costs attributable to the 2011 acquisitions.

Visa Indemnification Benefits

In 2011, 2010, and 2009, reductions to Northern Trust’s Visa indemnification liability and related charges totaled $23.1 million, $33.0 million, and $17.8 million, respectively. Northern Trust, in conjunction with other member banks of Visa U.S.A., Inc., is obligated to share in losses resulting from certain indemnified litigation involving Visa. The reductions reflect Northern Trust’s proportionate share of funds that Visa deposited into its litigation escrow account in those years. Visa indemnification charges are further discussed in Note 25 to the consolidated financial statements.

Other Operating Expense

Other operating expense in 2011 includes $12.6 million of operating costs associated with the 2011 acquisitions and $3.0 million of restructuring, acquisition and integration related charges. The components of other operating expense were as follows:

								CHANGE
(In Millions)	2011		2010		2009			2011 / 2010			2010 / 2009
Business Promotion	$	82.1	$	81.0	$	66.6			1	%		22	%
FDIC Insurance Premiums		29.3		33.9		54.1			(14	)		(37	)
Staff Related		37.6		37.4		31.3			1			19
Other Intangibles Amortization		17.5		14.4		16.2			22			(11	)
Capital Support Agreements		–		–		(109.3	)		N/M			N/M
Other Expenses		100.6		103.3		77.4			(3	)		33
Total Other Operating Expense	$	267.1	$	270.0	$	136.3			(1	)%		98	%

The decrease in FDIC insurance premiums reflects the discontinuation in 2010 of the FDIC Transaction Account Guarantee Program. The increase in other intangibles amortization expense primarily reflects the amortization of additional intangible assets purchased in connection with the 2011 acquisitions. The other expenses component of other operating expense reflects lower charges related to account servicing activities and decreases in other miscellaneous expense categories, partially offset by miscellaneous expense attributable to the 2011 acquisitions.

NONINTEREST EXPENSE — 2010 COMPARED WITH 2009

Noninterest expense for 2010 totaled $2.50 billion, up 8% from $2.32 billion in 2009. Noninterest expense for 2009 included a net expense reduction of $109.3 million associated with the final support payments and expiration of capital support agreement (CSA) obligations.

Compensation costs increased $8.3 million, or 1%, from 2009 and reflected the reversal in 2009 of accruals totaling $22.2 million related to performance stock units granted in 2008 and 2007 which were no longer expected to vest, partially offset by a decrease in salary expense in 2010. Staff on a full-time equivalent basis averaged 12,600 in 2010, up 2% compared with 12,300 in 2009. The 2010 increase primarily reflected additional staff to support international growth.

Employee benefit costs for 2010 were $237.6 million, down $4.5 million, or 2%, from $242.1 million in 2009, reflecting lower federal and employee insurance benefits.

2011 ANNUAL REPORT TO SHAREHOLDERS 28 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Outside services expense totaled $460.4 million in 2010, up 8% from $424.5 million in 2009 due to higher expense associated with investment manager sub-advisor fees, and technical services.

Equipment and software expense increased 10% to $287.1 million in 2010 from $261.1 million in 2009. The increase reflected higher levels of computer software depreciation and amortization from additional investments in capital assets and an increase in equipment expense from higher computer maintenance and equipment rental.

Net occupancy expense for 2010 was $167.8 million, down 2% from $170.8 million in 2009 due to decreased building depreciation, rent expense, and real estate taxes, partially offset by expense associated with building operations.

Reductions to Northern Trust’s Visa indemnification liability and related charges totaled $33.0 million and $17.8 million in 2010 and 2009, respectively.

Other operating expense totaled $270.0 million in 2010, up from $136.3 million in 2009, which included a net expense reduction of $109.3 million associated with the final support payments and expiration of the CSA obligations. Other operating expense also increased in 2010 due to increases in business promotion, staff related expense, and higher charges related to account servicing activities and increases in other miscellaneous expense categories. The increases were partially offset by a decrease in FDIC insurance premiums reflecting the 2009 special assessment of $20.2 million.

Provision for Income Taxes

Provisions for income tax and effective tax rates are impacted by levels of pre-tax income, state tax rates, and the impact of certain non-U.S. subsidiaries whose earnings are indefinitely reinvested, as well as non-recurring items such as the resolution of tax matters. The 2011 income tax provision was $280.1 million, representing an effective rate of 31.7%. This compares with $320.3 million of income tax expense and an effective rate of 32.4% in 2010. The decrease in the effective rate for 2011 primarily reflects adjustments to the Corporation’s intercompany service allocation methodology and the favorable resolutions of certain leasing matters with the Internal Revenue Service and certain state tax matters.

The tax provisions for 2011 and 2010 reflect reductions totaling $21.3 million and $20.1 million, respectively, related to certain non-U.S. subsidiaries whose earnings are being indefinitely reinvested. The higher reduction in 2011 reflects the adjustments to the Corporation’s intercompany service allocation methodology.

The 2009 income tax provision of $391.0 million represented an effective rate of 31.2%. The effective tax rate in 2009 reflected income tax benefits relating to the resolution of certain state and leasing tax positions taken in prior periods and included a $20.9 million reduction in the tax provision related to non-U.S. subsidiaries whose earnings are being indefinitely reinvested.

BUSINESS UNIT REPORTING

Northern Trust, under the leadership of Chairman and Chief Executive Officer Frederick H. Waddell, is organized around its two principal client-focused business units, C&IS and PFS. Investment management services and products are provided to the clients of these business units and to other U.S. and non-U.S. clients by NTGI. Operations support is provided to each of the business units by O&T. Mr. Waddell has been identified as the chief operating decision maker, having final authority over resource allocation decisions and performance assessment.

C&IS and PFS results are presented to promote a greater understanding of their financial performance. The information, presented on an internal management-reporting basis, derives from internal accounting systems that support Northern Trust’s strategic objectives and management structure. Management has developed accounting systems to allocate revenue and expense related to each segment. They incorporate processes for allocating assets, liabilities and equity, and the applicable interest income and expense. Equity is allocated based on the proportion of economic capital associated with the business units.

Allocations of capital and certain corporate expense may not be representative of levels that would be required if the segments were independent entities. The accounting policies used for management reporting are consistent with those described in Note 1 to the consolidated financial statements. Transfers of income and expense items are recorded at cost; there is no consolidated profit or loss on sales or transfers between business units. Northern Trust’s presentations are not necessarily consistent with similar information for other financial institutions.

2011 ANNUAL REPORT TO SHAREHOLDERS 29 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CONSOLIDATED FINANCIAL INFORMATION										CHANGE
(In Millions)	2011			2010			2009			2011 / 2010			2010 / 2009
Noninterest Income
Trust, Investment and Other Servicing Fees	$	2,169.5		$	2,081.9		$	2,083.8			4	%		N/M
Other		591.3			647.1			703.3			(9	)		(8	)%
Net Interest Income (FTE)*		1,049.3			957.8			1,040.0			10			(8	)
Revenue (FTE)*		3,810.1			3,686.8			3,827.1			3			(4	)
Provision for Credit Losses		55.0			160.0			215.0			(66	)		(26	)
Visa Indemnification Benefits		(23.1	)		(33.0	)		(17.8	)		(30	)		85
Noninterest Expense (Excluding Visa Indemnification Benefits)		2,854.3			2,530.9			2,334.5			13			8
Income before Income Taxes*		923.9			1,028.9			1,295.4			(10	)		(21	)
Provision for Income Taxes*		320.3			359.4			431.2			(11	)		(17	)
Net Income	$	603.6		$	669.5		$	864.2			(10	)%		(23	)%
Average Assets	$	91,947.9		$	76,008.2		$	74,314.2			21	%		2	%

* Stated on an FTE basis. The consolidated figures include $40.2 million, $39.1 million, and $40.2 million of FTE adjustment for 2011, 2010, and 2009, respectively.

Corporate & Institutional Services

The C&IS business unit is a leading global provider of asset servicing, securities lending, brokerage, banking and related services to corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth and government funds. Asset servicing and related services encompass a full range of industry leading capabilities including but not limited to: global master trust and custody, trade settlement, and reporting; fund administration; cash management; investment risk and performance analytical services; investment operations outsourcing; and transition management and commission recapture. Client relationships are managed through the Bank and the Bank’s and the Corporation’s other subsidiaries, including support from international locations in North America, Europe, the Middle East, and the Asia Pacific region. C&IS also executes related foreign exchange transactions from offices located in the United States, United Kingdom, and Singapore.

The following table summarizes the results of operations of C&IS for the years ended December 31, 2011, 2010, and 2009 on a management-reporting basis.

CORPORATE & INSTITUTIONAL SERVICES RESULTS OF OPERATIONS										CHANGE
(In Millions)	2011			2010			2009			2011 / 2010			2010 / 2009
Noninterest Income
Trust, Investment and Other Servicing Fees	$	1,196.4		$	1,175.1		$	1,236.8			2	%		(5	)%
Other		485.4			522.7			571.3			(7	)		(9	)
Net Interest Income (FTE)*		282.5			271.8			416.0			4			(35	)
Revenue (FTE)*		1,964.3			1,969.6			2,224.1			–			(11	)
Provision for Credit Losses		(20.5	)		(16.1	)		30.7			27			N/M
Noninterest Expense		1,522.4			1,328.9			1,200.6			15			11
Income before Income Taxes*		462.4			656.8			992.8			(30	)		(34	)
Provision for Income Taxes*		168.3			222.4			350.8			(24	)		(37	)
Net Income	$	294.1		$	434.4		$	642.0			(32	)%		(32	)%
Percentage of Consolidated Net Income		49	%		65	%		74	%
Average Assets	$	47,533.7		$	38,749.3		$	38,117.1			23	%		2	%

* Stated on an FTE basis.

The decrease in C&IS net income in 2011 resulted from reductions in securities lending revenue, a component of trust, investment and other servicing fees; lower foreign exchange trading income; and higher noninterest expense, including operating costs from the 2011 acquisitions of $78.9 million and 2011 restructuring, acquisition and integration charges totaling $60.8 million. These impacts were partially offset by increases in custody and fund administration revenue, a component of trust, investment and other servicing fees, primarily attributable to the current year acquisitions which in total contributed $76.6 million to C&IS revenues in 2011; and an increased negative provision for credit losses. Other

2011 ANNUAL REPORT TO SHAREHOLDERS 30 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

components of C&IS trust, investment and other servicing fees increased in 2011 primarily attributable to new business. The net income decrease in 2010 as compared to 2009 primarily reflects reductions in securities lending revenue, net interest income, and foreign exchange trading income, and higher noninterest expense, partially offset by a negative provision for credit losses.

C&IS Trust, Investment and Other Servicing Fees

C&IS trust, investment and other servicing fees are attributable to four general product types: Custody and Fund Administration, Investment Management, Securities Lending, and Other Services. Custody and fund administration fees are driven primarily by asset values, transaction volumes and number of accounts. Custody fees related to asset values are often priced based on values at the beginning of each quarter; however, there are custody fees that are based on quarter-end or month-end values or average values for a month or quarter. The fund administration fees that are asset value related are generally priced using average daily balances. Investment management fees are based primarily on market values throughout a period.

Securities lending revenue is affected by market values; the demand for securities to be lent, which drives volumes; and the interest rate spread earned on the investment of cash deposited by investment firms as collateral for securities they have borrowed. Securities lending revenue prior to 2011 had also included Northern Trust’s share of unrealized gains and losses on one mark-to-market investment fund used in securities lending activities. As of September 30, 2010, securities in the mark-to-market fund had been sold with the proceeds reinvested into a short duration fund, eliminating the mark-to-market impact on securities lending revenue in periods subsequent to the date of sale. The other services fee category in C&IS includes such products as benefit payment, performance analysis, electronic delivery, and other services. Revenues from these products are based generally on the volume of services provided or a fixed fee.

Provided below are the components of C&IS trust, investment and other servicing fees and a breakdown of its assets under custody and under management.

CORPORATE AND INSTITUTIONAL SERVICES TRUST, INVESTMENT AND OTHER SERVICING FEES
(In Millions)	2011		2010		2009
Custody and Fund Administration	$	770.1	$	646.1	$	583.0
Investment Management		262.5		261.2		247.1
Securities Lending		87.9		195.2		336.7
Other		75.9		72.6		70.0
Total Trust, Investment and Other Servicing Fees	$	1,196.4	$	1,175.1	$	1,236.8

2011 C&IS FEES

CORPORATE AND INSTITUTIONAL SERVICES ASSETS UNDER CUSTODY
			DECEMBER 31
(In Billions)	2011		2010		2009
North America	$	2,112.1	$	1,999.6	$	1,861.9
Europe, Middle East, and Africa		1,351.4		1,280.7		1,085.9
Asia Pacific		319.4		331.7		263.6
Securities Lending		94.7		99.1		114.5
Total Assets Under Custody	$	3,877.6	$	3,711.1	$	3,325.9

2011 C&IS ASSETS UNDER CUSTODY

CORPORATE AND INSTITUTIONAL SERVICES ASSETS UNDER MANAGEMENT
			DECEMBER 31
(In Billions)	2011		2010		2009
North America	$	304.0	$	284.7	$	257.6
Europe, Middle East, and Africa		48.7		69.0		63.5
Asia Pacific		41.8		36.4		46.4
Securities Lending		94.7		99.1		114.5
Total Assets Under Management	$	489.2	$	489.2	$	482.0

2011 C&IS ASSETS UNDER MANAGEMENT

2011 ANNUAL REPORT TO SHAREHOLDERS 31 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Custody and fund administration fees, the largest component of trust, investment and other servicing fees, increased $124.0 million, or 19%, primarily reflecting higher fund administration and global custody fee revenues, attributable to the 2011 acquisitions, other new business, and improved markets. Fees from investment management were relatively unchanged from the year-ago period as increases due to new business and improved markets were offset by $34.3 million of money market mutual fund fee waivers attributable to the persistent low level of short-term interest rates. Money market mutual fund fee waivers for 2010 totaled $12.9 million. Securities lending revenue decreased $107.3 million, or 55%. The prior year included the recovery of previously recorded unrealized asset valuation losses of approximately $114 million related to a mark-to-market investment fund used in our securities lending activities. There were no mark-to-market impacts in the current year as securities in the mark-to-market fund had been sold in September 2010 with the proceeds reinvested into a short duration fund. Excluding the impact of the prior year asset valuation recoveries, securities lending fees in 2011 increased by approximately $6.7 million, reflecting higher spreads on the investment of cash collateral, partially offset by lower average volumes.

C&IS assets under custody were $3.9 trillion at December 31, 2011, 4% higher than the $3.7 trillion at December 31, 2010. Managed assets totaled $489.2 billion at December 31, 2011 and 2010. Cash and other assets deposited by investment firms as collateral for securities borrowed from custody clients are managed by Northern Trust and are included in assets under custody and under management. This collateral totaled $94.7 billion and $99.1 billion at December 31, 2011 and 2010, respectively.

C&IS Other Noninterest Income

Other noninterest income for 2011 decreased $37.3 million, or 7%, to $485.4 million from $522.7 million in 2010. The decrease primarily reflects a $58.5 million, or 16%, decrease in foreign exchange trading income due to reduced volatility and client volumes in the current year, partially offset by the benefit of 2011 acquisitions and other new business. Other noninterest income for 2010 of $522.7 million decreased $48.6 million, or 9%, from $571.3 million in 2009. This decrease resulted from lower foreign exchange trading income due to reduced volatility that was partially offset by increased client volumes as compared to 2009.

C&IS Net Interest Income

Net interest income increased $10.7 million, or 4%, in 2011 to $282.5 million from $271.8 million in 2010. The increase primarily reflects higher levels of average earning assets, partially offset by a decline in the net interest margin. The C&IS net interest margin in 2011 was .70% compared to .77% in 2010 and 1.25% in 2009. The decrease in the net interest margin in 2011 is primarily attributable to a change in the application of internal funds transfer pricing used in determining net interest income. Low interest rates also impacted net interest income in 2010, which was down $144.2 million, or 35%, from $416.0 million in 2009.

C&IS Provision for Credit Losses

The provision for credit losses was negative $20.5 million for 2011 reflecting recoveries of previously charged off exposures and improvement in underlying asset quality metrics within both commercial and institutional loans and commercial real estate loans. The provision for credit losses was negative $16.1 million for 2010 compared to a $30.7 million provision in 2009, reflecting reduced loan balances and, to a lesser extent, improvement in underlying asset quality metrics within the commercial loan segment as compared to 2009.

C&IS Noninterest Expense

C&IS noninterest expense was up $193.5 million, or 15%, in 2011 and totaled $1.52 billion compared to $1.33 billion in 2010. Noninterest expense in 2011 increased primarily as a result of $78.9 million of operating expense attributable to the 2011 acquisitions and $60.8 million of current year restructuring, acquisition and integration related charges. The restructuring, acquisition and integration related charges are reflected in higher compensation and outside services expense and in higher indirect expense allocations for product and operating support. Excluding the operating expense attributable to the 2011 acquisitions and the restructuring, acquisition and integration related charges, C&IS noninterest expense increased $53.8 million, or 4%, from 2010. Noninterest expense in 2010 totaled $1.33 billion, a $128.3 million increase from 2009. 2009 included expense reductions of $100.6 million associated with the final support payments and expiration of the CSA obligations.

2011 ANNUAL REPORT TO SHAREHOLDERS 32 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Personal Financial Services

The PFS business unit provides personal trust, investment management, custody, and philanthropic services; financial consulting; guardianship and estate administration; brokerage services; and private and business banking. PFS focuses on high net worth individuals and families, business owners, executives, professionals, retirees, and established privately held businesses in its target markets. PFS also includes the Wealth Management Group, which provides customized products and services to meet the complex financial needs of individuals and family offices in the United States and throughout the world with assets typically exceeding $200 million. PFS services are delivered through a network of offices in 18 U.S. states and Washington, D.C., as well as offices in London and Guernsey.

The following table summarizes the results of operations of PFS for the years ended December 31, 2011, 2010, and 2009 on a management-reporting basis.

PERSONAL FINANCIAL SERVICES RESULTS OF OPERATIONS										CHANGE
(In Millions)	2011			2010			2009			2011 / 2010			2010 / 2009
Noninterest Income
Trust, Investment and Other Servicing Fees	$	973.1		$	906.8		$	847.0			7	%		7	%
Other		128.5			133.3			138.7			(4	)		(4	)
Net Interest Income (FTE)*		613.7			591.8			538.1			4			10
Revenue (FTE)*		1,715.3			1,631.9			1,523.8			5			7
Provision for Credit Losses		75.5			176.1			184.3			(57	)		(4	)
Noninterest Expense		1,214.9			1,103.0			1,044.6			10			6
Income before Income Taxes*		424.9			352.8			294.9			20			20
Provision for Income Taxes*		168.7			132.8			112.4			27			18
Net Income	$	256.2		$	220.0		$	182.5			16	%		21	%
Percentage of Consolidated Net Income		42	%		33	%		21	%
Average Assets	$	23,861.5		$	23,564.5		$	24,534.8			1	%		(4	)%

* Stated on an FTE basis.

PFS net income increased from 2010 as a result of higher revenues and a lower provision for credit losses, partially offset by increases in noninterest expense, including 2011 restructuring related charges totaling $27.4 million, and in the provision for income taxes. PFS revenue totaled $1.72 billion in 2011, an increase of $83.4 million, or 5%, from $1.63 billion in 2010, primarily attributable to increased trust, investment and other servicing fees and net interest income. These increases were partially offset by higher money market mutual fund fee waivers attributable to the prolonged low interest rate environment and decreased security commission and trading income and treasury management fees. PFS net income in 2010 increased $37.5 million, or 21%, from 2009 primarily attributable to increased trust, investment and other servicing fees and net interest income, as well as a lower provision for credit losses. These were partially offset by increased money market mutual fund fee waivers, noninterest expense, and provision for income tax.

2011 ANNUAL REPORT TO SHAREHOLDERS 33 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

PFS Trust, Investment and Other Servicing Fees

Provided below is a summary of PFS trust, investment and other servicing fees and assets under custody and under management.

PERSONAL FINANCIAL SERVICES TRUST, INVESTMENT AND OTHER SERVICING FEES	YEAR ENDED DECEMBER 31
(In Millions)	2011		2010		2009
Midwest	$	399.2	$	373.0	$	327.6
Southeast		218.1		200.3		188.6
West		208.5		185.8		173.7
Wealth Management		117.4		123.2		135.8
Northeast		29.9		24.5		21.3
Total Trust, Investment and Other Servicing Fees	$	973.1	$	906.8	$	847.0

2011 PFS FEES

PERSONAL FINANCIAL SERVICES ASSETS UNDER CUSTODY	DECEMBER 31
(In Billions)	2011		2010		2009
Wealth Management	$	226.5	$	221.9	$	196.0
Midwest		67.6		64.1		58.2
Southeast		37.2		36.7		34.0
West		36.5		34.8		31.1
Northeast		17.4		12.7		11.8
Total Assets Under Custody	$	385.2	$	370.2	$	331.1

2011 PFS ASSETS UNDER CUSTODY

PERSONAL FINANCIAL SERVICES ASSETS UNDER MANAGEMENT	DECEMBER 31
(In Billions)	2011		2010		2009
Midwest	$	68.5	$	60.4	$	57.0
Wealth Management		34.0		31.5		31.4
Southeast		32.2		29.1		27.3
West		29.1		26.6		23.7
Northeast		9.9		6.8		5.8
Total Assets Under Management	$	173.7	$	154.4	$	145.2

2011 PFS ASSETS UNDER MANAGEMENT

The PFS regions shown above are comprised of the following: Midwest includes Illinois, Michigan, Wisconsin, Missouri, Ohio and Minnesota; Southeast includes Florida and Georgia; West includes California, Washington, Nevada, Texas, Arizona, and Colorado; Northeast includes New York, Connecticut, Massachusetts, Washington, D.C., and Delaware; Wealth Management includes the results from the focus on the family office segment, complex fiduciary assignments and ultra-wealthy individuals through the provision of specialized asset management, investment consulting, global custody, fiduciary, and private banking services for domestic and international clients.

Fees in the majority of locations in which PFS operates and all mutual fund-related revenue are calculated primarily based on market values. PFS trust, investment and other servicing fees were $973.1 million in 2011, up 7% from $906.8 million in 2010, which in turn was up 7% from $847.0 million in 2009. The current year performance benefitted from new business and higher market valuations. Impacting the results in both years were waived fees in money market funds, totaling $67.8 million and $49.6 million in 2011 and 2010, respectively, due to the low level of short-term interest rates. Trust, investment and other servicing fees for 2010 were higher compared to 2009, reflecting higher market valuations and new business.

At December 31, 2011, assets under custody in PFS were $385.2 billion compared with $370.2 billion at December 31, 2010. Managed assets were $173.7 billion at December 31, 2011 compared to $154.4 billion at the previous year end.

2011 ANNUAL REPORT TO SHAREHOLDERS 34 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

PFS Other Noninterest Income

Other noninterest income for the year totaled $128.5 million compared to $133.3 million in 2010, a decrease of 4%, primarily driven by a decrease in security commissions and trading income and in treasury management fees. The other noninterest income decrease of 4% in 2010 compared to 2009 resulted from a decrease in core brokerage fee revenue and treasury management fees.

PFS Net Interest Income

Net interest income was $613.7 million for the year, up 4% from $591.8 million in 2010, which was 10% higher than 2009. Average loans increased $248.5 million in 2011, and the net interest margin increased to 2.61% from 2.55% in 2010, which in turn was up from the 2009 margin of 2.23%. The increased net interest margin for 2011 and 2010 largely reflects lower costs of funds.

PFS Provision for Credit Losses

The provision for credit losses was $75.5 million for 2011, compared with $176.1 million in 2010, and $184.3 million in 2009. The current year provision reflects improvements in commercial and institutional and commercial real estate loans, partially offset by continued weakness in residential real estate loans. The 2010 provision reflected continued weakness in residential and commercial real estate loans in certain markets. For a fuller discussion of the allowance and provision for credit losses refer to pages 56 and 57.

PFS Noninterest Expense

Noninterest expense of PFS increased $111.9 million, or 10%, to $1.21 billion in 2011 compared to $1.10 billion in 2010, primarily due to the $27.4 million of current year restructuring related charges which are reflected in higher compensation and benefits, outside services, and occupancy expense and in higher indirect expense allocations for product and operating support. Excluding the 2011 restructuring related charges, noninterest expense of PFS increased $84.5 million, or 8%, from 2010. Noninterest expense for 2010 was 6% higher than 2009, primarily attributable to higher indirect expense allocations for product and operating support, higher compensation, and increased charges associated with account servicing activities.

Northern Trust Global Investments

NTGI, through various subsidiaries of the Corporation, provides a broad range of asset management and related services and other products to clients around the world, including clients of C&IS and PFS. Clients include institutional and individual separately managed accounts, bank common and collective funds, registered investment companies, exchange traded funds, non-U.S. collective investment funds, and unregistered private investment funds. NTGI offers both active and passive equity and fixed income portfolio management, as well as alternative asset classes (such as private equity and hedge funds of funds) and multi-manager products and advisory services. NTGI’s activities also include overlay services and other risk management services. NTGI’s business operates internationally through subsidiaries, joint ventures, alliances, and distribution arrangements and its revenue and expense are fully allocated to C&IS and PFS.

At year-end 2011, Northern Trust managed $662.9 billion in assets for personal and institutional clients compared with $643.6 billion at year-end 2010. The increase in assets reflects higher equity markets in 2011 and new business.

NORTHERN TRUST GLOBAL INVESTMENTS

2011 ASSETS UNDER MANAGEMENT OF $662.9 BILLION

ASSET CLASSES

CLIENT SEGMENTS

MANAGEMENT STYLES

2011 ANNUAL REPORT TO SHAREHOLDERS 35 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Operations and Technology

The O&T business unit supports all Northern Trust’s business activities, including the processing and product management activities of C&IS, PFS, and NTGI. These activities are conducted principally in the operations and technology centers in Chicago, London, and Bangalore.

Corporate Financial Management Group

The Corporate Financial Management Group includes the Chief Financial Officer, Controller, Treasurer, and Investor Relations functions. The Group is responsible for Northern Trust’s accounting and financial infrastructure and for managing the Corporation’s financial position.

Corporate Risk Management Group

The Corporate Risk Management Group includes the Credit Policy and other Corporate Risk Management functions. The Credit Policy function is described in the “Risk Management – Loans and Other Extensions of Credit” section. The Corporate Risk Management Group monitors, measures, and facilitates the management of risks across the businesses of the Corporation and its subsidiaries.

Treasury and Other

Treasury and Other includes income and expense associated with the wholesale funding activities and the investment portfolios of the Corporation and the Bank. Treasury and Other also includes certain corporate-based expense, executive level compensation and nonrecurring items not allocated to the business units.

The following table summarizes the results of operations of Treasury and Other for the years ended December 31, 2011, 2010, and 2009 on a management-reporting basis.

TREASURY AND OTHER RESULTS OF OPERATIONS										CHANGE
(In Millions)	2011			2010			2009			2011 / 2010			2010 / 2009
Other Noninterest Income	$	(22.6	)	$	(8.9	)	$	(6.7	)		154	%		33	%
Net Interest Income (FTE)*		153.1			94.2			85.9			63			10
Revenue (FTE)*		130.5			85.3			79.2			53			8
Visa Indemnification Benefits		(23.1	)		(33.0	)		(17.8	)		(30	)		85
Noninterest Expense (Excluding Visa Indemnification Benefits)		117.0			99.0			89.3			18			11
Income before Income Taxes*		36.6			19.3			7.7			90			N/M
Provision (Benefit) for Income Taxes*		(16.7	)		4.2			(32.0	)		N/M			N/M
Net Income	$	53.3		$	15.1		$	39.7			N/M			(62	)%
Percentage of Consolidated Net Income		9	%		2	%		5	%
Average Assets	$	20,552.7		$	13,694.4		$	11,662.3			50	%		17	%

* Stated on an FTE basis.

The Treasury and Other negative other noninterest income for the years ended 2011, 2010, and 2009 include losses of $23.3 million, $21.2 million, and $26.7 million, respectively, from the write-down of nonagency residential mortgage-backed securities determined to be other-than-temporarily impaired. In 2010, these losses were partially offset by a gain on the sale of a building. The 2011 increase in net interest income reflects the benefit of higher average assets and a change in the application of internal funds transfer pricing used in determining net interest income, partially offset by reduced yields on the securities portfolio, as maturing investments have been replaced by lower yielding assets. The increase in average assets primarily reflects higher levels of average securities balances in 2011 compared to 2010. Noninterest expense in 2011 equaled $117.0 million, up $18 million, or 18%, from 2010, attributable to higher compensation and employee benefits, including $3.4 million of current year restructuring related charges. Noninterest expense was $99.0 million for 2010, an increase of $9.7 million, or 11%, compared to $89.3 million in 2009 and reflected higher compensation expense and the reversal in 2009 of accruals related to performance stock units granted in 2008 and 2007 which were no longer expected to vest. The tax benefits in 2011 and 2009 primarily reflect the favorable resolution of certain state tax positions taken in prior years and other federal and state tax matters not allocated to the business units for management reporting purposes. The tax benefit in 2011 also reflects adjustments to the Corporation’s intercompany service allocation methodology not allocated to the business units for management reporting purposes.

2011 ANNUAL REPORT TO SHAREHOLDERS 36 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING ESTIMATES

The use of estimates and assumptions is required in the preparation of financial statements in conformity with GAAP and actual results could differ from those estimates. The U.S. Securities and Exchange Commission has issued guidance relating to the disclosure of critical accounting estimates. Critical accounting estimates are those that require management to make subjective or complex judgments about the effect of matters that are inherently uncertain and may change in subsequent periods. Changes that may be required in the underlying assumptions or estimates in these areas could have a material impact on Northern Trust’s future financial condition and results of operations.

For Northern Trust, accounting estimates that are viewed as critical are those relating to the allowance for credit losses, pension plan accounting, other-than-temporary impairment (OTTI) of investment securities, and accounting for structured leasing transactions. Management has discussed the development and selection of each critical accounting estimate with the Audit Committee of the Corporation’s Board of Directors (Board).

Allowance for Credit Losses

The allowance for credit losses represents management’s estimate of probable losses which have occurred as of the date of the consolidated financial statements. The loan and lease portfolio and other lending related credit exposures are regularly reviewed to evaluate the adequacy of the allowance for credit losses. In determining the level of the allowance, Northern Trust evaluates the allowance necessary for impaired loans and lending-related commitments and also estimates losses inherent in other lending related credit exposures.

The allowance for credit losses consists of the following components:

Specific Allowance: The amount of specific allowance is determined through an individual evaluation of loans and lending-related commitments considered impaired that is based on expected future cash flows, the value of collateral, and other factors that may impact the borrower’s ability to pay. For impaired loans where the amount of specific allowance, if any, is determined based on the value of the underlying real estate collateral, third-party appraisals are typically obtained and utilized by management. These appraisals are generally less than twelve months old and are subject to adjustments to reflect management’s judgment as to the realizable value of the collateral.

Inherent Allowance: The amount of inherent allowance is based primarily on factors which incorporate management’s evaluation of historical charge-off experience and various qualitative factors such as management’s evaluation of economic and business conditions and changes in the character and size of the loan portfolio. Factors are applied to loan and lease credit exposures aggregated by shared risk characteristics and are reviewed quarterly by Northern Trust’s Loan Loss Allowance Committee which includes representatives from Credit Policy, business unit management, and Corporate Financial Management.

The quarterly analysis of the specific and inherent allowance components and the control process maintained by Credit Policy and the lending staff, as described in the “Risk Management – Loans and Other Extensions of Credit” section, are the principal methods relied upon by management for the timely identification of, and adjustment for, changes in estimated credit loss levels. In addition to Northern Trust’s own experience, management also considers regulatory guidance. Control processes and analyses employed to determine an appropriate level of allowance for credit losses are reviewed on at least an annual basis and modified as considered appropriate.

Loans, leases and other extensions of credit deemed uncollectible are charged to the allowance for credit losses. Subsequent recoveries, if any, are credited to the allowance. Determinations as to whether an uncollectible loan is charged-off or a specific reserve is established are based on management’s assessment as to the level of certainty regarding the amount of loss. The provision for credit losses, which is charged to income, is the amount necessary to adjust the allowance for credit losses to the level determined through the above process. Actual losses may vary from current estimates and the amount of the provision for credit losses may be either greater than or less than actual net charge-offs.

Management’s estimates utilized in establishing an appropriate level of allowance for credit losses are not dependent on any single assumption. Management evaluates numerous variables, many of which are interrelated or dependent on other assumptions and estimates, in determining allowance adequacy. Due to the inherent imprecision in accounting estimates, other estimates or assumptions could reasonably have been used in the current period and changes in estimates are reasonably likely to occur from period to period. Additionally, as an integral part of their examination process, various federal and state regulatory agencies also review the allowance for credit losses. These agencies may require that certain loan balances be classified differently or charged off when their credit evaluations differ

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from those of management, based on their judgments about information available to them at the time of their examination. However, management believes that the allowance for credit losses adequately addresses these uncertainties and has been established at an appropriate level to cover probable losses which have occurred as of the date of the consolidated financial statements.

Pension Plan Accounting

Northern Trust maintains a noncontributory defined benefit pension plan covering substantially all U.S. employees (the Qualified Plan) and a noncontributory supplemental pension plan (the Nonqualified Plan). Plan amendments, effective April 1, 2012, will reduce benefit accruals under the Qualified and Nonqualified Plans. Certain European-based employees also participate in local defined benefit pension plans that have been closed to new employees in prior years and have been closed to future benefit accruals, effective in 2010. Measuring cost and reporting liabilities resulting from defined benefit pension plans requires the use of several assumptions regarding future interest rates, asset returns, compensation increases and other actuarial-based projections relating to the plans. Due to the long-term nature of this obligation and the estimates that are required to be made, the assumptions used in determining the periodic pension expense and the projected pension obligation are closely monitored and reviewed annually for adjustments that may be required. Pension accounting guidance requires that differences between estimates and actual experience be recognized as other comprehensive income in the period in which they occur. The differences are amortized into net periodic pension expense from accumulated other comprehensive income over the future working lifetime of eligible participants. As a result, differences between the estimates made in the calculation of periodic pension expense and the projected pension obligation and actual experience affect stockholders’ equity in the period in which they occur but continue to be recognized as expense systematically and gradually over subsequent periods.

Northern Trust recognizes the significant impact that these pension-related assumptions have on the determination of the pension obligations and related expense and has established procedures for monitoring and setting these assumptions each year. These procedures include an annual review of actual demographic and investment experience with the pension plan’s actuaries. In addition to actual experience, adjustments to these assumptions consider observable yields on fixed income securities, known compensation trends and policies, as well as economic conditions and investment strategies that may impact the estimated long-term rate of return on plan assets.

In determining the pension expense for the U.S. plans in 2011, Northern Trust utilized a discount rate of 5.50% for both the Qualified Plan and the Nonqualified Plan. The rate of increase in the compensation level is based on a sliding scale that averaged 4.02%. The expected long-term rate of return on Qualified Plan assets was 8.00%.

In evaluating possible revisions to pension-related assumptions for the U.S. plans as of Northern Trust’s December 31, 2011 measurement date, the following were considered:

Discount Rate: Northern Trust estimates the discount rate for its U.S. pension plans by applying the projected cash flows for future benefit payments to several published discount rate yield curves as of the measurement date. These yield curves are composed of individual zero-coupon interest rates for 60 different time periods over a 30-year time horizon. Zero-coupon rates utilized by the yield curves are mathematically derived from observable market yields for AA-rated corporate bonds. The yield curve models referenced by Northern Trust in establishing the discount rate supported a rate between 4.54% and 5.12%, with an average decrease of 83 basis points over the prior year. As such, Northern Trust decreased the discount rate for the Qualified and Nonqualified plans from 5.50% for December 31, 2010 to 4.75% for December 31, 2011.

Compensation Level: As long-term compensation policies remained consistent with prior years, no changes were made to the compensation scale assumption since its 2007 revision based on a review of actual salary experience of eligible employees.

Rate of Return on Plan Assets: The expected return on plan assets is based on an estimate of the long-term (30 years) rate of return on plan assets, which is determined using a building block approach that considers the current asset mix and estimates of return by asset class based on historical experience, giving proper consideration to diversification and rebalancing. Current market factors such as inflation and interest rates are also evaluated before long-term capital market assumptions are determined. Peer data and historical

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returns are reviewed to check for reasonability and appropriateness. As a result of these analyses, Northern Trust’s rate of return assumption was maintained at 8.00% for 2011.

Mortality Table: Northern Trust uses the mortality table proposed by the U.S. Treasury for use in accordance with the provisions of the Pension Protection Act of 2006 (PPA) for both pre- and post-retirement mortality assumptions. This table is based on the RP2000 mortality table with projections of expected future mortality improvements.

In order to illustrate the sensitivity of these assumptions on the expected periodic pension expense in 2012 and the projected benefit obligation, the following table is presented to show the effect of increasing or decreasing each of these assumptions by 25 basis points.

(In Millions)	25 BASIS POINT INCREASE			25 BASIS POINT DECREASE
Increase (Decrease) in 2012 Pension Expense
Discount Rate Change		(4.5	)		4.7
Compensation Level Change		1.1			(1.1	)
Rate of Return on Plan Assets Change		(2.7	)		2.7
Increase (Decrease) in Projected Benefit Obligation
Discount Rate Change		(39.4	)		41.8
Compensation Level Change		2.5			(2.4	)

Pension Contributions: The deduction limits specified by the Internal Revenue Code for contributions made by sponsors of defined benefit pension plans are based on a “Target Liability” under the provisions of the PPA. Northern Trust contributed $100.0 million to the Qualified Plan in 2011 and $68.0 million in 2010. The investment return on these contributions decreases the U.S. pension expense. This benefit will be partially offset by the related forgone interest earnings on the funds contributed. The minimum required contribution is expected to be zero in 2012 and for several years thereafter. The maximum deductible contribution is estimated at $175.0 million for 2012.

The estimated U.S. Qualified Plan pension expense is expected to decrease by approximately $8.5 million in 2012 from the 2011 expense of $32.4 million. The decrease is due to the impact of plan amendments and the $100.0 million contribution in 2011, partially offset by the change in pension-related assumptions and other actuarial experiences.

Other-Than-Temporary Impairment of Investment Securities

Under GAAP, companies are required to perform periodic reviews of securities with unrealized losses to determine whether the declines in value are considered other-than-temporary. For available-for-sale and held-to-maturity securities that management has no intent to sell, and believes it more-likely-than-not that it will not be required to sell, prior to recovery, the consolidated statement of income reflects only the credit loss component of an impairment, while the remainder of the fair value loss is recognized in accumulated other comprehensive income. The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security as projected using the Corporation’s cash flow projections. For debt securities that Northern Trust intends to sell, or would more-likely-than-not be required to sell, before the expected recovery of the amortized cost basis, the full impairment (that is, the difference between the security’s amortized cost basis and fair value) is recognized in earnings. The application of significant judgment is required in determining the assumptions used in assessing whether an OTTI exists and, if so, in the calculation of the credit loss component of the OTTI. Assumptions used in this process are inherently subject to change in future periods. Different judgments or subsequent changes in estimates could result in materially different impairment loss recognition. The economic and financial market conditions experienced since the onset of the economic downturn in 2008 have negatively affected the liquidity and pricing of investment securities generally and residential mortgage-backed securities in particular, and have resulted in an increase in the likelihood and severity of OTTI charges.

Northern Trust conducts security impairment reviews quarterly to evaluate those securities within its investment portfolio that have indications of possible OTTI. A determination as to whether a security’s decline in market value is other-than-temporary takes into consideration numerous factors and the relative significance of any single factor can vary by security. Factors considered in determining whether impairment is other-than-temporary include, but are not limited to, the length of time which the security has been impaired; the severity of the impairment; the cause of the impairment; the financial condition and near-term prospects of the issuer; activity in the market of the issuer which may indicate adverse credit conditions; Northern Trust’s intent regarding the sale of the security as of the balance sheet date; and the likelihood that it will not be required to sell the security for a period of time sufficient to allow for the recovery of the security’s amortized cost basis. The Corporate Asset and Liability Policy Committee reviews the results of impairment analyses and concludes on whether OTTI exists.

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Impairment reviews conducted in 2011 and 2010 identified nonagency residential mortgage-backed securities determined to be other-than-temporarily impaired and credit-related losses totaling $23.3 million and $21.2 million, respectively, were recognized in connection with the write-down of the securities. The remaining securities with unrealized losses within Northern Trust’s portfolio as of December 31, 2011 and 2010 were not considered to be other-than-temporarily impaired. However, additional OTTI may occur in future periods as a result of market and economic conditions.

Accounting for Structured Leasing Transactions

Through its leasing subsidiary, Norlease, Inc., Northern Trust acts as a lessor in leveraged lease transactions primarily for transportation equipment, including commercial aircraft and railroad equipment. Northern Trust’s net investment in leveraged leases is reported at the aggregate of lease payments receivable and estimated residual values, net of non-recourse debt and unearned income. Unearned income is required to be recognized in interest income in a manner that yields a level rate of return on the net investment. Determining the net investment in a leveraged lease and the interest income to be recognized requires management to make assumptions regarding the amount and timing of cash flows, estimates of residual values, and the impact of income tax regulations and rates. Changes in these assumptions in future periods could affect asset balances and related interest income.

As part of the Internal Revenue Service’s (IRS) audit of the Corporation’s 1997-2004 federal income tax returns, the IRS challenged the Corporation’s tax position for certain of its leveraged leasing transactions and proposed to disallow certain tax deductions and assess related interest and penalties. In November 2011, the Corporation reached a final settlement with the IRS Appeals Office regarding the disputed leasing transactions. As a result of the settlement agreement reached, revisions were made to cash flow estimates regarding the timing and amount of leveraged lease income tax deductions, which increased interest income by $7.0 million for the year ended December 31, 2011. The IRS may disallow deductions relating to other lease transactions with similar characteristics as part of a future audit of tax returns. The Corporation believes that those transactions are valid leases for U.S. tax purposes and that its tax treatment of those transactions is appropriate based on its interpretation of the tax regulations and legal precedents.

FAIR VALUE MEASUREMENTS

The preparation of financial statements in conformity with GAAP requires certain assets and liabilities to be reported at fair value. As of December 31, 2011, approximately 31% of Northern Trust’s total assets and approximately 1% of its total liabilities were carried on the consolidated balance sheet at fair value. As discussed more fully in Note 3 to the consolidated financial statements, GAAP requires entities to categorize financial assets and liabilities carried at fair value according to a three-level valuation hierarchy. The hierarchy gives the highest priority to quoted, active market prices for identical assets and liabilities (Level 1) and the lowest priority to valuation techniques that require significant management judgment because one or more of the significant inputs are unobservable in the market place (Level 3). Approximately 13% of Northern Trust’s assets carried at fair value are classified as Level 1; Northern Trust typically does not hold equity securities or other instruments that are actively traded on an exchange.

Approximately 86% of Northern Trust’s assets and 94% of its liabilities carried at fair value are categorized as Level 2, as they are valued using models in which all significant inputs are observable in active markets. Investment securities classified as available for sale make up 96% of Level 2 assets with the remaining 4% primarily consisting of derivative financial instruments. Level 2 liabilities are comprised solely of derivative financial instruments.

Investment securities are principally valued by third party pricing vendors. Northern Trust has a well established process to validate all prices received from pricing vendors. Prices are compared to separate independent sources such as non-binding broker quotes and other vendor price feeds to ensure the fair value determination is consistent with GAAP and to ensure the proper classification of assets and liabilities in the fair value hierarchy.

As of December 31, 2011, all derivative assets and liabilities were classified in Level 2 and approximately 98%, measured on a notional value basis, related to client-related and trading activities, predominantly consisting of foreign exchange contracts. Derivative instruments are valued internally using widely accepted models that incorporate inputs readily observable in actively quoted markets and do not require significant management judgment. Northern Trust evaluated the impact of counterparty credit risk and its own credit risk on the valuation of derivative instruments. Factors considered included the likelihood of default by us

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and our counterparties, the remaining maturities of the instruments, our net exposures after giving effect to master netting agreements, available collateral, and other credit enhancements in determining the appropriate fair value of our derivative instruments. The resulting valuation adjustments are not considered material.

As of December 31, 2011, the fair value of Northern Trust’s Level 3 assets and liabilities were $178.3 million and $56.8 million, respectively, and represented approximately 1% of assets and 6% of liabilities carried at fair value, respectively. Level 3 assets consist of auction rate securities purchased from Northern Trust clients. The lack of activity in the auction rate security market has resulted in a lack of observable market inputs to use in determining fair value. Therefore, Northern Trust incorporated its own assumptions about future cash flows and the appropriate discount rate adjusted for credit and liquidity factors. In developing these assumptions, Northern Trust incorporated the contractual terms of the securities, the type of collateral, any credit enhancements available, and relevant market data, where available. As of December 31, 2011, Level 3 liabilities included financial guarantees relating to contingent purchase considerations and standby letters of credit. The fair value of contingent purchase consideration liabilities is determined using an income-based (discounted cash flow) model that incorporates Northern Trust’s own assumptions about future cash flows and appropriate discount rates. Northern Trust’s recorded liability for standby letters of credit, reflecting the obligation it has undertaken, is measured as the amount of unamortized fees on these instruments.

While Northern Trust believes its valuation methods for its assets and liabilities carried at fair value are appropriate and consistent with other market participants, the use of different methodologies or assumptions, particularly as applied to Level 3 assets and liabilities, could have a material effect on the computation of their estimated fair values.

IMPLEMENTATION OF ACCOUNTING STANDARDS

Information related to recent accounting pronouncements is contained in Note 2 to the consolidated financial statements.

CAPITAL EXPENDITURES

Proposed significant capital expenditures are reviewed and approved by Northern Trust’s senior management and, where appropriate, by the Board. This process is designed to assure that the major projects to which Northern Trust commits its resources produce benefits compatible with its strategic goals.

Capital expenditures in 2011 included ongoing enhancements to Northern Trust’s hardware and software capabilities as well as the enhancement of data and resiliency centers and the expansion or renovation of several existing and new offices. Capital expenditures for 2011 totaled $371.1 million, of which $274.2 million was for software, $57.4 million was for computer hardware and machinery, $27.9 million was for building and leasehold improvements, and $11.6 million was for furnishings. These capital expenditures are designed principally to support and enhance Northern Trust’s transaction processing, investment management, and asset servicing capabilities, as well as relationship management and client interaction. Additional capital expenditures planned for systems technology will result in future expense for the depreciation of hardware and amortization of software. Depreciation on computer hardware and machinery and software amortization are charged to equipment and software expense. Depreciation on building and leasehold improvements and on furnishings is charged to occupancy expense and equipment expense, respectively. Capital expenditures for 2010 totaled $311.1 million, of which $220.6 million was for software, $62.5 million was for computer hardware and machinery, $19.4 million was for building and leasehold improvements, and $8.6 million was for furnishings.

OFF-BALANCE SHEET ARRANGEMENTS

Assets Under Custody and Assets Under Management

Northern Trust, in the normal course of business, holds assets under custody, management and servicing in a fiduciary or agency capacity for its clients. In accordance with GAAP, these assets are not assets of Northern Trust and are not included in its consolidated balance sheet.

Financial Guarantees and Indemnifications

Northern Trust issues financial guarantees in the form of standby letters of credit to meet the liquidity and credit enhancement needs of its clients. Standby letters of credit obligate Northern Trust to meet certain financial obligations of its clients, if, under the contractual terms of the agreement, the clients are unable to do so. These instruments are primarily issued to support public and private financial commitments, including commercial paper, bond financing, initial margin requirements on futures exchanges and similar transactions.

Credit risk is the principal risk associated with these instruments. The contractual amounts of these instruments represent the credit risk should the instrument be fully drawn

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upon and the client default. To control the credit risk associated with issuing letters of credit, Northern Trust subjects such activities to the same credit quality and monitoring controls as its lending activities. Northern Trust is obligated to meet the entire financial obligation of these agreements and in certain cases is able to recover the amounts paid through recourse against collateral received or other participants.

Standby letters of credit totaled $4.3 billion at December 31, 2011 and 2010. These amounts include $608.2 million and $602.3 million of standby letters of credit secured by cash deposits or participated to others as of December 31, 2011 and 2010, respectively. The weighted average maturity of standby letters of credit was 27 months at December 31, 2011 and 20 months at December 31, 2010.

As part of the Corporation’s securities custody activities and at the direction of clients, Northern Trust lends securities owned by clients to borrowers who are reviewed and approved by Northern Trust’s Senior Credit Committee. The borrower is required to fully collateralize securities received with cash or marketable securities. As securities are loaned, collateral is maintained at a minimum of 100 percent of the fair value of the securities plus accrued interest, with the collateral revalued on a daily basis. In connection with these activities, Northern Trust has issued certain indemnifications to clients against loss that is a direct result of a borrower’s failure to return securities when due, should the value of such securities exceed the value of the collateral posted. The amount of securities loaned as of December 31, 2011 and 2010 subject to indemnification was $74.4 billion and $74.9 billion, respectively. Because of the credit quality of the borrowers and the requirement to fully collateralize securities borrowed, management believes that the exposure to credit loss from this activity is not significant.

Variable Interests

Variable Interest Entities (VIEs) are defined within GAAP as entities which either have a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. Investors that finance a VIE through debt or equity interests, or other counterparties that provide other forms of support, such as guarantees, subordinated fee arrangements, or certain types of derivative contracts, are variable interest holders in the entity and the variable interest holder, if any, that has both the power to direct the activities that most significantly impact the entity and a variable interest that could potentially be significant to the entity is deemed to be the VIE’s primary beneficiary and is required to consolidate the VIE.

Leveraged Leases. In leveraged leasing transactions, Northern Trust acts as lessor of the underlying asset subject to the lease, and typically funds 20% of the asset’s cost via an equity ownership in a trust with the remaining 80% provided by third party non-recourse debt holders. In such transactions, the trusts, which are VIEs, are created to provide the lessee use of the property with substantially all of the rights and obligations of ownership. The lessee’s maintenance and operation of the leased property has a direct effect on the fair value of the underlying property, and the lessee also has the ability to increase the benefits it can receive and limit the losses it can suffer by the manner in which it uses the property. As a result, Northern Trust has determined that it is not the primary beneficiary of these VIEs given it lacks the power to direct the activities that most significantly impact the economic performance of the VIEs.

Tax Credit Structures. Northern Trust invests in affordable housing projects that are designed to generate a return primarily through the realization of tax credits. The affordable housing projects are formed as limited partnerships and LLCs, and Northern Trust typically invests as a limited partner/investor member in the form of equity contributions. The economic performance of the affordable housing projects, which are deemed to be VIEs, is driven by the performance of their underlying investment projects as well as the VIEs’ ability to operate in compliance with the rules and regulations necessary for the qualification of tax credits generated by equity investments. Northern Trust has determined that it is not the primary beneficiary of these VIEs as it lacks the power to direct the activities that most significantly impact the economic performance of the underlying project or to affect the VIEs’ ability to operate in compliance with the rules and regulations necessary for the qualification of tax credits generated by equity investments. This power is held by the general partners and managing members who exercise full and exclusive control of the operations of the VIEs.

Trust Preferred Securities. As discussed in further detail in Note 13 to the consolidated financial statements, in 1997, Northern Trust issued Floating Rate Capital Securities, Series A and Series B, through statutory business trusts wholly-owned by the Corporation (“NTC Capital I” and “NTC Capital II”, respectively). The sole assets of the trusts are Subordinated Debentures of Northern Trust Corporation that have the same interest rates and maturity dates as the corresponding distribution rates and redemption dates of the Floating Rate Capital Securities. NTC Capital I and NTC Capital II are considered VIEs; however, as the sole asset of

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each trust is a receivable from the Corporation and the proceeds to the Corporation from the receivable exceed the Corporation’s investment in the VIEs’ equity shares, the Corporation is not permitted to consolidate the trusts, even though the Corporation owns all of the voting equity shares of the trusts, has fully guaranteed the trusts’ obligations, and has the right to redeem the preferred securities in certain circumstances.

Investment Funds. Northern Trust acts as asset manager for various funds in which clients of Northern Trust are investors. As an asset manager of funds, the Corporation earns a competitively priced fee that is based on assets managed and varies with each fund’s investment objective. Based on its analysis, Northern Trust has determined that it is not the primary beneficiary of these VIEs under GAAP.

As discussed in further detail in Note 28 to the consolidated financial statements, in November 2011, the Corporation purchased $90 million of securities at par from three investment funds (Funds). The securities were purchased to avoid the risk of the Funds being downgraded which could force certain holders to liquidate their investments. Northern Trust has no further obligations related to these actions as of December 31, 2011. As Northern Trust has no current plans to provide any support additional to that which is noted above, the maximum exposure to loss from its implicit interest in the Funds is the price paid to acquire the securities from the Funds. Any potential future support would be evaluated based upon the specific facts and circumstances and with careful consideration as to the potential impact on Northern Trust’s ability to maintain its well-capitalized status and meet its operational needs.

Under GAAP, the above actions reflect Northern Trust’s implicit interest in the credit risk of the affected Funds. Implicit interests are required to be considered when determining the primary beneficiary of a variable interest entity. The Funds were designed to create and pass to investors interest rate and credit risk. In determining whether Northern Trust is the primary beneficiary of these Funds, an expected loss calculation based on the characteristics of the underlying investments in the Funds is used to estimate the expected losses related to interest rate and credit risk, while also considering the relative rights and obligations of each of the variable interest holders. This analysis concluded that interest rate risk is the primary driver of expected losses within the Funds. As such, Northern Trust has determined that it is not the primary beneficiary of the Funds and is not required to consolidate them within its consolidated balance sheet.

In 2008, Northern Trust entered into CSAs with certain fund entities (CSA Funds) which held notes, asset backed securities, and other instruments whose values had been adversely impacted by widening risk premiums and liquidity spreads and significant rating agency downgrades. As of December 31, 2009, all CSAs had expired in connection with the final settlements of covered securities. However, under prior accounting standards the CSA Funds were considered VIEs and the CSAs reflected Northern Trust’s implicit variable interest in the credit risk of the affected CSA Funds. The CSA Funds were designed to create and pass to investors interest rate and credit risk. In determining whether Northern Trust was the primary beneficiary of the CSA Funds during the period in which the CSAs were in place, expected loss calculations based on the characteristics of the underlying investments in the CSA Funds were used to estimate the expected losses related to interest rate and credit risk, while also considering the relative rights and obligations of each of the variable interest holders. These analyses concluded that interest rate risk was the primary driver of expected losses within the CSA Funds. As such, Northern Trust determined that it was not the primary beneficiary of the CSA Funds and was not required to consolidate them within its consolidated balance sheet.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity Risk Management

The objectives of liquidity risk management are to ensure that Northern Trust can meet its cash flow obligations under both normal and adverse economic conditions while maintaining its ability to capitalize on business opportunities in a timely and cost effective manner. The liquidity of the Corporation is managed separately from that of the Bank which encompasses all of Northern Trust’s U.S. and international banking activities.

Governance and Risk Management Framework

Northern Trust manages its liquidity under a global risk management framework, incorporating regional policies, limits and management when appropriate. Corporate liquidity policies, risk appetite and limits are reviewed annually by the Business Risk Committee of the Board and approved by the Board. Management’s Corporate Asset and Liability Policy Committee (ALCO) is responsible for recommending liquidity policies to the Board, establishing internal guidelines, approving contingency plans, assessing Northern Trust’s overall liquidity status, and reviewing reports and analyses on

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a regular basis. The Corporate Treasury department has the day-to-day responsibility for measuring, analyzing and managing liquidity risk within the guidelines and limits established by ALCO and the Board.

Northern Trust’s Global Liquidity Management framework focuses on five key areas: Position Management; Modeling and Analysis; Contingency Planning; Peer Group Comparisons and Management Reporting; while providing for the review and management of the liquidity of the Corporation separate from that of the Bank. It is through this framework that management monitors its sources and uses of liquidity, evaluates their level of stability under various circumstances, plans for adverse situations, benchmarks itself against other banks, provides information to management, and complies with various U.S. and international regulations.

Northern Trust Consolidated Liquidity Management

Position management includes daily monitoring of cash positions and anticipating future funding requirements given both internal and external events. As the Corporation’s principal subsidiary, encompassing all of Northern Trust’s banking activities, the Bank centrally manages liquidity for all U.S. and international banking operations. Liquidity is provided by a variety of sources, including client deposits (institutional and personal) from our C&IS and PFS businesses, wholesale funding from the capital markets, maturities of short-term investments, and unencumbered liquid assets that can be sold or pledged to secure additional funds. While management does not view the Federal Reserve’s discount window as a primary source of liquidity, at December 31, 2011 the Bank had over $20 billion of securities and loans readily available as collateral to support discount window borrowings. The Bank is also very active in the U.S. interbank funding market, providing an important source of additional liquidity and low-cost funds. Liquidity is used by a variety of activities, including client withdrawals, purchases of securities, net loan growth, and draws on unfunded commitments to extend credit. Northern Trust maintains a very liquid balance sheet with loans representing 29% of total assets as of December 31, 2011. Further, at December 31, 2011 there were significant sources of liquidity within the Bank’s consolidated balance sheet in the form of securities available for sale and short-term money market assets. Unencumbered securities at the Bank, which include those placed at the Federal Reserve discount window, exceeded $25 billion at December 31, 2011.

Liquidity modeling and analysis evaluates a bank’s ability to meet its cash flow obligations given a variety of possible internal and external events and under different economic conditions. Northern Trust uses liquidity modeling to support its contingent liquidity plans, gain insight into its liquidity position and strengthen its liquidity policies and practices. Liquidity modeling is performed using multiple independent scenarios, across major currencies, at a consolidated corporate level and for various U.S. and international banking subsidiaries. These scenarios, which include both company specific and systemic events, analyze potential impacts on our domestic and foreign deposits, wholesale funds, financial market access, external borrowing capacity and off-balance sheet obligations.

Another important area of Northern Trust’s liquidity risk management is the development and maintenance of its contingent liquidity plans. A global contingent liquidity action plan covering the Corporation, Bank and major subsidiaries is approved by ALCO and regularly updated and tested. This plan, which can be activated in the event of an actual liquidity crisis, details organizational responsibilities and defines specific actions designed to ensure the proper maintenance of liquidity during periods of stress. In addition, international banking subsidiaries have individual contingent liquidity plans, which incorporate the global plan.

Northern Trust also analyzes its liquidity profile against a peer group of large U.S. bank holding companies, including other major custody banks. This analysis provides management with benchmarking information, highlights industry trends, and supports the establishment of new policies and strategies.

Management regularly reviews various reports, analyses and other information depicting changes in Northern Trust’s liquidity mix and funding concentrations, overall financial market conditions and other internal and external liquidity metrics. Management uses this information to evaluate the overall status of Northern Trust’s liquidity position and anticipate potential events that could stress that position in the future. An overall Liquidity Status Level for Northern Trust, established and regularly reviewed by ALCO, is monitored on an ongoing basis by the Corporate Treasury department. Downgrades in liquidity status resulting from internal, external or industry-wide events, trigger specific pre-determined actions and limits designed to position Northern Trust to better respond to potential liquidity stresses.

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Corporation Liquidity

The liquidity of the Corporation is managed separately from that of the Bank. The primary sources of cash for the Corporation are dividend payments from its subsidiaries, issuance of debt, issuance of equity (common and preferred), and interest and dividends earned on investment securities and money market assets. The Corporation’s uses of cash consist mainly of dividend payments to the Corporation’s stockholders; the payment of principal and interest to note holders; investments in, or loans, to its subsidiaries; purchases of its common stock; and acquisitions. The most significant uses of cash by the Corporation during 2011 were $750.0 million of loans to its subsidiaries, $273.7 million of common dividends paid to stockholders and $250 million of debt maturities.

On August 22, 2011, the Corporation issued $500 million of 3.38% fixed-rate senior notes due August 23, 2021. These notes are non-callable, unsecured and were issued at a discount to yield 3.427%.

On November 4, 2010, the Corporation issued $500 million of 3.45% fixed-rate senior notes due November 4, 2020. These notes are non-callable, unsecured and were issued at a discount to yield 3.464%.

During 2011, the Corporation received $500.0 million of dividends from the Bank and $5.1 million of dividends from other subsidiaries. Dividends from the Bank are subject to certain restrictions, as discussed in further detail in Note 30 to the consolidated financial statements. During 2012, the Bank has the ability to pay dividends equal to its 2012 eligible net profits plus $1.26 billion. As described in Note 21 to the consolidated financial statements, Northern Trust has elected to indefinitely reinvest undistributed earnings of certain non-US subsidiaries of the Bank approximating $677.5 million at December 31, 2011. This election, however, does not reduce the Bank’s ability to pay dividends to the Corporation.

The Corporation’s liquidity, defined as the amount of highly marketable assets, was $1.28 billion at year-end 2011 and $1.57 billion at year-end 2010. During, and at year-end, 2011 and 2010, these assets were comprised almost entirely of overnight money market placements which were fully available to the Corporation to support its own cash flow requirements or those of its subsidiary companies, as needed. Average liquidity during 2011 and 2010 was $1.29 billion and $1.44 billion, respectively. The cash flows of the Corporation are shown in Note 33 to the consolidated financial statements.

A significant source of liquidity for both the Corporation and the Bank is the ability to draw funding from capital markets globally. The availability and cost of these funds are influenced by our credit rating; as a result, a downgrade could have an adverse impact on our liquidity. The credit ratings of the Corporation and the Bank as of December 31, 2011, provided below, allow Northern Trust to access capital markets on favorable terms.

	CREDIT RATING
	STANDARD & POOR’S		MOODY’S		FITCHRATINGS
Northern Trust Corporation:
Commercial Paper		A-1		P-1		F1+
Senior Debt		A+		A1		AA-
Outlook		Stable		Stable		Stable
The Northern Trust Company:
Short-Term Deposit / Debt		AA-/A-1+		P-1/P-1		F1+/F1+
Long-Term Deposit / Debt		AA-/A-1+		Aa3/Aa3		AA/AA-
Outlook		Stable		Stable		Stable

The following table shows Northern Trust’s contractual obligations at December 31, 2011.

CONTRACTUAL OBLIGATIONS	PAYMENT DUE BY PERIOD
(In Millions)	TOTAL		ONE YEAR AND LESS		1-3 YEARS		4-5 YEARS		OVER 5 YEARS
Senior Notes*	$	2,126.7	$	206.9	$	922.4	$	–	$	997.4
Subordinated Debt*		1,033.4		–		200.0		231.1		602.3
Federal Home Loan Bank Borrowings*		1,055.0		670.0		335.0		–		50.0
Floating Rate Capital Debt*		276.9		–		–		–		276.9
Capital Lease Obligations**		64.2		7.9		16.5		16.2		23.6
Operating Leases**		745.6		86.9		157.9		120.6		380.2
Purchase Obligations***		260.6		113.6		103.6		43.4		–
Total Contractual Obligations	$	5,562.4	$	1,085.3	$	1,735.4	$	411.3	$	2,330.4

Note: Obligations as shown do not include deposit liabilities or interest requirements on funding sources.

* Refer to Notes 12 and 13 to the consolidated financial statements for further details.

** Refer to Note 10 to the consolidated financial statements for further details.

*** Purchase obligations consist primarily of ongoing operating costs related to outsourcing arrangements for certain cash management services and the support and maintenance of the Corporation’s technological requirements. Certain obligations are in the form of variable rate contracts and, in some instances, 2011 activity was used as a base to project future obligations.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Regulatory Environment

In recent years, U.S. regulatory agencies took various actions in order to improve liquidity in the financial markets. One of those actions was the establishment by the FDIC in October of 2008 of the Temporary Liquidity Guarantee Program. Among other provisions, this program guaranteed funds over $250,000 in noninterest-bearing, and certain interest-bearing, transaction deposit accounts held at FDIC insured banks. This additional FDIC protection above $250,000 was extended to January 1, 2013 by the Dodd-Frank Act.

During 2009, 2010, and 2011, many U.S. and international regulatory agencies proposed certain new rules and finalized others that address the management of liquidity risk for financial institutions. In December 2011, the Federal Reserve proposed Enhanced Prudential Standards for large bank holding companies, including the Corporation. Among other items, this proposal would implement new liquidity risk management requirements for bank holding companies, such as the Corporation, with at least $50 billion of consolidated assets. In December 2010, the International Basel Committee on Banking Supervision issued an International Framework for Liquidity Risk Measurement, Standards and Monitoring. This framework document outlines a standardized approach to international liquidity management and introduced two new liquidity measures, a Liquidity Coverage Ratio (LCR) and a Net Stable Funding Ratio (NSFR). Individual country regulators, including the Federal Reserve, are now expected to develop specific regulations for financial institutions under their jurisdiction. After an observation period which began in 2011 and will likely include revisions to both ratios, the LCR is scheduled to be implemented in January 2015 and the NSFR in January 2018. Also, in March 2010, U.S. regulatory agencies issued a joint Interagency Policy Statement on Funding and Liquidity Risk Management. Northern Trust actively follows these regulatory developments and regularly evaluates its liquidity risk management framework against these proposals and industry best practices in order to comply with applicable regulations and further enhance its liquidity policies.

Capital Management

One of Northern Trust’s primary objectives is to maintain a strong capital position to merit and maintain the confidence of clients, the investing public, bank regulators and stockholders. A strong capital position helps Northern Trust take advantage of profitable investment opportunities and withstand unforeseen adverse developments.

Northern Trust manages its capital on a total Corporation basis and on a legal entity basis. The Corporate Treasury department has the day-to-day responsibility for measuring and managing capital levels within standards established by the Capital Management Policy and the Board of Directors. The management of capital also involves regional management when appropriate. In establishing the standards for capital, a variety of factors are taken into consideration, including the overall risk of Northern Trust’s businesses, regulatory requirements, capital levels relative to our peers, and the impact on our credit ratings.

Capital levels were strengthened as average common equity in 2011 increased 6% or $389.8 million reaching $7.02 billion. Total stockholders’ equity was $7.12 billion at December 31, 2011, as compared to $6.83 billion at December 31, 2010. The Corporation declared common dividends totaling $273.4 million in 2011 and the Board maintained the quarterly dividend at $.28 per common share. The common dividend has increased 12% from its level five years ago. The Corporation’s share buyback program is used for general corporate purposes, including management of the Corporation’s capital level. During 2011, the Corporation purchased 1,599,572 of its own common shares at an average price per share of $49.63 in connection with equity based compensation plans. Under the share buyback program, the Corporation may purchase up to 5.6 million additional shares after December 31, 2011.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAPITAL ADEQUACY	DECEMBER 31
($ In Millions)	2011			2010
TIER 1 CAPITAL
Common Stockholders’ Equity	$	7,117		$	6,830
Floating Rate Capital Securities		269			269
Goodwill and Other Intangible Assets		(655	)		(454	)
Pension and Other Postretirement Benefit Adjustments		369			296
Other		5			36
Total Tier 1 Capital		7,105			6,977
TIER 2 CAPITAL
Allowance for Credit Losses Assigned to Loans and Leases		295			320
Allowance for Off-Balance Sheet Credit Loss		34			38
Allowance for Identified Losses		(48	)		(64	)
Long-Term Debt*		679			766
Total Tier 2 Capital		960			1,060
Total Risk-Based Capital	$	8,065		$	8,037
Risk-Weighted Assets**	$	56,667		$	51,472
Total Assets – End of Period (EOP)	$	100,224		$	83,844
Average Fourth Quarter Assets**		97,298			79,655
Total Loans and Leases – EOP		29,064			28,132
RATIOS
Risk-Based Capital Ratios
Tier 1		12.5	%		13.6	%
Total (Tier 1 and Tier 2)		14.2			15.6
Tier 1 Leverage		7.3			8.8
Tier 1 Common Equity***		12.1			13.0
COMMON STOCKHOLDERS’ EQUITY TO
Total Loans and Leases EOP		24.49	%		24.28	%
Total Assets EOP		7.10			8.15

* Long-Term Debt that qualifies for risk-based capital amortizes for the purpose of inclusion in tier 2 capital during the five years before maturity.

** Assets have been adjusted for goodwill and other intangible assets, net unrealized (gain) loss on securities and excess allowance for credit losses that have been excluded from tier 1 and tier 2 capital, if any.

*** A reconciliation of tier 1 common equity to tier 1 capital calculated under GAAP is provided below.

The following table provides a reconciliation of tier 1 common equity, a non-GAAP financial measure which excludes floating rate capital securities, to tier 1 capital calculated in accordance with applicable regulatory requirements and GAAP.

	DECEMBER 31
($ In Millions)	2011			2010
Tier 1 Capital	$	7,105		$	6,977
Less: Floating Rate Capital Securities		269			269
Tier 1 Common Equity		6,836			6,708
Tier 1 Capital Ratio		12.5	%		13.6	%
Tier 1 Common Equity Ratio		12.1	%		13.0	%

In addition to its capital ratios prepared in accordance with regulatory requirements and GAAP, Northern Trust is providing the ratio of tier 1 common equity to risk-weighted assets as it is a measure that the Corporation and investors use to assess capital adequacy.

At December 31, 2011, the Corporation’s tier 1 capital ratio was 12.5% and its total capital ratio was 14.2% of risk-weighted assets, both well above the ratios that are a requirement for regulatory classification as “well-capitalized”. The “well-capitalized” minimum ratios are 6.0% and 10.0%, respectively. The Corporation’s leverage ratio (tier 1 capital to fourth quarter average assets) of 7.3% is also well above the “well-capitalized” minimum requirement of 5.0%. In addition, the Bank had a ratio of 11.7% for tier 1 capital, 13.8% for total risk-based capital, and 6.8% for leverage, and each of the Corporation’s non-U.S. banking subsidiaries had capital ratios above their specified minimum requirements.

The current risk-based capital guidelines that apply to the Corporation and the Bank, commonly referred to as Basel I, are based upon the 1988 capital accord of the International Basel Committee on Banking Supervision (Basel Committee), a committee of central banks and bank supervisors, as implemented by the Federal Reserve Board.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Corporation also is subject to the Basel II framework for risk-based capital adequacy. The U.S. bank regulatory agencies have issued final rules with respect to implementation of the Basel II framework. Under the final Basel II rules, the Corporation is one of a small number of “core” banking organizations. As a result, the Corporation and the Bank will be required to use the advanced approaches under Basel II for calculating risk-based capital related to credit risk and operational risk, instead of the methodology reflected in the regulations effective prior to adoption of Basel II. The rules also require core banking organizations to have rigorous processes for assessing overall capital adequacy in relation to their total risk profiles, and to publicly disclose certain information about their risk profiles and capital adequacy.

The Corporation has for several years been preparing to comply with the advanced approaches of the Basel II framework. The Corporation is also addressing issues related to implementation timing differences between the U.S. and other jurisdictions, to ensure that the Corporation and its depository institution subsidiaries comply with regulatory requirements and expectations in all jurisdictions where they operate. Current results from a required parallel run of the Basel II risk-based capital framework have demonstrated that the use of the advanced approaches of the Basel II framework have not resulted in the Corporation’s or its U.S. subsidiary banks’ tier 1 capital or total risk-based capital ratios falling below the levels required for categorization as “well capitalized.”

On December 16, 2010, the Basel Committee released its final framework for strengthening international capital and liquidity regulation, known as Basel III. The Basel III calibration and phase-in arrangements were previously endorsed by the Seoul G20 Leaders Summit in November 2010, and will be subject to individual adoption by member nations, including the U.S. Under these standards, when fully phased-in on January 1, 2019, banking institutions will be required to satisfy three risk-based capital ratios:

_Ÿ A tier 1 common equity ratio of at least 7.0%, inclusive of 4.5% minimum tier 1 common equity ratio, net of regulatory deductions, and the new 2.5% “capital conservation buffer” of common equity to risk-weighted assets;

_Ÿ A tier 1 capital ratio of at least 8.5%, inclusive of the 2.5% capital conservation buffer; and

_Ÿ A total capital ratio of at least 10.5%, inclusive of the 2.5% capital conservation buffer.

The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a tier 1 common equity ratio above the minimum but below the conservation buffer may face constraints on dividends, equity repurchases and compensation based on the amount of such shortfall. The Basel Committee also announced that a “countercyclical buffer” of 0% to 2.5% of common equity or other loss-absorbing capital “will be implemented according to national circumstances” as an “extension” of the conservation buffer during periods of excess credit growth.

Basel I and Basel II do not include a leverage requirement as an international standard. However, Basel III introduces a non-risk adjusted tier 1 leverage ratio of 3%, based on a measure of total exposure rather than total assets, and new liquidity standards.

The increases to the minimum common equity and tier 1 capital ratios will be phased-in over two years beginning on January 1, 2013, with the full increases taking effect on January 1, 2015. This will be followed by a three-year phase-in, beginning on January 1, 2016, of the capital conservation buffer, with the full 2.5% buffer requirement taking effect on January 1, 2019.

Basel III also provides for the deduction of certain assets from capital (deferred tax assets, mortgage servicing rights, investments in financial firms and pension assets, among others, within prescribed limitations), the inclusion of other comprehensive income in capital, and increased capital for counterparty credit risk. The phase-in period for the capital deductions is proposed to occur in 20 percent increments starting January 1, 2014, with full implementation by January 1, 2018.

The federal banking agencies will likely implement changes to the current capital adequacy standards applicable to the Corporation and the Bank in light of Basel III. If adopted by federal banking agencies, Basel III could lead to significantly higher capital requirements and more restrictive leverage and liquidity ratios. The ultimate impact of the new capital and liquidity standards on the Corporation and the Bank is currently being reviewed and will depend on a number of factors, including the rulemaking and implementation by the U.S. banking regulators. The Corporation cannot determine the ultimate effect that potential legislation, or subsequent regulations, if enacted, would have upon the Corporation’s earnings or financial position. In addition, significant questions remain as to how the capital and liquidity mandates of the Dodd-Frank Act will be integrated with the requirements of Basel III. However, as the Corporation currently understands Basel III, it believes its capital strength, balance sheet and business model leave it well positioned for Basel III.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RISK MANAGEMENT

Overview

The Board provides risk oversight of management through its Audit, Business Strategy, Compensation and Benefits, and Business Risk Committees. The Audit Committee provides oversight with respect to risks relating to financial reporting and the legal component of compliance risk. The Business Strategy Committee provides oversight with respect to strategic risk for the Corporation and its subsidiaries. The Compensation and Benefits Committee reviews all compensation arrangements and practices and assesses the extent to which such arrangements and practices appropriately balance risks taken with related incentives. The Business Risk Committee provides oversight with respect to the following risks inherent in Northern Trust’s businesses: credit risk, market and liquidity risk, fiduciary risk, operational risk and the regulatory component of compliance risk.

The Business Risk Committee has approved a Corporate Risk Appetite Statement articulating Northern Trust’s expectation that risk is consciously considered as part of strategic decisions and in day-to-day activities. Northern Trust’s business units are expected to manage business activities consistent with the Corporate Risk Appetite Statement. Risk tolerances are further detailed in separate strategic, credit, operational, market, fiduciary and compliance risk policies and appetite statements. Various corporate committees and oversight entities have been established to review and approve risk management strategies, standards, management practices and tolerance levels. These committees and entities monitor and provide periodic reporting to the respective committees of the Board on risk performance and effectiveness of risk management processes.

Northern Trust’s assessment of risks is built upon its risk universe, a foundational component of Northern Trust’s integrated Enterprise Wide Risk Management Framework. The risk universe represents the major risk categories and sub-categories to which Northern Trust may be exposed through its business activities.

RISK CATEGORY	RISK MEASUREMENT	RISK TO EARNINGS AND/OR CAPITAL RESULTING FROM:
Credit	Obligor and Counterparty Risk	Failure of a borrower or counterparty to perform on an obligation.
Operational; Fiduciary; Compliance	Operational Risk	Inadequate or failed internal process, people and systems; or from external events.
Market and Liquidity	Market Risk – Trading Book	Changes in the value of trading positions.
	Interest Rate Risk – Banking Book	Changes in interest rates.
	Liquidity Risk	Funding needs during difficult markets.
Strategic	Strategy Risk	Adverse effects of business decisions, improper implementation of business decisions, unexpected external events.
	Business Risk	Adverse developments in the general business environment, which impact the entity’s results.
	Reputation Risk	Damage to the entity’s reputation.

Asset Quality and Credit Risk Management

Securities Portfolio

Northern Trust maintains a high quality securities portfolio, with 86% of the combined available for sale, held to maturity, and trading account portfolios at December 31, 2011 composed of U.S. Treasury and government sponsored agency securities and triple-A rated corporate notes, asset-backed securities, supranational and sovereign bonds, auction rate securities and obligations of states and political subdivisions. The remaining portfolio was composed of corporate notes, asset-backed securities, negotiable certificates of deposit, obligations of states and political subdivisions, auction rate securities and other securities, of which as a percentage of the total securities portfolio, 3% were rated double-A, 1% were rated below double-A, and 10% were not rated by Standard and Poor’s or Moody’s Investors Service (primarily negotiable certificates of deposits of banks whose long term ratings are at least A).

Corporate notes are primarily government guaranteed, such as bonds issued under the FDIC Temporary Liquidity Guarantee Program, with 79% of corporate notes rated triple-A, 16% rated double-A, and 5% rated below double-A. Residential mortgage-backed securities rated below double-A, which represented 84% of total residential mortgage-backed securities, had a total amortized cost and fair value of $168.6 million and $137.4 million, respectively, and were comprised primarily of subprime and Alt-A securities. Securities classified as “other asset-backed” at December 31, 2011 were

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

all triple-A rated with average lives of less than 5 years.

Total unrealized losses within the investment securities portfolio at December 31, 2011 were $85.0 million as compared to $99.5 million at December 31, 2010. The $14.5 million decrease in unrealized losses from the prior year end primarily reflects the improved valuations of residential mortgage-backed and other asset-backed securities due to improving credit markets and the tightening of credit spreads during 2011. As discussed above in the “Critical Accounting Estimates – Other-Than-Temporary Impairment of Investment Securities” section, processes are in place to provide for the timely identification of OTTI. Losses totaling $23.3 million were recognized in 2011 in connection with the write-down of securities determined to be other-than-temporarily impaired, as compared with $21.2 million in 2010 and $26.7 million in 2009. The remaining securities with unrealized losses within Northern Trust’s portfolio as of December 31, 2011 are not considered to be other-than-temporarily impaired. However, additional OTTI may occur in future periods as a result of market or other economic conditions.

Northern Trust is a participant in the repurchase agreement market. This market provides a relatively low cost alternative for short-term funding. Securities purchased under agreements to resell and securities sold under agreements to repurchase are accounted for as collateralized financings and recorded at the amounts at which the securities were acquired or sold plus accrued interest. To minimize any potential credit risk associated with these transactions, the fair value of the securities purchased or sold is monitored, limits are set on exposure with counterparties, and the financial condition of counterparties is regularly assessed. It is Northern Trust’s policy to take possession of securities purchased under agreements to resell. Securities sold under agreements to repurchase are held by the counterparty until the repurchase.

Loans and Other Extensions of Credit

Credit risk is inherent in many of Northern Trust’s activities. A significant component of credit risk relates to the loan portfolio. In addition, credit risk is inherent in certain contractual obligations such as legally binding unfunded commitments to extend credit, commercial letters of credit, and standby letters of credit. These contractual obligations and arrangements are discussed in Note 27 to the consolidated financial statements and are presented in tables that follow. Northern Trust focuses its lending efforts on clients who are looking to utilize a full range of financial services with Northern Trust.

Credit risk is managed through the Credit Policy function, which is designed to assure adherence to a high level of credit standards. Credit Policy reports to the Corporation’s Head of Corporate Risk Management. Credit Policy provides a system of checks and balances for Northern Trust’s diverse credit-related activities by establishing and monitoring all credit-related policies and practices throughout Northern Trust and assuring their uniform application. These activities are designed to diversify credit exposure on an industry and client basis and reduce overall credit risk. These credit management activities also apply to Northern Trust’s use of derivative financial instruments, including foreign exchange contracts and interest risk management instruments.

Individual credit authority for commercial and personal loans is limited to specified amounts and maturities. Credit decisions involving commitment exposure in excess of the specified individual limits are submitted to the appropriate Credit Approval Committee (Committee). Each Committee is chaired by the executive in charge of the area or their designee and has a Credit Policy officer as a voting participant. Each Committee’s credit approval authority is specified, based on commitment levels, risk ratings and maturities. Credits involving commitment exposure in excess of these limits require the approval of the Senior Credit Committee. All exposures approved by the Committees and the Senior Credit Committee require unanimous approval of all voting members.

The Counterparty Risk Management Committee established by Credit Policy manages counterparty risk. This committee has sole credit authority for exposure to all non-U.S. banks, certain U.S. banks which Credit Policy deems to be counterparties and which do not have commercial credit relationships within the Corporation, and certain other exposures. Under the direction of Credit Policy, country exposure limits are reviewed and approved by the Counterparty Risk Management Committee on a country-by-country basis.

As part of its credit process, Northern Trust utilizes an internal borrower risk rating system to support identification, approval, and monitoring of credit risk. Borrower risk ratings are used in credit underwriting, management reporting, setting of loss allowances, and economic capital calculations. Borrower risk ratings are discussed further in Note 6 to the consolidated financial statements.

Credit Policy oversees a range of portfolio reviews that focus on significant and/or weaker-rated credits. This approach allows management to take remedial action in an effort to deal with potential problems. In addition, independent from Credit Policy, the Credit Review Unit undertakes both on-site and off-site file reviews that evaluate

2011 ANNUAL REPORT TO SHAREHOLDERS 50 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

effectiveness of management’s implementation of Credit Policy’s requirements.

Northern Trust maintains a loan watch list. Borrowers designated as watch list represent exposures with elevated credit risk profiles that are monitored through internal watch lists, and consist of credits with borrower ratings of “6 to 9”. These credits, which include all nonperforming credits, are expected to exhibit minimally acceptable probabilities of default, elevated risk of default, or are currently in default. Loans outstanding to watch list borrowers associated with these risk profiles that are not currently in default but have limited financial flexibility totaled $647.2 million at December 31, 2011. Cash flows and capital levels range from acceptable to potentially insufficient to meet current requirements and borrowers typically have minimal cushion in adverse down cycle scenarios. An integral part of the Credit Policy function is a formal review of past due and potential problem loans to determine which credits, if any, need to be placed on nonperforming status or charged off.

As more fully described in the “Provision and Allowance for Credit Losses” section below, the provision for credit losses has been determined, through a disciplined credit review process, to be the amount needed to maintain the allowance for credit losses at an appropriate level to absorb probable credit losses that have been identified with specific borrower relationships (specific loss component) and for probable losses that are believed to be inherent in the loan and lease portfolios, unfunded commitments, and standby letters of credit (inherent loss component).

COMPOSITION OF LOAN PORTFOLIO	DECEMBER 31
(In Millions)	2011		2010		2009		2008		2007
Commercial
Commercial and Institutional	$	6,918.7	$	5,914.5	$	6,312.1	$	8,293.4	$	5,556.4
Commercial Real Estate		2,981.7		3,242.4		3,213.2		3,014.0		2,350.3
Lease Financing, net		978.8		1,063.7		1,004.4		1,143.8		1,168.4
Non-U.S.		1,057.5		1,046.2		728.5		1,791.7		2,274.1
Other		417.6		346.6		457.5		909.6		438.8
Total Commercial	$	12,354.3	$	11,613.4	$	11,715.7	$	15,152.5	$	11,788.0
Personal
Residential Real Estate	$	10,708.9	$	10,854.9	$	10,807.7	$	10,381.4	$	9,171.0
Private Client		5,651.4		5,423.7		5,004.4		4,832.2		4,016.6
Other		349.3		240.0		277.9		389.3		364.5
Total Personal	$	16,709.6	$	16,518.6	$	16,090.0	$	15,602.9	$	13,552.1
Total Loans and Leases	$	29,063.9	$	28,132.0	$	27,805.7	$	30,755.4	$	25,340.1

SUMMARY OF OFF-BALANCE SHEET FINANCIAL INSTRUMENTS WITH CONTRACT AMOUNTS THAT REPRESENT CREDIT RISK

	DECEMBER 31
(In Millions)	2011		2010
Unfunded Commitments to Extend Credit
One Year and Less	$	10,135.1	$	10,985.6
Over One Year		18,567.1		16,243.9
Total	$	28,702.2	$	27,229.5
Standby Letters of Credit	$	4,293.4	$	4,344.7
Commercial Letters of Credit		23.4		32.8
Custody Securities Lent with Indemnification		74,400.5		74,884.1

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

UNFUNDED COMMITMENTS TO EXTEND CREDIT AT DECEMBER 31, 2011 BY INDUSTRY SECTOR
	COMMITMENT EXPIRATION
(In Millions)	TOTAL COMMITMENTS		ONE YEAR AND LESS		OVER ONE YEAR		OUTSTANDING LOANS
Commercial
Commercial and Institutional
Industry Sector
Finance and Insurance	$	3,067.9	$	1,453.4	$	1,614.5	$	727.4
Holding Companies		38.0		28.5		9.5		89.5
Manufacturing		6,929.4		1,017.0		5,912.4		1,469.6
Mining		413.7		96.0		317.7		42.1
Public Administration		70.8		66.8		4.0		338.7
Retail Trade		834.9		217.9		617.0		155.6
Services		5,124.4		1,789.7		3,334.7		3,246.7
Transportation and Warehousing		294.2		6.1		288.1		194.6
Utilities		1,129.9		93.9		1,036.0		99.8
Wholesale Trade		757.4		244.6		512.8		459.9
Other Commercial		127.4		63.9		63.5		94.8
Commercial and Institutional*	$	18,788.0	$	5,077.8	$	13,710.2	$	6,918.7
Commercial Real Estate		174.3		89.4		84.9		2,981.7
Lease Financing, net		–		–		–		978.8
Non-U.S.		1,272.1		1,070.3		201.8		1,057.5
Other		340.5		277.9		62.6		417.6
Total Commercial	$	20,574.9	$	6,515.4	$	14,059.5	$	12,354.3
Personal
Residential Real Estate		2,181.8		291.5		1,890.3		10,708.9
Private Client		5,864.1		3,261.9		2,602.2		5,651.4
Other		81.4		66.3		15.1		349.3
Total Personal	$	8,127.3	$	3,619.7	$	4,507.6	$	16,709.6
Total	$	28,702.2	$	10,135.1	$	18,567.1	$	29,063.9

* Commercial and institutional industry sector information is presented on the basis of the North American Industry Classification System (NAICS).

NON-U.S. OUTSTANDINGS

As used in this discussion, non-U.S. outstandings are cross-border outstandings as defined by the U.S. Securities and Exchange Commission. They consist of loans, acceptances, interest-bearing deposits with financial institutions, accrued interest and other monetary assets. Not included are letters of credit, loan commitments, and non-U.S. office local currency claims on residents funded by local currency liabilities. Non-U.S. outstandings related to a country are net of guarantees given by third parties resident outside the country and the value of tangible, liquid collateral held outside the country. However, transactions with branches of non-U.S. banks are included in these outstandings and are classified according to the country location of the non-U.S. bank’s head office.

Short-term interbank time deposits with non-U.S. banks represent the largest category of non-U.S. outstandings. Northern Trust actively participates in the interbank market with U.S. and non-U.S. banks. International commercial lending activities also include import and export financing for U.S.-based clients.

Northern Trust places deposits with non-U.S. counterparties that have strong internal (Northern Trust) risk ratings and external credit ratings. These non-U.S. banks are approved and monitored by Northern Trust’s Counterparty Risk Management Committee, which has credit authority for exposure to all non-U.S. banks and employs a review process that results in credit limits. This process includes financial analysis of the non-U.S. banks, use of an internal risk rating system and consideration of external ratings from rating agencies. Each counterparty is reviewed at least annually and potentially more frequently based on deteriorating credit fundamentals or general market conditions. Separate from the entity-specific review process, the average life to maturity of deposits with non-U.S. banks is deliberately maintained on a short-term basis in order to respond quickly to changing credit conditions. Northern Trust also utilizes certain risk mitigation tools and agreements that may reduce exposures through use of cash collateral and/or balance sheet netting.

2011 ANNUAL REPORT TO SHAREHOLDERS 52 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Additionally, the Counterparty Risk Management Committee performs a country-risk analysis and imposes limits to country exposure. The following table provides information on non-U.S. outstandings by country that exceed 1.00% of Northern Trust’s assets.

NON-U.S. OUTSTANDINGS
(In Millions)	BANKS		COMMERCIAL AND OTHER		TOTAL
AT DECEMBER 31, 2011
Australia	$	2,513	$	667	$	3,180
United Kingdom		2,943		34		2,977
Singapore		2,604		2		2,606
Netherlands		1,466		63		1,529
France		1,501		–		1,501
Switzerland		1,225		26		1,251
Canada		1,113		13		1,126
Sweden		1,108		4		1,112
AT DECEMBER 31, 2010
Australia	$	2,114	$	3,159	$	5,273
United Kingdom		3,440		30		3,470
France		3,291		–		3,291
Singapore		1,313		14		1,327
Switzerland		1,284		17		1,301
Spain		894		–		894
AT DECEMBER 31, 2009
United Kingdom	$	2,348	$	27	$	2,375
France		2,078		1		2,079
Australia		1,310		364		1,674

Countries whose aggregate outstandings totaled between .75% and 1.00% of total assets were as follows: Finland with aggregate outstandings of $913 million, Hong Kong with aggregate outstandings of $845 million and Norway with aggregate outstandings of $841 million at December 31, 2011, Sweden with aggregate outstandings of $816 million and Canada with aggregate outstandings of $810 million at December 31, 2010, Spain with aggregate outstandings of $807 million, Netherlands with aggregate outstandings of $787 million and Singapore with aggregate outstandings of $654 million at December 31, 2009.

As of December 31, 2011, Northern Trust’s gross exposure to obligors in Portugal, Italy, Ireland, Greece and Spain, eurozone countries considered by Northern Trust to be experiencing significant economic, fiscal and/or political strains, totaled approximately $795 million, or less than 1% of Northern Trust’s total consolidated assets. The largest such exposure, totaling $770 million, was to obligors in Ireland, of which $7 million was to banks and $763 million was to commercial and other borrowers, primarily funds domiciled in Ireland whose assets and investment activities are broadly diversified by investment strategy, issuer type, country of risk, and/or instrument type. Exposures to these borrowers in Ireland may be secured or unsecured, committed or uncommitted, but are typically for short periods of a year or less for foreign exchange, overdraft accommodations, and loans. The remaining exposure reflects $25 million to banks in Spain in connection with foreign exchange and derivative contracts. There was negligible exposure to obligors in Portugal, Italy, or Greece. Exposure levels at December 31, 2011 reflect Northern Trust’s risk management policies and practices, as discussed in further detail above, which operated to limit exposures to higher risk European financial and sovereign entities.

2011 ANNUAL REPORT TO SHAREHOLDERS 53 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

NONPERFORMING ASSETS AND 90 DAY PAST DUE LOANS

Nonperforming assets consist of nonperforming loans and Other Real Estate Owned (OREO). OREO is comprised of commercial and residential properties acquired in partial or total satisfaction of loans. Loans that are delinquent 90 days or more and still accruing interest can fluctuate widely at any reporting period based on the timing of cash collections, renegotiations and renewals. The following table presents nonperforming assets and loans that were delinquent 90 days or more and still accruing for the current and prior four years.

NONPERFORMING ASSETS	DECEMBER 31
(In Millions)	2011			2010			2009			2008			2007
Nonperforming Loans
Commercial
Commercial and Institutional	$	31.3		$	58.0		$	48.5		$	21.3		$	10.4
Commercial Real Estate		79.5			116.4			109.3			35.8			–
Total Commercial		110.8			174.4			157.8			57.1			10.4
Personal
Residential Real Estate	$	177.6		$	153.3		$	116.9		$	32.7		$	5.8
Private Client		5.3			5.3			3.8			6.9			7.0
Total Personal		182.9			158.6			120.7			39.6			12.8
Total Nonperforming Loans and Leases		293.7			333.0			278.5			96.7			23.2
Other Real Estate Owned		21.2			45.5			29.6			3.5			6.1
Total Nonperforming Assets	$	314.9		$	378.5		$	308.1		$	100.2		$	29.3
90 Day Past Due Loans Still Accruing	$	13.1		$	13.0		$	15.1		$	27.8		$	8.6
Nonperforming Loans to Total Loans and Leases		1.01	%		1.18	%		1.00	%		.31	%		.09	%
Allowance for Credit Losses Assigned to Loans and Leases to Nonperforming Loans		1.0	x		1.0	x		1.1	x		2.4	x		6.4	x

While down from the prior year, the nonperforming loan portfolio as of December 31, 2011 remains elevated from historical levels and continues to reflect the deterioration in overall economic conditions experienced since the onset of the economic downturn in 2008 and its effect on Northern Trust’s loan portfolio. The decrease in nonperforming loans from December 31, 2010 reflects improvement within the commercial and institutional and commercial real estate loans, while weakness persists within residential real estate loans. Residential real estate and commercial real estate nonperforming loan balances as of December 31, 2010 reflected the continued weakness in those loan classes within certain markets. Changes in credit quality, including nonperforming loan balances, impact the level of the allowance for credit losses through the resultant adjustment of the specific allowance and of the qualitative factors used in the determination of the inherent allowance levels within the allowance for credit losses. Additional information regarding residential real estate and commercial real estate loans is provided below.

RESIDENTIAL REAL ESTATE

The residential real estate loan portfolio is primarily composed of mortgages to clients with whom Northern Trust is seeking to establish a comprehensive financial services relationship. At December 31, 2011, residential real estate loans totaled $10.7 billion or 38% of total U.S. loans at December 31, 2011, compared with $10.9 billion or 40% at December 31, 2010. All mortgages were underwritten utilizing Northern Trust’s credit standards which do not allow for the origination of loan types generally considered to be of high risk in nature, such as option ARM loans, subprime loans, loans with initial “teaser” rates, and loans with excessively high loan-to-value ratios. Residential real estate loans consist of conventional home mortgages and equity credit lines, which generally require a loan to collateral value of no more than 65% to 80% at inception. Revaluations of supporting collateral are obtained upon refinancing or default or when otherwise considered warranted. Collateral revaluations for mortgages are performed by independent third parties.

Of the total $10.7 billion in residential real estate loans, $4.0 billion were in the greater Chicago area, $2.8 billion were in Florida, and $1.5 billion were in California, with the remainder distributed throughout the other geographic regions within the U.S. served by Northern Trust. Legally binding commitments to extend residential real estate credit, which are primarily equity credit lines, totaled $2.2 billion and $2.5 billion at December 31, 2011 and 2010, respectively.

2011 ANNUAL REPORT TO SHAREHOLDERS 54 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

COMMERCIAL REAL ESTATE

In managing its credit exposure, management has defined a commercial real estate loan as one where: (1) the borrower’s principal business activity is the acquisition or the development of real estate for commercial purposes; (2) the principal collateral is real estate held for commercial purposes, and loan repayment is expected to flow from the operation of the property; or (3) the loan repayment is expected to flow from the sale or refinance of real estate as a normal and ongoing part of the business. Unsecured lines of credit to firms or individuals engaged in commercial real estate endeavors are included without regard to the use of loan proceeds. The commercial real estate portfolio consists of commercial mortgages and construction, acquisition and development loans extended primarily to highly experienced developers and/or investors well known to Northern Trust. Underwriting standards generally reflect conservative loan-to-value ratios and debt service coverage requirements. Recourse to borrowers through guarantees is also commonly required.

Commercial mortgage financing is provided for the acquisition or refinancing of income producing properties. Cash flows from the properties generally are sufficient to amortize the loan. These loans average approximately $1.3 million each and are primarily located in the Illinois, Florida, California, and Arizona markets. Construction, acquisition and development loans provide financing for commercial real estate prior to rental income stabilization. The intent is generally that the borrower will sell the project or refinance the loan through a commercial mortgage with Northern Trust or another financial institution upon completion.

The table below provides additional detail regarding commercial real estate loan types:

(In Millions)	2011		2010
Commercial Mortgages:
Office	$	615.6	$	605.3
Apartment/ Multi-family		656.3		572.4
Retail		523.1		517.8
Industrial/ Warehouse		357.7		383.7
Other		133.3		193.7
Total Commercial Mortgages		2,286.0		2,272.9
Construction, Acquisition and Development Loans		450.1		591.8
Single Family Investment		161.4		246.8
Other Commercial Real Estate Related		84.2		130.9
Total Commercial Real Estate Loans	$	2,981.7	$	3,242.4

At December 31, 2011, legally binding commitments to extend credit and standby letters of credit to commercial real estate borrowers totaled $174.3 million and $111.8 million, respectively. At December 31, 2010 legally binding commitments and standby letters of credit totaled $249.0 million and $116.1 million, respectively.

IMPAIRED LOANS

A loan is impaired when, based on current information and events, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement or when its terms have been modified as a concession resulting from the debtor’s financial difficulties, referred to as a troubled debt restructuring. All troubled debt restructurings are considered impaired loans in the calendar year of their restructuring. In subsequent years, a troubled debt restructuring may cease being classified as impaired if the loan was modified at a market rate and has performed according to the modified terms for at least six months. A loan that has been modified at a below market rate will return to performing status if it satisfies the six month performance requirement; however, it will remain classified as impaired. As of December 31, 2011, impaired loans totaled $279.4 million and included $113.3 million of loans deemed troubled debt restructurings as compared to total impaired loans of $301.2 million at December 31, 2010 that included $56.3 million of loans deemed troubled debt restructurings. Impaired loans had $32.8 million and $51.7 million of the allowance for credit losses allocated to them at December 31, 2011 and December 31, 2010, respectively. Impaired loans are measured based upon the loan’s market price, the present value of expected future cash flows, discounted at the loan’s effective interest rate, or at the fair value of the collateral if the loan is collateral dependent. If the loan valuation is less than the recorded value of the loan, dependent upon the level of certainty of loss, either a specific allowance is established or a charge-off is recorded for the difference. Smaller balance (individually less than $250,000) homogeneous loans are collectively evaluated for impairment and excluded from impaired loan disclosures as allowed under applicable accounting standards.

2011 ANNUAL REPORT TO SHAREHOLDERS 55 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Provision and Allowance for Credit Losses

Changes in the allowance for credit losses were as follows:

(In Millions)	2011			2010			2009
Balance at Beginning of Year	$	357.3		$	340.6		$	251.1
Charge-Offs		(116.3	)		(150.1	)		(132.3	)
Recoveries		32.9			6.9			6.5
Net Charge-Offs		(83.4	)		(143.2	)		(125.8	)
Provision for Credit Losses		55.0			160.0			215.0
Effect of Foreign Exchange Rates		—			(.1	)		.3
Balance at End of Year	$	328.9		$	357.3		$	340.6

The provision for credit losses is the charge to current earnings that is determined by management, through a disciplined credit review process, to be the amount needed to maintain the allowance for credit losses at an appropriate level to absorb probable credit losses that have been identified with specific borrower relationships (specific loss component) and for probable losses that are believed to be inherent in the loan and lease portfolios, unfunded commitments, and standby letters of credit (inherent loss component). The following table shows the specific portion of the allowance and the allocated portion of the inherent allowance and its components by loan category at December 31, 2011 and at each of the prior four year-ends, and the unallocated portion of the inherent allowance at December 31, 2007.

ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES

	DECEMBER 31
	2011						2010						2009						2008						2007
($ In Millions)	ALLOWANCE AMOUNT			PERCENT OF LOANS TO TOTAL LOANS			ALLOWANCE AMOUNT			PERCENT OF LOANS TO TOTAL LOANS			ALLOWANCE AMOUNT			PERCENT OF LOANS TO TOTAL LOANS			ALLOWANCE AMOUNT			PERCENT OF LOANS TO TOTAL LOANS			ALLOWANCE AMOUNT			PERCENT OF LOANS TO TOTAL LOANS
Specific Allowance	$	47.3			–	%	$	63.7			–	%	$	43.8			–	%	$	23.5			–	%	$	10.8			–	%
Allocated Inherent Allowance
Commercial
Commercial and Institutional		90.0			24			113.6			21			137.6			23			114.7			27			64.1			22
Commercial Real Estate		77.1			10			76.7			11			65.6			11			43.8			10			28.4			9
Lease Financing, net		1.8			3			1.3			4			1.4			4			3.3			3			3.6			5
Non-U.S.		4.7			4			3.8			4			4.9			3			7.4			6			7.4			9
Other		–			1			–			1			–			1			–			3			–			2
Total Commercial		173.6			42			195.4			41			209.5			42			169.2			49			103.5			47
Personal
Residential Real Estate		92.0			37			81.6			39			66.8			39			37.0			34			13.6			36
Private Client		16.0			20			16.6			19			20.5			18			21.4			16			6.2			16
Other		–			1			–			1			–			1			–			1			–			1
Total Personal		108.0			58			98.2			59			87.3			58			58.4			51			19.8			53
Total Allocated Inherent Allowance	$	281.6			100	%	$	293.6			100	%	$	296.8			100	%	$	227.6			100	%	$	123.3			100	%
Unallocated Inherent Allowance		–			–			–			–			–			–			–			–			26.1			–
Total Allowance for Credit Losses	$	328.9			100	%	$	357.3			100	%	$	340.6			100	%	$	251.1			100	%	$	160.2			100	%
Allowance Assigned to:
Loans and Leases	$	294.8					$	319.6					$	309.2					$	229.1					$	148.1
Unfunded Commitments and Standby Letters of Credit		34.1						37.7						31.4						22.0						12.1
Total Allowance for Credit Losses	$	328.9					$	357.3					$	340.6					$	251.1					$	160.2
Allowance Assigned to Loans and Leases to Total Loans and Leases		1.01	%					1.14	%					1.11	%					.74	%					.58	%

2011 ANNUAL REPORT TO SHAREHOLDERS 56 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SPECIFIC COMPONENT OF THE ALLOWANCE

The amount of specific allowance is determined through an individual evaluation of loans and lending-related commitments considered impaired that is based on expected future cash flows, collateral value, and other factors that may impact the borrower’s ability to pay.

At December 31, 2011, the specific allowance component amounted to $47.3 million compared with $63.7 million at the end of 2010. The $16.4 million decrease primarily reflects charge-offs and principal paydowns, partially offset by additional allowances provided for new and existing impaired loans. The decrease in impaired loans reflects improvement in commercial real estate and commercial and institutional loans, partially offset by continued weakness in residential real estate loans.

The increase in the specific component of the allowance from $43.8 million in 2009 to $63.7 million in 2010 primarily reflected additional allowances provided for new and existing impaired loans, partially offset by principal repayments received and charge-offs.

INHERENT COMPONENT OF THE ALLOWANCE

The inherent component of the allowance addresses exposure relating to probable but unidentified credit-related losses. The amount of the inherent loss allowance is based primarily on factors which incorporate management’s evaluation of historical charge-off experience and various qualitative factors such as management’s evaluation of economic and business conditions and changes in the character and size of the loan portfolio.

The historical charge-off experience for each loan category is based on data from the current and preceding three years. Qualitative factors reviewed by management include changes in asset quality metrics, the nature and volume of the portfolio, economic and business conditions, and in collateral valuations, such as property values, as well as other pertinent information. Changes in collateral values, delinquency ratios, portfolio volume and concentration, and other asset quality metrics, including management’s subjective evaluation of economic and business conditions, result in adjustments of qualitative allowance factors that are applied in the determination of inherent allowance requirements.

The inherent component of the allowance also covers the credit exposure associated with undrawn loan commitments and standby letters of credit. To estimate the allowance for credit losses on these instruments, management uses conversion rates to determine the estimated amount that will be funded and assigns an allowance factor based on the methodology utilized for outstanding loans.

The inherent portion of the allowance decreased $12.0 million to $281.6 million at December 31, 2011, compared with $293.6 million at December 31, 2010, which decreased $3.2 million from $296.8 million at December 31, 2009. The current year decrease in the inherent allowance reflects improvement in the underlying qualitative factors associated with the commercial and institutional class, while continued weakness exists in residential real estate loans in certain markets. The decrease in 2010 was driven by improvements in the commercial and institutional loan class, partially offset by continued weakness in residential real estate and commercial real estate loans in certain markets.

OVERALL ALLOWANCE

The evaluation of the factors above resulted in a total allowance for credit losses of $328.9 million at December 31, 2011, compared with $357.3 million at the end of 2010. The allowance of $294.8 million assigned to loans and leases, as a percentage of total loans and leases, was 1.01% at December 31, 2011, compared with 1.14% at December 31, 2010.

Allowances assigned to unfunded loan commitments and standby letters of credits totaled $34.1 million and $37.7 million at December 31, 2011 and December 31, 2010, respectively, and are included in other liabilities in the consolidated balance sheet.

PROVISION

The provision for credit losses was $55.0 million for 2011 and net charge-offs totaled $83.4 million. This compares with a $160.0 million provision for credit losses and net charge-offs of $143.2 million in 2010, and a $215.0 million provision for credit losses and net charge-offs of $125.8 million in 2009.

Market Risk Management

Overview

To ensure adherence to Northern Trust’s interest rate and foreign currency risk management policies, ALCO establishes and monitors guidelines designed to control the sensitivity of earnings to changes in interest rates and foreign currency exchange rates. The guidelines apply to both on- and off-balance sheet positions. The goal of the ALCO process is to maximize earnings while maintaining a high quality balance sheet and carefully controlling interest rate and foreign currency risk.

2011 ANNUAL REPORT TO SHAREHOLDERS 57 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Asset/Liability Management

Asset/liability management activities include lending, accepting and placing deposits, investing in securities, issuing debt, and hedging interest rate and foreign currency risk with derivative financial instruments. The primary market risk associated with asset/liability management activities is interest rate risk and, to a lesser degree, foreign currency risk.

INTEREST RATE RISK MANAGEMENT

Interest rate risk is the risk to earnings or capital due to changes in interest rates. Changes in interest rates can have a positive or negative impact on earnings depending on the positioning of assets, liabilities and off-balance sheet instruments. The impact to earnings will primarily come through net interest income, but it can also impact certain types of fees. Changes in interest rates can also impact the values of assets, liabilities, and off-balance sheet positions, which indirectly impact the value of capital. There are four commonly recognized types of interest rate risk: repricing, which arises from differences in the maturity and repricing terms of assets and liabilities; yield curve, which arises from changes in the shape of the yield curve; basis, which arises from the changing relationships between rates earned and paid on different financial instruments with otherwise similar repricing characteristics, and behavioral characteristics/embedded optionality, which arises from client or counterparty behavior in response to interest rate changes. To mitigate interest rate risk, the structure of the balance sheet is managed so that movements of interest rates on assets and liabilities (adjusted for hedges) are highly correlated which allows Northern Trust’s interest-bearing assets and liabilities to contribute to earnings even in periods of volatile interest rates.

Northern Trust uses two primary measurement techniques to manage interest rate risk: simulation of earnings and simulation of economic value of equity. These two techniques are complementary and are used in concert to provide a comprehensive interest rate risk management capability.

Simulation of earnings measures the sensitivity of earnings (SOE) under various interest rate scenarios. The modeling of SOE incorporates on-balance sheet positions, as well as derivative financial instruments (principally interest rate swaps) that are used to manage interest rate risk. Northern Trust uses market implied forward interest rates as the base case and measures the sensitivity (i.e. change) in earnings if future rates are 100 or 200 basis points higher or lower than base case forward rates. Each rate movement is assumed to occur gradually over the one-year period. The 100 basis point increase, for example, consists of twelve consecutive monthly increases of 8.3 basis points. Stress testing of interest rates is performed to include such scenarios as immediate parallel shocks to rates, non-parallel (i.e. twist) changes to yield curves that result in them becoming steeper or flatter, and changes to some of the yield curves (i.e. basis risk). The model simulations also incorporate the following assumptions:

_Ÿ the balance sheet size and mix remains essentially constant over the simulation horizon with maturing assets and liabilities replaced with instruments with similar terms as those that are maturing, with the exception of certain products (such as term borrowings and recent increases in nonmaturity deposits that are assumed to be temporary in nature) that are replaced with overnight wholesale instruments;

_Ÿ prepayments on mortgage loans are projected under each rate scenario using a third-party mortgage analytics system that incorporates market prepayment assumptions;

_Ÿ non-maturity deposit rates are projected based on Northern’s actual historical pattern of pricing these products, or based on judgment when there is no appropriate history or when current pricing strategies differ from history;

_Ÿ commercial demand deposits are treated as short-term rate sensitive as these balances may receive an explicit interest rate or an earnings credit rate that can be applied to fees for services provided by Northern Trust;

_Ÿ new business rates are based on current spreads to market indices;

_Ÿ currency exchange rates, credit spreads, and the initial relationship among market rates (e.g. Treasury and Libor) are assumed to remain constant over the simulation horizon; and

_Ÿ implied floors are assumed as interest rates approach zero in the declining rate scenarios, resulting in yield curves flattening, spread compression, and lower earnings.

2011 ANNUAL REPORT TO SHAREHOLDERS 58 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following table shows the estimated impact on 2012 pre-tax earnings of 100 and 200 basis point upward and downward movements in interest rates relative to forward rates.

INTEREST RATE RISK SIMULATION OF PRE-TAX INCOME AS OF DECEMBER 31, 2011

(In Millions)	ESTIMATED IMPACT ON 2012 PRE-TAX EARNINGS: INCREASE/(DECREASE)
INCREASE IN INTEREST RATES ABOVE MARKET IMPLIED FORWARD RATES
100 Basis Points		24
200 Basis Points		27
DECREASE IN INTEREST RATES BELOW MARKET IMPLIED FORWARD RATES
100 Basis Points		(74	)
200 Basis Points		(79	)

The rates in the lower rate scenarios may not reflect a full 100 or 200 basis point reduction as implied interest rate floors of zero are in place resulting in spread compression.

The simulations of earnings do not incorporate any management actions that may be used to mitigate negative consequences of actual interest rate deviations. For that reason and others, they do not reflect likely actual results but serve as conservative estimates of interest rate risk.

A second technique used to measure interest rate risk is simulation of the economic value of equity, which measures the sensitivity of economic value of equity (SEVE) to changes in interest rates. Economic value of equity is defined as the present value of assets minus the present value of liabilities net of the value of instruments that are used to manage the interest rate risk of balance sheet items. The potential effect of interest rate changes on economic equity is derived from the impact of such changes on projected future cash flows and the present value of these cash flows. Northern Trust uses current market rates (and the future rates implied by the market for path dependent items) as the base case and measures SEVE if current rates are immediately shocked up or down by 100 or 200 basis points. Stress testing of interest rates is performed to include such scenarios as immediate non-parallel (i.e. twist) shocks to yield curves that result in them becoming steeper or flatter and basis risk. The model simulations also incorporate the following assumptions:

_Ÿ prepayments on mortgage loans are projected under each rate scenario using a third-party mortgage analytics system that incorporates market prepayment assumptions;

_Ÿ non-maturity deposit rates are projected based on Northern’s actual historical pattern of pricing. Projected rates may also be based on judgment when there is no appropriate history or when current pricing strategies differ from history. The present values of these deposits are based on estimated remaining lives that are based on Northern’s actual historical runoff patterns with some balances assumed to be temporary;

_Ÿ currency exchange rates and credit spreads are assumed to remain constant over the simulation horizon;

_Ÿ the present values of most noninterest-related balances (such as receivables, equipment, and payables) are the same as their book values; and

_Ÿ The initial shock to current rates assumes the relationship among market curves (e.g. Treasury and Libor) remains the same. Implied floors are assumed as interest rates approach zero in the declining rate scenarios, resulting in yield curves flattening.

The following table shows the estimated impact on economic value of equity of 100 and 200 basis point shocks up and down from current interest rates.

INTEREST RATE RISK SIMULATION OF ECONOMIC VALUE OF EQUITY AS OF DECEMBER 31, 2011

(In Millions)	ESTIMATED IMPACT ON ECONOMIC VALUE OF EQUITY: INCREASE/(DECREASE)
INCREASE IN INTEREST RATES ABOVE MARKET IMPLIED FORWARD RATES
100 Basis Points		24
200 Basis Points		(89	)
DECREASE IN INTEREST RATES BELOW MARKET IMPLIED FORWARD RATES
100 Basis Points		(112	)
200 Basis Points		(84	)

The rates in the lower rate scenarios may not reflect a full 100 or 200 basis point reduction as implied interest rate floors of zero are in place resulting in spread compression.

The simulations of economic value of equity do not incorporate any management actions that might moderate the negative consequences of actual interest rate deviations. For that reason and others, they do not reflect likely actual results but serve as conservative estimates of interest rate risk.

Northern Trust limits aggregate interest rate risk, as measured by the above techniques, to an acceptable level within the context of risk-return trade-offs. A variety of actions may be used to implement risk management strategies to modify interest rate risk including:

_Ÿ purchases of securities;

_Ÿ sales of securities that are classified as available for sale;

2011 ANNUAL REPORT TO SHAREHOLDERS 59 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

_Ÿ issuance of senior notes and subordinated notes;

_Ÿ collateralized borrowings from the Federal Home Loan Bank;

_Ÿ placing and taking Eurodollar time deposits; and

_Ÿ hedges with various types of derivative financial instruments.

Northern Trust strives to use the most effective instruments for implementing its interest risk management strategies, considering the costs, liquidity, collateral and capital requirements of the various alternatives and the risk-return tradeoffs.

FOREIGN CURRENCY RISK MANAGEMENT

Northern Trust is exposed to non-trading foreign currency risk as a result of its holdings of non-U.S. dollar denominated assets and liabilities, investment in non-U.S. subsidiaries, and future non-U.S. dollar denominated revenue and expense. To manage currency exposures on the balance sheet, Northern Trust attempts to match its assets and liabilities by currency. If those currency offsets do not exist on the balance sheet, Northern Trust will use foreign exchange derivative contracts to mitigate its currency exposure. Foreign exchange contracts are also used to reduce Northern Trust’s currency exposure to future non-U.S. dollar denominated revenue and expense.

Foreign Exchange Trading. Foreign exchange trading activities consist principally of providing foreign exchange services to clients. Most of those services are provided in connection with Northern Trust’s growing global custody business. In the normal course of business Northern Trust also engages in trading of non-U.S. currencies for its own account. The market risks associated with these activities are foreign currency and interest rate risk.

Foreign currency trading positions exist when aggregate obligations to purchase and sell a currency other than the U.S. dollar either do not offset each other in amount, or offset each other over different time periods. Northern Trust mitigates the risk related to its non-U.S. currency positions by establishing limits on the amounts and durations of its positions. The limits on overnight inventory positions are generally lower than the limits established for intra-day trading activity. All overnight positions are monitored by a risk management function, which is separate from the trading function, to ensure that the limits are not exceeded. Although position limits are important in controlling foreign currency risk, they are not a substitute for the experience or judgment of Northern Trust’s senior management and its currency traders, who have extensive knowledge of the currency markets. Non-U.S. currency positions and strategies are adjusted as needed in response to changing market conditions.

As part of its risk management activities, Northern Trust measures daily the risk of loss associated with all non-U.S. currency positions using a Value-at-Risk (VaR) model. This statistical model provides estimates, at a variety of high confidence levels, of the potential loss in value that might be incurred if an adverse shift in non-U.S. currency exchange rates were to occur over a small number of days. The model, which is based on a variance/co-variance methodology and daily historical data over at least the past year, incorporates foreign currency and interest rate volatilities and correlations in price movement among the currencies. VaR is computed for each trading desk and for the global portfolio.

Northern Trust’s one-day VaR measure, at the 99% confidence level, totaled $740 thousand and $350 thousand as of December 31, 2011 and 2010, respectively. VaR totals representing the average, high and low for 2011 were $531 thousand, $1.4 million, and $88 thousand, respectively, with the average, high and low for 2010 being $333 thousand, $869 thousand and $93 thousand, respectively. These totals indicate the degree of risk inherent in non-U.S. currency dispositions as of year end and during the year; however, it is not a prediction of an expected gain or loss. Actual future gains and losses will vary depending on market conditions and the size and duration of future non-U.S. currency positions. During 2011 and 2010, Northern Trust did not incur an actual trading loss in excess of the daily value at risk estimate.

Other Trading Activities. Market risk associated with other trading activities is negligible. Northern Trust is a party to various derivative financial instruments, most of which consist of interest rate swaps entered into to meet clients’ interest rate risk management needs. When Northern Trust enters into such derivatives, its practice is to mitigate the resulting market risk with an exactly offsetting derivative. Northern Trust carries in its trading portfolio a small inventory of securities that are held for sale to its clients. The interest rate risk associated with these securities is insignificant.

Operational Risk Management

In providing its services, Northern Trust is exposed to operational risk which is the risk of loss from inadequate or failed internal processes, people, and systems or from external events. Operational risk reflects the potential for inadequate information systems, operating problems, product design and delivery difficulties, or catastrophes to result in losses. Operational risk includes compliance and fiduciary risks,

2011 ANNUAL REPORT TO SHAREHOLDERS 60 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

which under Northern Trust Corporation’s risk structure are governed and managed explicitly. Northern Trust’s success depends, in part, upon maintaining its reputation as a well managed institution with stockholders, existing and prospective clients, creditors and regulators.

Northern Trust seeks to minimize the frequency and severity of operational losses associated with compliance and fiduciary matters, product, process, and technology failures, and business continuity.

Operational risk is mitigated through a system of internal controls and risk management practices that are designed to keep operational risk and operational losses at levels appropriate to Northern Trust’s overall risk appetite and the inherent risk within the markets it operates in. While operational risk controls are extensive, operational losses have and will continue to occur.

The Operational Risk Committee of Northern Trust provides independent oversight and is responsible for setting the Corporate Operational Risk Management Policy and developing the operational risk management framework and programs that support the coordination of operational risk activities to identify, monitor, manage and report on operational risk.

The Corporate Operational Risk function is the focal point for the operational risk management framework and works closely with the business units to achieve the goal of assuring proactive management of operational risk within Northern Trust. To further limit operational risks, committee structures have been established to draft, enforce, and monitor adherence to corporate policies and established procedures. Each business unit is responsible for complying with corporate policies and external regulations applicable to the unit, and is responsible for establishing specific procedures to do so. Northern Trust’s internal auditors monitor the overall effectiveness of the system of internal controls on an ongoing basis.

RECONCILIATION OF OPERATING EARNINGS TO REPORTED EARNINGS

The following table provides a reconciliation of operating earnings, a non-GAAP financial measure which excludes Visa related indemnification benefits, to reported earnings prepared in accordance with GAAP. Management believes the presentation of operating earnings in addition to reported results prepared in accordance with GAAP provides a clearer indication of the results and trends in Northern Trust’s core businesses.

	YEAR ENDED DECEMBER 31
	2011						2010						2009
($ In Millions Except Per Share Data)	AMOUNT			PER COMMON SHARE			AMOUNT			PER COMMON SHARE			AMOUNT			PER COMMON SHARE
Reported Earnings	$	603.6		$	2.47		$	669.5		$	2.74		$	864.2		$	3.16
Visa Indemnification Benefit		(23.1	)		(.10	)		(33.0	)		(.14	)		(17.8	)		(.08	)
Tax Effect		8.7			.04			12.1			.05			6.6			.03
Visa Indemnification Benefit – Net of Tax		(14.4	)		(.06	)		(20.9	)		(.09	)		(11.2	)		(.05	)
Operating Earnings	$	589.2		$	2.41		$	648.6		$	2.65		$	853.0		$	3.11

RECONCILIATION OF REPORTED NET INTEREST INCOME TO FULLY TAXABLE EQUIVALENT

The table below presents a reconciliation of interest income and net interest income prepared in accordance with GAAP to interest income and net interest income on a fully taxable equivalent (FTE) basis, which are non-GAAP financial measures. Management believes this presentation provides a clearer indication of net interest margins for comparative purposes.

	YEAR ENDED DECEMBER 31
	2011								2010											2009
(In Millions)	REPORTED			FTE  ADJ.		FTE*			REPORTED			FTE ADJ.		FTE*			REPORTED			FTE ADJ.		FTE*
Interest Income	$	1,408.6		$	40.2	$	1,448.8		$	1,296.7		$	39.1	$	1,335.8		$	1,406.0		$	40.2	$	1,446.2
Interest Expense		399.5			–		399.5			378.0			–		378.0			406.2			–		406.2
Net Interest Income	$	1,009.1		$	40.2	$	1,049.3		$	918.7		$	39.1	$	957.8		$	999.8		$	40.2	$	1,040.0
Net Interest Margin		1.22	%				1.27	%		1.35	%				1.41	%		1.50	%				1.56	%

* Fully taxable equivalent (FTE)

2011 ANNUAL REPORT TO SHAREHOLDERS 61 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FACTORS AFFECTING FUTURE RESULTS

This report contains statements that may be considered forward-looking, such as the statements relating to Northern Trust’s financial goals, capital adequacy, dividend policy, expansion and business development plans, risk management policies, anticipated expense levels and projected profit improvements, business prospects and positioning with respect to market, demographic and pricing trends, strategic initiatives, reengineering and outsourcing activities, new business results and outlook, changes in securities market prices, credit quality including allowance levels, planned capital expenditures and technology spending, anticipated tax benefits and expenses, and the effects of any extraordinary events and various other matters (including developments with respect to litigation, other contingent liabilities and obligations, and regulation involving Northern Trust and changes in accounting policies, standards and interpretations) on Northern Trust’s business and results.

Forward-looking statements are typically identified by words or phrases such as “believe”, “expect”, “anticipate”, “intend”, “estimate”, “may increase”, “may fluctuate”, “plan”, “goal”, “target”, “strategy”, and similar expressions or future or conditional verbs such as “may”, “will”, “should”, “would”, and “could.” Forward-looking statements are Northern Trust’s current estimates or expectations of future events or future results. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties including: the health of the U.S. and international economies and particularly the continuing uncertainty in Europe; the recent downgrade of U.S. Government issued securities; the health and soundness of the financial institutions and other counterparties with which Northern Trust conducts business; changes in financial markets, including debt and equity markets, that impact the value, liquidity, or credit ratings of financial assets in general, or financial assets in particular investment funds, client portfolios, or securities lending collateral pools, including those funds, portfolios, collateral pools, and other financial assets with respect to which Northern Trust has taken, or may in the future take, actions to provide asset value stability or additional liquidity; the impact of the recent disruption and stress in the financial markets, the effectiveness of governmental actions taken in response, and the effect of such governmental actions on Northern Trust, its competitors and counterparties, financial markets generally and availability of credit specifically, and the U.S. and international economies, including special deposit assessments or potentially higher FDIC premiums; changes in foreign exchange trading client volumes, fluctuations and volatility in foreign currency exchange rates, and Northern Trust’s success in assessing and mitigating the risks arising from such changes, fluctuations and volatility; decline in the value of securities held in Northern Trust’s investment portfolio, particularly asset-backed securities, the liquidity and pricing of which may be negatively impacted by periods of economic turmoil and financial market disruptions; uncertainties inherent in the complex and subjective judgments required to assess credit risk and establish appropriate allowances therefor; difficulties in measuring, or determining whether there is other-than-temporary impairment in, the value of securities held in Northern Trust’s investment portfolio; Northern Trust’s success in managing various risks inherent in its business, including credit risk, operational risk, interest rate risk and liquidity risk, particularly during times of economic uncertainty and volatility in the credit and other markets; geopolitical risks and the risks of extraordinary events such as natural disasters, terrorist events, war and the U.S. and other governments’ responses to those events; the pace and extent of continued globalization of investment activity and growth in worldwide financial assets; regulatory and monetary policy developments; failure to obtain regulatory approvals when required; changes in tax laws, accounting requirements or interpretations and other legislation in the U.S. or other countries that could affect Northern Trust or its clients, including changes in accounting rules for fair value measurements and recognizing impairments; changes in the nature and activities of Northern Trust’s competition, including increased consolidation within the financial services industry; Northern Trust’s success in maintaining existing business and continuing to generate new business in its existing markets; Northern Trust’s success in identifying and penetrating targeted markets, through acquisition, strategic alliance or otherwise; Northern Trust’s success in integrating acquisitions and strategic alliances; Northern Trust’s success in addressing the complex needs of a global client base across multiple time zones and from multiple locations, and managing compliance with legal, tax, regulatory and other requirements in areas of faster growth in its businesses, especially in immature markets; Northern Trust’s ability to maintain a product mix that achieves acceptable margins; Northern Trust’s ability to continue to generate investment results that satisfy its clients and continue to develop its array of investment products; Northern Trust’s success in generating revenues in its securities lending business for itself and its clients, especially in periods of economic and financial market uncertainty; Northern Trust’s success in recruiting and retaining the necessary personnel to support business growth

2011 ANNUAL REPORT TO SHAREHOLDERS 62 NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

and expansion and maintain sufficient expertise to support increasingly complex products and services; Northern Trust’s success in implementing its revenue enhancement and expense management initiatives; Northern Trust’s ability, as products, methods of delivery, and client requirements change or become more complex, to continue to fund and accomplish innovation, improve risk management practices and controls, and address operating risks, including human errors or omissions, data security breach risks, pricing or valuation of securities, fraud, systems performance or defects, systems interruptions, and breakdowns in processes or internal controls; Northern Trust’s success in controlling expenses, particularly in a difficult economic environment; uncertainties inherent in Northern Trust’s assumptions concerning its pension plan, including discount rates and expected contributions, returns and payouts; increased costs of compliance and other risks associated with changes in regulation and the current regulatory environment, including the requirements of the Basel II capital regime and the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), areas of increased regulatory emphasis and oversight in the U.S. and other countries such as anti-money laundering, anti-bribery, and client privacy and the potential for substantial changes in the legal, regulatory and enforcement framework and oversight applicable to financial institutions in reaction to recent adverse financial market events, including changes pursuant to the Dodd-Frank Act that may, among other things, affect the leverage limits and risk-based capital and liquidity requirements for certain financial institutions, including Northern Trust, require those financial institutions to pay higher assessments, expose them to certain liabilities of their subsidiary depository institutions, and restrict or increase the regulation of certain activities, including foreign exchange, carried on by financial institutions, including Northern Trust; risks that evolving regulations, such as Basel II, and potential legislation and regulations, including Basel III and regulations that may be promulgated under the Dodd-Frank Act, could affect required regulatory capital for financial institutions, including Northern Trust, potentially resulting in changes to the cost and composition of capital for Northern Trust; risks and uncertainties inherent in the litigation and regulatory process, including the adequacy of contingent liability, tax, and other accruals; and the risk of events that could harm Northern Trust’s reputation and so undermine the confidence of clients, counterparties, rating agencies, and stockholders.

Some of these and other risks and uncertainties that may affect future results are discussed in more detail in the section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” captioned “Risk Management” in the 2011 Annual Report to Shareholders (pages 49-61), in the section of the “Notes to Consolidated Financial Statements” in the 2011 Annual Report to Shareholders captioned “Note 25 – Contingent Liabilities” (pages 111 and 112), in the sections of “Item 1 – Business” of the 2011 Annual Report on Form 10-K captioned “Government Monetary and Fiscal Policies,” “Competition” and “Regulation and Supervision” (pages 3-14), and in “Item 1A – Risk Factors” of the 2011 Annual Report on Form 10-K (pages 28-37). All forward-looking statements included in this report are based upon information presently available, and Northern Trust assumes no obligation to update any forward-looking statements.

2011 ANNUAL REPORT TO SHAREHOLDERS 63 NORTHERN TRUST CORPORATION

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of Northern Trust Corporation (Northern Trust) is responsible for establishing and maintaining adequate internal control over financial reporting. This internal control contains monitoring mechanisms, and actions are taken to correct deficiencies identified.

Management assessed Northern Trust’s internal control over financial reporting as of December 31, 2011. This assessment was based on criteria for effective internal control over financial reporting described in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management believes that, as of December 31, 2011, Northern Trust maintained effective internal control over financial reporting, including maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Northern Trust, and policies and procedures that provide reasonable assurance that (i) transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States; (ii) receipts and expenditures of Northern Trust are being made only in accordance with authorizations of management and directors of Northern Trust; and (iii) unauthorized acquisition, use, or disposition of Northern Trust’s assets that could have a material effect on the financial statements are prevented or timely detected. Additionally, KPMG LLP, the independent registered public accounting firm that audited Northern Trust’s consolidated financial statements as of, and for the year ended, December 31, 2011, included in this Annual Report, has issued an attestation report (included herein on page 65) on the effectiveness of Northern Trust’s internal control over financial reporting.

2011 ANNUAL REPORT TO SHAREHOLDERS 64 NORTHERN TRUST CORPORATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

THE STOCKHOLDERS AND BOARD OF DIRECTORS OF NORTHERN TRUST CORPORATION:

We have audited Northern Trust Corporation’s internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Northern Trust Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s Report on Internal Control Over Financial Reporting”. Our responsibility is to express an opinion on Northern Trust Corporation’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Northern Trust Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Northern Trust Corporation and subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2011, and our report dated February 24, 2012 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

CHICAGO, ILLINOIS

FEBRUARY 24, 2012

2011 ANNUAL REPORT TO SHAREHOLDERS 65 NORTHERN TRUST CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEET

	DECEMBER 31
($ In Millions Except Share Information)	2011			2010
ASSETS
Cash and Due from Banks	$	4,315.3		$	2,818.0
Federal Funds Sold and Securities Purchased under Agreements to Resell		121.3			160.1
Interest-Bearing Deposits with Banks		16,696.4			15,351.3
Federal Reserve Deposits and Other Interest-Bearing		13,448.6			10,924.6
Securities
Available for Sale		30,192.5			19,901.9
Held to Maturity (Fair value of $817.1 and $941.8)		799.2			922.2
Trading Account		8.0			6.8
Total Securities		30,999.7			20,830.9
Loans and Leases
Commercial		12,354.3			11,613.4
Personal		16,709.6			16,518.6
Total Loans and Leases (Net of unearned income of $374.1 and $456.8)		29,063.9			28,132.0
Allowance for Credit Losses Assigned to Loans and Leases		(294.8	)		(319.6	)
Buildings and Equipment		494.5			504.5
Client Security Settlement Receivables		778.3			701.3
Goodwill		532.0			400.9
Other Assets		4,068.5			4,339.9
Total Assets	$	100,223.7		$	83,843.9
LIABILITIES
Deposits
Demand and Other Noninterest-Bearing	$	22,792.0		$	7,658.9
Savings and Money Market		17,470.8			14,208.7
Savings Certificates and Other Time		3,058.3			3,913.0
Non-U.S. Offices – Noninterest-Bearing		3,488.4			2,942.7
– Interest-Bearing		35,868.0			35,472.4
Total Deposits		82,677.5			64,195.7
Federal Funds Purchased		815.3			3,691.7
Securities Sold under Agreements to Repurchase		1,198.8			954.4
Other Borrowings		931.5			347.7
Senior Notes		2,126.7			1,896.1
Long-Term Debt		2,133.3			2,729.3
Floating Rate Capital Debt		276.9			276.9
Other Liabilities		2,946.4			2,921.8
Total Liabilities		93,106.4			77,013.6
STOCKHOLDERS’ EQUITY
Common Stock, $1.66 2/3 Par Value; Authorized 560,000,000 shares; Outstanding shares of 241,008,509 and 242,268,903		408.6			408.6
Additional Paid-in Capital		977.5			920.0
Retained Earnings		6,302.3			5,972.1
Accumulated Other Comprehensive Loss		(345.6	)		(305.3	)
Treasury Stock (4,163,015 and 2,902,621 shares, at cost)		(225.5	)		(165.1	)
Total Stockholders’ Equity		7,117.3			6,830.3
Total Liabilities and Stockholders’ Equity	$	100,223.7		$	83,843.9

See accompanying notes to consolidated financial statements on pages 70-126.

2011 ANNUAL REPORT TO SHAREHOLDERS 66 NORTHERN TRUST CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF INCOME

	FOR THE YEAR ENDED DECEMBER 31
($ In Millions Except Per Share Information)	2011			2010			2009
Noninterest Income
Trust, Investment and Other Servicing Fees	$	2,169.5		$	2,081.9		$	2,083.8
Foreign Exchange Trading Income		324.5			382.2			445.7
Treasury Management Fees		72.1			78.1			81.8
Security Commissions and Trading Income		60.5			60.9			62.4
Other Operating Income		158.1			146.3			136.8
Investment Security Gains (Losses), net (1)		(23.9	)		(20.4	)		(23.4	)
Total Noninterest Income		2,760.8			2,729.0			2,787.1
Net Interest Income
Interest Income		1,408.6			1,296.7			1,406.0
Interest Expense		399.5			378.0			406.2
Net Interest Income		1,009.1			918.7			999.8
Provision for Credit Losses		55.0			160.0			215.0
Net Interest Income after Provision for Credit Losses		954.1			758.7			784.8
Noninterest Expense
Compensation		1,267.2			1,108.0			1,099.7
Employee Benefits		258.2			237.6			242.1
Outside Services		552.8			460.4			424.5
Equipment and Software		328.1			287.1			261.1
Occupancy		180.9			167.8			170.8
Visa Indemnification Benefits		(23.1	)		(33.0	)		(17.8	)
Other Operating Expense		267.1			270.0			136.3
Total Noninterest Expense		2,831.2			2,497.9			2,316.7
Income before Income Taxes		883.7			989.8			1,255.2
Provision for Income Taxes		280.1			320.3			391.0
Net Income	$	603.6		$	669.5		$	864.2
Net Income Applicable to Common Stock	$	603.6		$	669.5		$	753.1
PER COMMON SHARE
Net Income – Basic	$	2.47		$	2.74		$	3.18
– Diluted		2.47			2.74			3.16
Average Number of Common Shares Outstanding – Basic		241,401,310			242,028,776			235,511,879
– Diluted		241,811,384			242,502,531			236,416,029

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	FOR THE YEAR ENDED DECEMBER 31
(In Millions)	2011			2010			2009
Net Income	$	603.6		$	669.5		$	864.2
Cumulative Effect Adjustment from New Accounting Standard		–			–			(9.5	)
Other Comprehensive Income (Loss) (Net of Tax and Reclassifications)
Net Unrealized Gains on Securities Available for Sale		53.3			28.2			180.7
Net Unrealized Gains (Losses) on Cash Flow Hedges		(18.4	)		37.6			(5.5	)
Foreign Currency Translation Adjustments		(2.5	)		(18.3	)		(1.5	)
Pension and Other Postretirement Benefit Adjustments		(72.7	)		8.8			(30.9	)
Other Comprehensive Income (Loss)		(40.3	)		56.3			133.3
Comprehensive Income	$	563.3		$	725.8		$	997.5
(1)    Changes in Other-Than-Temporary-Impairment (OTTI) Losses	$	(1.1	)	$	(.8	)	$	(93.4	)
Noncredit-related OTTI Losses Recorded in (Reclassified from) OCI		(22.2	)		(20.4	)		66.7
Other Security Gains (Losses), net		(.6	)		.8			3.3
Investment Security Gains (Losses), net	$	(23.9	)	$	(20.4	)	$	(23.4	)

See accompanying notes to consolidated financial statements on pages 70-126.

2011 ANNUAL REPORT TO SHAREHOLDERS 67 NORTHERN TRUST CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

	FOR THE YEAR ENDED DECEMBER 31
(In Millions)	2011			2010			2009
PREFERRED STOCK
Balance at January 1	$	–		$	–		$	1,501.3
Redemption of Preferred Stock, Series B		–			–			(1,576.0	)
Discount Accretion – Preferred Stock		–			–			74.7
Balance at December 31		–			–			–
COMMON STOCK
Balance at January 1		408.6			408.6			379.8
Common Stock Issuance		–			–			28.8
Balance at December 31		408.6			408.6			408.6
ADDITIONAL PAID-IN CAPITAL
Balance at January 1		920.0			888.3			178.5
Common Stock Issuance		–			–			805.3
Repurchase of Warrant to Purchase Common Stock		–			–			(87.0	)
Treasury Stock Transactions – Stock Options and Awards		(13.2	)		(23.1	)		(39.1	)
Stock Options and Awards – Amortization		71.3			53.6			26.4
Stock Options and Awards – Tax Benefits		(.6	)		1.2			4.2
Balance at December 31		977.5			920.0			888.3
RETAINED EARNINGS
Balance at January 1, as Previously Reported		5,972.1			5,576.0			5,091.2
April 1 Cumulative Effect of Applying ASC 320 -10 (Formerly, FSP FAS 115-2)		–			–			9.5
Balance at January 1, as Adjusted		5,972.1			5,576.0			5,100.7
Net Income		603.6			669.5			864.2
Dividends Declared – Common Stock		(273.4	)		(273.4	)		(267.6	)
Dividends Declared – Preferred Stock		–			–			(46.6	)
Discount Accretion – Preferred Stock		–			–			(74.7	)
Balance at December 31		6,302.3			5,972.1			5,576.0
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance at January 1		(305.3	)		(361.6	)		(494.9	)
April 1 Cumulative Effect of Applying ASC 320 -10 (Formerly, FSP FAS 115-2)		–			–			(9.5	)
Net Unrealized Gains on Securities Available for Sale		53.3			28.2			171.1
Net Unrealized Gains (Losses) on Cash Flow Hedges		(18.4	)		37.5			(5.5	)
Foreign Currency Translation Adjustments		(2.5	)		(15.0	)		8.1
Pension and Other Postretirement Benefit Adjustments		(72.7	)		5.6			(30.9	)
Balance at December 31		(345.6	)		(305.3	)		(361.6	)
TREASURY STOCK
Balance at January 1		(165.1	)		(199.2	)		(266.5	)
Stock Options and Awards		19.0			41.0			81.1
Stock Purchased		(79.4	)		(6.9	)		(13.8	)
Balance at December 31		(225.5	)		(165.1	)		(199.2	)
Total Stockholders’ Equity at December 31	$	7,117.3		$	6,830.3		$	6,312.1

See accompanying notes to consolidated financial statements on pages 70-126.

2011 ANNUAL REPORT TO SHAREHOLDERS 68 NORTHERN TRUST CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF CASH FLOWS

	FOR THE YEAR ENDED DECEMBER 31
(In Millions)	2011			2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	603.6		$	669.5		$	864.2
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Investment Security (Gains) Losses, net		23.9			20.4			23.4
Amortization and Accretion of Securities and Unearned Income		(34.2	)		(55.5	)		(50.4	)
Provision for Credit Losses		55.0			160.0			215.0
Depreciation on Buildings and Equipment		89.2			93.5			95.7
Amortization of Computer Software		158.4			141.6			131.8
Amortization of Intangibles		17.5			14.4			16.2
Client Support Related Charges (Benefit)		–			–			(109.3	)
Capital Support Agreement Payments		–			–			(204.8	)
Increase (Decrease) in Accrued Income Taxes		(115.5	)		153.5			61.4
Qualified Pension Plan Contributions		(100.0	)		(68.0	)		(175.0	)
Visa Indemnification Benefits		(23.1	)		(33.0	)		(17.8	)
Deferred Income Tax Provision		97.2			12.1			183.8
(Increase) Decrease in Receivables		(179.7	)		(90.6	)		65.3
Increase (Decrease) in Interest Payable		5.0			7.7			(13.8	)
Changes in Derivative Instrument (Gains) Losses, net		172.1			(377.8	)		126.4
Other Operating Activities, net		484.9			142.4			(197.4	)
Net Cash Provided by Operating Activities		1,254.3			790.2			1,014.7
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (Increase) Decrease in Federal Funds Sold and Securities Purchased under Agreements to Resell		38.8			89.9			(81.0	)
Net (Increase) Decrease in Interest-Bearing Deposits with Banks		(1,345.1	)		(2,446.1	)		3,815.8
Net (Increase) Decrease in Federal Reserve Deposits and Other Interest-Bearing Assets		(2,512.4	)		4,048.4			(5,569.2	)
Purchases of Securities – Held to Maturity		(147.6	)		(448.6	)		(220.9	)
Proceeds from Maturity and Redemption of Securities – Held to Maturity		272.9			429.1			219.2
Purchases of Securities – Available for Sale		(33,302.1	)		(14,697.0	)		(14,053.0	)
Proceeds from Sale, Maturity and Redemption of Securities – Available for Sale		23,082.9			11,432.5			11,925.9
Net Increase (Decrease) in Loans and Leases		(1,017.9	)		(479.8	)		2,832.7
Purchases of Buildings and Equipment, net		(96.9	)		(90.5	)		(132.6	)
Purchases and Development of Computer Software		(274.2	)		(220.6	)		(181.6	)
Net (Increase) Decrease in Client Security Settlement Receivables		(77.0	)		93.5			(85.5	)
Decrease in Cash Due to Acquisitions, net of Cash Acquired		(172.6	)		–			–
Other Investing Activities, net		162.8			521.2			(148.4	)
Net Cash Used in Investing Activities		(15,388.4	)		(1,768.0	)		(1,678.6	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Increase (Decrease) in Deposits		18,481.8			5,914.4			(4,125.1	)
Net Increase (Decrease) in Federal Funds Purchased		(2,876.3	)		(2,958.1	)		4,866.3
Net Increase (Decrease) in Securities Sold under Agreements to Repurchase		244.4			(83.1	)		(491.6	)
Net Increase (Decrease) in Short-Term Other Borrowings		630.5			(573.3	)		626.3
Proceeds from Term Federal Funds Purchased		7,962.3			19,045.6			17,933.4
Repayments of Term Federal Funds Purchased		(7,981.3	)		(20,217.5	)		(17,217.4	)
Proceeds from Senior Notes and Long-Term Debt		500.0			1,142.7			500.0
Repayments of Senior Notes and Long-Term Debt		(880.7	)		(918.3	)		(422.4	)
Treasury Stock Purchased		(79.0	)		(5.9	)		(10.7	)
Net Proceeds from Stock Options		75.6			70.6			38.9
Cash Dividends Paid on Common Stock		(273.7	)		(273.2	)		(260.3	)
Proceeds from Common Stock Issuance		–			–			834.1
Cash Dividends Paid on Preferred Stock		–			–			(46.6	)
Redemption of Preferred Stock – Series B		–			–			(1,576.0	)
Repurchase of Warrant to Purchase Common Stock		–			–			(87.0	)
Other Financing Activities, net		–			1.2			(140.7	)
Net Cash Provided by Financing Activities		15,803.6			1,145.1			421.2
Effect of Foreign Currency Exchange Rates on Cash		(172.2	)		158.9			86.3
Increase (Decrease) in Cash and Due from Banks		1,497.3			326.2			(156.4	)
Cash and Due from Banks at Beginning of Year		2,818.0			2,491.8			2,648.2
Cash and Due from Banks at End of Year	$	4,315.3		$	2,818.0		$	2,491.8
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest Paid	$	394.5		$	370.3		$	420.0
Income Taxes Paid		153.3			173.1			409.6
Transfers from Loans to OREO		68.8			52.1			26.2

See accompanying notes to consolidated financial statements on pages 70-126.

2011 ANNUAL REPORT TO SHAREHOLDERS 69 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Summary of Significant Accounting Policies

The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) and reporting practices prescribed for the banking industry. A description of the more significant accounting policies follows.

A. Basis of Presentation. The consolidated financial statements include the accounts of Northern Trust Corporation (Corporation) and its wholly-owned subsidiary, The Northern Trust Company (Bank), and various other wholly-owned subsidiaries of the Corporation and Bank. Throughout the notes, the term “Northern Trust” refers to the Corporation and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The consolidated statement of income includes results of acquired subsidiaries from the dates of their acquisition. Certain prior year balances have been reclassified consistent with the current year’s presentation.

B. Nature of Operations. The Corporation is a financial holding company under the Gramm-Leach-Bliley Act. The Bank is an Illinois banking corporation headquartered in Chicago and the Corporation’s principal subsidiary. The Corporation conducts business in the United States (U.S.) and internationally through the Bank, trust companies, and various other U.S. and non-U.S. subsidiaries.

Northern Trust generates the majority of its revenues from its two primary business units: Corporate and Institutional Services (C&IS) and Personal Financial Services (PFS). Investment management services and products are provided to C&IS and PFS through a third business unit, Northern Trust Global Investments (NTGI). Operating and systems support for these business units is provided by a fourth business unit, Operations and Technology (O&T).

The C&IS business unit provides asset servicing, asset management, securities lending, brokerage, banking and related services to corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth and government funds. C&IS client relationships are managed through the Bank and the Bank’s and the Corporation’s other subsidiaries, including support from international locations in North America, Europe, the Middle East, and the Asia Pacific region.

The PFS business unit provides personal trust, investment management, custody, and philanthropic services; financial consulting; wealth management and family office services; guardianship and estate administration; brokerage services; and private and business banking. PFS focuses on high net worth individuals and families, business owners, executives, professionals, retirees, and established privately held businesses in its target markets. PFS services are delivered through a network of offices in 18 U.S. states as well as offices in London and Guernsey.

C. Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

D. Foreign Currency Remeasurement and Translation. Asset and liability accounts denominated in nonfunctional currencies are remeasured into functional currencies at period end rates of exchange, except for buildings and equipment which are remeasured at exchange rates in effect at the date of acquisition. Results from remeasurement of asset and liability accounts are reported in other operating income as currency translation gains (losses), net. Income and expense accounts are remeasured at period average rates of exchange.

Asset and liability accounts of entities with functional currencies that are not the U.S. dollar are translated at period end rates of exchange. Income and expense accounts are translated at period average rates of exchange. Translation adjustments, net of applicable taxes, are reported directly to accumulated other comprehensive income (AOCI), a component of stockholders’ equity.

E. Securities. Securities Available for Sale are reported at fair value, with unrealized gains and losses credited or charged, net of the tax effect, to AOCI. Realized gains and losses on securities available for sale are determined on a specific identification basis and are reported within other security gains (losses), net, in the consolidated statement of income. Interest income is recorded on the accrual basis, adjusted for the amortization of premium and accretion of discount.

Securities Held to Maturity consist of debt securities that management intends to, and Northern Trust has the ability to, hold until maturity. Such securities are reported at cost, adjusted for amortization of premium and accretion of discount. Interest income is recorded on the accrual basis adjusted for the amortization of premium and accretion of discount.

2011 ANNUAL REPORT TO SHAREHOLDERS 70 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Securities Held for Trading are stated at fair value. Realized and unrealized gains and losses on securities held for trading are reported in the consolidated statement of income within security commissions and trading income.

Nonmarketable Securities primarily consist of Federal Reserve and Federal Home Loan Bank stock and affordable housing investments which are recorded in other assets on the consolidated balance sheet. Federal Reserve and Federal Home Loan Bank stock are reported at cost, which represents redemption value. Affordable housing investments, which are discussed in further detail in Note 28, are reported at cost using the effective yield method and amortized over the lives of the related tax credits.

Other-Than-Temporary Impairment (OTTI). A security is considered to be other-than-temporarily impaired if the present value of cash flows expected to be collected are less than the security’s amortized cost basis (the difference being defined as the credit loss) or if the fair value of the security is less than the security’s amortized cost basis and the investor intends, or more-likely-than-not will be required, to sell the security before recovery of the security’s amortized cost basis. If an OTTI exists, the charge to earnings is limited to the amount of credit loss if the investor does not intend to sell the security, and it is more-likely-than-not that it will not be required to sell the security, before recovery of the security’s amortized cost basis. Any remaining difference between fair value and amortized cost is recognized in AOCI, net of applicable taxes. Otherwise, the entire difference between fair value and amortized cost is charged to earnings.

F. Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase. Securities purchased under agreements to resell and securities sold under agreements to repurchase are accounted for as collateralized financings and recorded at the amounts at which the securities were acquired or sold plus accrued interest. To minimize any potential credit risk associated with these transactions, the fair value of the securities purchased or sold is monitored, limits are set on exposure with counterparties, and the financial condition of counterparties is regularly assessed. It is Northern Trust’s policy to take possession of securities purchased under agreements to resell.

G. Derivative Financial Instruments. Northern Trust is a party to various derivative instruments that are used in the normal course of business to meet the needs of its clients; as part of its trading activity for its own account; and as part of its risk management activities. These instruments include foreign exchange contracts, interest rate contracts, and credit default swap contracts. Derivative financial instruments are recorded on the consolidated balance sheet at fair value within other assets and liabilities. Derivative asset and liability positions with the same counterparty are reflected on a net basis in cases where legally enforceable master netting agreements exist. Derivative assets and liabilities are further reduced by cash collateral received from, and deposited with, derivative counterparties. The accounting for changes in the fair value of a derivative in the consolidated statement of income depends on whether or not the contract has been designated as a hedge and qualifies for hedge accounting under GAAP. Derivative financial instruments are recorded on the consolidated cash flow statement within Changes in Derivative Instrument Gains/Losses, net.

Changes in the fair value of client-related and trading derivative instruments, which are not designated hedges under GAAP, are recognized currently in either foreign exchange trading income or security commissions and trading income. Changes in the fair value of derivative instruments entered into for risk management purposes but not designated as hedges are recognized currently in other operating income. Certain derivative instruments used by Northern Trust to manage risk are formally designated and qualify for hedge accounting as fair value, cash flow, or net investment hedges.

Derivatives designated as fair value hedges are used to limit Northern Trust’s exposure to changes in the fair value of assets and liabilities due to movements in interest rates. Changes in the fair value of fair value hedges are recognized currently in income. For substantially all fair value hedges, Northern Trust applies the “shortcut” method of accounting, available under GAAP, which assumes there is no ineffectiveness in a hedge. As a result, changes recorded in the fair value of the hedged item are equal to the offsetting gain or loss on the derivative and are reflected in the same line item. For fair value hedges that do not qualify for the “shortcut” method of accounting, Northern Trust utilizes regression analysis, a “long-haul” method of accounting, in assessing whether these hedging relationships are highly effective at inception and quarterly thereafter.

Derivatives designated as cash flow hedges are used to minimize the variability in cash flows of earning assets or forecasted transactions caused by movements in interest or foreign exchange rates. The effective portion of changes in the fair value of a cash flow hedge is recognized in AOCI. When the hedged forecasted transaction impacts earnings, balances in AOCI are reclassified to the same income or expense classification as the hedged item. Northern Trust assesses effectiveness using regression analysis for cash flow hedges of available for sale securities. Ineffectiveness is measured using

2011 ANNUAL REPORT TO SHAREHOLDERS 71 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the hypothetical derivative method. For cash flow hedges of forecasted foreign currency denominated revenue and expenditure transactions, Northern Trust closely matches all terms of the hedged item and the hedging derivative at inception and on an ongoing basis which limits hedge ineffectiveness. To the extent all terms are not perfectly matched, effectiveness is assessed using the dollar-offset method and any ineffectiveness is measured using the hypothetical derivative method. Any ineffectiveness is recognized currently in earnings.

Foreign exchange contracts and qualifying non-derivative instruments designated as net investment hedges are used to minimize Northern Trust’s exposure to variability in the foreign currency translation of net investments in non-U.S. branches and subsidiaries. The effective portion of changes in the fair value of the hedging instrument is recognized in AOCI consistent with the related translation gains and losses. For net investment hedges, all critical terms of the hedged item and the hedging instrument are matched at inception and on an ongoing basis to eliminate hedge ineffectiveness.

Fair value, cash flow, and net investment hedge derivatives are designated and formally documented as such contemporaneous with the transaction. The formal documentation describes the hedge relationship and identifies the hedging instruments and hedged items. Included in the documentation is a discussion of the risk management objectives and strategies for undertaking such hedges, as well as a description of the method for assessing hedge effectiveness at inception and on an ongoing basis. For hedges that do not qualify for the “shortcut” method of accounting, a formal assessment is performed on a calendar quarter basis to verify that derivatives used in hedging transactions continue to be highly effective in offsetting the changes in fair value or cash flows of the hedged item. Hedge accounting is discontinued if a derivative ceases to be highly effective, is terminated or sold, or if Northern Trust removes the derivative’s hedge designation. Subsequent gains and losses on these derivatives are included in foreign exchange trading income or security commissions and trading income. For discontinued cash flow hedges, the accumulated gain or loss on the derivative remains in AOCI and is reclassified to earnings in the period in which the previously hedged forecasted transaction impacts earnings or is no longer probable of occurring. For discontinued fair value hedges, the accumulated gain or loss on the hedged item is amortized over the remaining life of the hedged item.

H. Loans and Leases. Loans and leases are recognized assets that represent a contractual right to receive money either on demand or on fixed or determinable dates. Loans and leases are disaggregated for disclosure purposes by portfolio segment (segment) and by class. Segment is defined as the level at which management develops and documents a systematic methodology to determine the allowance for credit losses. Northern Trust has defined its segments as commercial and personal. A class of loans and leases is a subset of a segment, the components of which have similar risk characteristics, measurement attributes, or risk monitoring method. The classes within the commercial segment have been defined as commercial and institutional, commercial real estate, lease financing, non-US and other. The classes within the personal segment have been defined as residential real estate, private client and other.

Loan Classification. Loans that are held for investment are reported at the principal amount outstanding, net of unearned income. Loans classified as held for sale are reported at the lower of aggregate cost or fair value. Loan commitments for residential real estate loans that will be classified as held for sale at the time of funding and which have an interest rate lock are recorded on the balance sheet at fair value with subsequent gains or losses recognized as other income. Unrealized gains on these loan commitments are reported as other assets, with unrealized losses reported as other liabilities. Other unfunded commitments relating to loans that are not held for sale are recorded in other liabilities and are carried at the amount of unamortized fees with an allowance for credit loss liability recognized for any estimated probable losses.

Interest Income. Interest income on loans is recorded on an accrual basis unless, in the opinion of management, there is a question as to the ability of the debtor to meet the terms of the loan agreement, or interest or principal is more than 90 days contractually past due and the loan is not well-secured and in the process of collection. Past due status is based on how long after the contractual due date a principal or interest payment is received. For disclosure purposes, loans that are 29 days past due or less are shown as current. At the time a loan is determined to be nonperforming, interest accrued but not collected is reversed against interest income of the current period and the loan is classified as nonperforming. Interest collected on nonperforming loans is applied to principal unless, in the opinion of management, collectability of principal is not in doubt. Management’s assessment of indicators of loan and lease collectability, and its policies relative to the recognition of interest income, including the suspension and subsequent resumption of income recognition, do not meaningfully vary between loan and lease classes. Nonperforming loans are returned to performing status when factors indicating doubtful collectability no longer

2011 ANNUAL REPORT TO SHAREHOLDERS 72 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

exist. Factors considered in returning a loan to performing status are consistent across all classes of loans and leases and, in accordance with regulatory guidance, relate primarily to expected payment performance. Loans are eligible to be returned to performing status when: (i) no principal or interest that is due is unpaid and repayment of the remaining contractual principal and interest is expected or (ii) the loan has otherwise become well-secured (possessing realizable value sufficient to discharge the debt, including accrued interest, in full) and is in the process of collection (through action reasonably expected to result in debt repayment or restoration to a current status in the near future). A loan that has not been brought fully current may be restored to performing status provided there has been a sustained period of repayment performance (generally a minimum of six months) by the borrower in accordance with the contractual terms, and Northern Trust is reasonably assured of repayment within a reasonable period of time. Additionally, a loan that has been formally restructured so as to be reasonably assured of repayment and performance according to its modified terms may be returned to accrual status, provided there was a well-documented credit evaluation of the borrower’s financial condition and prospects of repayment under the revised terms and there has been a sustained period of repayment performance (generally a minimum of six months) under the revised terms.

Impaired Loans. A loan is considered to be impaired when, based on current information and events, management determines that it is probable that Northern Trust will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans are identified through ongoing credit management and risk rating processes, including the formal review of past due and watch list credits. Payment performance and delinquency status are critical factors in identifying impairment for all loans and leases, particularly those within the residential real estate, private client and personal-other classes. Other key factors considered in identifying impairment of loans and leases within the commercial and institutional, non-U.S., lease financing, and commercial-other classes relate to the borrower’s ability to perform under the terms of the obligation as measured through the assessment of future cash flows, including consideration of collateral value, market value, and other factors. A loan is also considered to be impaired if its terms have been modified as a concession resulting from the debtor’s financial difficulties, referred to as a troubled debt restructuring (TDR). All troubled debt restructurings are considered impaired loans in the calendar year of their restructuring. In subsequent years, a troubled debt restructuring may cease being classified as impaired if the loan was modified at a market rate and has performed according to the modified terms for at least six months. A loan that has been modified at a below market rate will return to performing status if it satisfies the six month performance requirement; however, it will remain classified as impaired. Impairment is measured based upon the loan’s market price, the present value of expected future cash flows, discounted at the loan’s effective interest rate, or at the fair value of the collateral if the loan is collateral dependent. If the loan valuation is less than the recorded value of the loan, based on the certainty of loss, either a specific allowance is established, or a charge-off is recorded, for the difference. Smaller balance (individually less than $250,000) homogeneous loans are collectively evaluated for impairment and excluded from impaired loan disclosures in accordance with applicable accounting standards. Northern Trust’s accounting policies for impaired loans are consistent across all classes of loans and leases.

Premiums and Discounts. Premiums and discounts on loans are recognized as an adjustment of yield using the interest method based on the contractual terms of the loan. Certain direct origination costs and fees are netted, deferred and amortized over the life of the related loan as an adjustment to the loan’s yield.

Direct Financing and Leverage Leases. Unearned lease income from direct financing and leveraged leases is recognized using the interest method. This method provides a constant rate of return on the unrecovered investment over the life of the lease. The rate of return and the allocation of income over the lease term are recalculated from the inception of the lease if during the lease term assumptions regarding the amount or timing of estimated cash flows change. Lease residual values are established at the inception of the lease based on in-house valuations and market analyses provided by outside parties. Lease residual values are reviewed at least annually for other-than-temporary impairment. A decline in the estimated residual value of a leased asset determined to be other-than-temporary would be recorded in the period in which the decline is identified as a reduction of interest income.

I. Allowance for Credit Losses. The allowance for credit losses represents management’s estimate of probable losses which have occurred as of the date of the consolidated financial statements. The loan and lease portfolio and other lending related credit exposures are regularly reviewed to evaluate the adequacy of the allowance for credit losses. In determining the level of the allowance, Northern Trust evaluates the allowance necessary for impaired loans and also

2011 ANNUAL REPORT TO SHAREHOLDERS 73 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

estimates losses inherent in other credit exposures. The result is an allowance with the following components:

Specific Allowance. The amount of specific allowance is determined through an individual evaluation of loans and lending-related commitments considered impaired that is based on expected future cash flows, the value of collateral, and other factors that may impact the borrower’s ability to pay. For impaired loans where the amount of specific allowance, if any, is determined based on the value of the underlying real estate collateral, third-party appraisals are generally obtained and utilized by management. These appraisals are generally less than twelve months old and are subject to adjustments to reflect management’s judgment as to the realizable value of the collateral.

Inherent Allowance. The amount of inherent loss allowance is based primarily on factors which incorporate management’s evaluation of historical charge-off experience and various qualitative factors such as management’s evaluation of economic and business conditions and changes in the character and size of the loan portfolio. Factors are applied to loan and lease credit exposures aggregated by shared risk characteristics and are reviewed quarterly by Northern Trust’s Loan Loss Allowance Committee which includes representatives from Credit Policy, business unit management, and Corporate Financial Management.

Loans, leases and other extensions of credit deemed uncollectible are charged to the allowance for credit losses. Subsequent recoveries, if any, are credited to the allowance. Northern Trust’s policies relative to the charging-off of uncollectible loans and leases are consistent across both loan and lease segments. Determinations as to whether an uncollectible loan is charged-off or a specific reserve is established are based on management’s assessment as to the level of certainty regarding the amount of loss. The provision for credit losses, which is charged to income, is the amount necessary to adjust the allowance for credit losses to the level determined to be appropriate through the above process. Actual losses may vary from current estimates and the amount of the provision for credit losses may be either greater than or less than actual net charge-offs.

Northern Trust analyzes its exposure to credit losses from both on-balance sheet and off-balance sheet activity using a consistent methodology. In estimating the allowance for credit losses for undrawn loan commitments and standby letters of credit, management uses conversion rates to determine the estimated amount that will be funded. Factors based on historical loss experience and specific risk characteristics of the loan product are utilized to calculate inherent losses related to unfunded commitments and standby letters of credit as of the reporting date. The portion of the allowance assigned to loans and leases is reported as a contra asset, directly following loans and leases in the consolidated balance sheet. The portion of the allowance assigned to unfunded loan commitments and standby letters of credit is reported in other liabilities in the consolidated balance sheet.

J. Standby Letters of Credit. Fees on standby letters of credit are recognized in other operating income on the straight-line method over the lives of the underlying agreements. Northern Trust’s recorded liability for standby letters of credit, reflecting the obligation it has undertaken, is measured as the amount of unamortized fees on these instruments.

K. Buildings and Equipment. Buildings and equipment owned are carried at original cost less accumulated depreciation. The charge for depreciation is computed on the straight-line method based on the following range of lives: buildings – 10 to 30 years; equipment – 3 to 10 years; and leasehold improvements – the shorter of the lease term or 15 years. Leased properties meeting certain criteria are capitalized and amortized using the straight-line method over the lease period.

L. Other Real Estate Owned (OREO). OREO is comprised of commercial and residential real estate properties acquired in partial or total satisfaction of loans. OREO assets are carried at the lower of cost or fair value less estimated costs to sell and are recorded in other assets in the consolidated balance sheet. Fair value is typically based on third-party appraisals. Appraisals of OREO properties are updated on an annual basis and are subject to adjustments to reflect management’s judgment as to the realizable value of the properties. Losses identified at the time of acquisition of such properties are charged against the allowance for credit losses assigned to loans and leases. Subsequent write-downs that may be required to the carrying value of these assets and gains or losses realized from asset sales are recorded within other operating expenses.

M. Goodwill and Other Intangible Assets. Goodwill is not subject to amortization. Separately identifiable acquired intangible assets with finite lives are amortized over their estimated useful lives, primarily on a straight-line basis. Purchased software and allowable internal costs, including compensation relating to software developed for internal use, are capitalized. Software is amortized using the straight-line method over the estimated useful lives of the assets, generally ranging from 3 to 10 years.

2011 ANNUAL REPORT TO SHAREHOLDERS 74 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill and other intangible assets are reviewed for impairment on an annual basis or more frequently if events or changes in circumstances indicate the carrying amounts may not be recoverable.

N. Assets Under Custody and Assets Under Management. Assets held in fiduciary or agency capacities are not included in the consolidated balance sheet, since such items are not assets of Northern Trust.

O. Trust, Investment and Other Servicing Fees. Trust, investment and other servicing fees are recorded on the accrual basis, over the period in which the service is provided. Fees are a function of the market value of assets custodied, managed and serviced, the volume of transactions, securities lending volume and spreads, and fees for other services rendered, as set forth in the underlying client agreement. This revenue recognition involves the use of estimates and assumptions, including components that are calculated based on estimated asset valuations and transaction volumes.

Securities lending fees have been impacted by Northern Trust’s share of unrealized investment gains and losses in one investment fund that is used in securities lending activities and accounted for at fair value. As of September 30, 2010, securities in the mark-to-market fund had been sold with the proceeds reinvested into a short duration fund, eliminating the mark-to-market impact on securities lending revenue in future periods. Certain investment management fee arrangements also may provide performance fees that are based on client portfolio returns exceeding predetermined levels. Northern Trust adheres to a policy in which it does not record any performance-based fee income until the end of the contract period, thereby eliminating the potential that revenue will be recognized in one quarter and reversed in a future quarter. Therefore, Northern Trust does not record any revenue under incentive fee programs that is at risk due to future performance contingencies. These arrangements often contain similar terms for the payment of performance-based fees to sub-advisors. The accounting for these performance-based expenses matches the treatment for the related performance-based revenues.

Client reimbursed out-of-pocket expenses that are an extension of existing services that are being rendered are recorded on a gross basis as revenue.

P. Client Security Settlement Receivables. These receivables represent other collection items presented on behalf of custody clients and settled through withdrawals from short term investment funds on a next day basis.

Q. Income Taxes. Northern Trust follows an asset and liability approach to account for income taxes. The objective is to recognize the amount of taxes payable or refundable for the current year, and to recognize deferred tax assets and liabilities resulting from temporary differences between the amounts reported in the financial statements and the tax bases of assets and liabilities. The measurement of tax assets and liabilities is based on enacted tax laws and applicable tax rates.

Tax positions taken or expected to be taken on a tax return are evaluated based on their likelihood of being sustained upon examination by tax authorities. Only tax positions that are considered more-likely-than-not to be sustained are recorded in the consolidated financial statements. Northern Trust recognizes any interest and penalties related to unrecognized tax benefits in the provision for income taxes.

R. Cash Flow Statements. Cash and cash equivalents have been defined as “Cash and Due from Banks”.

S. Pension and Other Postretirement Benefits. Northern Trust records the funded status of its defined benefit pension and other postretirement plans on the consolidated balance sheet. Prepaid pension benefits are reported in other assets and unfunded pension and postretirement benefit liabilities are reported in other liabilities. Plan assets and benefit obligations are measured annually at December 31. Pension costs are recognized ratably over the estimated working lifetime of eligible participants.

T. Share-Based Compensation Plans. Northern Trust recognizes as compensation expense the grant-date fair value of stock options and other equity-based compensation granted to employees within the consolidated income statement using a fair-value-based method. The fair values of stock and stock unit awards, including performance stock unit awards and director awards, are based on the price of the Corporation’s stock on the date of grant. The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The model utilizes weighted-average assumptions regarding the period of time that options granted are expected to be outstanding (expected term) based primarily on the historical exercise behavior attributable to previous option grants, the estimated yield from dividends paid on the Corporation’s stock over the expected term of the options, the expected volatility of Northern Trust’s stock price over a period equal to the expected term of the options, and a risk free interest rate based on the U.S. Treasury yield curve at the time of grant for a period equal to the expected term of the options granted.

2011 ANNUAL REPORT TO SHAREHOLDERS 75 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Compensation expense for share-based award grants with terms that provide for a graded vesting schedule, whereby portions of the award vest in increments over the requisite service period, are recognized on a straight-line basis over the requisite service period for the entire award. Northern Trust does not include an estimate of future forfeitures in its recognition of share-based compensation as historical forfeitures have not been significant. Share-based compensation is adjusted based on forfeitures as they occur. Dividend equivalents are paid on stock units on a current basis prior to vesting and distribution. Cash flows resulting from the realization of tax deductions from the exercise of stock options in excess of the compensation cost recognized (excess tax benefits) are classified as financing cash flows.

U. Net Income Per Common Share. Basic net income per common share is computed by dividing net income/loss applicable to common stock by the weighted average number of common shares outstanding during each period. Diluted net income per common share is computed by dividing net income applicable to common stock and potential common shares by the aggregate of the weighted average number of common shares outstanding during the period and common share equivalents calculated for stock options and restricted stock outstanding using the treasury stock method. In a period of a net loss, diluted net income per common share is calculated in the same manner as basic net income per common share.

Northern Trust has issued certain restricted stock awards, which are unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents. These restricted shares are considered participating securities. Accordingly, Northern Trust calculates net income applicable to common stock using the two-class method, whereby net income is allocated between common stock and participating securities.

Note 2 – Recent Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-11, “Disclosures about Offsetting Assets and Liabilities”. The ASU requires disclosure of information about offsetting and related arrangements to enable users of the financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position, including the effect or potential effect of rights of setoff associated with certain financial instruments and derivative instruments. The provisions of the ASU are effective for annual reporting periods beginning on or after January 1, 2013. The adoption of this ASU by Northern Trust, effective January 1, 2013, will result in additional disclosures, but is not expected to have an impact on its consolidated financial position or results of operations.

In December 2011, the FASB issued ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05”. The ASU indefinitely defers the provisions of ASU No. 2011-05, “Presentation of Comprehensive Income” (ASU 2011-05) which require reclassification adjustments out of accumulated other comprehensive income to be presented in the consolidated statement of income. The provisions of the ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, concurrently with the provisions of ASU 201.51-05. Since this ASU addresses financial statement presentation only, its adoption will not impact Northern Trust’s consolidated financial position or results of operations.

Note 3 – Fair Value Measurements

Fair value under GAAP is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Fair Value Hierarchy. The following describes the hierarchy of valuation inputs (Levels 1, 2, and 3) used to measure fair value and the primary valuation methodologies used by Northern Trust for financial instruments measured at fair value on a recurring basis. Observable inputs reflect market data obtained from sources independent of the reporting entity; unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information available. GAAP requires an entity measuring fair value to maximize the use of observable inputs and minimize the use of unobservable inputs and establishes a fair value hierarchy of inputs. Financial instruments are categorized within the hierarchy based on the lowest level input that is significant to their valuation.

2011 ANNUAL REPORT TO SHAREHOLDERS 76 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Level 1 – Quoted, active market prices for identical assets or liabilities. Northern Trust’s Level 1 assets and liabilities include available for sale investments in U.S. treasury securities and U.S. treasury securities held to fund employee benefit and deferred compensation obligations.

Level 2 – Observable inputs other than Level 1 prices, such as quoted active market prices for similar assets or liabilities, quoted prices for identical or similar assets in inactive markets, and model-derived valuations in which all significant inputs are observable in active markets. Northern Trust’s Level 2 assets include available for sale and trading account securities. Their fair values are determined by external pricing vendors.

Level 2 assets and liabilities also include derivative contracts which are valued using widely accepted income-based models that incorporate inputs readily observable in actively quoted markets and reflect the contractual terms of the contracts. Observable inputs include foreign exchange rates and interest rates for foreign exchange contracts; credit spreads, default probabilities, and recovery rates for credit default swap contracts; interest rates for interest rate swap contracts and forward contracts; and interest rates and volatility inputs for interest rate option contracts. Northern Trust evaluates the impact of counterparty credit risk and its own credit risk on the valuation of its derivative instruments. Factors considered include the likelihood of default by Northern Trust and its counterparties, the remaining maturities of the instruments, net exposures after giving effect to master netting agreements, available collateral, and other credit enhancements in determining the appropriate fair value of derivative instruments. The resulting valuation adjustments have not been considered material. Level 2 other assets represent investments in mutual and collective trust funds held to fund employee benefit and deferred compensation obligations. These investments are valued at the funds’ net asset values based on a market approach.

Level 3 – Valuation techniques in which one or more significant inputs are unobservable in the marketplace. Northern Trust’s Level 3 assets consist of auction rate securities. To estimate their fair value, Northern Trust developed an internal income-based model. The lack of activity in the auction rate security market has resulted in a lack of observable market inputs to incorporate within the model. Therefore, significant inputs to the model include Northern Trust’s own assumptions about future cash flows and appropriate discount rates, both adjusted for credit and liquidity factors. In developing these assumptions, Northern Trust incorporated the contractual terms of the securities, the types of collateral, any credit enhancements available, and relevant market data, where available. Level 3 liabilities include acquisition related contingent purchase considerations and indemnification obligations related to litigation involving Visa Inc. (Visa), discussed in further detail in Note 25 – Contingent Liabilities, and standby letters of credit, discussed in Note 27 – Off-Balance Sheet Financial Instruments. The fair value of contingent purchase consideration liabilities is determined using an income-based (discounted cash flow) model that incorporates Northern Trust’s own assumptions about future cash flows and appropriate discount rates. The fair value of the net estimated liability for Visa related indemnifications is based on a market approach, but requires management to exercise significant judgment given the limited number of market transactions involving identical or comparable liabilities. Northern Trust’s recorded liability for standby letters of credit, reflecting the obligation it has undertaken, is measured as the amount of unamortized fees on these instruments.

Northern Trust believes its valuation methods for its assets and liabilities carried at fair value are appropriate; however, the use of different methodologies or assumptions, particularly as applied to Level 3 assets and liabilities, could have a material effect on the computation of their estimated fair values.

2011 ANNUAL REPORT TO SHAREHOLDERS 77 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following presents assets and liabilities measured at fair value on a recurring basis as of December 31, 2011 and 2010, segregated by fair value hierarchy level.

	DECEMBER 31, 2011
(In Millions)	LEVEL  1		LEVEL 2		LEVEL 3		NETTING  *			ASSETS/ LIABILITIES AT FAIR VALUE
Securities
Available for Sale
U.S. Government	$	4,029.4	$	–	$	–	$	–		$	4,029.4
Obligations of States and Political Subdivisions		–		15.8		–		–			15.8
Government Sponsored Agency		–		16,771.4		–		–			16,771.4
Corporate Debt		–		2,676.7		–		–			2,676.7
Non-U.S. Government		–		173.7		–		–			173.7
Residential Mortgage-Backed		–		163.8		–		–			163.8
Other Asset-Backed		–		1,604.8		–		–			1,604.8
Certificates of Deposit		–		2,418.1		–		–			2,418.1
Auction Rate		–		–		178.3		–			178.3
Other		–		2,160.5		–		–			2,160.5
Total		4,029.4		25,984.8		178.3		–			30,192.5
Trading Account		–		8.0		–		–			8.0
Total		4,029.4		25,992.8		178.3		–			30,200.5
Other Assets
Derivatives
Foreign Exchange Contracts		–		3,087.3		–		–			3,087.3
Interest Rate Swaps		–		338.3		–		–			338.3
Credit Default Swaps		–		.7		–		–			.7
Total		–		3,426.3		–		(2,243.7	)		1,182.6
All Other		71.4		35.1		–		–			106.5
Total		71.4		3,461.4		–		(2,243.7	)		1,289.1
Total Assets at Fair Value		4,100.8		29,454.2		178.3		(2,243.7	)		31,489.6
Other Liabilities
Derivatives
Foreign Exchange Contracts		–		2,991.6		–		–			2,991.6
Interest Rate Swaps		–		231.9		–		–			231.9
Credit Default Swaps		–		.1		–		–			.1
Total		–		3,223.6		–		(2,281.0	)		942.6
All Other		–		–		100.6		–			100.6
Total Liabilities at Fair Value	$	–	$	3,223.6	$	100.6	$	(2,281.0	)	$	1,043.2

* Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting agreements exist between Northern Trust and the counterparty. As of December 31, 2011, derivative assets and liabilities shown above also include reductions of $220.1 million and $257.4 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties.

2011 ANNUAL REPORT TO SHAREHOLDERS 78 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	DECEMBER 31, 2010
(In Millions)	LEVEL 1		LEVEL 2		LEVEL 3		NETTING *			ASSETS/ LIABILITIES AT FAIR VALUE
Securities
Available for Sale
U.S. Government	$	658.4	$	–	$	–	$	–		$	658.4
Obligations of States and Political Subdivisions		–		36.3		–		–			36.3
Government Sponsored Agency		–		11,970.7		–		–			11,970.7
Corporate Debt		–		2,554.0		–		–			2,554.0
Non-U.S. Government		–		440.6		–		–			440.6
Residential Mortgage-Backed		–		254.6		–		–			254.6
Other Asset-Backed		–		1,605.7		–		–			1,605.7
Certificates of Deposit		–		1,402.5		–		–			1,402.5
Auction Rate		–		–		367.8		–			367.8
Other		–		611.3		–		–			611.3
Total		658.4		18,875.7		367.8		–			19,901.9
Trading Account		–		6.8		–		–			6.8
Total		658.4		18,882.5		367.8		–			19,908.7
Other Assets
Derivatives
Foreign Exchange Contracts		–		5,792.8		–		–			5,792.8
Interest Rate Swaps		–		285.8		–		–			285.8
Interest Rate Options		–		.1		–		–			.1
Forward Contracts		–		.5		–		–			.5
Total		–		6,079.2		–		(4,770.9	)		1,308.3
All Other		65.9		37.4		–		–			103.3
Total		65.9		6,116.6		–		(4,770.9	)		1,411.6
Total Assets at Fair Value		724.3		24,999.1		367.8		(4,770.9	)		21,320.3
Other Liabilities
Derivatives
Foreign Exchange Contracts		–		5,781.3		–		–			5,781.3
Interest Rate Swaps		–		163.7		–		–			163.7
Interest Rate Options		–		.1		–		–			.1
Credit Default Swaps		–		2.8		–		–			2.8
Forward Contracts		–		.2		–		–			.2
Total		–		5,948.1		–		(4,106.4	)		1,841.7
All Other		–		–		58.6		–			58.6
Total Liabilities at Fair Value	$	–	$	5,948.1	$	58.6	$	(4,106.4	)	$	1,900.3

* Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting agreements exist between Northern Trust and the counterparty. As of December 31, 2010, derivative assets and liabilities shown above also include reductions of $2,952.7 million and $2,288.2 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties.

2011 ANNUAL REPORT TO SHAREHOLDERS 79 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following presents the changes in Level 3 assets for the years ended December 31, 2011 and 2010.

	AUCTION RATE SECURITIES
(In Millions)	2011			2010
Fair Value at January 1	$	367.8		$	427.7
Total Realized and Unrealized
Losses (Gains) Included in Earnings		(10.7	)		(3.7	)
Gains (Losses) Included in Other Comprehensive Income		(19.0	)		(7.2	)
Purchases, Issuances, Sales, and Settlements
Sales		(1.5	)		(.3	)
Settlements		(158.3	)		(48.7	)
Fair Value at December 31	$	178.3		$	367.8

As of December 31, 2011 and 2010, auction rate securities had a net unrealized loss of $8.2 million ($5.1 million net of tax) and a net unrealized gain of $10.8 million ($6.8 million net of tax), respectively. Realized gains of $10.7 million in 2011 include $10.6 million from redemptions by issuers and $.1 million from sales of securities. Realized gains of $3.7 million in 2010 include $3.4 million from redemptions by issuers and $.3 million from sales of securities. Gains on redemptions and sales are included in interest income and investment security gains (losses), net, respectively, within the consolidated statement of income.

The following presents the changes in Level 3 liabilities for the years ended December 31, 2011 and 2010.

	OTHER LIABILITIES
(In Millions)	2011			2010
Fair Value at January 1	$	58.6		$	94.4
Total Realized and Unrealized (Gains) Losses
Included in Earnings		(.6	)		(4.5	)
Included in Other Comprehensive Income		–			–
Purchases, Issuances, Sales, and Settlements
Issuances		68.4			3.4
Settlements		(25.8	)		(34.7	)
Fair Value at December 31		100.6		$	58.6
Unrealized Gains (Losses) Included in Earnings Related to Financial Instruments Held at December 31	$	–		$	–

Balances include contingent purchase considerations and a net estimated liability for Visa related indemnifications (refer to Note 25) and standby letters of credit (refer to Note 27).

All realized and unrealized gains and losses related to Level 3 liabilities are included in other operating income or other operating expense with the exception of those related to the Visa indemnification liability, which have been presented separately in the consolidated statement of income. As of December 31, 2011, the Visa indemnification liability had been eliminated in its entirety.

Carrying values of assets and liabilities that are not measured at fair value on a recurring basis may be adjusted to fair value in periods subsequent to their initial recognition, for example, to record an impairment of an asset. GAAP requires entities to separately disclose these subsequent fair value measurements and to classify them under the fair value hierarchy.

The following provides information regarding those assets measured at fair value on a nonrecurring basis at December 31, 2011 and 2010, segregated by fair value hierarchy level.

(In Millions)	LEVEL  1		LEVEL  2		LEVEL  3		TOTAL FAIR VALUE
December 31, 2011
Loans (1)	$	–	$	–	$	64.3	$	64.3
Other Real Estate Owned (2)		–		–		3.8		3.8
Total Assets at Fair Value	$	–	$	–	$	68.1	$	68.1
December 31, 2010
Loans (1)	$	–	$	–	$	72.4	$	72.4
Other Real Estate Owned (2)		–		–		13.5		13.5
Total Assets at Fair Value	$	–	$	–	$	85.9	$	85.9

(1) Northern Trust provided an additional $11.3 million and $22.5 million of specific allowances to reduce the fair value of these loans during the years ended December 31, 2011 and 2010, respectively.

(2) Northern Trust charged $1.5 million and $4.9 million through other operating expenses during the years ended December 31, 2011 and 2010, respectively, to reduce the fair values of these Other Real Estate Owned (OREO) properties.

The fair values of loan collateral and OREO properties were estimated using a market approach typically supported by third party appraisals, and were subject to adjustments to reflect management’s judgment as to their realizable value.

Fair Value of Financial Instruments. GAAP requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate fair value. It excludes from this requirement nonfinancial assets and liabilities, as well as a wide range of franchise, relationship, and intangible values that add value to Northern Trust. Accordingly, the required fair value disclosures provide only a partial estimate of the fair value of Northern Trust. Financial instruments recorded at fair value on Northern Trust’s consolidated balance sheet are discussed above. The following methods and assumptions were used in

2011 ANNUAL REPORT TO SHAREHOLDERS 80 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

estimating the fair values of financial instruments that are not carried at fair value.

Held to Maturity Securities. The fair values of held to maturity securities were modeled by external pricing vendors or, in limited cases, modeled internally, using widely accepted models which are based on an income approach that incorporates current market yield curves and assumptions regarding anticipated prepayments and defaults.

Loans (excluding lease receivables). The fair value of the loan portfolio was estimated using a discounted cash flow methodology based on current market rates offered by Northern Trust as of the date of the consolidated financial statements. The fair values of all loans were adjusted to reflect current assessments of loan collectibility.

Federal Reserve and Federal Home Loan Bank Stock. The fair values of Federal Reserve and Federal Home Loan Bank stock are equal to their carrying values which represent redemption value.

Affordable Housing Investments. Affordable housing investments are valued at cost, which approximates fair value.

Savings Certificates and Other Time Deposits. The fair values of these instruments were estimated using an income approach (discounted cash flow) that incorporates market interest rates offered by Northern Trust.

Senior Notes, Subordinated Debt, and Floating Rate Capital Debt. Fair values were determined using a market approach based on quoted market prices, when available. If quoted market prices were not available, fair values were based on quoted market prices for comparable instruments.

Federal Home Loan Bank Borrowings. The fair values of these instruments were estimated using an income approach (discounted cash flow) that incorporates market interest rates available to Northern Trust.

Loan Commitments. The fair values of loan commitments represent the amount of unamortized fees on these instruments.

Financial Instruments Valued at Carrying Value. Due to their short maturity, the carrying values of certain financial instruments approximated their fair values. These financial instruments include cash and due from banks; federal funds sold and securities purchased under agreements to resell; interest-bearing deposits with banks; federal reserve deposits and other interest-bearing assets; client security settlement receivables; non-U.S. offices interest-bearing deposits; federal funds purchased; securities sold under agreements to repurchase; and other borrowings (includes term federal funds purchased and other short-term borrowings). As required by GAAP, the fair values required to be disclosed for demand, noninterest-bearing, savings, and money market deposits must equal the amounts disclosed in the consolidated balance sheet, even though such deposits are typically priced at a premium in banking industry consolidations.

2011 ANNUAL REPORT TO SHAREHOLDERS 81 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the fair values of financial instruments.

	DECEMBER 31
	2011				2010
(In Millions)	BOOK  VALUE		FAIR  VALUE		BOOK VALUE		FAIR VALUE
ASSETS
Cash and Due from Banks	$	4,315.3	$	4,315.3	$	2,818.0	$	2,818.0
Federal Funds Sold and Resell Agreements		121.3		121.3		160.1		160.1
Interest-Bearing Deposits with Banks		16,696.4		16,696.4		15,351.3		15,351.3
Federal Reserve Deposits and Other Interest-Bearing		13,448.6		13,448.6		10,924.6		10,924.6
Securities
Available for Sale		30,192.5		30,192.5		19,901.9		19,901.9
Held to Maturity		799.2		817.1		922.2		941.8
Trading Account		8.0		8.0		6.8		6.8
Loans (excluding Leases)
Held for Investment		27,782.7		27,913.7		26,747.8		26,814.2
Held for Sale		9.3		9.3		2.2		2.2
Client Security Settlement Receivables		778.3		778.3		701.3		701.3
Other Assets
Federal Reserve and Federal Home Loan Bank Stock		172.9		172.9		185.5		185.5
Affordable Housing Investments		290.8		290.8		265.4		265.4
All Other		106.5		106.5		103.3		103.3
LIABILITIES
Deposits
Demand, Noninterest-Bearing, Savings and Money Market		43,751.2		43,751.2		24,810.3		24,810.3
Savings Certificates and Other Time		3,058.3		3,065.5		3,913.0		3,929.7
Non-U.S. Offices Interest-Bearing		35,868.0		35,868.0		35,472.4		35,472.4
Federal Funds Purchased		815.3		815.3		3,691.7		3,691.7
Securities Sold under Agreements to Repurchase		1,198.8		1,198.8		954.4		954.4
Other Borrowings		931.5		931.5		347.7		347.7
Senior Notes		2,126.7		2,197.3		1,896.1		1,936.5
Long Term Debt (excluding Leases)
Subordinated Debt		1,033.4		1,040.0		1,148.7		1,177.2
Federal Home Loan Bank Borrowings		1,055.0		1,082.1		1,532.5		1,613.5
Floating Rate Capital Debt		276.9		211.6		276.9		223.2
Other Liabilities
Financial Guarantees		43.8		43.8		58.6		58.6
Contingent Consideration		56.8		56.8		—		—
Loan Commitments		28.9		28.9		32.4		32.4
DERIVATIVE INSTRUMENTS
Asset/Liability Management
Foreign Exchange Contracts
Assets		25.2		25.2		44.9		44.9
Liabilities		31.8		31.8		51.4		51.4
Interest Rate Swaps
Assets		149.6		149.6		134.6		134.6
Liabilities		47.3		47.3		15.3		15.3
Credit Default Swaps
Assets		.7		.7		–		–
Liabilities		.1		.1		2.8		2.8
Forward Contracts
Assets		–		–		.5		.5
Liabilities		–		–		.2		.2
Client-Related and Trading
Foreign Exchange Contracts
Assets		3,062.1		3,062.1		5,747.9		5,747.9
Liabilities		2,959.8		2,959.8		5,729.9		5,729.9
Interest Rate Swaps
Assets		188.7		188.7		151.2		151.2
Liabilities		184.6		184.6		148.4		148.4
Interest Rate Option
Assets		–		–		.1		.1
Liabilities		–		–		.1		.1

2011 ANNUAL REPORT TO SHAREHOLDERS 82 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4 – Securities

Securities Available for Sale. The following tables summarize the amortized cost, fair values, and remaining maturities of securities available for sale.

RECONCILIATION OF AMORTIZED COST TO FAIR VALUES OF SECURITIES AVAILABLE FOR SALE	DECEMBER 31, 2011
(In Millions)	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES		FAIR VALUE
U.S. Government	$	3,965.9	$	63.5	$	—	$	4,029.4
Obligations of States and Political Subdivisions		14.9		.9		—		15.8
Government Sponsored Agency		16,702.6		86.1		17.3		16,771.4
Corporate Debt		2,677.7		4.7		5.7		2,676.7
Non-U.S. Government Debt		173.7		—		—		173.7
Residential Mortgage-Backed		196.1		—		32.3		163.8
Other Asset-Backed		1,606.8		1.3		3.3		1,604.8
Certificates of Deposit		2,418.2		.2		.3		2,418.1
Auction Rate		186.5		4.3		12.5		178.3
Other		2,150.2		12.8		2.5		2,160.5
Total	$	30,092.6	$	173.8	$	73.9	$	30,192.5
	DECEMBER 31, 2010
(In Millions)	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES		FAIR VALUE
U.S. Government	$	667.2	$	1.0	$	9.8	$	658.4
Obligations of States and Political Subdivisions		35.4		.9		–		36.3
Government Sponsored Agency		11,937.0		47.0		13.3		11,970.7
Corporate Debt		2,547.7		7.8		1.5		2,554.0
Non-U.S. Government Debt		440.6		–		–		440.6
Residential Mortgage-Backed		308.0		.9		54.3		254.6
Other Asset-Backed		1,606.5		1.5		2.3		1,605.7
Certificates of Deposit		1,402.5		–		–		1,402.5
Auction Rate		357.0		14.2		3.4		367.8
Other		610.8		4.2		3.7		611.3
Total	$	19,912.7	$	77.5	$	88.3	$	19,901.9

REMAINING MATURITY OF SECURITIES AVAILABLE FOR SALE	DECEMBER 31, 2011
(In Millions)	AMORTIZED COST		FAIR VALUE
Due in One Year or Less	$	9,468.8	$	9,469.6
Due After One Year Through Five Years		18,464.6		18,555.1
Due After Five Years Through Ten Years		1,326.7		1,333.7
Due After Ten Years		832.5		834.1
Total	$	30,092.6	$	30,192.5

Mortgage-backed and asset-backed securities are included in the above table taking into account anticipated future prepayments.

2011 ANNUAL REPORT TO SHAREHOLDERS 83 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Securities Held to Maturity. The following tables summarize the amortized cost, fair values and remaining maturities of securities held to maturity.

RECONCILIATION OF AMORTIZED COST TO FAIR VALUES OF SECURITIES HELD TO MATURITY	DECEMBER 31, 2011
(In Millions)	AMORTIZED COST		GROSSUNREALIZED GAINS		GROSS UNREALIZED LOSSES		FAIR VALUE
Obligations of States and Political Subdivisions	$	529.4	$	24.6	$	.1	$	553.9
Government Sponsored Agency		156.8		4.3		.1		161.0
Other		113.0		.1		10.9		102.2
Total	$	799.2	$	29.0	$	11.1	$	817.1
	DECEMBER 31, 2010
(In Millions)	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES		FAIR VALUE
Obligations of States and Political Subdivisions	$	635.0	$	26.2	$	.4	$	660.8
Government Sponsored Agency		169.3		4.6		.2		173.7
Other		117.9		–		10.6		107.3
Total	$	922.2	$	30.8	$	11.2	$	941.8

REMAINING MATURITY OF SECURITIES HELD TO MATURITY	DECEMBER 31, 2011
(In Millions)	AMORTIZED COST		FAIR VALUE
Due in One Year or Less	$	199.5	$	200.9
Due After One Year Through Five Years		355.4		365.5
Due After Five Years Through Ten Years		215.5		226.1
Due After Ten Years		28.8		24.6
Total	$	799.2	$	817.1

Mortgage-backed and asset-backed securities are included in the above table taking into account anticipated future prepayments.

Investment Security Gains and Losses. Net investment security losses totaling $23.9 million, $20.4 million, and $23.4 million were recognized in 2011, 2010, and 2009, respectively, and included OTTI losses of $23.3 million, $21.2 million, and $26.7 million, respectively. There were $.6 million of other realized net security losses in 2011 and $.8 million and $3.3 million of realized net security gains in 2010 and 2009, respectively.

Securities with Unrealized Losses. The following tables provide information regarding securities that have been in a continuous unrealized loss position for less than 12 months, and for 12 months or longer, as of December 31, 2011 and December 31, 2010.

SECURITIES WITH UNREALIZED LOSSES AS OF DECEMBER 31, 2011	LESS THAN 12 MONTHS				12 MONTHS OR LONGER				TOTAL
(In Millions)	FAIR VALUE		UNREALIZED LOSSES		FAIR VALUE		UNREALIZED LOSSES		FAIR VALUE		UNREALIZED LOSSES
Obligations of States and Political Subdivisions	$	2.7	$	.1	$	—	$	—	$	2.7	$	.1
Government Sponsored Agency		5,492.5		14.1		470.1		3.3		5,962.6		17.4
Corporate Debt		1,027.5		4.1		123.6		1.6		1,151.1		5.7
Residential Mortgage-Backed		4.7		.9		158.8		31.4		163.5		32.3
Other Asset-Backed		824.6		2.3		205.7		1.0		1,030.3		3.3
Certificates of Deposit		1,019.9		.3		—		—		1,019.9		.3
Auction Rate		61.0		7.3		52.6		5.2		113.6		12.5
Other		634.9		4.3		144.9		9.1		779.8		13.4
Total	$	9,067.8	$	33.4	$	1,155.7	$	51.6	$	10,223.5	$	85.0

2011 ANNUAL REPORT TO SHAREHOLDERS 84 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SECURITIES WITH UNREALIZED LOSSES AS OF DECEMBER 31, 2010	LESS THAN 12 MONTHS				12 MONTHS OR LONGER				TOTAL
(In Millions)	FAIR VALUE		UNREALIZED LOSSES		FAIR VALUE		UNREALIZED LOSSES		FAIR VALUE		UNREALIZED LOSSES
U.S. Government	$	492.9	$	9.8	$	–	$	–	$	492.9	$	9.8
Obligations of States and Political Subdivisions		3.0		–		3.2		.4		6.2		.4
Government Sponsored Agency		980.7		11.0		328.7		2.5		1,309.4		13.5
Corporate Debt		930.6		1.1		475.2		.4		1,405.8		1.5
Residential Mortgage-Backed		–		–		248.8		54.3		248.8		54.3
Other Asset-Backed		513.5		2.2		27.0		.1		540.5		2.3
Auction Rate		77.6		3.3		.7		.1		78.3		3.4
Other		482.2		6.8		36.5		7.5		518.7		14.3
Total	$	3,480.5	$	34.2	$	1,120.1	$	65.3	$	4,600.6	$	99.5

As of December 31, 2011, 386 securities with a combined fair value of $10.2 billion were in an unrealized loss position, with their unrealized losses totaling $85.0 million. Unrealized losses on residential mortgage-backed securities totaling $32.3 million reflect the impact of credit and liquidity spreads on the valuations of 25 residential mortgage-backed securities, with $31.4 million having been in an unrealized loss position for more than 12 months. Residential mortgage-backed securities rated below double-A at December 31, 2011 represented 84% of the total fair value of residential mortgage-backed securities, were comprised primarily of sub-prime and Alt-A securities, and had a total amortized cost and fair value of $168.6 million and $137.4 million, respectively. Securities classified as “other asset-backed” at December 31, 2011 were predominantly floating rate with average lives less than 5 years, and 100% were rated triple-A.

Unrealized losses of $17.4 million related to government sponsored agency securities are primarily attributable to changes in market rates since their purchase. The majority of the $13.4 million of unrealized losses in securities classified as “other” at December 31, 2011 relate to securities which Northern Trust purchases for compliance with the Community Reinvestment Act (CRA). Unrealized losses on these CRA related other securities are attributable to their purchase at below market rates for the purpose of supporting institutions and programs that benefit low to moderate income communities within Northern Trust’s market area. Unrealized losses of $12.5 million related to auction rate securities primarily reflect reduced market liquidity as a majority of auctions continue to fail preventing holders from liquidating their investments at par. Unrealized losses of $5.7 million within corporate debt securities primarily reflect widened credit spreads; 66% of the corporate debt portfolio is backed by guarantees provided by U.S. and non-U.S. governmental entities. The remaining unrealized losses on Northern Trust’s securities portfolio as of December 31, 2011 are attributable to changes in overall market interest rates, increased credit spreads, or reduced market liquidity. As of December 31, 2011, Northern Trust does not intend to sell any investment in an unrealized loss position and it is not more likely than not that Northern Trust will be required to sell any such investment before recovery of its amortized cost basis, which may be maturity.

Security impairment reviews are conducted quarterly to identify and evaluate securities that have indications of possible OTTI. A determination as to whether a security’s decline in market value is other-than-temporary takes into consideration numerous factors and the relative significance of any single factor can vary by security. Factors Northern Trust considers in determining whether impairment is other-than-temporary include, but are not limited to, the length of time which the security has been impaired; the severity of the impairment; the cause of the impairment and the financial condition and near-term prospects of the issuer; activity in the market of the issuer which may indicate adverse credit conditions; Northern Trust’s intent regarding the sale of the security as of the balance sheet date; and the likelihood that it will not be required to sell the security for a period of time sufficient to allow for the recovery of the security’s amortized cost basis. For each security meeting the requirements of Northern Trust’s internal screening process, an extensive review is conducted to determine if OTTI has occurred.

While all securities are considered, the following describes Northern Trust’s process for identifying credit impairment within non-agency residential mortgage-backed securities, the security type for which Northern Trust has previously recognized OTTI. To determine if an unrealized loss on a non-agency residential mortgage-backed security is other-than-temporary, economic models are used to perform cash flow analyses by developing multiple scenarios in order to create reasonable forecasts of the security’s future performance using available data including servicers’ loan charge off patterns, prepayment speeds, annualized default rates, each security’s current delinquency pipeline, the

2011 ANNUAL REPORT TO SHAREHOLDERS 85 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

delinquency pipeline’s growth rate, the roll rate from delinquency to default, loan loss severities and historical performance of like collateral, along with Northern Trust’s outlook for the housing market and the overall economy. If the present value of future cash flows projected as a result of this analysis is less than the current amortized cost of the security, a credit-related OTTI loss is recorded to earnings equal to the difference between the two amounts.

Expected losses on non-agency residential mortgage-backed securities are influenced by a number of factors, including but not limited to, U.S. economic and housing market performance, security credit enhancement level, insurance coverage, year of origination, and type of collateral. The factors used in developing the expected loss on non-agency residential mortgage-backed securities vary by year of origination and type of collateral. As of December 31, 2011, the expected losses on subprime, Alt-A, prime and 2nd lien collateral portfolios were developed using default roll rates, determined primarily by the stage of delinquency of the underlying instrument, that generally assumed ultimate default rates approximating 5% to 30% for current loans; 30% for loans 30 to 60 days delinquent; 80% for loans 60 to 90 days delinquent; 90% for loans delinquent greater than 90 days; and 100% for OREO properties and loans that are in foreclosure.

Information regarding amortized cost, weighted average ultimate default rates, and loss severity rates for the December 31, 2011 non-agency residential mortgage-backed securities portfolio, by security type, are provided in the following table.

	DECEMBER 31, 2011
						LOSS SEVERITY RATES
(In Millions)	AMORTIZED COST		WEIGHTED AVERAGE ULTIMATE DEFAULT RATES			LOW			HIGH			WEIGHTED AVERAGE
Prime	$	24.0		14.7	%		38.6	%		66.0	%		51.1	%
Alt-A		32.9		41.9			54.3			70.6			68.2
Subprime		105.2		51.7			67.1			85.4			73.3
2nd Lien		34.0		33.8			98.7			100.0			99.4
Total Non-Agency Residential Mortgage-Backed Securities	$	196.1		42.2	%		38.6	%		100.0	%		74.2	%

During the year ended December 31, 2011, performance metrics specific to Alt-A and subprime loans remained weak resulting in the recognition of OTTI losses on non-agency residential mortgage-backed securities totaling $23.3 million. OTTI losses totaled $21.2 million for the year ended December 31, 2010 and $26.7 million for the year ended December 31, 2009.

Credit Losses on Debt Securities. The table below provides information regarding total other-than-temporarily impaired securities, including noncredit-related amounts recognized in other comprehensive income and net impairment losses recognized in earnings, for the years ended December 31, 2011, 2010 and 2009.

	DECEMBER 31,
(In Millions)	2011			2010			2009
Changes in Other-Than-Temporary Impairment Losses*	$	(1.1	)	$	(.8	)	$	(93.4	)
Noncredit-related Losses Reclassified from OCI**	$	(22.2	)		(20.4	)		66.7
Net Impairment Losses Recognized in Earnings	$	(23.3	)		(21.2	)		(26.7	)

* For initial other-than-temporary impairments in the respective year, the balance includes the excess of the amortized cost over the fair value of the impaired securities. For subsequent impairments of the same security, the balance includes any additional changes in fair value of the security subsequent to its most recently recorded OTTI.

** For initial other-than-temporary impairments in the respective year, the balance includes the portion of the excess of amortized cost over the fair value of the impaired securities that was recorded in OCI. For subsequent impairments of the same security, the balance includes additional changes in OCI for that security subsequent to its most recently recorded OTTI.

2011 ANNUAL REPORT TO SHAREHOLDERS 86 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Provided in the table below are the cumulative credit-related losses recognized in earnings on debt securities other-than-temporarily impaired.

	YEAR ENDED DECEMBER 31,
($ In Millions)	2011			2010
Cumulative Credit-Related Losses on Securities Held – Beginning of Year	$	94.2		$	73.0
Plus: Losses on Newly Identified Impairments		1.5			3.3
Additional Losses on Previously Identified Impairments		21.8			17.9
Less: Losses on Securities Sold During the Year		(49.3	)		—
Cumulative Credit-Related Losses on Securities Held – End of Year	$	68.2		$	94.2

The table below provides information regarding debt securities held as of December 31, 2011 and 2010, for which an OTTI loss had been recognized in the years presented or previously.

	DECEMBER 31,
(In Millions)	2011			2010
Fair Value	$	73.6		$	79.9
Amortized Cost Basis		96.8			113.3
Noncredit-related Losses Recognized in OCI		(23.2	)		(33.4	)
Tax Effect		8.6			12.2
Amount Recognized in OCI	$	(14.6	)	$	(21.2	)

Note 5 – Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase

Securities purchased under agreements to resell and securities sold under agreements to repurchase are recorded at the amounts at which the securities were acquired or sold plus accrued interest. To minimize any potential credit risk associated with these transactions, the fair value of the securities purchased or sold is monitored, limits are set on exposure with counterparties, and the financial condition of counterparties is regularly assessed. It is Northern Trust’s policy to take possession of securities purchased under agreements to resell.

The following tables summarize information related to securities purchased under agreements to resell and securities sold under agreements to repurchase.

SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL	DECEMBER 31
($ In Millions)	2011			2010
Balance at December 31	$	74.7		$	152.1
Average Balance During the Year		246.3			277.3
Average Interest Rate Earned During the Year		.07	%		.17	%
Maximum Month-End Balance During the Year		424.2			578.0

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE	DECEMBER 31
($ In Millions)	2011			2010
Balance at December 31	$	1,198.8		$	954.4
Average Balance During the Year		815.8			626.8
Average Interest Rate Paid During the Year		.08	%		.17	%
Maximum Month-End Balance During the Year		1,479.3			954.4

Note 6 – Loans and Leases

Amounts outstanding for loans and leases, by segment and class, are shown below.

	DECEMBER 31
(In Millions)	2011			2010
Commercial
Commercial and Institutional	$	6,918.7		$	5,914.5
Commercial Real Estate		2,981.7			3,242.4
Lease Financing, net		978.8			1,063.7
Non-U.S.		1,057.5			1,046.2
Other		417.6			346.6
Total Commercial		12,354.3			11,613.4
Personal
Residential Real Estate		10,708.9			10,854.9
Private Client		5,651.4			5,423.7
Other		349.3			240.0
Total Personal		16,709.6			16,518.6
Total Loans and Leases	$	29,063.9		$	28,132.0
Allowance for Credit Losses Assigned to Loans and Leases		(294.8	)		(319.6	)
Net Loans and Leases	$	28,769.1		$	27,812.4

2011 ANNUAL REPORT TO SHAREHOLDERS 87 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Included within the non-U.S., commercial-other, and personal-other classes are short duration advances, primarily related to the processing of custodied client investments, that totaled $1.6 billion and $1.4 billion at December 31, 2011 and 2010, respectively. Demand deposits reclassified as loan balances totaled $191.6 million and $76.6 million at December 31, 2011 and 2010, respectively. Loans classified as held for sale totaled $9.3 million at December 31, 2011 and $2.2 million at December 31, 2010.

The components of the net investment in direct finance and leveraged leases are as follows:

	DECEMBER 31
(In Millions)	2011			2010
Direct Finance Leases:
Lease Receivable	$	156.3		$	148.4
Residual Value		149.2			176.1
Initial Direct Costs		2.9			1.8
Unearned Income		(44.1	)		(44.9	)
Investment in Direct Finance Leases	$	264.3		$	281.4
Leveraged Leases:
Net Rental Receivable		326.0			353.0
Residual Value		622.7			743.8
Unearned Income		(234.2	)		(314.5	)
Investment in Leveraged Leases	$	714.5		$	782.3
Lease Financing, net	$	978.8		$	1,063.7

The following schedule reflects the future minimum lease payments to be received over the next five years under direct finance leases:

(In Millions)	FUTURE MINIMUM LEASE PAYMENTS
2012	$	33.9
2013		28.9
2014		25.1
2015		21.4
2016		15.6

Credit Quality Indicators. Credit quality indicators are statistics, measurements or other metrics that provide information regarding the relative credit risk of loans and leases. Northern Trust utilizes a variety of credit quality indicators to assess the credit risk of loans and leases at the segment, class, and individual credit exposure levels.

As part of its credit process, Northern Trust utilizes an internal borrower risk rating system to support identification, approval, and monitoring of credit risk. Borrower risk ratings are used in credit underwriting, management reporting, and the calculation of credit loss allowances and economic capital.

Risk ratings are used for ranking the credit risk of borrowers and the probability of their default. Each borrower is rated using one of a number of ratings models that consider both quantitative and qualitative factors. The ratings models vary among classes of loans and leases in order to capture the unique risk characteristics inherent within each particular type of credit exposure. Provided below are the more significant performance indicator attributes considered within Northern Trust’s borrower rating models, by loan and lease class.

_Ÿ Commercial and Institutional: leverage, profit margin, liquidity, return on assets, asset size, and capital levels;

_Ÿ Commercial Real Estate: debt service coverage, leasing status, loan-to-value, loan-to-cost, and guarantor support;

_Ÿ Lease Financing and Commercial-Other: leverage and profit margin levels;

_Ÿ Non-U.S.: entity type, liquidity, size, and leverage;

_Ÿ Residential Real Estate: payment history and cash flow-to-debt and net worth ratios;

_Ÿ Private Client: cash flow-to-debt, net worth, and leverage; and

_Ÿ Personal-Other: cash flow-to-debt and net worth ratios.

While the criteria vary by model, the objective is for borrower ratings to be consistent in both the measurement and ranking of risk. Each model is calibrated to a master rating scale to support this consistency. Ratings for borrowers not in default range from “1” for the strongest credits to “7” for the weakest non-defaulted credits. Ratings of “8” or “9” are used for defaulted borrowers. Borrower risk ratings are monitored and are revised when events or circumstances indicate a change is warranted. Risk ratings are validated at least annually.

2011 ANNUAL REPORT TO SHAREHOLDERS 88 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loan and lease segment and class balances at December 31, 2011 and December 31, 2010 are provided below, segregated by borrower ratings into “1 to 3”, “4 to 5”, and “6 to 9”(watch list), categories.

	DECEMBER 31, 2011								DECEMBER 31, 2010
(In Millions)	1 TO 3 CATEGORY		4 TO 5 CATEGORY		6 TO 9 CATEGORY (WATCH LIST)		TOTAL		1 TO 3 CATEGORY		4 TO 5 CATEGORY		6 TO 9 CATEGORY (WATCH LIST)		TOTAL
Commercial
Commercial and Institutional	$	3,681.8	$	3,029.1	$	207.8	$	6,918.7	$	2,821.5	$	2,849.8	$	243.2	$	5,914.5
Commercial Real Estate		1,247.1		1,467.2		267.4		2,981.7		1,232.8		1,594.3		415.3		3,242.4
Lease Financing, net		547.7		422.3		8.8		978.8		571.6		473.0		19.1		1,063.7
Non-U.S.		519.0		527.3		11.2		1,057.5		430.0		596.5		19.7		1,046.2
Other		241.4		176.2		–		417.6		209.5		137.1		–		346.6
Total Commercial		6,237.0		5,622.1		495.2		12,354.3		5,265.4		5,650.7		697.3		11,613.4
Personal
Residential Real Estate		2,777.1		7,501.0		430.8		10,708.9		2,896.0		7,586.9		372.0		10,854.9
Private Client		3,390.6		2,245.9		14.9		5,651.4		3,326.5		2,064.1		33.1		5,423.7
Other		162.3		187.0		–		349.3		78.1		161.9		–		240.0
Total Personal		6,330.0		9,933.9		445.7		16,709.6		6,300.6		9,812.9		405.1		16,518.6
Total Loans and Leases	$	12,567.0	$	15,556.0	$	940.9	$	29,063.9	$	11,566.0	$	15,463.6	$	1,102.4	$	28,132.0

Loans and leases in the “1 to 3” category are expected to exhibit minimal to modest probabilities of default and are characterized by borrowers having the strongest financial qualities, including above average financial flexibility, cash flows and capital levels. Borrowers assigned these ratings are anticipated to experience very little to moderate financial pressure in adverse down cycle scenarios.

Loans and leases in the “4 to 5” category are expected to exhibit moderate to acceptable probabilities of default and are characterized by borrowers with less financial flexibility than those in the “1 to 3” category. Cash flows and capital levels are generally sufficient to allow for borrowers to meet current requirements, but have reduced cushion in adverse down cycle scenarios.

Loans and leases in the watch list category have elevated credit risk profiles that are monitored through internal watch lists, and consist of credits with borrower ratings of “6 to 9”. These credits, which include all nonperforming loans and leases, are expected to exhibit minimally acceptable probabilities of default, elevated risk of default, or are currently in default. Borrowers associated with these risk profiles that are not currently in default have limited financial flexibility. Cash flows and capital levels range from acceptable to potentially insufficient to meet current requirements, particularly in adverse down cycle scenarios.

2011 ANNUAL REPORT TO SHAREHOLDERS 89 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables provide balances and delinquency status of performing and nonperforming loans and leases by segment and class, as well as the total other real estate owned and nonperforming asset balances, as of December 31, 2011 and December 31, 2010.

(In Millions)	CURRENT		30 – 59 DAYS PAST DUE		60 – 89 DAYS PAST DUE		90 DAYS OR MORE PAST DUE		TOTAL PERFORMING		NONPERFORMING		TOTAL LOANS AND LEASES
DECEMBER 31, 2011
Commercial
Commercial and Institutional	$	6,869.2	$	15.0	$	2.7	$	.5	$	6,887.4	$	31.3	$	6,918.7
Commercial Real Estate		2,878.2		10.8		10.3		2.9		2,902.2		79.5		2,981.7
Lease Financing, net		978.8		–		–		–		978.8		–		978.8
Non-U.S.		1,057.5		–		–		–		1,057.5		–		1,057.5
Other		417.6		–		–		–		417.6		–		417.6
Total Commercial		12,201.3		25.8		13.0		3.4		12,243.5		110.8		12,354.3
Personal
Residential Real Estate		10,428.0		67.7		27.6		8.0		10,531.3		177.6		10,708.9
Private Client		5,623.0		15.7		5.7		1.7		5,646.1		5.3		5,651.4
Other		349.3		–		–		–		349.3		–		349.3
Total Personal		16,400.3		83.4		33.3		9.7		16,526.7		182.9		16,709.6
Total Loans and Leases	$	28,601.6	$	109.2	$	46.3	$	13.1	$	28,770.2	$	293.7	$	29,063.9
								Total Other Real Estate  Owned			$	21.2
								Total Nonperforming Assets			$	314.9

(In Millions)	CURRENT		30 – 59 DAYS PAST DUE		60 – 89 DAYS PAST DUE		90 DAYS OR MORE PAST DUE		TOTAL PERFORMING		NONPERFORMING		TOTAL LOANS AND LEASES
DECEMBER 31, 2010
Commercial
Commercial and Institutional	$	5,831.2	$	16.3	$	8.2	$	.8	$	5,856.5	$	58.0	$	5,914.5
Commercial Real Estate		3,076.7		24.2		15.7		9.4		3,126.0		116.4		3,242.4
Lease Financing, net		1,063.7		–		–		–		1,063.7		–		1,063.7
Non-U.S.		1,046.2		–		–		–		1,046.2		–		1,046.2
Other		346.6		–		–		–		346.6		–		346.6
Total Commercial		11,364.4		40.5		23.9		10.2		11,439.0		174.4		11,613.4
Personal
Residential Real Estate		10,607.4		76.1		17.2		.9		10,701.6		153.3		10,854.9
Private Client		5,367.8		35.7		13.0		1.9		5,418.4		5.3		5,423.7
Other		240.0		–		–		–		240.0		–		240.0
Total Personal		16,215.2		111.8		30.2		2.8		16,360.0		158.6		16,518.6
Total Loans and Leases	$	27,579.6	$	152.3	$	54.1	$	13.0	$	27,799.0	$	333.0	$	28,132.0
								Total Other Real Estate Owned			$	45.5
								Total Nonperforming Assets			$	378.5

2011 ANNUAL REPORT TO SHAREHOLDERS 90 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables provide information related to impaired loans by segment and class.

	AS OF DECEMBER 31, 2011						AS OF DECEMBER 31, 2010
(In Millions)	RECORDED INVESTMENT		UNPAID PRINCIPAL BALANCE		SPECIFIC ALLOWANCE		RECORDED INVESTMENT		UNPAID PRINCIPAL BALANCE		SPECIFIC ALLOWANCE
With no related specific allowance:
Commercial and Institutional	$	21.4	$	24.0	$	–	$	17.9	$	26.1	$	–
Commercial Real Estate		46.5		68.0		–		43.7		62.4		–
Residential Real Estate		134.4		162.6		–		111.9		138.1		–
Private Client		1.6		1.9		–		3.7		3.9		–
With a related specific allowance:
Commercial and Institutional		11.9		20.5		8.8		41.7		47.8		19.8
Commercial Real Estate		41.4		50.1		14.1		77.2		88.9		29.5
Residential Real Estate		18.9		26.2		8.9		5.1		5.1		2.4
Private Client		3.3		3.6		1.0		–		–		–
Total:
Commercial		121.2		162.6		22.9		180.5		225.2		49.3
Personal		158.2		194.3		9.9		120.7		147.1		2.4
Total	$	279.4	$	356.9	$	32.8	$	301.2	$	372.3	$	51.7

	YEAR ENDED DECEMBER 31, 2011
(In Millions)	AVERAGE RECORDED INVESTMENT		INTEREST INCOME RECOGNIZED
With no related specific allowance:
Commercial and Institutional	$	18.3	$	.1
Commercial Real Estate		33.0		.5
Residential Real Estate		111.8		2.1
Private Client		2.2		–
With a related specific allowance:
Commercial and Institutional		23.6		–
Commercial Real Estate		59.8		–
Residential Real Estate		9.7		–
Private Client		2.0		–
Total:
Commercial		134.7		.6
Personal		125.7		2.1
Total	$	260.4	$	2.7

Note: Average recorded investments in impaired loans are calculated as the average of the month-end impaired loan balances for the period.

Interest income that would have been recorded on nonperforming loans in accordance with their original terms totaled approximately $15.4 million in 2011, $16.0 million in 2010, and $8.0 million in 2009.

The average recorded investment in impaired loans was $253.8 million for the year ended December 31, 2010.

There were $9.7 million and $16.3 million of unfunded loan commitments and standby letters of credit at December 31, 2011 and 2010, respectively, issued to borrowers whose loans were classified as nonperforming or impaired.

Troubled Debt Restructurings. As of December 31, 2011 and December 31, 2010, there were $72.2 million and $33.4 million, respectively, of nonperforming TDRs and $41.1 million and $22.9 million, respectively, of performing TDRs, included within impaired loans.

The following table provides, by segment and class, the number of loans and leases modified in TDRs during the year ended December 31, 2011, and their total recorded investments and unpaid principal balances as of December 31, 2011.

($ In Millions)	NUMBER OF LOANS AND LEASES		RECORDED INVESTMENT		UNPAID PRINCIPAL BALANCE
Commercial
Commercial and Institutional		6	$	10.4	$	12.1
Commercial Real Estate		16		34.0		42.6
Total Commercial		22		44.4		54.7
Personal
Residential Real Estate		148		32.6		40.4
Private Client		1		–		–
Total Personal		149		32.6		40.4
Total Loans and Leases		171	$	77.0	$	95.1

Note: Period end balances reflect all paydowns and charge-offs during the year.

TDR modifications primarily involve interest rate concessions, extensions of term, deferrals of principal, and other modifications. Other modifications typically reflect other nonstandard terms which Northern Trust would not

2011 ANNUAL REPORT TO SHAREHOLDERS 91 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

offer to non-troubled borrowers. During the year ended December 31, 2011, TDR modifications of loans within the commercial and institutional class were primarily interest rate concessions, deferrals of principal and other modifications; modifications of commercial real estate loans were primarily interest rate concessions, extensions of term and other modifications; and modifications of residential real estate loans were primarily interest rate concessions, deferrals of principal and extensions of term.

The following table provides, by segment and class, the number of loans and leases modified in troubled debt restructurings during the previous 12 months which subsequently became nonperforming during the year ended December 31, 2011 as well as their total recorded investments and unpaid principal balances as of December 31, 2011.

($ In Millions)	NUMBER OF LOANS AND LEASES		RECORDED INVESTMENT		UNPAID PRINCIPAL BALANCE
Commercial
Commercial and Institutional		1	$	–	$	.4
Total Commercial		1		–		.4
Personal
Residential Real Estate		8		2.1		2.6
Private Client		1		.8		1.1
Total Personal		9		2.9		3.7
Total Loans and Leases		10	$	2.9	$	4.1

Note: Period end balances reflect all paydowns and charge-offs during the year.

All loans and leases modified in TDRs are evaluated for impairment. The nature and extent of impairment of TDRs, including those which have experienced a subsequent default, is considered in the determination of an appropriate level of allowance for credit losses.

Note 7 – Allowance for Credit Losses

The allowance for credit losses, which represents management’s estimate of probable losses related to specific borrower relationships and inherent in the loan and lease portfolios, unfunded commitments, and standby letters of credit, is determined by management through a disciplined credit review process. Northern Trust’s accounting policies related to the estimation of the allowance for credit losses and the charging off of loans, leases and other extensions of credit deemed uncollectible are consistent across both loan and lease segments.

Northern Trust’s Loan Loss Allowance Committee assesses a common set of qualitative factors in establishing the inherent portion of the allowance for credit losses. The risk characteristics underlying these qualitative factors, and management’s assessments as to the relative importance of a qualitative factor, can vary between loan segments and between classes within loan segments. Factors evaluated include those related to external matters, such as economic conditions and changes in collateral value, and those related to internal matters, such as changes in asset quality metrics and loan review activities. Risk characteristics such as portfolio delinquencies, percentage of portfolio on the watch list and on nonperforming status, and average borrower ratings are also assessed in the determination of the inherent allowance.

Loan-to-value levels are considered for collateral-secured loans and leases in both the personal and commercial segments. Borrower debt service coverage is evaluated in the personal segment, and cash flow coverage is analyzed in the commercial segment. Similar risk characteristics by type of exposure are analyzed when determining the allowance for unfunded commitments and standby letters of credit. These qualitative factors, together with historical loss rates, serve as the basis for the allowance for credit losses.

Loans, leases and other extensions of credit deemed uncollectible are charged to the allowance for credit losses. Subsequent recoveries, if any, are credited to the allowance. Determinations as to whether an uncollectible loan is charged-off or a specific allowance is established are based on management’s assessment as to the level of certainty regarding the amount of loss.

2011 ANNUAL REPORT TO SHAREHOLDERS 92 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Changes in the allowance for credit losses by segment were as follows:

	2011									2010									2009
(In Millions)	COMMERCIAL			PERSONAL			TOTAL			COMMERCIAL			PERSONAL			TOTAL			COMMERCIAL			PERSONAL			TOTAL
Balance at Beginning of Year	$	256.7		$	100.6		$	357.3		$	252.2		$	88.4		$	340.6		$	185.6		$	65.5		$	251.1
Charge-Offs		(56.3	)		(60.0	)		(116.3	)		(76.2	)		(73.9	)		(150.1	)		(53.1	)		(79.2	)		(132.3	)
Recoveries		21.5			11.4			32.9			3.6			3.3			6.9			3.1			3.4			6.5
Net Charge-Offs		(34.8	)		(48.6	)		(83.4	)		(72.6	)		(70.6	)		(143.2	)		(50.0	)		(75.8	)		(125.8	)
Provision for Credit Losses		(10.9	)		65.9			55.0			77.2			82.8			160.0			116.3			98.7			215.0
Effect of Foreign Exchange Rates		–			–			–			(.1	)		–			(.1	)		.3			–			.3
Balance at End of Year	$	211.0		$	117.9		$	328.9		$	256.7		$	100.6		$	357.3		$	252.2		$	88.4		$	340.6
Allowance for Credit Losses Assigned to:
Loans and Leases	$	178.6		$	116.2		$	294.8		$	220.7		$	98.9		$	319.6		$	222.9		$	86.3		$	309.2
Unfunded Commitments and Standby Letters of Credit		32.4			1.7			34.1			36.0			1.7			37.7			29.3			2.1			31.4
Total Allowance for Credit Losses	$	211.0		$	117.9		$	328.9		$	256.7		$	100.6		$	357.3		$	252.2		$	88.4		$	340.6

The following tables provide information regarding the recorded investments in loans and leases and the allowances for credit losses by segment as of December 31, 2011 and 2010.

(In Millions)	COMMERCIAL		PERSONAL		TOTAL
DECEMBER 31, 2011
Loans and Leases:
Specifically Evaluated for Impairment	$	121.2	$	158.2	$	279.4
Evaluated for Inherent Impairment		12,233.1		16,551.4		28,784.5
Total Loans and Leases		12,354.3		16,709.6		29,063.9
Allowance for Credit Losses on Credit Exposures:
Specifically Evaluated for Impairment		22.9		9.9		32.8
Evaluated for Inherent Impairment		155.7		106.3		262.0
Allowance assigned to loans and leases		178.6		116.2		294.8
Allowance assigned to unfunded commitments and standby letters of credit		32.4		1.7		34.1
Total Allowance for Credit Losses	$	211.0	$	117.9	$	328.9

(In Millions)	COMMERCIAL		PERSONAL		TOTAL
DECEMBER 31, 2010
Loans and Leases:
Specifically Evaluated for Impairment	$	180.5	$	120.7	$	301.2
Evaluated for Inherent Impairment		11,432.9		16,397.9		27,830.8
Total Loans and Leases		11,613.4		16,518.6		28,132.0
Allowance for Credit Losses on Credit Exposures:
Specifically Evaluated for Impairment		49.3		2.4		51.7
Evaluated for Inherent Impairment		171.4		96.5		267.9
Allowance assigned to loans and leases		220.7		98.9		319.6
Allowance assigned to unfunded commitments and standby letters of credit		36.0		1.7		37.7
Total Allowance for Credit Losses	$	256.7	$	100.6	$	357.3

Note 8 – Concentrations of Credit Risk

Concentrations of credit risk exist if a number of borrowers or other counterparties are engaged in similar activities and have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. The fact that a credit exposure falls into one of these groups does not necessarily indicate that the credit has a higher than normal degree of credit risk. These groups are: commercial real estate, residential real estate, and banks and bank holding companies.

Commercial Real Estate. The commercial real estate portfolio consists of commercial mortgages and construction, acquisition and development loans extended primarily to highly experienced developers and/or investors well known to Northern Trust. Underwriting standards generally reflect conservative loan-to-value ratios and debt service coverage requirements. Recourse to borrowers through guarantees is also commonly required. Commercial mortgage financing is provided for the acquisition or refinancing of income producing properties. Cash flows from the properties generally are sufficient to amortize the loan. These loans average approximately $1.3 million each and are primarily located in the Illinois, Florida, California, and Arizona markets. Construction, acquisition and development loans provide financing for commercial real estate prior to rental income stabilization. The intent is generally that the borrower will sell the project or refinance the loan through a commercial mortgage with Northern Trust or another financial institution upon completion.

2011 ANNUAL REPORT TO SHAREHOLDERS 93 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below provides additional detail regarding commercial real estate loan types:

(In Millions)	2011		2010
Commercial Mortgages:
Office	$	615.6	$	605.3
Apartment/ Multi-family		656.3		572.4
Retail		523.1		517.8
Industrial/ Warehouse		357.7		383.7
Other		133.3		193.7
Total Commercial Mortgages		2,286.0		2,272.9
Construction, Acquisition and Development Loans		450.1		591.8
Single Family Investment		161.4		246.8
Other Commercial Real Estate Related		84.2		130.9
Total Commercial Real Estate Loans	$	2,981.7	$	3,242.4

Residential Real Estate. At December 31, 2011, residential real estate loans totaled $10.7 billion, or 38% of total U.S. loans at December 31, 2011, compared with $10.9 billion or 40% at December 31, 2010. Residential real estate loans consist of conventional home mortgages and equity credit lines, which generally require a loan to collateral value of no more than 65% to 80% at inception. Revaluations of supporting collateral are obtained upon refinancing or default or when otherwise considered warranted. Collateral revaluations for mortgages are performed by independent third parties. Of the total $10.7 billion in residential real estate loans, $4.0 billion were in the greater Chicago area, $2.8 billion were in Florida, and $1.5 billion were in California, with the remainder distributed throughout the other geographic regions within the U.S. served by Northern Trust. Legally binding commitments to extend residential real estate credit, which are primarily equity credit lines, totaled $2.2 billion at December 31, 2011 and $2.5 billion at December 31, 2010.

Banks and Bank Holding Companies. On-balance sheet credit risk to banks and bank holding companies, both U.S. and non-U.S., consists primarily of interest bearing deposits with banks, federal funds sold, and securities purchased under agreements to resell, which totaled $16.8 billion and $15.5 billion at December 31, 2011 and 2010, respectively, and noninterest-bearing demand balances maintained at correspondent banks, which totaled $4.2 billion and $2.7 billion at December 31, 2011 and 2010, respectively. Credit risk associated with U.S. and non-U.S. banks and bank holding companies deemed to be counterparties by Credit Policy is managed by the Counterparty Risk Management Committee. Credit risk associated with other U.S. banks and bank holding companies that maintain commercial credit relationships with Northern Trust is managed by the relevant Credit Approval Committee and/or the Senior Credit Committee. Credit limits are established through a review process that includes an internally prepared financial analysis, use of an internal risk rating system and consideration of external ratings from rating agencies. Northern Trust places deposits with banks that have strong internal and external credit ratings and the average life to maturity of deposits with banks is maintained on a short-term basis in order to respond quickly to changing credit conditions.

Note 9 – Buildings and Equipment

A summary of buildings and equipment is presented below.

	DECEMBER 31, 2011
(In Millions)	ORIGINAL COST		ACCUMULATED DEPRECIATION		NET BOOKVALUE
Land and Improvements	$	32.6	$	.8	$	31.8
Buildings		252.2		127.0		125.2
Equipment		391.0		209.1		181.9
Leasehold Improvements		298.5		180.5		118.0
Buildings Leased under Capital Leases		83.9		46.3		37.6
Total Buildings and Equipment	$	1,058.2	$	563.7	$	494.5

The charge for depreciation, which includes depreciation of assets recorded under capital leases, amounted to $89.2 million in 2011, $93.5 million in 2010, and $95.7 million in 2009.

Note 10 – Lease Commitments

At December 31, 2011, Northern Trust was obligated under a number of non-cancelable operating leases for buildings and equipment. Certain leases contain rent escalation clauses based on market indices or increases in real estate taxes and other operating expenses and renewal option clauses calling for increased rentals. There are no restrictions imposed by any lease agreement regarding the payment of dividends, debt

2011 ANNUAL REPORT TO SHAREHOLDERS 94 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

financing or Northern Trust entering into further lease agreements. Minimum annual lease commitments as of December 31, 2011 for all non-cancelable operating leases with a term of 1 year or more are as follows:

(In Millions)	FUTURE MINIMUM LEASE PAYMENTS
2012	$	86.9
2013		85.8
2014		72.1
2015		67.3
2016		53.3
Later Years		380.2
Total Minimum Lease Payments	$	745.6

Operating lease rental expense, net of rental income, is recorded in occupancy expense and amounted to $84.2 million in 2011, $68.1 million in 2010, and $70.2 million in 2009. Net rental expense in 2011 includes $6.4 million of restructuring, acquisition and integration related charges attributable to reductions in office space.

One of the buildings and related land utilized for Chicago operations has been leased under an agreement that qualifies as a capital lease. The original long-term financing for the property was provided by the Corporation and the Bank. In the event of sale or refinancing, the Bank would anticipate receiving full repayment of any outstanding loans plus 42% of any proceeds in excess of the original project costs.

The following table reflects the future minimum lease payments required under capital leases, net of any payments received on the long-term financing, and the present value of net capital lease obligations at December 31, 2011.

(In Millions)	FUTURE MINIMUM LEASE PAYMENTS, NET
2012	$	7.9
2013		8.1
2014		8.4
2015		8.2
2016		8.0
Later Years		23.6
Total Minimum Lease Payments, net		64.2
Less: Amount Representing Interest		19.3
Net Present Value under Capital Lease Obligations	$	44.9

Note 11 – Goodwill and Other Intangibles

Changes in the carrying amount of goodwill by business unit for the years ended December 31, 2011 and 2010 were as follows:

(In Millions)	CORPORATE AND INSTITUTIONAL SERVICES			PERSONAL FINANCIAL SERVICES			TOTAL
Balance at December 31, 2009	$	334.7		$	66.9		$	401.6
Goodwill Acquired		–			4.6			4.6
Other Changes*		(5.2	)		(.1	)		(5.3	)
Balance at December 31, 2010	$	329.5		$	71.4		$	400.9
Goodwill Acquired		131.4			—			131.4
Other Changes*		(.3	)		—			(.3	)
Balance at December 31, 2011	$	460.6		$	71.4		$	532.0

* Includes the effect of foreign exchange rates on non-U.S. dollar denominated goodwill.

Other intangible assets are included in other assets in the consolidated balance sheet. The gross carrying amount and accumulated amortization of other intangible assets subject to amortization as of December 31, 2011 and 2010 were as follows:

OTHER INTANGIBLE ASSETS-SUBJECT TO AMORTIZATION *

	DECEMBER 31
(In Millions)	2011		2010
Gross Carrying Amount	$	251.2	$	164.2
Accumulated Amortization		127.8		111.0
Net Book Value	$	123.4	$	53.2

* Includes the effect of foreign exchange rates on non-U.S. dollar denominated intangible assets.

Other intangible assets consist primarily of the value of acquired client relationships. Amortization expense related to other intangible assets was $16.8 million, $14.8 million, and $16.2 million for the years ended December 31, 2011, 2010, and 2009, respectively. Amortization expense for the years 2012, 2013, 2014, 2015 and 2016 is estimated to be $20.8 million, $20.5 million, $20.4 million, $11.7 million, and $9.1 million, respectively.

2011 ANNUAL REPORT TO SHAREHOLDERS 95 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In June 2011, Northern Trust completed its acquisition of the fund administration, investment operations outsourcing and custody business of Bank of Ireland Securities Services. The purchase price, which is subject to certain performance-related adjustments over a one year period after the acquisition date, totaled $84.4 million and was comprised of $71.0 million of cash and $13.4 million of contingent consideration. Goodwill and other intangible assets associated with the acquisition totaled $30.0 million and $45.0 million, respectively. The estimated fair value of the contingent purchase consideration at December 31, 2011 was $11.4 million.

In July 2011, Northern Trust completed its acquisition of Omnium LLC, a hedge fund administrator. The purchase price, which is subject to certain performance-related adjustments over a five year period after the acquisition date, totaled $145.1 million and was comprised of $101.6 million of cash and $43.5 million of contingent consideration. Goodwill and other intangible assets associated with the acquisition totaled $101.4 million and $43.9 million, respectively. The estimated fair value of the contingent purchase consideration at December 31, 2011 was $45.4 million.

Note 12 – Senior Notes and Long-Term Debt

Senior Notes. A summary of senior notes outstanding at December 31 is presented below.

($ In Millions)	RATE			2011		2010
Corporation-Senior Notes (a) (d)
Fixed Rate Due Aug. 2011 (f)		5.30	%	$	—	$	249.9
Fixed Rate Due Nov. 2012 (g) (l)		5.20			206.9		214.6
Fixed Rate Due Aug. 2013 (h) (l)		5.50			422.4		432.2
Fixed Rate Due May 2014		4.63			500.0		500.0
Fixed Rate Due Nov. 2020 (j)		3.45			499.5		499.4
Fixed Rate Due Aug. 2021 (k)		3.38			497.9		–
Total Senior Notes				$	2,126.7	$	1,896.1

Long-Term Debt. A summary of long-term debt outstanding at December 31 is presented below.

($ In Millions)	2011		2010
Bank-Subordinated Debt (a) (d)
6.30% Notes due March 2011 (b)	$	–	$	150.0
4.60% Notes due Feb. 2013 (b)		200.0		200.0
5.85% Notes due Nov. 2017 (b) (l)		241.5		229.5
6.50% Notes due Aug. 2018 (b) (i) (l)		360.8		337.6
5.375% Sterling Denominated Notes due March 2015 (e)		231.1		231.6
Total Bank-Subordinated Debt		1,033.4		1,148.7
Federal Home Loan Bank Borrowings
One Year or Less (Average Rate at Year End – 4.64% in 2011; 4.18% in 2010)		670.0		426.4
One to Three Years (Average Rate at Year End – 4.08% in 2011; 4.46% in 2010)		335.0		870.0
Three to Five Years (Average Rate at Year End – None in 2011; 4.40% in 2010)		–		135.0
Five to Ten Years (Average Rate at Year End – 6.29% in 2011; 6.38% in 2010)		50.0		101.1
Total Federal Home Loan Bank Borrowings		1,055.0		1,532.5
Capital Lease Obligations (c)		44.9		48.1
Total Long-Term Debt	$	2,133.3	$	2,729.3
Long-Term Debt Qualifying as Risk-Based Capital	$	678.9	$	765.8

(a) Not redeemable prior to maturity.

(b) Under the terms of its current Offering Circular dated August 23, 2011, the Bank has the ability to offer from time to time its senior bank notes in an aggregate principal amount of up to $4.5 billion at any one time outstanding and up to an additional $1.0 billion of subordinated notes. Each senior note will mature from 30 days to fifteen years, and each subordinated note will mature from five years to fifteen years, following its date of original issuance. Each note will mature on such date as selected by the initial purchaser and agreed to by the Bank.

(c) Refer to Note 10.

(d) Debt issue costs are recorded as an asset and amortized on a straight-line basis over the life of the Note.

(e) Notes issued at a discount of ..484%.

(f) Notes issued at a discount of .035%.

(g) Notes issued at a discount of .044%.

(h) Notes issued at a discount of .09%.

(i) Notes issued at a discount of .02%

(j) Notes issued at a discount of .117%

(k) Notes issued at a discount of .437%

(l) Interest rate swap contracts were entered into to modify the interest expense on these senior and subordinated notes from fixed rates to floating rates. The swaps are recorded as fair value hedges and at December 31, 2011, increases in the carrying values of the senior and subordinated notes outstanding of $29.9 million and $102.6 million, respectively, were recorded. As of December 31, 2010, increases in the carrying values of senior and subordinated notes outstanding of $47.8 million and $67.4 million, respectively, were recorded.

2011 ANNUAL REPORT TO SHAREHOLDERS 96 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 13 – Floating Rate Capital Debt

In January 1997, the Corporation issued $150 million of Floating Rate Capital Securities, Series A, through a statutory business trust wholly-owned by the Corporation (“NTC Capital I”). In April 1997, the Corporation also issued, through a separate wholly-owned statutory business trust (“NTC Capital II”), $120 million of Floating Rate Capital Securities, Series B. The sole assets of the trusts are Subordinated Debentures of Northern Trust Corporation that have the same interest rates and maturity dates as the corresponding distribution rates and redemption dates of the Floating Rate Capital Securities. The Series A Securities were issued at a discount to yield 60.5 basis points above the three-month London Interbank Offered Rate (LIBOR) and are due January 15, 2027. The Series B Securities were issued at a discount to yield 67.9 basis points above the three-month LIBOR and are due April 15, 2027. Both Series A and B Securities currently qualify as tier 1 capital for regulatory purposes. Under the provisions of The Dodd-Frank Wall Street Reform and Consumer Protection Act, the tier 1 regulatory capital treatment of these securities will be phased out over a three-year period beginning on January 1, 2013. The specifics of the phaseout of tier 1 capital treatment have not yet been established by bank regulators.

The Corporation has fully, irrevocably and unconditionally guaranteed all payments due on the Series A and B Securities. The holders of the Series A and B Securities are entitled to receive preferential cumulative cash distributions quarterly in arrears (based on the liquidation amount of $1,000 per Security) at an interest rate equal to the rate on the corresponding Subordinated Debentures. The interest rate on the Series A and Series B securities is equal to three-month LIBOR plus .52% and .59%, respectively. Subject to certain exceptions, the Corporation has the right to defer payment of interest on the Subordinated Debentures at any time or from time to time for a period not exceeding 20 consecutive quarterly periods provided that no extension period may extend beyond the stated maturity date. If interest is deferred on the Subordinated Debentures, distributions on the Series A and B Securities will also be deferred and the Corporation will not be permitted, subject to certain exceptions, to pay or declare any cash distributions with respect to the Corporation’s capital stock or debt securities that rank the same as or junior to the Subordinated Debentures, until all past due distributions are paid. The Subordinated Debentures are unsecured and subordinated to substantially all of the Corporation’s existing indebtedness.

The Corporation has the right to redeem the Series A and Series B Subordinated Debentures, in whole or in part, at a price equal to the principal amount plus accrued and unpaid interest. The following table summarizes the book values of the outstanding Subordinated Debentures as of December 31, 2011 and 2010:

	DECEMBER 31
(In Millions)	2011		2010
NTC Capital I Subordinated Debentures due January 15, 2027	$	153.8	$	153.8
NTC Capital II Subordinated Debentures due April 15, 2027		123.1		123.1
Total Subordinated Debentures	$	276.9	$	276.9

Note 14 – Stockholders’ Equity

Preferred Stock. The Corporation is authorized to issue 10,000,000 shares of preferred stock without par value. The Board of Directors of the Corporation is authorized to fix the particular preferences, rights, qualifications and restrictions for each series of preferred stock issued. There was no preferred stock outstanding at December 31, 2011 or 2010.

Common Stock. On May 1, 2009, Northern Trust issued 17,250,000 shares of common stock of the Corporation with a par value of $1.66  ²/3 per share. Under the Corporation’s current share buyback program, the Corporation may purchase an additional 5.6 million shares after December 31, 2011. The repurchased shares would be used for general purposes of the Corporation, including management of the Corporation’s capital level and the issuance of shares under stock option and other incentive plans of the Corporation.

The average price paid per share for common stock repurchased in 2011, 2010, and 2009 was $49.63, $52.33, and $55.05, respectively.

An analysis of changes in the number of shares of common stock outstanding follows:

	2011			2010			2009
Balance at January 1		242,268,903			241,679,942			223,263,132
Common Stock Issuance		–			–			17,250,000
Incentive Plan and Awards		189,793			300,376			479,359
Stock Options Exercised		149,385			419,846			938,249
Treasury Stock Purchased		(1,599,572	)		(131,261	)		(250,798	)
Balance at December 31		241,008,509			242,268,903			241,679,942

2011 ANNUAL REPORT TO SHAREHOLDERS 97 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. Treasury Capital Purchase Program. On November 14, 2008, in connection with the Corporation’s participation in the U.S. Department of the Treasury’s (U.S. Treasury) Troubled Asset Relief Program’s Capital Purchase Program (Capital Purchase Program), the Corporation issued 1,576,000 shares of Series B Preferred Stock and a warrant for the purchase of the Corporation’s common stock to the U.S. Treasury for total proceeds of $1,576.0 million. The proceeds received were allocated between the preferred stock and the warrant based on their relative fair values, which resulted in the recording of a discount on the preferred stock upon issuance that reflected the value allocated to the warrant. On June 17, 2009, Northern Trust repaid in full the $1,576.0 million preferred share investment made by the U.S. Treasury under the Capital Purchase Program. On August 26, 2009, Northern Trust repurchased the warrant for $87 million, completing the Corporation’s participation in the Capital Purchase Program.

Series B Preferred Stock. The Series B Preferred Stock was without par value and had a liquidation preference of $1,000 per share. Cumulative dividends on the Series B Preferred Stock accrued on the liquidation preference at a rate of 5% per annum for the first five years, and at a rate of 9% per annum thereafter. The fair value of the Series B Preferred Stock was determined through the use of a discounted cash flow model. The model incorporated projected cash flows over management’s estimate of a five year life of the preferred stock at the date of issuance and an assumed market yield of 12%. The discount was accreted using a constant effective yield of approximately 6.13% over a five year term, consistent with management’s estimate of the life of the preferred stock at the date of issuance. Dividends on the preferred stock and the related accretion of the discount on preferred stock reduced net income applicable to common stock by $111.1 million in 2009.

Common Stock Warrant. The warrant issued in connection with the Capital Purchase Program entitled the U.S. Treasury to purchase 3,824,624 shares of the Corporation’s common stock at an exercise price of $61.81 per share. The warrant had a 10-year term. The fair value of the common stock warrant at the date of its issuance was determined through the use of a Black-Scholes valuation model. In addition to the market price of Northern Trust’s common stock at the date of the warrant’s issuance, the model utilized an expected term of ten years, consistent with the term of the warrant, an estimated yield of 2.19% from dividends paid on the Corporation’s stock over the expected term of the warrant, which reflected the Corporation’s strong capital position and the restrictions on its ability to increase the dividend rate as a result of the Corporation’s participation in the Capital Purchase Program, the historical volatility of Northern Trust’s stock price over the most recent ten-year term as of the date of issuance of 36.06%, and a risk free interest rate of 3.98% based on a ten-year swap rate to maturity at the time of the warrant’s issuance.

2011 ANNUAL REPORT TO SHAREHOLDERS 98 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 15 – Accumulated Other Comprehensive Income (Loss)

The following table summarizes the components of accumulated other comprehensive income (loss) at December 31, 2011, 2010, and 2009, and changes during the years then ended.

	PERIOD CHANGE
(In Millions)	BEGINNING BALANCE (NET OF TAX)			BEFORE TAX AMOUNT			TAX  EFFECT			ENDING BALANCE (NET OF TAX)
DECEMBER 31, 2011
Noncredit-Related Unrealized Losses on Securities OTTI	$	(21.2	)	$	10.2		$	(3.6	)	$	(14.6	)
Other Unrealized Gains (Losses) on Securities Available for Sale, net		7.7			61.6			(23.4	)		45.9
Reclassification Adjustments		–			13.5			(5.0	)		8.5
Net Unrealized Gains (Losses) on Securities Available for Sale		(13.5	)		85.3			(32.0	)		39.8
Unrealized Gains (Losses) on Cash Flow Hedge Designations		11.4			(23.6	)		8.8			(3.4	)
Reclassification Adjustments		–			(5.6	)		2.0			(3.6	)
Net Unrealized Gains (Losses) on Cash Flow Hedge Designations		11.4			(29.2	)		10.8			(7.0	)
Foreign Currency Translation Adjustments		(7.0	)		18.7			(21.2	)		(9.5	)
Pension and Other Postretirement Benefit Adjustments
Net Actuarial (Loss) Gain		(299.5	)		(158.2	)		61.3			(396.4	)
Prior Service (Cost) Benefit		3.3			7.7			(2.9	)		8.1
Reclassification Adjustments		–			30.2			(10.8	)		19.4
Total Pension and Other Postretirement Benefit Adjustments		(296.2	)		(120.3	)		47.6			(368.9	)
Accumulated Other Comprehensive Income (Loss)	$	(305.3	)	$	(45.5	)	$	5.2		$	(345.6	)
DECEMBER 31, 2010
Noncredit-Related Unrealized Losses on Securities OTTI	$	(42.0	)	$	33.0		$	(12.2	)	$	(21.2	)
Other Unrealized Gains (Losses) on Securities Available for Sale, net		.3			(8.8	)		3.4			(5.1	)
Reclassification Adjustments		–			20.2			(7.4	)		12.8
Net Unrealized Gains (Losses) on Securities Available for Sale		(41.7	)		44.4			(16.2	)		(13.5	)
Unrealized Gains (Losses) on Cash Flow Hedge Designations		(26.2	)		46.7			(17.1	)		3.4
Reclassification Adjustments		–			12.6			(4.6	)		8.0
Net Unrealized Gains (Losses) on Cash Flow Hedge Designations		(26.2	)		59.3			(21.7	)		11.4
Foreign Currency Translation Adjustments		11.3			4.0			(22.3	)		(7.0	)
Pension and Other Postretirement Benefit Adjustments
Net Actuarial (Loss) Gain		(310.5	)		(16.4	)		9.3			(317.6	)
Prior Service (Cost) Benefit		5.5			–			–			5.5
Reclassification Adjustments		–			25.0			(9.1	)		15.9
Total Pension and Other Postretirement Benefit Adjustments		(305.0	)		8.6			.2			(296.2	)
Accumulated Other Comprehensive Income (Loss)	$	(361.6	)	$	116.3		$	(60.0	)	$	(305.3	)
DECEMBER 31, 2009
Cumulative Effect of Applying FSP FAS 115-2 (ASC 320-10)	$	–		$	(15.0	)	$	5.5		$	(9.5	)
Noncredit-Related Unrealized Losses on Securities OTTI		–			(66.4	)		24.4			(42.0	)
Other Unrealized Gains (Losses) on Securities Available for Sale, net		(212.9	)		374.7			(137.5	)		24.3
Reclassification Adjustments		–			(22.9	)		8.4			(14.5	)
Net Unrealized Gains (Losses) on Securities Available for Sale		(212.9	)		270.4			(99.2	)		(41.7	)
Unrealized Gains (Losses) on Cash Flow Hedge Designations		(20.7	)		8.2			(3.0	)		(15.5	)
Reclassification Adjustments		–			(16.9	)		6.2			(10.7	)
Net Unrealized Gains (Losses) on Cash Flow Hedge Designations		(20.7	)		(8.7	)		3.2			(26.2	)
Foreign Currency Translation Adjustments		12.8			(38.1	)		36.6			11.3
Pension and Other Postretirement Benefit Adjustments
Net Actuarial (Loss) Gain		(266.5	)		(64.0	)		8.8			(321.7	)
Prior Service (Cost) Benefit		(6.4	)		17.6			(6.4	)		4.8
Transition Obligation		(1.2	)		1.4			(.5	)		(.3	)
Reclassification Adjustments		–			19.4			(7.2	)		12.2
Total Pension and Other Postretirement Benefit Adjustments		(274.1	)		(25.6	)		(5.3	)		(305.0	)
Accumulated Other Comprehensive Income (Loss)	$	(494.9	)	$	198.0		$	(64.7	)	$	(361.6	)

2011 ANNUAL REPORT TO SHAREHOLDERS 99 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16 – Net Income Per Common Share

The computations of net income per common share are presented below.

(In Millions Except Share Information)	2011		2010		2009
BASIC NET INCOME PER COMMON SHARE
Average Number of Common Shares Outstanding		241,401,310		242,028,776		235,511,879
Net Income	$	603.6	$	669.5	$	864.2
Less: Dividends on Preferred Stock		–		–		(111.1	)
Net Income Applicable to Common Stock	$	603.6	$	669.5		753.1
Less: Earnings Allocated to Participating Securities		7.1		5.6		5.3
Earnings Allocated to Common Shares Outstanding		596.5		663.9		747.8
Basic Net Income Per Common Share		2.47		2.74		3.18
DILUTED NET INCOME PER COMMON SHARE
Average Number of Common Shares Outstanding		241,401,310		242,028,776		235,511,879
Plus Stock Option Dilution		410,074		473,755		904,150
Average Common and Potential Common Shares		241,811,384		242,502,531		236,416,029
Earnings Allocated to Common and Potential Common Shares	$	596.5	$	663.9	$	747.8
Diluted Net Income Per Common Share		2.47		2.74		3.16

Note: Common stock equivalents totaling 13,240,787, 8,392,686, and 7,146,701 for the years ended December 31, 2011, 2010, and 2009, respectively, were not included in the computation of diluted earnings per share because their inclusion would have been antidilutive.

Note 17 – Net Interest Income

The components of net interest income were as follows:

(In Millions)	2011		2010		2009
Interest Income
Loans and Leases	$	938.7	$	932.6	$	942.2
Securities – Taxable		223.6		186.0		208.4
– Non-Taxable		25.0		29.5		33.5
Interest-Bearing Deposits with Banks		192.8		134.6		209.6
Federal Reserve Deposits and Other		28.5		14.0		12.3
Total Interest Income	$	1,408.6	$	1,296.7		1,406.0
Interest Expense
Deposits	$	230.0	$	201.0		207.0
Federal Funds Purchased		1.9		4.8		5.7
Securities Sold under Agreements to Repurchase		.7		1.0		1.1
Other Borrowings		5.5		5.4		4.2
Senior Notes		64.4		48.6		44.0
Long-Term Debt		94.6		114.8		139.9
Floating Rate Capital Debt		2.4		2.4		4.3
Total Interest Expense		399.5		378.0		406.2
Net Interest Income	$	1,009.1	$	918.7	$	999.8

2011 ANNUAL REPORT TO SHAREHOLDERS 100 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 18 – Other Operating Income

The components of other operating income were as follows:

(In Millions)	2011		2010		2009
Loan Service Fees	$	68.9	$	60.3	$	52.1
Banking Service Fees		54.9		57.3		53.1
Other Income		34.3		28.7		31.6
Total Other Operating Income	$	158.1	$	146.3	$	136.8

Note 19 – Other Operating Expense

The components of other operating expense were as follows:

(In Millions)	2011		2010		2009
Business Promotion	$	82.1	$	81.0	$	66.6
FDIC Insurance Premiums		29.3		33.9		54.1
Staff Related		37.6		37.4		31.3
Other Intangibles Amortization		17.5		14.4		16.2
Capital Support Agreements		–		–		(109.3	)
Other Expenses		100.6		103.3		77.4
Total Other Operating Expense	$	267.1	$	270.0	$	136.3

Note 20 – Restructuring, Acquisition and Integration Related Charges

Charges totaling $91.6 million ($59.8 million on an after tax basis) were recorded in the year ended December 31, 2011 in connection with restructuring, acquisition and integration related activities. No similar charges were recorded in 2010 or 2009. Restructuring charges include severance expense, consulting expense, charges related to software write-offs, and reductions in office space. Acquisition and integration charges relate to expense incurred in connection with the acquisition and integration of the fund administration, investment operations outsourcing, and custody business of the Bank of Ireland Securities Services, now known as Northern Trust Securities Services (Ireland) Limited, and of Omnium LLC, now known as Northern Trust Hedge Fund Services LLC. The following table details the amounts and associated expense categories of the charges recorded.

(In Millions)	YEAR ENDED DECEMBER 31, 2011
Compensation	$	50.2
Employee Benefits		4.3
Outside Services		16.8
Equipment and Software		10.9
Occupancy		6.4
Other Operating Expense		3.0
Total Charges	$	91.6

Note 21 – Income Taxes

The following table reconciles the total provision for income taxes recorded in the consolidated statement of income with the amounts computed at the statutory federal tax rate of 35%.

(In Millions)	2011			2010			2009
Tax at Statutory Rate	$	309.3		$	346.4		$	439.3
Tax Exempt Income		(9.9	)		(10.8	)		(11.9	)
Leveraged Lease Adjustments		(4.7	)		(.8	)		(4.8	)
Foreign Tax Rate Differential		(21.3	)		(20.1	)		(20.9	)
State Taxes, net		22.8			17.3			9.8
Other		(16.1	)		(11.7	)		(20.5	)
Provision for Income Taxes	$	280.1		$	320.3		$	391.0

The Corporation files income tax returns in the U.S. federal, various state, and foreign jurisdictions. The Corporation is no longer subject to income tax examinations by U.S. federal or by non-U.S. tax authorities for years before 2005. The Corporation is no longer subject to income tax examinations by state or local tax authorities for years before 1997.

Included in other liabilities within the consolidated balance sheet at December 31, 2011 and 2010 were $17.8 million and $89.9 million of unrecognized tax benefits, respectively. If recognized, 2011 and 2010 net income would have increased by $14.5 million and $22.6 million, respectively, resulting in a decrease of those years’ effective

2011 ANNUAL REPORT TO SHAREHOLDERS 101 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

income tax rates. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(In Millions)	2011			2010
Balance at January 1	$	89.9		$	88.9
Additions for Tax Positions Taken in Current Year		–			.2
Additions for Tax Positions Taken in Prior Years		2.2			7.1
Reductions for Tax Positions Taken in Prior Years		(5.2	)		(6.0	)
Reductions Resulting from Expiration of Statutes		(.9	)		(.3	)
Reductions Resulting from Settlements with Taxing Authorities		(68.2	)		–
Balance at December 31	$	17.8		$	89.9

As part of its audit of federal tax returns filed from 1997-2004, the Internal Revenue Service (IRS) challenged the Corporation’s tax position with respect to certain structured leasing transactions and proposed to disallow certain tax deductions and assess related interest and penalties. In November 2011, the Corporation reached a settlement agreement with the IRS Appeals Office regarding all remaining disputed structured leasing transactions.

Included in unrecognized tax benefits at January 1, 2011 were $66.7 million of U.S. federal and state tax positions related to leveraged leasing tax deductions. As a result of the settlement agreement reached in 2011, this balance was fully eliminated as of December 31, 2011. Other unrecognized tax benefits had net decreases of $5.4 million, resulting in a remaining balance of $17.8 million at December 31, 2011. It is possible that changes in the amount of unrecognized tax benefits could occur in the next 12 months due to changes in judgment related to recognition or measurement, settlements with taxing authorities, or expiration of statute of limitations. Management does not believe that future changes, if any, would have a material effect on the consolidated financial position or liquidity of Northern Trust, although they could have a material effect on operating results for a particular period.

GAAP requires a reallocation of lease income from the inception of a leveraged lease if during its term the expected timing of lease related income tax deductions is revised. The impacts of revisions to management’s assumptions are recorded through earnings in the period in which the assumptions change. As a result of the settlement agreement reached in 2011, revisions were made to cash flow estimates regarding the timing and amount of leveraged lease income tax deductions which increased interest income by $7.0 million and reduced the provision for income taxes, inclusive of interest and penalties, by $4.7 million for the year ended December 31, 2011. For the year ended December 31, 2010, revised cash flow estimates regarding the timing and amount of leveraged lease income tax deductions reduced interest income by $.9 million and reduced the provision for income taxes, inclusive of interest and penalties, by $.8 million. For the year ended December 31, 2009, revised cash flow estimates regarding the timing and amount of leveraged lease income tax deductions increased interest income by $1.1 million and increased the provision for income taxes, inclusive of interest and penalties, by $1.5 million.

During the years ended December 31, 2011, 2010, and 2009, ($1.2) million, $.4 million, and $1.9 million of interest and penalties, net of tax, were included in the provision for income taxes. As of December 31, 2011 and 2010, the liability for the potential payment of interest and penalties totaled $9.1 million and $27.1 million, net of tax, respectively.

Pre-tax earnings of non-U.S. subsidiaries are subject to U.S. taxation when effectively repatriated. Northern Trust provides income taxes on the undistributed earnings of non-U.S. subsidiaries, except to the extent that those earnings are indefinitely reinvested outside the U.S. Northern Trust elected to indefinitely reinvest $105.9 million, $102.8 million, and $103.5 million of 2011, 2010, and 2009 earnings, respectively, of certain non-U.S. subsidiaries and, therefore, no U.S. deferred income taxes were recorded on those earnings. As of December 31, 2011, the cumulative amount of undistributed pre-tax earnings in these subsidiaries approximated $677.5 million. Based on the current U.S. federal income tax rate, an additional deferred tax liability of approximately $154.5 million would have been required as of December 31, 2011 if Northern Trust had not elected to indefinitely reinvest those earnings.

The components of the consolidated provision for income taxes for each of the three years ended December 31 are as follows:

(In Millions)	2011		2010		2009
Current Tax Provision:
Federal	$	113.6	$	220.0	$	124.6
State		15.1		21.8		(7.1	)
Non-U.S.		54.2		66.4		89.7
Total		182.9		308.2		207.2
Deferred Tax Provision:
Federal		84.0		6.2		162.9
State		11.3		5.2		24.1
Non-U.S.		1.9		.7		(3.2	)
Total		97.2		12.1		183.8
Provision for Income Taxes	$	280.1	$	320.3	$	391.0

2011 ANNUAL REPORT TO SHAREHOLDERS 102 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In addition to the amounts shown above, tax charges (benefits) have been recorded directly to stockholders’ equity for the following items:

(In Millions)	2011			2010			2009
Current Tax Benefit for Employee Stock Options and Other Stock-Based Plans	$	.6		$	(1.2	)	$	(4.2	)
Tax Effect of Other Comprehensive Income		(5.2	)		60.0			64.7

Deferred taxes result from temporary differences between the amounts reported in the consolidated financial statements and the tax bases of assets and liabilities. Deferred tax liabilities and assets have been computed as follows:

	DECEMBER 31
(In Millions)	2011		2010		2009
Deferred Tax Liabilities:
Lease Financing	$	398.2	$	382.4	$	404.6
Software Development		254.9		197.2		180.8
Accumulated Depreciation		48.6		40.7		16.1
Compensation and Benefits		7.1		23.3		9.7
State Taxes, net		52.4		41.7		34.2
Other Liabilities		137.6		41.1		37.1
Gross Deferred Tax Liabilities		898.8		726.4		682.5
Deferred Tax Assets:
Allowance for Credit Losses		114.5		124.7		118.5
Visa Indemnification		—		8.1		19.7
Other Assets		150.0		51.3		74.1
Gross Deferred Tax Assets		264.5		184.1		212.3
Valuation Reserve		—		—		—
Deferred Tax Assets, net of Valuation Reserve		264.5		184.1		212.3
Net Deferred Tax Liabilities	$	634.3	$	542.3	$	470.2

No valuation allowance related to deferred tax assets was recorded at December 31, 2011, 2010, or 2009, as management believes it is more likely that not that the deferred tax assets will be fully realized. At December 31, 2011, Northern Trust had no net operating loss carryforwards.

Note 22 – Employee Benefits

The Corporation and certain of its subsidiaries provide various benefit programs, including defined benefit pension, postretirement health care, and defined contribution plans. A description of each major plan and related disclosures are provided below.

Pension. A noncontributory qualified defined benefit pension plan covers substantially all U.S. employees of Northern Trust. Employees of various European subsidiaries participate in local defined benefit plans, although those plans were closed in prior years to new participants and have been closed to future benefit accruals, effective in 2010.

Northern Trust also maintains a noncontributory supplemental pension plan for participants whose retirement benefit payments under the U.S. plan are expected to exceed the limits imposed by federal tax law. Northern Trust has a nonqualified trust, referred to as a “Rabbi” Trust, used to hold assets designated for the funding of benefits in excess of those permitted in certain of its qualified retirement plans. This arrangement offers participants a degree of assurance for payment of benefits in excess of those permitted in the related qualified plans. As the “Rabbi” Trust assets remain subject to the claims of creditors and are not the property of the employees, they are accounted for as corporate assets and are included in other assets in the consolidated balance sheet. Total assets in the “Rabbi” Trust related to the nonqualified pension plan at December 31, 2011 and 2010 amounted to $71.4 million and $65.9 million, respectively.

Benefit levels under the U.S. qualified and supplemental plans have been modified by Plan Amendments effective April 1, 2012. The amendments reduced the projected benefit obligations for these plans by $7.7 million at December 31, 2011. U.S. qualified and supplemental plan expense in 2012 and future periods will reflect the modified benefit levels.

2011 ANNUAL REPORT TO SHAREHOLDERS 103 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables set forth the status, amounts included in AOCI, and net periodic pension expense of the U.S. plan, non-U.S. plans, and supplemental plan for 2011, 2010 and 2009. Prior service costs are being amortized on a straight-line basis over 10 years for the U.S. plan and 9 years for the supplemental plan.

PLAN STATUS

	U.S. PLAN						NON-U.S. PLANS						SUPPLEMENTAL PLAN
($ In Millions)	2011			2010			2011			2010			2011			2010
Accumulated Benefit Obligation	$	797.6		$	659.0		$	127.1		$	116.1		$	89.9		$	79.6
Projected Benefit		904.6			762.9			127.1			116.1			100.3			86.9
Plan Assets at Fair Value		1,094.1			982.1			123.3			122.2			–			–
Funded Status at December 31	$	189.5		$	219.2		$	(3.8	)	$	6.1		$	(100.3	)	$	(86.9	)
Weighted-Average Assumptions:
Discount Rates		4.75	%		5.50	%		5.02	%		5.58	%		4.75	%		5.50	%
Rate of Increase in Compensation Level		4.02			4.02			N/A			N/A			4.02			4.02
Expected Long-Term Rate of Return on Assets		8.00			8.00			5.28			6.27			N/A			N/A

AMOUNTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME

	U.S. PLAN					NON-U.S. PLANS				SUPPLEMENTAL PLAN
(In Millions)	2011			2010		2011		2010		2011		2010
Net Actuarial Loss	$	490.4		$	382.1	$	24.8	$	16.3	$	66.4	$	56.5
Prior Service Cost		(4.4	)		6.5		–		–		2.7		1.3
Gross Amount in Accumulated Other Comprehensive Income		486.0			388.6		24.8		16.3		69.1		57.8
Income Tax Effect		183.1			142.6		3.7		2.8		26.0		21.1
Net Amount in Accumulated Other Comprehensive Income	$	302.9		$	246.0	$	21.1	$	13.5	$	43.1	$	36.7

NET PERIODIC PENSION EXPENSE

	U.S. PLAN									NON-U.S. PLANS									SUPPLEMENTAL PLAN
($ In Millions)	2011			2010			2009			2011			2010			2009			2011			2010			2009
Service Cost	$	42.8		$	37.9		$	33.1		$	–		$	1.8		$	3.8		$	3.2		$	3.2		$	2.6
Interest Cost		40.8			36.9			33.4			6.5			6.9			6.7			4.4			4.8			3.9
Expected Return on Plan Assets		(78.8	)		(73.2	)		(59.7	)		(8.3	)		(8.3	)		(8.1	)		N/A			N/A			N/A
Gain on Plan Curtailment		–			–			–			–			(2.2	)		–			–			–			–
Amortization:
Net Loss		26.0			20.0			12.2			.2			.5			1.3			5.6			6.0			3.9
Prior Service Cost		1.6			1.6			1.2			–			–			–			0.4			.1			(.1	)
Net Periodic Pension Expense (Benefit)	$	32.4		$	23.2		$	20.2		$	(1.6	)	$	(1.3	)	$	3.7		$	13.6		$	14.1		$	10.3
Weighted-Average Assumptions:
Discount Rates		5.50	%		6.00	%		6.25	%		5.58	%		6.05	%		5.80	%		5.50	%		6.00	%		6.25	%
Rate of Increase in Compensation Level		4.02			4.02			4.02			N/A			4.31			4.15			4.02			4.02			4.02
Expected Long-Term Rate of Return on Assets		8.00			8.00			8.00			6.27			6.60			6.66			N/A			N/A			N/A

Pension expense for 2012 is expected to include approximately $41.1 million and $.1 million related to the amortization of net loss and prior service cost balances, respectively, from AOCI.

2011 ANNUAL REPORT TO SHAREHOLDERS 104 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CHANGE IN BENEFIT OBLIGATION

	U.S. PLAN						NON-U.S. PLANS						SUPPLEMENTAL PLAN
(In Millions)	2011			2010			2011			2010			2011			2010
Beginning Balance	$	762.9		$	642.0		$	116.1		$	134.4		$	86.9		$	85.9
Service Cost		42.8			37.9			–			1.8			3.2			3.2
Interest Cost		40.8			36.9			6.5			6.9			4.4			4.8
Actuarial Loss (Gain)		108.8			80.7			8.0			(2.1	)		15.4			5.0
Plan Curtailment		–			–			–			(11.4	)		–			–
Benefits Paid		(41.3	)		(34.6	)		(2.5	)		(5.9	)		(11.3	)		(12.0	)
Plan Amendment		(9.4	)		–			–			–			1.7			–
Foreign Exchange Rate Changes		–			–			(1.0	)		(7.6	)		–			–
Ending Balance	$	904.6		$	762.9		$	127.1		$	116.1		$	100.3		$	86.9

ESTIMATED FUTURE BENEFIT PAYMENTS

(In Millions)	U.S. PLAN		NON-U.S. PLANS		SUPPLEMENTAL PLAN
2012	$	65.6	$	1.9	$	12.5
2013		71.1		2.0		11.6
2014		71.7		2.2		9.1
2015		75.6		2.6		9.0
2016		78.2		2.8		9.1
2017-2021		400.5		17.5		48.5

CHANGE IN PLAN ASSETS

	U.S. PLAN						NON-U.S. PLANS
(In Millions)	2011			2010			2011			2010
Fair Value of Assets at Beginning of Period	$	982.1		$	821.9		$	122.2		$	113.7
Actual Return on Assets		53.3			126.8			4.5			9.3
Employer Contributions		100.0			68.0			–			10.4
Benefits Paid		(41.3	)		(34.6	)		(2.5	)		(5.9	)
Foreign Exchange Rate Changes		–			–			(.9	)		(5.3	)
Fair Value of Assets at End of Period	$	1,094.1		$	982.1		$	123.3		$	122.2

The minimum required contribution for the U.S. qualified plan in 2012 is estimated to be zero and the maximum deductible contribution is estimated at $175.0 million.

A total return investment strategy approach is employed for Northern Trust’s U.S. pension plan whereby a mix of U.S. and non-U.S. equities, fixed income and alternative asset investments are used to maximize the long-term return of plan assets for a prudent level of risk. This is accomplished by diversifying the portfolio across various asset classes, with the goal of reducing volatility of return, and among various issuers of securities to reduce principal risk. Northern Trust utilizes an asset/liability methodology to determine the investment policies that will best meet its short and long-term objectives. The process is performed by modeling current and alternative strategies for asset allocation, funding policy and actuarial methods and assumptions. The financial modeling uses projections of expected capital market returns and expected volatility of those returns to determine alternative asset mixes having the greatest probability of meeting the plan’s investment objectives. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The intent of this strategy is to minimize plan expenses by outperforming growth in plan liabilities over the long run.

The target allocation of plan assets since November 2008, by major asset category, is 40% U.S. stocks, 21% non-U.S. stocks, 21% long duration fixed income securities, and 18% alternative investments, split between private equity funds (5%), hedge funds (5%), global real estate (5%) and commodities (3%). Equity investments include common stocks that are listed on an exchange and investments in comingled funds that invest primarily in publicly traded equities. Equity investments are diversified across U.S. and non-U.S. stocks and divided by investment style and market capitalization. Fixed income securities held include U.S. treasury securities and investments in comingled funds that invest in a diversified blend of longer duration fixed income securities. Alternative investments, including private equity, hedge funds, global real estate, and commodities, are used judiciously to enhance long-term returns while improving portfolio diversification. Private equity assets consist primarily of investments in limited partnerships that invest in individual companies in the form of non-public equity or non-public debt positions. Direct or co-investment in non-public stock by the plan is prohibited. The plan’s private equity investments are limited to 20% of the total limited partnership and the maximum allowable loss cannot exceed the commitment amount. The plan holds one investment in a hedge fund of funds, which invests, either directly or indirectly, in a diversified portfolio of funds or other pooled investment vehicles.

Investment in global real estate is designed to provide stable income returns and added diversification based upon

2011 ANNUAL REPORT TO SHAREHOLDERS 105 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the historical low correlation between real estate and equity or fixed income investments. The plan’s global real estate assets consist of one collective index fund that invests in a diversified portfolio of global real estate investments, primarily equity securities.

Commodities also improve portfolio diversification as they tend to react to changing economic fundamentals differently than traditional financial assets. Because commodity prices typically rise with rising inflation, investments in commodities are also likely to provide an offset against inflation. Commodity assets include an investment in one mutual fund that invests in commodity-linked derivative instruments, backed by a portfolio of fixed income securities.

Though not a primary strategy for meeting the plan’s objectives, derivatives may be used from time to time, depending on the nature of the asset class to which they relate, to gain market exposure in an efficient and timely manner, to hedge foreign currency exposure or interest rate risk, or to alter the duration of a portfolio. There were no derivatives held by the plan at December 31, 2011 or 2010.

Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies, and quarterly investment portfolio reviews. Standards used to evaluate the plan’s investment manager performance include, but are not limited to, the achievement of objectives, operation within guidelines and policy, and comparison against a relative benchmark. In addition, each manager of the investment funds held by the plan is ranked against a universe of peers and compared to a relative benchmark. Total plan performance analysis includes an analysis of the market environment, asset allocation impact on performance, risk and return relative to other ERISA plans, and manager impacts upon plan performance.

The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies used by Northern Trust for plan assets measured at fair value.

Level 1 – Quoted, active market prices for identical assets or liabilities. The U.S. pension plan’s Level 1 investments include foreign and domestic common stocks and mutual and collective trust funds. Foreign and domestic common stocks are exchange traded and are valued at the closing price reported by the respective exchanges on the day of valuation. Share prices of the funds, referred to as a fund’s Net Asset Value (NAV), are calculated daily based on the closing market prices and accruals of securities in the fund’s total portfolio (total value of the fund) divided by the number of fund shares currently issued and outstanding. Redemptions of the mutual and collective trust fund shares occur by contract at the respective fund’s redemption date NAV.

Level 2 – Observable inputs other than Level 1 prices, such as quoted active market prices for similar assets or liabilities, quoted prices for identical or similar assets in inactive markets, and model-derived valuations in which all significant inputs are observable in active markets. The U.S. pension plan’s Level 2 assets include U.S. government securities and mutual and collective trust funds. U.S. government securities are valued by a third party pricing source that incorporates market observable data such as reported sales of similar securities, broker quotes and reference data. The inputs used are based on observable data in active markets. The NAVs of the funds are calculated monthly based on the closing market prices and accruals of securities in the fund’s total portfolio (total value of the fund) divided by the number of fund shares currently issued and outstanding. Redemptions of the mutual and collective trust fund shares occur by contract at the respective fund’s redemption date NAV.

Level 3 inputs – Valuation techniques in which one or more significant inputs are unobservable in the marketplace. The U.S. pension plan’s Level 3 assets are private equity and hedge funds which invest in underlying groups of investment funds or other pooled investment vehicles that are selected by the respective funds’ investment managers. The investment funds and the underlying investments held by these investment funds are valued at fair value. In determining the fair value of the underlying investments of each fund, the fund’s investment manager or general partner takes into account the estimated value reported by the underlying funds as well as any other considerations that may, in their judgment, increase or decrease such estimated value.

While Northern Trust believes its valuation methods for plan assets are appropriate and consistent with other market participants, the use of different methodologies or assumptions, particularly as applied to Level 3 assets, could have a material effect on the computation of their estimated fair values.

2011 ANNUAL REPORT TO SHAREHOLDERS 106 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the fair values of Northern Trust’s U.S. pension plan assets, by major asset category, and their level within the fair value hierarchy defined by GAAP as of December 31, 2011 and 2010.

	DECEMBER 31, 2011
(In Millions)	LEVEL  1		LEVEL  2		LEVEL  3		TOTAL
Equity Securities
U.S.	$	195.7	$	197.7	$	–	$	393.4
Non-U.S.		139.7		35.0		–		174.7
Fixed Income – U.S. Government		–		292.1		–		292.1
Alternative Investments
Private Equity Funds		–		–		45.5		45.5
Hedge Fund		–		–		29.2		29.2
Global Real Estate Fund		–		38.1		–		38.1
Commodity Linked Fund		34.3		–		–		34.3
Cash and Other		86.8		–		–		86.8
Total Assets at Fair Value	$	456.5	$	562.9	$	74.7	$	1,094.1

	DECEMBER 31, 2010
(In Millions)	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Equity Securities
U.S.	$	185.2	$	221.7	$	–	$	406.9
Non-U.S.		169.9		40.6		–		210.5
Fixed Income – U.S. Government		–		207.8		–		207.8
Alternative Investments
Private Equity Funds		–		–		33.5		33.5
Hedge Fund		–		–		29.7		29.7
Global Real Estate Fund		–		41.6		–		41.6
Commodity Linked Fund		39.3		–		–		39.3
Cash and Other		12.8		–		–		12.8
Total Assets at Fair Value	$	407.2	$	511.7	$	63.2	$	982.1

The following table presents the changes in Level 3 assets for the year ended December 31, 2011 and 2010.

	PRIVATE EQUITY FUNDS						HEDGE FUND
(In Millions)	2011			2010			2011			2010
Fair Value at January 1,	$	33.5		$	28.8		$	29.7		$	28.7
Actual Return on Plan Assets		7.8			2.9			(0.5	)		1.0
Purchases		7.0			4.5			–			–
Sales		(2.8	)		(2.7	)		–			–
Settlements		–			–			–			–
Fair Value at December 31,	$	45.5		$	33.5		$	29.2		$	29.7

Note: The return on plan assets represents the change in the unrealized gain (or loss) on assets still held at December 31.

A building block approach is employed for Northern Trust’s U.S. pension plan in determining the long-term rate of return for plan assets. Historical markets and long-term historical relationships between equities, fixed income and other asset classes are studied using the widely-accepted capital market principle that assets with higher volatility generate a greater return over the long-run. Current market factors such as inflation expectations and interest rates are evaluated before long-term capital market assumptions are determined. The long-term portfolio rate of return is established with consideration given to diversification and rebalancing. The rate is reviewed against peer data and historical returns to verify the return is reasonable and appropriate. Based on this approach and the plan’s target asset allocation, the expected long-term rate of return on assets as of the plan’s December 31, 2011 measurement date was set at 8.00%.

Postretirement Health Care. Northern Trust maintains an unfunded postretirement health care plan. Employees retiring at age 55 or older under the provisions of the U.S. defined benefit plan who have attained 15 years of service may be eligible for subsidized postretirement health care coverage. The cost of this benefit is no longer subsidized by Northern Trust for new employee hires or employees who were under age 40 at December 31, 2002, employees who have not attained 15 years of service by their termination date and employees who were not at least age 55 with at least 15 years of service on December 31, 2011. The provisions of this plan may be changed further at the discretion of Northern Trust, which also reserves the right to terminate these benefits at any time.

The following tables set forth the postretirement health care plan status and amounts included in AOCI at December 31, the net periodic postretirement benefit cost of the plan for 2011 and 2010, and the change in the accumulated postretirement benefit obligation during 2011 and 2010.

PLAN STATUS

(In Millions)	2011		2010
Accumulated Postretirement Benefit Obligation at Measurement Date:
Retirees and Dependents	$	31.8	$	29.4
Actives Eligible for Benefits		22.7		14.9
Actives Not Yet Eligible		–		7.0
Net Postretirement Benefit Liability	$	54.5	$	51.3

AMOUNTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME

(In Millions)	2011			2010
Net Actuarial Loss	$	10.9		$	13.0
Prior Service Benefit		(8.0	)		(13.0	)
Gross Amount in Accumulated Other Comprehensive Income		2.9			–
Income Tax Effect		1.1			–
Net Amount in Accumulated Other Comprehensive Income	$	1.8		$	–

2011 ANNUAL REPORT TO SHAREHOLDERS 107 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NET PERIODIC POSTRETIREMENT BENEFIT EXPENSE

(In Millions)	2011			2010			2009
Service Cost	$	.4		$	.8		$	1.7
Interest Cost		2.8			2.8			3.7
Amortization
Net Loss		1.6			2.0			.5
Transition Obligation		–			–			.5
Prior Service Benefit		(5.2	)		(5.2	)		(.1	)
Net Periodic Postretirement Benefit Expense	$	(.4	)	$	.4		$	6.3

CHANGE IN ACCUMULATED POSTRETIREMENT

BENEFIT OBLIGATION

(In Millions)	2011			2010
Beginning Balance	$	51.3		$	49.9
Service Cost		.4			.8
Interest Cost		2.8			2.8
Actuarial Loss (Gain)		(.2	)		(.6	)
Gross Benefits Paid		(.4	)		(2.1	)
Medicare Subsidy		.6			.5
Plan Change		–			–
Ending Balance	$	54.5		$	51.3

ESTIMATED FUTURE BENEFIT PAYMENTS

(In Millions)	TOTAL POSTRETIREMENT MEDICAL BENEFITS		EXPECTED PRESCRIPTION DRUG SUBSIDY AMOUNT
2012	$	3.7	$	(.6	)
2013		4.2		(.7	)
2014		4.5		(.8	)
2015		4.6		(.9	)
2016		4.7		(1.0	)
2017-2021		22.4		(5.0	)

Net periodic postretirement benefit expense for 2012 is expected to include approximately $1.1 million related to the amortization from AOCI of the net loss, and to be decreased by $5.0 million related to the amortization from AOCI of the prior service benefit.

The weighted average discount rate used in determining the accumulated postretirement benefit obligation was 4.75% at December 31, 2011 and 5.50% at December 31, 2010. For measurement purposes, an 8.50% annual increase in the cost of covered medical benefits and a 9.00% annual increase in the cost of covered prescription drug benefits were assumed for 2011. These rates are assumed to gradually decrease until they reach 5.00% in 2018 for medical and 2019 for prescription drugs. The health care cost trend rate assumption has an effect on the amounts reported. For example, increasing or decreasing the assumed health care trend rate by one percentage point in each year would have the following effect.

(In Millions)	1–PERCENTAGE POINT INCREASE		1–PERCENTAGE POINT DECREASE
Effect on Postretirement Benefit Obligation	$	2.2	$	(2.5	)
Effect on Total Service and Interest Cost Components		.1		(.1	)

Defined Contribution Plans. The Corporation and its subsidiaries maintain various defined contribution plans covering substantially all employees. The Corporation’s contribution includes a matching component and a component contingent upon predetermined corporate performance-based objectives being met. The expense associated with defined contribution plans is charged to employee benefits and totaled $39.3 million in 2011, $46.5 million in 2010, and $47.0 million in 2009.

Note 23 – Share-Based Compensation Plans

Northern Trust recognizes as compensation expense the grant-date fair value of stock options and other equity based compensation granted to employees within the income statement using a fair value-based method.

Total compensation expense for share-based payment arrangements and the associated tax impacts were as follows for the periods presented:

	FOR THE YEAR ENDED DECEMBER 31,
(In Millions)	2011		2010		2009
Stock Options	$	34.1	$	27.6	$	27.9
Stock and Stock Unit Awards		36.2		25.1		19.7
Performance Stock Units		—		—		(22.2	)
Total Share-Based Compensation Expense	$	70.3	$	52.7	$	25.4
Tax Benefits Recognized	$	26.5	$	19.3	$	9.3

As of December 31, 2011, there was $122.5 million of unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Corporation’s stock-based compensation plans. That cost is expected to be recognized as expense over a weighted-average period of approximately 3 years. Share-based compensation

2011 ANNUAL REPORT TO SHAREHOLDERS 108 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

expense in 2009 includes the reversal of accruals related to performance stock units granted in 2008 and 2007 which were not expected to vest.

The Amended and Restated Northern Trust Corporation 2002 Stock Plan (the Plan) is administered by the Compensation and Benefits Committee (Committee) of the Board of Directors. All employees of the Corporation and its subsidiaries and all directors of the Corporation are eligible to receive awards under the Plan. The Plan provides for the grant of stock options, stock appreciation rights, stock awards, stock units and performance shares. As detailed below, grants are outstanding under both the Plan and The Northern Trust Corporation Amended 1992 Incentive Stock Plan (1992 Plan), a predecessor plan. The total number of shares of the Corporation’s common stock authorized for issuance under the Plan is 40,000,000. As of December 31, 2011, shares available for future grant under the Plan totaled 12,423,266.

The following describes Northern Trust’s share-based payment arrangements and applies to awards under the Plan and the 1992 Plan, as applicable.

Stock Options. Stock options consist of options to purchase common stock at prices not less than 100% of the fair value thereof on the date the options are granted. Options have a maximum ten-year life and generally vest and become exercisable in one to four years after the date of grant. In addition, all options may become exercisable upon a “change of control” as defined in the Plan or the 1992 Plan. All options terminate at such time as determined by the Committee and as provided in the terms and conditions of the respective option grants.

The weighted-average assumptions used for options granted during the years ended December 31 are as follows:

	2011			2010			2009
Expected Term (in Years)		7.7			7.4			6.8
Dividend Yield		4.56	%		4.38	%		3.51	%
Expected Volatility		43.2			41.5			40.7
Risk Free Interest Rate		2.94			2.64			2.46

The expected term of options represents the period of time options granted are expected to be outstanding based primarily on the historical exercise behavior attributable to previous option grants. Dividend yield represents the estimated yield from dividends paid on the Corporation’s common stock over the expected term of the options. Expected volatility is determined based on the historical daily volatility of Northern Trust’s stock price over the most recent period equal to the expected term of the option. The risk free interest rate is based on the U.S. Treasury yield curve at the time of grant for a period equal to the expected term of the options granted.

The following table provides information about stock options granted, vested, and exercised in the years ended December 31.

(In Millions, Except Per Share Information)	2011		2010		2009
Weighted Average Grant-Date Per Share Fair Value of Stock Options Granted	$	15.26	$	14.45	$	16.94
Grant-Date Fair Value of Stock Options Vested		27.9		26.7		18.4
Stock Options Exercised:
Intrinsic Value as of Exercise Date		1.5		5.0		11.3
Cash Received		5.4		16.9		38.9
Tax Deduction Benefits Realized		.5		1.7		3.6

The following is a summary of changes in nonvested stock options for the year ended December 31, 2011.

NONVESTED SHARES	SHARES			WEIGHTED- AVERAGE GRANT- DATE FAIR VALUE PER SHARE
Nonvested as December 31, 2010		4,735,065		$	15.89
Granted		2,380,933			15.26
Vested		(1,713,989	)		16.30
Forfeited or Cancelled		(53,662	)		15.43
Nonvested at December 31, 2011		5,348,347		$	15.48

2011 ANNUAL REPORT TO SHAREHOLDERS 109 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of the status of stock options under the Plan and the 1992 Plan at December 31, 2011, and changes during the year then ended, are presented in the table below.

($ In Millions Except Per Share Information)	SHARES			WEIGHTED AVERAGE EXERCISE PRICE PER  SHARE		WEIGHTED AVERAGE REMAINING CONTRACTUAL TERM (YEARS)		AGGREGATE INTRINSIC VALUE
Options Outstanding, December 31, 2010		16,407,354		$	53.78
Granted		2,380,933			51.73
Exercised		(149,385	)		38.66
Forfeited, Expired or Cancelled		(1,637,487	)		66.65
Options Outstanding, December 31, 2011		17,001,415		$	52.39		5.0	$	9.1
Options Exercisable, December 31, 2011		11,653,068		$	51.80		3.5	$	9.0

Stock and Stock Unit Awards. Stock or stock unit awards may be granted by the Committee to participants which entitle them to receive a payment in the Corporation’s common stock or cash under the terms of the Plan and such other terms and conditions as the Committee deems appropriate. Each stock unit provides the recipient the opportunity to receive one share of stock for each stock unit that vests. The stock units granted in 2011 predominately vest at a rate equal to 50% on the third anniversary date of the grant and 50% on the fourth anniversary date. Stock and stock unit grants totaled 995,176, 1,223,539, and 646,549, with weighted average grant-date fair values of $50.79, $50.67, and $56.07 per share, for the years ended December 31, 2011, 2010, and 2009, respectively. The total fair value of shares vested during the years ended December 31, 2011, 2010, and 2009, was $7.1 million, $19.1 million, and $25.6 million, respectively.

A summary of the status of outstanding stock and stock unit awards under the Plan and the 1992 Plan at December 31, 2011, and changes during the year then ended, is presented in the table below.

($ In Millions)	NUMBER			AGGREGATE INTRINSIC VALUE
Stock and Stock Unit Awards Outstanding, December 31, 2010		2,144,510		$	118.8
Granted		995,176
Distributed		(179,812	)
Forfeited		(45,309	)
Stock and Stock Unit Awards Outstanding, December 31, 2011		2,914,565		$	115.6
Units Convertible, December 31, 2011		105,498		$	4.2

The following is a summary of nonvested stock and stock unit awards at December 31, 2011, and changes during the year then ended.

NONVESTED STOCK AND STOCK UNITS	NUMBER			WEIGHTED AVERAGE GRANT- DATE FAIR VALUE PER UNIT		WEIGHTED AVERAGE REMAINING VESTING TERM (YEARS)
Nonvested at December 31, 2010		2,038,244		$	54.41		2.7
Granted		995,176			50.79
Vested		(179,044	)		66.81
Forfeited		(45,309	)		54.99
Nonvested at December 31, 2011		2,809,067		$	52.33		2.4

Director Stock Awards. In 2011, stock units with a total value of $1.1 million (22,188 stock units) that vest on the date of the 2012 annual meeting of the Corporation’s stockholders were granted to non-employee directors. In 2010, stock units with a total value of $1.1 million (21,131 stock units) that vested on the date of the 2011 annual meeting of the Corporation’s stockholders were granted to non-employee directors. Stock units granted to non-employee directors do not have voting rights. Each stock unit entitles a director to one share of common stock at vesting, unless a director elects to defer receipt of the shares. Directors may elect to defer the payment of their annual stock unit grant and cash-based compensation until termination of services as director. Amounts deferred are converted into stock units representing shares of common stock of the Corporation. Distributions of deferred stock units are made in stock. Distributions of the

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stock unit account that relate to cash-based compensation are made in cash based on the fair value of the stock units at the time of distribution.

Note 24 – Cash-Based Compensation Plans

Various incentive plans provide for cash incentives and bonuses to selected employees based upon accomplishment of corporate net income objectives, business unit goals, and individual performance. The estimated contributions to these plans are charged to compensation expense and totaled $176.7 million in 2011, $168.4 million in 2010, and $168.9 million in 2009.

Note 25 – Contingent Liabilities

Legal Proceedings. In the normal course of business, the Corporation and its subsidiaries are routinely defendants in or parties to a number of pending and threatened legal actions, including, but not limited to, actions brought on behalf of various claimants or classes of claimants, regulatory matters, employment matters, and challenges from tax authorities regarding the amount of taxes due. In certain of these actions and proceedings, claims for substantial monetary damages or adjustments to recorded tax liabilities are asserted.

Based on current knowledge, after consultation with legal counsel and after taking into account current accruals, management does not believe that losses, if any, arising from pending litigation or threatened legal actions or regulatory matters will have a material adverse effect on the consolidated financial position or liquidity of the Corporation, although such matters could have a material adverse effect on the Corporation’s operating results for a particular period.

Under GAAP, (i) an event is “probable” if the “future event or events are likely to occur”; (ii) an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely”; and (iii) an event is “remote” if “the chance of the future event or events occurring is slight”. Thus, references to the upper end of the range of reasonably possible loss for cases in which the Corporation is able to estimate a range of reasonably possible loss mean the upper end of the range of loss for cases for which the Corporation believes the risk of loss is more than remote.

For the reasons set out in this paragraph, the outcome of some matters is inherently difficult to predict and/or the range of loss cannot be reasonably estimated. This may be the case in matters that (i) will be decided by a jury, (ii) are in early stages, (iii) involve uncertainty as to the likelihood of a class being certified or the ultimate size of the class, (iv) are subject to appeals or motions, (v) involve significant factual issues to be resolved, including with respect to the amount of damages, or (vi) seek very large damages based on novel and complex damage and liability legal theories. Accordingly, the Corporation cannot reasonably estimate the eventual outcome of these pending matters, the timing of their ultimate resolution, or what the eventual loss, fines or penalties, if any, related to each pending matter will be.

In accordance with applicable accounting guidance, the Corporation records accruals for litigation and regulatory matters when those matters present loss contingencies that are both probable and reasonably estimable. When loss contingencies are not both probable and reasonably estimable, the Corporation does not record accruals. No material accruals have been recorded for pending litigation or threatened legal actions or regulatory matters.

For a limited number of the matters for which a loss is reasonably possible in future periods, whether in excess of an accrued liability or where there is no accrued liability, the Corporation is able to estimate a range of possible loss. As of December 31, 2011, the Corporation has estimated the upper end of the range of reasonably possible losses for these matters to be approximately $32 million in the aggregate. This aggregate amount of reasonably possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions, and known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results will vary significantly from the current estimate.

In certain other pending matters, there may be a range of reasonably possible losses (including reasonably possible losses in excess of amounts accrued) that cannot be reasonably estimated for the reasons described above. The following is a description of the nature of certain of these matters.

As previously disclosed, a number of participants in our securities lending program, which is associated with the Corporation’s asset servicing business, have commenced either individual lawsuits or putative class actions in which they claim, among other things, that we failed to exercise prudence in the investment management of the collateral received from the borrowers of the securities, resulting in losses that they seek to recover. The cases assert various contractual, statutory and common law claims, including claims for breach of fiduciary duty under common law and under the Employee Retirement Income Security Act (ERISA). Based on our review of these matters, we believe we operated our securities lending program prudently and appropriately. The Corporation has also been cooperating fully with an SEC investigation related to our securities lending program. At this

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stage of these proceedings, it is not possible for management to assess the probability of a material adverse outcome or reasonably estimate the amount of any potential loss.

On August 24, 2010, a lawsuit (hereinafter referred to as the “Securities Class Action”) was filed in federal court in the Northern District of Illinois against the Corporation and three of its present or former officers, including the present and former Chief Executive Officers of the Corporation, on behalf of a purported class of purchasers of Corporation stock during the period from October 17, 2007 to October 20, 2009. The amended complaint alleges that during the purported class period the defendants violated Sections 10(b) and 20(a) of the Exchange Act by allegedly taking insufficient provisions for credit losses with respect to the Corporation’s real estate loan portfolio and failing to make sufficient disclosures regarding its securities lending business. Plaintiff seeks compensatory damages in an unspecified amount. At this stage of the suit, it is not possible for management to assess the probability of a material adverse outcome or reasonably estimate the amount of any potential loss.

On September 7, 2010, a shareholder derivative lawsuit, purportedly brought on behalf of the Corporation, was filed in the Circuit Court of Cook County, Illinois against a number of the Corporation’s current and former officers and directors. The Corporation is named as a nominal defendant. The complaint asserts that the individual defendants violated their fiduciary duties to the Corporation based upon substantially the same allegations made in the Securities Class Action complaint. Certain individual defendants are also alleged to have sold some of their holdings of Northern Trust Corporation stock while in possession of material nonpublic information. Plaintiff seeks compensatory damages in an unspecified amount from the individual defendants on behalf of the Corporation. The only relief sought against the Corporation is an order requiring the implementation of certain corporate governance procedures. On December 20, 2011, the court granted the Corporation’s motion to dismiss the derivative lawsuit but gave plaintiff leave to file an amended complaint. Plaintiff elected, instead, to enter into an agreed order staying the derivative suit until the judge in the Securities Class Action rules on the Corporation’s motion to dismiss that complaint.

Visa Membership. Northern Trust, as a member of Visa U.S.A. Inc. (Visa U.S.A.) and in connection with the 2007 initial public offering of Visa, Inc. (Visa), received shares of restricted stock in Visa, a portion of which was redeemed pursuant to a mandatory redemption. The proceeds of the redemption totaled $167.9 million and were recorded as a gain in 2008. The remaining Visa shares held by Northern Trust are recorded at their original cost basis of zero and have restrictions as to their sale or transfer.

Northern Trust, in conjunction with other member banks of Visa U.S.A., is obligated to indemnify Visa for losses resulting from certain indemnified litigation involving Visa and has been required to recognize, at its estimated fair value in accordance with GAAP, a guarantee liability arising from such litigation that has not yet settled.

During 2007, Northern Trust recorded charges and corresponding liabilities of $150 million relating to Visa indemnified litigation. Subsequently, Visa established an escrow account to cover the settlements of, or judgments in, indemnified litigation. The fundings by Visa of its escrow account have resulted in reductions of Northern Trust’s Visa related indemnification liability and of the future realization of the value of outstanding shares of Visa common stock held by Northern Trust as a member bank of Visa U.S.A. Reductions of Northern Trust’s indemnification liability totaling $23.1 million, $33.0 million, and $17.8 million were recorded in 2011, 2010, and 2009, respectively, which combined with a $76.1 million reduction recorded in 2008, fully eliminated the indemnification liability as of December 31, 2011. Northern Trust’s net Visa related indemnification liability totaled $23.1 million at December 31, 2010.

While the ultimate resolution of outstanding Visa related litigation is highly uncertain and the estimation of any potential losses is highly judgmental, Northern Trust anticipates that the value of its remaining shares of Visa stock will be more than adequate to offset any remaining indemnification obligations related to Visa litigation.

Contingent Purchase Consideration. As discussed in further detail in Note 11 – Goodwill and Other Intangibles, in connection with the acquisitions consummated in 2011, contingent consideration was recorded relating to certain performance-related purchase price adjustments. The fair value of the contingent consideration at December 31, 2011 totaled $56.8 million.

Note 26 – Derivative Financial Instruments

Northern Trust is a party to various derivative financial instruments that are used in the normal course of business to meet the needs of its clients; as part of its trading activity for its own account; and as part of its risk management activities. These instruments include foreign exchange contracts, interest rate contracts, and credit default swap contracts.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Northern Trust’s primary risks associated with these instruments is the possibility that interest rates, foreign exchange rates, or credit spreads could change in an unanticipated manner, resulting in higher costs or a loss in the underlying value of the instrument. These risks are mitigated by establishing limits, monitoring the level of actual positions taken against such established limits, and monitoring the level of any interest rate sensitivity gaps created by such positions. When establishing position limits, market liquidity and volatility, as well as experience in each market, are all taken into account.

The estimated credit risk associated with derivative instruments relates to the failure of the counterparty and the failure of Northern Trust to pay based on the contractual terms of the agreement, and is generally limited to the unrealized fair value gains and losses on these instruments, respectively. The amount of credit risk will increase or decrease during the lives of the instruments as interest rates, foreign exchange rates, or credit spreads fluctuate. This risk is controlled by limiting such activity to an approved list of counterparties and by subjecting such activity to the same credit and quality controls as are followed in lending and investment activities. Credit Support Annex agreements are currently in place with a number of counterparties which mitigate the aforementioned credit risk associated with derivative activity conducted with those counterparties by requiring that significant net unrealized fair value gains be supported by collateral placed with Northern Trust.

All derivative financial instruments, whether designated as hedges or not, are recorded on the consolidated balance sheet at fair value within other assets or other liabilities. As noted in the discussions below, the manner in which changes in the fair value of a derivative is accounted for in the consolidated statement of income depends on whether the contract has been designated as a hedge and qualifies for hedge accounting under GAAP. Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting agreements exist between Northern Trust and the counterparty. Derivative assets and liabilities recorded on the consolidated balance sheet were each reduced by $2,023.6 million and $1,818.2 million as of December 31, 2011 and 2010, respectively, as a result of master netting agreements in place. Derivative assets and liabilities recorded at December 31, 2011 also reflect reductions of $220.1 million and $257.4 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties. This compares with reductions of derivative assets and liabilities of $2,622.3 million and $2,962.2 million, respectively, at December 31, 2010. Additional cash collateral received from and deposited with derivative counterparties totaling $72.3 million and $47.8 million, respectively, of as of December 31, 2011, and $9.9 million and $.5 million, respectively, as of December 31, 2010, were not offset against derivative assets and liabilities on the consolidated balance sheet as the amounts exceeded the net derivative positions with those counterparties.

Certain master netting agreements Northern Trust enters into with derivative counterparties contain credit-risk-related contingent features in which the counterparty has the option to declare Northern Trust in default and accelerate cash settlement of the net derivative liabilities with the counterparty in the event Northern Trust’s credit rating falls below specified levels. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position was $.2 billion and $3.3 billion on December 31, 2011 and 2010, respectively. Cash collateral amounts deposited with derivative counterparties on those dates included $.1 billion and $2.9 billion, respectively, posted against these liabilities, resulting in a net maximum amount of termination payments that could have been required at December 31, 2011 and 2010 of $121.6 million and $387.1 million, respectively. Accelerated settlement of these liabilities would not have a material effect on the consolidated financial position or liquidity of Northern Trust.

Foreign Exchange Contracts are agreements to exchange specific amounts of currencies at a future date, at a specified rate of exchange. Foreign exchange contracts are entered into primarily to meet the foreign exchange needs of clients. Foreign exchange contracts are also used for trading purposes and risk management. For risk management purposes, Northern Trust currently uses foreign exchange contracts to reduce its exposure to changes in foreign exchange rates relating to certain forecasted non-functional currency denominated revenue and expenditure transactions, foreign currency denominated assets and liabilities, and net investments in non-U.S. affiliates.

Interest Rate Contracts include swap, option, and forward contracts. Interest rate swap contracts involve the exchange of fixed and floating rate interest payment obligations without the exchange of the underlying principal amounts. Northern Trust enters into interest rate swap contracts on behalf of its clients and also utilizes such contracts to reduce or eliminate the exposure to changes in the cash flows or fair value of hedged assets or liabilities due to changes in interest rates. Interest rate option contracts consist of caps, floors, and swaptions, and provide for the transfer or reduction of interest rate risk in exchange for a fee. Northern Trust enters into option contracts primarily as a seller of interest rate protection

2011 ANNUAL REPORT TO SHAREHOLDERS 113 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

to clients. Northern Trust receives a fee at the outset of the agreement for the assumption of the risk of an unfavorable change in interest rates. This assumed interest rate risk is then mitigated by entering into an offsetting position with an outside counterparty. Northern Trust may also purchase option contracts for risk management purposes. Northern Trust enters into interest rate forward contracts to lend funds to a potential borrower at a specified interest rate within a specified period of time. These forward contracts are derivative instruments if the loans that will result from the exercise of the commitments will be held for sale.

Credit Default Swap Contracts are agreements to transfer credit default risk from one party to another in exchange for a fee. Northern Trust enters into credit default swaps with outside counterparties where the counterparty agrees to assume the underlying credit exposure of a specific Northern Trust commercial loan or loan commitment.

Client-Related and Trading Derivative Instruments. In excess of 97% of Northern Trust’s derivatives outstanding at December 31, 2011 and 2010, measured on a notional value basis, relate to client-related and trading activities. These activities consist principally of providing foreign exchange services to clients in connection with Northern Trust’s global custody business. However, in the normal course of business, Northern Trust also engages in trading of currencies for its own account.

The following table shows the notional amounts of client-related and trading derivative financial instruments. Notional amounts of derivative financial instruments do not represent credit risk, and are not recorded in the consolidated balance sheet. They are used merely to express the volume of this activity. Northern Trust’s credit-related risk of loss is limited to the positive fair value of the derivative instrument, which is significantly less than the notional amount.

	DECEMBER 31, 2011						DECEMBER 31, 2010
(In Millions)	NOTIONAL VALUE		FAIR VALUE ASSET		LIABILITY		NOTIONAL VALUE		FAIR VALUE ASSET		LIABILITY
Foreign Exchange Contracts	$	239,901.3	$	3,062.1	$	2,959.8	$	242,007.1	$	5,747.9	$	5,729.9
Interest Rate Option Contracts		100.5		—		—		126.1		.1		.1
Interest Rate Swap Contracts		4,570.4		188.7		184.6		4,301.7		151.2		148.4
Total	$	244,572.2	$	3,250.8	$	3,144.4	$	246,434.9	$	5,899.2	$	5,878.4

Changes in the fair value of client-related and trading derivative instruments are recognized currently in income. The following table shows the location and amount of gains and losses recorded in the consolidated statement of income for the years ended December 31, 2011 and 2010.

	LOCATION OF DERIVATIVE GAIN/(LOSS) RECOGNIZED IN INCOME	AMOUNT OF DERIVATIVE GAIN/ (LOSS) RECOGNIZED IN INCOME
(In Millions)		DECEMBER 31,  2011		DECEMBER 31, 2010
Foreign Exchange Contracts	Foreign Exchange Trading Income	$	324.5	$	382.2
Interest Rate Swap Contracts	Security Commissions and Trading Income		5.9		9.3
Total		$	330.4	$	391.5

Risk Management Instruments. Northern Trust uses derivative instruments to hedge its exposure to foreign currency, interest rate, and credit risk. Certain hedging relationships are formally designated and qualify for hedge accounting under GAAP as fair value, cash flow, or net investment hedges. Other derivatives that are entered into for risk management purposes as economic hedges are not formally designated as hedges and, therefore, are accounted for as trading instruments.

In order to qualify for hedge accounting, a formal assessment is performed on a calendar quarter basis to verify that derivatives used in designated hedging transactions continue to be highly effective in offsetting the changes in fair value or cash flows of the hedged item. If a derivative ceases to be highly effective, matures, is sold, or is terminated, or if a hedged forecasted transaction is no longer expected to occur, hedge accounting is terminated and the derivative is treated as if it were a trading instrument.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table identifies the types and classifications of derivative instruments designated as hedges and used by Northern Trust to manage risk, their notional and fair values, and the respective risks addressed.

			DECEMBER 31, 2011						DECEMBER 31, 2010
					FAIR VALUE						FAIR VALUE
(In Millions)	DERIVATIVE INSTRUMENT	RISK CLASSIFICATION	NOTIONAL VALUE		ASSET		LIABILITY		NOTIONAL VALUE		ASSET		LIABILITY
FAIR VALUE HEDGES
Available for Sale Investment Securities	Interest Rate Swap Contracts	Interest Rate	$	2,172.0	$	2.6	$	46.8	$	860.0	$	4.8	$	14.9
Senior Notes and Long-Term Subordinated Debt	Interest Rate Swap Contracts	Interest Rate		1,100.0		147.0		.5		1,100.0		129.8		.4
CASH FLOW HEDGES
Forecasted Foreign Currency Denominated Transactions	Foreign Exchange Contracts	Foreign Currency		932.9		9.4		27.2		935.3		19.3		15.2
NET INVESTMENT HEDGES
Net Investments in Non-U.S. Affiliates	Foreign Exchange Contracts	Foreign Currency		1,554.7		12.0		1.5		1,390.1		13.0		18.3
Total			$	5,759.6	$	171.0	$	76.0	$	4,285.4	$	166.9	$	48.5

In addition to the above, Sterling denominated debt, totaling $241.2 million and $241.8 million at December 31, 2011 and 2010, respectively, was designated as a hedge of the foreign exchange risk associated with the net investment in certain non-U.S. affiliates.

Derivatives are designated as fair value hedges to limit Northern Trust’s exposure to changes in the fair value of assets and liabilities due to movements in interest rates. For a fair value hedge, changes in the fair value of the derivative instrument and changes in the fair value of the hedged asset or liability attributable to the hedged risk are recorded currently in income.

The following table shows the location and amount of derivative gains and losses recorded in the consolidated statement of income related to fair value hedges for the years ended December 31, 2011 and 2010.

	DERIVATIVE INSTRUMENT	LOCATION OF DERIVATIVE GAIN/(LOSS) RECOGNIZED IN INCOME	AMOUNT OF DERIVATIVE GAIN/ (LOSS) RECOGNIZED IN INCOME
(In Millions)			DECEMBER 31, 2011			DECEMBER 31, 2010
Available for Sale Investment Securities	Interest Rate Swap Contracts	Interest Income		(56.6	)		(13.3	)
Senior Notes and Long-Term Subordinated Debt	Interest Rate Swap Contracts	Interest Expense		194.4			78.8
Total				137.8			65.5

Northern Trust applies the “shortcut” method of accounting, available under GAAP, to substantially all of its fair value hedges, which assumes there is no ineffectiveness in a hedge. As a result, changes recorded in the fair value of the hedged item are equal to the offsetting gain or loss on the derivative and are reflected in the same line item as the gain or loss. For fair value hedges that do not qualify for the “shortcut” method of accounting, Northern Trust utilizes regression analysis, a “long-haul” method of accounting, in assessing whether the hedging relationships are highly effective at inception and on an ongoing basis. There were $.3 million and $.2 million of changes recorded in the fair values of outstanding hedged items for such “long-haul” hedges during the years ended December 31, 2011 and 2010, respectively. There was $.9 million and $.1 million ineffectiveness recorded during the years ended December 31, 2011 and 2010, respectively, and no ineffectiveness recorded during the year ended December 31, 2009, for available for sale investment securities, senior notes, and subordinated debt.

Derivatives are also designated as cash flow hedges in order to minimize the variability in cash flows of earning assets or forecasted transactions caused by movements in interest or foreign exchange rates. The effective portion of changes in the fair value of such derivatives is recognized in AOCI, a component of stockholders’ equity, and there is no change to the accounting for the hedged item. When the hedged forecasted transaction impacts earnings, balances in AOCI are reclassified to the same income or expense classification as the hedged item. Northern Trust assesses effectiveness using regression analysis for cash flow hedges of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

available for sale securities. Ineffectiveness is measured using the hypothetical derivative method. For cash flow hedges of forecasted foreign currency denominated revenue and expenditure transactions, Northern Trust closely matches all terms of the hedged item and the hedging derivative at inception and on an ongoing basis which limits hedge ineffectiveness. To the extent all terms are not perfectly matched, effectiveness is assessed using the dollar-offset method and any ineffectiveness is measured using the hypothetical derivative method. There was no ineffectiveness recognized in earnings for cash flow hedges during the years ended December 31, 2011, 2010 or 2009. As of December 31, 2011, twenty-three months is the maximum length of time over which the exposure to variability in future cash flows of forecasted foreign currency denominated transactions is being hedged.

The following table provides cash flow hedge derivative gains and losses recognized in AOCI and the amounts reclassified to earnings during the years ended December 31, 2011 and 2010.

	2011			2010
(In Millions)	FOREIGN EXCHANGE CONTRACTS			FOREIGN EXCHANGE CONTRACTS
Net Gain/(Loss) Recognized in AOCI	$	(23.6	)	$	46.7
Net Gain/(Loss) Reclassified from AOCI to Earnings
Trust, Investment and Other Servicing Fees		.6			7.2
Other Operating Income		(.1	)		.2
Interest Income		(1.2	)		1.7
Interest Expense		–			.1
Compensation		3.0			(8.2	)
Employee Benefits		.9			(2.1	)
Equipment and Software Expense		–			(.1	)
Occupancy Expense		.5			(1.1	)
Other Operating Expense		1.9			(4.0	)
Total	$	5.6		$	(6.3	)

During the year ended December 31, 2011 and 2010, none and $6.3 million, respectively, of net foreign exchange contract losses were reclassified into earnings as a result of the discontinuance of cash flow hedges as it was no longer probable that the original forecasted transactions would occur. It is estimated that a net loss of $10.3 million will be reclassified into earnings within the next twelve months relating to cash flow hedges.

Certain foreign exchange contracts and qualifying nonderivative instruments are designated as net investment hedges to minimize Northern Trust’s exposure to variability in the foreign currency translation of net investments in non-U.S. branches and subsidiaries. The effective portion of changes in the fair value of the hedging instrument is recognized in AOCI consistent with the related translation gains and losses of the hedged net investment. For net investment hedges, all critical terms of the hedged item and the hedging instrument are matched at inception and on an ongoing basis to eliminate hedge ineffectiveness. As a result, no ineffectiveness was recorded for these hedges during the year ended December 31, 2011, 2010 or 2009. Amounts recorded in AOCI are reclassified to earnings only upon the sale or liquidation of an investment in a non-U.S. branch or subsidiary.

The following table provides net investment hedge gains and losses recognized in AOCI during the years ended December 31, 2011 and 2010.

(In Millions)	AMOUNT OF HEDGING INSTRUMENT GAIN/(LOSS) RECOGNIZED IN AOCI (BEFORE TAX)
	2011		2010
Foreign Exchange Contracts	$	25.2	$	40.6
Sterling Denominated Subordinated Debt		.5		9.8
Sterling Denominated Senior Debt		–		10.5
Total	$	25.7	$	60.9

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Derivatives not formally designated as hedges under GAAP are entered into for the purpose of managing the foreign currency risk of non-U.S. dollar denominated assets and liabilities, forecasted foreign currency denominated transactions and the credit risk and interest rate risk of loans and loan commitments. The following table identifies the types and classifications of risk management derivative instruments not formally designated as hedges, their notional and fair values, and the respective risks addressed.

			DECEMBER 31, 2011						DECEMBER 31, 2010
					FAIR VALUE						FAIR VALUE
(In Millions)	DERIVATIVE INSTRUMENT	RISK CLASSIFICATION	NOTIONAL VALUE		ASSET		LIABILITY		NOTIONAL VALUE		ASSET		LIABILITY
Commercial Loans and Loan Commitments	Credit Default Swap Contracts	Credit	$	60.5	$	.7	$	.1	$	149.5	$	–	$	2.8
Loan Commitments	Forward Contracts	Interest Rate		–		–		–		14.3		.5		.2
Forecasted Foreign Currency Denominated Transactions	Foreign Exchange Contracts	Foreign Currency		127.3		2.1		2.6		616.1		12.3		16.2
Commercial Loans	Foreign Exchange Contracts	Foreign Currency		84.3		1.3		.3		60.6		.1		.9
Net Investments in Non-U.S. Affiliates	Foreign Exchange Contracts	Foreign Currency		63.5		.4		.2		61.3		.2		.8
Total			$	335.6		4.5	$	3.2	$	901.8		13.1	$	20.9

Changes in the fair value of derivative instruments not formally designated as hedges are recognized currently in income. The following table provides the location and amount of gains and losses recorded in the consolidated statement of income for the years ended December 31, 2011 and 2010.

			2011			2010
(In Millions)	LOCATION OF DERIVATIVE GAIN/(LOSS) RECOGNIZED IN INCOME		AMOUNT RECOGNIZED IN INCOME			AMOUNT RECOGNIZED IN INCOME
Credit Default Swap Contracts		Other Operating Income	$	.9		$	(1.7	)
Forward Contracts		Other Operating Income		.2			.3
Foreign Exchange Contracts		Other Operating Income		(7.0	)		(19.7	)
Total			$	(5.9	)	$	(21.1	)

Note 27 – Off-Balance Sheet Financial Instruments

Commitments and Letters of Credit. Northern Trust, in the normal course of business, enters into various types of commitments and issues letters of credit to meet the liquidity and credit enhancement needs of its clients. The contractual amounts of these instruments represent the potential credit exposure should the instrument be fully drawn upon and the client default. To control the credit risk associated with entering into commitments and issuing letters of credit, Northern Trust subjects such activities to the same credit quality and monitoring controls as its lending activities.

Commitments and letters of credit consist of the following:

Legally Binding Commitments to Extend Credit generally have fixed expiration dates or other termination clauses. Since a significant portion of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future loans or liquidity requirements.

Commercial Letters of Credit are instruments issued by Northern Trust on behalf of its clients that authorize a third party (the beneficiary) to draw drafts up to a stipulated amount under the specified terms and conditions of the agreement. Commercial letters of credit are issued primarily to facilitate international trade.

Standby Letters of Credit obligate Northern Trust to meet certain financial obligations of its clients, if, under the contractual terms of the agreement, the clients are unable to do so. These instruments are primarily issued to support public and private financial commitments, including commercial paper, bond financing, initial margin requirements on futures exchanges, and similar transactions. Northern Trust is obligated to meet the entire financial

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

obligation of these agreements and in certain cases is able to recover the amounts paid through recourse against collateral received or other participants.

The following table shows the contractual amounts of commitments and letters of credit.

COMMITMENTS AND LETTERS OF CREDIT

	DECEMBER 31
(In Millions)	2011		2010
Legally Binding Commitments to Extend Credit*	$	28,702.2	$	27,229.5
Standby Letters of Credit**	$	4,293.4	$	4,344.7
Commercial Letters of Credit		23.4		32.8

* These amounts exclude $.5 billion and $1.6 billion of commitments participated to others at December 31, 2011 and 2010, respectively.

** These amounts include $608.2 million and $602.3 million of standby letters of credit secured by cash deposits or participated to others as of December 31, 2011 and 2010, respectively. The weighted average maturity of standby letters of credit was 27 months at December 31, 2011 and 20 months at December 31, 2010.

Other Off-Balance Sheet Financial Instruments. As part of securities custody activities and at the direction of clients, Northern Trust lends securities owned by clients to borrowers who are reviewed and approved by the Senior Credit Committee. Borrowers are required to fully collateralize securities received with cash or marketable securities. As securities are loaned, collateral is maintained at a minimum of 100 percent of the fair value of the securities plus accrued interest, with revaluations of the collateral performed on a daily basis. In connection with these activities, Northern Trust has issued certain indemnifications to clients against loss that is a direct result of a borrower’s failure to return securities when due, should the value of such securities exceed the value of the collateral required to be posted. The amount of securities loaned as of December 31, 2011 and 2010 subject to indemnification was $74.4 billion and $74.9 billion, respectively. Because of the credit quality of the borrowers and the requirement to fully collateralize securities borrowed, management believes that the exposure to credit loss from this

activity is not significant and, therefore, no liability has been recorded relating to the indemnifications provided.

The Bank is a participating member of various cash, securities, and foreign exchange clearing and settlement organizations such as The Depository Trust Company in New York. It participates in these organizations on behalf of its clients and on its own behalf as a result of its own activities. A wide variety of cash and securities transactions are settled through these organizations, including those involving obligations of states and political subdivisions, asset-backed securities, commercial paper, dollar placements, and securities issued by the Government National Mortgage Association.

As a result of its participation in cash, securities, and foreign exchange clearing and settlement organizations, the Bank could be responsible for a pro rata share of certain credit-related losses arising out of the clearing activities. The method in which such losses would be shared by the clearing members is stipulated in each clearing organization’s membership agreement. Credit exposure related to these agreements varies from day to day, primarily as a result of fluctuations in the volume of transactions cleared through the organizations. The estimated credit exposure at December 31, 2011 and 2010 was $80 million and $68 million, respectively, based on the membership agreements and clearing volume for those days. Controls related to these clearing transactions are closely monitored by management to protect the assets of Northern Trust and its clients.

Note 28 – Variable Interest Entities

Variable Interest Entities (VIEs) are defined within GAAP as entities which either have a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. Investors that finance a VIE through debt or equity interests, or other counterparties that provide other forms of support, such as guarantees, subordinated fee arrangements, or certain types of derivative contracts, are variable interest holders in the entity and the variable interest holder, if any, that has both the power to direct the activities that most significantly impact the entity and a variable interest that could potentially be significant to the entity is deemed to be the VIE’s primary beneficiary and is required to consolidate the VIE.

Leveraged Leases. In leveraged leasing transactions, Northern Trust acts as lessor of the underlying asset subject to the lease and typically funds 20% of the asset’s cost via an equity ownership in a trust with the remaining 80% provided by third party non-recourse debt holders. In such transactions, the trusts, which are VIEs, are created to provide the lessee use of the property with substantially all of the rights and obligations of ownership. The lessee’s maintenance and operation of the leased property has a direct effect on the fair value of the underlying property, and the lessee also has the ability to increase the benefits it can receive and limit the losses it can suffer by the manner in which it uses the property. As a result, Northern Trust has determined that it is

2011 ANNUAL REPORT TO SHAREHOLDERS 118 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

not the primary beneficiary of these VIEs given it lacks the power to direct the activities that most significantly impact the

economic performance of the VIEs.

Northern Trust’s maximum exposure to loss as a result of its involvement with the leveraged lease trust VIEs is limited to the carrying amounts of its leveraged lease investments. As of December 31, 2011 and 2010, the carrying amounts of these investments, which are included in loans and leases in the consolidated balance sheet, were $714.5 million and $782.3 million, respectively. Northern Trust’s funding requirements relative to the VIEs are limited to its invested capital. Northern Trust has no other liquidity arrangements or obligations to purchase assets of the VIEs that would expose Northern Trust to a loss.

Tax Credit Structures. Northern Trust invests in affordable housing projects that are designed to generate a return primarily through the realization of tax credits. The affordable housing projects are formed as limited partnerships and LLCs, and Northern Trust typically invests as a limited partner/investor member in the form of equity contributions. The economic performance of the affordable housing projects, which are deemed to be VIEs, is driven by the performance of their underlying investment projects as well as the VIEs’ ability to operate in compliance with the rules and regulations necessary for the qualification of tax credits generated by equity investments. Northern Trust has determined that it is not the primary beneficiary of any affordable housing projects as it lacks the power to direct the activities that most significantly impact the economic performance of the underlying project or to affect the VIEs’ ability to operate in compliance with the rules and regulations necessary for the qualification of tax credits generated by equity investments. This power is held by the general partners and managing members who exercise full and exclusive control of the operations of the VIEs.

Northern Trust’s maximum exposure to loss as a result of its involvement with the affordable housing projects is limited to the carrying amounts of its investments and any unfunded commitments. As of December 31, 2011 and 2010, the carrying amounts of these investments, which are included in other assets in the consolidated balance sheet, were $264.9 million and $265.4 million, respectively. As of December 31, 2011 and 2010, liabilities related to unfunded commitments, which are included in other liabilities in the consolidated balance sheet, were $44.5 million and $35.5 million, respectively. Northern Trust’s funding requirements are limited to its invested capital and any additional unfunded commitments for future equity contributions. Northern Trust has no other liquidity arrangements or obligations to purchase assets of the affordable housing projects that would expose it to a loss.

Trust Preferred Securities. As discussed in further detail in Note 13 – Floating Rate Capital Debt, in 1997, Northern Trust issued Floating Rate Capital Securities, Series A and Series B, through NTC Capital I and NTC Capital II, respectively, statutory business trusts wholly-owned by the Corporation. The sole assets of the trusts are Subordinated Debentures of the Corporation that have the same interest rates and maturity dates as the corresponding distribution rates and redemption dates of the Floating Rate Capital Securities. NTC Capital I and NTC Capital II are considered VIEs; however, as the sole asset of each trust is a receivable from the Corporation and the proceeds to the Corporation from the receivable exceed the Corporation’s investment in the VIEs’ equity shares, the Corporation is not permitted to consolidate the trusts, even though the Corporation owns all of the voting equity shares of the trusts, has fully guaranteed the trusts’ obligations, and has the right to redeem the preferred securities in certain circumstances. Northern Trust recognizes the subordinated debentures on its consolidated balance sheet as long-term liabilities.

Investment Funds. Northern Trust acts as asset manager for various funds in which clients of Northern Trust are investors. As an asset manager of funds, the Corporation earns a competitively priced fee that is based on assets managed and that varies with each fund’s investment objective. Based on its analysis, Northern Trust has determined that it is not the primary beneficiary of these VIEs under GAAP.

In November 2011, Northern Trust purchased $90 million of securities at par from three investment funds (Funds). The net assets held by the Funds as of December 31, 2011 totaled $16.5 billion. The securities were purchased to avoid the risk of the Funds being downgraded which could force certain holders to liquidate their investments. Northern Trust incurred a pre-tax charge of $2 million in connection with these actions and has no further obligations related to these actions as of December 31, 2011. Any potential future support would be evaluated based upon the specific facts and circumstances and with careful consideration as to the potential impact on Northern Trust’s ability to maintain its well-capitalized status and meet its operational needs.

Under GAAP, the above actions reflect Northern Trust’s implicit interest in the credit risk of the affected Funds. Implicit interests are required to be considered when determining the primary beneficiary of a variable interest

2011 ANNUAL REPORT TO SHAREHOLDERS 119 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

entity. The Funds were designed to create and pass to investors interest rate and credit risk. In determining whether Northern Trust is the primary beneficiary of these Funds, an expected loss calculation based on the characteristics of the underlying investments in the Funds is used to estimate the expected losses related to interest rate and credit risk, while also considering the relative rights and obligations of each of the variable interest holders. This analysis concluded that interest rate risk is the primary driver of expected losses within the Funds. As such, Northern Trust has determined that it is not the primary beneficiary of the Funds and is not required to consolidate them within its consolidated balance sheet. As Northern Trust has no current plans to provide any support additional to that which is noted above, the maximum exposure to loss from its implicit interest in the Funds is $88.4 million, which represents the fair value of the securities acquired from the Funds as of December 31, 2011.

In 2008, Northern Trust entered into CSAs with certain investment funds (CSA Funds) which held notes, asset backed securities, and other instruments whose values had been adversely impacted by widening risk premiums and liquidity spreads and significant rating agency downgrades. Northern Trust entered into the CSAs to assist the CSA Funds in maintaining net asset values of $1.00 in order to provide financial stability to the CSA Funds and investors in the CSA Funds. The CSAs also allowed the registered funds to hold assets that had fallen to below investment grade, thus avoiding a forced sale in an inactive market.

In 2009, all CSAs expired in connection with the final settlements of covered securities, and as such, Northern Trust’s maximum exposure to loss as of December 31, 2009 was zero. During 2009, final cash payments totaling $204.8 million were made under the CSAs and reductions of other operating expenses totaling $109.3 million were recorded to reflect the difference between the actual cash payments made and the recorded liability as of December 31, 2008. However, under prior accounting standards the CSA Funds were considered VIEs and the CSAs reflected Northern Trust’s implicit variable interest in the credit risk of the affected CSA Funds. The CSA Funds were designed to create and pass to investors interest rate and credit risk. In determining whether Northern Trust was the primary beneficiary of the CSA Funds during the period in which the CSAs were in place, expected loss calculations based on the characteristics of the underlying investments in the CSA Funds were used to estimate the expected losses related to interest rate and credit risk, while also considering the relative rights and obligations of each of the variable interest holders. These analyses concluded that interest rate risk was the primary driver of expected losses within the CSA Funds. As such, Northern Trust determined that it was not the primary beneficiary of the CSA Funds and was not required to consolidate them within its consolidated balance sheet.

Note 29 – Pledged and Restricted Assets

Certain of Northern Trust’s subsidiaries, as required or permitted by law, pledge assets to secure public and trust deposits, repurchase agreements, Federal Home Loan Bank borrowings, and for other purposes. On December 31, 2011, securities and loans totaling $27.9 billion ($21.5 billion of government sponsored agency and other securities, $460.2 million of obligations of states and political subdivisions, and $6.0 billion of loans), were pledged. Collateral required for these purposes totaled $4.8 billion. Included in the total pledged assets are available for sale securities with a total fair value of $1.2 billion which were pledged as collateral for agreements to repurchase securities sold transactions. The secured parties to these transactions have the right to repledge or sell these securities.

Northern Trust is permitted to repledge or sell collateral accepted from agreements to resell securities purchased transactions. The total fair value of accepted collateral as of December 31, 2011 was $74.7 million. There was no repledged or sold collateral as of December 31, 2011.

Deposits maintained to meet Federal Reserve Bank reserve requirements averaged $429.9 million in 2011.

Note 30 – Restrictions on Subsidiary Dividends and Loans or Advances

Provisions of state and federal banking laws restrict the amount of dividends that can be paid to the Corporation by its banking subsidiaries. Under applicable state and federal laws, at a minimum no dividends may be paid in an amount greater than the net or undivided profits (as defined by regulatory agencies) then on hand, subject to other applicable and potentially more restrictive laws that may vary from state to state. Federal Reserve Board rules provide that no state bank that is a Federal Reserve System member may declare or pay a dividend if the total of all dividends declared during the calendar year, including the proposed dividend, exceeds its net profits for that year, combined with its retained net profits for the preceding two years, unless the dividend has been approved by the Federal Reserve Board. The Bank is subject to this requirement. The Bank is also prohibited under federal law from paying any dividends if the Bank is undercapitalized or if the payment of the dividends would cause the Bank to

2011 ANNUAL REPORT TO SHAREHOLDERS 120 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

become undercapitalized. In addition, the federal regulatory agencies are authorized to prohibit a bank or bank holding company from engaging in an unsafe or unsound banking practice. The payment of dividends could, depending on the financial condition of the Bank, be deemed to constitute an unsafe or unsound practice. In addition, state laws may restrict to different degrees the amount of dividends that may be paid without state regulatory approval. Based on these restrictions, the Corporation’s banking subsidiaries, without regulatory approval, could declare dividends during 2012 equal to their 2012 eligible net profits (as defined by regulatory agencies) plus $1.26 billion. The ability of each banking subsidiary to pay dividends to the Corporation may be further restricted going forward as a result of regulatory policies and guidelines, including regulations issued pursuant to the Dodd-Frank Act, relating to dividend payments and capital adequacy.

On November 22, 2011, the Federal Reserve Board issued a final rule implementing the requirement of the Dodd-Frank Act that top-tier bank holding companies domiciled in the U.S. with total consolidated assets of $50 billion or more, including the Corporation, submit annual capital plans to the Federal Reserve Board for review. Under the final rule, the Federal Reserve Board will annually evaluate institutions’ capital adequacy, internal capital adequacy assessment processes, and their plans to make capital distributions, such as dividend payments or stock repurchases. The Federal Reserve Board will approve dividend increases or other capital distributions only for companies whose capital plans are approved by supervisors and are able to demonstrate sufficient financial strength to operate as successful financial intermediaries under stressed macroeconomic and financial market scenarios, after making the desired capital distributions.

State and federal laws limit the transfer of funds by the Bank to the Corporation and certain of its affiliates in the form of loans or extensions of credit, investments, derivative transactions, repurchase agreements, reverse repurchase agreements, securities lending or borrowing transactions or purchases of assets. Transfers of this kind to the Corporation or a nonbanking subsidiary by the Bank are each limited to 10% of the Bank’s capital and surplus with respect to each affiliate and to 20% in the aggregate, and are also subject to certain collateral requirements and other restrictions on covered transactions. These transactions, as well as other transactions between the Bank and the Corporation or its affiliates, must also be on terms substantially the same as, or at least as favorable as, those prevailing at the time for comparable transactions with non-affiliated companies or, in the absence of comparable transactions, on terms, or under circumstances, including credit standards, that would be offered to, or would apply to, non-affiliated companies.

Note 31 – Business Units and Related Information

Northern Trust is organized around its two principal client-focused business units, C&IS and PFS. Investment management services and products are provided to the clients of these business units and to other U.S. and non-U.S. clients by NTGI. Operating and systems support is provided to each of the business units by the O&T business unit. The revenue and expenses of NTGI are fully allocated to C&IS and PFS. The revenue and expenses of O&T are fully allocated to C&IS, PFS, and Treasury and Other.

C&IS and PFS results are presented to promote a greater understanding of their financial performance. The information, presented on an internal management-reporting basis as opposed to GAAP which is used for consolidated financial reporting purposes, derives from internal accounting systems that support Northern Trust’s strategic objectives and management structure. The accounting policies used for management reporting are consistent with those described in Note 1 – Summary of Significant Accounting Policies.

The following tables show the earnings contribution of Northern Trust’s business units for the years ended December 31, 2011, 2010, and 2009.

CORPORATE AND INSTITUTIONAL SERVICES RESULTS OF OPERATIONS

(In Millions)	2011			2010			2009
NONINTEREST INCOME
Trust, Investment and Other Servicing Fees	$	1,196.4		$	1,175.1		$	1,236.8
Other		485.4			522.7			571.3
Net Interest Income (FTE)*		282.5			271.8			416.0
Revenue (FTE)*		1,964.3			1,969.6			2,224.1
Provision for Credit Losses		(20.5	)		(16.1	)		30.7
Noninterest Expense		1,522.4			1,328.9			1,200.6
Income before Income Taxes*		462.4			656.8			992.8
Provision for Income Taxes*		168.3			222.4			350.8
Net Income	$	294.1		$	434.4		$	642.0
Percentage of Consolidated Net Income		49	%		65	%		74	%
Average Assets	$	47,533.7		$	38,749.3		$	38,117.1

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PERSONAL FINANCIAL SERVICES RESULTS OF OPERATIONS

(In Millions)	2011			2010			2009
NONINTEREST INCOME
Trust, Investment and Other Servicing Fees	$	973.1		$	906.8		$	847.0
Other		128.5			133.3			138.7
Net Interest Income (FTE)*		613.7			591.8			538.1
Revenue (FTE)*		1,715.3			1,631.9			1,523.8
Provision for Credit Losses		75.5			176.1			184.3
Noninterest Expense		1,214.9			1,103.0			1,044.6
Income before Income Taxes*		424.9			352.8			294.9
Provision for Income Taxes*		168.7			132.8			112.4
Net Income	$	256.2		$	220.0		$	182.5
Percentage of Consolidated Net Income		42	%		33	%		21	%
Average Assets	$	23,861.5		$	23,564.5		$	24,534.8

TREASURY AND OTHER RESULTS OF OPERATIONS

(In Millions)	2011			2010			2009
Other Noninterest Income	$	(22.6	)	$	(8.9	)	$	(6.7	)
Net Interest Income (FTE)*		153.1			94.2			85.9
Revenue (FTE)*		130.5			85.3			79.2
Visa Indemnification Benefits		(23.1	)		(33.0	)		(17.8	)
Noninterest Expense (Excluding Visa Indemnification Benefits)		117.0			99.0			89.3
Income before Income Taxes*		36.6			19.3			7.7
Provision (Benefit) for Income Taxes*		(16.7	)		4.2			(32.0	)
Net Income	$	53.3		$	15.1		$	39.7
Percentage of Consolidated Net Income		9	%		2	%		5	%
Average Assets	$	20,552.7		$	13,694.4		$	11,662.3

CONSOLIDATED FINANCIAL INFORMATION

(In Millions)	2011			2010			2009
NONINTEREST INCOME
Trust, Investment and Other Servicing Fees	$	2,169.5		$	2,081.9		$	2,083.8
Other		591.3			647.1			703.3
Net Interest Income (FTE)*		1,049.3			957.8			1,040.0
Revenue (FTE)*		3,810.1			3,686.8			3,827.1
Provision for Credit Losses		55.0			160.0			215.0
Visa Indemnification Benefits		(23.1	)		(33.0	)		(17.8	)
Noninterest Expense (Excluding Visa Indemnification Benefits)		2,854.3			2,530.9			2,334.5
Income before Income Taxes*		923.9			1,028.9			1,295.4
Provision for Income Taxes*		320.3			359.4			431.2
Net Income	$	603.6		$	669.5		$	864.2
Average Assets	$	91,947.9		$	76,008.2		$	74,314.2

* Stated on an FTE basis. The consolidated figures include $40.2 million, $39.1 million, and $40.2 million, of FTE adjustment for 2011, 2010, and 2009, respectively.

Northern Trust’s international activities are centered in the global custody, treasury management, foreign exchange, asset servicing, asset management, and commercial banking businesses. The operations of Northern Trust are managed on a business unit basis and include components of both U.S and non-U.S. source income and assets. Non-U.S. source income and assets are not separately identified in Northern Trust’s internal management reporting system. However, Northern Trust is required to disclose non-U.S. activities based on the domicile of the customer. Due to the complex and integrated nature of Northern Trust’s activities, it is impossible to segregate with precision revenues, expenses and assets between U.S. and non-U.S. domiciled customers. Therefore, certain subjective estimates and assumptions have been made to allocate revenues, expenses and assets between U.S. and non-U.S. operations.

For purposes of this disclosure, all foreign exchange trading income has been allocated to non-U.S. operations. Interest expense is allocated to non-U.S. operations based on specifically matched or pooled funding. Allocations of indirect noninterest expenses related to non-U.S. activities are not significant, but when made, are based on various methods such as time, space, and number of employees.

2011 ANNUAL REPORT TO SHAREHOLDERS 122 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below summarizes international performance based on the allocation process described above without regard to guarantors or the location of collateral. The U.S. performance includes the impacts of benefits totaling $23.1 million, $33.0 million, and $17.8 million recorded in 2011, 2010 and 2009, respectively, from reductions in the Visa indemnification liability.

DISTRIBUTION OF TOTAL ASSETS AND OPERATING PERFORMANCE

(In Millions)	TOTAL ASSETS		TOTAL REVENUE*		INCOME BEFORE INCOME TAXES		NET  INCOME
2011
Non-U.S.	$	28,625.2	$	1,084.8	$	284.4	$	199.3
U.S.		71,598.5		2,685.1		599.3		404.3
Total	$	100,223.7	$	3,769.9	$	883.7	$	603.6
2010
Non-U.S.	$	24,472.9	$	980.9	$	325.1	$	229.3
U.S.		59,371.0		2,666.8		664.7		440.2
Total	$	83,843.9	$	3,647.7	$	989.8	$	669.5
2009
Non-U.S.	$	19,253.2	$	1,086.9	$	445.4	$	305.8
U.S.		62,888.3		2,700.0		809.8		558.4
Total	$	82,141.5	$	3,786.9	$	1,255.2	$	864.2

* Revenue is comprised of net interest income and noninterest income.

Note 32 – Regulatory Capital Requirements

Northern Trust and its U.S. subsidiary banks are subject to various regulatory capital requirements administered by the federal bank regulatory authorities. Under these requirements, banks must maintain specific ratios of total and tier 1 capital to risk-weighted assets and of tier 1 capital to average quarterly assets in order to be classified as “well capitalized.” The regulatory capital requirements impose certain restrictions upon banks that meet minimum capital requirements but are not “well capitalized” and obligate the federal bank regulatory authorities to take “prompt corrective action” with respect to banks that do not maintain such minimum ratios. Such prompt corrective action could have a direct material effect on a bank’s financial statements.

As of December 31, 2011 and 2010, Northern Trust’s U.S. subsidiary banks had capital ratios above the level required for classification as a “well capitalized” institution and had not received any regulatory notification of a lower classification. Additionally, Northern Trust’s subsidiary banks located outside the U.S. are subject to regulatory capital requirements in the jurisdictions in which they operate. As of December 31, 2011 and 2010, Northern Trust’s non-U.S. banking subsidiaries had capital ratios above their specified minimum requirements. On October 1, 2011, the Corporation merged its national bank subsidiary, Northern Trust, NA, and federal savings bank, Northern Trust Bank, FSB, with and into the Bank.

There are no conditions or events since December 31, 2011 that management believes have adversely affected the capital categorization of any Northern Trust subsidiary bank.

2011 ANNUAL REPORT TO SHAREHOLDERS 123 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below summarizes the risk-based capital amounts and ratios for Northern Trust and for each of its U.S. subsidiary banks whose net income for 2011 or 2010 exceeded 10% of the consolidated total.

	ACTUAL					MINIMUM TO QUALIFY AS WELL CAPITALIZED
($ In Millions)	AMOUNT		RATIO			AMOUNT		RATIO
AS OF DECEMBER 31, 2011
Total Capital to Risk-Weighted Assets
Consolidated	$	8,065		14.2	%	$	5,667		10.0	%
The Northern Trust Company		7,763		13.8			5,631		10.0
Tier 1 Capital to Risk-Weighted Assets
Consolidated		7,105		12.5			3,400		6.0
The Northern Trust Company		6,603		11.7			3,378		6.0
Tier 1 Capital (to Fourth Quarter Average Assets)
Consolidated		7,105		7.3			4,865		5.0
The Northern Trust Company		6,603		6.8			4,852		5.0
AS OF DECEMBER 31, 2010
Total Capital to Risk-Weighted Assets
Consolidated	$	8,036		15.6	%	$	5,147		10.0	%
The Northern Trust Company		6,440		16.2			3,978		10.0
Northern Trust, NA		1,461		13.9			1,050		10.0
Tier 1 Capital to Risk-Weighted Assets
Consolidated		6,977		13.6			3,088		6.0
The Northern Trust Company		5,293		13.3			2,387		6.0
Northern Trust, NA		1,301		12.4			630		6.0
Tier 1 Capital (to Fourth Quarter Average Assets)
Consolidated		6,977		8.8			3,983		5.0
The Northern Trust Company		5,293		8.0			3,323		5.0
Northern Trust, NA		1,301		10.8			602		5.0

The current risk-based capital guidelines that apply to the Corporation and the Bank, commonly referred to as Basel I, are based upon the 1988 capital accord of the International Basel Committee on Banking Supervision (Basel Committee), a committee of central banks and bank supervisors, as implemented by the Federal Reserve Board.

The Corporation also is subject to the Basel II framework for risk-based capital adequacy. The U.S. bank regulatory agencies have issued final rules with respect to implementation of the Basel II framework. Under the final Basel II rules, the Corporation is one of a small number of “core” banking organizations. As a result, the Corporation and the Bank will be required to use the advanced approaches under Basel II for calculating risk-based capital related to credit risk and operational risk, instead of the methodology reflected in the regulations effective prior to adoption of Basel II. The rules also require core banking organizations to have rigorous processes for assessing overall capital adequacy in relation to their total risk profiles, and to publicly disclose certain information about their risk profiles and capital adequacy.

The Corporation has for several years been preparing to comply with the advanced approaches of the Basel II framework. The Corporation is also addressing issues related to implementation timing differences between the U.S. and other jurisdictions, to ensure that the Corporation and its depository institution subsidiaries comply with regulatory requirements and expectations in all jurisdictions where they operate.

In December 2010, the Basel Committee released its final framework for strengthening international capital and liquidity regulation, known as Basel III. The Basel III calibration and phase-in arrangements were previously endorsed by the Seoul G20 Leaders Summit in November 2010, and will be subject to individual adoption by member nations, including the U.S. The federal banking agencies could implement changes to the current capital adequacy standards applicable to the Corporation and the Bank in light of Basel III.

2011 ANNUAL REPORT TO SHAREHOLDERS 124 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 33 – Northern Trust Corporation (Corporation only)

Condensed financial information is presented below. Investments in wholly-owned subsidiaries are carried on the equity method of accounting.

CONDENSED BALANCE SHEET	DECEMBER 31
(In Millions)	2011			2010
ASSETS
Cash on Deposit with Subsidiary Bank	$	6.5		$	6.8
Time Deposits with Subsidiary Banks		1,269.2			1,561.2
Securities		97.1			118.2
Advances to Wholly-Owned Subsidiaries – Banks		1,035.0			285.0
– Nonbank		5.0			5.0
Investments in Wholly-Owned Subsidiaries – Banks		6,890.6			6,855.1
– Nonbank		152.6			121.2
Buildings and Equipment		3.4			3.4
Other Assets		373.3			339.5
Total Assets	$	9,832.7		$	9,295.4
LIABILITIES
Long-Term Debt	$	2,126.7		$	1,896.1
Floating Rate Capital Debt		276.9			276.9
Other Liabilities		311.8			292.1
Total Liabilities		2,715.4			2,465.1
STOCKHOLDERS’ EQUITY
Common Stock		408.6			408.6
Additional Paid-in Capital		977.5			920.0
Retained Earnings		6,302.3			5,972.1
Accumulated Other Comprehensive Loss		(345.6	)		(305.3	)
Treasury Stock		(225.5	)		(165.1	)
Total Stockholders’ Equity		7,117.3			6,830.3
Total Liabilities and Stockholders’ Equity	$	9,832.7		$	9,295.4

CONDENSED STATEMENT OF INCOME	FOR THE YEAR ENDED DECEMBER 31
(In Millions)	2011		2010			2009
OPERATING INCOME
Dividends – Bank Subsidiaries	$	500.0	$	–		$	410.0
– Nonbank Subsidiaries		5.1		67.2			25.6
Intercompany Interest and Other Charges		19.8		11.4			10.1
Interest and Other Income		13.3		6.9			13.7
Total Operating Income		538.2		85.5			459.4
OPERATING EXPENSES
Interest Expense		66.9		50.8			45.7
Other Operating Expenses		12.6		15.4			(93.2	)
Total Operating Expenses		79.5		66.2			(47.5	)
Income (Loss) before Income Taxes and Equity in Undistributed Net Income of Subsidiaries		458.7		19.3			506.9
Benefit (Expense) for Income Taxes		24.8		23.0			(25.0	)
Income (Loss) before Equity in Undistributed Net Income of Subsidiaries		483.5		42.3			481.9
Equity in Undistributed Net Income of Subsidiaries – Banks		71.0		636.9			364.7
– Nonbank		49.1		(9.7	)		17.6
Net Income	$	603.6	$	669.5		$	864.2
Net Income Applicable to Common Stock	$	603.6	$	669.5		$	753.1

2011 ANNUAL REPORT TO SHAREHOLDERS 125 NORTHERN TRUST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED STATEMENT OF CASH FLOWS	FOR THE YEAR ENDED DECEMBER 31
(In Millions)	2011			2010			2009
OPERATING ACTIVITIES:
Net Income	$	603.6		$	669.5		$	864.2
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:
Equity in Undistributed Net Income of Subsidiaries		(120.1	)		(620.9	)		(382.2	)
Decrease in Prepaid Expenses		.2			1.2			2.0
Client Support-Related Charges (Benefit)		—			—			(109.3	)
Capital Support Agreement Payments		—			—			(204.8	)
Increase (Decrease) in Accrued Income Taxes		28.5			61.8			283.6
Other, net		(41.2	)		(13.3	)		20.4
Net Cash Provided by Operating Activities		471.0			98.3			473.9
INVESTING ACTIVITIES:
Net Increase in Time Deposits with Banks		292.1			(77.2	)		(268.0	)
Purchases of Securities – Available for Sale		(91.4	)		(109.7	)		—
Proceeds from Sale, Maturity and Redemption of Securities – Available for Sale		105.4			4.7			411.8
Net Increase in Capital Investments in Subsidiaries		(.5	)		(204.8	)		(42.0	)
Advances to Wholly-Owned Subsidiaries		(750.0	)		—			—
Other, net		—			(.9	)		(7.9	)
Net Cash Provided by (Used in) Investing Activities		(444.4	)		(387.9	)		93.9
FINANCING ACTIVITIES:
Net Increase in Senior Notes		250.0			497.2			500.0
Proceeds from Common Stock Issuance		—			—			834.1
Redemption of Preferred Stock – Series B		—			—			(1,576.0	)
Cash Dividends Paid on Preferred Stock		—			—			(46.6	)
Repurchase of Warrant to Purchase Common Stock		—			—			(87.0	)
Treasury Stock Purchased		(79.0	)		(5.9	)		(10.7	)
Cash Dividends Paid on Common Stock		(273.7	)		(273.2	)		(260.3	)
Net Proceeds from Stock Options		75.6			70.6			38.9
Other, net		.1			1.2			23.8
Net Cash Provided by (Used in) Financing Activities		(27.0	)		289.9			(583.8	)
Net Change in Cash on Deposit with Subsidiary Bank		(.4	)		.3			(16.0	)
Cash on Deposit with Subsidiary Bank at Beginning of Year		6.8			6.5			22.5
Cash on Deposit with Subsidiary Bank at End of Year	$	6.4		$	6.8		$	6.5

2011 ANNUAL REPORT TO SHAREHOLDERS 126 NORTHERN TRUST CORPORATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

THE STOCKHOLDERS AND BOARD OF DIRECTORS OF NORTHERN TRUST CORPORATION:

We have audited the accompanying consolidated balance sheet of Northern Trust Corporation and subsidiaries (Northern Trust) as of December 31, 2011 and 2010, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2011. These consolidated financial statements are the responsibility of Northern Trust’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Northern Trust Corporation and subsidiaries as of December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Northern Trust Corporation’s internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 24, 2012 expressed an unqualified opinion on the effectiveness of Northern Trust Corporation’s internal control over financial reporting.

/s/ KPMG LLP

CHICAGO, ILLINOIS

FEBRUARY 24, 2012

2011 ANNUAL REPORT TO SHAREHOLDERS 127 NORTHERN TRUST CORPORATION

CONSOLIDATED FINANCIAL STATISTICS

AVERAGE STATEMENT OF CONDITION WITH ANALYSIS OF NET INTEREST INCOME

(INTEREST AND RATE ON A TAXABLE EQUIVALENT BASIS)	2011								2010
($ In Millions)	INTEREST		AVERAGE BALANCE			RATE			INTEREST		AVERAGE BALANCE			RATE
AVERAGE EARNING ASSETS
Federal Funds Sold and Resell Agreements	$	.2	$	261.0			.09	%	$	.5	$	293.9			.18	%
Interest-Bearing Deposits with Banks		192.8		17,124.5			1.13			134.6		14,599.7			.92
Federal Reserve Deposits and Other Interest-Bearing		28.3		10,610.2			.27			13.5		5,598.2			.24
Securities
U.S. Government		23.4		1,766.5			1.32			1.1		162.0			.67
Obligations of States and Political Subdivisions		40.4		605.6			6.67			47.4		726.9			6.52
Government Sponsored Agency		102.4		14,290.0			.72			116.6		11,802.2			.99
Other		117.8		9,744.3			1.21			84.7		7,168.1			1.18
Total Securities		284.0		26,406.4			1.08			249.8		19,859.2			1.26
Loans and Leases		943.5		28,346.7			3.33			937.4		27,514.4			3.41
Total Earning Assets	$	1,448.8	$	82,748.8			1.75	%	$	1,335.8	$	67,865.4			1.97	%
Allowance for Credit Losses Assigned to Loans and Leases		–		(305.3	)		–			–		(313.0	)		–
Cash and Due from Banks		–		3,845.3			–			–		2,788.4			–
Buildings and Equipment		–		500.7			–			–		534.7			–
Client Security Settlement Receivables		–		429.1			–			–		399.7			–
Goodwill		–		466.0			–			–		396.3			–
Other Assets		–		4,263.3			–			–		4,336.7			–
Total Assets	$	–	$	91,947.9			–	%	$	–	$	76,008.2			–	%
AVERAGE SOURCE OF FUNDS
Deposits
Savings and Money Market	$	26.0	$	14,297.6			.18	%	$	34.9	$	13,049.5			.27	%
Savings Certificates and Other Time		27.8		3,605.4			.77			40.4		3,704.6			1.09
Non-U.S. Offices – Interest-Bearing		176.1		39,973.5			.44			125.7		29,968.4			.42
Total Interest-Bearing Deposits		229.9		57,876.5			.40			201.0		46,722.5			.43
Short-Term Borrowings		8.2		4,466.8			.18			11.2		5,849.5			.19
Senior Notes		64.4		1,983.3			3.25			48.6		1,509.0			3.22
Long-Term Debt		94.6		2,446.3			3.87			114.8		2,821.6			4.07
Floating Rate Capital Debt		2.4		276.9			.88			2.4		276.8			.87
Total Interest-Related Funds		399.5		67,049.8			.60	%		378.0		57,179.4			.66
Interest Rate Spread		–		–			1.15			–		–			1.31
Demand and Other Noninterest-Bearing Deposits		–		14,569.9			–			–		8,860.6			–
Other Liabilities		–		3,304.0			–			–		3,333.8			–
Stockholders’ Equity		–		7,024.2			–			–		6,634.4			–
Total Liabilities and Stockholders’ Equity		–	$	91,947.9			–			–		76,008.2			–
Net Interest Income/Margin (FTE Adjusted)	$	1,049.3		–			1.27	%	$	957.8		–			1.41	%
Net Interest Income/Margin (Unadjusted)	$	1,009.1		–			1.22	%	$	918.7		–			1.35	%
Net Interest Income/Margin Components
U.S.	$	911.2	$	59,053.7			1.54	%	$	863.6	$	49,776.5			1.73	%
Non-U.S.		138.1		23,695.1			.58			94.2		18,088.9			.52
Consolidated	$	1,049.3	$	82,748.8			1.27	%	$	957.8	$	67,865.4			1.41	%

Notes – Other securities include Federal Reserve and Federal Home Loan Bank stock and certain affordable housing investments which are classified in other assets on the consolidated balance sheet as of December 31, 2011 and 2010.

– Average balances include nonaccrual loans.

– Total interest income includes adjustments on loans and securities to a taxable equivalent basis. Such adjustments are based on the U.S. federal income tax rate (35%) and State of Illinois income tax rate (7.30%). Lease financing receivable balances are reduced by deferred income. Total taxable equivalent interest adjustments amounted to $40.2 million in 2011, $39.1 million in 2010, $40.2 million in 2009, $49.8 million in 2008, $62.5 million in 2007.

– Interest revenue on cash collateral positions is reported above within interest-bearing deposits with banks and within loans and leases. Interest expense on cash collateral positions is reported above within non-U.S. offices interest-bearing deposits. Related cash collateral received from and deposited with derivative counterparties is recorded net of the associated derivative contract within other assets and other liabilities, respectively.

2011 ANNUAL REPORT TO SHAREHOLDERS 128 NORTHERN TRUST CORPORATION

CONSOLIDATED FINANCIAL STATISTICS

2009								2008								2007
INTEREST		AVERAGE BALANCE			RATE			INTEREST		AVERAGE BALANCE			RATE			INTEREST		AVERAGE BALANCE			RATE
$	.7	$	375.7			.21	%	$	37.2	$	1,569.8			2.37	%	$	67.6	$	1,330.6			5.08	%
	209.6		15,359.9			1.36			888.2		21,451.9			4.14			776.7		16,797.3			4.62
	11.6		4,880.2			.24			9.3		1,538.5			.60			1.2		21.3			5.50
	221.9		20,615.8			1.08			934.7		24,560.2			3.81			845.5		18,149.2			4.66
	.2		41.8			.50			.4		19.2			2.08			6.8		124.3			5.46
	53.5		817.5			6.55			56.0		838.2			6.68			59.0		883.7			6.68
	147.7		11,900.4			1.24			243.1		8,655.7			2.81			525.4		9,740.2			5.39
	76.0		4,598.1			1.65			95.2		2,773.9			3.43			87.7		1,711.2			5.13
	277.4		17,357.8			1.60			394.7		12,287.0			3.21			678.9		12,459.4			5.45
	946.9		28,697.2			3.30			1,198.9		27,402.7			4.38			1,322.3		22,817.8			5.80
	$1,446.2	$	66,670.8			2.17	%	$	2,528.3	$	64,249.9			3.94	%	$	2,846.7	$	53,426.4			5.33	%
	–		(275.0	)		–			–		(170.0	)		–			–		(140.2	)		–
	–		2,535.8			–			–		3,236.8			–			–		3,026.9			–
	–		537.3			–			–		495.0			–			–		485.4			–
	–		419.7			–			–		395.1			–			–		220.0			–
	–		398.4			–			–		414.2			–			–		426.9			–
	–		4,027.2			–			–		4,407.5			–			–		3,142.6			–
	$–	$	74,314.2			–	%		–	$	73,028.5			–	%		–	$	60,588.0			–	%
	$53.7	$	11,162.4			.48	%	$	137.9	$	7,786.5			1.77	%	$	236.5	$	7,016.4			3.37	%
	56.9		2,777.3			2.05			72.0		2,124.3			3.39			95.6		2,019.8			4.73
	16.3		1,101.8			1.48			20.2		615.3			3.28			24.5		518.1			4.74
	80.1		27,157.6			.29			885.9		35,958.2			2.46			1,206.8		28,587.8			4.22
	207.0		42,199.1			.49			1,116.0		46,484.3			2.40			1,563.4		38,142.1			4.10
	11.0		6,748.7			.16			77.4		4,609.0			1.68			191.5		4,321.5			4.43
	44.0		1,388.6			3.17			38.6		804.1			4.80			26.7		478.6			5.58
	139.9		3,058.5			4.57			155.8		2,999.9			5.19			141.0		2,504.0			5.63
	4.3		276.7			1.54			11.6		276.6			4.19			16.2		276.5			5.88
	406.2		53,671.6			.76			1,399.4		55,173.9			2.54			1,938.8		45,722.7			4.24
	–		–			1.41			–		–			1.40			–		–			1.09
	–		11,026.9			–			–		8,814.8			–			–		7,648.4			–
	–		3,011.6			–			–		3,933.6			–			–		3,052.7			–
	–		6,604.1			–			–		5,106.2			–			–		4,164.2			–
	–	$	74,314.2			–			–	$	73,028.5			–			–	$	60,588.0			–
	$1,040.0		–			1.56	%	$	1,128.9		–			1.76	%	$	907.9		–			1.70	%
	$999.8		–			1.50	%	$	1,079.1		–			1.68	%	$	845.4		–			1.58	%
	$859.8	$	49,270.9			1.75	%	$	762.2	$	41,740.7			1.83	%	$	749.5	$	35,472.3			2.11	%
	180.2		17,399.9			1.04			366.7		22,509.2			1.63			158.4		17,954.1			.88
	$1,040.0	$	66,670.8			1.56	%	$	1,128.9	$	64,249.9			1.76	%	$	907.9	$	53,426.4			1.70	%

2011 ANNUAL REPORT TO SHAREHOLDERS 129 NORTHERN TRUST CORPORATION

CONSOLIDATED FINANCIAL STATISTICS

QUARTERLY FINANCIAL DATA (UNAUDITED)

STATEMENT OF INCOME	2011												2010
($ In Millions Except Per Share Information)	FOURTH QUARTER			THIRD QUARTER			SECOND QUARTER			FIRST QUARTER			FOURTH QUARTER			THIRD QUARTER			SECOND QUARTER			FIRST QUARTER
Trust, Investment and Other Servicing Fees	$	541.5		$	555.3		$	557.8		$	514.9		$	504.6		$	518.7		$	543.5		$	515.1
Other Noninterest Income		142.3			159.5			140.9			148.6			169.5			137.3			187.9			152.4
Net Interest Income
Interest Income		354.8			347.0			359.7			347.1			334.3			330.2			317.9			314.3
Interest Expense		83.0			90.2			113.6			112.7			112.3			96.7			85.1			83.9
Net Interest Income		271.8			256.8			246.1			234.4			222.0			233.5			232.8			230.4
Allowance for Credit Losses		12.5			17.5			10.0			15.0			40.0			30.0			50.0			40.0
Noninterest Expense		771.7			701.3			705.3			652.9			641.7			622.1			614.4			619.7
Provision for Income Taxes		41.2			82.4			77.5			79.0			57.3			81.8			100.2			81.0
Net Income	$	130.2		$	170.4		$	152.0		$	151.0		$	157.1		$	155.6		$	199.6		$	157.2
Net Income Applicable to Common Stock	$	130.2		$	170.4		$	152.0		$	151.0		$	157.1		$	155.6		$	199.6		$	157.2
PER COMMON SHARE
Net Income – Basic	$	.53		$	.70		$	.62		$	.62		$	.64		$	.64		$	.82		$	.65
– Diluted		.53			.70			.62			.61			.64			.64			.82			.64
AVERAGE BALANCE SHEET ASSETS
Cash and Due from Banks	$	3,951.4		$	4,127.5		$	3,861.7		$	3,431.6		$	3,056.6		$	2,708.2		$	2,903.7		$	2,479.9
Federal Funds Sold and Securities Purchased under Agreements to Resell		246.8			273.4			272.5			251.1			294.4			309.6			292.8			278.4
Interest-Bearing Deposits with Banks		18,848.1			17,234.8			16,230.6			16,153.8			14,461.5			14,386.1			15,003.7			14,581.1
Federal Reserve Deposits and Other Interest-Bearing		7,892.1			10,808.5			14,799.6			8,950.1			7,223.2			4,536.1			3,886.2			6,753.8
Securities		31,459.7			27,642.6			24,033.2			22,246.4			21,285.0			20,346.7			19,369.8			18,303.9
Loans and Leases		28,779.7			28,469.1			28,330.9			27,795.0			27,614.9			27,376.2			27,569.1			27,497.8
Allowance for Credit Losses Assigned to Loans		(293.2	)		(300.9	)		(308.2	)		(319.2	)		(314.7	)		(320.6	)		(311.0	)		(305.4	)
Other Assets		7,068.2			5,774.7			5,138.8			4,756.9			6,488.8			5,364.4			5,571.5			5,380.0
Total Assets	$	97,952.8		$	94,029.7		$	92,359.1		$	83,265.7		$	80,109.7		$	74,706.7		$	74,285.8		$	74,969.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Demand and Other Noninterest-Bearing	$	20,518.6		$	16,851.3		$	11,017.4		$	9,748.8		$	8,875.9		$	8,137.3		$	8,926.9		$	9,517.9
Savings and Money Market		14,919.1			14,137.3			14,222.9			13,901.7			13,338.3			13,004.8			12,960.8			12,889.6
Savings Certificates and Other Time		3,283.9			3,625.3			3,686.9			3,831.3			3,845.7			3,573.1			3,561.5			3,848.1
Non-U.S. Offices – Interest-Bearing		40,494.5			41,688.4			41,568.4			36,075.3			33,241.1			30,116.5			28,473.4			27,973.4
Total Deposits		79,216.1			76,302.3			70,495.6			63,557.1			59,301.0			54,831.7			53,922.6			54,229.0
Short-Term Borrowings		2,661.5			3,003.8			7,114.6			5,130.3			5,237.5			5,222.3			6,123.6			6,839.4
Senior Notes		2,129.7			2,015.3			1,891.9			1,893.2			1,716.4			1,403.6			1,396.6			1,518.3
Long-Term Debt		2,134.6			2,179.8			2,756.9			2,723.3			2,751.0			2,792.7			2,940.7			2,803.1
Floating Rate Capital Debt		276.9			276.9			276.9			276.9			276.8			276.8			276.8			276.8
Other Liabilities		4,345.5			3,157.1			2,866.5			2,832.1			3,980.2			3,494.8			3,078.9			2,848.4
Stockholders’ Equity		7,188.5			7,094.5			6,956.7			6,852.8			6,846.8			6,684.8			6,546.6			6,454.6
Total Liabilities and Stockholders’ Equity	$	97,952.8		$	94,029.7		$	92,359.1		$	83,265.7		$	80,109.7		$	74,706.7		$	74,285.8		$	74,969.6
ANALYSIS OF NET INTEREST INCOME
Earning Assets	$	87,226.4		$	84,428.4		$	83,666.8		$	75,396.4		$	70,941.8		$	66,954.7		$	66,121.6		$	67,415.1
Interest-Related Funds		65,900.2			66,926.8			71,518.5			63,832.0			60,406.8			56,389.8			55,733.4			56,148.7
Noninterest-Related Funds		21,326.2			17,501.6			12,148.3			11,564.4			10,535.0			10,564.9			10,388.2			11,266.4
Net Interest Income (Fully Taxable Equivalent)		281.3			266.6			256.6			244.9			232.3			243.0			242.4			240.1
Net Interest Margin (Fully Taxable Equivalent)		1.28	%		1.25	%		1.23	%		1.32	%		1.30	%		1.44	%		1.47	%		1.44	%
COMMON STOCK DIVIDEND AND MARKET PRICE
Dividends	$	.28		$	.28		$	.28		$	.28		$	.28		$	.28		$	.28		$	.28
Market Price Range – High		42.70			48.53			52.57			56.86			56.05			50.85			59.36			56.50
– Low		33.20			33.51			44.58			48.93			47.02			45.30			46.60			48.89

Note: The common stock of Northern Trust Corporation is traded on the Nasdaq Stock Market under the symbol NTRS.

2011 ANNUAL REPORT TO SHAREHOLDERS 130 NORTHERN TRUST CORPORATION

SENIOR OFFICERS

NORTHERN TRUST CORPORATION

THE NORTHERN TRUST COMPANY

Management Group

Frederick H. Waddell

Chairman and Chief Executive Officer

Sherry S. Barrat

Vice Chairman

Jeffrey D. Cohodes

Executive Vice President

Head of Corporate Risk Management

Steven L. Fradkin

President –

Corporate & Institutional Services

Timothy P. Moen

Executive Vice President

Human Resources and Administration

William L. Morrison

President and Chief Operating Officer

Michael G. O’Grady

Executive Vice President

Chief Financial Officer

Stephen N. Potter

President –

Northern Trust Global Investments

Jana R. Schreuder

President –

Personal Financial Services

Joyce M. St. Clair

President –

Operations & Technology

Kelly R. Welsh

Executive Vice President

General Counsel

NORTHERN TRUST CORPORATION

Other Senior Officers

Aileen B. Blake

Executive Vice President

Controller

Robert P. Browne

Executive Vice President

Chief Investment Officer

Kelly King Dibble

Senior Vice President

Director of Public Affairs

William R. Dodds, Jr.

Executive Vice President

Treasurer

Rose A. Ellis

Corporate Secretary

Assistant General Counsel

Beverly J. Fleming

Senior Vice President

Director of Investor Relations

Kandace K. Heck

Executive Vice President

General Auditor (Effective March 1, 2012)

Connie L. Lindsey

Executive Vice President

Corporate Social Responsibility

Saverio Mirarchi

Senior Vice President

Chief Compliance and Ethics Officer

Dan E. Phelps

Executive Vice President

General Auditor (Until March 1, 2012)

James E. Roselle

Executive Vice President

Associate General Counsel

Jason J. Tyler

Senior Vice President

Head of Corporate Strategy

Mark J. Van Grinsven

Executive Vice President

Credit Policy

THE NORTHERN TRUST COMPANY

Other Executive Vice Presidents

Sheldon T. Anderson

Steven R. Bell

Penelope J. Biggs

David C. Blowers

Wayne G. Bowers

S. Biff Bowman

Peter B. Cherecwich

Marianne G. Doan

Jennifer L. Driscoll

Arthur J. Fogel

Peter A. Gloyne

Mark C. Gossett

Darrell B. Jackson

J. Jeffery Kauffman

Wilson Leech

Lyle L. Logan

Steve “Mac” MacLellan

R. Hugh Magill

Peter A. Magrini

K. Kelly Mannard

Brian P. Ovaert

Teresa A. Parker

S. Gillian Pembleton

Douglas P. Regan

Alan W. Robertson

Colin A. Robertson

Jean E. Sheridan

John D. Skjervem

David L. Tentinger

Mabel C. Tung

Michael A. Vardas

Lloyd A. Wennlund

2011 ANNUAL REPORT TO SHAREHOLDERS 131 NORTHERN TRUST CORPORATION

BOARD OF DIRECTORS

NORTHERN TRUST CORPORATION

Board of Directors

Frederick H. Waddell

Chairman and Chief Executive Officer

Northern Trust Corporation and

The Northern Trust Company (6)

Linda Walker Bynoe

President and Chief Executive Officer

Telemat Ltd.

Project management and consulting firm (1, 2, 6)

Nicholas D. Chabraja

Retired Chairman and Chief Executive Officer

General Dynamics Corporation

Worldwide defense, aerospace, and other technology products manufacturer (1, 4)

Susan Crown

Vice President

Henry Crown and Company

Worldwide company with diversified manufacturing operations, real estate, and securities;

Chairman

SCE

Philanthropic foundation (4, 5)

Dipak C. Jain

Dean

INSEAD

Educational institution (3, 4, 6)

Robert W. Lane

Retired Chairman and Chief Executive Officer

Deere & Company

Worldwide provider of agricultural, construction, and forestry equipment and financial services (1, 3)

Robert C. McCormack

Advisory Director

Trident Capital

Venture capital firm (1, 4)

Edward J. Mooney

Retired Délégué Général–North America

Suez Lyonnaise des Eaux

Worldwide provider of energy, water, waste, and communications services;

Retired Chairman and Chief Executive Officer

Nalco Chemical Company

Manufacturer of specialized service chemicals (1, 2, 5, 6)

John W. Rowe

Chairman and Chief Executive Officer

Exelon Corporation

Producer and wholesale marketer of energy (4, 5, 6)

Martin P. Slark

Vice Chairman and Chief Executive Officer

Molex Incorporated

Manufacturer of electronic, electrical, and fiber optic interconnection products and systems (2, 3)

David H.B. Smith Jr.

Executive Vice President–Policy & Legal Affairs and General Counsel

Mutual Fund Directors Forum

Nonprofit membership organization for investment company directors (1, 2)

Enrique J. Sosa

Retired President

BP Amoco Chemicals

Worldwide chemical division of BP p.l.c. (2, 4)

Charles A. Tribbett III

Managing Director

Russell Reynolds Associates

Worldwide executive recruiting firm (3, 5)

Advisory Director

Sir John R.H. Bond

Chairman

Xstrata plc

Global diversified mining group (2, 3)*

*In an advisory capacity

Board Committees

1. Audit Committee

2. Business Risk Committee

3. Business Strategy Committee

4. Compensation and Benefits Committee

5. Corporate Governance Committee

6. Executive Committee

2011 ANNUAL REPORT TO SHAREHOLDERS 132 NORTHERN TRUST CORPORATION

CORPORATE INFORMATION

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN

The graph below compares the cumulative total stockholder return on the Corporation’s common stock to the cumulative total return of the S&P 500 Index and the Keefe, Bruyette & Woods (KBW) Bank Index for the five fiscal years which commenced January 1, 2007 and ended December 31, 2011. The cumulative total stockholder return assumes the investment of $100 in the Corporation’s common stock and in each index on December 31, 2006 and assumes reinvestment of dividends. The KBW Bank Index is a modified-capitalization-weighted index made up of 24 of the largest banking companies in the United States. The Corporation is included in the S&P 500 Index and the KBW Bank Index.

We caution you not to draw any conclusions from the data in this performance graph, as past results do not necessarily indicate future performance.

Total Return Assumes $100 Invested on

December 31, 2006 with Reinvestment of Dividends

Five-Year Cumulative Total Return

	DECEMBER 31,
	2006		2007		2008		2009		2010		2011
Northern Trust		100		128		89		91		98		72
S&P 500		100		105		66		84		97		99
KBW Bank Index		100		78		41		40		50		38

2011 ANNUAL REPORT TO SHAREHOLDERS 133 NORTHERN TRUST CORPORATION

CORPORATE INFORMATION

ANNUAL MEETING

The annual meeting of stockholders will be held on Tuesday, April 17, 2012, at 10:30 A.M. (Central Time) at

50 South La Salle Street, Chicago, Illinois.

STOCK LISTING

The common stock of Northern Trust Corporation is traded on the NASDAQ Stock Market under the symbol NTRS.

STOCK TRANSFER AGENT, REGISTRAR,

AND DIVIDEND DISBURSING AGENT

Wells Fargo Bank, N.A.

Shareowner Services

161 North Concord Exchange Street

South St. Paul, Minnesota 55075

General Phone Number: 1-800-468-9716

Internet Site: www.shareowneronline.com

AVAILABLE INFORMATION

The Corporation’s Internet address is northerntrust.com. Through our Web site, we make available free of charge our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act (15 U.S.C. 78m(a) or 78o(d)) as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission. Information contained on the Web site is not part of the Annual Report.

10-K REPORT

Copies of the Corporation’s 2011 10-K Report filed with the Securities and Exchange Commission will be available by the end of March 2012 and will be mailed to stockholders and other interested persons upon written request to:

Rose A. Ellis

Corporate Secretary

Northern Trust Corporation

50 South La Salle Street, M-9

Chicago, Illinois 60603

QUARTERLY EARNINGS RELEASES

Copies of the Corporation’s quarterly earnings releases

may be obtained by accessing Northern Trust’s Web site

at northerntrust.com or by calling the Corporate Communications department at 312-444-4272.

INVESTOR RELATIONS

Please direct Investor Relations inquiries to:

Beverly J. Fleming, Director of Investor Relations,

at 312-444-7811 or beverly_fleming@ntrs.com.

NORTHERNTRUST.COM

Information about the Corporation, including financial performance and products and services, is available on Northern Trust’s Web site at northerntrust.com.

NORTHERN TRUST GLOBAL INVESTMENTS

Northern Trust Corporation uses the name Northern Trust Global Investments to identify the investment management business, including portfolio management, research, and trading, carried on by several of its affiliates, including The Northern Trust Company, Northern Trust Global Advisors, and Northern Trust Investments.

2011 ANNUAL REPORT TO SHAREHOLDERS 134 NORTHERN TRUST CORPORATION

EX-21

Exhibit 21

NORTHERN TRUST CORPORATION SUBSIDIARIES AS OF FEBRUARY 24, 2012.

	Percent Owned			Jurisdiction of Incorporation
The Northern Trust Company		100	%	Illinois
Norlease, Inc.		100	%	Delaware
TNT-NL Leasing I, Inc.		100	%	Delaware
TNT-NL Eurolease I, Ltd.		100	%	Bermuda
TNT-NL Eurolease II, Ltd.*		100	%	Bermuda
Clenston Ltd.*		100	%	Bermuda
MFC Company, Inc.		100	%	Delaware
The Northern Trust Company, Canada		100	%	Ontario, Canada
Northern Trust Hedge Fund Services, L.L.C.		100	%	Delaware
Nortrust Nominees, Ltd.		100	%	England
The Northern Trust Company U.K. Pension Plan Limited		100	%	England
Northern Trust Guernsey Holdings Limited		99	%	Guernsey
Northern Trust (Guernsey) Limited		99	%	Guernsey
The Northern Trust International Banking Corporation		100	%	Edge Act
Northern Trust Cayman International, Ltd.		100	%	Cayman Islands, BWI
The Northern Trust Company of Hong Kong Limited		99.99	%	Hong Kong
Northern Trust Partners Guernsey Limited		100	%	Guernsey (Inactive)
The Nelson Trafalgar Guernsey Limited Partnership		100	%	Guernsey (Inactive)
Northern Trust Fund Managers (Ireland) Limited		100	%	Ireland
Northern Trust Global Fund Services Bermuda		100	%	Bermuda
Northern Trust HFS Hong Kong Limited		100	%	Hong Kong
Northern Trust Global Fund Services Cayman Limited		100	%	Cayman Islands, BWI
NT EBT Limited		100	%	England
Northern Trust Management Services Limited		100	%	England
Northern Trust Global Investments Limited		100	%	England
The Northern Trust Scottish Limited Partnership		99	%	Scotland
Northern Trust Luxembourg Capital S.A.R.L.		100	%	Luxembourg
Northern Trust (Ireland) Limited		100	%	Ireland
Northern Trust Fund Services (Ireland) Limited		100	%	Ireland
Nortrust Nominees (Ireland) Limited		100	%	Ireland
NTRS Nominees Limited		100	%	Ireland
Northern Trust Nominees (Ireland) Limited		100	%	Ireland
Northern Trust Securities Services (Ireland) Limited		100	%	Ireland
Northern Trust Pension Trustees (Ireland) Limited		100	%	Ireland
Northern Trust Property Services (Ireland) Limited		100	%	Ireland
Northern Trust Management Services (Ireland) Limited		100	%	Ireland
Northern Trust International Fund Administration Services (Ireland) Limited		100	%	Ireland
Northern Trust Fiduciary Services (Ireland) Limited		100	%	Ireland
Northern Trust GFS Holdings Limited		99	%	Guernsey
Northern Trust Fiduciary Services (Guernsey) Limited		99	%	Guernsey
Arnold Limited		99	%	Guernsey
Control Nominees Limited		99	%	Guernsey
Truchot Limited		99	%	Guernsey
Vivian Limited		99	%	Guernsey
Doyle Administration Limited		99	%	Guernsey
Barfield Nominees Limited		99	%	Guernsey
Northern Trust International Fund Administration Services (Guernsey) Limited		99	%	Guernsey
Trafalgar Representatives Limited		50	%	Guernsey
Nelson Representatives Limited		50	%	Guernsey
Admiral Nominees Limited		50	%	Guernsey
Northern Trust Fiduciary Services (Jersey) Limited		99	%	Jersey
Saline Nominees Limited		99	%	Guernsey

NORTHERN TRUST CORPORATION SUBSIDIARIES AS OF FEBRUARY 24, 2012.

(continued)

	Percent Owned			Jurisdiction of Incorporation
Northern Trust International Fund Administrators (Jersey) Limited		100	%	Jersey
Northern Trust Partners Scotland Limited		100	%	Scotland
Northern Operating Services Private Limited		99	%	India
NTG Services LLC		100	%	Delaware LLC
NT Mortgage Holdings LLC		100	%	Delaware LLC
Northern Trust Investments, Inc.		100	%	Illinois
Northern Trust Holdings Limited		100	%	England
Northern Trust Global Services Limited		100	%	England
Northern Trust European Holdings Limited		100	%	England
Northern Trust Luxembourg Management Company S.A.		99.99	%	Luxembourg
Northern Trust Directors Services (Guernsey) Limited		100	%	Guernsey
Realnor Properties, Inc.		100	%	Florida
Waterline Partners, LLC		100	%	California
Northern Trust Company of California		100	%	California
Northern Trust Holdings L.L.C.		100	%	Delaware
Northern Investment Corporation		100	%	Delaware
Northern Investment Management Company		100	%	Delaware (Inactive)
Northern Trust Securities, Inc.		100	%	Delaware
Northern Trust Services, Inc.		100	%	Illinois
Nortrust Realty Management, Inc.		100	%	Illinois
The Northern Trust Company of New York		100	%	New York
The Northern Trust Company of Connecticut		100	%	Connecticut
NT Global Advisors, Inc.		100	%	Ontario, Canada
Northern Trust Global Investments Japan, K.K.		100	%	Japan
NTC Capital I		100	%	Delaware
NTC Capital II		100	%	Delaware
Equilend Holdings LLC		10	%	Delaware
The Northern Trust Company of Connecticut		100	%	Delaware
TNT – Comer College Prep, LLC		100	%	Delaware

* Indirectly owned by Norlease Inc. through Delaware business trusts.

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

The Board of Directors of

Northern Trust Corporation:

We consent to the incorporation by reference in the registration statements on Form S-3 Nos. 333-175892, 333-175892-01, 333-152678, 333-152678-01, 333-152678-02, and 333-152678-03 and on Form S-8 Nos. 333-174384, 333-144848, 333-86418, 333-84085, and 333-52623 of Northern Trust Corporation of our reports dated February 24, 2012, with respect to the consolidated balance sheet of Northern Trust Corporation and subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2011, and the effectiveness of internal control over financial reporting as of December 31, 2011, which reports appear in the December 31, 2011 annual report on Form 10-K of Northern Trust Corporation.

/s/ KPMG LLP

Chicago, Illinois

February 24, 2012

EX-24

Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

That the undersigned officers and directors of Northern Trust Corporation hereby severally constitute and appoint Frederick H. Waddell, William L. Morrison and Kelly R. Welsh, and each of them singly, our true and lawful attorneys and agents with full power to them and each of them singly, to sign for us in our names, in the capacities indicated below, Form 10-K, annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, for the fiscal year ended December 31, 2011, and to file such Form, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby granting to such attorneys and agents, and each of them, full power of substitution and revocation in the premises, and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Northern Trust Corporation to comply with the provisions of the Securities Exchange Act of 1934, as amended, and all regulations of the Securities and Exchange Commission thereunder, hereby ratifying and confirming our signatures as they may be signed by our attorneys, or any one of them, to such Form, and all that our attorneys and agents, or any of them, may do or cause to be done by virtue of these presents.

IN WITNESS WHEREOF, the undersigned have hereunto executed this Power of Attorney this 14th day of February, 2012.

/s/ Frederick H. Waddell
Frederick H. Waddell     Chairman, Chief Executive Officer, and Director
/s/ William L. Morrison	/s/ Aileen B. Blake
William L. Morrison     President and     Chief Financial Officer	Aileen B. Blake       Executive Vice President and Controller       (Chief Accounting Officer)
/s/ Linda Walker Bynoe	/s/ Nicholas D. Chabraja
Linda Walker Bynoe     Director	Nicholas D. Chabraja       Director
/s/ Susan Crown	/s/ Dipak C. Jain
Susan Crown     Director	Dipak C. Jain       Director
/s/ Robert W. Lane	/s/ Robert C. McCormack
Robert W. Lane     Director	Robert C. McCormack       Director

/s/ Edward J. Mooney	/s/ John W. Rowe
Edward J. Mooney	John W. Rowe
Director	Director
/s/ Martin P. Slark	/s/ David H.B. Smith
Martin P. Slark	David H.B. Smith
Director	Director
/s/ Enrique J. Sosa	/s/ Charles A. Tribbett III
Enrique J.Sosa	Charles A. Tribbett III
Director	Director

STATE OF ILLINOIS                   )

                                                         )         SS

COUNTY OF COOK                     )

I, Eileen C. Ratzka, a Notary Public, DO HEREBY CERTIFY that the above named directors and officers of Northern Trust Corporation, personally known to me to be the same persons whose names are subscribed to the foregoing instrument, appeared before me this day in person, and severally acknowledged that they signed and delivered the instrument as their free and voluntary act, for the uses and purposes therein set forth.

GIVEN under my hand and notarial seal this 14th day of February, 2012.

/s/ Eileen C. Ratzka

    Eileen C. Ratzka

    Notary Public

My Commission Expires: 8/17/13

-2-

EX-31.(I)

Exhibit 31(i)

Certification of CEO Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Frederick H. Waddell, certify that:

1. I have reviewed this report on Form 10-K for the year ending December 31, 2011 of Northern Trust Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 24, 2012	/s/ Frederick H. Waddell
	Frederick H. Waddell
	Chief Executive Officer

EX-31.(II)

Exhibit 31(ii)

Certification of CFO Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael G. O’Grady, certify that:

1. I have reviewed this report on Form 10-K for the year ending December 31, 2011 of Northern Trust Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 24, 2012	/s/ Michael G. O’Grady
	Michael G. O’Grady
	Chief Financial Officer

EX-32

Exhibit 32(i)

Certifications of CEO and CFO Pursuant to

18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Northern Trust Corporation (the “Corporation”) on Form 10-K for the period ending December 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Frederick H. Waddell, as Chief Executive Officer of the Corporation, and Michael G. O’Grady, as Chief Financial Officer of the Corporation, each hereby certifies, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Frederick H. Waddell

Frederick H. Waddell

Chief Executive Officer

February 24, 2012

/s/ Michael G. O’Grady

Michael G. O’Grady

Chief Financial Officer

February 24, 2012

This certification accompanies the Report pursuant to section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by Northern Trust Corporation for purposes of section 18 of the Securities Exchange Act of 1934, as amended.

XML

Business Units and Related Information

12 Months Ended

Dec. 31, 2011

Business Units and Related Information

Note 31 – Business Units and Related Information

Northern Trust is organized around its two principal client-focused business units, C&IS and PFS. Investment management services and products are provided to the clients of these business units and to other U.S. and non-U.S. clients by NTGI. Operating and systems support is provided to each of the business units by the O&T business unit. The revenue and expenses of NTGI are fully allocated to C&IS and PFS. The revenue and expenses of O&T are fully allocated to C&IS, PFS, and Treasury and Other.

C&IS and PFS results are presented to promote a greater understanding of their financial performance. The information, presented on an internal management-reporting basis as opposed to GAAP which is used for consolidated financial reporting purposes, derives from internal accounting systems that support Northern Trust’s strategic objectives and management structure. The accounting policies used for management reporting are consistent with those described in Note 1 – Summary of Significant Accounting Policies.

The following tables show the earnings contribution of Northern Trust’s business units for the years ended December 31, 2011, 2010, and 2009.

CORPORATE AND INSTITUTIONAL SERVICES RESULTS OF OPERATIONS

(In Millions)	2011			2010			2009
NONINTEREST INCOME
Trust, Investment and Other Servicing Fees	$	1,196.4		$	1,175.1		$	1,236.8
Other		485.4			522.7			571.3
Net Interest Income (FTE)*		282.5			271.8			416.0
Revenue (FTE)*		1,964.3			1,969.6			2,224.1
Provision for Credit Losses		(20.5	)		(16.1	)		30.7
Noninterest Expense		1,522.4			1,328.9			1,200.6
Income before Income Taxes*		462.4			656.8			992.8
Provision for Income Taxes*		168.3			222.4			350.8
Net Income	$	294.1		$	434.4		$	642.0
Percentage of Consolidated Net Income		49	%		65	%		74	%
Average Assets	$	47,533.7		$	38,749.3		$	38,117.1

PERSONAL FINANCIAL SERVICES RESULTS OF OPERATIONS

(In Millions)	2011			2010			2009
NONINTEREST INCOME
Trust, Investment and Other Servicing Fees	$	973.1		$	906.8		$	847.0
Other		128.5			133.3			138.7
Net Interest Income (FTE)*		613.7			591.8			538.1
Revenue (FTE)*		1,715.3			1,631.9			1,523.8
Provision for Credit Losses		75.5			176.1			184.3
Noninterest Expense		1,214.9			1,103.0			1,044.6
Income before Income Taxes*		424.9			352.8			294.9
Provision for Income Taxes*		168.7			132.8			112.4
Net Income	$	256.2		$	220.0		$	182.5
Percentage of Consolidated Net Income		42	%		33	%		21	%
Average Assets	$	23,861.5		$	23,564.5		$	24,534.8

TREASURY AND OTHER RESULTS OF OPERATIONS

(In Millions)	2011			2010			2009
Other Noninterest Income	$	(22.6	)	$	(8.9	)	$	(6.7	)
Net Interest Income (FTE)*		153.1			94.2			85.9
Revenue (FTE)*		130.5			85.3			79.2
Visa Indemnification Benefits		(23.1	)		(33.0	)		(17.8	)
Noninterest Expense (Excluding Visa Indemnification Benefits)		117.0			99.0			89.3
Income before Income Taxes*		36.6			19.3			7.7
Provision (Benefit) for Income Taxes*		(16.7	)		4.2			(32.0	)
Net Income	$	53.3		$	15.1		$	39.7
Percentage of Consolidated Net Income		9	%		2	%		5	%
Average Assets	$	20,552.7		$	13,694.4		$	11,662.3

CONSOLIDATED FINANCIAL INFORMATION

(In Millions)	2011			2010			2009
NONINTEREST INCOME
Trust, Investment and Other Servicing Fees	$	2,169.5		$	2,081.9		$	2,083.8
Other		591.3			647.1			703.3
Net Interest Income (FTE)*		1,049.3			957.8			1,040.0
Revenue (FTE)*		3,810.1			3,686.8			3,827.1
Provision for Credit Losses		55.0			160.0			215.0
Visa Indemnification Benefits		(23.1	)		(33.0	)		(17.8	)
Noninterest Expense (Excluding Visa Indemnification Benefits)		2,854.3			2,530.9			2,334.5
Income before Income Taxes*		923.9			1,028.9			1,295.4
Provision for Income Taxes*		320.3			359.4			431.2
Net Income	$	603.6		$	669.5		$	864.2
Average Assets	$	91,947.9		$	76,008.2		$	74,314.2

* Stated on an FTE basis. The consolidated figures include $40.2 million, $39.1 million, and $40.2 million, of FTE adjustment for 2011, 2010, and 2009, respectively.

Northern Trust’s international activities are centered in the global custody, treasury management, foreign exchange, asset servicing, asset management, and commercial banking businesses. The operations of Northern Trust are managed on a business unit basis and include components of both U.S and non-U.S. source income and assets. Non-U.S. source income and assets are not separately identified in Northern Trust’s internal management reporting system. However, Northern Trust is required to disclose non-U.S. activities based on the domicile of the customer. Due to the complex and integrated nature of Northern Trust’s activities, it is impossible to segregate with precision revenues, expenses and assets between U.S. and non-U.S. domiciled customers. Therefore, certain subjective estimates and assumptions have been made to allocate revenues, expenses and assets between U.S. and non-U.S. operations.

For purposes of this disclosure, all foreign exchange trading income has been allocated to non-U.S. operations. Interest expense is allocated to non-U.S. operations based on specifically matched or pooled funding. Allocations of indirect noninterest expenses related to non-U.S. activities are not significant, but when made, are based on various methods such as time, space, and number of employees.

The table below summarizes international performance based on the allocation process described above without regard to guarantors or the location of collateral. The U.S. performance includes the impacts of benefits totaling $23.1 million, $33.0 million, and $17.8 million recorded in 2011, 2010 and 2009, respectively, from reductions in the Visa indemnification liability.

DISTRIBUTION OF TOTAL ASSETS AND OPERATING PERFORMANCE

(In Millions)	TOTAL ASSETS		TOTAL REVENUE*		INCOME BEFORE INCOME TAXES		NET  INCOME
2011
Non-U.S.	$	28,625.2	$	1,084.8	$	284.4	$	199.3
U.S.		71,598.5		2,685.1		599.3		404.3
Total	$	100,223.7	$	3,769.9	$	883.7	$	603.6
2010
Non-U.S.	$	24,472.9	$	980.9	$	325.1	$	229.3
U.S.		59,371.0		2,666.8		664.7		440.2
Total	$	83,843.9	$	3,647.7	$	989.8	$	669.5
2009
Non-U.S.	$	19,253.2	$	1,086.9	$	445.4	$	305.8
U.S.		62,888.3		2,700.0		809.8		558.4
Total	$	82,141.5	$	3,786.9	$	1,255.2	$	864.2

* Revenue is comprised of net interest income and noninterest income.

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Postretirement Health Care Plan Status (Detail) (Other Postretirement Benefit Plans, Defined Benefit, USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Defined Benefit Plan Disclosure [Line Items]
Postretirement Benefit Liability	$ 54.5	$ 51.3	$ 49.9
Retirees and Dependents
Defined Benefit Plan Disclosure [Line Items]
Postretirement Benefit Liability	31.8	29.4
Actives Eligible for Benefits
Defined Benefit Plan Disclosure [Line Items]
Postretirement Benefit Liability	22.7	14.9
Actives Not Yet Eligible
Defined Benefit Plan Disclosure [Line Items]
Postretirement Benefit Liability		$ 7.0

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Summary of Long Term Debt Outstanding (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Debt Disclosure [Line Items]
Bank-Subordinated Debt	$ 1,033.4	[1],[2]	$ 1,148.7	[1],[2]
Federal Home Loan Bank Borrowings	1,055.0		1,532.5
Capital Lease Obligations	44.9	[3]	48.1	[3]
Total Long-Term Debt	2,133.3		2,729.3
Long-Term Debt Qualifying as Risk-Based Capital	678.9		765.8
Notes 6.30 Percent Bank Subordinated Debt Due March 2011
Debt Disclosure [Line Items]
Bank-Subordinated Debt			150.0	[1],[2],[4]
Notes 4.60 Percent Bank Subordinated Debt Due February 2013
Debt Disclosure [Line Items]
Bank-Subordinated Debt	200.0	[1],[2],[4]	200.0	[1],[2],[4]
Notes 5.85 Percent Bank Subordinated Debt Due November 2017
Debt Disclosure [Line Items]
Bank-Subordinated Debt	241.5	[1],[2],[4],[5]	229.5	[1],[2],[4],[5]
Notes 6.50 Percent Bank Subordinated Debt Due August 2018
Debt Disclosure [Line Items]
Bank-Subordinated Debt	360.8	[1],[2],[4],[5],[6]	337.6	[1],[2],[4],[5],[6]
Sterling Denominated Notes 5.375 Percent Bank Subordinated Debt Due March 2015
Debt Disclosure [Line Items]
Bank-Subordinated Debt	231.1	[1],[2],[7]	231.6	[1],[2],[7]
One Year or Less
Debt Disclosure [Line Items]
Federal Home Loan Bank Borrowings	670.0		426.4
One to Three Years
Debt Disclosure [Line Items]
Federal Home Loan Bank Borrowings	335.0		870.0
Three to Five Years
Debt Disclosure [Line Items]
Federal Home Loan Bank Borrowings			135.0
Five to Ten Years
Debt Disclosure [Line Items]
Federal Home Loan Bank Borrowings	$ 50.0		$ 101.1

[1] Not redeemable prior to maturity.

[2] Debt issue costs are recorded as an asset and amortized on a straight-line basis over the life of the Note.

[3] Refer to Note 10.

[4] Under the terms of its current Offering Circular dated August 23, 2011, the Bank has the ability to offer from time to time its senior bank notes in an aggregate principal amount of up to $4.5 billion at any one time outstanding and up to an additional $1.0 billion of subordinated notes. Each senior note will mature from 30 days to fifteen years, and each subordinated note will mature from five years to fifteen years, following its date of original issuance. Each note will mature on such date as selected by the initial purchaser and agreed to by the Bank.

[5] Interest rate swap contracts were entered into to modify the interest expense on these senior and subordinated notes from fixed rates to floating rates. The swaps are recorded as fair value hedges and at December 31, 2011, increases in the carrying values of the senior and subordinated notes outstanding of $29.9 million and $102.6 million, respectively, were recorded. As of December 31, 2010, increases in the carrying values of senior and subordinated notes outstanding of $47.8 million and $67.4 million, respectively, were recorded.

[6] Notes issued at a discount of .02%

[7] Notes issued at a discount of .484%.

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Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2011

Changes in Number of Shares of Common Stock Outstanding

An analysis of changes in the number of shares of common stock outstanding follows:

	2011			2010			2009
Balance at January 1		242,268,903			241,679,942			223,263,132
Common Stock Issuance		–			–			17,250,000
Incentive Plan and Awards		189,793			300,376			479,359
Stock Options Exercised		149,385			419,846			938,249
Treasury Stock Purchased		(1,599,572	)		(131,261	)		(250,798	)
Balance at December 31		241,008,509			242,268,903			241,679,942

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Changes in Nonvested Stock Options (Detail) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
WEIGHTED-AVERAGE GRANT-DATE FAIR VALUE PER SHARE
Granted	$ 15.26	$ 14.45	$ 16.94
Unvested Options
SHARES
Nonvested stock options outstanding,at beginning of the year	4,735,065
Granted	2,380,933
Vested	(1,713,989)
Foreited or Cancelled	(53,662)
Nonvested stock options outstanding,at the end of the year	5,348,347
WEIGHTED-AVERAGE GRANT-DATE FAIR VALUE PER SHARE
Nonvested stock options weighted average grant-date fair value,at beginning of the year	$ 15.89
Granted	$ 15.26
Vested	$ 16.30
Foreited or Cancelled	$ 15.43
Nonvested stock options weighted average grant-date fair value,at the end of the year	$ 15.48

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Concentrations of Credit Risk (Tables)

12 Months Ended

Dec. 31, 2011

Commercial Real Estate Loan Types

The table below provides additional detail regarding commercial real estate loan types:

(In Millions)	2011		2010
Commercial Mortgages:
Office	$	615.6	$	605.3
Apartment/ Multi-family		656.3		572.4
Retail		523.1		517.8
Industrial/ Warehouse		357.7		383.7
Other		133.3		193.7
Total Commercial Mortgages		2,286.0		2,272.9
Construction, Acquisition and Development Loans		450.1		591.8
Single Family Investment		161.4		246.8
Other Commercial Real Estate Related		84.2		130.9
Total Commercial Real Estate Loans	$	2,981.7	$	3,242.4

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Distribution of Total Assets and Operating Performance (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Total Assets	$ 100,223.7		$ 83,843.9		$ 82,141.5
Total Revenue	3,769.9	[1]	3,647.7	[1]	3,786.9	[1]
Income Before Income Taxes	883.7		989.8		1,255.2
Net Income	603.6		669.5		864.2
Non - U.S.
Total Assets	28,625.2		24,472.9		19,253.2
Total Revenue	1,084.8	[1]	980.9	[1]	1,086.9	[1]
Income Before Income Taxes	284.4		325.1		445.4
Net Income	199.3		229.3		305.8
U.S.
Total Assets	71,598.5		59,371.0		62,888.3
Total Revenue	2,685.1	[1]	2,666.8	[1]	2,700.0	[1]
Income Before Income Taxes	599.3		664.7		809.8
Net Income	$ 404.3		$ 440.2		$ 558.4

[1] Revenue is comprised of net interest income and noninterest income.

XML

Net Income Per Common Share - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Common stock equivalents not included in the computation of diluted earnings per share because their inclusion would have been antidilutive	13,240,787	8,392,686	7,146,701

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Assets and Liabilities Measured at Fair Value on Recurring Basis Segregated by Fair Value Hierarchy Level (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	$ 30,192.5		$ 19,901.9
Trading Account	8.0		6.8
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total	30,200.5		19,908.7
All Other	106.5		103.3
Total	1,289.1		1,411.6
Total Assets at Fair Value	31,489.6		21,320.3
All Other	100.6		58.6
Total Liabilities at Fair Value	1,043.2		1,900.3
Fair Value, Measurements, Recurring | Securities Investment
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	30,192.5		19,901.9
Trading Account	8.0		6.8
Fair Value, Measurements, Recurring | Securities Investment | U.S. Government
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	4,029.4		658.4
Fair Value, Measurements, Recurring | Securities Investment | Obligations of States and Political Subdivisions
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	15.8		36.3
Fair Value, Measurements, Recurring | Securities Investment | Government Sponsored Agency
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	16,771.4		11,970.7
Fair Value, Measurements, Recurring | Securities Investment | Corporate Debt
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	2,676.7		2,554.0
Fair Value, Measurements, Recurring | Securities Investment | Non-U.S. Government
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	173.7		440.6
Fair Value, Measurements, Recurring | Securities Investment | Residential Mortgage-Backed
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	163.8		254.6
Fair Value, Measurements, Recurring | Securities Investment | Other Asset-Backed
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	1,604.8		1,605.7
Fair Value, Measurements, Recurring | Securities Investment | Certificates of Deposit
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	2,418.1		1,402.5
Fair Value, Measurements, Recurring | Securities Investment | Auction Rate Securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	178.3		367.8
Fair Value, Measurements, Recurring | Securities Investment | Others
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	2,160.5		611.3
Fair Value, Measurements, Recurring | Other Assets
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	1,182.6		1,308.3
Fair Value, Measurements, Recurring | Other Assets | Foreign Exchange Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	3,087.3		5,792.8
Fair Value, Measurements, Recurring | Other Assets | Interest Rate Swap Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	338.3		285.8
Fair Value, Measurements, Recurring | Other Assets | Credit Default Swap Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	0.7
Fair Value, Measurements, Recurring | Other Assets | Interest Rate Option
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives			0.1
Fair Value, Measurements, Recurring | Other Assets | Forward Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives			0.5
Fair Value, Measurements, Recurring | Other Liabilities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	942.6		1,841.7
Fair Value, Measurements, Recurring | Other Liabilities | Foreign Exchange Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	2,991.6		5,781.3
Fair Value, Measurements, Recurring | Other Liabilities | Interest Rate Swap Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	231.9		163.7
Fair Value, Measurements, Recurring | Other Liabilities | Credit Default Swap Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	0.1		2.8
Fair Value, Measurements, Recurring | Other Liabilities | Interest Rate Option
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives			0.1
Fair Value, Measurements, Recurring | Other Liabilities | Forward Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives			0.2
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total	4,029.4		658.4
All Other	71.4		65.9
Total	71.4		65.9
Total Assets at Fair Value	4,100.8		724.3
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Securities Investment
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	4,029.4		658.4
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Securities Investment | U.S. Government
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	4,029.4		658.4
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total	25,992.8		18,882.5
All Other	35.1		37.4
Total	3,461.4		6,116.6
Total Assets at Fair Value	29,454.2		24,999.1
Total Liabilities at Fair Value	3,223.6		5,948.1
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Securities Investment
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	25,984.8		18,875.7
Trading Account	8.0		6.8
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Securities Investment | Obligations of States and Political Subdivisions
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	15.8		36.3
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Securities Investment | Government Sponsored Agency
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	16,771.4		11,970.7
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Securities Investment | Corporate Debt
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	2,676.7		2,554.0
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Securities Investment | Non-U.S. Government
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	173.7		440.6
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Securities Investment | Residential Mortgage-Backed
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	163.8		254.6
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Securities Investment | Other Asset-Backed
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	1,604.8		1,605.7
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Securities Investment | Certificates of Deposit
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	2,418.1		1,402.5
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Securities Investment | Others
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	2,160.5		611.3
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Assets
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	3,426.3		6,079.2
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Assets | Foreign Exchange Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	3,087.3		5,792.8
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Assets | Interest Rate Swap Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	338.3		285.8
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Assets | Credit Default Swap Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	0.7
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Assets | Interest Rate Option
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives			0.1
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Assets | Forward Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives			0.5
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Liabilities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	3,223.6		5,948.1
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Liabilities | Foreign Exchange Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	2,991.6		5,781.3
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Liabilities | Interest Rate Swap Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	231.9		163.7
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Liabilities | Credit Default Swap Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	0.1		2.8
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Liabilities | Interest Rate Option
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives			0.1
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Liabilities | Forward Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives			0.2
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total	178.3		367.8
Total Assets at Fair Value	178.3		367.8
All Other	100.6		58.6
Total Liabilities at Fair Value	100.6		58.6
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Securities Investment
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	178.3		367.8
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Securities Investment | Auction Rate Securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Available for Sale	178.3		367.8
Fair Value, Measurements, Recurring | Netting and Collateral
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total	(2,243.7)	[1]	(4,770.9)	[2]
Total Assets at Fair Value	(2,243.7)	[1]	(4,770.9)	[2]
Total Liabilities at Fair Value	(2,281.0)	[1]	(4,106.4)	[2]
Fair Value, Measurements, Recurring | Netting and Collateral | Other Assets
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	(2,243.7)	[1]	(4,770.9)	[2]
Fair Value, Measurements, Recurring | Netting and Collateral | Other Liabilities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Derivatives	$ (2,281.0)	[1]	$ (4,106.4)	[2]

[1] Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting agreements exist between Northern Trust and the counterparty. As of December 31, 2011, derivative assets and liabilities shown above also include reductions of $220.1 million and $257.4 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties.

[2] Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting agreements exist between Northern Trust and the counterparty. As of December 31, 2010, derivative assets and liabilities shown above also include reductions of $2,952.7 million and $2,288.2 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties.

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Components of Other Operating Expense (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Component of Operating Other Cost and Expense [Line Items]
Business Promotion	$ 82.1	$ 81.0	$ 66.6
FDIC Insurance Premiums	29.3	33.9	54.1
Staff Related	37.6	37.4	31.3
Other Intangibles Amortization	17.5	14.4	16.2
Capital Support Agreements			(109.3)
Other Expenses	100.6	103.3	77.4
Total Other Operating Expense	$ 267.1	$ 270.0	$ 136.3

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Accumulated Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2011

Components of Accumulated Other Comprehensive Income (Loss)

The following table summarizes the components of accumulated other comprehensive income (loss) at December 31, 2011, 2010, and 2009, and changes during the years then ended.

	PERIOD CHANGE
(In Millions)	BEGINNING BALANCE (NET OF TAX)			BEFORE TAX AMOUNT			TAX  EFFECT			ENDING BALANCE (NET OF TAX)
DECEMBER 31, 2011
Noncredit-Related Unrealized Losses on Securities OTTI	$	(21.2	)	$	10.2		$	(3.6	)	$	(14.6	)
Other Unrealized Gains (Losses) on Securities Available for Sale, net		7.7			61.6			(23.4	)		45.9
Reclassification Adjustments		–			13.5			(5.0	)		8.5
Net Unrealized Gains (Losses) on Securities Available for Sale		(13.5	)		85.3			(32.0	)		39.8
Unrealized Gains (Losses) on Cash Flow Hedge Designations		11.4			(23.6	)		8.8			(3.4	)
Reclassification Adjustments		–			(5.6	)		2.0			(3.6	)
Net Unrealized Gains (Losses) on Cash Flow Hedge Designations		11.4			(29.2	)		10.8			(7.0	)
Foreign Currency Translation Adjustments		(7.0	)		18.7			(21.2	)		(9.5	)
Pension and Other Postretirement Benefit Adjustments
Net Actuarial (Loss) Gain		(299.5	)		(158.2	)		61.3			(396.4	)
Prior Service (Cost) Benefit		3.3			7.7			(2.9	)		8.1
Reclassification Adjustments		–			30.2			(10.8	)		19.4
Total Pension and Other Postretirement Benefit Adjustments		(296.2	)		(120.3	)		47.6			(368.9	)
Accumulated Other Comprehensive Income (Loss)	$	(305.3	)	$	(45.5	)	$	5.2		$	(345.6	)
DECEMBER 31, 2010
Noncredit-Related Unrealized Losses on Securities OTTI	$	(42.0	)	$	33.0		$	(12.2	)	$	(21.2	)
Other Unrealized Gains (Losses) on Securities Available for Sale, net		.3			(8.8	)		3.4			(5.1	)
Reclassification Adjustments		–			20.2			(7.4	)		12.8
Net Unrealized Gains (Losses) on Securities Available for Sale		(41.7	)		44.4			(16.2	)		(13.5	)
Unrealized Gains (Losses) on Cash Flow Hedge Designations		(26.2	)		46.7			(17.1	)		3.4
Reclassification Adjustments		–			12.6			(4.6	)		8.0
Net Unrealized Gains (Losses) on Cash Flow Hedge Designations		(26.2	)		59.3			(21.7	)		11.4
Foreign Currency Translation Adjustments		11.3			4.0			(22.3	)		(7.0	)
Pension and Other Postretirement Benefit Adjustments
Net Actuarial (Loss) Gain		(310.5	)		(16.4	)		9.3			(317.6	)
Prior Service (Cost) Benefit		5.5			–			–			5.5
Reclassification Adjustments		–			25.0			(9.1	)		15.9
Total Pension and Other Postretirement Benefit Adjustments		(305.0	)		8.6			.2			(296.2	)
Accumulated Other Comprehensive Income (Loss)	$	(361.6	)	$	116.3		$	(60.0	)	$	(305.3	)
DECEMBER 31, 2009
Cumulative Effect of Applying FSP FAS 115-2 (ASC 320-10)	$	–		$	(15.0	)	$	5.5		$	(9.5	)
Noncredit-Related Unrealized Losses on Securities OTTI		–			(66.4	)		24.4			(42.0	)
Other Unrealized Gains (Losses) on Securities Available for Sale, net		(212.9	)		374.7			(137.5	)		24.3
Reclassification Adjustments		–			(22.9	)		8.4			(14.5	)
Net Unrealized Gains (Losses) on Securities Available for Sale		(212.9	)		270.4			(99.2	)		(41.7	)
Unrealized Gains (Losses) on Cash Flow Hedge Designations		(20.7	)		8.2			(3.0	)		(15.5	)
Reclassification Adjustments		–			(16.9	)		6.2			(10.7	)
Net Unrealized Gains (Losses) on Cash Flow Hedge Designations		(20.7	)		(8.7	)		3.2			(26.2	)
Foreign Currency Translation Adjustments		12.8			(38.1	)		36.6			11.3
Pension and Other Postretirement Benefit Adjustments
Net Actuarial (Loss) Gain		(266.5	)		(64.0	)		8.8			(321.7	)
Prior Service (Cost) Benefit		(6.4	)		17.6			(6.4	)		4.8
Transition Obligation		(1.2	)		1.4			(.5	)		(.3	)
Reclassification Adjustments		–			19.4			(7.2	)		12.2
Total Pension and Other Postretirement Benefit Adjustments		(274.1	)		(25.6	)		(5.3	)		(305.0	)
Accumulated Other Comprehensive Income (Loss)	$	(494.9	)	$	198.0		$	(64.7	)	$	(361.6	)

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Gains and Losses Recorded in Consolidated Statement of Income related to Derivative Instruments Not Formally Designated as Hedges (Detail) (Nondesignated, USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Derivative Instruments, Gain (Loss) [Line Items]
Amount Recognized in Income	$ (5.9)	$ (21.1)
Credit Default Swap Contracts | Others Operating Income
Derivative Instruments, Gain (Loss) [Line Items]
Amount Recognized in Income	0.9	(1.7)
Forward Contracts | Others Operating Income
Derivative Instruments, Gain (Loss) [Line Items]
Amount Recognized in Income	0.2	0.3
Foreign Exchange Contracts | Others Operating Income
Derivative Instruments, Gain (Loss) [Line Items]
Amount Recognized in Income	$ (7.0)	$ (19.7)

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Reconciliation of Amortized Cost to Fair Values of Securities Available for Sale (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Investment Holdings [Line Items]
AMORTIZED COST	$ 30,092.6	$ 19,912.7
GROSS UNREALIZED GAINS	173.8	77.5
GROSS UNREALIZED LOSSES	73.9	88.3
FAIR VALUE	30,192.5	19,901.9
U.S. Government
Investment Holdings [Line Items]
AMORTIZED COST	3,965.9	667.2
GROSS UNREALIZED GAINS	63.5	1.0
GROSS UNREALIZED LOSSES		9.8
FAIR VALUE	4,029.4	658.4
Obligations of States and Political Subdivisions
Investment Holdings [Line Items]
AMORTIZED COST	14.9	35.4
GROSS UNREALIZED GAINS	0.9	0.9
FAIR VALUE	15.8	36.3
Government Sponsored Agency
Investment Holdings [Line Items]
AMORTIZED COST	16,702.6	11,937.0
GROSS UNREALIZED GAINS	86.1	47.0
GROSS UNREALIZED LOSSES	17.3	13.3
FAIR VALUE	16,771.4	11,970.7
Corporate Debt
Investment Holdings [Line Items]
AMORTIZED COST	2,677.7	2,547.7
GROSS UNREALIZED GAINS	4.7	7.8
GROSS UNREALIZED LOSSES	5.7	1.5
FAIR VALUE	2,676.7	2,554.0
Non-U.S. Government
Investment Holdings [Line Items]
AMORTIZED COST	173.7	440.6
FAIR VALUE	173.7	440.6
Residential Mortgage-Backed
Investment Holdings [Line Items]
AMORTIZED COST	196.1	308.0
GROSS UNREALIZED GAINS		0.9
GROSS UNREALIZED LOSSES	32.3	54.3
FAIR VALUE	163.8	254.6
Other Asset-Backed
Investment Holdings [Line Items]
AMORTIZED COST	1,606.8	1,606.5
GROSS UNREALIZED GAINS	1.3	1.5
GROSS UNREALIZED LOSSES	3.3	2.3
FAIR VALUE	1,604.8	1,605.7
Certificates of Deposit
Investment Holdings [Line Items]
AMORTIZED COST	2,418.2	1,402.5
GROSS UNREALIZED GAINS	0.2
GROSS UNREALIZED LOSSES	0.3
FAIR VALUE	2,418.1	1,402.5
Auction Rate Securities
Investment Holdings [Line Items]
AMORTIZED COST	186.5	357.0
GROSS UNREALIZED GAINS	4.3	14.2
GROSS UNREALIZED LOSSES	12.5	3.4
FAIR VALUE	178.3	367.8
Others
Investment Holdings [Line Items]
AMORTIZED COST	2,150.2	610.8
GROSS UNREALIZED GAINS	12.8	4.2
GROSS UNREALIZED LOSSES	2.5	3.7
FAIR VALUE	$ 2,160.5	$ 611.3

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Summary of Nonvested Stock and Stock Unit Awards (Detail) (Stock and Stock Unit Awards, USD $)	12 Months Ended
	Dec. 31, 2011 Year
Stock and Stock Unit Awards
NUMBER
Beginning Balance	2,038,244
Granted	995,176
Vested	(179,044)
Forfeited	(45,309)
Ending Balance	2,809,067
WEIGHTED AVERAGE GRANT-DATE FAIR VALUE PER UNIT
Nonvested at beginning of the year	$ 54.41
Granted	$ 50.79
Vested	$ 66.81
Forfeited	$ 54.99
Nonvested at the end of year	$ 52.33
WEIGHTED AVERAGE REMAINING VESTING TERM (YEARS)
Nonvested at beginning of the year	2.7
Nonvested at the end of year	2.4

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Buildings and Equipment - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Property, Plant and Equipment [Line Items]
Depreciation of assets	$ 89.2	$ 93.5	$ 95.7

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Loans and Leases (Tables)

12 Months Ended

Dec. 31, 2011

Amounts Outstanding for Loans and Leases by Segment and Class

Amounts outstanding for loans and leases, by segment and class, are shown below.

	DECEMBER 31
(In Millions)	2011			2010
Commercial
Commercial and Institutional	$	6,918.7		$	5,914.5
Commercial Real Estate		2,981.7			3,242.4
Lease Financing, net		978.8			1,063.7
Non-U.S.		1,057.5			1,046.2
Other		417.6			346.6
Total Commercial		12,354.3			11,613.4
Personal
Residential Real Estate		10,708.9			10,854.9
Private Client		5,651.4			5,423.7
Other		349.3			240.0
Total Personal		16,709.6			16,518.6
Total Loans and Leases	$	29,063.9		$	28,132.0
Allowance for Credit Losses Assigned to Loans and Leases		(294.8	)		(319.6	)
Net Loans and Leases	$	28,769.1		$	27,812.4

Components of Net Investments in Direct Finance and Leverage Leases

The components of the net investment in direct finance and leveraged leases are as follows:

	DECEMBER 31
(In Millions)	2011			2010
Direct Finance Leases:
Lease Receivable	$	156.3		$	148.4
Residual Value		149.2			176.1
Initial Direct Costs		2.9			1.8
Unearned Income		(44.1	)		(44.9	)
Investment in Direct Finance Leases	$	264.3		$	281.4
Leveraged Leases:
Net Rental Receivable		326.0			353.0
Residual Value		622.7			743.8
Unearned Income		(234.2	)		(314.5	)
Investment in Leveraged Leases	$	714.5		$	782.3
Lease Financing, net	$	978.8		$	1,063.7

Future Minimum Lease Payments to be Received

The following schedule reflects the future minimum lease payments to be received over the next five years under direct finance leases:

(In Millions)	FUTURE MINIMUM LEASE PAYMENTS
2012	$	33.9
2013		28.9
2014		25.1
2015		21.4
2016		15.6

Loan and Lease Segment and Class Balances Segregated by Borrower Ratings into "1 to 3", "4 to 5", and "6 to 9" (Watch List) Categories

Loan and lease segment and class balances at December 31, 2011 and December 31, 2010 are provided below, segregated by borrower ratings into “1 to 3”, “4 to 5”, and “6 to 9”(watch list), categories.

	DECEMBER 31, 2011								DECEMBER 31, 2010
(In Millions)	1 TO 3 CATEGORY		4 TO 5 CATEGORY		6 TO 9 CATEGORY (WATCH LIST)		TOTAL		1 TO 3 CATEGORY		4 TO 5 CATEGORY		6 TO 9 CATEGORY (WATCH LIST)		TOTAL
Commercial
Commercial and Institutional	$	3,681.8	$	3,029.1	$	207.8	$	6,918.7	$	2,821.5	$	2,849.8	$	243.2	$	5,914.5
Commercial Real Estate		1,247.1		1,467.2		267.4		2,981.7		1,232.8		1,594.3		415.3		3,242.4
Lease Financing, net		547.7		422.3		8.8		978.8		571.6		473.0		19.1		1,063.7
Non-U.S.		519.0		527.3		11.2		1,057.5		430.0		596.5		19.7		1,046.2
Other		241.4		176.2		–		417.6		209.5		137.1		–		346.6
Total Commercial		6,237.0		5,622.1		495.2		12,354.3		5,265.4		5,650.7		697.3		11,613.4
Personal
Residential Real Estate		2,777.1		7,501.0		430.8		10,708.9		2,896.0		7,586.9		372.0		10,854.9
Private Client		3,390.6		2,245.9		14.9		5,651.4		3,326.5		2,064.1		33.1		5,423.7
Other		162.3		187.0		–		349.3		78.1		161.9		–		240.0
Total Personal		6,330.0		9,933.9		445.7		16,709.6		6,300.6		9,812.9		405.1		16,518.6
Total Loans and Leases	$	12,567.0	$	15,556.0	$	940.9	$	29,063.9	$	11,566.0	$	15,463.6	$	1,102.4	$	28,132.0

Balances and Delinquency Status of Performing and Nonperforming Loans and Leases by Segment and Class as well as Total Other Real Estate Owned and Nonperforming Asset Balances

The following tables provide balances and delinquency status of performing and nonperforming loans and leases by segment and class, as well as the total other real estate owned and nonperforming asset balances, as of December 31, 2011 and December 31, 2010.

(In Millions)	CURRENT		30 –59 DAYS PAST DUE		60 –89 DAYS PAST DUE		90 DAYS OR MORE PAST DUE		TOTAL PERFORMING		NONPERFORMING		TOTAL LOANS AND LEASES
DECEMBER 31, 2011
Commercial
Commercial and Institutional	$	6,869.2	$	15.0	$	2.7	$	.5	$	6,887.4	$	31.3	$	6,918.7
Commercial Real Estate		2,878.2		10.8		10.3		2.9		2,902.2		79.5		2,981.7
Lease Financing, net		978.8		–		–		–		978.8		–		978.8
Non-U.S.		1,057.5		–		–		–		1,057.5		–		1,057.5
Other		417.6		–		–		–		417.6		–		417.6
Total Commercial		12,201.3		25.8		13.0		3.4		12,243.5		110.8		12,354.3
Personal
Residential Real Estate		10,428.0		67.7		27.6		8.0		10,531.3		177.6		10,708.9
Private Client		5,623.0		15.7		5.7		1.7		5,646.1		5.3		5,651.4
Other		349.3		–		–		–		349.3		–		349.3
Total Personal		16,400.3		83.4		33.3		9.7		16,526.7		182.9		16,709.6
Total Loans and Leases	$	28,601.6	$	109.2	$	46.3	$	13.1	$	28,770.2	$	293.7	$	29,063.9
								Total Other Real Estate  Owned			$	21.2
								Total Nonperforming Assets			$	314.9

(In Millions)	CURRENT		30 –59 DAYS PAST DUE		60 –89 DAYS PAST DUE		90 DAYS OR MORE PAST DUE		TOTAL PERFORMING		NONPERFORMING		TOTAL LOANS AND LEASES
DECEMBER 31, 2010
Commercial
Commercial and Institutional	$	5,831.2	$	16.3	$	8.2	$	.8	$	5,856.5	$	58.0	$	5,914.5
Commercial Real Estate		3,076.7		24.2		15.7		9.4		3,126.0		116.4		3,242.4
Lease Financing, net		1,063.7		–		–		–		1,063.7		–		1,063.7
Non-U.S.		1,046.2		–		–		–		1,046.2		–		1,046.2
Other		346.6		–		–		–		346.6		–		346.6
Total Commercial		11,364.4		40.5		23.9		10.2		11,439.0		174.4		11,613.4
Personal
Residential Real Estate		10,607.4		76.1		17.2		.9		10,701.6		153.3		10,854.9
Private Client		5,367.8		35.7		13.0		1.9		5,418.4		5.3		5,423.7
Other		240.0		–		–		–		240.0		–		240.0
Total Personal		16,215.2		111.8		30.2		2.8		16,360.0		158.6		16,518.6
Total Loans and Leases	$	27,579.6	$	152.3	$	54.1	$	13.0	$	27,799.0	$	333.0	$	28,132.0
								Total Other Real Estate Owned			$	45.5
								Total Nonperforming Assets			$	378.5

Impaired Loans by Segment and Class

The following tables provide information related to impaired loans by segment and class.

	AS OF DECEMBER 31, 2011						AS OF DECEMBER 31, 2010
(In Millions)	RECORDED INVESTMENT		UNPAID PRINCIPAL BALANCE		SPECIFIC ALLOWANCE		RECORDED INVESTMENT		UNPAID PRINCIPAL BALANCE		SPECIFIC ALLOWANCE
With no related specific allowance:
Commercial and Institutional	$	21.4	$	24.0	$	–	$	17.9	$	26.1	$	–
Commercial Real Estate		46.5		68.0		–		43.7		62.4		–
Residential Real Estate		134.4		162.6		–		111.9		138.1		–
Private Client		1.6		1.9		–		3.7		3.9		–
With a related specific allowance:
Commercial and Institutional		11.9		20.5		8.8		41.7		47.8		19.8
Commercial Real Estate		41.4		50.1		14.1		77.2		88.9		29.5
Residential Real Estate		18.9		26.2		8.9		5.1		5.1		2.4
Private Client		3.3		3.6		1.0		–		–		–
Total:
Commercial		121.2		162.6		22.9		180.5		225.2		49.3
Personal		158.2		194.3		9.9		120.7		147.1		2.4
Total	$	279.4	$	356.9	$	32.8	$	301.2	$	372.3	$	51.7

Average Recorded Investment in Impaired Loans

	YEAR ENDED DECEMBER 31, 2011
(In Millions)	AVERAGE RECORDED INVESTMENT		INTEREST INCOME RECOGNIZED
With no related specific allowance:
Commercial and Institutional	$	18.3	$	.1
Commercial Real Estate		33.0		.5
Residential Real Estate		111.8		2.1
Private Client		2.2		–
With a related specific allowance:
Commercial and Institutional		23.6		–
Commercial Real Estate		59.8		–
Residential Real Estate		9.7		–
Private Client		2.0		–
Total:
Commercial		134.7		.6
Personal		125.7		2.1
Total	$	260.4	$	2.7

Note: Average recorded investments in impaired loans are calculated as the average of the month-end impaired loan balances for the period.

Number of Loans and Leases Modified in TDRs and Total Recorded Investments and Unpaid Principal Balances

The following table provides, by segment and class, the number of loans and leases modified in TDRs during the year ended December 31, 2011, and their total recorded investments and unpaid principal balances as of December 31, 2011.

($ In Millions)	NUMBER OF LOANS AND LEASES		RECORDED INVESTMENT		UNPAID PRINCIPAL BALANCE
Commercial
Commercial and Institutional		6	$	10.4	$	12.1
Commercial Real Estate		16		34.0		42.6
Total Commercial		22		44.4		54.7
Personal
Residential Real Estate		148		32.6		40.4
Private Client		1		–		–
Total Personal		149		32.6		40.4
Total Loans and Leases		171	$	77.0	$	95.1

Note: Period end balances reflect all paydowns and charge-offs during the year. 

Number of Loans and Leases Modified in Troubled Debt Restructurings which became Nonperforming, as well as Total Recorded Investments and Unpaid Principal Balances

The following table provides, by segment and class, the number of loans and leases modified in troubled debt restructurings during the previous 12 months which subsequently became nonperforming during the year ended December 31, 2011 as well as their total recorded investments and unpaid principal balances as of December 31, 2011.

($ In Millions)	NUMBER OF LOANS AND LEASES		RECORDED INVESTMENT		UNPAID PRINCIPAL BALANCE
Commercial
Commercial and Institutional		1	$	–	$	.4
Total Commercial		1		–		.4
Personal
Residential Real Estate		8		2.1		2.6
Private Client		1		.8		1.1
Total Personal		9		2.9		3.7
Total Loans and Leases		10	$	2.9	$	4.1

Note: Period end balances reflect all paydowns and charge-offs during the year. 

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Contingent Liabilities

12 Months Ended

Dec. 31, 2011

Contingent Liabilities

Note 25 – Contingent Liabilities

Legal Proceedings. In the normal course of business, the Corporation and its subsidiaries are routinely defendants in or parties to a number of pending and threatened legal actions, including, but not limited to, actions brought on behalf of various claimants or classes of claimants, regulatory matters, employment matters, and challenges from tax authorities regarding the amount of taxes due. In certain of these actions and proceedings, claims for substantial monetary damages or adjustments to recorded tax liabilities are asserted.

Based on current knowledge, after consultation with legal counsel and after taking into account current accruals, management does not believe that losses, if any, arising from pending litigation or threatened legal actions or regulatory matters will have a material adverse effect on the consolidated financial position or liquidity of the Corporation, although such matters could have a material adverse effect on the Corporation’s operating results for a particular period.

Under GAAP, (i) an event is “probable” if the “future event or events are likely to occur”; (ii) an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely”; and (iii) an event is “remote” if “the chance of the future event or events occurring is slight”. Thus, references to the upper end of the range of reasonably possible loss for cases in which the Corporation is able to estimate a range of reasonably possible loss mean the upper end of the range of loss for cases for which the Corporation believes the risk of loss is more than remote.

For the reasons set out in this paragraph, the outcome of some matters is inherently difficult to predict and/or the range of loss cannot be reasonably estimated. This may be the case in matters that (i) will be decided by a jury, (ii) are in early stages, (iii) involve uncertainty as to the likelihood of a class being certified or the ultimate size of the class, (iv) are subject to appeals or motions, (v) involve significant factual issues to be resolved, including with respect to the amount of damages, or (vi) seek very large damages based on novel and complex damage and liability legal theories. Accordingly, the Corporation cannot reasonably estimate the eventual outcome of these pending matters, the timing of their ultimate resolution, or what the eventual loss, fines or penalties, if any, related to each pending matter will be.

In accordance with applicable accounting guidance, the Corporation records accruals for litigation and regulatory matters when those matters present loss contingencies that are both probable and reasonably estimable. When loss contingencies are not both probable and reasonably estimable, the Corporation does not record accruals. No material accruals have been recorded for pending litigation or threatened legal actions or regulatory matters.

For a limited number of the matters for which a loss is reasonably possible in future periods, whether in excess of an accrued liability or where there is no accrued liability, the Corporation is able to estimate a range of possible loss. As of December 31, 2011, the Corporation has estimated the upper end of the range of reasonably possible losses for these matters to be approximately $32 million in the aggregate. This aggregate amount of reasonably possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions, and known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results will vary significantly from the current estimate.

In certain other pending matters, there may be a range of reasonably possible losses (including reasonably possible losses in excess of amounts accrued) that cannot be reasonably estimated for the reasons described above. The following is a description of the nature of certain of these matters.

As previously disclosed, a number of participants in our securities lending program, which is associated with the Corporation’s asset servicing business, have commenced either individual lawsuits or putative class actions in which they claim, among other things, that we failed to exercise prudence in the investment management of the collateral received from the borrowers of the securities, resulting in losses that they seek to recover. The cases assert various contractual, statutory and common law claims, including claims for breach of fiduciary duty under common law and under the Employee Retirement Income Security Act (ERISA). Based on our review of these matters, we believe we operated our securities lending program prudently and appropriately. The Corporation has also been cooperating fully with an SEC investigation related to our securities lending program. At this stage of these proceedings, it is not possible for management to assess the probability of a material adverse outcome or reasonably estimate the amount of any potential loss.

On August 24, 2010, a lawsuit (hereinafter referred to as the “Securities Class Action”) was filed in federal court in the Northern District of Illinois against the Corporation and three of its present or former officers, including the present and former Chief Executive Officers of the Corporation, on behalf of a purported class of purchasers of Corporation stock during the period from October 17, 2007 to October 20, 2009. The amended complaint alleges that during the purported class period the defendants violated Sections 10(b) and 20(a) of the Exchange Act by allegedly taking insufficient provisions for credit losses with respect to the Corporation’s real estate loan portfolio and failing to make sufficient disclosures regarding its securities lending business. Plaintiff seeks compensatory damages in an unspecified amount. At this stage of the suit, it is not possible for management to assess the probability of a material adverse outcome or reasonably estimate the amount of any potential loss.

On September 7, 2010, a shareholder derivative lawsuit, purportedly brought on behalf of the Corporation, was filed in the Circuit Court of Cook County, Illinois against a number of the Corporation’s current and former officers and directors. The Corporation is named as a nominal defendant. The complaint asserts that the individual defendants violated their fiduciary duties to the Corporation based upon substantially the same allegations made in the Securities Class Action complaint. Certain individual defendants are also alleged to have sold some of their holdings of Northern Trust Corporation stock while in possession of material nonpublic information. Plaintiff seeks compensatory damages in an unspecified amount from the individual defendants on behalf of the Corporation. The only relief sought against the Corporation is an order requiring the implementation of certain corporate governance procedures. On December 20, 2011, the court granted the Corporation’s motion to dismiss the derivative lawsuit but gave plaintiff leave to file an amended complaint. Plaintiff elected, instead, to enter into an agreed order staying the derivative suit until the judge in the Securities Class Action rules on the Corporation’s motion to dismiss that complaint.

Visa Membership. Northern Trust, as a member of Visa U.S.A. Inc. (Visa U.S.A.) and in connection with the 2007 initial public offering of Visa, Inc. (Visa), received shares of restricted stock in Visa, a portion of which was redeemed pursuant to a mandatory redemption. The proceeds of the redemption totaled $167.9 million and were recorded as a gain in 2008. The remaining Visa shares held by Northern Trust are recorded at their original cost basis of zero and have restrictions as to their sale or transfer.

Northern Trust, in conjunction with other member banks of Visa U.S.A., is obligated to indemnify Visa for losses resulting from certain indemnified litigation involving Visa and has been required to recognize, at its estimated fair value in accordance with GAAP, a guarantee liability arising from such litigation that has not yet settled.

During 2007, Northern Trust recorded charges and corresponding liabilities of $150 million relating to Visa indemnified litigation. Subsequently, Visa established an escrow account to cover the settlements of, or judgments in, indemnified litigation. The fundings by Visa of its escrow account have resulted in reductions of Northern Trust’s Visa related indemnification liability and of the future realization of the value of outstanding shares of Visa common stock held by Northern Trust as a member bank of Visa U.S.A. Reductions of Northern Trust’s indemnification liability totaling $23.1 million, $33.0 million, and $17.8 million were recorded in 2011, 2010, and 2009, respectively, which combined with a $76.1 million reduction recorded in 2008, fully eliminated the indemnification liability as of December 31, 2011. Northern Trust’s net Visa related indemnification liability totaled $23.1 million at December 31, 2010.

While the ultimate resolution of outstanding Visa related litigation is highly uncertain and the estimation of any potential losses is highly judgmental, Northern Trust anticipates that the value of its remaining shares of Visa stock will be more than adequate to offset any remaining indemnification obligations related to Visa litigation.

Contingent Purchase Consideration. As discussed in further detail in Note 11 – Goodwill and Other Intangibles, in connection with the acquisitions consummated in 2011, contingent consideration was recorded relating to certain performance-related purchase price adjustments. The fair value of the contingent consideration at December 31, 2011 totaled $56.8 million.

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Regulatory Capital Requirements - Additional Information (Detail) (Lower Limit)	12 Months Ended
	Dec. 31, 2011
Lower Limit
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Percentage of Consolidated Net Income	10.00%

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Remaining Maturity of Securities Available for Sale (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011
Available for Sale - Amortized Cost
Due in One Year or Less	$ 9,468.8
Due After One Year Through Five Years	18,464.6
Due After Five Years Through Ten Years	1,326.7
Due After Ten Years	832.5
Total	30,092.6
Available for Sale - Fair Value
Due in One Year or Less	9,469.6
Due After One Year Through Five Years	18,555.1
Due After Five Years Through Ten Years	1,333.7
Due After Ten Years	834.1
Total	$ 30,192.5

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Changes in Number of Shares of Common Stock Outstanding (Detail)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Reconciliation of Common Stock Outstanding [Line Items]
Beginning balance	242,268,903	241,679,942	223,263,132
Common Stock Issuance			17,250,000
Incentive Plan and Awards	189,793	300,376	479,359
Stock Options Exercised	149,385	419,846	938,249
Treasury Stock Purchased	(1,599,572)	(131,261)	(250,798)
Ending balance	241,008,509	242,268,903	241,679,942

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Reconciliation of Total Provision for Income Taxes with Amounts Computed at Federal Tax Rate of 35% (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Reconciliation of Statutory Federal Tax Rate [Line Items]
Tax at Statutory Rate	$ 309.3	$ 346.4	$ 439.3
Tax Exempt Income	(9.9)	(10.8)	(11.9)
Leveraged Lease Adjustments	(4.7)	(0.8)	(4.8)
Foreign Tax Rate Differential	(21.3)	(20.1)	(20.9)
State Taxes, net	22.8	17.3	9.8
Other	(16.1)	(11.7)	(20.5)
Provision for Income Taxes	$ 280.1	$ 320.3	$ 391.0

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Employee Benefits - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Defined Benefit Plan Disclosure [Line Items]
Projected benefit obligation reduced	$ 7,700,000
Estimated contribution defined contribution plans	39,300,000	46,500,000	47,000,000
Defined Benefit Postretirement Health Coverage
Defined Benefit Plan Disclosure [Line Items]
Services attained by employees for eligibility, years	15 years
Services attained by employees for eligibility, retiring age	55
Defined Benefit Postretirement Health Coverage | Lower Limit
Defined Benefit Plan Disclosure [Line Items]
Cost of benefit no longer subsidized by the company, age	40
United States Pension Plans of US Entity, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Assets related to the pension plan	1,094,100,000	982,100,000	821,900,000
Prior service costs, amortization period (years)	10 years
Expected long-term rate of return on plan assets	8.00%
Weighted average discount rate used in determining the accumulated postretirement benefit obligation	4.75%	5.50%
United States Pension Plans of US Entity, Defined Benefit | Derivative Financial Instruments, Assets
Defined Benefit Plan Disclosure [Line Items]
Assets related to the pension plan	0	0
United States Pension Plans of US Entity, Defined Benefit | Qualified Defined Benefit Pension Plans | Lower Limit
Defined Benefit Plan Disclosure [Line Items]
Contribution to plan assets	0
United States Pension Plans of US Entity, Defined Benefit | Qualified Defined Benefit Pension Plans | Upper Limit
Defined Benefit Plan Disclosure [Line Items]
Contribution to plan assets	175,000,000
United States Pension Plans of US Entity, Defined Benefit | U.S. Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Assets related to the pension plan	393,400,000	406,900,000
Equity target allocation of plan assets	40.00%
United States Pension Plans of US Entity, Defined Benefit | Non-U.S. Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Assets related to the pension plan	174,700,000	210,500,000
Equity target allocation of plan assets	21.00%
United States Pension Plans of US Entity, Defined Benefit | Fixed Income Funds
Defined Benefit Plan Disclosure [Line Items]
Debt target allocation of plan assets	21.00%
United States Pension Plans of US Entity, Defined Benefit | Private Equity Funds
Defined Benefit Plan Disclosure [Line Items]
Assets related to the pension plan	45,500,000	33,500,000
United States Pension Plans of US Entity, Defined Benefit | Private Equity Funds | Upper Limit
Defined Benefit Plan Disclosure [Line Items]
Equity target allocation of plan assets	20.00%
United States Pension Plans of US Entity, Defined Benefit | Hedge Fund
Defined Benefit Plan Disclosure [Line Items]
Assets related to the pension plan	29,200,000	29,700,000
United States Pension Plans of US Entity, Defined Benefit | Global Real Estate Fund
Defined Benefit Plan Disclosure [Line Items]
Assets related to the pension plan	38,100,000	41,600,000
United States Pension Plans of US Entity, Defined Benefit | Commodity Linked Fund
Defined Benefit Plan Disclosure [Line Items]
Assets related to the pension plan	34,300,000	39,300,000
United States Pension Plans of US Entity, Defined Benefit | Alternative Investment
Defined Benefit Plan Disclosure [Line Items]
Other target allocation of plan assets	18.00%
United States Pension Plans of US Entity, Defined Benefit | Alternative Investment | Private Equity Funds
Defined Benefit Plan Disclosure [Line Items]
Equity target allocation of plan assets	5.00%
United States Pension Plans of US Entity, Defined Benefit | Alternative Investment | Hedge Fund
Defined Benefit Plan Disclosure [Line Items]
Other target allocation of plan assets	5.00%
United States Pension Plans of US Entity, Defined Benefit | Alternative Investment | Global Real Estate Fund
Defined Benefit Plan Disclosure [Line Items]
Real Estate target allocation of plan assets	5.00%
United States Pension Plans of US Entity, Defined Benefit | Alternative Investment | Commodity Linked Fund
Defined Benefit Plan Disclosure [Line Items]
Other target allocation of plan assets	3.00%
Supplemental Employee Retirement Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Prior service costs, amortization period (years)	9 years
Weighted average discount rate used in determining the accumulated postretirement benefit obligation	4.75%	5.50%
Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Expected amortization of net loss	41,100,000
Expected amortization of prior service cost (credit)	100,000
Other Postretirement Benefit Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Expected amortization of net loss	1,100,000
Expected amortization of prior service cost (credit)	5,000,000
Weighted average discount rate used in determining the accumulated postretirement benefit obligation	4.75%	5.50%
Ultimate health care rate	5.00%
Other Postretirement Benefit Plans, Defined Benefit | Medical Benefits
Defined Benefit Plan Disclosure [Line Items]
Current health care cost trend rate	8.50%
Year in which ultimate trend rate will be reached	2018
Other Postretirement Benefit Plans, Defined Benefit | Prescription Drug Benefits
Defined Benefit Plan Disclosure [Line Items]
Current health care cost trend rate	9.00%
Year in which ultimate trend rate will be reached	2019
Rabbi Trust
Defined Benefit Plan Disclosure [Line Items]
Assets related to the pension plan	$ 71,400,000	$ 65,900,000

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Fair Value Measurements - Additional Information (Detail) (Auction Rate Securities, USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net unrealized gain (loss) related to securities, before tax	$ (8.2)	$ 10.8
Net unrealized gain (loss) related to securities, net of tax	(5.1)	6.8
Realized gains on securities	10.7	3.7
Redemptions by Issuers
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Realized gains on securities	10.6	3.4
Sales of Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Realized gains on securities	$ 0.1	$ 0.3

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Securities Sold Under Agreements to Repurchase (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Securities Financing Transaction [Line Items]
Balance at Ending of Year	$ 1,198.8	$ 954.4
Average Balance During the Year	815.8	626.8
Average Interest Rate Paid During the Year	0.08%	0.17%
Maximum Month-End Balance During the Year	$ 1,479.3	$ 954.4

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Net Interest Income (Tables)

12 Months Ended

Dec. 31, 2011

Components of Net Interest Income

The components of net interest income were as follows:

(In Millions)	2011		2010		2009
Interest Income
Loans and Leases	$	938.7	$	932.6	$	942.2
Securities – Taxable		223.6		186.0		208.4
– Non-Taxable		25.0		29.5		33.5
Interest-Bearing Deposits with Banks		192.8		134.6		209.6
Federal Reserve Deposits and Other		28.5		14.0		12.3
Total Interest Income	$	1,408.6	$	1,296.7		1,406.0
Interest Expense
Deposits	$	230.0	$	201.0		207.0
Federal Funds Purchased		1.9		4.8		5.7
Securities Sold under Agreements to Repurchase		.7		1.0		1.1
Other Borrowings		5.5		5.4		4.2
Senior Notes		64.4		48.6		44.0
Long-Term Debt		94.6		114.8		139.9
Floating Rate Capital Debt		2.4		2.4		4.3
Total Interest Expense		399.5		378.0		406.2
Net Interest Income	$	1,009.1	$	918.7	$	999.8

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Other Intangible Assets Subject to Amortization (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 251.2	[1]	$ 164.2	[1]
Accumulated Amortization	127.8	[1]	111.0	[1]
Net Book Value	$ 123.4	[1]	$ 53.2	[1]

[1] Includes the effect of foreign exchange rates on non-U.S. dollar denominated intangible assets.

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Plan Status of U.S. Plan, Non-U.S. Plans, and Supplemental Plan (Detail) (USD $)	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
United States Pension Plans of US Entity, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Accumulated Benefit Obligation	$ 797,600,000	$ 659,000,000
Projected Benefit	904,600,000	762,900,000	642,000,000
Plan Assets at Fair Value	1,094,100,000	982,100,000	821,900,000
Funded Status at end of period	189,500,000	219,200,000
Weighted-Average Assumptions:
Discount Rates	4.75%	5.50%
Rate of Increase in Compensation Level	4.02%	4.02%
Expected Long-Term Rate of Return on Assets	8.00%	8.00%
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Accumulated Benefit Obligation	127,100,000	116,100,000
Projected Benefit	127,100,000	116,100,000	134,400,000
Plan Assets at Fair Value	123,300,000	122,200,000	113,700,000
Funded Status at end of period	(3,800,000)	6,100,000
Weighted-Average Assumptions:
Discount Rates	5.02%	5.58%
Expected Long-Term Rate of Return on Assets	5.28%	6.27%
Supplemental Employee Retirement Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Accumulated Benefit Obligation	89,900,000	79,600,000
Projected Benefit	100,300,000	86,900,000	85,900,000
Funded Status at end of period	$ (100,300,000)	$ (86,900,000)
Weighted-Average Assumptions:
Discount Rates	4.75%	5.50%
Rate of Increase in Compensation Level	4.02%	4.02%

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Assets Measure at Fair Value on Nonrecurring Basis (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Provision for Credit Losses	$ 55.0	$ 160.0	$ 215.0
Other Operating Expenses	267.1	270.0	136.3
Loans | Fair Value, Inputs, Level 3 | Specific Allowances
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Provision for Credit Losses	11.3	22.5
Other Operating Expenses	$ 1.5	$ 4.9

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Compensation Expense for Share-Based Payment Arrangements and Associated Tax Impacts (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-Based Compensation Expense	$ 70.3	$ 52.7	$ 25.4
Tax Benefits Recognized	26.5	19.3	9.3
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-Based Compensation Expense	34.1	27.6	27.9
Stock and Stock Unit Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-Based Compensation Expense	36.2	25.1	19.7
Performance-Based Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-Based Compensation Expense			$ (22.2)

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Credit-Related Losses Recognized in Earnings on Debt Securities Other-than-temporarily Impaired (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Cumulative Credit-Related Losses on Securities Held - Beginning of Year	$ 94.2	$ 73.0
Plus: Losses on Newly Identified Impairments	1.5	3.3
Additional Losses on Previously Identified Impairments	21.8	17.9
Less: Losses on Securities Sold During the Year	(49.3)
Cumulative Credit-Related Losses on Securities Held - End of Year	$ 68.2	$ 94.2

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Postretirement Health Care Change in Accumulated Postretirement Benefit Obligation (Detail) (Other Postretirement Benefit Plans, Defined Benefit, USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Other Postretirement Benefit Plans, Defined Benefit
Beginning Balance	$ 51.3	$ 49.9
Service Cost	0.4	0.8	1.7
Interest Cost	2.8	2.8	3.7
Actuarial Loss (Gain)	(0.2)	(0.6)
Gross Benefits Paid	(0.4)	(2.1)
Medicare Subsidy	0.6	0.5
Plan Change
Ending Balance	$ 54.5	$ 51.3	$ 49.9

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Share-Based Compensation Plans - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to unvested share-based compensation	$ 122.5
Weighted average period of recognition of unvested share-based compensation (in years)	3
Shares of common stock authorized for issuance under the Plan	40,000,000
Shares available for future grant under the Plan	12,423,266
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of the fair value for options to purchase common stock on the date the options are granted	100.00%
Stock Options | Upper Limit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option maximum term (in years)	10 years
Options vest and become exercisable after the date of grant (in years)	4 years
Stock Options | Lower Limit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options vest and become exercisable after the date of grant (in years)	1 year
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock units vesting description	The stock units granted in 2011 predominately vest at a rate equal to 50% on the third anniversary date of the grant and 50% on the fourth anniversary date.
Number of stock units granted	995,176	1,223,539	646,549
Stock units weighted average grant date fair value	$ 50.79	$ 50.67	$ 56.07
Fair value of shares vested	7.1	19.1	25.6
Restricted Stock Units | Third Anniversary Of Grant Date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage at which units can vest	50.00%
Restricted Stock Units | Fourth Anniversary Of Grant Date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage at which units can vest	50.00%
Non Employee Directors, Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total value of stock awards granted	$ 1.1	$ 1.1
Number of stock units granted	22,188	21,131

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Remaining Maturity of Securities Held to Maturity (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Held to Maturity - Amortized Cost
Due in One Year or Less	$ 199.5
Due After One Year Through Five Years	355.4
Due After Five Years Through Ten Years	215.5
Due After Ten Years	28.8
Total	799.2	922.2
Held to Maturity - Fair Value
Due in One Year or Less	200.9
Due After One Year Through Five Years	365.5
Due After Five Years Through Ten Years	226.1
Due After Ten Years	24.6
FAIR VALUE	$ 817.1	$ 941.8

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Debt Securities Held for which Other-Than-Temporary Impairment Loss has been Recognized in Current Period or Previously (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
OtherThanTemporary Impairment Non Credit Losses Recognized In Earnings [Line Items]
Fair Value	$ 73.6	$ 79.9
Amortized Cost Basis	96.8	113.3
Noncredit-related Losses Recognized in OCI	(23.2)	(33.4)
Tax Effect	8.6	12.2
Amount Recognized in OCI	$ (14.6)	$ (21.2)

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Book and Fair Values of Financial Instruments (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
ASSETS
Cash and Due from Banks	$ 4,315.3	$ 2,818.0	$ 2,491.8	$ 2,648.2
Federal Funds Sold and Resell Agreements	121.3	160.1
Interest-Bearing Deposits with Banks	16,696.4	15,351.3
Federal Reserve Deposits and Other Interest-Bearing	13,448.6	10,924.6
Securities:
Available for Sale	30,192.5	19,901.9
Held to Maturity	799.2	922.2
Trading Account	8.0	6.8
Loans (excluding Leases)
Client Security Settlement Receivables	778.3	701.3
Deposits:
Savings Certificates and Other Time	3,058.3	3,913.0
Non-U.S. Offices Interest-Bearing	35,868.0	35,472.4
Federal Funds Purchased	815.3	3,691.7
Securities Sold under Agreements to Repurchase	1,198.8	954.4
Other Borrowings	931.5	347.7
Senior Notes	2,126.7	1,896.1
Other Liabilities
Contingent Consideration	56.8
Carrying (Reported) Amount, Fair Value Disclosure
ASSETS
Cash and Due from Banks	4,315.3	2,818.0
Federal Funds Sold and Resell Agreements	121.3	160.1
Interest-Bearing Deposits with Banks	16,696.4	15,351.3
Federal Reserve Deposits and Other Interest-Bearing	13,448.6	10,924.6
Securities:
Available for Sale	30,192.5	19,901.9
Held to Maturity	799.2	922.2
Trading Account	8.0	6.8
Loans (excluding Leases)
Held for Investment	27,782.7	26,747.8
Held for Sale	9.3	2.2
Client Security Settlement Receivables	778.3	701.3
Other Assets
Federal Reserve and Federal Home Loan Bank Stock	172.9	185.5
Affordable Housing Investments	290.8	265.4
All Other	106.5	103.3
Deposits:
Demand, Noninterest-Bearing, Savings and Money Market	43,751.2	24,810.3
Savings Certificates and Other Time	3,058.3	3,913.0
Non-U.S. Offices Interest-Bearing	35,868.0	35,472.4
Federal Funds Purchased	815.3	3,691.7
Securities Sold under Agreements to Repurchase	1,198.8	954.4
Other Borrowings	931.5	347.7
Senior Notes	2,126.7	1,896.1
Long Term Debt (excluding Leases):
Subordinated Debt	1,033.4	1,148.7
Federal Home Loan Bank Borrowings	1,055.0	1,532.5
Floating Rate Capital Debt	276.9	276.9
Other Liabilities
Financial Guarantees	43.8	58.6
Contingent Consideration	56.8
Loan Commitments	28.9	32.4
Carrying (Reported) Amount, Fair Value Disclosure | Asset And Liability Management | Foreign Exchange Contracts
DERIVATIVE INSTRUMENTS
Assets	25.2	44.9
Liabilities	31.8	51.4
Carrying (Reported) Amount, Fair Value Disclosure | Asset And Liability Management | Interest Rate Swap Contracts
DERIVATIVE INSTRUMENTS
Assets	149.6	134.6
Liabilities	47.3	15.3
Carrying (Reported) Amount, Fair Value Disclosure | Asset And Liability Management | Credit Default Swap Contracts
DERIVATIVE INSTRUMENTS
Assets	0.7
Liabilities	0.1	2.8
Carrying (Reported) Amount, Fair Value Disclosure | Asset And Liability Management | Forward Contracts
DERIVATIVE INSTRUMENTS
Assets		0.5
Liabilities		0.2
Carrying (Reported) Amount, Fair Value Disclosure | Client Related and Trading | Foreign Exchange Contracts
DERIVATIVE INSTRUMENTS
Assets	3,062.1	5,747.9
Liabilities	2,959.8	5,729.9
Carrying (Reported) Amount, Fair Value Disclosure | Client Related and Trading | Interest Rate Swap Contracts
DERIVATIVE INSTRUMENTS
Assets	188.7	151.2
Liabilities	184.6	148.4
Carrying (Reported) Amount, Fair Value Disclosure | Client Related and Trading | Interest Rate Option Contracts
DERIVATIVE INSTRUMENTS
Assets		0.1
Liabilities		0.1
Estimate of Fair Value, Fair Value Disclosure
ASSETS
Cash and Due from Banks	4,315.3	2,818.0
Federal Funds Sold and Resell Agreements	121.3	160.1
Interest-Bearing Deposits with Banks	16,696.4	15,351.3
Federal Reserve Deposits and Other Interest-Bearing	13,448.6	10,924.6
Securities:
Available for Sale	30,192.5	19,901.9
Held to Maturity	817.1	941.8
Trading Account	8.0	6.8
Loans (excluding Leases)
Held for Investment	27,913.7	26,814.2
Held for Sale	9.3	2.2
Client Security Settlement Receivables	778.3	701.3
Other Assets
Federal Reserve and Federal Home Loan Bank Stock	172.9	185.5
Affordable Housing Investments	290.8	265.4
All Other	106.5	103.3
Deposits:
Demand, Noninterest-Bearing, Savings and Money Market	43,751.2	24,810.3
Savings Certificates and Other Time	3,065.5	3,929.7
Non-U.S. Offices Interest-Bearing	35,868.0	35,472.4
Federal Funds Purchased	815.3	3,691.7
Securities Sold under Agreements to Repurchase	1,198.8	954.4
Other Borrowings	931.5	347.7
Senior Notes	2,197.3	1,936.5
Long Term Debt (excluding Leases):
Subordinated Debt	1,040.0	1,177.2
Federal Home Loan Bank Borrowings	1,082.1	1,613.5
Floating Rate Capital Debt	211.6	223.2
Other Liabilities
Financial Guarantees	43.8	58.6
Contingent Consideration	56.8
Loan Commitments	28.9	32.4
Estimate of Fair Value, Fair Value Disclosure | Asset And Liability Management | Foreign Exchange Contracts
DERIVATIVE INSTRUMENTS
Assets	25.2	44.9
Liabilities	31.8	51.4
Estimate of Fair Value, Fair Value Disclosure | Asset And Liability Management | Interest Rate Swap Contracts
DERIVATIVE INSTRUMENTS
Assets	149.6	134.6
Liabilities	47.3	15.3
Estimate of Fair Value, Fair Value Disclosure | Asset And Liability Management | Credit Default Swap Contracts
DERIVATIVE INSTRUMENTS
Assets	0.7
Liabilities	0.1	2.8
Estimate of Fair Value, Fair Value Disclosure | Asset And Liability Management | Forward Contracts
DERIVATIVE INSTRUMENTS
Assets		0.5
Liabilities		0.2
Estimate of Fair Value, Fair Value Disclosure | Client Related and Trading | Foreign Exchange Contracts
DERIVATIVE INSTRUMENTS
Assets	3,062.1	5,747.9
Liabilities	2,959.8	5,729.9
Estimate of Fair Value, Fair Value Disclosure | Client Related and Trading | Interest Rate Swap Contracts
DERIVATIVE INSTRUMENTS
Assets	188.7	151.2
Liabilities	184.6	148.4
Estimate of Fair Value, Fair Value Disclosure | Client Related and Trading | Interest Rate Option Contracts
DERIVATIVE INSTRUMENTS
Assets		0.1
Liabilities		$ 0.1

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Assets and Liabilities Measured at Fair Value on Recurring Basis Segregated by Fair Value Hierarchy Level (Parenthetical) (Detail) (Fair Value, Measurements, Recurring, Netting and Collateral, USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Derivative Financial Instruments, Assets
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Reduction in derivatives due to cash collateral received from and deposited with derivative counterparties	$ 220.1	$ 2,952.7
Derivative Financial Instruments, Liabilities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Reduction in derivatives due to cash collateral received from and deposited with derivative counterparties	$ (257.4)	$ (2,288.2)

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Net Interest Income

12 Months Ended

Dec. 31, 2011

Net Interest Income

Note 17 – Net Interest Income

The components of net interest income were as follows:

(In Millions)	2011		2010		2009
Interest Income
Loans and Leases	$	938.7	$	932.6	$	942.2
Securities – Taxable		223.6		186.0		208.4
– Non-Taxable		25.0		29.5		33.5
Interest-Bearing Deposits with Banks		192.8		134.6		209.6
Federal Reserve Deposits and Other		28.5		14.0		12.3
Total Interest Income	$	1,408.6	$	1,296.7		1,406.0
Interest Expense
Deposits	$	230.0	$	201.0		207.0
Federal Funds Purchased		1.9		4.8		5.7
Securities Sold under Agreements to Repurchase		.7		1.0		1.1
Other Borrowings		5.5		5.4		4.2
Senior Notes		64.4		48.6		44.0
Long-Term Debt		94.6		114.8		139.9
Floating Rate Capital Debt		2.4		2.4		4.3
Total Interest Expense		399.5		378.0		406.2
Net Interest Income	$	1,009.1	$	918.7	$	999.8

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Changes in Level 3 U.S. Pension Plan Assets (Detail) (United States Pension Plans of US Entity, Defined Benefit, USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Defined Benefit Plan Disclosure [Line Items]
Fair Value at beginning of year	$ 982,100,000	$ 821,900,000
Actual Return on Plan Assets	53,300,000	126,800,000
Fair Value at end of year	1,094,100,000	982,100,000
Private Equity Funds
Defined Benefit Plan Disclosure [Line Items]
Fair Value at end of year	45,500,000	33,500,000
Hedge Fund
Defined Benefit Plan Disclosure [Line Items]
Fair Value at end of year	29,200,000	29,700,000
Fair Value, Inputs, Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair Value at end of year	74,700,000	63,200,000
Fair Value, Inputs, Level 3 | Private Equity Funds
Defined Benefit Plan Disclosure [Line Items]
Fair Value at beginning of year	33,500,000	28,800,000
Actual Return on Plan Assets	7,800,000	2,900,000
Purchases	7,000,000	4,500,000
Sales	(2,800,000)	(2,700,000)
Settlements
Fair Value at end of year	45,500,000	33,500,000
Fair Value, Inputs, Level 3 | Hedge Fund
Defined Benefit Plan Disclosure [Line Items]
Fair Value at beginning of year	29,700,000	28,700,000
Actual Return on Plan Assets	(500,000)	1,000,000
Settlements
Fair Value at end of year	$ 29,200,000	$ 29,700,000

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Earnings Contribution of Northern Trust's Business Units (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009		Dec. 31, 2008	Dec. 31, 2007
Segment Reporting Information [Line Items]
Trust, Investment and Other Servicing Fees	$ 2,169.5		$ 2,081.9		$ 2,083.8
Other	591.3		647.1		703.3
Net Interest Income (FTE)	1,049.3	[1]	957.8	[1]	1,040.0	[1]
Revenue (FTE)	3,810.1	[1]	3,686.8	[1]	3,827.1	[1]
Provision for Credit Losses	55.0		160.0		215.0
Visa Indemnification Benefits	(23.1)		(33.0)		(17.8)		(76.1)	150.0
Noninterest Expense (Excluding Visa Indemnification Benefits)	2,854.3		2,530.9		2,334.5
Income before Income Taxes	923.9	[1]	1,028.9	[1]	1,295.4	[1]
Provision (Benefit) for Income Taxes	320.3	[1]	359.4	[1]	431.2	[1]
Net Income	603.6		669.5		864.2
Average Assets	91,947.9		76,008.2		74,314.2
Corporate and Institutional Services
Segment Reporting Information [Line Items]
Trust, Investment and Other Servicing Fees	1,196.4		1,175.1		1,236.8
Other	485.4		522.7		571.3
Net Interest Income (FTE)	282.5	[1]	271.8	[1]	416.0	[1]
Revenue (FTE)	1,964.3	[1]	1,969.6	[1]	2,224.1	[1]
Provision for Credit Losses	(20.5)		(16.1)		30.7
Noninterest Expense (Excluding Visa Indemnification Benefits)	1,522.4		1,328.9		1,200.6
Income before Income Taxes	462.4	[1]	656.8	[1]	992.8	[1]
Provision (Benefit) for Income Taxes	168.3	[1]	222.4	[1]	350.8	[1]
Net Income	294.1		434.4		642.0
Percentage of Consolidated Net Income	49.00%		65.00%		74.00%
Average Assets	47,533.7		38,749.3		38,117.1
Personal Financial Services
Segment Reporting Information [Line Items]
Trust, Investment and Other Servicing Fees	973.1		906.8		847.0
Other	128.5		133.3		138.7
Net Interest Income (FTE)	613.7	[1]	591.8	[1]	538.1	[1]
Revenue (FTE)	1,715.3	[1]	1,631.9	[1]	1,523.8	[1]
Provision for Credit Losses	75.5		176.1		184.3
Noninterest Expense (Excluding Visa Indemnification Benefits)	1,214.9		1,103.0		1,044.6
Income before Income Taxes	424.9	[1]	352.8	[1]	294.9	[1]
Provision (Benefit) for Income Taxes	168.7	[1]	132.8	[1]	112.4	[1]
Net Income	256.2		220.0		182.5
Percentage of Consolidated Net Income	42.00%		33.00%		21.00%
Average Assets	23,861.5		23,564.5		24,534.8
Treasury and Other
Segment Reporting Information [Line Items]
Other	(22.6)		(8.9)		(6.7)
Net Interest Income (FTE)	153.1	[1]	94.2	[1]	85.9	[1]
Revenue (FTE)	130.5	[1]	85.3	[1]	79.2	[1]
Visa Indemnification Benefits	(23.1)		(33.0)		(17.8)
Noninterest Expense (Excluding Visa Indemnification Benefits)	117.0		99.0		89.3
Income before Income Taxes	36.6	[1]	19.3	[1]	7.7	[1]
Provision (Benefit) for Income Taxes	(16.7)	[1]	4.2	[1]	(32.0)	[1]
Net Income	53.3		15.1		39.7
Percentage of Consolidated Net Income	9.00%		2.00%		5.00%
Average Assets	$ 20,552.7		$ 13,694.4		$ 11,662.3

[1] Stated on an FTE basis. The consolidated figures include $40.2 million, $39.1 million, and $40.2 million, of FTE adjustment for 2011, 2010, and 2009, respectively.

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Lease Commitments (Tables)

12 Months Ended

Dec. 31, 2011

Future Minimum Lease Payments for Non-cancelable Operating Leases

Minimum annual lease commitments as of December 31, 2011 for all non-cancelable operating leases with a term of 1 year or more are as follows:

(In Millions)	FUTURE MINIMUM LEASE PAYMENTS
2012	$	86.9
2013		85.8
2014		72.1
2015		67.3
2016		53.3
Later Years		380.2
Total Minimum Lease Payments	$	745.6

Future Minimum Lease Payments for Capital Leases

The following table reflects the future minimum lease payments required under capital leases, net of any payments received on the long-term financing, and the present value of net capital lease obligations at December 31, 2011.

(In Millions)	FUTURE MINIMUM LEASE PAYMENTS, NET
2012	$	7.9
2013		8.1
2014		8.4
2015		8.2
2016		8.0
Later Years		23.6
Total Minimum Lease Payments, net		64.2
Less: Amount Representing Interest		19.3
Net Present Value under Capital Lease Obligations	$	44.9

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Cash-Based Compensation Plans - Additional information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash Based Compensation Plan Expense [Line Items]
Cash based compensation expense	$ 176.7	$ 168.4	$ 168.9

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2011

Basis of Presentation

A. Basis of Presentation. The consolidated financial statements include the accounts of Northern Trust Corporation (Corporation) and its wholly-owned subsidiary, The Northern Trust Company (Bank), and various other wholly-owned subsidiaries of the Corporation and Bank. Throughout the notes, the term “Northern Trust” refers to the Corporation and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The consolidated statement of income includes results of acquired subsidiaries from the dates of their acquisition. Certain prior year balances have been reclassified consistent with the current year’s presentation.

Nature of Operations

B. Nature of Operations. The Corporation is a financial holding company under the Gramm-Leach-Bliley Act. The Bank is an Illinois banking corporation headquartered in Chicago and the Corporation’s principal subsidiary. The Corporation conducts business in the United States (U.S.) and internationally through the Bank, trust companies, and various other U.S. and non-U.S. subsidiaries.

Northern Trust generates the majority of its revenues from its two primary business units: Corporate and Institutional Services (C&IS) and Personal Financial Services (PFS). Investment management services and products are provided to C&IS and PFS through a third business unit, Northern Trust Global Investments (NTGI). Operating and systems support for these business units is provided by a fourth business unit, Operations and Technology (O&T).

The C&IS business unit provides asset servicing, asset management, securities lending, brokerage, banking and related services to corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth and government funds. C&IS client relationships are managed through the Bank and the Bank’s and the Corporation’s other subsidiaries, including support from international locations in North America, Europe, the Middle East, and the Asia Pacific region.

The PFS business unit provides personal trust, investment management, custody, and philanthropic services; financial consulting; wealth management and family office services; guardianship and estate administration; brokerage services; and private and business banking. PFS focuses on high net worth individuals and families, business owners, executives, professionals, retirees, and established privately held businesses in its target markets. PFS services are delivered through a network of offices in 18 U.S. states as well as offices in London and Guernsey.

Use of Estimates in the Preparation of Financial Statements

C. Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Foreign Currency Translation

D. Foreign Currency Remeasurement and Translation. Asset and liability accounts denominated in nonfunctional currencies are remeasured into functional currencies at period end rates of exchange, except for buildings and equipment which are remeasured at exchange rates in effect at the date of acquisition. Results from remeasurement of asset and liability accounts are reported in other operating income as currency translation gains (losses), net. Income and expense accounts are remeasured at period average rates of exchange.

Asset and liability accounts of entities with functional currencies that are not the U.S. dollar are translated at period end rates of exchange. Income and expense accounts are translated at period average rates of exchange. Translation adjustments, net of applicable taxes, are reported directly to accumulated other comprehensive income (AOCI), a component of stockholders’ equity.

Marketable Securities

E. Securities. Securities Available for Sale are reported at fair value, with unrealized gains and losses credited or charged, net of the tax effect, to AOCI. Realized gains and losses on securities available for sale are determined on a specific identification basis and are reported within other security gains (losses), net, in the consolidated statement of income. Interest income is recorded on the accrual basis, adjusted for the amortization of premium and accretion of discount.

Securities Held to Maturity consist of debt securities that management intends to, and Northern Trust has the ability to, hold until maturity. Such securities are reported at cost, adjusted for amortization of premium and accretion of discount. Interest income is recorded on the accrual basis adjusted for the amortization of premium and accretion of discount.

Securities Held for Trading are stated at fair value. Realized and unrealized gains and losses on securities held for trading are reported in the consolidated statement of income within security commissions and trading income.

Nonmarketable Securities primarily consist of Federal Reserve and Federal Home Loan Bank stock and affordable housing investments which are recorded in other assets on the consolidated balance sheet. Federal Reserve and Federal Home Loan Bank stock are reported at cost, which represents redemption value. Affordable housing investments, which are discussed in further detail in Note 28, are reported at cost using the effective yield method and amortized over the lives of the related tax credits.

Other-Than-Temporary Impairment (OTTI). A security is considered to be other-than-temporarily impaired if the present value of cash flows expected to be collected are less than the security’s amortized cost basis (the difference being defined as the credit loss) or if the fair value of the security is less than the security’s amortized cost basis and the investor intends, or more-likely-than-not will be required, to sell the security before recovery of the security’s amortized cost basis. If an OTTI exists, the charge to earnings is limited to the amount of credit loss if the investor does not intend to sell the security, and it is more-likely-than-not that it will not be required to sell the security, before recovery of the security’s amortized cost basis. Any remaining difference between fair value and amortized cost is recognized in AOCI, net of applicable taxes. Otherwise, the entire difference between fair value and amortized cost is charged to earnings.

Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase

F. Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase. Securities purchased under agreements to resell and securities sold under agreements to repurchase are accounted for as collateralized financings and recorded at the amounts at which the securities were acquired or sold plus accrued interest. To minimize any potential credit risk associated with these transactions, the fair value of the securities purchased or sold is monitored, limits are set on exposure with counterparties, and the financial condition of counterparties is regularly assessed. It is Northern Trust’s policy to take possession of securities purchased under agreements to resell.

Derivative Financial Instruments

G. Derivative Financial Instruments. Northern Trust is a party to various derivative instruments that are used in the normal course of business to meet the needs of its clients; as part of its trading activity for its own account; and as part of its risk management activities. These instruments include foreign exchange contracts, interest rate contracts, and credit default swap contracts. Derivative financial instruments are recorded on the consolidated balance sheet at fair value within other assets and liabilities. Derivative asset and liability positions with the same counterparty are reflected on a net basis in cases where legally enforceable master netting agreements exist. Derivative assets and liabilities are further reduced by cash collateral received from, and deposited with, derivative counterparties. The accounting for changes in the fair value of a derivative in the consolidated statement of income depends on whether or not the contract has been designated as a hedge and qualifies for hedge accounting under GAAP. Derivative financial instruments are recorded on the consolidated cash flow statement within Changes in Derivative Instrument Gains/Losses, net.

Changes in the fair value of client-related and trading derivative instruments, which are not designated hedges under GAAP, are recognized currently in either foreign exchange trading income or security commissions and trading income. Changes in the fair value of derivative instruments entered into for risk management purposes but not designated as hedges are recognized currently in other operating income. Certain derivative instruments used by Northern Trust to manage risk are formally designated and qualify for hedge accounting as fair value, cash flow, or net investment hedges.

Derivatives designated as fair value hedges are used to limit Northern Trust’s exposure to changes in the fair value of assets and liabilities due to movements in interest rates. Changes in the fair value of fair value hedges are recognized currently in income. For substantially all fair value hedges, Northern Trust applies the “shortcut” method of accounting, available under GAAP, which assumes there is no ineffectiveness in a hedge. As a result, changes recorded in the fair value of the hedged item are equal to the offsetting gain or loss on the derivative and are reflected in the same line item. For fair value hedges that do not qualify for the “shortcut” method of accounting, Northern Trust utilizes regression analysis, a “long-haul” method of accounting, in assessing whether these hedging relationships are highly effective at inception and quarterly thereafter.

Derivatives designated as cash flow hedges are used to minimize the variability in cash flows of earning assets or forecasted transactions caused by movements in interest or foreign exchange rates. The effective portion of changes in the fair value of a cash flow hedge is recognized in AOCI. When the hedged forecasted transaction impacts earnings, balances in AOCI are reclassified to the same income or expense classification as the hedged item. Northern Trust assesses effectiveness using regression analysis for cash flow hedges of available for sale securities. Ineffectiveness is measured using the hypothetical derivative method. For cash flow hedges of forecasted foreign currency denominated revenue and expenditure transactions, Northern Trust closely matches all terms of the hedged item and the hedging derivative at inception and on an ongoing basis which limits hedge ineffectiveness. To the extent all terms are not perfectly matched, effectiveness is assessed using the dollar-offset method and any ineffectiveness is measured using the hypothetical derivative method. Any ineffectiveness is recognized currently in earnings.

Foreign exchange contracts and qualifying non-derivative instruments designated as net investment hedges are used to minimize Northern Trust’s exposure to variability in the foreign currency translation of net investments in non-U.S. branches and subsidiaries. The effective portion of changes in the fair value of the hedging instrument is recognized in AOCI consistent with the related translation gains and losses. For net investment hedges, all critical terms of the hedged item and the hedging instrument are matched at inception and on an ongoing basis to eliminate hedge ineffectiveness.

Fair value, cash flow, and net investment hedge derivatives are designated and formally documented as such contemporaneous with the transaction. The formal documentation describes the hedge relationship and identifies the hedging instruments and hedged items. Included in the documentation is a discussion of the risk management objectives and strategies for undertaking such hedges, as well as a description of the method for assessing hedge effectiveness at inception and on an ongoing basis. For hedges that do not qualify for the “shortcut” method of accounting, a formal assessment is performed on a calendar quarter basis to verify that derivatives used in hedging transactions continue to be highly effective in offsetting the changes in fair value or cash flows of the hedged item. Hedge accounting is discontinued if a derivative ceases to be highly effective, is terminated or sold, or if Northern Trust removes the derivative’s hedge designation. Subsequent gains and losses on these derivatives are included in foreign exchange trading income or security commissions and trading income. For discontinued cash flow hedges, the accumulated gain or loss on the derivative remains in AOCI and is reclassified to earnings in the period in which the previously hedged forecasted transaction impacts earnings or is no longer probable of occurring. For discontinued fair value hedges, the accumulated gain or loss on the hedged item is amortized over the remaining life of the hedged item.

Loans and Leases

H. Loans and Leases. Loans and leases are recognized assets that represent a contractual right to receive money either on demand or on fixed or determinable dates. Loans and leases are disaggregated for disclosure purposes by portfolio segment (segment) and by class. Segment is defined as the level at which management develops and documents a systematic methodology to determine the allowance for credit losses. Northern Trust has defined its segments as commercial and personal. A class of loans and leases is a subset of a segment, the components of which have similar risk characteristics, measurement attributes, or risk monitoring method. The classes within the commercial segment have been defined as commercial and institutional, commercial real estate, lease financing, non-US and other. The classes within the personal segment have been defined as residential real estate, private client and other.

Loan Classification. Loans that are held for investment are reported at the principal amount outstanding, net of unearned income. Loans classified as held for sale are reported at the lower of aggregate cost or fair value. Loan commitments for residential real estate loans that will be classified as held for sale at the time of funding and which have an interest rate lock are recorded on the balance sheet at fair value with subsequent gains or losses recognized as other income. Unrealized gains on these loan commitments are reported as other assets, with unrealized losses reported as other liabilities. Other unfunded commitments relating to loans that are not held for sale are recorded in other liabilities and are carried at the amount of unamortized fees with an allowance for credit loss liability recognized for any estimated probable losses.

Interest Income. Interest income on loans is recorded on an accrual basis unless, in the opinion of management, there is a question as to the ability of the debtor to meet the terms of the loan agreement, or interest or principal is more than 90 days contractually past due and the loan is not well-secured and in the process of collection. Past due status is based on how long after the contractual due date a principal or interest payment is received. For disclosure purposes, loans that are 29 days past due or less are shown as current. At the time a loan is determined to be nonperforming, interest accrued but not collected is reversed against interest income of the current period and the loan is classified as nonperforming. Interest collected on nonperforming loans is applied to principal unless, in the opinion of management, collectability of principal is not in doubt. Management’s assessment of indicators of loan and lease collectability, and its policies relative to the recognition of interest income, including the suspension and subsequent resumption of income recognition, do not meaningfully vary between loan and lease classes. Nonperforming loans are returned to performing status when factors indicating doubtful collectability no longer exist. Factors considered in returning a loan to performing status are consistent across all classes of loans and leases and, in accordance with regulatory guidance, relate primarily to expected payment performance. Loans are eligible to be returned to performing status when: (i) no principal or interest that is due is unpaid and repayment of the remaining contractual principal and interest is expected or (ii) the loan has otherwise become well-secured (possessing realizable value sufficient to discharge the debt, including accrued interest, in full) and is in the process of collection (through action reasonably expected to result in debt repayment or restoration to a current status in the near future). A loan that has not been brought fully current may be restored to performing status provided there has been a sustained period of repayment performance (generally a minimum of six months) by the borrower in accordance with the contractual terms, and Northern Trust is reasonably assured of repayment within a reasonable period of time. Additionally, a loan that has been formally restructured so as to be reasonably assured of repayment and performance according to its modified terms may be returned to accrual status, provided there was a well-documented credit evaluation of the borrower’s financial condition and prospects of repayment under the revised terms and there has been a sustained period of repayment performance (generally a minimum of six months) under the revised terms.

Impaired Loans. A loan is considered to be impaired when, based on current information and events, management determines that it is probable that Northern Trust will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans are identified through ongoing credit management and risk rating processes, including the formal review of past due and watch list credits. Payment performance and delinquency status are critical factors in identifying impairment for all loans and leases, particularly those within the residential real estate, private client and personal-other classes. Other key factors considered in identifying impairment of loans and leases within the commercial and institutional, non-U.S., lease financing, and commercial-other classes relate to the borrower’s ability to perform under the terms of the obligation as measured through the assessment of future cash flows, including consideration of collateral value, market value, and other factors. A loan is also considered to be impaired if its terms have been modified as a concession resulting from the debtor’s financial difficulties, referred to as a troubled debt restructuring (TDR). All troubled debt restructurings are considered impaired loans in the calendar year of their restructuring. In subsequent years, a troubled debt restructuring may cease being classified as impaired if the loan was modified at a market rate and has performed according to the modified terms for at least six months. A loan that has been modified at a below market rate will return to performing status if it satisfies the six month performance requirement; however, it will remain classified as impaired. Impairment is measured based upon the loan’s market price, the present value of expected future cash flows, discounted at the loan’s effective interest rate, or at the fair value of the collateral if the loan is collateral dependent. If the loan valuation is less than the recorded value of the loan, based on the certainty of loss, either a specific allowance is established, or a charge-off is recorded, for the difference. Smaller balance (individually less than $250,000) homogeneous loans are collectively evaluated for impairment and excluded from impaired loan disclosures in accordance with applicable accounting standards. Northern Trust’s accounting policies for impaired loans are consistent across all classes of loans and leases.

Premiums and Discounts. Premiums and discounts on loans are recognized as an adjustment of yield using the interest method based on the contractual terms of the loan. Certain direct origination costs and fees are netted, deferred and amortized over the life of the related loan as an adjustment to the loan’s yield.

Direct Financing and Leverage Leases. Unearned lease income from direct financing and leveraged leases is recognized using the interest method. This method provides a constant rate of return on the unrecovered investment over the life of the lease. The rate of return and the allocation of income over the lease term are recalculated from the inception of the lease if during the lease term assumptions regarding the amount or timing of estimated cash flows change. Lease residual values are established at the inception of the lease based on in-house valuations and market analyses provided by outside parties. Lease residual values are reviewed at least annually for other-than-temporary impairment. A decline in the estimated residual value of a leased asset determined to be other-than-temporary would be recorded in the period in which the decline is identified as a reduction of interest income.

Allowance for Credit Losses

I. Allowance for Credit Losses. The allowance for credit losses represents management’s estimate of probable losses which have occurred as of the date of the consolidated financial statements. The loan and lease portfolio and other lending related credit exposures are regularly reviewed to evaluate the adequacy of the allowance for credit losses. In determining the level of the allowance, Northern Trust evaluates the allowance necessary for impaired loans and also estimates losses inherent in other credit exposures. The result is an allowance with the following components:

Specific Allowance. The amount of specific allowance is determined through an individual evaluation of loans and lending-related commitments considered impaired that is based on expected future cash flows, the value of collateral, and other factors that may impact the borrower’s ability to pay. For impaired loans where the amount of specific allowance, if any, is determined based on the value of the underlying real estate collateral, third-party appraisals are generally obtained and utilized by management. These appraisals are generally less than twelve months old and are subject to adjustments to reflect management’s judgment as to the realizable value of the collateral.

Inherent Allowance. The amount of inherent loss allowance is based primarily on factors which incorporate management’s evaluation of historical charge-off experience and various qualitative factors such as management’s evaluation of economic and business conditions and changes in the character and size of the loan portfolio. Factors are applied to loan and lease credit exposures aggregated by shared risk characteristics and are reviewed quarterly by Northern Trust’s Loan Loss Allowance Committee which includes representatives from Credit Policy, business unit management, and Corporate Financial Management.

Loans, leases and other extensions of credit deemed uncollectible are charged to the allowance for credit losses. Subsequent recoveries, if any, are credited to the allowance. Northern Trust’s policies relative to the charging-off of uncollectible loans and leases are consistent across both loan and lease segments. Determinations as to whether an uncollectible loan is charged-off or a specific reserve is established are based on management’s assessment as to the level of certainty regarding the amount of loss. The provision for credit losses, which is charged to income, is the amount necessary to adjust the allowance for credit losses to the level determined to be appropriate through the above process. Actual losses may vary from current estimates and the amount of the provision for credit losses may be either greater than or less than actual net charge-offs.

Northern Trust analyzes its exposure to credit losses from both on-balance sheet and off-balance sheet activity using a consistent methodology. In estimating the allowance for credit losses for undrawn loan commitments and standby letters of credit, management uses conversion rates to determine the estimated amount that will be funded. Factors based on historical loss experience and specific risk characteristics of the loan product are utilized to calculate inherent losses related to unfunded commitments and standby letters of credit as of the reporting date. The portion of the allowance assigned to loans and leases is reported as a contra asset, directly following loans and leases in the consolidated balance sheet. The portion of the allowance assigned to unfunded loan commitments and standby letters of credit is reported in other liabilities in the consolidated balance sheet.

Standby Letters of Credit

J. Standby Letters of Credit. Fees on standby letters of credit are recognized in other operating income on the straight-line method over the lives of the underlying agreements. Northern Trust’s recorded liability for standby letters of credit, reflecting the obligation it has undertaken, is measured as the amount of unamortized fees on these instruments.

Buildings and Equipment

K. Buildings and Equipment. Buildings and equipment owned are carried at original cost less accumulated depreciation. The charge for depreciation is computed on the straight-line method based on the following range of lives: buildings – 10 to 30 years; equipment – 3 to 10 years; and leasehold improvements – the shorter of the lease term or 15 years. Leased properties meeting certain criteria are capitalized and amortized using the straight-line method over the lease period.

Other Real Estate Owned (OREO)

L. Other Real Estate Owned (OREO). OREO is comprised of commercial and residential real estate properties acquired in partial or total satisfaction of loans. OREO assets are carried at the lower of cost or fair value less estimated costs to sell and are recorded in other assets in the consolidated balance sheet. Fair value is typically based on third-party appraisals. Appraisals of OREO properties are updated on an annual basis and are subject to adjustments to reflect management’s judgment as to the realizable value of the properties. Losses identified at the time of acquisition of such properties are charged against the allowance for credit losses assigned to loans and leases. Subsequent write-downs that may be required to the carrying value of these assets and gains or losses realized from asset sales are recorded within other operating expenses.

Goodwill and Other Intangible Assets

M. Goodwill and Other Intangible Assets. Goodwill is not subject to amortization. Separately identifiable acquired intangible assets with finite lives are amortized over their estimated useful lives, primarily on a straight-line basis. Purchased software and allowable internal costs, including compensation relating to software developed for internal use, are capitalized. Software is amortized using the straight-line method over the estimated useful lives of the assets, generally ranging from 3 to 10 years.

Goodwill and other intangible assets are reviewed for impairment on an annual basis or more frequently if events or changes in circumstances indicate the carrying amounts may not be recoverable.

Assets Under Custody and Assets Under Management

N. Assets Under Custody and Assets Under Management. Assets held in fiduciary or agency capacities are not included in the consolidated balance sheet, since such items are not assets of Northern Trust.

Trust, Investment and Other Servicing Fees

O. Trust, Investment and Other Servicing Fees. Trust, investment and other servicing fees are recorded on the accrual basis, over the period in which the service is provided. Fees are a function of the market value of assets custodied, managed and serviced, the volume of transactions, securities lending volume and spreads, and fees for other services rendered, as set forth in the underlying client agreement. This revenue recognition involves the use of estimates and assumptions, including components that are calculated based on estimated asset valuations and transaction volumes.

Securities lending fees have been impacted by Northern Trust’s share of unrealized investment gains and losses in one investment fund that is used in securities lending activities and accounted for at fair value. As of September 30, 2010, securities in the mark-to-market fund had been sold with the proceeds reinvested into a short duration fund, eliminating the mark-to-market impact on securities lending revenue in future periods. Certain investment management fee arrangements also may provide performance fees that are based on client portfolio returns exceeding predetermined levels. Northern Trust adheres to a policy in which it does not record any performance-based fee income until the end of the contract period, thereby eliminating the potential that revenue will be recognized in one quarter and reversed in a future quarter. Therefore, Northern Trust does not record any revenue under incentive fee programs that is at risk due to future performance contingencies. These arrangements often contain similar terms for the payment of performance-based fees to sub-advisors. The accounting for these performance-based expenses matches the treatment for the related performance-based revenues.

Client reimbursed out-of-pocket expenses that are an extension of existing services that are being rendered are recorded on a gross basis as revenue.

Client Security Settlement Receivable

P. Client Security Settlement Receivables. These receivables represent other collection items presented on behalf of custody clients and settled through withdrawals from short term investment funds on a next day basis.

Income Taxes

Q. Income Taxes. Northern Trust follows an asset and liability approach to account for income taxes. The objective is to recognize the amount of taxes payable or refundable for the current year, and to recognize deferred tax assets and liabilities resulting from temporary differences between the amounts reported in the financial statements and the tax bases of assets and liabilities. The measurement of tax assets and liabilities is based on enacted tax laws and applicable tax rates.

Tax positions taken or expected to be taken on a tax return are evaluated based on their likelihood of being sustained upon examination by tax authorities. Only tax positions that are considered more-likely-than-not to be sustained are recorded in the consolidated financial statements. Northern Trust recognizes any interest and penalties related to unrecognized tax benefits in the provision for income taxes.

Cash Flow Statements

R. Cash Flow Statements. Cash and cash equivalents have been defined as “Cash and Due from Banks”.

Pension and Other Postretirement Benefits

S. Pension and Other Postretirement Benefits. Northern Trust records the funded status of its defined benefit pension and other postretirement plans on the consolidated balance sheet. Prepaid pension benefits are reported in other assets and unfunded pension and postretirement benefit liabilities are reported in other liabilities. Plan assets and benefit obligations are measured annually at December 31. Pension costs are recognized ratably over the estimated working lifetime of eligible participants.

Share-Based Compensation Plans

T. Share-Based Compensation Plans. Northern Trust recognizes as compensation expense the grant-date fair value of stock options and other equity-based compensation granted to employees within the consolidated income statement using a fair-value-based method. The fair values of stock and stock unit awards, including performance stock unit awards and director awards, are based on the price of the Corporation’s stock on the date of grant. The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The model utilizes weighted-average assumptions regarding the period of time that options granted are expected to be outstanding (expected term) based primarily on the historical exercise behavior attributable to previous option grants, the estimated yield from dividends paid on the Corporation’s stock over the expected term of the options, the expected volatility of Northern Trust’s stock price over a period equal to the expected term of the options, and a risk free interest rate based on the U.S. Treasury yield curve at the time of grant for a period equal to the expected term of the options granted.

Compensation expense for share-based award grants with terms that provide for a graded vesting schedule, whereby portions of the award vest in increments over the requisite service period, are recognized on a straight-line basis over the requisite service period for the entire award. Northern Trust does not include an estimate of future forfeitures in its recognition of share-based compensation as historical forfeitures have not been significant. Share-based compensation is adjusted based on forfeitures as they occur. Dividend equivalents are paid on stock units on a current basis prior to vesting and distribution. Cash flows resulting from the realization of tax deductions from the exercise of stock options in excess of the compensation cost recognized (excess tax benefits) are classified as financing cash flows.

Net Income Per Common Share

U. Net Income Per Common Share. Basic net income per common share is computed by dividing net income/loss applicable to common stock by the weighted average number of common shares outstanding during each period. Diluted net income per common share is computed by dividing net income applicable to common stock and potential common shares by the aggregate of the weighted average number of common shares outstanding during the period and common share equivalents calculated for stock options and restricted stock outstanding using the treasury stock method. In a period of a net loss, diluted net income per common share is calculated in the same manner as basic net income per common share.

Northern Trust has issued certain restricted stock awards, which are unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents. These restricted shares are considered participating securities. Accordingly, Northern Trust calculates net income applicable to common stock using the two-class method, whereby net income is allocated between common stock and participating securities.

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Business Units and Related Information - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Segment Reporting Information [Line Items]
Visa indemnified litigation benefit (charges) recorded	$ 23.1	$ 33.0	$ 17.8

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Assets Measure at Fair Value on Nonrecurring Basis (Detail) (Fair Value, Measurements, Nonrecurring, USD $) In Millions, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Asset	$ 68.1		$ 85.9
Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Asset	64.3	[1]	72.4	[1]
Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Asset	3.8	[2]	13.5	[2]
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Asset	68.1		85.9
Fair Value, Inputs, Level 3 | Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Asset	64.3	[1]	72.4	[1]
Fair Value, Inputs, Level 3 | Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Asset	$ 3.8	[2]	$ 13.5	[2]

[1] Northern Trust provided an additional $11.3 million and $22.5 million of specific allowances to reduce the fair value of these loans during the years ended December 31, 2011 and 2010, respectively.

[2] Northern Trust charged $1.5 million and $4.9 million through other operating expenses during the years ended December 31, 2011 and 2010, respectively, to reduce the fair values of these Other Real Estate Owned (OREO) properties.

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Number of Loans and Leases Modified in TDRs and Total Recorded Investments and Unpaid Principal Balances (Detail) (USD $) In Millions, unless otherwise specified			12 Months Ended			12 Months Ended					12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2011 Class of Financing Receivable Contract	Dec. 31, 2011 Commercial	Dec. 31, 2010 Commercial	Dec. 31, 2011 Commercial Class of Financing Receivable Contract	Dec. 31, 2011 Commercial Class of Financing Receivable Commercial and Institutional Contract	Dec. 31, 2011 Commercial Class of Financing Receivable Commercial Real Estates Contract	Dec. 31, 2011 Personal	Dec. 31, 2010 Personal	Dec. 31, 2011 Personal Class of Financing Receivable Contract	Dec. 31, 2011 Personal Class of Financing Receivable Residential Real Estate Contract	Dec. 31, 2011 Personal Class of Financing Receivable Private Client Contract
Financing Receivable, Modifications [Line Items]
NUMBER OF LOANS AND LEASES			171			22	6	16			149	148	1
UNPAID PRINCIPAL BALANCE	$ 356.9	$ 372.3	$ 95.1	$ 162.6	$ 225.2	$ 54.7	$ 12.1	$ 42.6	$ 194.3	$ 147.1	$ 40.4	$ 40.4
RECORDED INVESTMENT			$ 77.0			$ 44.4	$ 10.4	$ 34.0			$ 32.6	$ 32.6

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Pledged and Restricted Assets

12 Months Ended

Dec. 31, 2011

Pledged and Restricted Assets

Note 29 – Pledged and Restricted Assets

Certain of Northern Trust’s subsidiaries, as required or permitted by law, pledge assets to secure public and trust deposits, repurchase agreements, Federal Home Loan Bank borrowings, and for other purposes. On December 31, 2011, securities and loans totaling $27.9 billion ($21.5 billion of government sponsored agency and other securities, $460.2 million of obligations of states and political subdivisions, and $6.0 billion of loans), were pledged. Collateral required for these purposes totaled $4.8 billion. Included in the total pledged assets are available for sale securities with a total fair value of $1.2 billion which were pledged as collateral for agreements to repurchase securities sold transactions. The secured parties to these transactions have the right to repledge or sell these securities.

Northern Trust is permitted to repledge or sell collateral accepted from agreements to resell securities purchased transactions. The total fair value of accepted collateral as of December 31, 2011 was $74.7 million. There was no repledged or sold collateral as of December 31, 2011.

Deposits maintained to meet Federal Reserve Bank reserve requirements averaged $429.9 million in 2011.

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Senior Notes and Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2011

Summary of Senior Notes Outstanding

Senior Notes. A summary of senior notes outstanding at December 31 is presented below.

($ In Millions)	RATE			2011		2010
Corporation-Senior Notes (a) (d)
Fixed Rate Due Aug. 2011 (f)		5.30	%	$	—	$	249.9
Fixed Rate Due Nov. 2012 (g) (l)		5.20			206.9		214.6
Fixed Rate Due Aug. 2013 (h) (l)		5.50			422.4		432.2
Fixed Rate Due May 2014		4.63			500.0		500.0
Fixed Rate Due Nov. 2020 (j)		3.45			499.5		499.4
Fixed Rate Due Aug. 2021 (k)		3.38			497.9		–
Total Senior Notes				$	2,126.7	$	1,896.1

Summary of Long Term Debt Outstanding

Long-Term Debt. A summary of long-term debt outstanding at December 31 is presented below.

($ In Millions)	2011		2010
Bank-Subordinated Debt (a) (d)
6.30% Notes due March 2011 (b)	$	–	$	150.0
4.60% Notes due Feb. 2013 (b)		200.0		200.0
5.85% Notes due Nov. 2017 (b) (l)		241.5		229.5
6.50% Notes due Aug. 2018 (b) (i) (l)		360.8		337.6
5.375% Sterling Denominated Notes due March 2015 (e)		231.1		231.6
Total Bank-Subordinated Debt		1,033.4		1,148.7
Federal Home Loan Bank Borrowings
One Year or Less (Average Rate at Year End – 4.64% in 2011; 4.18% in 2010)		670.0		426.4
One to Three Years (Average Rate at Year End – 4.08% in 2011; 4.46% in 2010)		335.0		870.0
Three to Five Years (Average Rate at Year End – None in 2011; 4.40% in 2010)		–		135.0
Five to Ten Years (Average Rate at Year End – 6.29% in 2011; 6.38% in 2010)		50.0		101.1
Total Federal Home Loan Bank Borrowings		1,055.0		1,532.5
Capital Lease Obligations (c)		44.9		48.1
Total Long-Term Debt	$	2,133.3	$	2,729.3
Long-Term Debt Qualifying as Risk-Based Capital	$	678.9	$	765.8

(a) Not redeemable prior to maturity.

(b) Under the terms of its current Offering Circular dated August 23, 2011, the Bank has the ability to offer from time to time its senior bank notes in an aggregate principal amount of up to $4.5 billion at any one time outstanding and up to an additional $1.0 billion of subordinated notes. Each senior note will mature from 30 days to fifteen years, and each subordinated note will mature from five years to fifteen years, following its date of original issuance. Each note will mature on such date as selected by the initial purchaser and agreed to by the Bank.

(c) Refer to Note 10.

(d) Debt issue costs are recorded as an asset and amortized on a straight-line basis over the life of the Note.

(e) Notes issued at a discount of .484%.

(f) Notes issued at a discount of .035%.

(g) Notes issued at a discount of .044%.

(h) Notes issued at a discount of .09%.

(i) Notes issued at a discount of .02%

(j) Notes issued at a discount of .117%

(k) Notes issued at a discount of .437%

(l) Interest rate swap contracts were entered into to modify the interest expense on these senior and subordinated notes from fixed rates to floating rates. The swaps are recorded as fair value hedges and at December 31, 2011, increases in the carrying values of the senior and subordinated notes outstanding of $29.9 million and $102.6 million, respectively, were recorded. As of December 31, 2010, increases in the carrying values of senior and subordinated notes outstanding of $47.8 million and $67.4 million, respectively, were recorded.

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Regulatory Capital Requirements (Tables)

12 Months Ended

Dec. 31, 2011

Risk-Based Capital Amounts and Ratios for Northern Trust and for Each of its U.S. Subsidiary Banks Whose Net Income for 2011 or 2010 Exceeded 10% of the Consolidated Total

The table below summarizes the risk-based capital amounts and ratios for Northern Trust and for each of its U.S. subsidiary banks whose net income for 2011 or 2010 exceeded 10% of the consolidated total.

	ACTUAL					MINIMUM TO QUALIFY AS WELL CAPITALIZED
($ In Millions)	AMOUNT		RATIO			AMOUNT		RATIO
AS OF DECEMBER 31, 2011
Total Capital to Risk-Weighted Assets
Consolidated	$	8,065		14.2	%	$	5,667		10.0	%
The Northern Trust Company		7,763		13.8			5,631		10.0
Tier 1 Capital to Risk-Weighted Assets
Consolidated		7,105		12.5			3,400		6.0
The Northern Trust Company		6,603		11.7			3,378		6.0
Tier 1 Capital (to Fourth Quarter Average Assets)
Consolidated		7,105		7.3			4,865		5.0
The Northern Trust Company		6,603		6.8			4,852		5.0
AS OF DECEMBER 31, 2010
Total Capital to Risk-Weighted Assets
Consolidated	$	8,036		15.6	%	$	5,147		10.0	%
The Northern Trust Company		6,440		16.2			3,978		10.0
Northern Trust, NA		1,461		13.9			1,050		10.0
Tier 1 Capital to Risk-Weighted Assets
Consolidated		6,977		13.6			3,088		6.0
The Northern Trust Company		5,293		13.3			2,387		6.0
Northern Trust, NA		1,301		12.4			630		6.0
Tier 1 Capital (to Fourth Quarter Average Assets)
Consolidated		6,977		8.8			3,983		5.0
The Northern Trust Company		5,293		8.0			3,323		5.0
Northern Trust, NA		1,301		10.8			602		5.0

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Derivative Financial Instruments - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Derivative [Line Items]
This amount represents additional cash collateral received from derivative counterparties not offset against derivative assets and liabilities	$ 72.3	$ 9.9
This amount represents additional cash collateral deposited with derivative counterparties not offset against derivative assets and liabilities	47.8	0.5
Aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a liability position	200	3,300
Collateral deposited with derivative counterparties for derivatives instruments with credit-risk-related contingent features that are in a liability position	100	2,900
Termination payments that could have been required for derivative instruments with credit-risk-related contingent features	121.6	387.1
Sterling denominated debt designated as hedges of foreign exchange risk	241.2	241.8
Maximum length of time being hedged for exposure to variability in future cash flows of forecasted foreign currency denominated transactions	Twenty-three months is the maximum length of time over which the exposure to variability in future cash flows of forecasted foreign currency denominated transactions is being hedged.
Maximum length of time over which the exposure to variability in future cash flows of forecasted foreign currency denominated transactions is being hedged	23 months
Net foreign exchange contract losses reclassified from AOCI	0	6.3
Estimated net gain (loss) to be reclassified into earnings within the next twelve months relating to cash flow hedges	(10.3)
Derivative Financial Instruments, Assets
Derivative [Line Items]
Derivative assets recorded on the consolidated balance sheet, reduced as a result of master netting agreements	2,023.6	1,818.2
Reduction in derivative assets (liabilities) due to cash collateral received from (deposited with) derivative counterparties	220.1	2,622.3
Derivative Financial Instruments, Liabilities
Derivative [Line Items]
Derivative liabilities recorded on the consolidated balance sheet, reduced as a result of master netting agreements	2,023.6	1,818.2
Reduction in derivative assets (liabilities) due to cash collateral received from (deposited with) derivative counterparties	257.4	2,962.2
Client Related and Trading
Derivative [Line Items]
Percentage of derivatives outstanding related to client-related and trading activities	97.00%	97.00%
Changes recorded in the fair value of the hedged items in a fair value hedge	0.3	0.2
The net gain/loss recognized in earnings during the period representing the amount of hedge ineffectiveness for fair value hedges of available for sale investment securities, senior notes, or subordinated debt	$ 0.9	$ 0.1	$ 0

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Summary of Senior Notes Outstanding (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Debt Outstanding [Line Items]
Senior Notes	$ 2,126.7		$ 1,896.1
Fixed Rate Corporate Senior Notes 5.30 Percent Due August 2011
Debt Outstanding [Line Items]
Interest Rate	5.30%	[1],[2],[3]
Senior Notes			249.9	[1],[2],[3]
Fixed Rate Corporate Senior Notes 5.20 Percent Due November 2012
Debt Outstanding [Line Items]
Interest Rate	5.20%	[1],[2],[4],[5]
Senior Notes	206.9	[1],[2],[4],[5]	214.6	[1],[2],[4],[5]
Fixed Rate Corporate Senior Notes 5.50 Percent Due August 2013
Debt Outstanding [Line Items]
Interest Rate	5.50%	[1],[2],[5],[6]
Senior Notes	422.4	[1],[2],[5],[6]	432.2	[1],[2],[5],[6]
Fixed Rate Corporate Senior Notes 4.63 Percent Due May 2014
Debt Outstanding [Line Items]
Interest Rate	4.63%
Senior Notes	500.0		500.0
Fixed Rate Corporate Senior Notes 3.45 Percent Due November 2020
Debt Outstanding [Line Items]
Interest Rate	3.45%	[1],[2],[7]
Senior Notes	499.5	[1],[2],[7]	499.4	[1],[2],[7]
Fixed Rate Corporate Senior Notes 3.38 Percent Due August 2021
Debt Outstanding [Line Items]
Interest Rate	3.38%	[1],[2],[8]
Senior Notes	$ 497.9	[1],[2],[8]

[1] Not redeemable prior to maturity.

[2] Debt issue costs are recorded as an asset and amortized on a straight-line basis over the life of the Note.

[3] Notes issued at a discount of .035%.

[4] Notes issued at a discount of .044%.

[5] Interest rate swap contracts were entered into to modify the interest expense on these senior and subordinated notes from fixed rates to floating rates. The swaps are recorded as fair value hedges and at December 31, 2011, increases in the carrying values of the senior and subordinated notes outstanding of $29.9 million and $102.6 million, respectively, were recorded. As of December 31, 2010, increases in the carrying values of senior and subordinated notes outstanding of $47.8 million and $67.4 million, respectively, were recorded.

[6] Notes issued at a discount of .09%.

[7] Notes issued at a discount of .117%

[8] Notes issued at a discount of .437%

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Information Pertaining to Stock Options Granted, Vested, and Exercised (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted Average Grant-Date Per Share Fair Value of Stock Options Granted	$ 15.26	$ 14.45	$ 16.94
Grant-Date Fair Value of Stock Options Vested	$ 27.9	$ 26.7	$ 18.4
Stock Options Exercised:
Intrinsic Value as of Exercise Date	1.5	5.0	11.3
Cash Received	5.4	16.9	38.9
Tax Deduction Benefits Realized	$ 0.5	$ 1.7	$ 3.6

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Reconciliation of Total Provision for Income Taxes with Amounts Computed at Federal Tax Rate of 35%

The following table reconciles the total provision for income taxes recorded in the consolidated statement of income with the amounts computed at the statutory federal tax rate of 35%.

(In Millions)	2011			2010			2009
Tax at Statutory Rate	$	309.3		$	346.4		$	439.3
Tax Exempt Income		(9.9	)		(10.8	)		(11.9	)
Leveraged Lease Adjustments		(4.7	)		(.8	)		(4.8	)
Foreign Tax Rate Differential		(21.3	)		(20.1	)		(20.9	)
State Taxes, net		22.8			17.3			9.8
Other		(16.1	)		(11.7	)		(20.5	)
Provision for Income Taxes	$	280.1		$	320.3		$	391.0

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(In Millions)	2011			2010
Balance at January 1	$	89.9		$	88.9
Additions for Tax Positions Taken in Current Year		–			.2
Additions for Tax Positions Taken in Prior Years		2.2			7.1
Reductions for Tax Positions Taken in Prior Years		(5.2	)		(6.0	)
Reductions Resulting from Expiration of Statutes		(.9	)		(.3	)
Reductions Resulting from Settlements with Taxing Authorities		(68.2	)		–
Balance at December 31	$	17.8		$	89.9

Components of Consolidated Provision for Income Taxes

The components of the consolidated provision for income taxes for each of the three years ended December 31 are as follows:

(In Millions)	2011		2010		2009
Current Tax Provision:
Federal	$	113.6	$	220.0	$	124.6
State		15.1		21.8		(7.1	)
Non-U.S.		54.2		66.4		89.7
Total		182.9		308.2		207.2
Deferred Tax Provision:
Federal		84.0		6.2		162.9
State		11.3		5.2		24.1
Non-U.S.		1.9		.7		(3.2	)
Total		97.2		12.1		183.8
Provision for Income Taxes	$	280.1	$	320.3	$	391.0

Tax Charges (Benefits) Recorded Directly to Stockholders' Equity

In addition to the amounts shown above, tax charges (benefits) have been recorded directly to stockholders’ equity for the following items:

(In Millions)	2011			2010			2009
Current Tax Benefit for Employee Stock Options and Other Stock-Based Plans	$	.6		$	(1.2	)	$	(4.2	)
Tax Effect of Other Comprehensive Income		(5.2	)		60.0			64.7

Deferred Tax Liabilities and Assets

Deferred tax liabilities and assets have been computed as follows:

	DECEMBER 31
(In Millions)	2011		2010		2009
Deferred Tax Liabilities:
Lease Financing	$	398.2	$	382.4	$	404.6
Software Development		254.9		197.2		180.8
Accumulated Depreciation		48.6		40.7		16.1
Compensation and Benefits		7.1		23.3		9.7
State Taxes, net		52.4		41.7		34.2
Other Liabilities		137.6		41.1		37.1
Gross Deferred Tax Liabilities		898.8		726.4		682.5
Deferred Tax Assets:
Allowance for Credit Losses		114.5		124.7		118.5
Visa Indemnification		—		8.1		19.7
Other Assets		150.0		51.3		74.1
Gross Deferred Tax Assets		264.5		184.1		212.3
Valuation Reserve		—		—		—
Deferred Tax Assets, net of Valuation Reserve		264.5		184.1		212.3
Net Deferred Tax Liabilities	$	634.3	$	542.3	$	470.2

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Allowance for Credit Losses (Tables)

12 Months Ended

Dec. 31, 2011

Changes in Allowance for Credit Losses by Segment

Changes in the allowance for credit losses by segment were as follows:

	2011									2010									2009
(In Millions)	COMMERCIAL			PERSONAL			TOTAL			COMMERCIAL			PERSONAL			TOTAL			COMMERCIAL			PERSONAL			TOTAL
Balance at Beginning of Year	$	256.7		$	100.6		$	357.3		$	252.2		$	88.4		$	340.6		$	185.6		$	65.5		$	251.1
Charge-Offs		(56.3	)		(60.0	)		(116.3	)		(76.2	)		(73.9	)		(150.1	)		(53.1	)		(79.2	)		(132.3	)
Recoveries		21.5			11.4			32.9			3.6			3.3			6.9			3.1			3.4			6.5
Net Charge-Offs		(34.8	)		(48.6	)		(83.4	)		(72.6	)		(70.6	)		(143.2	)		(50.0	)		(75.8	)		(125.8	)
Provision for Credit Losses		(10.9	)		65.9			55.0			77.2			82.8			160.0			116.3			98.7			215.0
Effect of Foreign Exchange Rates		–			–			–			(.1	)		–			(.1	)		.3			–			.3
Balance at End of Year	$	211.0		$	117.9		$	328.9		$	256.7		$	100.6		$	357.3		$	252.2		$	88.4		$	340.6
Allowance for Credit Losses Assigned to:
Loans and Leases	$	178.6		$	116.2		$	294.8		$	220.7		$	98.9		$	319.6		$	222.9		$	86.3		$	309.2
Unfunded Commitments and Standby Letters of Credit		32.4			1.7			34.1			36.0			1.7			37.7			29.3			2.1			31.4
Total Allowance for Credit Losses	$	211.0		$	117.9		$	328.9		$	256.7		$	100.6		$	357.3		$	252.2		$	88.4		$	340.6

Allowances for Credit Losses and Recorded Investments in Loans and Leases by Segment

The following tables provide information regarding the recorded investments in loans and leases and the allowances for credit losses by segment as of December 31, 2011 and 2010.

(In Millions)	COMMERCIAL		PERSONAL		TOTAL
DECEMBER 31, 2011
Loans and Leases:
Specifically Evaluated for Impairment	$	121.2	$	158.2	$	279.4
Evaluated for Inherent Impairment		12,233.1		16,551.4		28,784.5
Total Loans and Leases		12,354.3		16,709.6		29,063.9
Allowance for Credit Losses on Credit Exposures:
Specifically Evaluated for Impairment		22.9		9.9		32.8
Evaluated for Inherent Impairment		155.7		106.3		262.0
Allowance assigned to loans and leases		178.6		116.2		294.8
Allowance assigned to unfunded commitments and standby letters of credit		32.4		1.7		34.1
Total Allowance for Credit Losses	$	211.0	$	117.9	$	328.9

(In Millions)	COMMERCIAL		PERSONAL		TOTAL
DECEMBER 31, 2010
Loans and Leases:
Specifically Evaluated for Impairment	$	180.5	$	120.7	$	301.2
Evaluated for Inherent Impairment		11,432.9		16,397.9		27,830.8
Total Loans and Leases		11,613.4		16,518.6		28,132.0
Allowance for Credit Losses on Credit Exposures:
Specifically Evaluated for Impairment		49.3		2.4		51.7
Evaluated for Inherent Impairment		171.4		96.5		267.9
Allowance assigned to loans and leases		220.7		98.9		319.6
Allowance assigned to unfunded commitments and standby letters of credit		36.0		1.7		37.7
Total Allowance for Credit Losses	$	256.7	$	100.6	$	357.3

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Contractual Amounts of Commitments and Letters of Credit (Parenthetical) (Detail) (USD $)	Dec. 31, 2011		Dec. 31, 2010
Commitments to Extend Credit
Commitments and Letters of Credit [Line Items]
Legally Binding Commitments	$ 500,000,000		$ 1,600,000,000
Standby Letters of Credit
Commitments and Letters of Credit [Line Items]
Letters of Credit	4,293,400,000	[1]	4,344,700,000	[1]
Weighted average maturity of standby letters of credit (in months)	27		20
Secured by Cash Deposits or Participated to Others | Standby Letters of Credit
Commitments and Letters of Credit [Line Items]
Letters of Credit	$ 608,200,000		$ 602,300,000

[1] These amounts include $608.2 million and $602.3 million of standby letters of credit secured by cash deposits or participated to others as of December 31, 2011 and 2010, respectively. The weighted average maturity of standby letters of credit was 27 months at December 31, 2011 and 20 months at December 31, 2010.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies

Note 1 – Summary of Significant Accounting Policies

The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) and reporting practices prescribed for the banking industry. A description of the more significant accounting policies follows.

A. Basis of Presentation. The consolidated financial statements include the accounts of Northern Trust Corporation (Corporation) and its wholly-owned subsidiary, The Northern Trust Company (Bank), and various other wholly-owned subsidiaries of the Corporation and Bank. Throughout the notes, the term “Northern Trust” refers to the Corporation and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The consolidated statement of income includes results of acquired subsidiaries from the dates of their acquisition. Certain prior year balances have been reclassified consistent with the current year’s presentation.

B. Nature of Operations. The Corporation is a financial holding company under the Gramm-Leach-Bliley Act. The Bank is an Illinois banking corporation headquartered in Chicago and the Corporation’s principal subsidiary. The Corporation conducts business in the United States (U.S.) and internationally through the Bank, trust companies, and various other U.S. and non-U.S. subsidiaries.

Northern Trust generates the majority of its revenues from its two primary business units: Corporate and Institutional Services (C&IS) and Personal Financial Services (PFS). Investment management services and products are provided to C&IS and PFS through a third business unit, Northern Trust Global Investments (NTGI). Operating and systems support for these business units is provided by a fourth business unit, Operations and Technology (O&T).

The C&IS business unit provides asset servicing, asset management, securities lending, brokerage, banking and related services to corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth and government funds. C&IS client relationships are managed through the Bank and the Bank’s and the Corporation’s other subsidiaries, including support from international locations in North America, Europe, the Middle East, and the Asia Pacific region.

The PFS business unit provides personal trust, investment management, custody, and philanthropic services; financial consulting; wealth management and family office services; guardianship and estate administration; brokerage services; and private and business banking. PFS focuses on high net worth individuals and families, business owners, executives, professionals, retirees, and established privately held businesses in its target markets. PFS services are delivered through a network of offices in 18 U.S. states as well as offices in London and Guernsey.

C. Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

D. Foreign Currency Remeasurement and Translation. Asset and liability accounts denominated in nonfunctional currencies are remeasured into functional currencies at period end rates of exchange, except for buildings and equipment which are remeasured at exchange rates in effect at the date of acquisition. Results from remeasurement of asset and liability accounts are reported in other operating income as currency translation gains (losses), net. Income and expense accounts are remeasured at period average rates of exchange.

Asset and liability accounts of entities with functional currencies that are not the U.S. dollar are translated at period end rates of exchange. Income and expense accounts are translated at period average rates of exchange. Translation adjustments, net of applicable taxes, are reported directly to accumulated other comprehensive income (AOCI), a component of stockholders’ equity.

E. Securities. Securities Available for Sale are reported at fair value, with unrealized gains and losses credited or charged, net of the tax effect, to AOCI. Realized gains and losses on securities available for sale are determined on a specific identification basis and are reported within other security gains (losses), net, in the consolidated statement of income. Interest income is recorded on the accrual basis, adjusted for the amortization of premium and accretion of discount.

Securities Held to Maturity consist of debt securities that management intends to, and Northern Trust has the ability to, hold until maturity. Such securities are reported at cost, adjusted for amortization of premium and accretion of discount. Interest income is recorded on the accrual basis adjusted for the amortization of premium and accretion of discount.

Securities Held for Trading are stated at fair value. Realized and unrealized gains and losses on securities held for trading are reported in the consolidated statement of income within security commissions and trading income.

Nonmarketable Securities primarily consist of Federal Reserve and Federal Home Loan Bank stock and affordable housing investments which are recorded in other assets on the consolidated balance sheet. Federal Reserve and Federal Home Loan Bank stock are reported at cost, which represents redemption value. Affordable housing investments, which are discussed in further detail in Note 28, are reported at cost using the effective yield method and amortized over the lives of the related tax credits.

Other-Than-Temporary Impairment (OTTI). A security is considered to be other-than-temporarily impaired if the present value of cash flows expected to be collected are less than the security’s amortized cost basis (the difference being defined as the credit loss) or if the fair value of the security is less than the security’s amortized cost basis and the investor intends, or more-likely-than-not will be required, to sell the security before recovery of the security’s amortized cost basis. If an OTTI exists, the charge to earnings is limited to the amount of credit loss if the investor does not intend to sell the security, and it is more-likely-than-not that it will not be required to sell the security, before recovery of the security’s amortized cost basis. Any remaining difference between fair value and amortized cost is recognized in AOCI, net of applicable taxes. Otherwise, the entire difference between fair value and amortized cost is charged to earnings.

F. Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase. Securities purchased under agreements to resell and securities sold under agreements to repurchase are accounted for as collateralized financings and recorded at the amounts at which the securities were acquired or sold plus accrued interest. To minimize any potential credit risk associated with these transactions, the fair value of the securities purchased or sold is monitored, limits are set on exposure with counterparties, and the financial condition of counterparties is regularly assessed. It is Northern Trust’s policy to take possession of securities purchased under agreements to resell.

G. Derivative Financial Instruments. Northern Trust is a party to various derivative instruments that are used in the normal course of business to meet the needs of its clients; as part of its trading activity for its own account; and as part of its risk management activities. These instruments include foreign exchange contracts, interest rate contracts, and credit default swap contracts. Derivative financial instruments are recorded on the consolidated balance sheet at fair value within other assets and liabilities. Derivative asset and liability positions with the same counterparty are reflected on a net basis in cases where legally enforceable master netting agreements exist. Derivative assets and liabilities are further reduced by cash collateral received from, and deposited with, derivative counterparties. The accounting for changes in the fair value of a derivative in the consolidated statement of income depends on whether or not the contract has been designated as a hedge and qualifies for hedge accounting under GAAP. Derivative financial instruments are recorded on the consolidated cash flow statement within Changes in Derivative Instrument Gains/Losses, net.

Changes in the fair value of client-related and trading derivative instruments, which are not designated hedges under GAAP, are recognized currently in either foreign exchange trading income or security commissions and trading income. Changes in the fair value of derivative instruments entered into for risk management purposes but not designated as hedges are recognized currently in other operating income. Certain derivative instruments used by Northern Trust to manage risk are formally designated and qualify for hedge accounting as fair value, cash flow, or net investment hedges.

Derivatives designated as fair value hedges are used to limit Northern Trust’s exposure to changes in the fair value of assets and liabilities due to movements in interest rates. Changes in the fair value of fair value hedges are recognized currently in income. For substantially all fair value hedges, Northern Trust applies the “shortcut” method of accounting, available under GAAP, which assumes there is no ineffectiveness in a hedge. As a result, changes recorded in the fair value of the hedged item are equal to the offsetting gain or loss on the derivative and are reflected in the same line item. For fair value hedges that do not qualify for the “shortcut” method of accounting, Northern Trust utilizes regression analysis, a “long-haul” method of accounting, in assessing whether these hedging relationships are highly effective at inception and quarterly thereafter.

Derivatives designated as cash flow hedges are used to minimize the variability in cash flows of earning assets or forecasted transactions caused by movements in interest or foreign exchange rates. The effective portion of changes in the fair value of a cash flow hedge is recognized in AOCI. When the hedged forecasted transaction impacts earnings, balances in AOCI are reclassified to the same income or expense classification as the hedged item. Northern Trust assesses effectiveness using regression analysis for cash flow hedges of available for sale securities. Ineffectiveness is measured using the hypothetical derivative method. For cash flow hedges of forecasted foreign currency denominated revenue and expenditure transactions, Northern Trust closely matches all terms of the hedged item and the hedging derivative at inception and on an ongoing basis which limits hedge ineffectiveness. To the extent all terms are not perfectly matched, effectiveness is assessed using the dollar-offset method and any ineffectiveness is measured using the hypothetical derivative method. Any ineffectiveness is recognized currently in earnings.

Foreign exchange contracts and qualifying non-derivative instruments designated as net investment hedges are used to minimize Northern Trust’s exposure to variability in the foreign currency translation of net investments in non-U.S. branches and subsidiaries. The effective portion of changes in the fair value of the hedging instrument is recognized in AOCI consistent with the related translation gains and losses. For net investment hedges, all critical terms of the hedged item and the hedging instrument are matched at inception and on an ongoing basis to eliminate hedge ineffectiveness.

Fair value, cash flow, and net investment hedge derivatives are designated and formally documented as such contemporaneous with the transaction. The formal documentation describes the hedge relationship and identifies the hedging instruments and hedged items. Included in the documentation is a discussion of the risk management objectives and strategies for undertaking such hedges, as well as a description of the method for assessing hedge effectiveness at inception and on an ongoing basis. For hedges that do not qualify for the “shortcut” method of accounting, a formal assessment is performed on a calendar quarter basis to verify that derivatives used in hedging transactions continue to be highly effective in offsetting the changes in fair value or cash flows of the hedged item. Hedge accounting is discontinued if a derivative ceases to be highly effective, is terminated or sold, or if Northern Trust removes the derivative’s hedge designation. Subsequent gains and losses on these derivatives are included in foreign exchange trading income or security commissions and trading income. For discontinued cash flow hedges, the accumulated gain or loss on the derivative remains in AOCI and is reclassified to earnings in the period in which the previously hedged forecasted transaction impacts earnings or is no longer probable of occurring. For discontinued fair value hedges, the accumulated gain or loss on the hedged item is amortized over the remaining life of the hedged item.

H. Loans and Leases. Loans and leases are recognized assets that represent a contractual right to receive money either on demand or on fixed or determinable dates. Loans and leases are disaggregated for disclosure purposes by portfolio segment (segment) and by class. Segment is defined as the level at which management develops and documents a systematic methodology to determine the allowance for credit losses. Northern Trust has defined its segments as commercial and personal. A class of loans and leases is a subset of a segment, the components of which have similar risk characteristics, measurement attributes, or risk monitoring method. The classes within the commercial segment have been defined as commercial and institutional, commercial real estate, lease financing, non-US and other. The classes within the personal segment have been defined as residential real estate, private client and other.

Loan Classification. Loans that are held for investment are reported at the principal amount outstanding, net of unearned income. Loans classified as held for sale are reported at the lower of aggregate cost or fair value. Loan commitments for residential real estate loans that will be classified as held for sale at the time of funding and which have an interest rate lock are recorded on the balance sheet at fair value with subsequent gains or losses recognized as other income. Unrealized gains on these loan commitments are reported as other assets, with unrealized losses reported as other liabilities. Other unfunded commitments relating to loans that are not held for sale are recorded in other liabilities and are carried at the amount of unamortized fees with an allowance for credit loss liability recognized for any estimated probable losses.

Interest Income. Interest income on loans is recorded on an accrual basis unless, in the opinion of management, there is a question as to the ability of the debtor to meet the terms of the loan agreement, or interest or principal is more than 90 days contractually past due and the loan is not well-secured and in the process of collection. Past due status is based on how long after the contractual due date a principal or interest payment is received. For disclosure purposes, loans that are 29 days past due or less are shown as current. At the time a loan is determined to be nonperforming, interest accrued but not collected is reversed against interest income of the current period and the loan is classified as nonperforming. Interest collected on nonperforming loans is applied to principal unless, in the opinion of management, collectability of principal is not in doubt. Management’s assessment of indicators of loan and lease collectability, and its policies relative to the recognition of interest income, including the suspension and subsequent resumption of income recognition, do not meaningfully vary between loan and lease classes. Nonperforming loans are returned to performing status when factors indicating doubtful collectability no longer exist. Factors considered in returning a loan to performing status are consistent across all classes of loans and leases and, in accordance with regulatory guidance, relate primarily to expected payment performance. Loans are eligible to be returned to performing status when: (i) no principal or interest that is due is unpaid and repayment of the remaining contractual principal and interest is expected or (ii) the loan has otherwise become well-secured (possessing realizable value sufficient to discharge the debt, including accrued interest, in full) and is in the process of collection (through action reasonably expected to result in debt repayment or restoration to a current status in the near future). A loan that has not been brought fully current may be restored to performing status provided there has been a sustained period of repayment performance (generally a minimum of six months) by the borrower in accordance with the contractual terms, and Northern Trust is reasonably assured of repayment within a reasonable period of time. Additionally, a loan that has been formally restructured so as to be reasonably assured of repayment and performance according to its modified terms may be returned to accrual status, provided there was a well-documented credit evaluation of the borrower’s financial condition and prospects of repayment under the revised terms and there has been a sustained period of repayment performance (generally a minimum of six months) under the revised terms.

Impaired Loans. A loan is considered to be impaired when, based on current information and events, management determines that it is probable that Northern Trust will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans are identified through ongoing credit management and risk rating processes, including the formal review of past due and watch list credits. Payment performance and delinquency status are critical factors in identifying impairment for all loans and leases, particularly those within the residential real estate, private client and personal-other classes. Other key factors considered in identifying impairment of loans and leases within the commercial and institutional, non-U.S., lease financing, and commercial-other classes relate to the borrower’s ability to perform under the terms of the obligation as measured through the assessment of future cash flows, including consideration of collateral value, market value, and other factors. A loan is also considered to be impaired if its terms have been modified as a concession resulting from the debtor’s financial difficulties, referred to as a troubled debt restructuring (TDR). All troubled debt restructurings are considered impaired loans in the calendar year of their restructuring. In subsequent years, a troubled debt restructuring may cease being classified as impaired if the loan was modified at a market rate and has performed according to the modified terms for at least six months. A loan that has been modified at a below market rate will return to performing status if it satisfies the six month performance requirement; however, it will remain classified as impaired. Impairment is measured based upon the loan’s market price, the present value of expected future cash flows, discounted at the loan’s effective interest rate, or at the fair value of the collateral if the loan is collateral dependent. If the loan valuation is less than the recorded value of the loan, based on the certainty of loss, either a specific allowance is established, or a charge-off is recorded, for the difference. Smaller balance (individually less than $250,000) homogeneous loans are collectively evaluated for impairment and excluded from impaired loan disclosures in accordance with applicable accounting standards. Northern Trust’s accounting policies for impaired loans are consistent across all classes of loans and leases.

Premiums and Discounts. Premiums and discounts on loans are recognized as an adjustment of yield using the interest method based on the contractual terms of the loan. Certain direct origination costs and fees are netted, deferred and amortized over the life of the related loan as an adjustment to the loan’s yield.

Direct Financing and Leverage Leases. Unearned lease income from direct financing and leveraged leases is recognized using the interest method. This method provides a constant rate of return on the unrecovered investment over the life of the lease. The rate of return and the allocation of income over the lease term are recalculated from the inception of the lease if during the lease term assumptions regarding the amount or timing of estimated cash flows change. Lease residual values are established at the inception of the lease based on in-house valuations and market analyses provided by outside parties. Lease residual values are reviewed at least annually for other-than-temporary impairment. A decline in the estimated residual value of a leased asset determined to be other-than-temporary would be recorded in the period in which the decline is identified as a reduction of interest income.

I. Allowance for Credit Losses. The allowance for credit losses represents management’s estimate of probable losses which have occurred as of the date of the consolidated financial statements. The loan and lease portfolio and other lending related credit exposures are regularly reviewed to evaluate the adequacy of the allowance for credit losses. In determining the level of the allowance, Northern Trust evaluates the allowance necessary for impaired loans and also estimates losses inherent in other credit exposures. The result is an allowance with the following components:

Specific Allowance. The amount of specific allowance is determined through an individual evaluation of loans and lending-related commitments considered impaired that is based on expected future cash flows, the value of collateral, and other factors that may impact the borrower’s ability to pay. For impaired loans where the amount of specific allowance, if any, is determined based on the value of the underlying real estate collateral, third-party appraisals are generally obtained and utilized by management. These appraisals are generally less than twelve months old and are subject to adjustments to reflect management’s judgment as to the realizable value of the collateral.

Inherent Allowance. The amount of inherent loss allowance is based primarily on factors which incorporate management’s evaluation of historical charge-off experience and various qualitative factors such as management’s evaluation of economic and business conditions and changes in the character and size of the loan portfolio. Factors are applied to loan and lease credit exposures aggregated by shared risk characteristics and are reviewed quarterly by Northern Trust’s Loan Loss Allowance Committee which includes representatives from Credit Policy, business unit management, and Corporate Financial Management.

Loans, leases and other extensions of credit deemed uncollectible are charged to the allowance for credit losses. Subsequent recoveries, if any, are credited to the allowance. Northern Trust’s policies relative to the charging-off of uncollectible loans and leases are consistent across both loan and lease segments. Determinations as to whether an uncollectible loan is charged-off or a specific reserve is established are based on management’s assessment as to the level of certainty regarding the amount of loss. The provision for credit losses, which is charged to income, is the amount necessary to adjust the allowance for credit losses to the level determined to be appropriate through the above process. Actual losses may vary from current estimates and the amount of the provision for credit losses may be either greater than or less than actual net charge-offs.

Northern Trust analyzes its exposure to credit losses from both on-balance sheet and off-balance sheet activity using a consistent methodology. In estimating the allowance for credit losses for undrawn loan commitments and standby letters of credit, management uses conversion rates to determine the estimated amount that will be funded. Factors based on historical loss experience and specific risk characteristics of the loan product are utilized to calculate inherent losses related to unfunded commitments and standby letters of credit as of the reporting date. The portion of the allowance assigned to loans and leases is reported as a contra asset, directly following loans and leases in the consolidated balance sheet. The portion of the allowance assigned to unfunded loan commitments and standby letters of credit is reported in other liabilities in the consolidated balance sheet.

J. Standby Letters of Credit. Fees on standby letters of credit are recognized in other operating income on the straight-line method over the lives of the underlying agreements. Northern Trust’s recorded liability for standby letters of credit, reflecting the obligation it has undertaken, is measured as the amount of unamortized fees on these instruments.

K. Buildings and Equipment. Buildings and equipment owned are carried at original cost less accumulated depreciation. The charge for depreciation is computed on the straight-line method based on the following range of lives: buildings – 10 to 30 years; equipment – 3 to 10 years; and leasehold improvements – the shorter of the lease term or 15 years. Leased properties meeting certain criteria are capitalized and amortized using the straight-line method over the lease period.

L. Other Real Estate Owned (OREO). OREO is comprised of commercial and residential real estate properties acquired in partial or total satisfaction of loans. OREO assets are carried at the lower of cost or fair value less estimated costs to sell and are recorded in other assets in the consolidated balance sheet. Fair value is typically based on third-party appraisals. Appraisals of OREO properties are updated on an annual basis and are subject to adjustments to reflect management’s judgment as to the realizable value of the properties. Losses identified at the time of acquisition of such properties are charged against the allowance for credit losses assigned to loans and leases. Subsequent write-downs that may be required to the carrying value of these assets and gains or losses realized from asset sales are recorded within other operating expenses.

M. Goodwill and Other Intangible Assets. Goodwill is not subject to amortization. Separately identifiable acquired intangible assets with finite lives are amortized over their estimated useful lives, primarily on a straight-line basis. Purchased software and allowable internal costs, including compensation relating to software developed for internal use, are capitalized. Software is amortized using the straight-line method over the estimated useful lives of the assets, generally ranging from 3 to 10 years.

Goodwill and other intangible assets are reviewed for impairment on an annual basis or more frequently if events or changes in circumstances indicate the carrying amounts may not be recoverable.

N. Assets Under Custody and Assets Under Management. Assets held in fiduciary or agency capacities are not included in the consolidated balance sheet, since such items are not assets of Northern Trust.

O. Trust, Investment and Other Servicing Fees. Trust, investment and other servicing fees are recorded on the accrual basis, over the period in which the service is provided. Fees are a function of the market value of assets custodied, managed and serviced, the volume of transactions, securities lending volume and spreads, and fees for other services rendered, as set forth in the underlying client agreement. This revenue recognition involves the use of estimates and assumptions, including components that are calculated based on estimated asset valuations and transaction volumes.

Securities lending fees have been impacted by Northern Trust’s share of unrealized investment gains and losses in one investment fund that is used in securities lending activities and accounted for at fair value. As of September 30, 2010, securities in the mark-to-market fund had been sold with the proceeds reinvested into a short duration fund, eliminating the mark-to-market impact on securities lending revenue in future periods. Certain investment management fee arrangements also may provide performance fees that are based on client portfolio returns exceeding predetermined levels. Northern Trust adheres to a policy in which it does not record any performance-based fee income until the end of the contract period, thereby eliminating the potential that revenue will be recognized in one quarter and reversed in a future quarter. Therefore, Northern Trust does not record any revenue under incentive fee programs that is at risk due to future performance contingencies. These arrangements often contain similar terms for the payment of performance-based fees to sub-advisors. The accounting for these performance-based expenses matches the treatment for the related performance-based revenues.

Client reimbursed out-of-pocket expenses that are an extension of existing services that are being rendered are recorded on a gross basis as revenue.

P. Client Security Settlement Receivables. These receivables represent other collection items presented on behalf of custody clients and settled through withdrawals from short term investment funds on a next day basis.

Q. Income Taxes. Northern Trust follows an asset and liability approach to account for income taxes. The objective is to recognize the amount of taxes payable or refundable for the current year, and to recognize deferred tax assets and liabilities resulting from temporary differences between the amounts reported in the financial statements and the tax bases of assets and liabilities. The measurement of tax assets and liabilities is based on enacted tax laws and applicable tax rates.

Tax positions taken or expected to be taken on a tax return are evaluated based on their likelihood of being sustained upon examination by tax authorities. Only tax positions that are considered more-likely-than-not to be sustained are recorded in the consolidated financial statements. Northern Trust recognizes any interest and penalties related to unrecognized tax benefits in the provision for income taxes.

R. Cash Flow Statements. Cash and cash equivalents have been defined as “Cash and Due from Banks”.

S. Pension and Other Postretirement Benefits. Northern Trust records the funded status of its defined benefit pension and other postretirement plans on the consolidated balance sheet. Prepaid pension benefits are reported in other assets and unfunded pension and postretirement benefit liabilities are reported in other liabilities. Plan assets and benefit obligations are measured annually at December 31. Pension costs are recognized ratably over the estimated working lifetime of eligible participants.

T. Share-Based Compensation Plans. Northern Trust recognizes as compensation expense the grant-date fair value of stock options and other equity-based compensation granted to employees within the consolidated income statement using a fair-value-based method. The fair values of stock and stock unit awards, including performance stock unit awards and director awards, are based on the price of the Corporation’s stock on the date of grant. The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The model utilizes weighted-average assumptions regarding the period of time that options granted are expected to be outstanding (expected term) based primarily on the historical exercise behavior attributable to previous option grants, the estimated yield from dividends paid on the Corporation’s stock over the expected term of the options, the expected volatility of Northern Trust’s stock price over a period equal to the expected term of the options, and a risk free interest rate based on the U.S. Treasury yield curve at the time of grant for a period equal to the expected term of the options granted.

Compensation expense for share-based award grants with terms that provide for a graded vesting schedule, whereby portions of the award vest in increments over the requisite service period, are recognized on a straight-line basis over the requisite service period for the entire award. Northern Trust does not include an estimate of future forfeitures in its recognition of share-based compensation as historical forfeitures have not been significant. Share-based compensation is adjusted based on forfeitures as they occur. Dividend equivalents are paid on stock units on a current basis prior to vesting and distribution. Cash flows resulting from the realization of tax deductions from the exercise of stock options in excess of the compensation cost recognized (excess tax benefits) are classified as financing cash flows.

U. Net Income Per Common Share. Basic net income per common share is computed by dividing net income/loss applicable to common stock by the weighted average number of common shares outstanding during each period. Diluted net income per common share is computed by dividing net income applicable to common stock and potential common shares by the aggregate of the weighted average number of common shares outstanding during the period and common share equivalents calculated for stock options and restricted stock outstanding using the treasury stock method. In a period of a net loss, diluted net income per common share is calculated in the same manner as basic net income per common share.

Northern Trust has issued certain restricted stock awards, which are unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents. These restricted shares are considered participating securities. Accordingly, Northern Trust calculates net income applicable to common stock using the two-class method, whereby net income is allocated between common stock and participating securities.

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Change in Plan Assets (Detail) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
United States Pension Plans of US Entity, Defined Benefit
Fair Value at beginning of year	$ 982,100,000	$ 821,900,000
Actual Return on Assets	53,300,000	126,800,000
Employer Contributions	100,000,000	68,000,000
Benefits Paid	(41,300,000)	(34,600,000)
Fair Value at end of year	1,094,100,000	982,100,000
Foreign Pension Plans, Defined Benefit
Fair Value at beginning of year	122,200,000	113,700,000
Actual Return on Assets	4,500,000	9,300,000
Employer Contributions		10,400,000
Benefits Paid	(2,500,000)	(5,900,000)
Foreign Exchange Rate Changes	(900,000)	(5,300,000)
Fair Value at end of year	$ 123,300,000	$ 122,200,000

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Summary of Book Values of Outstanding Subordinated Debentures (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Debt Outstanding [Line Items]
Floating Rate Capital Debt	$ 276.9	$ 276.9
NTC Capital I Subordinated Debentures Due January 15th 2027
Debt Outstanding [Line Items]
Floating Rate Capital Debt	153.8	153.8
NTC Capital II Subordinated Debentures Due April 15th 2027
Debt Outstanding [Line Items]
Floating Rate Capital Debt	$ 123.1	$ 123.1

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Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2011

Plan Status of U.S. Plan, Non-U.S. Plans, and Supplemental Plan

PLAN STATUS

	U.S. PLAN						NON-U.S. PLANS						SUPPLEMENTAL PLAN
($ In Millions)	2011			2010			2011			2010			2011			2010
Accumulated Benefit Obligation	$	797.6		$	659.0		$	127.1		$	116.1		$	89.9		$	79.6
Projected Benefit		904.6			762.9			127.1			116.1			100.3			86.9
Plan Assets at Fair Value		1,094.1			982.1			123.3			122.2			–			–
Funded Status at December 31	$	189.5		$	219.2		$	(3.8	)	$	6.1		$	(100.3	)	$	(86.9	)
Weighted-Average Assumptions:
Discount Rates		4.75	%		5.50	%		5.02	%		5.58	%		4.75	%		5.50	%
Rate of Increase in Compensation Level		4.02			4.02			N/A			N/A			4.02			4.02
Expected Long-Term Rate of Return on Assets		8.00			8.00			5.28			6.27			N/A			N/A

Change in Benefit Obligation

CHANGE IN BENEFIT OBLIGATION

	U.S. PLAN						NON-U.S. PLANS						SUPPLEMENTAL PLAN
(In Millions)	2011			2010			2011			2010			2011			2010
Beginning Balance	$	762.9		$	642.0		$	116.1		$	134.4		$	86.9		$	85.9
Service Cost		42.8			37.9			–			1.8			3.2			3.2
Interest Cost		40.8			36.9			6.5			6.9			4.4			4.8
Actuarial Loss (Gain)		108.8			80.7			8.0			(2.1	)		15.4			5.0
Plan Curtailment		–			–			–			(11.4	)		–			–
Benefits Paid		(41.3	)		(34.6	)		(2.5	)		(5.9	)		(11.3	)		(12.0	)
Plan Amendment		(9.4	)		–			–			–			1.7			–
Foreign Exchange Rate Changes		–			–			(1.0	)		(7.6	)		–			–
Ending Balance	$	904.6		$	762.9		$	127.1		$	116.1		$	100.3		$	86.9

Change in Plan Assets

CHANGE IN PLAN ASSETS

	U.S. PLAN						NON-U.S. PLANS
(In Millions)	2011			2010			2011			2010
Fair Value of Assets at Beginning of Period	$	982.1		$	821.9		$	122.2		$	113.7
Actual Return on Assets		53.3			126.8			4.5			9.3
Employer Contributions		100.0			68.0			–			10.4
Benefits Paid		(41.3	)		(34.6	)		(2.5	)		(5.9	)
Foreign Exchange Rate Changes		–			–			(.9	)		(5.3	)
Fair Value of Assets at End of Period	$	1,094.1		$	982.1		$	123.3		$	122.2

Fair Values of U.S. Pension Plan Assets, by Major Asset Category, and Their Level within Fair Value Hierarchy

The following table presents the fair values of Northern Trust’s U.S. pension plan assets, by major asset category, and their level within the fair value hierarchy defined by GAAP as of December 31, 2011 and 2010.

	DECEMBER 31, 2011
(In Millions)	LEVEL  1		LEVEL  2		LEVEL  3		TOTAL
Equity Securities
U.S.	$	195.7	$	197.7	$	–	$	393.4
Non-U.S.		139.7		35.0		–		174.7
Fixed Income – U.S. Government		–		292.1		–		292.1
Alternative Investments
Private Equity Funds		–		–		45.5		45.5
Hedge Fund		–		–		29.2		29.2
Global Real Estate Fund		–		38.1		–		38.1
Commodity Linked Fund		34.3		–		–		34.3
Cash and Other		86.8		–		–		86.8
Total Assets at Fair Value	$	456.5	$	562.9	$	74.7	$	1,094.1

	DECEMBER 31, 2010
(In Millions)	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Equity Securities
U.S.	$	185.2	$	221.7	$	–	$	406.9
Non-U.S.		169.9		40.6		–		210.5
Fixed Income – U.S. Government		–		207.8		–		207.8
Alternative Investments
Private Equity Funds		–		–		33.5		33.5
Hedge Fund		–		–		29.7		29.7
Global Real Estate Fund		–		41.6		–		41.6
Commodity Linked Fund		39.3		–		–		39.3
Cash and Other		12.8		–		–		12.8
Total Assets at Fair Value	$	407.2	$	511.7	$	63.2	$	982.1

Changes in Level 3 U.S. Pension Plan Assets

The following table presents the changes in Level 3 assets for the year ended December 31, 2011 and 2010.

	PRIVATE EQUITY FUNDS						HEDGE FUND
(In Millions)	2011			2010			2011			2010
Fair Value at January 1,	$	33.5		$	28.8		$	29.7		$	28.7
Actual Return on Plan Assets		7.8			2.9			(0.5	)		1.0
Purchases		7.0			4.5			–			–
Sales		(2.8	)		(2.7	)		–			–
Settlements		–			–			–			–
Fair Value at December 31,	$	45.5		$	33.5		$	29.2		$	29.7

Note: The return on plan assets represents the change in the unrealized gain (or loss) on assets still held at December 31.

Health Care Cost Trend Rate Sensitivity Analysis

The health care cost trend rate assumption has an effect on the amounts reported. For example, increasing or decreasing the assumed health care trend rate by one percentage point in each year would have the following effect.

(In Millions)	1–PERCENTAGE POINT INCREASE		1–PERCENTAGE POINT DECREASE
Effect on Postretirement Benefit Obligation	$	2.2	$	(2.5	)
Effect on Total Service and Interest Cost Components		.1		(.1	)

Pension Plans, Defined Benefit

Amounts Included in Accumulated Other Comprehensive Income

AMOUNTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME

	U.S. PLAN					NON-U.S. PLANS				SUPPLEMENTAL PLAN
(In Millions)	2011			2010		2011		2010		2011		2010
Net Actuarial Loss	$	490.4		$	382.1	$	24.8	$	16.3	$	66.4	$	56.5
Prior Service Cost		(4.4	)		6.5		–		–		2.7		1.3
Gross Amount in Accumulated Other Comprehensive Income		486.0			388.6		24.8		16.3		69.1		57.8
Income Tax Effect		183.1			142.6		3.7		2.8		26.0		21.1
Net Amount in Accumulated Other Comprehensive Income	$	302.9		$	246.0	$	21.1	$	13.5	$	43.1	$	36.7

Components of Company's Net Periodic Benefit Cost

NET PERIODIC PENSION EXPENSE

	U.S. PLAN									NON-U.S. PLANS									SUPPLEMENTAL PLAN
($ In Millions)	2011			2010			2009			2011			2010			2009			2011			2010			2009
Service Cost	$	42.8		$	37.9		$	33.1		$	–		$	1.8		$	3.8		$	3.2		$	3.2		$	2.6
Interest Cost		40.8			36.9			33.4			6.5			6.9			6.7			4.4			4.8			3.9
Expected Return on Plan Assets		(78.8	)		(73.2	)		(59.7	)		(8.3	)		(8.3	)		(8.1	)		N/A			N/A			N/A
Gain on Plan Curtailment		–			–			–			–			(2.2	)		–			–			–			–
Amortization:
Net Loss		26.0			20.0			12.2			.2			.5			1.3			5.6			6.0			3.9
Prior Service Cost		1.6			1.6			1.2			–			–			–			0.4			.1			(.1	)
Net Periodic Pension Expense (Benefit)	$	32.4		$	23.2		$	20.2		$	(1.6	)	$	(1.3	)	$	3.7		$	13.6		$	14.1		$	10.3
Weighted-Average Assumptions:
Discount Rates		5.50	%		6.00	%		6.25	%		5.58	%		6.05	%		5.80	%		5.50	%		6.00	%		6.25	%
Rate of Increase in Compensation Level		4.02			4.02			4.02			N/A			4.31			4.15			4.02			4.02			4.02
Expected Long-Term Rate of Return on Assets		8.00			8.00			8.00			6.27			6.60			6.66			N/A			N/A			N/A

Estimated Future Benefit Payments

ESTIMATED FUTURE BENEFIT PAYMENTS

(In Millions)	U.S. PLAN		NON-U.S. PLANS		SUPPLEMENTAL PLAN
2012	$	65.6	$	1.9	$	12.5
2013		71.1		2.0		11.6
2014		71.7		2.2		9.1
2015		75.6		2.6		9.0
2016		78.2		2.8		9.1
2017-2021		400.5		17.5		48.5

Other Postretirement Benefit Plans, Defined Benefit

Plan Status of U.S. Plan, Non-U.S. Plans, and Supplemental Plan

PLAN STATUS

(In Millions)	2011		2010
Accumulated Postretirement Benefit Obligation at Measurement Date:
Retirees and Dependents	$	31.8	$	29.4
Actives Eligible for Benefits		22.7		14.9
Actives Not Yet Eligible		–		7.0
Net Postretirement Benefit Liability	$	54.5	$	51.3

Amounts Included in Accumulated Other Comprehensive Income

AMOUNTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME

(In Millions)	2011			2010
Net Actuarial Loss	$	10.9		$	13.0
Prior Service Benefit		(8.0	)		(13.0	)
Gross Amount in Accumulated Other Comprehensive Income		2.9			–
Income Tax Effect		1.1			–
Net Amount in Accumulated Other Comprehensive Income	$	1.8		$	–

Components of Company's Net Periodic Benefit Cost

NET PERIODIC POSTRETIREMENT BENEFIT EXPENSE

(In Millions)	2011			2010			2009
Service Cost	$	.4		$	.8		$	1.7
Interest Cost		2.8			2.8			3.7
Amortization
Net Loss		1.6			2.0			.5
Transition Obligation		–			–			.5
Prior Service Benefit		(5.2	)		(5.2	)		(.1	)
Net Periodic Postretirement Benefit Expense	$	(.4	)	$	.4		$	6.3

Estimated Future Benefit Payments

ESTIMATED FUTURE BENEFIT PAYMENTS

(In Millions)	TOTAL POSTRETIREMENT MEDICAL BENEFITS		EXPECTED PRESCRIPTION DRUG SUBSIDY AMOUNT
2012	$	3.7	$	(.6	)
2013		4.2		(.7	)
2014		4.5		(.8	)
2015		4.6		(.9	)
2016		4.7		(1.0	)
2017-2021		22.4		(5.0	)

Postretirement Health Care Change in Accumulated Postretirement Benefit Obligation

CHANGE IN ACCUMULATED POSTRETIREMENT

BENEFIT OBLIGATION

(In Millions)	2011			2010
Beginning Balance	$	51.3		$	49.9
Service Cost		.4			.8
Interest Cost		2.8			2.8
Actuarial Loss (Gain)		(.2	)		(.6	)
Gross Benefits Paid		(.4	)		(2.1	)
Medicare Subsidy		.6			.5
Plan Change		–			–
Ending Balance	$	54.5		$	51.3

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Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Income Taxes [Line Items]
Unrecognized tax benefit	$ 17.8	$ 89.9	$ 88.9
Increase in net income from recognition of unrecognized tax benefits	14.5	22.6
Interest and penalties, net of tax, included in the provision for income taxes	(1.2)	0.4	1.9
Liability for the potential payment of interest and penalties	9.1	27.1
Earnings of certain non-U.S. subsidiaries indefinitely reinvested	105.9	102.8	103.5
Approximated cumulative amount of undistributed pre-tax earnings in subsidiaries	677.5
Additional deferred tax liability if Northern Trust had not elected to indefinitely reinvest foreign earnings	154.5
Leveraged Lease Obligations
Income Taxes [Line Items]
Unrecognized tax benefit		66.7
Leveraged Lease Obligations | Interest Income
Income Taxes [Line Items]
Application of new tax estimates	(7.0)	0.9	(1.1)
Leveraged Lease Obligations | Income Tax Expense Benefit
Income Taxes [Line Items]
Application of new tax estimates	4.7	0.8	(1.5)
Unrecognized Tax Benefit Other
Income Taxes [Line Items]
Increase (decrease) in unrecognized tax benefits	(5.4)
Unrecognized tax benefit	$ 17.8

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Restrictions on Subsidiary Dividends and Loans or Advances - Additional Information (Detail) (USD $) In Billions, unless otherwise specified	Dec. 31, 2011	Nov. 22, 2011
Additional amount of dividends that could be declare without regulatory approval	$ 1.26
Regulatory limits on transfer of capital and surplus by a banking subsidiary to the Corporation and certain of its affiliates	10.00%
Regulatory limits on aggregate transfer of capital and surplus by banking subsidiaries to the Corporation	20.00%
Amount of total consolidated assets requirement to submit annual capital plans to the Federal Reserve Board for review according to Dodd-Frank Act		$ 50

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Net Periodic Pension Expense of U.S. Plan, Non-U.S. Plans, and Supplemental Plan (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
United States Pension Plans of US Entity, Defined Benefit
Defined Benefit plan Net periodic benefit cost
Service Cost	$ 42.8	$ 37.9	$ 33.1
Interest Cost	40.8	36.9	33.4
Expected Return on Plan Assets	(78.8)	(73.2)	(59.7)
Amortization:
Net Loss	26.0	20.0	12.2
Prior Service Cost	1.6	1.6	1.2
Net Periodic Pension Expense (Benefit)	32.4	23.2	20.2
Weighted-Average Assumptions:
Discount Rates	5.50%	6.00%	6.25%
Rate of Increase in Compensation Level	4.02%	4.02%	4.02%
Expected Long-Term Rate of Return on Assets	8.00%	8.00%	8.00%
Foreign Pension Plans, Defined Benefit
Defined Benefit plan Net periodic benefit cost
Service Cost		1.8	3.8
Interest Cost	6.5	6.9	6.7
Expected Return on Plan Assets	(8.3)	(8.3)	(8.1)
Gain on Plan Curtailment		(2.2)
Amortization:
Net Loss	0.2	0.5	1.3
Net Periodic Pension Expense (Benefit)	(1.6)	(1.3)	3.7
Weighted-Average Assumptions:
Discount Rates	5.58%	6.05%	5.80%
Rate of Increase in Compensation Level		4.31%	4.15%
Expected Long-Term Rate of Return on Assets	6.27%	6.60%	6.66%
Supplemental Employee Retirement Plans, Defined Benefit
Defined Benefit plan Net periodic benefit cost
Service Cost	3.2	3.2	2.6
Interest Cost	4.4	4.8	3.9
Amortization:
Net Loss	5.6	6.0	3.9
Prior Service Cost	0.4	0.1	(0.1)
Net Periodic Pension Expense (Benefit)	$ 13.6	$ 14.1	$ 10.3
Weighted-Average Assumptions:
Discount Rates	5.50%	6.00%	6.25%
Rate of Increase in Compensation Level	4.02%	4.02%	4.02%

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2011

Assets and Liabilities Measured at Fair Value on Recurring Basis Segregated by Fair Value Hierarchy Level

The following presents assets and liabilities measured at fair value on a recurring basis as of December 31, 2011 and 2010, segregated by fair value hierarchy level.

	DECEMBER 31, 2011
(In Millions)	LEVEL  1		LEVEL 2		LEVEL 3		NETTING  *			ASSETS/ LIABILITIES AT FAIR VALUE
Securities
Available for Sale
U.S. Government	$	4,029.4	$	–	$	–	$	–		$	4,029.4
Obligations of States and Political Subdivisions		–		15.8		–		–			15.8
Government Sponsored Agency		–		16,771.4		–		–			16,771.4
Corporate Debt		–		2,676.7		–		–			2,676.7
Non-U.S. Government		–		173.7		–		–			173.7
Residential Mortgage-Backed		–		163.8		–		–			163.8
Other Asset-Backed		–		1,604.8		–		–			1,604.8
Certificates of Deposit		–		2,418.1		–		–			2,418.1
Auction Rate		–		–		178.3		–			178.3
Other		–		2,160.5		–		–			2,160.5
Total		4,029.4		25,984.8		178.3		–			30,192.5
Trading Account		–		8.0		–		–			8.0
Total		4,029.4		25,992.8		178.3		–			30,200.5
Other Assets
Derivatives
Foreign Exchange Contracts		–		3,087.3		–		–			3,087.3
Interest Rate Swaps		–		338.3		–		–			338.3
Credit Default Swaps		–		.7		–		–			.7
Total		–		3,426.3		–		(2,243.7	)		1,182.6
All Other		71.4		35.1		–		–			106.5
Total		71.4		3,461.4		–		(2,243.7	)		1,289.1
Total Assets at Fair Value		4,100.8		29,454.2		178.3		(2,243.7	)		31,489.6
Other Liabilities
Derivatives
Foreign Exchange Contracts		–		2,991.6		–		–			2,991.6
Interest Rate Swaps		–		231.9		–		–			231.9
Credit Default Swaps		–		.1		–		–			.1
Total		–		3,223.6		–		(2,281.0	)		942.6
All Other		–		–		100.6		–			100.6
Total Liabilities at Fair Value	$	–	$	3,223.6	$	100.6	$	(2,281.0	)	$	1,043.2

* Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting agreements exist between Northern Trust and the counterparty. As of December 31, 2011, derivative assets and liabilities shown above also include reductions of $220.1 million and $257.4 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties.

	DECEMBER 31, 2010
(In Millions)	LEVEL 1		LEVEL 2		LEVEL 3		NETTING *			ASSETS/ LIABILITIES AT FAIR VALUE
Securities
Available for Sale
U.S. Government	$	658.4	$	–	$	–	$	–		$	658.4
Obligations of States and Political Subdivisions		–		36.3		–		–			36.3
Government Sponsored Agency		–		11,970.7		–		–			11,970.7
Corporate Debt		–		2,554.0		–		–			2,554.0
Non-U.S. Government		–		440.6		–		–			440.6
Residential Mortgage-Backed		–		254.6		–		–			254.6
Other Asset-Backed		–		1,605.7		–		–			1,605.7
Certificates of Deposit		–		1,402.5		–		–			1,402.5
Auction Rate		–		–		367.8		–			367.8
Other		–		611.3		–		–			611.3
Total		658.4		18,875.7		367.8		–			19,901.9
Trading Account		–		6.8		–		–			6.8
Total		658.4		18,882.5		367.8		–			19,908.7
Other Assets
Derivatives
Foreign Exchange Contracts		–		5,792.8		–		–			5,792.8
Interest Rate Swaps		–		285.8		–		–			285.8
Interest Rate Options		–		.1		–		–			.1
Forward Contracts		–		.5		–		–			.5
Total		–		6,079.2		–		(4,770.9	)		1,308.3
All Other		65.9		37.4		–		–			103.3
Total		65.9		6,116.6		–		(4,770.9	)		1,411.6
Total Assets at Fair Value		724.3		24,999.1		367.8		(4,770.9	)		21,320.3
Other Liabilities
Derivatives
Foreign Exchange Contracts		–		5,781.3		–		–			5,781.3
Interest Rate Swaps		–		163.7		–		–			163.7
Interest Rate Options		–		.1		–		–			.1
Credit Default Swaps		–		2.8		–		–			2.8
Forward Contracts		–		.2		–		–			.2
Total		–		5,948.1		–		(4,106.4	)		1,841.7
All Other		–		–		58.6		–			58.6
Total Liabilities at Fair Value	$	–	$	5,948.1	$	58.6	$	(4,106.4	)	$	1,900.3

* Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting agreements exist between Northern Trust and the counterparty. As of December 31, 2010, derivative assets and liabilities shown above also include reductions of $2,952.7 million and $2,288.2 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties.

Changes in Level 3 Assets

The following presents the changes in Level 3 assets for the years ended December 31, 2011 and 2010.

	AUCTION RATE SECURITIES
(In Millions)	2011			2010
Fair Value at January 1	$	367.8		$	427.7
Total Realized and Unrealized
Losses (Gains) Included in Earnings		(10.7	)		(3.7	)
Gains (Losses) Included in Other Comprehensive Income		(19.0	)		(7.2	)
Purchases, Issuances, Sales, and Settlements
Sales		(1.5	)		(.3	)
Settlements		(158.3	)		(48.7	)
Fair Value at December 31	$	178.3		$	367.8

Changes in Level 3 Liabilities

The following presents the changes in Level 3 liabilities for the years ended December 31, 2011 and 2010.

	OTHER LIABILITIES
(In Millions)	2011			2010
Fair Value at January 1	$	58.6		$	94.4
Total Realized and Unrealized (Gains) Losses
Included in Earnings		(.6	)		(4.5	)
Included in Other Comprehensive Income		–			–
Purchases, Issuances, Sales, and Settlements
Issuances		68.4			3.4
Settlements		(25.8	)		(34.7	)
Fair Value at December 31		100.6		$	58.6
Unrealized Gains (Losses) Included in Earnings Related to Financial Instruments Held at December 31	$	–		$	–

Assets Measure at Fair Value on Nonrecurring Basis

The following provides information regarding those assets measured at fair value on a nonrecurring basis at December 31, 2011 and 2010, segregated by fair value hierarchy level.

(In Millions)	LEVEL  1		LEVEL  2		LEVEL  3		TOTAL FAIR VALUE
December 31, 2011
Loans (1)	$	–	$	–	$	64.3	$	64.3
Other Real Estate Owned (2)		–		–		3.8		3.8
Total Assets at Fair Value	$	–	$	–	$	68.1	$	68.1
December 31, 2010
Loans (1)	$	–	$	–	$	72.4	$	72.4
Other Real Estate Owned (2)		–		–		13.5		13.5
Total Assets at Fair Value	$	–	$	–	$	85.9	$	85.9

(1) Northern Trust provided an additional $11.3 million and $22.5 million of specific allowances to reduce the fair value of these loans during the years ended December 31, 2011 and 2010, respectively.

(2) Northern Trust charged $1.5 million and $4.9 million through other operating expenses during the years ended December 31, 2011 and 2010, respectively, to reduce the fair values of these Other Real Estate Owned (OREO) properties.

Book and Fair Values of Financial Instruments

The following table summarizes the fair values of financial instruments.

	DECEMBER 31
	2011				2010
(In Millions)	BOOK  VALUE		FAIR  VALUE		BOOK VALUE		FAIR VALUE
ASSETS
Cash and Due from Banks	$	4,315.3	$	4,315.3	$	2,818.0	$	2,818.0
Federal Funds Sold and Resell Agreements		121.3		121.3		160.1		160.1
Interest-Bearing Deposits with Banks		16,696.4		16,696.4		15,351.3		15,351.3
Federal Reserve Deposits and Other Interest-Bearing		13,448.6		13,448.6		10,924.6		10,924.6
Securities
Available for Sale		30,192.5		30,192.5		19,901.9		19,901.9
Held to Maturity		799.2		817.1		922.2		941.8
Trading Account		8.0		8.0		6.8		6.8
Loans (excluding Leases)
Held for Investment		27,782.7		27,913.7		26,747.8		26,814.2
Held for Sale		9.3		9.3		2.2		2.2
Client Security Settlement Receivables		778.3		778.3		701.3		701.3
Other Assets
Federal Reserve and Federal Home Loan Bank Stock		172.9		172.9		185.5		185.5
Affordable Housing Investments		290.8		290.8		265.4		265.4
All Other		106.5		106.5		103.3		103.3
LIABILITIES
Deposits
Demand, Noninterest-Bearing, Savings and Money Market		43,751.2		43,751.2		24,810.3		24,810.3
Savings Certificates and Other Time		3,058.3		3,065.5		3,913.0		3,929.7
Non-U.S. Offices Interest-Bearing		35,868.0		35,868.0		35,472.4		35,472.4
Federal Funds Purchased		815.3		815.3		3,691.7		3,691.7
Securities Sold under Agreements to Repurchase		1,198.8		1,198.8		954.4		954.4
Other Borrowings		931.5		931.5		347.7		347.7
Senior Notes		2,126.7		2,197.3		1,896.1		1,936.5
Long Term Debt (excluding Leases)
Subordinated Debt		1,033.4		1,040.0		1,148.7		1,177.2
Federal Home Loan Bank Borrowings		1,055.0		1,082.1		1,532.5		1,613.5
Floating Rate Capital Debt		276.9		211.6		276.9		223.2
Other Liabilities
Financial Guarantees		43.8		43.8		58.6		58.6
Contingent Consideration		56.8		56.8		—		—
Loan Commitments		28.9		28.9		32.4		32.4
DERIVATIVE INSTRUMENTS
Asset/Liability Management
Foreign Exchange Contracts
Assets		25.2		25.2		44.9		44.9
Liabilities		31.8		31.8		51.4		51.4
Interest Rate Swaps
Assets		149.6		149.6		134.6		134.6
Liabilities		47.3		47.3		15.3		15.3
Credit Default Swaps
Assets		.7		.7		–		–
Liabilities		.1		.1		2.8		2.8
Forward Contracts
Assets		–		–		.5		.5
Liabilities		–		–		.2		.2
Client-Related and Trading
Foreign Exchange Contracts
Assets		3,062.1		3,062.1		5,747.9		5,747.9
Liabilities		2,959.8		2,959.8		5,729.9		5,729.9
Interest Rate Swaps
Assets		188.7		188.7		151.2		151.2
Liabilities		184.6		184.6		148.4		148.4
Interest Rate Option
Assets		–		–		.1		.1
Liabilities		–		–		.1		.1

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Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

Note 21 – Income Taxes

The following table reconciles the total provision for income taxes recorded in the consolidated statement of income with the amounts computed at the statutory federal tax rate of 35%.

(In Millions)	2011			2010			2009
Tax at Statutory Rate	$	309.3		$	346.4		$	439.3
Tax Exempt Income		(9.9	)		(10.8	)		(11.9	)
Leveraged Lease Adjustments		(4.7	)		(.8	)		(4.8	)
Foreign Tax Rate Differential		(21.3	)		(20.1	)		(20.9	)
State Taxes, net		22.8			17.3			9.8
Other		(16.1	)		(11.7	)		(20.5	)
Provision for Income Taxes	$	280.1		$	320.3		$	391.0

The Corporation files income tax returns in the U.S. federal, various state, and foreign jurisdictions. The Corporation is no longer subject to income tax examinations by U.S. federal or by non-U.S. tax authorities for years before 2005. The Corporation is no longer subject to income tax examinations by state or local tax authorities for years before 1997.

Included in other liabilities within the consolidated balance sheet at December 31, 2011 and 2010 were $17.8 million and $89.9 million of unrecognized tax benefits, respectively. If recognized, 2011 and 2010 net income would have increased by $14.5 million and $22.6 million, respectively, resulting in a decrease of those years’ effective income tax rates. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(In Millions)	2011			2010
Balance at January 1	$	89.9		$	88.9
Additions for Tax Positions Taken in Current Year		–			.2
Additions for Tax Positions Taken in Prior Years		2.2			7.1
Reductions for Tax Positions Taken in Prior Years		(5.2	)		(6.0	)
Reductions Resulting from Expiration of Statutes		(.9	)		(.3	)
Reductions Resulting from Settlements with Taxing Authorities		(68.2	)		–
Balance at December 31	$	17.8		$	89.9

As part of its audit of federal tax returns filed from 1997-2004, the Internal Revenue Service (IRS) challenged the Corporation’s tax position with respect to certain structured leasing transactions and proposed to disallow certain tax deductions and assess related interest and penalties. In November 2011, the Corporation reached a settlement agreement with the IRS Appeals Office regarding all remaining disputed structured leasing transactions.

Included in unrecognized tax benefits at January 1, 2011 were $66.7 million of U.S. federal and state tax positions related to leveraged leasing tax deductions. As a result of the settlement agreement reached in 2011, this balance was fully eliminated as of December 31, 2011. Other unrecognized tax benefits had net decreases of $5.4 million, resulting in a remaining balance of $17.8 million at December 31, 2011. It is possible that changes in the amount of unrecognized tax benefits could occur in the next 12 months due to changes in judgment related to recognition or measurement, settlements with taxing authorities, or expiration of statute of limitations. Management does not believe that future changes, if any, would have a material effect on the consolidated financial position or liquidity of Northern Trust, although they could have a material effect on operating results for a particular period.

GAAP requires a reallocation of lease income from the inception of a leveraged lease if during its term the expected timing of lease related income tax deductions is revised. The impacts of revisions to management’s assumptions are recorded through earnings in the period in which the assumptions change. As a result of the settlement agreement reached in 2011, revisions were made to cash flow estimates regarding the timing and amount of leveraged lease income tax deductions which increased interest income by $7.0 million and reduced the provision for income taxes, inclusive of interest and penalties, by $4.7 million for the year ended December 31, 2011. For the year ended December 31, 2010, revised cash flow estimates regarding the timing and amount of leveraged lease income tax deductions reduced interest income by $.9 million and reduced the provision for income taxes, inclusive of interest and penalties, by $.8 million. For the year ended December 31, 2009, revised cash flow estimates regarding the timing and amount of leveraged lease income tax deductions increased interest income by $1.1 million and increased the provision for income taxes, inclusive of interest and penalties, by $1.5 million.

During the years ended December 31, 2011, 2010, and 2009, ($1.2) million, $.4 million, and $1.9 million of interest and penalties, net of tax, were included in the provision for income taxes. As of December 31, 2011 and 2010, the liability for the potential payment of interest and penalties totaled $9.1 million and $27.1 million, net of tax, respectively.

Pre-tax earnings of non-U.S. subsidiaries are subject to U.S. taxation when effectively repatriated. Northern Trust provides income taxes on the undistributed earnings of non-U.S. subsidiaries, except to the extent that those earnings are indefinitely reinvested outside the U.S. Northern Trust elected to indefinitely reinvest $105.9 million, $102.8 million, and $103.5 million of 2011, 2010, and 2009 earnings, respectively, of certain non-U.S. subsidiaries and, therefore, no U.S. deferred income taxes were recorded on those earnings. As of December 31, 2011, the cumulative amount of undistributed pre-tax earnings in these subsidiaries approximated $677.5 million. Based on the current U.S. federal income tax rate, an additional deferred tax liability of approximately $154.5 million would have been required as of December 31, 2011 if Northern Trust had not elected to indefinitely reinvest those earnings.

The components of the consolidated provision for income taxes for each of the three years ended December 31 are as follows:

(In Millions)	2011		2010		2009
Current Tax Provision:
Federal	$	113.6	$	220.0	$	124.6
State		15.1		21.8		(7.1	)
Non-U.S.		54.2		66.4		89.7
Total		182.9		308.2		207.2
Deferred Tax Provision:
Federal		84.0		6.2		162.9
State		11.3		5.2		24.1
Non-U.S.		1.9		.7		(3.2	)
Total		97.2		12.1		183.8
Provision for Income Taxes	$	280.1	$	320.3	$	391.0

In addition to the amounts shown above, tax charges (benefits) have been recorded directly to stockholders’ equity for the following items:

(In Millions)	2011			2010			2009
Current Tax Benefit for Employee Stock Options and Other Stock-Based Plans	$	.6		$	(1.2	)	$	(4.2	)
Tax Effect of Other Comprehensive Income		(5.2	)		60.0			64.7

Deferred taxes result from temporary differences between the amounts reported in the consolidated financial statements and the tax bases of assets and liabilities. Deferred tax liabilities and assets have been computed as follows:

	DECEMBER 31
(In Millions)	2011		2010		2009
Deferred Tax Liabilities:
Lease Financing	$	398.2	$	382.4	$	404.6
Software Development		254.9		197.2		180.8
Accumulated Depreciation		48.6		40.7		16.1
Compensation and Benefits		7.1		23.3		9.7
State Taxes, net		52.4		41.7		34.2
Other Liabilities		137.6		41.1		37.1
Gross Deferred Tax Liabilities		898.8		726.4		682.5
Deferred Tax Assets:
Allowance for Credit Losses		114.5		124.7		118.5
Visa Indemnification		—		8.1		19.7
Other Assets		150.0		51.3		74.1
Gross Deferred Tax Assets		264.5		184.1		212.3
Valuation Reserve		—		—		—
Deferred Tax Assets, net of Valuation Reserve		264.5		184.1		212.3
Net Deferred Tax Liabilities	$	634.3	$	542.3	$	470.2

No valuation allowance related to deferred tax assets was recorded at December 31, 2011, 2010, or 2009, as management believes it is more likely that not that the deferred tax assets will be fully realized. At December 31, 2011, Northern Trust had no net operating loss carryforwards.

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Restructuring, Acquisition and Integration Related Charges

12 Months Ended

Dec. 31, 2011

Restructuring, Acquisition and Integration Related Charges

Note 20 – Restructuring, Acquisition and Integration Related Charges

Charges totaling $91.6 million ($59.8 million on an after tax basis) were recorded in the year ended December 31, 2011 in connection with restructuring, acquisition and integration related activities. No similar charges were recorded in 2010 or 2009. Restructuring charges include severance expense, consulting expense, charges related to software write-offs, and reductions in office space. Acquisition and integration charges relate to expense incurred in connection with the acquisition and integration of the fund administration, investment operations outsourcing, and custody business of the Bank of Ireland Securities Services, now known as Northern Trust Securities Services (Ireland) Limited, and of Omnium LLC, now known as Northern Trust Hedge Fund Services LLC. The following table details the amounts and associated expense categories of the charges recorded.

(In Millions)	YEAR ENDED DECEMBER 31, 2011
Compensation	$	50.2
Employee Benefits		4.3
Outside Services		16.8
Equipment and Software		10.9
Occupancy		6.4
Other Operating Expense		3.0
Total Charges	$	91.6

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Allowances for Credit Losses and Recorded Investments in Loans and Leases by Segment (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Financing Receivable, Allowance for Credit Losses [Line Items]
Specifically Evaluated for Impairment	$ 279.4	$ 301.2
Evaluated for Inherent Impairment	28,784.5	27,830.8
Total Loans and Leases	29,063.9	28,132.0
Specifically Evaluated for Impairment	32.8	51.7
Evaluated for Inherent Impairment	262.0	267.9
Allowance assigned to loans and leases	294.8	319.6	309.2
Allowance assigned to unfunded commitments and standby letters of credit	34.1	37.7	31.4
Total Allowance for Credit Losses	328.9	357.3	340.6	251.1
Commercial
Financing Receivable, Allowance for Credit Losses [Line Items]
Specifically Evaluated for Impairment	121.2	180.5
Evaluated for Inherent Impairment	12,233.1	11,432.9
Total Loans and Leases	12,354.3	11,613.4
Specifically Evaluated for Impairment	22.9	49.3
Evaluated for Inherent Impairment	155.7	171.4
Allowance assigned to loans and leases	178.6	220.7	222.9
Allowance assigned to unfunded commitments and standby letters of credit	32.4	36.0	29.3
Total Allowance for Credit Losses	211.0	256.7	252.2	185.6
Personal
Financing Receivable, Allowance for Credit Losses [Line Items]
Specifically Evaluated for Impairment	158.2	120.7
Evaluated for Inherent Impairment	16,551.4	16,397.9
Total Loans and Leases	16,709.6	16,518.6
Specifically Evaluated for Impairment	9.9	2.4
Evaluated for Inherent Impairment	106.3	96.5
Allowance assigned to loans and leases	116.2	98.9	86.3
Allowance assigned to unfunded commitments and standby letters of credit	1.7	1.7	2.1
Total Allowance for Credit Losses	$ 117.9	$ 100.6	$ 88.4	$ 65.5

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Net Income Per Common Share (Tables)

12 Months Ended

Dec. 31, 2011

Computations of Net Income Per Common Share

The computations of net income per common share are presented below.

(In Millions Except Share Information)	2011		2010		2009
BASIC NET INCOME PER COMMON SHARE
Average Number of Common Shares Outstanding		241,401,310		242,028,776		235,511,879
Net Income	$	603.6	$	669.5	$	864.2
Less: Dividends on Preferred Stock		–		–		(111.1	)
Net Income Applicable to Common Stock	$	603.6	$	669.5		753.1
Less: Earnings Allocated to Participating Securities		7.1		5.6		5.3
Earnings Allocated to Common Shares Outstanding		596.5		663.9		747.8
Basic Net Income Per Common Share		2.47		2.74		3.18
DILUTED NET INCOME PER COMMON SHARE
Average Number of Common Shares Outstanding		241,401,310		242,028,776		235,511,879
Plus Stock Option Dilution		410,074		473,755		904,150
Average Common and Potential Common Shares		241,811,384		242,502,531		236,416,029
Earnings Allocated to Common and Potential Common Shares	$	596.5	$	663.9	$	747.8
Diluted Net Income Per Common Share		2.47		2.74		3.16

Note: Common stock equivalents totaling 13,240,787, 8,392,686, and 7,146,701 for the years ended December 31, 2011, 2010, and 2009, respectively, were not included in the computation of diluted earnings per share because their inclusion would have been antidilutive.

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Securities (Tables)

12 Months Ended

Dec. 31, 2011

Reconciliation of Amortized Cost to Fair Values of Securities Available for Sale

Securities Available for Sale. The following tables summarize the amortized cost, fair values, and remaining maturities of securities available for sale.

RECONCILIATION OF AMORTIZED COST TO FAIR VALUES OF SECURITIES AVAILABLE FOR SALE	DECEMBER 31, 2011
(In Millions)	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES		FAIR VALUE
U.S. Government	$	3,965.9	$	63.5	$	—	$	4,029.4
Obligations of States and Political Subdivisions		14.9		.9		—		15.8
Government Sponsored Agency		16,702.6		86.1		17.3		16,771.4
Corporate Debt		2,677.7		4.7		5.7		2,676.7
Non-U.S. Government Debt		173.7		—		—		173.7
Residential Mortgage-Backed		196.1		—		32.3		163.8
Other Asset-Backed		1,606.8		1.3		3.3		1,604.8
Certificates of Deposit		2,418.2		.2		.3		2,418.1
Auction Rate		186.5		4.3		12.5		178.3
Other		2,150.2		12.8		2.5		2,160.5
Total	$	30,092.6	$	173.8	$	73.9	$	30,192.5
	DECEMBER 31, 2010
(In Millions)	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES		FAIR VALUE
U.S. Government	$	667.2	$	1.0	$	9.8	$	658.4
Obligations of States and Political Subdivisions		35.4		.9		–		36.3
Government Sponsored Agency		11,937.0		47.0		13.3		11,970.7
Corporate Debt		2,547.7		7.8		1.5		2,554.0
Non-U.S. Government Debt		440.6		–		–		440.6
Residential Mortgage-Backed		308.0		.9		54.3		254.6
Other Asset-Backed		1,606.5		1.5		2.3		1,605.7
Certificates of Deposit		1,402.5		–		–		1,402.5
Auction Rate		357.0		14.2		3.4		367.8
Other		610.8		4.2		3.7		611.3
Total	$	19,912.7	$	77.5	$	88.3	$	19,901.9

Reconciliation of Amortized Cost to Fair Values of Securities Held to Maturity

Securities Held to Maturity. The following tables summarize the amortized cost, fair values and remaining maturities of securities held to maturity.

RECONCILIATION OF AMORTIZED COST TO FAIR VALUES OF SECURITIES HELD TO MATURITY	DECEMBER 31, 2011
(In Millions)	AMORTIZED COST		GROSSUNREALIZED GAINS		GROSS UNREALIZED LOSSES		FAIR VALUE
Obligations of States and Political Subdivisions	$	529.4	$	24.6	$	.1	$	553.9
Government Sponsored Agency		156.8		4.3		.1		161.0
Other		113.0		.1		10.9		102.2
Total	$	799.2	$	29.0	$	11.1	$	817.1
	DECEMBER 31, 2010
(In Millions)	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES		FAIR VALUE
Obligations of States and Political Subdivisions	$	635.0	$	26.2	$	.4	$	660.8
Government Sponsored Agency		169.3		4.6		.2		173.7
Other		117.9		–		10.6		107.3
Total	$	922.2	$	30.8	$	11.2	$	941.8

Securities Continuous Unrealized Loss Position

The following tables provide information regarding securities that have been in a continuous unrealized loss position for less than 12 months, and for 12 months or longer, as of December 31, 2011 and December 31, 2010.

SECURITIES WITH UNREALIZED LOSSES AS OF DECEMBER 31, 2011	LESS THAN 12 MONTHS				12 MONTHS OR LONGER				TOTAL
(In Millions)	FAIR VALUE		UNREALIZED LOSSES		FAIR VALUE		UNREALIZED LOSSES		FAIR VALUE		UNREALIZED LOSSES
Obligations of States and Political Subdivisions	$	2.7	$	.1	$	—	$	—	$	2.7	$	.1
Government Sponsored Agency		5,492.5		14.1		470.1		3.3		5,962.6		17.4
Corporate Debt		1,027.5		4.1		123.6		1.6		1,151.1		5.7
Residential Mortgage-Backed		4.7		.9		158.8		31.4		163.5		32.3
Other Asset-Backed		824.6		2.3		205.7		1.0		1,030.3		3.3
Certificates of Deposit		1,019.9		.3		—		—		1,019.9		.3
Auction Rate		61.0		7.3		52.6		5.2		113.6		12.5
Other		634.9		4.3		144.9		9.1		779.8		13.4
Total	$	9,067.8	$	33.4	$	1,155.7	$	51.6	$	10,223.5	$	85.0

SECURITIES WITH UNREALIZED LOSSES AS OF DECEMBER 31, 2010	LESS THAN 12 MONTHS				12 MONTHS OR LONGER				TOTAL
(In Millions)	FAIR VALUE		UNREALIZED LOSSES		FAIR VALUE		UNREALIZED LOSSES		FAIR VALUE		UNREALIZED LOSSES
U.S. Government	$	492.9	$	9.8	$	–	$	–	$	492.9	$	9.8
Obligations of States and Political Subdivisions		3.0		–		3.2		.4		6.2		.4
Government Sponsored Agency		980.7		11.0		328.7		2.5		1,309.4		13.5
Corporate Debt		930.6		1.1		475.2		.4		1,405.8		1.5
Residential Mortgage-Backed		–		–		248.8		54.3		248.8		54.3
Other Asset-Backed		513.5		2.2		27.0		.1		540.5		2.3
Auction Rate		77.6		3.3		.7		.1		78.3		3.4
Other		482.2		6.8		36.5		7.5		518.7		14.3
Total	$	3,480.5	$	34.2	$	1,120.1	$	65.3	$	4,600.6	$	99.5

Book Values, Ultimate Default Rates, and Loss Severity Rates for Non-Agency Residential Mortgage-Backed Securities Portfolio, by Security Type

Information regarding amortized cost, weighted average ultimate default rates, and loss severity rates for the December 31, 2011 non-agency residential mortgage-backed securities portfolio, by security type, are provided in the following table.

	DECEMBER 31, 2011
						LOSS SEVERITY RATES
(In Millions)	AMORTIZED COST		WEIGHTED AVERAGE ULTIMATE DEFAULT RATES			LOW			HIGH			WEIGHTED AVERAGE
Prime	$	24.0		14.7	%		38.6	%		66.0	%		51.1	%
Alt-A		32.9		41.9			54.3			70.6			68.2
Subprime		105.2		51.7			67.1			85.4			73.3
2nd Lien		34.0		33.8			98.7			100.0			99.4
Total Non-Agency Residential Mortgage-Backed Securities	$	196.1		42.2	%		38.6	%		100.0	%		74.2	%

Credit Related Impairment Losses Recognized in Earnings on Other Than Temporarily Impaired Securities

The table below provides information regarding total other-than-temporarily impaired securities, including noncredit-related amounts recognized in other comprehensive income and net impairment losses recognized in earnings, for the years ended December 31, 2011, 2010 and 2009.

	DECEMBER 31,
(In Millions)	2011			2010			2009
Changes in Other-Than-Temporary Impairment Losses*	$	(1.1	)	$	(.8	)	$	(93.4	)
Noncredit-related Losses Reclassified from OCI**	$	(22.2	)		(20.4	)		66.7
Net Impairment Losses Recognized in Earnings	$	(23.3	)		(21.2	)		(26.7	)

* For initial other-than-temporary impairments in the respective year, the balance includes the excess of the amortized cost over the fair value of the impaired securities. For subsequent impairments of the same security, the balance includes any additional changes in fair value of the security subsequent to its most recently recorded OTTI.

** For initial other-than-temporary impairments in the respective year, the balance includes the portion of the excess of amortized cost over the fair value of the impaired securities that was recorded in OCI. For subsequent impairments of the same security, the balance includes additional changes in OCI for that security subsequent to its most recently recorded OTTI.

Credit-Related Losses Recognized in Earnings on Debt Securities Other-than-temporarily Impaired

Provided in the table below are the cumulative credit-related losses recognized in earnings on debt securities other-than-temporarily impaired.

	YEAR ENDED DECEMBER 31,
($ In Millions)	2011			2010
Cumulative Credit-Related Losses on Securities Held – Beginning of Year	$	94.2		$	73.0
Plus: Losses on Newly Identified Impairments		1.5			3.3
Additional Losses on Previously Identified Impairments		21.8			17.9
Less: Losses on Securities Sold During the Year		(49.3	)		—
Cumulative Credit-Related Losses on Securities Held – End of Year	$	68.2		$	94.2

Debt Securities Held for which Other-Than-Temporary Impairment Loss has been Recognized in Current Period or Previously

The table below provides information regarding debt securities held as of December 31, 2011 and 2010, for which an OTTI loss had been recognized in the years presented or previously.

	DECEMBER 31,
(In Millions)	2011			2010
Fair Value	$	73.6		$	79.9
Amortized Cost Basis		96.8			113.3
Noncredit-related Losses Recognized in OCI		(23.2	)		(33.4	)
Tax Effect		8.6			12.2
Amount Recognized in OCI	$	(14.6	)	$	(21.2	)

Available for Sale Investment Securities

Remaining Maturity of Securities

REMAINING MATURITY OF SECURITIES AVAILABLE FOR SALE	DECEMBER 31, 2011
(In Millions)	AMORTIZED COST		FAIR VALUE
Due in One Year or Less	$	9,468.8	$	9,469.6
Due After One Year Through Five Years		18,464.6		18,555.1
Due After Five Years Through Ten Years		1,326.7		1,333.7
Due After Ten Years		832.5		834.1
Total	$	30,092.6	$	30,192.5

Held-to-maturity Securities

Remaining Maturity of Securities

REMAINING MATURITY OF SECURITIES HELD TO MATURITY	DECEMBER 31, 2011
(In Millions)	AMORTIZED COST		FAIR VALUE
Due in One Year or Less	$	199.5	$	200.9
Due After One Year Through Five Years		355.4		365.5
Due After Five Years Through Ten Years		215.5		226.1
Due After Ten Years		28.8		24.6
Total	$	799.2	$	817.1

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Employee Benefits

12 Months Ended

Dec. 31, 2011

Employee Benefits

Note 22 – Employee Benefits

The Corporation and certain of its subsidiaries provide various benefit programs, including defined benefit pension, postretirement health care, and defined contribution plans. A description of each major plan and related disclosures are provided below.

Pension. A noncontributory qualified defined benefit pension plan covers substantially all U.S. employees of Northern Trust. Employees of various European subsidiaries participate in local defined benefit plans, although those plans were closed in prior years to new participants and have been closed to future benefit accruals, effective in 2010.

Northern Trust also maintains a noncontributory supplemental pension plan for participants whose retirement benefit payments under the U.S. plan are expected to exceed the limits imposed by federal tax law. Northern Trust has a nonqualified trust, referred to as a “Rabbi” Trust, used to hold assets designated for the funding of benefits in excess of those permitted in certain of its qualified retirement plans. This arrangement offers participants a degree of assurance for payment of benefits in excess of those permitted in the related qualified plans. As the “Rabbi” Trust assets remain subject to the claims of creditors and are not the property of the employees, they are accounted for as corporate assets and are included in other assets in the consolidated balance sheet. Total assets in the “Rabbi” Trust related to the nonqualified pension plan at December 31, 2011 and 2010 amounted to $71.4 million and $65.9 million, respectively.

Benefit levels under the U.S. qualified and supplemental plans have been modified by Plan Amendments effective April 1, 2012. The amendments reduced the projected benefit obligations for these plans by $7.7 million at December 31, 2011. U.S. qualified and supplemental plan expense in 2012 and future periods will reflect the modified benefit levels.

The following tables set forth the status, amounts included in AOCI, and net periodic pension expense of the U.S. plan, non-U.S. plans, and supplemental plan for 2011, 2010 and 2009. Prior service costs are being amortized on a straight-line basis over 10 years for the U.S. plan and 9 years for the supplemental plan.

PLAN STATUS

	U.S. PLAN						NON-U.S. PLANS						SUPPLEMENTAL PLAN
($ In Millions)	2011			2010			2011			2010			2011			2010
Accumulated Benefit Obligation	$	797.6		$	659.0		$	127.1		$	116.1		$	89.9		$	79.6
Projected Benefit		904.6			762.9			127.1			116.1			100.3			86.9
Plan Assets at Fair Value		1,094.1			982.1			123.3			122.2			–			–
Funded Status at December 31	$	189.5		$	219.2		$	(3.8	)	$	6.1		$	(100.3	)	$	(86.9	)
Weighted-Average Assumptions:
Discount Rates		4.75	%		5.50	%		5.02	%		5.58	%		4.75	%		5.50	%
Rate of Increase in Compensation Level		4.02			4.02			N/A			N/A			4.02			4.02
Expected Long-Term Rate of Return on Assets		8.00			8.00			5.28			6.27			N/A			N/A

AMOUNTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME

	U.S. PLAN					NON-U.S. PLANS				SUPPLEMENTAL PLAN
(In Millions)	2011			2010		2011		2010		2011		2010
Net Actuarial Loss	$	490.4		$	382.1	$	24.8	$	16.3	$	66.4	$	56.5
Prior Service Cost		(4.4	)		6.5		–		–		2.7		1.3
Gross Amount in Accumulated Other Comprehensive Income		486.0			388.6		24.8		16.3		69.1		57.8
Income Tax Effect		183.1			142.6		3.7		2.8		26.0		21.1
Net Amount in Accumulated Other Comprehensive Income	$	302.9		$	246.0	$	21.1	$	13.5	$	43.1	$	36.7

NET PERIODIC PENSION EXPENSE

	U.S. PLAN									NON-U.S. PLANS									SUPPLEMENTAL PLAN
($ In Millions)	2011			2010			2009			2011			2010			2009			2011			2010			2009
Service Cost	$	42.8		$	37.9		$	33.1		$	–		$	1.8		$	3.8		$	3.2		$	3.2		$	2.6
Interest Cost		40.8			36.9			33.4			6.5			6.9			6.7			4.4			4.8			3.9
Expected Return on Plan Assets		(78.8	)		(73.2	)		(59.7	)		(8.3	)		(8.3	)		(8.1	)		N/A			N/A			N/A
Gain on Plan Curtailment		–			–			–			–			(2.2	)		–			–			–			–
Amortization:
Net Loss		26.0			20.0			12.2			.2			.5			1.3			5.6			6.0			3.9
Prior Service Cost		1.6			1.6			1.2			–			–			–			0.4			.1			(.1	)
Net Periodic Pension Expense (Benefit)	$	32.4		$	23.2		$	20.2		$	(1.6	)	$	(1.3	)	$	3.7		$	13.6		$	14.1		$	10.3
Weighted-Average Assumptions:
Discount Rates		5.50	%		6.00	%		6.25	%		5.58	%		6.05	%		5.80	%		5.50	%		6.00	%		6.25	%
Rate of Increase in Compensation Level		4.02			4.02			4.02			N/A			4.31			4.15			4.02			4.02			4.02
Expected Long-Term Rate of Return on Assets		8.00			8.00			8.00			6.27			6.60			6.66			N/A			N/A			N/A

Pension expense for 2012 is expected to include approximately $41.1 million and $.1 million related to the amortization of net loss and prior service cost balances, respectively, from AOCI.

CHANGE IN BENEFIT OBLIGATION

	U.S. PLAN						NON-U.S. PLANS						SUPPLEMENTAL PLAN
(In Millions)	2011			2010			2011			2010			2011			2010
Beginning Balance	$	762.9		$	642.0		$	116.1		$	134.4		$	86.9		$	85.9
Service Cost		42.8			37.9			–			1.8			3.2			3.2
Interest Cost		40.8			36.9			6.5			6.9			4.4			4.8
Actuarial Loss (Gain)		108.8			80.7			8.0			(2.1	)		15.4			5.0
Plan Curtailment		–			–			–			(11.4	)		–			–
Benefits Paid		(41.3	)		(34.6	)		(2.5	)		(5.9	)		(11.3	)		(12.0	)
Plan Amendment		(9.4	)		–			–			–			1.7			–
Foreign Exchange Rate Changes		–			–			(1.0	)		(7.6	)		–			–
Ending Balance	$	904.6		$	762.9		$	127.1		$	116.1		$	100.3		$	86.9

ESTIMATED FUTURE BENEFIT PAYMENTS

(In Millions)	U.S. PLAN		NON-U.S. PLANS		SUPPLEMENTAL PLAN
2012	$	65.6	$	1.9	$	12.5
2013		71.1		2.0		11.6
2014		71.7		2.2		9.1
2015		75.6		2.6		9.0
2016		78.2		2.8		9.1
2017-2021		400.5		17.5		48.5

CHANGE IN PLAN ASSETS

	U.S. PLAN						NON-U.S. PLANS
(In Millions)	2011			2010			2011			2010
Fair Value of Assets at Beginning of Period	$	982.1		$	821.9		$	122.2		$	113.7
Actual Return on Assets		53.3			126.8			4.5			9.3
Employer Contributions		100.0			68.0			–			10.4
Benefits Paid		(41.3	)		(34.6	)		(2.5	)		(5.9	)
Foreign Exchange Rate Changes		–			–			(.9	)		(5.3	)
Fair Value of Assets at End of Period	$	1,094.1		$	982.1		$	123.3		$	122.2

The minimum required contribution for the U.S. qualified plan in 2012 is estimated to be zero and the maximum deductible contribution is estimated at $175.0 million.

A total return investment strategy approach is employed for Northern Trust’s U.S. pension plan whereby a mix of U.S. and non-U.S. equities, fixed income and alternative asset investments are used to maximize the long-term return of plan assets for a prudent level of risk. This is accomplished by diversifying the portfolio across various asset classes, with the goal of reducing volatility of return, and among various issuers of securities to reduce principal risk. Northern Trust utilizes an asset/liability methodology to determine the investment policies that will best meet its short and long-term objectives. The process is performed by modeling current and alternative strategies for asset allocation, funding policy and actuarial methods and assumptions. The financial modeling uses projections of expected capital market returns and expected volatility of those returns to determine alternative asset mixes having the greatest probability of meeting the plan’s investment objectives. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The intent of this strategy is to minimize plan expenses by outperforming growth in plan liabilities over the long run.

The target allocation of plan assets since November 2008, by major asset category, is 40% U.S. stocks, 21% non-U.S. stocks, 21% long duration fixed income securities, and 18% alternative investments, split between private equity funds (5%), hedge funds (5%), global real estate (5%) and commodities (3%). Equity investments include common stocks that are listed on an exchange and investments in comingled funds that invest primarily in publicly traded equities. Equity investments are diversified across U.S. and non-U.S. stocks and divided by investment style and market capitalization. Fixed income securities held include U.S. treasury securities and investments in comingled funds that invest in a diversified blend of longer duration fixed income securities. Alternative investments, including private equity, hedge funds, global real estate, and commodities, are used judiciously to enhance long-term returns while improving portfolio diversification. Private equity assets consist primarily of investments in limited partnerships that invest in individual companies in the form of non-public equity or non-public debt positions. Direct or co-investment in non-public stock by the plan is prohibited. The plan’s private equity investments are limited to 20% of the total limited partnership and the maximum allowable loss cannot exceed the commitment amount. The plan holds one investment in a hedge fund of funds, which invests, either directly or indirectly, in a diversified portfolio of funds or other pooled investment vehicles.

Investment in global real estate is designed to provide stable income returns and added diversification based upon the historical low correlation between real estate and equity or fixed income investments. The plan’s global real estate assets consist of one collective index fund that invests in a diversified portfolio of global real estate investments, primarily equity securities.

Commodities also improve portfolio diversification as they tend to react to changing economic fundamentals differently than traditional financial assets. Because commodity prices typically rise with rising inflation, investments in commodities are also likely to provide an offset against inflation. Commodity assets include an investment in one mutual fund that invests in commodity-linked derivative instruments, backed by a portfolio of fixed income securities.

Though not a primary strategy for meeting the plan’s objectives, derivatives may be used from time to time, depending on the nature of the asset class to which they relate, to gain market exposure in an efficient and timely manner, to hedge foreign currency exposure or interest rate risk, or to alter the duration of a portfolio. There were no derivatives held by the plan at December 31, 2011 or 2010.

Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies, and quarterly investment portfolio reviews. Standards used to evaluate the plan’s investment manager performance include, but are not limited to, the achievement of objectives, operation within guidelines and policy, and comparison against a relative benchmark. In addition, each manager of the investment funds held by the plan is ranked against a universe of peers and compared to a relative benchmark. Total plan performance analysis includes an analysis of the market environment, asset allocation impact on performance, risk and return relative to other ERISA plans, and manager impacts upon plan performance.

The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies used by Northern Trust for plan assets measured at fair value.

Level 1 – Quoted, active market prices for identical assets or liabilities. The U.S. pension plan’s Level 1 investments include foreign and domestic common stocks and mutual and collective trust funds. Foreign and domestic common stocks are exchange traded and are valued at the closing price reported by the respective exchanges on the day of valuation. Share prices of the funds, referred to as a fund’s Net Asset Value (NAV), are calculated daily based on the closing market prices and accruals of securities in the fund’s total portfolio (total value of the fund) divided by the number of fund shares currently issued and outstanding. Redemptions of the mutual and collective trust fund shares occur by contract at the respective fund’s redemption date NAV.

Level 2 – Observable inputs other than Level 1 prices, such as quoted active market prices for similar assets or liabilities, quoted prices for identical or similar assets in inactive markets, and model-derived valuations in which all significant inputs are observable in active markets. The U.S. pension plan’s Level 2 assets include U.S. government securities and mutual and collective trust funds. U.S. government securities are valued by a third party pricing source that incorporates market observable data such as reported sales of similar securities, broker quotes and reference data. The inputs used are based on observable data in active markets. The NAVs of the funds are calculated monthly based on the closing market prices and accruals of securities in the fund’s total portfolio (total value of the fund) divided by the number of fund shares currently issued and outstanding. Redemptions of the mutual and collective trust fund shares occur by contract at the respective fund’s redemption date NAV.

Level 3 inputs – Valuation techniques in which one or more significant inputs are unobservable in the marketplace. The U.S. pension plan’s Level 3 assets are private equity and hedge funds which invest in underlying groups of investment funds or other pooled investment vehicles that are selected by the respective funds’ investment managers. The investment funds and the underlying investments held by these investment funds are valued at fair value. In determining the fair value of the underlying investments of each fund, the fund’s investment manager or general partner takes into account the estimated value reported by the underlying funds as well as any other considerations that may, in their judgment, increase or decrease such estimated value.

While Northern Trust believes its valuation methods for plan assets are appropriate and consistent with other market participants, the use of different methodologies or assumptions, particularly as applied to Level 3 assets, could have a material effect on the computation of their estimated fair values.

The following table presents the fair values of Northern Trust’s U.S. pension plan assets, by major asset category, and their level within the fair value hierarchy defined by GAAP as of December 31, 2011 and 2010.

	DECEMBER 31, 2011
(In Millions)	LEVEL  1		LEVEL  2		LEVEL  3		TOTAL
Equity Securities
U.S.	$	195.7	$	197.7	$	–	$	393.4
Non-U.S.		139.7		35.0		–		174.7
Fixed Income – U.S. Government		–		292.1		–		292.1
Alternative Investments
Private Equity Funds		–		–		45.5		45.5
Hedge Fund		–		–		29.2		29.2
Global Real Estate Fund		–		38.1		–		38.1
Commodity Linked Fund		34.3		–		–		34.3
Cash and Other		86.8		–		–		86.8
Total Assets at Fair Value	$	456.5	$	562.9	$	74.7	$	1,094.1

	DECEMBER 31, 2010
(In Millions)	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Equity Securities
U.S.	$	185.2	$	221.7	$	–	$	406.9
Non-U.S.		169.9		40.6		–		210.5
Fixed Income – U.S. Government		–		207.8		–		207.8
Alternative Investments
Private Equity Funds		–		–		33.5		33.5
Hedge Fund		–		–		29.7		29.7
Global Real Estate Fund		–		41.6		–		41.6
Commodity Linked Fund		39.3		–		–		39.3
Cash and Other		12.8		–		–		12.8
Total Assets at Fair Value	$	407.2	$	511.7	$	63.2	$	982.1

The following table presents the changes in Level 3 assets for the year ended December 31, 2011 and 2010.

	PRIVATE EQUITY FUNDS						HEDGE FUND
(In Millions)	2011			2010			2011			2010
Fair Value at January 1,	$	33.5		$	28.8		$	29.7		$	28.7
Actual Return on Plan Assets		7.8			2.9			(0.5	)		1.0
Purchases		7.0			4.5			–			–
Sales		(2.8	)		(2.7	)		–			–
Settlements		–			–			–			–
Fair Value at December 31,	$	45.5		$	33.5		$	29.2		$	29.7

Note: The return on plan assets represents the change in the unrealized gain (or loss) on assets still held at December 31.

A building block approach is employed for Northern Trust’s U.S. pension plan in determining the long-term rate of return for plan assets. Historical markets and long-term historical relationships between equities, fixed income and other asset classes are studied using the widely-accepted capital market principle that assets with higher volatility generate a greater return over the long-run. Current market factors such as inflation expectations and interest rates are evaluated before long-term capital market assumptions are determined. The long-term portfolio rate of return is established with consideration given to diversification and rebalancing. The rate is reviewed against peer data and historical returns to verify the return is reasonable and appropriate. Based on this approach and the plan’s target asset allocation, the expected long-term rate of return on assets as of the plan’s December 31, 2011 measurement date was set at 8.00%.

Postretirement Health Care. Northern Trust maintains an unfunded postretirement health care plan. Employees retiring at age 55 or older under the provisions of the U.S. defined benefit plan who have attained 15 years of service may be eligible for subsidized postretirement health care coverage. The cost of this benefit is no longer subsidized by Northern Trust for new employee hires or employees who were under age 40 at December 31, 2002, employees who have not attained 15 years of service by their termination date and employees who were not at least age 55 with at least 15 years of service on December 31, 2011. The provisions of this plan may be changed further at the discretion of Northern Trust, which also reserves the right to terminate these benefits at any time.

The following tables set forth the postretirement health care plan status and amounts included in AOCI at December 31, the net periodic postretirement benefit cost of the plan for 2011 and 2010, and the change in the accumulated postretirement benefit obligation during 2011 and 2010.

PLAN STATUS

(In Millions)	2011		2010
Accumulated Postretirement Benefit Obligation at Measurement Date:
Retirees and Dependents	$	31.8	$	29.4
Actives Eligible for Benefits		22.7		14.9
Actives Not Yet Eligible		–		7.0
Net Postretirement Benefit Liability	$	54.5	$	51.3

AMOUNTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME

(In Millions)	2011			2010
Net Actuarial Loss	$	10.9		$	13.0
Prior Service Benefit		(8.0	)		(13.0	)
Gross Amount in Accumulated Other Comprehensive Income		2.9			–
Income Tax Effect		1.1			–
Net Amount in Accumulated Other Comprehensive Income	$	1.8		$	–

NET PERIODIC POSTRETIREMENT BENEFIT EXPENSE

(In Millions)	2011			2010			2009
Service Cost	$	.4		$	.8		$	1.7
Interest Cost		2.8			2.8			3.7
Amortization
Net Loss		1.6			2.0			.5
Transition Obligation		–			–			.5
Prior Service Benefit		(5.2	)		(5.2	)		(.1	)
Net Periodic Postretirement Benefit Expense	$	(.4	)	$	.4		$	6.3

CHANGE IN ACCUMULATED POSTRETIREMENT

BENEFIT OBLIGATION

(In Millions)	2011			2010
Beginning Balance	$	51.3		$	49.9
Service Cost		.4			.8
Interest Cost		2.8			2.8
Actuarial Loss (Gain)		(.2	)		(.6	)
Gross Benefits Paid		(.4	)		(2.1	)
Medicare Subsidy		.6			.5
Plan Change		–			–
Ending Balance	$	54.5		$	51.3

ESTIMATED FUTURE BENEFIT PAYMENTS

(In Millions)	TOTAL POSTRETIREMENT MEDICAL BENEFITS		EXPECTED PRESCRIPTION DRUG SUBSIDY AMOUNT
2012	$	3.7	$	(.6	)
2013		4.2		(.7	)
2014		4.5		(.8	)
2015		4.6		(.9	)
2016		4.7		(1.0	)
2017-2021		22.4		(5.0	)

Net periodic postretirement benefit expense for 2012 is expected to include approximately $1.1 million related to the amortization from AOCI of the net loss, and to be decreased by $5.0 million related to the amortization from AOCI of the prior service benefit.

The weighted average discount rate used in determining the accumulated postretirement benefit obligation was 4.75% at December 31, 2011 and 5.50% at December 31, 2010. For measurement purposes, an 8.50% annual increase in the cost of covered medical benefits and a 9.00% annual increase in the cost of covered prescription drug benefits were assumed for 2011. These rates are assumed to gradually decrease until they reach 5.00% in 2018 for medical and 2019 for prescription drugs. The health care cost trend rate assumption has an effect on the amounts reported. For example, increasing or decreasing the assumed health care trend rate by one percentage point in each year would have the following effect.

(In Millions)	1–PERCENTAGE POINT INCREASE		1–PERCENTAGE POINT DECREASE
Effect on Postretirement Benefit Obligation	$	2.2	$	(2.5	)
Effect on Total Service and Interest Cost Components		.1		(.1	)

Defined Contribution Plans. The Corporation and its subsidiaries maintain various defined contribution plans covering substantially all employees. The Corporation’s contribution includes a matching component and a component contingent upon predetermined corporate performance-based objectives being met. The expense associated with defined contribution plans is charged to employee benefits and totaled $39.3 million in 2011, $46.5 million in 2010, and $47.0 million in 2009.

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Share-Based Compensation Plans

12 Months Ended

Dec. 31, 2011

Share-Based Compensation Plans

Note 23 – Share-Based Compensation Plans

Northern Trust recognizes as compensation expense the grant-date fair value of stock options and other equity based compensation granted to employees within the income statement using a fair value-based method.

Total compensation expense for share-based payment arrangements and the associated tax impacts were as follows for the periods presented:

	FOR THE YEAR ENDED DECEMBER 31,
(In Millions)	2011		2010		2009
Stock Options	$	34.1	$	27.6	$	27.9
Stock and Stock Unit Awards		36.2		25.1		19.7
Performance Stock Units		—		—		(22.2	)
Total Share-Based Compensation Expense	$	70.3	$	52.7	$	25.4
Tax Benefits Recognized	$	26.5	$	19.3	$	9.3

As of December 31, 2011, there was $122.5 million of unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Corporation’s stock-based compensation plans. That cost is expected to be recognized as expense over a weighted-average period of approximately 3 years. Share-based compensation expense in 2009 includes the reversal of accruals related to performance stock units granted in 2008 and 2007 which were not expected to vest.

The Amended and Restated Northern Trust Corporation 2002 Stock Plan (the Plan) is administered by the Compensation and Benefits Committee (Committee) of the Board of Directors. All employees of the Corporation and its subsidiaries and all directors of the Corporation are eligible to receive awards under the Plan. The Plan provides for the grant of stock options, stock appreciation rights, stock awards, stock units and performance shares. As detailed below, grants are outstanding under both the Plan and The Northern Trust Corporation Amended 1992 Incentive Stock Plan (1992 Plan), a predecessor plan. The total number of shares of the Corporation’s common stock authorized for issuance under the Plan is 40,000,000. As of December 31, 2011, shares available for future grant under the Plan totaled 12,423,266.

The following describes Northern Trust’s share-based payment arrangements and applies to awards under the Plan and the 1992 Plan, as applicable.

Stock Options. Stock options consist of options to purchase common stock at prices not less than 100% of the fair value thereof on the date the options are granted. Options have a maximum ten-year life and generally vest and become exercisable in one to four years after the date of grant. In addition, all options may become exercisable upon a “change of control” as defined in the Plan or the 1992 Plan. All options terminate at such time as determined by the Committee and as provided in the terms and conditions of the respective option grants.

The weighted-average assumptions used for options granted during the years ended December 31 are as follows:

	2011			2010			2009
Expected Term (in Years)		7.7			7.4			6.8
Dividend Yield		4.56	%		4.38	%		3.51	%
Expected Volatility		43.2			41.5			40.7
Risk Free Interest Rate		2.94			2.64			2.46

The expected term of options represents the period of time options granted are expected to be outstanding based primarily on the historical exercise behavior attributable to previous option grants. Dividend yield represents the estimated yield from dividends paid on the Corporation’s common stock over the expected term of the options. Expected volatility is determined based on the historical daily volatility of Northern Trust’s stock price over the most recent period equal to the expected term of the option. The risk free interest rate is based on the U.S. Treasury yield curve at the time of grant for a period equal to the expected term of the options granted.

The following table provides information about stock options granted, vested, and exercised in the years ended December 31.

(In Millions, Except Per Share Information)	2011		2010		2009
Weighted Average Grant-Date Per Share Fair Value of Stock Options Granted	$	15.26	$	14.45	$	16.94
Grant-Date Fair Value of Stock Options Vested		27.9		26.7		18.4
Stock Options Exercised:
Intrinsic Value as of Exercise Date		1.5		5.0		11.3
Cash Received		5.4		16.9		38.9
Tax Deduction Benefits Realized		.5		1.7		3.6

The following is a summary of changes in nonvested stock options for the year ended December 31, 2011.

NONVESTED SHARES	SHARES			WEIGHTED- AVERAGE GRANT- DATE FAIR VALUE PER SHARE
Nonvested as December 31, 2010		4,735,065		$	15.89
Granted		2,380,933			15.26
Vested		(1,713,989	)		16.30
Forfeited or Cancelled		(53,662	)		15.43
Nonvested at December 31, 2011		5,348,347		$	15.48

A summary of the status of stock options under the Plan and the 1992 Plan at December 31, 2011, and changes during the year then ended, are presented in the table below.

($ In Millions Except Per Share Information)	SHARES			WEIGHTED AVERAGE EXERCISE PRICE PER  SHARE		WEIGHTED AVERAGE REMAINING CONTRACTUAL TERM (YEARS)		AGGREGATE INTRINSIC VALUE
Options Outstanding, December 31, 2010		16,407,354		$	53.78
Granted		2,380,933			51.73
Exercised		(149,385	)		38.66
Forfeited, Expired or Cancelled		(1,637,487	)		66.65
Options Outstanding, December 31, 2011		17,001,415		$	52.39		5.0	$	9.1
Options Exercisable, December 31, 2011		11,653,068		$	51.80		3.5	$	9.0

Stock and Stock Unit Awards. Stock or stock unit awards may be granted by the Committee to participants which entitle them to receive a payment in the Corporation’s common stock or cash under the terms of the Plan and such other terms and conditions as the Committee deems appropriate. Each stock unit provides the recipient the opportunity to receive one share of stock for each stock unit that vests. The stock units granted in 2011 predominately vest at a rate equal to 50% on the third anniversary date of the grant and 50% on the fourth anniversary date. Stock and stock unit grants totaled 995,176, 1,223,539, and 646,549, with weighted average grant-date fair values of $50.79, $50.67, and $56.07 per share, for the years ended December 31, 2011, 2010, and 2009, respectively. The total fair value of shares vested during the years ended December 31, 2011, 2010, and 2009, was $7.1 million, $19.1 million, and $25.6 million, respectively.

A summary of the status of outstanding stock and stock unit awards under the Plan and the 1992 Plan at December 31, 2011, and changes during the year then ended, is presented in the table below.

($ In Millions)	NUMBER			AGGREGATE INTRINSIC VALUE
Stock and Stock Unit Awards Outstanding, December 31, 2010		2,144,510		$	118.8
Granted		995,176
Distributed		(179,812	)
Forfeited		(45,309	)
Stock and Stock Unit Awards Outstanding, December 31, 2011		2,914,565		$	115.6
Units Convertible, December 31, 2011		105,498		$	4.2

The following is a summary of nonvested stock and stock unit awards at December 31, 2011, and changes during the year then ended.

NONVESTED STOCK AND STOCK UNITS	NUMBER			WEIGHTED AVERAGE GRANT- DATE FAIR VALUE PER UNIT		WEIGHTED AVERAGE REMAINING VESTING TERM (YEARS)
Nonvested at December 31, 2010		2,038,244		$	54.41		2.7
Granted		995,176			50.79
Vested		(179,044	)		66.81
Forfeited		(45,309	)		54.99
Nonvested at December 31, 2011		2,809,067		$	52.33		2.4

Director Stock Awards. In 2011, stock units with a total value of $1.1 million (22,188 stock units) that vest on the date of the 2012 annual meeting of the Corporation’s stockholders were granted to non-employee directors. In 2010, stock units with a total value of $1.1 million (21,131 stock units) that vested on the date of the 2011 annual meeting of the Corporation’s stockholders were granted to non-employee directors. Stock units granted to non-employee directors do not have voting rights. Each stock unit entitles a director to one share of common stock at vesting, unless a director elects to defer receipt of the shares. Directors may elect to defer the payment of their annual stock unit grant and cash-based compensation until termination of services as director. Amounts deferred are converted into stock units representing shares of common stock of the Corporation. Distributions of deferred stock units are made in stock. Distributions of the stock unit account that relate to cash-based compensation are made in cash based on the fair value of the stock units at the time of distribution.

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CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$ 603.6	$ 669.5	$ 864.2
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Investment Security (Gains) Losses, net	23.9	20.4	23.4
Amortization and Accretion of Securities and Unearned Income	(34.2)	(55.5)	(50.4)
Provision for Credit Losses	55.0	160.0	215.0
Depreciation on Buildings and Equipment	89.2	93.5	95.7
Amortization of Computer Software	158.4	141.6	131.8
Amortization of Intangibles	17.5	14.4	16.2
Client Support Related Charges (Benefit)			(109.3)
Capital Support Agreement Payments			(204.8)
Increase (Decrease) in Accrued Income Taxes	(115.5)	153.5	61.4
Qualified Pension Plan Contributions	(100.0)	(68.0)	(175.0)
Visa Indemnification Benefits	(23.1)	(33.0)	(17.8)
Deferred Income Tax Provision	97.2	12.1	183.8
(Increase) Decrease in Receivables	(179.7)	(90.6)	65.3
Increase (Decrease) in Interest Payable	5.0	7.7	(13.8)
Changes in Derivative Instrument (Gains) Losses, net	172.1	(377.8)	126.4
Other Operating Activities, net	484.9	142.4	(197.4)
Net Cash Provided by Operating Activities	1,254.3	790.2	1,014.7
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (Increase) Decrease in Federal Funds Sold and Securities Purchased under Agreements to Resell	38.8	89.9	(81.0)
Net (Increase) Decrease in Interest-Bearing Deposits with Banks	(1,345.1)	(2,446.1)	3,815.8
Net (Increase) Decrease in Federal Reserve Deposits and Other Interest-Bearing Assets	(2,512.4)	4,048.4	(5,569.2)
Purchases of Securities - Held to Maturity	(147.6)	(448.6)	(220.9)
Proceeds from Maturity and Redemption of Securities - Held to Maturity	272.9	429.1	219.2
Purchases of Securities - Available for Sale	(33,302.1)	(14,697.0)	(14,053.0)
Proceeds from Sale, Maturity and Redemption of Securities - Available for Sale	23,082.9	11,432.5	11,925.9
Net Increase (Decrease) in Loans and Leases	(1,017.9)	(479.8)	2,832.7
Purchases of Buildings and Equipment, net	(96.9)	(90.5)	(132.6)
Purchases and Development of Computer Software	(274.2)	(220.6)	(181.6)
Net (Increase) Decrease in Client Security Settlement Receivables	(77.0)	93.5	(85.5)
Decrease in Cash Due to Acquisitions, net of Cash Acquired	(172.6)
Other Investing Activities, net	162.8	521.2	(148.4)
Net Cash Provided by (Used in) Investing Activities	(15,388.4)	(1,768.0)	(1,678.6)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Increase (Decrease) in Deposits	18,481.8	5,914.4	(4,125.1)
Net Increase (Decrease) in Federal Funds Purchased	(2,876.3)	(2,958.1)	4,866.3
Net Increase (Decrease) in Securities Sold under Agreements to Repurchase	244.4	(83.1)	(491.6)
Net Increase (Decrease) in Short-Term Other Borrowings	630.5	(573.3)	626.3
Proceeds from Term Federal Funds Purchased	7,962.3	19,045.6	17,933.4
Repayments of Term Federal Funds Purchased	(7,981.3)	(20,217.5)	(17,217.4)
Proceeds from Senior Notes and Long-Term Debt	500.0	1,142.7	500.0
Repayments of Senior Notes and Long-Term Debt	(880.7)	(918.3)	(422.4)
Treasury Stock Purchased	(79.0)	(5.9)	(10.7)
Net Proceeds from Stock Options	75.6	70.6	38.9
Cash Dividends Paid on Common Stock	(273.7)	(273.2)	(260.3)
Proceeds from Common Stock Issuance			834.1
Cash Dividends Paid on Preferred Stock			(46.6)
Redemption of Preferred Stock - Series B			(1,576.0)
Repurchase of Warrant to Purchase Common Stock			(87.0)
Other Financing Activities, net		1.2	(140.7)
Net Cash Provided by (Used in) Financing Activities	15,803.6	1,145.1	421.2
Effect of Foreign Currency Exchange Rates on Cash	(172.2)	158.9	86.3
Increase (Decrease) in Cash and Due from Banks	1,497.3	326.2	(156.4)
Cash and Due from Banks at Beginning of Year	2,818.0	2,491.8	2,648.2
Cash and Due from Banks at End of Year	4,315.3	2,818.0	2,491.8
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest Paid	394.5	370.3	420.0
Income Taxes Paid	153.3	173.1	409.6
Transfers from Loans to OREO	$ 68.8	$ 52.1	$ 26.2

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Gains and Losses Recorded in Consolidated Statement of Income related to Fair Value Hedges (Detail) (Asset And Liability Management, FAIR VALUE HEDGES, USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Derivative Gain/(Loss) Recognized in Income	$ 137.8	$ 65.5
Available for Sale Investment Securities | Interest Rate Swap Contracts | Interest Income
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Derivative Gain/(Loss) Recognized in Income	(56.6)	(13.3)
Senior Notes and Long- Term Subordinated Debt | Interest Rate Swap Contracts | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Derivative Gain/(Loss) Recognized in Income	$ 194.4	$ 78.8

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Cash-Based Compensation Plans

12 Months Ended

Dec. 31, 2011

Cash-Based Compensation Plans

Note 24 – Cash-Based Compensation Plans

Various incentive plans provide for cash incentives and bonuses to selected employees based upon accomplishment of corporate net income objectives, business unit goals, and individual performance. The estimated contributions to these plans are charged to compensation expense and totaled $176.7 million in 2011, $168.4 million in 2010, and $168.9 million in 2009.

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Notional and Fair Value Amounts of Client-related and Trading Derivative Financial Instruments (Detail) (Client Related and Trading, USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Derivative [Line Items]
NOTIONAL VALUE	$ 244,572.2	$ 246,434.9
ASSET FAIR VALUE	3,250.8	5,899.2
LIABILITY FAIR VALUE	3,144.4	5,878.4
Foreign Exchange Contracts
Derivative [Line Items]
NOTIONAL VALUE	239,901.3	242,007.1
ASSET FAIR VALUE	3,062.1	5,747.9
LIABILITY FAIR VALUE	2,959.8	5,729.9
Interest Rate Option Contracts
Derivative [Line Items]
NOTIONAL VALUE	100.5	126.1
ASSET FAIR VALUE		0.1
LIABILITY FAIR VALUE		0.1
Interest Rate Swap Contracts
Derivative [Line Items]
NOTIONAL VALUE	4,570.4	4,301.7
ASSET FAIR VALUE	188.7	151.2
LIABILITY FAIR VALUE	$ 184.6	$ 148.4

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Securities Continuous Unrealized Loss Position (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Investments, Unrealized Loss Position [Line Items]
LESS THAN 12 MONTHS FAIR VALUE	$ 9,067.8	$ 3,480.5
LESS THAN 12 MONTHS UNREALIZED LOSSES	33.4	34.2
12 MONTHS OR LONGER FAIR VALUE	1,155.7	1,120.1
12 MONTHS OR LONGER UNREALIZED LOSSES	51.6	65.3
TOTAL FAIR VALUE	10,223.5	4,600.6
TOTAL UNREALIZED LOSSES	85.0	99.5
Obligations of States and Political Subdivisions
Investments, Unrealized Loss Position [Line Items]
LESS THAN 12 MONTHS FAIR VALUE	2.7	3.0
LESS THAN 12 MONTHS UNREALIZED LOSSES	0.1
12 MONTHS OR LONGER FAIR VALUE		3.2
12 MONTHS OR LONGER UNREALIZED LOSSES		0.4
TOTAL FAIR VALUE	2.7	6.2
TOTAL UNREALIZED LOSSES	0.1	0.4
Government Sponsored Agency
Investments, Unrealized Loss Position [Line Items]
LESS THAN 12 MONTHS FAIR VALUE	5,492.5	980.7
LESS THAN 12 MONTHS UNREALIZED LOSSES	14.1	11.0
12 MONTHS OR LONGER FAIR VALUE	470.1	328.7
12 MONTHS OR LONGER UNREALIZED LOSSES	3.3	2.5
TOTAL FAIR VALUE	5,962.6	1,309.4
TOTAL UNREALIZED LOSSES	17.4	13.5
Corporate Debt
Investments, Unrealized Loss Position [Line Items]
LESS THAN 12 MONTHS FAIR VALUE	1,027.5	930.6
LESS THAN 12 MONTHS UNREALIZED LOSSES	4.1	1.1
12 MONTHS OR LONGER FAIR VALUE	123.6	475.2
12 MONTHS OR LONGER UNREALIZED LOSSES	1.6	0.4
TOTAL FAIR VALUE	1,151.1	1,405.8
TOTAL UNREALIZED LOSSES	5.7	1.5
Residential Mortgage-Backed
Investments, Unrealized Loss Position [Line Items]
LESS THAN 12 MONTHS FAIR VALUE	4.7
LESS THAN 12 MONTHS UNREALIZED LOSSES	0.9
12 MONTHS OR LONGER FAIR VALUE	158.8	248.8
12 MONTHS OR LONGER UNREALIZED LOSSES	31.4	54.3
TOTAL FAIR VALUE	163.5	248.8
TOTAL UNREALIZED LOSSES	32.3	54.3
Other Asset-Backed
Investments, Unrealized Loss Position [Line Items]
LESS THAN 12 MONTHS FAIR VALUE	824.6	513.5
LESS THAN 12 MONTHS UNREALIZED LOSSES	2.3	2.2
12 MONTHS OR LONGER FAIR VALUE	205.7	27.0
12 MONTHS OR LONGER UNREALIZED LOSSES	1.0	0.1
TOTAL FAIR VALUE	1,030.3	540.5
TOTAL UNREALIZED LOSSES	3.3	2.3
Certificates of Deposit
Investments, Unrealized Loss Position [Line Items]
LESS THAN 12 MONTHS FAIR VALUE	1,019.9
LESS THAN 12 MONTHS UNREALIZED LOSSES	0.3
TOTAL FAIR VALUE	1,019.9
TOTAL UNREALIZED LOSSES	0.3
Auction Rate Securities
Investments, Unrealized Loss Position [Line Items]
LESS THAN 12 MONTHS FAIR VALUE	61.0	77.6
LESS THAN 12 MONTHS UNREALIZED LOSSES	7.3	3.3
12 MONTHS OR LONGER FAIR VALUE	52.6	0.7
12 MONTHS OR LONGER UNREALIZED LOSSES	5.2	0.1
TOTAL FAIR VALUE	113.6	78.3
TOTAL UNREALIZED LOSSES	12.5	3.4
Others
Investments, Unrealized Loss Position [Line Items]
LESS THAN 12 MONTHS FAIR VALUE	634.9	482.2
LESS THAN 12 MONTHS UNREALIZED LOSSES	4.3	6.8
12 MONTHS OR LONGER FAIR VALUE	144.9	36.5
12 MONTHS OR LONGER UNREALIZED LOSSES	9.1	7.5
TOTAL FAIR VALUE	779.8	518.7
TOTAL UNREALIZED LOSSES	13.4	14.3
U.S. Government
Investments, Unrealized Loss Position [Line Items]
LESS THAN 12 MONTHS FAIR VALUE		492.9
LESS THAN 12 MONTHS UNREALIZED LOSSES		9.8
TOTAL FAIR VALUE		492.9
TOTAL UNREALIZED LOSSES		$ 9.8

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Summary of Senior Notes Outstanding (Parenthetical) (Detail)	Dec. 31, 2011	Dec. 31, 2010
Fixed Rate Corporate Senior Notes 5.30 Percent Due August 2011
Debt Outstanding [Line Items]
Notes issued at a discount	0.035%	0.035%
Fixed Rate Corporate Senior Notes 5.20 Percent Due November 2012
Debt Outstanding [Line Items]
Notes issued at a discount	0.044%	0.044%
Fixed Rate Corporate Senior Notes 5.50 Percent Due August 2013
Debt Outstanding [Line Items]
Notes issued at a discount	0.09%	0.09%
Fixed Rate Corporate Senior Notes 3.45 Percent Due November 2020
Debt Outstanding [Line Items]
Notes issued at a discount	0.117%	0.117%
Fixed Rate Corporate Senior Notes 3.38 Percent Due August 2021
Debt Outstanding [Line Items]
Notes issued at a discount	0.437%	0.437%

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Regulatory Capital Requirements

12 Months Ended

Dec. 31, 2011

Regulatory Capital Requirements

Note 32 – Regulatory Capital Requirements

Northern Trust and its U.S. subsidiary banks are subject to various regulatory capital requirements administered by the federal bank regulatory authorities. Under these requirements, banks must maintain specific ratios of total and tier 1 capital to risk-weighted assets and of tier 1 capital to average quarterly assets in order to be classified as “well capitalized.” The regulatory capital requirements impose certain restrictions upon banks that meet minimum capital requirements but are not “well capitalized” and obligate the federal bank regulatory authorities to take “prompt corrective action” with respect to banks that do not maintain such minimum ratios. Such prompt corrective action could have a direct material effect on a bank’s financial statements.

As of December 31, 2011 and 2010, Northern Trust’s U.S. subsidiary banks had capital ratios above the level required for classification as a “well capitalized” institution and had not received any regulatory notification of a lower classification. Additionally, Northern Trust’s subsidiary banks located outside the U.S. are subject to regulatory capital requirements in the jurisdictions in which they operate. As of December 31, 2011 and 2010, Northern Trust’s non-U.S. banking subsidiaries had capital ratios above their specified minimum requirements. On October 1, 2011, the Corporation merged its national bank subsidiary, Northern Trust, NA, and federal savings bank, Northern Trust Bank, FSB, with and into the Bank.

There are no conditions or events since December 31, 2011 that management believes have adversely affected the capital categorization of any Northern Trust subsidiary bank.

The table below summarizes the risk-based capital amounts and ratios for Northern Trust and for each of its U.S. subsidiary banks whose net income for 2011 or 2010 exceeded 10% of the consolidated total.

	ACTUAL					MINIMUM TO QUALIFY AS WELL CAPITALIZED
($ In Millions)	AMOUNT		RATIO			AMOUNT		RATIO
AS OF DECEMBER 31, 2011
Total Capital to Risk-Weighted Assets
Consolidated	$	8,065		14.2	%	$	5,667		10.0	%
The Northern Trust Company		7,763		13.8			5,631		10.0
Tier 1 Capital to Risk-Weighted Assets
Consolidated		7,105		12.5			3,400		6.0
The Northern Trust Company		6,603		11.7			3,378		6.0
Tier 1 Capital (to Fourth Quarter Average Assets)
Consolidated		7,105		7.3			4,865		5.0
The Northern Trust Company		6,603		6.8			4,852		5.0
AS OF DECEMBER 31, 2010
Total Capital to Risk-Weighted Assets
Consolidated	$	8,036		15.6	%	$	5,147		10.0	%
The Northern Trust Company		6,440		16.2			3,978		10.0
Northern Trust, NA		1,461		13.9			1,050		10.0
Tier 1 Capital to Risk-Weighted Assets
Consolidated		6,977		13.6			3,088		6.0
The Northern Trust Company		5,293		13.3			2,387		6.0
Northern Trust, NA		1,301		12.4			630		6.0
Tier 1 Capital (to Fourth Quarter Average Assets)
Consolidated		6,977		8.8			3,983		5.0
The Northern Trust Company		5,293		8.0			3,323		5.0
Northern Trust, NA		1,301		10.8			602		5.0

The current risk-based capital guidelines that apply to the Corporation and the Bank, commonly referred to as Basel I, are based upon the 1988 capital accord of the International Basel Committee on Banking Supervision (Basel Committee), a committee of central banks and bank supervisors, as implemented by the Federal Reserve Board.

The Corporation also is subject to the Basel II framework for risk-based capital adequacy. The U.S. bank regulatory agencies have issued final rules with respect to implementation of the Basel II framework. Under the final Basel II rules, the Corporation is one of a small number of “core” banking organizations. As a result, the Corporation and the Bank will be required to use the advanced approaches under Basel II for calculating risk-based capital related to credit risk and operational risk, instead of the methodology reflected in the regulations effective prior to adoption of Basel II. The rules also require core banking organizations to have rigorous processes for assessing overall capital adequacy in relation to their total risk profiles, and to publicly disclose certain information about their risk profiles and capital adequacy.

The Corporation has for several years been preparing to comply with the advanced approaches of the Basel II framework. The Corporation is also addressing issues related to implementation timing differences between the U.S. and other jurisdictions, to ensure that the Corporation and its depository institution subsidiaries comply with regulatory requirements and expectations in all jurisdictions where they operate.

In December 2010, the Basel Committee released its final framework for strengthening international capital and liquidity regulation, known as Basel III. The Basel III calibration and phase-in arrangements were previously endorsed by the Seoul G20 Leaders Summit in November 2010, and will be subject to individual adoption by member nations, including the U.S. The federal banking agencies could implement changes to the current capital adequacy standards applicable to the Corporation and the Bank in light of Basel III.

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Floating Rate Capital Debt (Tables)

12 Months Ended

Dec. 31, 2011

Summary of Book Values of Outstanding Subordinated Debentures

The following table summarizes the book values of the outstanding Subordinated Debentures as of December 31, 2011 and 2010:

	DECEMBER 31
(In Millions)	2011		2010
NTC Capital I Subordinated Debentures due January 15, 2027	$	153.8	$	153.8
NTC Capital II Subordinated Debentures due April 15, 2027		123.1		123.1
Total Subordinated Debentures	$	276.9	$	276.9

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Changes in Level 3 Assets (Detail) (Auction Rate Securities, USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Auction Rate Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Assets Beginning Balance	$ 367.8	$ 427.7
Total Realized and Unrealized
Losses (Gains) Included in Earnings	(10.7)	(3.7)
Gains (Losses) Included in Other Comprehensive Income	(19.0)	(7.2)
Purchases, Issuances, Sales, and Settlements
Sales	(1.5)	(0.3)
Settlements	(158.3)	(48.7)
Fair Value Assets Ending Balance	$ 178.3	$ 367.8

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CONSOLIDATED BALANCE SHEET (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
ASSETS
Cash and Due from Banks	$ 4,315.3	$ 2,818.0
Federal Funds Sold and Securities Purchased under Agreements to Resell	121.3	160.1
Interest-Bearing Deposits with Banks	16,696.4	15,351.3
Federal Reserve Deposits and Other Interest-Bearing	13,448.6	10,924.6
Securities
Available for Sale	30,192.5	19,901.9
Held to Maturity (Fair value of $817.1 and $941.8)	799.2	922.2
Trading Account	8.0	6.8
Total Securities	30,999.7	20,830.9
Loans and Leases
Commercial	12,354.3	11,613.4
Personal	16,709.6	16,518.6
Total Loans and Leases	29,063.9	28,132.0
Allowance for Credit Losses Assigned to Loans and Leases	(294.8)	(319.6)
Buildings and Equipment	494.5	504.5
Client Security Settlement Receivables	778.3	701.3
Goodwill	532.0	400.9
Other Assets	4,068.5	4,339.9
Total Assets	100,223.7	83,843.9
Deposits
Demand and Other Noninterest-Bearing	22,792.0	7,658.9
Savings and Money Market	17,470.8	14,208.7
Savings Certificates and Other Time	3,058.3	3,913.0
Non-U.S. Offices Noninterest-Bearing	3,488.4	2,942.7
Non-U.S. Offices Interest-Bearing	35,868.0	35,472.4
Total Deposits	82,677.5	64,195.7
Federal Funds Purchased	815.3	3,691.7
Securities Sold under Agreements to Repurchase	1,198.8	954.4
Other Borrowings	931.5	347.7
Senior Notes	2,126.7	1,896.1
Long-Term Debt	2,133.3	2,729.3
Floating Rate Capital Debt	276.9	276.9
Other Liabilities	2,946.4	2,921.8
Total Liabilities	93,106.4	77,013.6
STOCKHOLDERS' EQUITY
Common Stock, $1.66 2/3 Par Value; Authorized 560,000,000 shares; Outstanding shares of 241,008,509 and 242,268,903	408.6	408.6
Additional Paid-in Capital	977.5	920.0
Retained Earnings	6,302.3	5,972.1
Accumulated Other Comprehensive Loss	(345.6)	(305.3)
Treasury Stock (4,163,015 and 2,902,621 shares, at cost)	(225.5)	(165.1)
Total Stockholders' Equity	7,117.3	6,830.3
Total Liabilities and Stockholders' Equity	$ 100,223.7	$ 83,843.9

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Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase (Tables)

12 Months Ended

Dec. 31, 2011

Securities Purchased Under Agreements to Resell

SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL	DECEMBER 31
($ In Millions)	2011			2010
Balance at December 31	$	74.7		$	152.1
Average Balance During the Year		246.3			277.3
Average Interest Rate Earned During the Year		.07	%		.17	%
Maximum Month-End Balance During the Year		424.2			578.0

Securities Sold Under Agreements to Repurchase

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE	DECEMBER 31
($ In Millions)	2011			2010
Balance at December 31	$	1,198.8		$	954.4
Average Balance During the Year		815.8			626.8
Average Interest Rate Paid During the Year		.08	%		.17	%
Maximum Month-End Balance During the Year		1,479.3			954.4

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Impaired Loans by Segment and Class (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Financing Receivable, Impaired [Line Items]
RECORDED INVESTMENT	$ 279.4	$ 301.2
UNPAID PRINCIPAL BALANCE	356.9	372.3
SPECIFIC ALLOWANCE	32.8	51.7
AVERAGE RECORDED INVESTMENT	260.4	253.8
INTEREST INCOME RECOGNIZED	2.7
Commercial
Financing Receivable, Impaired [Line Items]
RECORDED INVESTMENT	121.2	180.5
UNPAID PRINCIPAL BALANCE	162.6	225.2
SPECIFIC ALLOWANCE	22.9	49.3
AVERAGE RECORDED INVESTMENT	134.7
INTEREST INCOME RECOGNIZED	0.6
Commercial | Commercial and Institutional | Impaired Financing Receivables with Related Allowance
Financing Receivable, Impaired [Line Items]
RECORDED INVESTMENT	11.9	41.7
UNPAID PRINCIPAL BALANCE	20.5	47.8
SPECIFIC ALLOWANCE	8.8	19.8
AVERAGE RECORDED INVESTMENT	23.6
Commercial | Commercial and Institutional | Impaired Financing Receivables with No Related Allowance
Financing Receivable, Impaired [Line Items]
RECORDED INVESTMENT	21.4	17.9
UNPAID PRINCIPAL BALANCE	24.0	26.1
AVERAGE RECORDED INVESTMENT	18.3
INTEREST INCOME RECOGNIZED	0.1
Commercial | Commercial Real Estate | Impaired Financing Receivables with Related Allowance
Financing Receivable, Impaired [Line Items]
RECORDED INVESTMENT	41.4	77.2
UNPAID PRINCIPAL BALANCE	50.1	88.9
SPECIFIC ALLOWANCE	14.1	29.5
AVERAGE RECORDED INVESTMENT	59.8
Commercial | Commercial Real Estate | Impaired Financing Receivables with No Related Allowance
Financing Receivable, Impaired [Line Items]
RECORDED INVESTMENT	46.5	43.7
UNPAID PRINCIPAL BALANCE	68.0	62.4
AVERAGE RECORDED INVESTMENT	33.0
INTEREST INCOME RECOGNIZED	0.5
Personal
Financing Receivable, Impaired [Line Items]
RECORDED INVESTMENT	158.2	120.7
UNPAID PRINCIPAL BALANCE	194.3	147.1
SPECIFIC ALLOWANCE	9.9	2.4
AVERAGE RECORDED INVESTMENT	125.7
INTEREST INCOME RECOGNIZED	2.1
Personal | Residential Real Estate | Impaired Financing Receivables with Related Allowance
Financing Receivable, Impaired [Line Items]
RECORDED INVESTMENT	18.9	5.1
UNPAID PRINCIPAL BALANCE	26.2	5.1
SPECIFIC ALLOWANCE	8.9	2.4
AVERAGE RECORDED INVESTMENT	9.7
Personal | Residential Real Estate | Impaired Financing Receivables with No Related Allowance
Financing Receivable, Impaired [Line Items]
RECORDED INVESTMENT	134.4	111.9
UNPAID PRINCIPAL BALANCE	162.6	138.1
AVERAGE RECORDED INVESTMENT	111.8
INTEREST INCOME RECOGNIZED	2.1
Personal | Private Client | Impaired Financing Receivables with Related Allowance
Financing Receivable, Impaired [Line Items]
RECORDED INVESTMENT	3.3
UNPAID PRINCIPAL BALANCE	3.6
SPECIFIC ALLOWANCE	1.0
AVERAGE RECORDED INVESTMENT	2.0
Personal | Private Client | Impaired Financing Receivables with No Related Allowance
Financing Receivable, Impaired [Line Items]
RECORDED INVESTMENT	1.6	3.7
UNPAID PRINCIPAL BALANCE	1.9	3.9
AVERAGE RECORDED INVESTMENT	$ 2.2

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Amounts Included in Accumulated Other Comprehensive Income (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
United States Pension Plans of US Entity, Defined Benefit
Schedule of Pension Amounts in Accumulated Other Comprehensive Income (Loss) [Line Items]
Net Actuarial Loss	$ 490.4	$ 382.1
Prior Service Cost	(4.4)	6.5
Gross Amount in Accumulated Other Comprehensive Income	486.0	388.6
Income Tax Effect	183.1	142.6
Net Amount in Accumulated Other Comprehensive Income	302.9	246.0
Foreign Pension Plans, Defined Benefit
Schedule of Pension Amounts in Accumulated Other Comprehensive Income (Loss) [Line Items]
Net Actuarial Loss	24.8	16.3
Gross Amount in Accumulated Other Comprehensive Income	24.8	16.3
Income Tax Effect	3.7	2.8
Net Amount in Accumulated Other Comprehensive Income	21.1	13.5
Supplemental Employee Retirement Plans, Defined Benefit
Schedule of Pension Amounts in Accumulated Other Comprehensive Income (Loss) [Line Items]
Net Actuarial Loss	66.4	56.5
Prior Service Cost	2.7	1.3
Gross Amount in Accumulated Other Comprehensive Income	69.1	57.8
Income Tax Effect	26.0	21.1
Net Amount in Accumulated Other Comprehensive Income	$ 43.1	$ 36.7

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Summary of Long Term Debt Outstanding (Parenthetical) (Detail) (USD $)		1 Months Ended				1 Months Ended				1 Months Ended				1 Months Ended													1 Months Ended		12 Months Ended
	Dec. 31, 2010 Notes 6.30 Percent Bank Subordinated Debt Due March 2011	Aug. 23, 2011 Notes 6.30 Percent Bank Subordinated Debt Due March 2011 Upper Limit	Aug. 23, 2011 Notes 6.30 Percent Bank Subordinated Debt Due March 2011 Lower Limit	Dec. 31, 2011 Notes 4.60 Percent Bank Subordinated Debt Due February 2013	Dec. 31, 2010 Notes 4.60 Percent Bank Subordinated Debt Due February 2013	Aug. 23, 2011 Notes 4.60 Percent Bank Subordinated Debt Due February 2013 Upper Limit	Aug. 23, 2011 Notes 4.60 Percent Bank Subordinated Debt Due February 2013 Lower Limit	Dec. 31, 2011 Notes 5.85 Percent Bank Subordinated Debt Due November 2017	Dec. 31, 2010 Notes 5.85 Percent Bank Subordinated Debt Due November 2017	Aug. 23, 2011 Notes 5.85 Percent Bank Subordinated Debt Due November 2017 Upper Limit	Aug. 23, 2011 Notes 5.85 Percent Bank Subordinated Debt Due November 2017 Lower Limit	Dec. 31, 2011 Notes 6.50 Percent Bank Subordinated Debt Due August 2018	Dec. 31, 2010 Notes 6.50 Percent Bank Subordinated Debt Due August 2018	Aug. 23, 2011 Notes 6.50 Percent Bank Subordinated Debt Due August 2018 Upper Limit	Aug. 23, 2011 Notes 6.50 Percent Bank Subordinated Debt Due August 2018 Lower Limit	Dec. 31, 2011 Sterling Denominated Notes 5.375 Percent Bank Subordinated Debt Due March 2015	Dec. 31, 2010 Sterling Denominated Notes 5.375 Percent Bank Subordinated Debt Due March 2015	Dec. 31, 2011 One Year or Less	Dec. 31, 2010 One Year or Less	Dec. 31, 2011 One to Three Years	Dec. 31, 2010 One to Three Years	Dec. 31, 2010 Three to Five Years	Dec. 31, 2011 Five to Ten Years	Dec. 31, 2010 Five to Ten Years	Aug. 23, 2011 Senior Notes Upper Limit	Aug. 23, 2011 Subordinated Debt Upper Limit	Aug. 23, 2011 Sterling Denominated Floating Rate Bank Senior Note 0.71 Percent Due March 2010 Upper Limit	Aug. 23, 2011 Sterling Denominated Floating Rate Bank Senior Note 0.71 Percent Due March 2010 Lower Limit	Dec. 31, 2011 Interest Rate Swap Contracts Senior Notes	Dec. 31, 2010 Interest Rate Swap Contracts Senior Notes	Dec. 31, 2011 Interest Rate Swap Contracts Subordinated Debt	Dec. 31, 2010 Interest Rate Swap Contracts Subordinated Debt
Debt Disclosure [Line Items]
Interest Rate	6.30%			4.60%	4.60%			5.85%	5.85%			6.50%	6.50%			5.375%	5.375%
Federal Home Loan Bank Borrowings, Average Rate at Year End																		4.64%	4.18%	4.08%	4.46%	4.40%	6.29%	6.38%
Offering Circular, ability to offer notes in aggregate principal amount																									$ 4,500,000,000	$ 1,000,000,000
Debt maturity		15 years	5 years			15 years	5 years			15 years	5 years			15 years	5 years												15 years	30 days
Notes issued at a discount												0.02%	0.02%			0.484%	0.484%
Increases in the carrying values of notes outstanding covered by interest-rate swap contracts																													$ 29,900,000	$ 47,800,000	$ 102,600,000	$ 67,400,000

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CONSOLIDATED STATEMENT OF INCOME (Parenthetical) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Changes in Other-Than-Temporary-Impairment (OTTI) Losses	$ (1.1)		$ (0.8)		$ (93.4)
Noncredit-related OTTI Losses Recorded in (Reclassified from) OCI	(22.2)	[1]	(20.4)	[1]	66.7	[1]
Other Security Gains (Losses), net	(0.6)		0.8		3.3
Investment Security Gains (Losses), net	$ (23.9)	[2]	$ (20.4)	[2]	$ (23.4)	[2]

[1] For initial other-than-temporary impairments in the respective year, the balance includes the portion of the excess of amortized cost over the fair value of the impaired securities that was recorded in OCI. For subsequent impairments of the same security, the balance includes additional changes in OCI for that security subsequent to its most recently recorded OTTI.

[2] Changes in Other-Than-Temporary-Impairment (OTTI) Losses (1.1 ) $ (.8 ) $ (93.4 ) Noncredit-related OTTI Losses Recorded in (Reclassified from) OCI (22.2 ) (20.4 ) 66.7 Other Security Gains (Losses), net (.6 ) .8 3.3 Investment Security Gains (Losses), net (23.9 ) $ (20.4 ) $ (23.4 )

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Loan and Lease Segment and Class Balances Segregated by Borrower Ratings into "1 to 3", "4 to 5", and "6 to 9" (Watch List) Categories (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Financing Receivable, Recorded Investment [Line Items]
Residential real estate	$ 10,700.0	$ 10,900.0
Commercial Real Estate	2,981.7	3,242.4
Lease Financing, net	978.8	1,063.7
TOTAL LOANS AND LEASES	29,063.9	28,132.0
Commercial
Financing Receivable, Recorded Investment [Line Items]
Commercial and Institutional	6,918.7	5,914.5
Commercial Real Estate	2,981.7	3,242.4
Lease Financing, net	978.8	1,063.7
Non-U.S.	1,057.5	1,046.2
Other	417.6	346.6
TOTAL LOANS AND LEASES	12,354.3	11,613.4
Personal
Financing Receivable, Recorded Investment [Line Items]
Residential real estate	10,708.9	10,854.9
Private Client	5,651.4	5,423.7
Other	349.3	240.0
TOTAL LOANS AND LEASES	16,709.6	16,518.6
1 to 3 Category
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	12,567.0	11,566.0
1 to 3 Category | Commercial
Financing Receivable, Recorded Investment [Line Items]
Commercial and Institutional	3,681.8	2,821.5
Commercial Real Estate	1,247.1	1,232.8
Lease Financing, net	547.7	571.6
Non-U.S.	519.0	430.0
Other	241.4	209.5
TOTAL LOANS AND LEASES	6,237.0	5,265.4
1 to 3 Category | Personal
Financing Receivable, Recorded Investment [Line Items]
Residential real estate	2,777.1	2,896.0
Private Client	3,390.6	3,326.5
Other	162.3	78.1
TOTAL LOANS AND LEASES	6,330.0	6,300.6
4 to 5 Category
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	15,556.0	15,463.6
4 to 5 Category | Commercial
Financing Receivable, Recorded Investment [Line Items]
Commercial and Institutional	3,029.1	2,849.8
Commercial Real Estate	1,467.2	1,594.3
Lease Financing, net	422.3	473.0
Non-U.S.	527.3	596.5
Other	176.2	137.1
TOTAL LOANS AND LEASES	5,622.1	5,650.7
4 to 5 Category | Personal
Financing Receivable, Recorded Investment [Line Items]
Residential real estate	7,501.0	7,586.9
Private Client	2,245.9	2,064.1
Other	187.0	161.9
TOTAL LOANS AND LEASES	9,933.9	9,812.9
6 to 9 Category (Watch List)
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	940.9	1,102.4
6 to 9 Category (Watch List) | Commercial
Financing Receivable, Recorded Investment [Line Items]
Commercial and Institutional	207.8	243.2
Commercial Real Estate	267.4	415.3
Lease Financing, net	8.8	19.1
Non-U.S.	11.2	19.7
TOTAL LOANS AND LEASES	495.2	697.3
6 to 9 Category (Watch List) | Personal
Financing Receivable, Recorded Investment [Line Items]
Residential real estate	430.8	372.0
Private Client	14.9	33.1
TOTAL LOANS AND LEASES	$ 445.7	$ 405.1

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Gains and Losses Recorded in Consolidated Statement of Income Related to Client Related and Trading Derivative Financial Instruments (Detail) (Client Related and Trading, USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Derivative Instruments, Gain (Loss) [Line Items]
AMOUNT OF DERIVATIVE GAIN/(LOSS)RECOGNIZED IN INCOME	$ 330.4	$ 391.5
Foreign Exchange Contracts | Foreign Exchange Trading Income
Derivative Instruments, Gain (Loss) [Line Items]
AMOUNT OF DERIVATIVE GAIN/(LOSS)RECOGNIZED IN INCOME	324.5	382.2
Interest Rate Swap Contracts | Security Commissions and Trading Income
Derivative Instruments, Gain (Loss) [Line Items]
AMOUNT OF DERIVATIVE GAIN/(LOSS)RECOGNIZED IN INCOME	$ 5.9	$ 9.3

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Estimated Future Benefit Payments (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011
United States Pension Plans of US Entity, Defined Benefit
Schedule of Pension Expected Future Benefit Payments [Line Items]
2012	$ 65.6
2013	71.1
2014	71.7
2015	75.6
2016	78.2
2017-2021	400.5
Foreign Pension Plans, Defined Benefit
Schedule of Pension Expected Future Benefit Payments [Line Items]
2012	1.9
2013	2.0
2014	2.2
2015	2.6
2016	2.8
2017-2021	17.5
Supplemental Employee Retirement Plans, Defined Benefit
Schedule of Pension Expected Future Benefit Payments [Line Items]
2012	12.5
2013	11.6
2014	9.1
2015	9.0
2016	9.1
2017-2021	$ 48.5

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Condensed Statement of Cash Flows (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
OPERATING ACTIVITIES:
Net Income	$ 603.6	$ 669.5	$ 864.2
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:
Client Support-Related Charges (Benefit)			(109.3)
Capital Support Agreement Payments			(204.8)
Increase (Decrease) in Accrued Income Taxes	(115.5)	153.5	61.4
Other, net	484.9	142.4	(197.4)
Net Cash Provided by Operating Activities	1,254.3	790.2	1,014.7
INVESTING ACTIVITIES:
Net Increase in Time Deposits with Banks	(1,345.1)	(2,446.1)	3,815.8
Purchases of Securities - Available for Sale	(33,302.1)	(14,697.0)	(14,053.0)
Proceeds from Sale, Maturity and Redemption of Securities - Available for Sale	23,082.9	11,432.5	11,925.9
Other, net	162.8	521.2	(148.4)
Net Cash Provided by (Used in) Investing Activities	(15,388.4)	(1,768.0)	(1,678.6)
FINANCING ACTIVITIES:
Net Increase in Senior Notes	500.0	1,142.7	500.0
Proceeds from Common Stock Issuance			834.1
Redemption of Preferred Stock - Series B			(1,576.0)
Cash Dividends Paid on Preferred Stock			(46.6)
Repurchase of Warrant to Purchase Common Stock			(87.0)
Treasury Stock Purchased	(79.0)	(5.9)	(10.7)
Cash Dividends Paid on Common Stock	(273.7)	(273.2)	(260.3)
Net Proceeds from Stock Options	75.6	70.6	38.9
Other, net		1.2	(140.7)
Net Cash Provided by (Used in) Financing Activities	15,803.6	1,145.1	421.2
Increase (Decrease) in Cash and Due from Banks	1,497.3	326.2	(156.4)
Cash and Due from Banks at Beginning of Year	2,818.0	2,491.8	2,648.2
Cash and Due from Banks at End of Year	4,315.3	2,818.0	2,491.8
Parent Company
OPERATING ACTIVITIES:
Net Income	603.6	669.5	864.2
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:
Equity in Undistributed Net Income of Subsidiaries	(120.1)	(620.9)	(382.2)
Decrease in Prepaid Expenses	0.2	1.2	2.0
Client Support-Related Charges (Benefit)			(109.3)
Capital Support Agreement Payments			(204.8)
Increase (Decrease) in Accrued Income Taxes	28.5	61.8	283.6
Other, net	(41.2)	(13.3)	20.4
Net Cash Provided by Operating Activities	471.0	98.3	473.9
INVESTING ACTIVITIES:
Net Increase in Time Deposits with Banks	292.1	(77.2)	(268.0)
Purchases of Securities - Available for Sale	(91.4)	(109.7)
Proceeds from Sale, Maturity and Redemption of Securities - Available for Sale	105.4	4.7	411.8
Net Increase in Capital Investments in Subsidiaries	(0.5)	(204.8)	(42.0)
Advances to Wholly-Owned Subsidiaries	(750.0)
Other, net		(0.9)	(7.9)
Net Cash Provided by (Used in) Investing Activities	(444.4)	(387.9)	93.9
FINANCING ACTIVITIES:
Net Increase in Senior Notes	250.0	497.2	500.0
Proceeds from Common Stock Issuance			834.1
Redemption of Preferred Stock - Series B			(1,576.0)
Cash Dividends Paid on Preferred Stock			(46.6)
Repurchase of Warrant to Purchase Common Stock			(87.0)
Treasury Stock Purchased	(79.0)	(5.9)	(10.7)
Cash Dividends Paid on Common Stock	(273.7)	(273.2)	(260.3)
Net Proceeds from Stock Options	75.6	70.6	38.9
Other, net	0.1	1.2	23.8
Net Cash Provided by (Used in) Financing Activities	(27.0)	289.9	(583.8)
Increase (Decrease) in Cash and Due from Banks	(0.4)	0.3	(16.0)
Cash and Due from Banks at Beginning of Year	6.8	6.5	22.5
Cash and Due from Banks at End of Year	$ 6.5	$ 6.8	$ 6.5

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Fair Values of U.S. Pension Plan Assets, by Major Asset Category, and Their Level within Fair Value Hierarchy (Detail) (United States Pension Plans of US Entity, Defined Benefit, USD $)	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	$ 1,094,100,000	$ 982,100,000	$ 821,900,000
U.S. Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	393,400,000	406,900,000
Non-U.S. Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	174,700,000	210,500,000
Fixed Income - U.S. Government
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	292,100,000	207,800,000
Private Equity Funds
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	45,500,000	33,500,000
Hedge Fund
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	29,200,000	29,700,000
Global Real Estate Fund
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	38,100,000	41,600,000
Commodity Linked Fund
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	34,300,000	39,300,000
Cash and Other
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	86,800,000	12,800,000
Fair Value, Inputs, Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	456,500,000	407,200,000
Fair Value, Inputs, Level 1 | U.S. Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	195,700,000	185,200,000
Fair Value, Inputs, Level 1 | Non-U.S. Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	139,700,000	169,900,000
Fair Value, Inputs, Level 1 | Commodity Linked Fund
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	34,300,000	39,300,000
Fair Value, Inputs, Level 1 | Cash and Other
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	86,800,000	12,800,000
Fair Value, Inputs, Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	562,900,000	511,700,000
Fair Value, Inputs, Level 2 | U.S. Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	197,700,000	221,700,000
Fair Value, Inputs, Level 2 | Non-U.S. Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	35,000,000	40,600,000
Fair Value, Inputs, Level 2 | Fixed Income - U.S. Government
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	292,100,000	207,800,000
Fair Value, Inputs, Level 2 | Global Real Estate Fund
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	38,100,000	41,600,000
Fair Value, Inputs, Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	74,700,000	63,200,000
Fair Value, Inputs, Level 3 | Private Equity Funds
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	45,500,000	33,500,000	28,800,000
Fair Value, Inputs, Level 3 | Hedge Fund
Defined Benefit Plan Disclosure [Line Items]
Fair Values, Pension Plan Assets	$ 29,200,000	$ 29,700,000	$ 28,700,000

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Other Operating Expense (Tables)

12 Months Ended

Dec. 31, 2011

Components of Other Operating Expense

The components of other operating expense were as follows:

(In Millions)	2011		2010		2009
Business Promotion	$	82.1	$	81.0	$	66.6
FDIC Insurance Premiums		29.3		33.9		54.1
Staff Related		37.6		37.4		31.3
Other Intangibles Amortization		17.5		14.4		16.2
Capital Support Agreements		–		–		(109.3	)
Other Expenses		100.6		103.3		77.4
Total Other Operating Expense	$	267.1	$	270.0	$	136.3

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Changes in Allowance for Credit Losses by Segment (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at Beginning of Year	$ 357.3	$ 340.6	$ 251.1
Charge-Offs	(116.3)	(150.1)	(132.3)
Recoveries	32.9	6.9	6.5
Net Charge-Offs	(83.4)	(143.2)	(125.8)
Provision for Credit Losses	55.0	160.0	215.0
Effect of Foreign Exchange Rates		(0.1)	0.3
Balance at End of Year	328.9	357.3	340.6
Allowance assigned to loans and leases	294.8	319.6	309.2
Allowance assigned to unfunded commitments and standby letters of credit	34.1	37.7	31.4
Total Allowance for Credit Losses	328.9	357.3	340.6
Commercial
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at Beginning of Year	256.7	252.2	185.6
Charge-Offs	(56.3)	(76.2)	(53.1)
Recoveries	21.5	3.6	3.1
Net Charge-Offs	(34.8)	(72.6)	(50.0)
Provision for Credit Losses	(10.9)	77.2	116.3
Effect of Foreign Exchange Rates		(0.1)	0.3
Balance at End of Year	211.0	256.7	252.2
Allowance assigned to loans and leases	178.6	220.7	222.9
Allowance assigned to unfunded commitments and standby letters of credit	32.4	36.0	29.3
Total Allowance for Credit Losses	211.0	256.7	252.2
Personal
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance at Beginning of Year	100.6	88.4	65.5
Charge-Offs	(60.0)	(73.9)	(79.2)
Recoveries	11.4	3.3	3.4
Net Charge-Offs	(48.6)	(70.6)	(75.8)
Provision for Credit Losses	65.9	82.8	98.7
Balance at End of Year	117.9	100.6	88.4
Allowance assigned to loans and leases	116.2	98.9	86.3
Allowance assigned to unfunded commitments and standby letters of credit	1.7	1.7	2.1
Total Allowance for Credit Losses	$ 117.9	$ 100.6	$ 88.4

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Off-Balance Sheet Financial Instruments

12 Months Ended

Dec. 31, 2011

Off-Balance Sheet Financial Instruments

Note 27 – Off-Balance Sheet Financial Instruments

Commitments and Letters of Credit. Northern Trust, in the normal course of business, enters into various types of commitments and issues letters of credit to meet the liquidity and credit enhancement needs of its clients. The contractual amounts of these instruments represent the potential credit exposure should the instrument be fully drawn upon and the client default. To control the credit risk associated with entering into commitments and issuing letters of credit, Northern Trust subjects such activities to the same credit quality and monitoring controls as its lending activities.

Commitments and letters of credit consist of the following:

Legally Binding Commitments to Extend Credit generally have fixed expiration dates or other termination clauses. Since a significant portion of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future loans or liquidity requirements.

Commercial Letters of Credit are instruments issued by Northern Trust on behalf of its clients that authorize a third party (the beneficiary) to draw drafts up to a stipulated amount under the specified terms and conditions of the agreement. Commercial letters of credit are issued primarily to facilitate international trade.

Standby Letters of Credit obligate Northern Trust to meet certain financial obligations of its clients, if, under the contractual terms of the agreement, the clients are unable to do so. These instruments are primarily issued to support public and private financial commitments, including commercial paper, bond financing, initial margin requirements on futures exchanges, and similar transactions. Northern Trust is obligated to meet the entire financial obligation of these agreements and in certain cases is able to recover the amounts paid through recourse against collateral received or other participants.

The following table shows the contractual amounts of commitments and letters of credit.

COMMITMENTS AND LETTERS OF CREDIT

	DECEMBER 31
(In Millions)	2011		2010
Legally Binding Commitments to Extend Credit*	$	28,702.2	$	27,229.5
Standby Letters of Credit**	$	4,293.4	$	4,344.7
Commercial Letters of Credit		23.4		32.8

* These amounts exclude $.5 billion and $1.6 billion of commitments participated to others at December 31, 2011 and 2010, respectively.

** These amounts include $608.2 million and $602.3 million of standby letters of credit secured by cash deposits or participated to others as of December 31, 2011 and 2010, respectively. The weighted average maturity of standby letters of credit was 27 months at December 31, 2011 and 20 months at December 31, 2010.

Other Off-Balance Sheet Financial Instruments. As part of securities custody activities and at the direction of clients, Northern Trust lends securities owned by clients to borrowers who are reviewed and approved by the Senior Credit Committee. Borrowers are required to fully collateralize securities received with cash or marketable securities. As securities are loaned, collateral is maintained at a minimum of 100 percent of the fair value of the securities plus accrued interest, with revaluations of the collateral performed on a daily basis. In connection with these activities, Northern Trust has issued certain indemnifications to clients against loss that is a direct result of a borrower’s failure to return securities when due, should the value of such securities exceed the value of the collateral required to be posted. The amount of securities loaned as of December 31, 2011 and 2010 subject to indemnification was $74.4 billion and $74.9 billion, respectively. Because of the credit quality of the borrowers and the requirement to fully collateralize securities borrowed, management believes that the exposure to credit loss from this

activity is not significant and, therefore, no liability has been recorded relating to the indemnifications provided.

The Bank is a participating member of various cash, securities, and foreign exchange clearing and settlement organizations such as The Depository Trust Company in New York. It participates in these organizations on behalf of its clients and on its own behalf as a result of its own activities. A wide variety of cash and securities transactions are settled through these organizations, including those involving obligations of states and political subdivisions, asset-backed securities, commercial paper, dollar placements, and securities issued by the Government National Mortgage Association.

As a result of its participation in cash, securities, and foreign exchange clearing and settlement organizations, the Bank could be responsible for a pro rata share of certain credit-related losses arising out of the clearing activities. The method in which such losses would be shared by the clearing members is stipulated in each clearing organization’s membership agreement. Credit exposure related to these agreements varies from day to day, primarily as a result of fluctuations in the volume of transactions cleared through the organizations. The estimated credit exposure at December 31, 2011 and 2010 was $80 million and $68 million, respectively, based on the membership agreements and clearing volume for those days. Controls related to these clearing transactions are closely monitored by management to protect the assets of Northern Trust and its clients.

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Health Care Cost Trend Rate Assumption Effects (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011
Health Care Cost Trend Rates Assumptions [Line Items]
Effect on Postretirement Benefit Obligation - 1 Percentage Point Increase	$ 2.2
Effect on Total Service and Interest Cost Components - 1 Percentage Point Increase	0.1
Effect on Postretirement Benefit Obligation - 1 Percentage Point Decrease	(2.5)
Effect on Total Service and Interest Cost Components - 1 Percentage Point Decrease	$ (0.1)

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Tax Charges (Benefits) Recorded Directly to Stockholders' Equity (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Accumulated Other Comprehensive Income (Loss) [Line Items]
Current Tax Benefit for Employee Stock Options and Other Stock-Based Plans	$ 0.6	$ (1.2)	$ (4.2)
Tax Effect of Other Comprehensive Income	$ (5.2)	$ 60.0	$ 64.7

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Off-Balance Sheet Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2011

Contractual Amounts of Commitments and Letters of Credit

COMMITMENTS AND LETTERS OF CREDIT

	DECEMBER 31
(In Millions)	2011		2010
Legally Binding Commitments to Extend Credit*	$	28,702.2	$	27,229.5
Standby Letters of Credit**	$	4,293.4	$	4,344.7
Commercial Letters of Credit		23.4		32.8

* These amounts exclude $.5 billion and $1.6 billion of commitments participated to others at December 31, 2011 and 2010, respectively.

** These amounts include $608.2 million and $602.3 million of standby letters of credit secured by cash deposits or participated to others as of December 31, 2011 and 2010, respectively. The weighted average maturity of standby letters of credit was 27 months at December 31, 2011 and 20 months at December 31, 2010.

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Stockholders' Equity

12 Months Ended

Dec. 31, 2011

Stockholders' Equity

Note 14 – Stockholders’ Equity

Preferred Stock. The Corporation is authorized to issue 10,000,000 shares of preferred stock without par value. The Board of Directors of the Corporation is authorized to fix the particular preferences, rights, qualifications and restrictions for each series of preferred stock issued. There was no preferred stock outstanding at December 31, 2011 or 2010.

Common Stock. On May 1, 2009, Northern Trust issued 17,250,000 shares of common stock of the Corporation with a par value of $1.66  ²/3 per share. Under the Corporation’s current share buyback program, the Corporation may purchase an additional 5.6 million shares after December 31, 2011. The repurchased shares would be used for general purposes of the Corporation, including management of the Corporation’s capital level and the issuance of shares under stock option and other incentive plans of the Corporation.

The average price paid per share for common stock repurchased in 2011, 2010, and 2009 was $49.63, $52.33, and $55.05, respectively.

An analysis of changes in the number of shares of common stock outstanding follows:

	2011			2010			2009
Balance at January 1		242,268,903			241,679,942			223,263,132
Common Stock Issuance		–			–			17,250,000
Incentive Plan and Awards		189,793			300,376			479,359
Stock Options Exercised		149,385			419,846			938,249
Treasury Stock Purchased		(1,599,572	)		(131,261	)		(250,798	)
Balance at December 31		241,008,509			242,268,903			241,679,942

U.S. Treasury Capital Purchase Program. On November 14, 2008, in connection with the Corporation’s participation in the U.S. Department of the Treasury’s (U.S. Treasury) Troubled Asset Relief Program’s Capital Purchase Program (Capital Purchase Program), the Corporation issued 1,576,000 shares of Series B Preferred Stock and a warrant for the purchase of the Corporation’s common stock to the U.S. Treasury for total proceeds of $1,576.0 million. The proceeds received were allocated between the preferred stock and the warrant based on their relative fair values, which resulted in the recording of a discount on the preferred stock upon issuance that reflected the value allocated to the warrant. On June 17, 2009, Northern Trust repaid in full the $1,576.0 million preferred share investment made by the U.S. Treasury under the Capital Purchase Program. On August 26, 2009, Northern Trust repurchased the warrant for $87 million, completing the Corporation’s participation in the Capital Purchase Program.

Series B Preferred Stock. The Series B Preferred Stock was without par value and had a liquidation preference of $1,000 per share. Cumulative dividends on the Series B Preferred Stock accrued on the liquidation preference at a rate of 5% per annum for the first five years, and at a rate of 9% per annum thereafter. The fair value of the Series B Preferred Stock was determined through the use of a discounted cash flow model. The model incorporated projected cash flows over management’s estimate of a five year life of the preferred stock at the date of issuance and an assumed market yield of 12%. The discount was accreted using a constant effective yield of approximately 6.13% over a five year term, consistent with management’s estimate of the life of the preferred stock at the date of issuance. Dividends on the preferred stock and the related accretion of the discount on preferred stock reduced net income applicable to common stock by $111.1 million in 2009.

Common Stock Warrant. The warrant issued in connection with the Capital Purchase Program entitled the U.S. Treasury to purchase 3,824,624 shares of the Corporation’s common stock at an exercise price of $61.81 per share. The warrant had a 10-year term. The fair value of the common stock warrant at the date of its issuance was determined through the use of a Black-Scholes valuation model. In addition to the market price of Northern Trust’s common stock at the date of the warrant’s issuance, the model utilized an expected term of ten years, consistent with the term of the warrant, an estimated yield of 2.19% from dividends paid on the Corporation’s stock over the expected term of the warrant, which reflected the Corporation’s strong capital position and the restrictions on its ability to increase the dividend rate as a result of the Corporation’s participation in the Capital Purchase Program, the historical volatility of Northern Trust’s stock price over the most recent ten-year term as of the date of issuance of 36.06%, and a risk free interest rate of 3.98% based on a ten-year swap rate to maturity at the time of the warrant’s issuance.

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Variable Interest Entities

12 Months Ended

Dec. 31, 2011

Variable Interest Entities

Note 28 – Variable Interest Entities

Variable Interest Entities (VIEs) are defined within GAAP as entities which either have a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. Investors that finance a VIE through debt or equity interests, or other counterparties that provide other forms of support, such as guarantees, subordinated fee arrangements, or certain types of derivative contracts, are variable interest holders in the entity and the variable interest holder, if any, that has both the power to direct the activities that most significantly impact the entity and a variable interest that could potentially be significant to the entity is deemed to be the VIE’s primary beneficiary and is required to consolidate the VIE.

Leveraged Leases. In leveraged leasing transactions, Northern Trust acts as lessor of the underlying asset subject to the lease and typically funds 20% of the asset’s cost via an equity ownership in a trust with the remaining 80% provided by third party non-recourse debt holders. In such transactions, the trusts, which are VIEs, are created to provide the lessee use of the property with substantially all of the rights and obligations of ownership. The lessee’s maintenance and operation of the leased property has a direct effect on the fair value of the underlying property, and the lessee also has the ability to increase the benefits it can receive and limit the losses it can suffer by the manner in which it uses the property. As a result, Northern Trust has determined that it is not the primary beneficiary of these VIEs given it lacks the power to direct the activities that most significantly impact the

economic performance of the VIEs.

Northern Trust’s maximum exposure to loss as a result of its involvement with the leveraged lease trust VIEs is limited to the carrying amounts of its leveraged lease investments. As of December 31, 2011 and 2010, the carrying amounts of these investments, which are included in loans and leases in the consolidated balance sheet, were $714.5 million and $782.3 million, respectively. Northern Trust’s funding requirements relative to the VIEs are limited to its invested capital. Northern Trust has no other liquidity arrangements or obligations to purchase assets of the VIEs that would expose Northern Trust to a loss.

Tax Credit Structures. Northern Trust invests in affordable housing projects that are designed to generate a return primarily through the realization of tax credits. The affordable housing projects are formed as limited partnerships and LLCs, and Northern Trust typically invests as a limited partner/investor member in the form of equity contributions. The economic performance of the affordable housing projects, which are deemed to be VIEs, is driven by the performance of their underlying investment projects as well as the VIEs’ ability to operate in compliance with the rules and regulations necessary for the qualification of tax credits generated by equity investments. Northern Trust has determined that it is not the primary beneficiary of any affordable housing projects as it lacks the power to direct the activities that most significantly impact the economic performance of the underlying project or to affect the VIEs’ ability to operate in compliance with the rules and regulations necessary for the qualification of tax credits generated by equity investments. This power is held by the general partners and managing members who exercise full and exclusive control of the operations of the VIEs.

Northern Trust’s maximum exposure to loss as a result of its involvement with the affordable housing projects is limited to the carrying amounts of its investments and any unfunded commitments. As of December 31, 2011 and 2010, the carrying amounts of these investments, which are included in other assets in the consolidated balance sheet, were $264.9 million and $265.4 million, respectively. As of December 31, 2011 and 2010, liabilities related to unfunded commitments, which are included in other liabilities in the consolidated balance sheet, were $44.5 million and $35.5 million, respectively. Northern Trust’s funding requirements are limited to its invested capital and any additional unfunded commitments for future equity contributions. Northern Trust has no other liquidity arrangements or obligations to purchase assets of the affordable housing projects that would expose it to a loss.

Trust Preferred Securities. As discussed in further detail in Note 13 – Floating Rate Capital Debt, in 1997, Northern Trust issued Floating Rate Capital Securities, Series A and Series B, through NTC Capital I and NTC Capital II, respectively, statutory business trusts wholly-owned by the Corporation. The sole assets of the trusts are Subordinated Debentures of the Corporation that have the same interest rates and maturity dates as the corresponding distribution rates and redemption dates of the Floating Rate Capital Securities. NTC Capital I and NTC Capital II are considered VIEs; however, as the sole asset of each trust is a receivable from the Corporation and the proceeds to the Corporation from the receivable exceed the Corporation’s investment in the VIEs’ equity shares, the Corporation is not permitted to consolidate the trusts, even though the Corporation owns all of the voting equity shares of the trusts, has fully guaranteed the trusts’ obligations, and has the right to redeem the preferred securities in certain circumstances. Northern Trust recognizes the subordinated debentures on its consolidated balance sheet as long-term liabilities.

Investment Funds. Northern Trust acts as asset manager for various funds in which clients of Northern Trust are investors. As an asset manager of funds, the Corporation earns a competitively priced fee that is based on assets managed and that varies with each fund’s investment objective. Based on its analysis, Northern Trust has determined that it is not the primary beneficiary of these VIEs under GAAP.

In November 2011, Northern Trust purchased $90 million of securities at par from three investment funds (Funds). The net assets held by the Funds as of December 31, 2011 totaled $16.5 billion. The securities were purchased to avoid the risk of the Funds being downgraded which could force certain holders to liquidate their investments. Northern Trust incurred a pre-tax charge of $2 million in connection with these actions and has no further obligations related to these actions as of December 31, 2011. Any potential future support would be evaluated based upon the specific facts and circumstances and with careful consideration as to the potential impact on Northern Trust’s ability to maintain its well-capitalized status and meet its operational needs.

Under GAAP, the above actions reflect Northern Trust’s implicit interest in the credit risk of the affected Funds. Implicit interests are required to be considered when determining the primary beneficiary of a variable interest entity. The Funds were designed to create and pass to investors interest rate and credit risk. In determining whether Northern Trust is the primary beneficiary of these Funds, an expected loss calculation based on the characteristics of the underlying investments in the Funds is used to estimate the expected losses related to interest rate and credit risk, while also considering the relative rights and obligations of each of the variable interest holders. This analysis concluded that interest rate risk is the primary driver of expected losses within the Funds. As such, Northern Trust has determined that it is not the primary beneficiary of the Funds and is not required to consolidate them within its consolidated balance sheet. As Northern Trust has no current plans to provide any support additional to that which is noted above, the maximum exposure to loss from its implicit interest in the Funds is $88.4 million, which represents the fair value of the securities acquired from the Funds as of December 31, 2011.

In 2008, Northern Trust entered into CSAs with certain investment funds (CSA Funds) which held notes, asset backed securities, and other instruments whose values had been adversely impacted by widening risk premiums and liquidity spreads and significant rating agency downgrades. Northern Trust entered into the CSAs to assist the CSA Funds in maintaining net asset values of $1.00 in order to provide financial stability to the CSA Funds and investors in the CSA Funds. The CSAs also allowed the registered funds to hold assets that had fallen to below investment grade, thus avoiding a forced sale in an inactive market.

In 2009, all CSAs expired in connection with the final settlements of covered securities, and as such, Northern Trust’s maximum exposure to loss as of December 31, 2009 was zero. During 2009, final cash payments totaling $204.8 million were made under the CSAs and reductions of other operating expenses totaling $109.3 million were recorded to reflect the difference between the actual cash payments made and the recorded liability as of December 31, 2008. However, under prior accounting standards the CSA Funds were considered VIEs and the CSAs reflected Northern Trust’s implicit variable interest in the credit risk of the affected CSA Funds. The CSA Funds were designed to create and pass to investors interest rate and credit risk. In determining whether Northern Trust was the primary beneficiary of the CSA Funds during the period in which the CSAs were in place, expected loss calculations based on the characteristics of the underlying investments in the CSA Funds were used to estimate the expected losses related to interest rate and credit risk, while also considering the relative rights and obligations of each of the variable interest holders. These analyses concluded that interest rate risk was the primary driver of expected losses within the CSA Funds. As such, Northern Trust determined that it was not the primary beneficiary of the CSA Funds and was not required to consolidate them within its consolidated balance sheet.

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Number of Loans and Leases Modified in Troubled Debt Restructurings which became Nonperforming, as well as Total Recorded Investments and Unpaid Principal Balances (Detail) (USD $) In Millions, unless otherwise specified							12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2011 Commercial	Dec. 31, 2010 Commercial	Dec. 31, 2011 Personal	Dec. 31, 2010 Personal	Dec. 31, 2011 Nonperforming Financing Receivable Class of Financing Receivable Contract	Dec. 31, 2011 Nonperforming Financing Receivable Class of Financing Receivable Commercial Contract	Dec. 31, 2011 Nonperforming Financing Receivable Class of Financing Receivable Commercial Commercial and Institutional Contract	Dec. 31, 2011 Nonperforming Financing Receivable Class of Financing Receivable Personal Contract	Dec. 31, 2011 Nonperforming Financing Receivable Class of Financing Receivable Personal Residential Real Estate Contract	Dec. 31, 2011 Nonperforming Financing Receivable Class of Financing Receivable Personal Private Client Contract
Financing Receivable, Modifications [Line Items]
NUMBER OF LOANS AND LEASES							10	1	1	9	8	1
UNPAID PRINCIPAL BALANCE	$ 356.9	$ 372.3	$ 162.6	$ 225.2	$ 194.3	$ 147.1	$ 4.1	$ 0.4	$ 0.4	$ 3.7	$ 2.6	$ 1.1
RECORDED INVESTMENT							$ 2.9			$ 2.9	$ 2.1	$ 0.8

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Components of Other Operating Income (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Components of Other Operating Income [Line Items]
Loan Service Fees	$ 68.9	$ 60.3	$ 52.1
Banking Service Fees	54.9	57.3	53.1
Other Income	34.3	28.7	31.6
Total Other Operating Income	$ 158.1	$ 146.3	$ 136.8

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Variable Interest Entities - Additional Information (Detail) (USD $)	12 Months Ended	1 Months Ended	12 Months Ended
	Dec. 31, 2009	Nov. 30, 2011 Investment Funds	Dec. 31, 2011 Investment Funds	Dec. 31, 2009 Investment Funds	Dec. 31, 2011 Tax Credit Structures	Dec. 31, 2010 Tax Credit Structures	Dec. 31, 2011 Leveraged Leasing Transactions	Dec. 31, 2010 Leveraged Leasing Transactions
Variable Interest Entity [Line Items]
Funding of asset's cost via an equity interest							20.00%	20.00%
Funding of asset's cost via third party non recourse debt holders							80.00%	80.00%
Carrying amounts					$ 264,900,000	$ 265,400,000	$ 714,500,000	$ 782,300,000
Liabilities related to unfunded commitments					44,500,000	35,500,000
Purchase of securities at par from three investment funds		90,000,000
Final cash payments	204,800,000			204,800,000
Net assets held by the Funds			16,500,000,000
Reduction of other operating expenses				109,300,000
Pre-tax charge			2,000,000
Maximum exposure			$ 88,400,000	$ 0
Net asset values of the funds				$ 1.00

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Net Income Per Common Share

12 Months Ended

Dec. 31, 2011

Net Income Per Common Share

Note 16 – Net Income Per Common Share

The computations of net income per common share are presented below.

(In Millions Except Share Information)	2011		2010		2009
BASIC NET INCOME PER COMMON SHARE
Average Number of Common Shares Outstanding		241,401,310		242,028,776		235,511,879
Net Income	$	603.6	$	669.5	$	864.2
Less: Dividends on Preferred Stock		–		–		(111.1	)
Net Income Applicable to Common Stock	$	603.6	$	669.5		753.1
Less: Earnings Allocated to Participating Securities		7.1		5.6		5.3
Earnings Allocated to Common Shares Outstanding		596.5		663.9		747.8
Basic Net Income Per Common Share		2.47		2.74		3.18
DILUTED NET INCOME PER COMMON SHARE
Average Number of Common Shares Outstanding		241,401,310		242,028,776		235,511,879
Plus Stock Option Dilution		410,074		473,755		904,150
Average Common and Potential Common Shares		241,811,384		242,502,531		236,416,029
Earnings Allocated to Common and Potential Common Shares	$	596.5	$	663.9	$	747.8
Diluted Net Income Per Common Share		2.47		2.74		3.16

Note: Common stock equivalents totaling 13,240,787, 8,392,686, and 7,146,701 for the years ended December 31, 2011, 2010, and 2009, respectively, were not included in the computation of diluted earnings per share because their inclusion would have been antidilutive.

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Northern Trust Corporation (Corporation only) (Tables)

12 Months Ended

Dec. 31, 2011

Condensed Balance Sheet

CONDENSED BALANCE SHEET	DECEMBER 31
(In Millions)	2011			2010
ASSETS
Cash on Deposit with Subsidiary Bank	$	6.5		$	6.8
Time Deposits with Subsidiary Banks		1,269.2			1,561.2
Securities		97.1			118.2
Advances to Wholly-Owned Subsidiaries – Banks		1,035.0			285.0
– Nonbank		5.0			5.0
Investments in Wholly-Owned Subsidiaries – Banks		6,890.6			6,855.1
– Nonbank		152.6			121.2
Buildings and Equipment		3.4			3.4
Other Assets		373.3			339.5
Total Assets	$	9,832.7		$	9,295.4
LIABILITIES
Long-Term Debt	$	2,126.7		$	1,896.1
Floating Rate Capital Debt		276.9			276.9
Other Liabilities		311.8			292.1
Total Liabilities		2,715.4			2,465.1
STOCKHOLDERS’ EQUITY
Common Stock		408.6			408.6
Additional Paid-in Capital		977.5			920.0
Retained Earnings		6,302.3			5,972.1
Accumulated Other Comprehensive Loss		(345.6	)		(305.3	)
Treasury Stock		(225.5	)		(165.1	)
Total Stockholders’ Equity		7,117.3			6,830.3
Total Liabilities and Stockholders’ Equity	$	9,832.7		$	9,295.4

Condensed Statement of Income

CONDENSED STATEMENT OF INCOME	FOR THE YEAR ENDED DECEMBER 31
(In Millions)	2011		2010			2009
OPERATING INCOME
Dividends – Bank Subsidiaries	$	500.0	$	–		$	410.0
– Nonbank Subsidiaries		5.1		67.2			25.6
Intercompany Interest and Other Charges		19.8		11.4			10.1
Interest and Other Income		13.3		6.9			13.7
Total Operating Income		538.2		85.5			459.4
OPERATING EXPENSES
Interest Expense		66.9		50.8			45.7
Other Operating Expenses		12.6		15.4			(93.2	)
Total Operating Expenses		79.5		66.2			(47.5	)
Income (Loss) before Income Taxes and Equity in Undistributed Net Income of Subsidiaries		458.7		19.3			506.9
Benefit (Expense) for Income Taxes		24.8		23.0			(25.0	)
Income (Loss) before Equity in Undistributed Net Income of Subsidiaries		483.5		42.3			481.9
Equity in Undistributed Net Income of Subsidiaries – Banks		71.0		636.9			364.7
– Nonbank		49.1		(9.7	)		17.6
Net Income	$	603.6	$	669.5		$	864.2
Net Income Applicable to Common Stock	$	603.6	$	669.5		$	753.1

Condensed Statement of Cash Flows

CONDENSED STATEMENT OF CASH FLOWS	FOR THE YEAR ENDED DECEMBER 31
(In Millions)	2011			2010			2009
OPERATING ACTIVITIES:
Net Income	$	603.6		$	669.5		$	864.2
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:
Equity in Undistributed Net Income of Subsidiaries		(120.1	)		(620.9	)		(382.2	)
Decrease in Prepaid Expenses		.2			1.2			2.0
Client Support-Related Charges (Benefit)		—			—			(109.3	)
Capital Support Agreement Payments		—			—			(204.8	)
Increase (Decrease) in Accrued Income Taxes		28.5			61.8			283.6
Other, net		(41.2	)		(13.3	)		20.4
Net Cash Provided by Operating Activities		471.0			98.3			473.9
INVESTING ACTIVITIES:
Net Increase in Time Deposits with Banks		292.1			(77.2	)		(268.0	)
Purchases of Securities – Available for Sale		(91.4	)		(109.7	)		—
Proceeds from Sale, Maturity and Redemption of Securities – Available for Sale		105.4			4.7			411.8
Net Increase in Capital Investments in Subsidiaries		(.5	)		(204.8	)		(42.0	)
Advances to Wholly-Owned Subsidiaries		(750.0	)		—			—
Other, net		—			(.9	)		(7.9	)
Net Cash Provided by (Used in) Investing Activities		(444.4	)		(387.9	)		93.9
FINANCING ACTIVITIES:
Net Increase in Senior Notes		250.0			497.2			500.0
Proceeds from Common Stock Issuance		—			—			834.1
Redemption of Preferred Stock – Series B		—			—			(1,576.0	)
Cash Dividends Paid on Preferred Stock		—			—			(46.6	)
Repurchase of Warrant to Purchase Common Stock		—			—			(87.0	)
Treasury Stock Purchased		(79.0	)		(5.9	)		(10.7	)
Cash Dividends Paid on Common Stock		(273.7	)		(273.2	)		(260.3	)
Net Proceeds from Stock Options		75.6			70.6			38.9
Other, net		.1			1.2			23.8
Net Cash Provided by (Used in) Financing Activities		(27.0	)		289.9			(583.8	)
Net Change in Cash on Deposit with Subsidiary Bank		(.4	)		.3			(16.0	)
Cash on Deposit with Subsidiary Bank at Beginning of Year		6.8			6.5			22.5
Cash on Deposit with Subsidiary Bank at End of Year	$	6.4		$	6.8		$	6.5

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Changes in Carrying Amounts of Goodwill by Business Unit (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010
Goodwill [Line Items]
Beginning Balance	$ 400.9		$ 401.6
Goodwill Acquired	131.4		4.6
Other Changes	(0.3)	[1]	(5.3)	[1]
Ending Balance	532.0		400.9
Corporate and Institutional Services
Goodwill [Line Items]
Beginning Balance	329.5		334.7
Goodwill Acquired	131.4
Other Changes	(0.3)	[1]	(5.2)	[1]
Ending Balance	460.6		329.5
Personal Financial Services
Goodwill [Line Items]
Beginning Balance	71.4		66.9
Goodwill Acquired	0		4.6
Other Changes	0	[1]	(0.1)	[1]
Ending Balance	$ 71.4		$ 71.4

[1] Includes the effect of foreign exchange rates on non-U.S. dollar denominated goodwill.

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Status of Stock Options Under Plan and 1992 Plan (Detail) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
SHARES
Exercised	(149,385)	(419,846)	(938,249)
Stock options under the Plan and the 1992 Plan
SHARES
Nonvested stock options outstanding,at beginning of the year	16,407,354
Granted	2,380,933
Exercised	(149,385)
Forfeited, Expired or Cancelled	(1,637,487)
Nonvested stock options outstanding,at the end of the year	17,001,415
Options Exercisable, at the end of year	11,653,068
WEIGHTED AVERAGE EXERCISE PRICE PER SHARE
Beginning Balance	53.78
Granted	51.73
Exercised	38.66
Forfeited, Expired or Cancelled	66.65
Ending Balance	52.39
Options Exercisable, at the end of year	51.80
WEIGHTED AVERAGE REMAINING CONTRACTUAL TERM (YEARS)
Options Outstanding, at the end of year	5.0
Options Exercisable, at the end of year	3.5
AGGREGATE INTRINSIC VALUE
Options Outstanding, at the end of year	9.1
Options Exercisable, at the end of year	9.0

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CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) In Millions	Total	PREFERRED STOCK	COMMON STOCK	ADDITIONAL PAID-IN CAPITAL	RETAINED EARNINGS	ACCUMULATED OTHER COMPREHENSIVE LOSS	TREASURY STOCK
Beginning Balance at Dec. 31, 2008		$ 1,501.3	$ 379.8	$ 178.5	$ 5,091.2	$ (494.9)	$ (266.5)
April 1 Cumulative Effect of Applying ASC 320-10 (Formerly, FSP FAS 115-2)					9.5	(9.5)
Common Stock Issuance			28.8	805.3
Redemption of Preferred Stock, Series B		(1,576.0)
Beginning balance, as Adjusted					5,100.7
Net Unrealized Gains on Securities Available for Sale	180.7					171.1
Repurchase of Warrant to Purchase Common Stock				(87.0)
Net Income	864.2				864.2
Net Unrealized Gains (Lossses) on Cash Flow Hedges	(5.5)					(5.5)
Stock Options and Awards				(39.1)			81.1
Dividends Declared - Common Stock					(267.6)
Foreign Currency Translation Adjustments	(1.5)					8.1
Stock Options and Awards - Amortization				26.4
Stock Purchased							(13.8)
Dividends Declared - Preferred Stock	(111.1)				(46.6)
Pension and Other Postretirement Benefit Adjustments	(30.9)					(30.9)
Stock Options and Awards - Tax Benefits	4.2			4.2
Discount Accretion - Preferred Stock		74.7			(74.7)
Ending Balance at Dec. 31, 2009	6,312.1		408.6	888.3	5,576.0	(361.6)	(199.2)
Beginning balance, as Adjusted					5,576.0
Net Unrealized Gains on Securities Available for Sale	28.2					28.2
Net Income	669.5				669.5
Net Unrealized Gains (Lossses) on Cash Flow Hedges	37.6					37.5
Stock Options and Awards				(23.1)			41.0
Dividends Declared - Common Stock					(273.4)
Foreign Currency Translation Adjustments	(18.3)					(15.0)
Stock Options and Awards - Amortization				53.6
Stock Purchased							(6.9)
Pension and Other Postretirement Benefit Adjustments	8.8					5.6
Stock Options and Awards - Tax Benefits	1.2			1.2
Ending Balance at Dec. 31, 2010	6,830.3		408.6	920.0	5,972.1	(305.3)	(165.1)
Beginning balance, as Adjusted					5,972.1
Net Unrealized Gains on Securities Available for Sale	53.3					53.3
Net Income	603.6				603.6
Net Unrealized Gains (Lossses) on Cash Flow Hedges	(18.4)					(18.4)
Stock Options and Awards				(13.2)			19.0
Dividends Declared - Common Stock					(273.4)
Foreign Currency Translation Adjustments	(2.5)					(2.5)
Stock Options and Awards - Amortization				71.3
Stock Purchased							(79.4)
Pension and Other Postretirement Benefit Adjustments	(72.7)					(72.7)
Stock Options and Awards - Tax Benefits	(0.6)			(0.6)
Ending Balance at Dec. 31, 2011	$ 7,117.3		$ 408.6	$ 977.5	$ 6,302.3	$ (345.6)	$ (225.5)

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CONSOLIDATED BALANCE SHEET (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Held to Maturity, Fair value	$ 817.1	$ 941.8
Total Loans and Leases, unearned income	$ 374.1	$ 456.8
Common Stock, Par Value	$ 1.6667	$ 1.6667
Common Stock, Authorized	560,000,000	560,000,000
Common Stock, Outstanding	241,008,509	242,268,903
Treasury Stock, shares	4,163,015	2,902,621

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Buildings and Equipment

12 Months Ended

Dec. 31, 2011

Buildings and Equipment

Note 9 – Buildings and Equipment

A summary of buildings and equipment is presented below.

	DECEMBER 31, 2011
(In Millions)	ORIGINAL COST		ACCUMULATED DEPRECIATION		NET BOOKVALUE
Land and Improvements	$	32.6	$	.8	$	31.8
Buildings		252.2		127.0		125.2
Equipment		391.0		209.1		181.9
Leasehold Improvements		298.5		180.5		118.0
Buildings Leased under Capital Leases		83.9		46.3		37.6
Total Buildings and Equipment	$	1,058.2	$	563.7	$	494.5

The charge for depreciation, which includes depreciation of assets recorded under capital leases, amounted to $89.2 million in 2011, $93.5 million in 2010, and $95.7 million in 2009.

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Buildings and Equipment (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Property, Plant and Equipment [Line Items]
ORIGINAL COST	$ 1,058.2
ACCUMULATED DEPRECIATION	563.7
NET BOOK VALUE	494.5	504.5
Land Improvements
Property, Plant and Equipment [Line Items]
ORIGINAL COST	32.6
ACCUMULATED DEPRECIATION	0.8
NET BOOK VALUE	31.8
Building
Property, Plant and Equipment [Line Items]
ORIGINAL COST	252.2
ACCUMULATED DEPRECIATION	127.0
NET BOOK VALUE	125.2
Equipment
Property, Plant and Equipment [Line Items]
ORIGINAL COST	391.0
ACCUMULATED DEPRECIATION	209.1
NET BOOK VALUE	181.9
Leasehold Improvements
Property, Plant and Equipment [Line Items]
ORIGINAL COST	298.5
ACCUMULATED DEPRECIATION	180.5
NET BOOK VALUE	118.0
Buildings Leased under Capital Leases
Property, Plant and Equipment [Line Items]
ORIGINAL COST	83.9
ACCUMULATED DEPRECIATION	46.3
NET BOOK VALUE	$ 37.6

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Future Minimum Lease Payments to be Received (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011
Schedule of Capital Lease Obligations [Line Items]
2012	$ 33.9
2013	28.9
2014	25.1
2015	21.4
2016	$ 15.6

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Loans and Leases - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other U.S. loans and non-U.S. loans, short duration advances	$ 1,600,000,000	$ 1,400,000,000
Demand deposits	191,600,000	76,600,000
Loans held for sale	9,300,000	2,200,000
Unfunded loan commitments and standby letters of credit	9,700,000	16,300,000
Interest income that would have been recorded on nonperforming loans in accordance with their original terms	15,400,000	16,000,000	8,000,000
AVERAGE RECORDED INVESTMENT	260,400,000	253,800,000
TOTAL LOANS AND LEASES	29,063,900,000	28,132,000,000
Nonperforming Financing Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
TOTAL LOANS AND LEASES	72,200,000	33,400,000
Performing Financing Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
TOTAL LOANS AND LEASES	$ 41,100,000	$ 22,900,000

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Components of Net Interest Income (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Interest Income
Loans and Leases	$ 938.7	$ 932.6	$ 942.2
Securities - Taxable	223.6	186.0	208.4
- Non-Taxable	25.0	29.5	33.5
Interest-Bearing Deposits with Banks	192.8	134.6	209.6
Federal Reserve Deposits and Other	28.5	14.0	12.3
Total Interest Income	1,408.6	1,296.7	1,406.0
Interest Expense
Deposits	230.0	201.0	207.0
Federal Funds Purchased	1.9	4.8	5.7
Securities Sold under Agreements to Repurchase	0.7	1.0	1.1
Other Borrowings	5.5	5.4	4.2
Senior Notes	64.4	48.6	44.0
Long-Term Debt	94.6	114.8	139.9
Floating Rate Capital Debt	2.4	2.4	4.3
Total Interest Expense	399.5	378.0	406.2
Net Interest Income	$ 1,009.1	$ 918.7	$ 999.8

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Deferred Tax Liabilities and Assets (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Deferred Tax Liabilities:
Lease Financing	$ 398.2	$ 382.4	$ 404.6
Software Development	254.9	197.2	180.8
Accumulated Depreciation	48.6	40.7	16.1
Compensation and Benefits	7.1	23.3	9.7
State Taxes, net	52.4	41.7	34.2
Other Liabilities	137.6	41.1	37.1
Gross Deferred Tax Liabilities	898.8	726.4	682.5
Deferred Tax Assets:
Allowance for Credit Losses	114.5	124.7	118.5
Visa Indemnification		8.1	19.7
Other Assets	150.0	51.3	74.1
Gross Deferred Tax Assets	264.5	184.1	212.3
Valuation Reserve
Deferred Tax Assets, net of Valuation Reserve	264.5	184.1	212.3
Net Deferred Tax Liabilities	$ 634.3	$ 542.3	$ 470.2

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Off-Balance Sheet Financial Instruments - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Other Off Balance Sheet Financial Instruments [Line Items]
Minimum collateral maintained against fair value of client securities loaned plus accrued interest	100.00%
Securities loaned and subject to indemnification	$ 74,400	$ 74,900
Estimated credit exposure from clearing activities	$ 80	$ 68

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Postretirement Health Care Estimated Future Benefit Payments (Detail) (Other Postretirement Benefit Plans, Defined Benefit, USD $) In Millions, unless otherwise specified	Dec. 31, 2011
Defined Benefit Postretirement Health Coverage
Schedule of Other Postretirement Benefits Expected Benefit Payments[Line Items]
TOTAL POSTRETIREMENT MEDICAL BENEFITS - 2012	$ 3.7
TOTAL POSTRETIREMENT MEDICAL BENEFITS - 2013	4.2
TOTAL POSTRETIREMENT MEDICAL BENEFITS - 2014	4.5
TOTAL POSTRETIREMENT MEDICAL BENEFITS - 2015	4.6
TOTAL POSTRETIREMENT MEDICAL BENEFITS - 2016	4.7
TOTAL POSTRETIREMENT MEDICAL BENEFITS 2017-2021	22.4
Medicare Part D Subsidy
Schedule of Other Postretirement Benefits Expected Benefit Payments[Line Items]
EXPECTED PRESCRIPTION DRUG SUBSIDY AMOUNT - 2012	(0.6)
EXPECTED PRESCRIPTION DRUG SUBSIDY AMOUNT - 2013	(0.7)
EXPECTED PRESCRIPTION DRUG SUBSIDY AMOUNT - 2014	(0.8)
EXPECTED PRESCRIPTION DRUG SUBSIDY AMOUNT - 2015	(0.9)
EXPECTED PRESCRIPTION DRUG SUBSIDY AMOUNT - 2016	(1.0)
EXPECTED PRESCRIPTION DRUG SUBSIDY AMOUNT - 2017-2021	$ (5.0)

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Components of Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)	$ (305.3)
PERIOD CHANGE TAX EFFECT	5.2	(60.0)	(64.7)
ENDING BALANCE (NET OF TAX)	(345.6)	(305.3)
Year 2011
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)	(305.3)
PERIOD CHANGE BEFORE TAX AMOUNT	(45.5)
PERIOD CHANGE TAX EFFECT	5.2
ENDING BALANCE (NET OF TAX)	(345.6)
Year 2011 | Noncredit-Related Unrealized Losses on Securities OTTI
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)	(21.2)
PERIOD CHANGE BEFORE TAX AMOUNT	10.2
PERIOD CHANGE TAX EFFECT	(3.6)
ENDING BALANCE (NET OF TAX)	(14.6)
Year 2011 | Other Unrealized Gains (Losses) on Securities Available for Sale, net
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)	7.7
PERIOD CHANGE BEFORE TAX AMOUNT	61.6
PERIOD CHANGE TAX EFFECT	(23.4)
ENDING BALANCE (NET OF TAX)	45.9
Year 2011 | Reclassification Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
PERIOD CHANGE BEFORE TAX AMOUNT	13.5
PERIOD CHANGE TAX EFFECT	(5.0)
ENDING BALANCE (NET OF TAX)	8.5
Year 2011 | Net Unrealized Gains (Losses) on Securities Available for Sale
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)	(13.5)
PERIOD CHANGE BEFORE TAX AMOUNT	85.3
PERIOD CHANGE TAX EFFECT	(32.0)
ENDING BALANCE (NET OF TAX)	39.8
Year 2011 | Unrealized Gains (Losses) on Cash Flow Hedge Designations
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)	11.4
PERIOD CHANGE BEFORE TAX AMOUNT	(23.6)
PERIOD CHANGE TAX EFFECT	8.8
ENDING BALANCE (NET OF TAX)	(3.4)
Year 2011 | Reclassification Adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
PERIOD CHANGE BEFORE TAX AMOUNT	(5.6)
PERIOD CHANGE TAX EFFECT	2.0
ENDING BALANCE (NET OF TAX)	(3.6)
Year 2011 | Net Unrealized Gains (Losses) on Cash Flow Hedge Designations
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)	11.4
PERIOD CHANGE BEFORE TAX AMOUNT	(29.2)
PERIOD CHANGE TAX EFFECT	10.8
ENDING BALANCE (NET OF TAX)	(7.0)
Year 2011 | Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)	(7.0)
PERIOD CHANGE BEFORE TAX AMOUNT	18.7
PERIOD CHANGE TAX EFFECT	(21.2)
ENDING BALANCE (NET OF TAX)	(9.5)
Year 2011 | Net Actuarial (Loss) Gain
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)	(299.5)
PERIOD CHANGE BEFORE TAX AMOUNT	(158.2)
PERIOD CHANGE TAX EFFECT	61.3
ENDING BALANCE (NET OF TAX)	(396.4)
Year 2011 | Prior Service (Cost) Benefit
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)	3.3
PERIOD CHANGE BEFORE TAX AMOUNT	7.7
PERIOD CHANGE TAX EFFECT	(2.9)
ENDING BALANCE (NET OF TAX)	8.1
Year 2011 | Pension and Other Postretirement Benefit Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
PERIOD CHANGE BEFORE TAX AMOUNT	30.2
PERIOD CHANGE TAX EFFECT	(10.8)
ENDING BALANCE (NET OF TAX)	19.4
Year 2011 | Total Pension and Other Postretirement Benefit Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)	(296.2)
PERIOD CHANGE BEFORE TAX AMOUNT	(120.3)
PERIOD CHANGE TAX EFFECT	47.6
ENDING BALANCE (NET OF TAX)	(368.9)
Year 2010
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)		(361.6)
PERIOD CHANGE BEFORE TAX AMOUNT		116.3
PERIOD CHANGE TAX EFFECT		(60.0)
ENDING BALANCE (NET OF TAX)		(305.3)
Year 2010 | Noncredit-Related Unrealized Losses on Securities OTTI
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)		(42.0)
PERIOD CHANGE BEFORE TAX AMOUNT		33.0
PERIOD CHANGE TAX EFFECT		(12.2)
ENDING BALANCE (NET OF TAX)		(21.2)
Year 2010 | Other Unrealized Gains (Losses) on Securities Available for Sale, net
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)		0.3
PERIOD CHANGE BEFORE TAX AMOUNT		(8.8)
PERIOD CHANGE TAX EFFECT		3.4
ENDING BALANCE (NET OF TAX)		(5.1)
Year 2010 | Reclassification Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
PERIOD CHANGE BEFORE TAX AMOUNT		20.2
PERIOD CHANGE TAX EFFECT		(7.4)
ENDING BALANCE (NET OF TAX)		12.8
Year 2010 | Net Unrealized Gains (Losses) on Securities Available for Sale
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)		(41.7)
PERIOD CHANGE BEFORE TAX AMOUNT		44.4
PERIOD CHANGE TAX EFFECT		(16.2)
ENDING BALANCE (NET OF TAX)		(13.5)
Year 2010 | Unrealized Gains (Losses) on Cash Flow Hedge Designations
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)		(26.2)
PERIOD CHANGE BEFORE TAX AMOUNT		46.7
PERIOD CHANGE TAX EFFECT		(17.1)
ENDING BALANCE (NET OF TAX)		3.4
Year 2010 | Reclassification Adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
PERIOD CHANGE BEFORE TAX AMOUNT		12.6
PERIOD CHANGE TAX EFFECT		(4.6)
ENDING BALANCE (NET OF TAX)		8.0
Year 2010 | Net Unrealized Gains (Losses) on Cash Flow Hedge Designations
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)		(26.2)
PERIOD CHANGE BEFORE TAX AMOUNT		59.3
PERIOD CHANGE TAX EFFECT		(21.7)
ENDING BALANCE (NET OF TAX)		11.4
Year 2010 | Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)		11.3
PERIOD CHANGE BEFORE TAX AMOUNT		4.0
PERIOD CHANGE TAX EFFECT		(22.3)
ENDING BALANCE (NET OF TAX)		(7.0)
Year 2010 | Net Actuarial (Loss) Gain
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)		(310.5)
PERIOD CHANGE BEFORE TAX AMOUNT		(16.4)
PERIOD CHANGE TAX EFFECT		9.3
ENDING BALANCE (NET OF TAX)		(317.6)
Year 2010 | Prior Service (Cost) Benefit
Accumulated Other Comprehensive Income (Loss) [Line Items]
ENDING BALANCE (NET OF TAX)		5.5	5.5
Year 2010 | Pension and Other Postretirement Benefit Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
PERIOD CHANGE BEFORE TAX AMOUNT		25.0
PERIOD CHANGE TAX EFFECT		(9.1)
ENDING BALANCE (NET OF TAX)		15.9
Year 2010 | Total Pension and Other Postretirement Benefit Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)		(305.0)
PERIOD CHANGE BEFORE TAX AMOUNT		8.6
PERIOD CHANGE TAX EFFECT		0.2
ENDING BALANCE (NET OF TAX)		(296.2)
Year 2009
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)			(494.9)
PERIOD CHANGE BEFORE TAX AMOUNT			198.0
PERIOD CHANGE TAX EFFECT			(64.7)
ENDING BALANCE (NET OF TAX)			(361.6)
Year 2009 | Noncredit-Related Unrealized Losses on Securities OTTI
Accumulated Other Comprehensive Income (Loss) [Line Items]
PERIOD CHANGE BEFORE TAX AMOUNT			(66.4)
PERIOD CHANGE TAX EFFECT			24.4
ENDING BALANCE (NET OF TAX)			(42.0)
Year 2009 | Other Unrealized Gains (Losses) on Securities Available for Sale, net
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)			(212.9)
PERIOD CHANGE BEFORE TAX AMOUNT			374.7
PERIOD CHANGE TAX EFFECT			(137.5)
ENDING BALANCE (NET OF TAX)			24.3
Year 2009 | Reclassification Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
PERIOD CHANGE BEFORE TAX AMOUNT			(22.9)
PERIOD CHANGE TAX EFFECT			8.4
ENDING BALANCE (NET OF TAX)			(14.5)
Year 2009 | Net Unrealized Gains (Losses) on Securities Available for Sale
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)			(212.9)
PERIOD CHANGE BEFORE TAX AMOUNT			270.4
PERIOD CHANGE TAX EFFECT			(99.2)
ENDING BALANCE (NET OF TAX)			(41.7)
Year 2009 | Unrealized Gains (Losses) on Cash Flow Hedge Designations
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)			(20.7)
PERIOD CHANGE BEFORE TAX AMOUNT			8.2
PERIOD CHANGE TAX EFFECT			(3.0)
ENDING BALANCE (NET OF TAX)			(15.5)
Year 2009 | Reclassification Adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
PERIOD CHANGE BEFORE TAX AMOUNT			(16.9)
PERIOD CHANGE TAX EFFECT			6.2
ENDING BALANCE (NET OF TAX)			(10.7)
Year 2009 | Net Unrealized Gains (Losses) on Cash Flow Hedge Designations
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)			(20.7)
PERIOD CHANGE BEFORE TAX AMOUNT			(8.7)
PERIOD CHANGE TAX EFFECT			3.2
ENDING BALANCE (NET OF TAX)			(26.2)
Year 2009 | Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)			12.8
PERIOD CHANGE BEFORE TAX AMOUNT			(38.1)
PERIOD CHANGE TAX EFFECT			36.6
ENDING BALANCE (NET OF TAX)			11.3
Year 2009 | Net Actuarial (Loss) Gain
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)			(266.5)
PERIOD CHANGE BEFORE TAX AMOUNT			(64.0)
PERIOD CHANGE TAX EFFECT			8.8
ENDING BALANCE (NET OF TAX)			(321.7)
Year 2009 | Prior Service (Cost) Benefit
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)			(6.4)
PERIOD CHANGE BEFORE TAX AMOUNT			17.6
PERIOD CHANGE TAX EFFECT			(6.4)
ENDING BALANCE (NET OF TAX)			4.8
Year 2009 | Pension and Other Postretirement Benefit Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
PERIOD CHANGE BEFORE TAX AMOUNT			19.4
PERIOD CHANGE TAX EFFECT			(7.2)
ENDING BALANCE (NET OF TAX)			12.2
Year 2009 | Total Pension and Other Postretirement Benefit Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)			(274.1)
PERIOD CHANGE BEFORE TAX AMOUNT			(25.6)
PERIOD CHANGE TAX EFFECT			(5.3)
ENDING BALANCE (NET OF TAX)			(305.0)
Year 2009 | Cumulative Effect of Applying FSP FAS 115-2 (ASC 320-10)
Accumulated Other Comprehensive Income (Loss) [Line Items]
PERIOD CHANGE BEFORE TAX AMOUNT			(15.0)
PERIOD CHANGE TAX EFFECT			5.5
ENDING BALANCE (NET OF TAX)			(9.5)
Year 2009 | Transition Obligation
Accumulated Other Comprehensive Income (Loss) [Line Items]
BEGINNING BALANCE (NET OF TAX)			(1.2)
PERIOD CHANGE BEFORE TAX AMOUNT			1.4
PERIOD CHANGE TAX EFFECT			(0.5)
ENDING BALANCE (NET OF TAX)			$ (0.3)

XML

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2011	Feb. 17, 2012	Jun. 30, 2011
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Trading Symbol	NTRS
Entity Registrant Name	NORTHERN TRUST CORP
Entity Central Index Key	0000073124
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		241,114,976
Entity Public Float			$ 10,768,957,505

XML

Restructuring, Acquisition and Integration Related Charges - Additional Information (Detail) (Restructuring Acquisition and Integration Charges, USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011
Restructuring Acquisition and Integration Charges
Restructuring Acquisition and Integration Charges [Line Items]
Restructuring, acquisition and integration charges	$ 91.6
Restructuring, acquisition and integration charges net of tax	$ 59.8

XML

Lease Commitments

12 Months Ended

Dec. 31, 2011

Lease Commitments

Note 10 – Lease Commitments

At December 31, 2011, Northern Trust was obligated under a number of non-cancelable operating leases for buildings and equipment. Certain leases contain rent escalation clauses based on market indices or increases in real estate taxes and other operating expenses and renewal option clauses calling for increased rentals. There are no restrictions imposed by any lease agreement regarding the payment of dividends, debt financing or Northern Trust entering into further lease agreements. Minimum annual lease commitments as of December 31, 2011 for all non-cancelable operating leases with a term of 1 year or more are as follows:

(In Millions)	FUTURE MINIMUM LEASE PAYMENTS
2012	$	86.9
2013		85.8
2014		72.1
2015		67.3
2016		53.3
Later Years		380.2
Total Minimum Lease Payments	$	745.6

Operating lease rental expense, net of rental income, is recorded in occupancy expense and amounted to $84.2 million in 2011, $68.1 million in 2010, and $70.2 million in 2009. Net rental expense in 2011 includes $6.4 million of restructuring, acquisition and integration related charges attributable to reductions in office space.

One of the buildings and related land utilized for Chicago operations has been leased under an agreement that qualifies as a capital lease. The original long-term financing for the property was provided by the Corporation and the Bank. In the event of sale or refinancing, the Bank would anticipate receiving full repayment of any outstanding loans plus 42% of any proceeds in excess of the original project costs.

The following table reflects the future minimum lease payments required under capital leases, net of any payments received on the long-term financing, and the present value of net capital lease obligations at December 31, 2011.

(In Millions)	FUTURE MINIMUM LEASE PAYMENTS, NET
2012	$	7.9
2013		8.1
2014		8.4
2015		8.2
2016		8.0
Later Years		23.6
Total Minimum Lease Payments, net		64.2
Less: Amount Representing Interest		19.3
Net Present Value under Capital Lease Obligations	$	44.9

XML

Net Investment Hedge Gains and Losses Recognized in AOCI (Detail) (NET INVESTMENT HEDGES, USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Derivative [Line Items]
Hedging Instrument Gain/(Loss) Recognized in AOCI (Before Tax)	$ 25.7	$ 60.9
Foreign Exchange Contracts
Derivative [Line Items]
Hedging Instrument Gain/(Loss) Recognized in AOCI (Before Tax)	25.2	40.6
Sterling Denominated Subordinated Debt
Derivative [Line Items]
Hedging Instrument Gain/(Loss) Recognized in AOCI (Before Tax)	0.5	9.8
Sterling Denominated Senior Debt
Derivative [Line Items]
Hedging Instrument Gain/(Loss) Recognized in AOCI (Before Tax)	$ 0	$ 10.5

XML

Reconciliation of Amortized Cost to Fair Values of Securities Held to Maturity (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Schedule of Held-to-maturity Securities [Line Items]
Held to Maturity (Fair value of $817.1 and $941.8)	$ 799.2	$ 922.2
GROSS UNREALIZED GAINS	29.0	30.8
GROSS UNREALIZED LOSSES	11.1	11.2
FAIR VALUE	817.1	941.8
Obligations of States and Political Subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Held to Maturity (Fair value of $817.1 and $941.8)	529.4	635.0
GROSS UNREALIZED GAINS	24.6	26.2
GROSS UNREALIZED LOSSES	0.1	0.4
FAIR VALUE	553.9	660.8
Government Sponsored Agency
Schedule of Held-to-maturity Securities [Line Items]
Held to Maturity (Fair value of $817.1 and $941.8)	156.8	169.3
GROSS UNREALIZED GAINS	4.3	4.6
GROSS UNREALIZED LOSSES	0.1	0.2
FAIR VALUE	161.0	173.7
Others
Schedule of Held-to-maturity Securities [Line Items]
Held to Maturity (Fair value of $817.1 and $941.8)	113.0	117.9
GROSS UNREALIZED GAINS	0.1
GROSS UNREALIZED LOSSES	10.9	10.6
FAIR VALUE	$ 102.2	$ 107.3

XML

Condensed Balance Sheet (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
ASSETS
Cash on Deposit with Subsidiary Bank	$ 4,315.3	$ 2,818.0	$ 2,491.8	$ 2,648.2
Securities	30,999.7	20,830.9
Buildings and Equipment	494.5	504.5
Other Assets	4,068.5	4,339.9
Total Assets	100,223.7	83,843.9	82,141.5
LIABILITIES
Long-Term Debt	2,133.3	2,729.3
Floating Rate Capital Debt	276.9	276.9
Other Liabilities	2,946.4	2,921.8
Total Liabilities	93,106.4	77,013.6
STOCKHOLDERS' EQUITY
Common Stock	408.6	408.6
Additional Paid-in Capital	977.5	920.0
Retained Earnings	6,302.3	5,972.1
Accumulated Other Comprehensive Loss	(345.6)	(305.3)
Treasury Stock	(225.5)	(165.1)
Total Stockholders' Equity	7,117.3	6,830.3	6,312.1
Total Liabilities and Stockholders' Equity	100,223.7	83,843.9
Parent Company
ASSETS
Cash on Deposit with Subsidiary Bank	6.5	6.8	6.5	22.5
Time Deposits with Subsidiary Banks	1,269.2	1,561.2
Securities	97.1	118.2
Buildings and Equipment	3.4	3.4
Other Assets	373.3	339.5
Total Assets	9,832.7	9,295.4
LIABILITIES
Long-Term Debt	2,126.7	1,896.1
Floating Rate Capital Debt	276.9	276.9
Other Liabilities	311.8	292.1
Total Liabilities	2,715.4	2,465.1
STOCKHOLDERS' EQUITY
Common Stock	408.6	408.6
Additional Paid-in Capital	977.5	920.0
Retained Earnings	6,302.3	5,972.1
Accumulated Other Comprehensive Loss	(345.6)	(305.3)
Treasury Stock	(225.5)	(165.1)
Total Stockholders' Equity	7,117.3	6,830.3
Total Liabilities and Stockholders' Equity	9,832.7	9,295.4
Parent Company | Banks Industry
ASSETS
Advances to Wholly-Owned Subsidiaries	1,035.0	285.0
Investments in Wholly-Owned Subsidiaries	6,890.6	6,855.1
Parent Company | Nonbank Subsidiaries
ASSETS
Advances to Wholly-Owned Subsidiaries	5.0	5.0
Investments in Wholly-Owned Subsidiaries	$ 152.6	$ 121.2

XML

Amounts Outstanding for Loans and Leases by Segment and Class (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Accounts, Notes, Loans and Financing Receivable [Line Items]
Residential real estate	$ 10,700.0	$ 10,900.0
Commercial Real Estate	2,981.7	3,242.4
Lease Financing, net	978.8	1,063.7
Total Loans and Leases	29,063.9	28,132.0
Allowance for Credit Losses Assigned to Loans and Leases	(294.8)	(319.6)	(309.2)
Net Loans and Leases	28,769.1	27,812.4
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial and Institutional	6,918.7	5,914.5
Commercial Real Estate	2,981.7	3,242.4
Lease Financing, net	978.8	1,063.7
Non-U.S.	1,057.5	1,046.2
Other	417.6	346.6
Total Loans and Leases	12,354.3	11,613.4
Allowance for Credit Losses Assigned to Loans and Leases	(178.6)	(220.7)	(222.9)
Personal
Accounts, Notes, Loans and Financing Receivable [Line Items]
Residential real estate	10,708.9	10,854.9
Private Client	5,651.4	5,423.7
Other	349.3	240.0
Total Loans and Leases	16,709.6	16,518.6
Allowance for Credit Losses Assigned to Loans and Leases	$ (116.2)	$ (98.9)	$ (86.3)

XML

CONSOLIDATED STATEMENT OF INCOME (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Noninterest Income
Trust, Investment and Other Servicing Fees	$ 2,169.5		$ 2,081.9		$ 2,083.8
Foreign Exchange Trading Income	324.5		382.2		445.7
Treasury Management Fees	72.1		78.1		81.8
Security Commissions and Trading Income	60.5		60.9		62.4
Other Operating Income	158.1		146.3		136.8
Investment Security Gains (Losses), net	(23.9)	[1]	(20.4)	[1]	(23.4)	[1]
Total Noninterest Income	2,760.8		2,729.0		2,787.1
Net Interest Income
Interest Income	1,408.6		1,296.7		1,406.0
Interest Expense	399.5		378.0		406.2
Net Interest Income	1,009.1		918.7		999.8
Provision for Credit Losses	55.0		160.0		215.0
Net Interest Income after Provision for Credit Losses	954.1		758.7		784.8
Noninterest Expense
Compensation	1,267.2		1,108.0		1,099.7
Employee Benefits	258.2		237.6		242.1
Outside Services	552.8		460.4		424.5
Equipment and Software	328.1		287.1		261.1
Occupancy	180.9		167.8		170.8
Visa Indemnification Benefits	(23.1)		(33.0)		(17.8)
Other Operating Expense	267.1		270.0		136.3
Total Noninterest Expense	2,831.2		2,497.9		2,316.7
Income before Income Taxes	883.7		989.8		1,255.2
Provision for Income Taxes	280.1		320.3		391.0
Net Income	603.6		669.5		864.2
Net Income Applicable to Common Stock	$ 603.6		$ 669.5		$ 753.1
PER COMMON SHARE
Net Income - Basic	$ 2.47		$ 2.74		$ 3.18
Net Income - Diluted	$ 2.47		$ 2.74		$ 3.16
Average Number of Common Shares Outstanding - Basic	241,401,310		242,028,776		235,511,879
Average Number of Common Shares Outstanding - Diluted	241,811,384		242,502,531		236,416,029

[1] Changes in Other-Than-Temporary-Impairment (OTTI) Losses (1.1 ) $ (.8 ) $ (93.4 ) Noncredit-related OTTI Losses Recorded in (Reclassified from) OCI (22.2 ) (20.4 ) 66.7 Other Security Gains (Losses), net (.6 ) .8 3.3 Investment Security Gains (Losses), net (23.9 ) $ (20.4 ) $ (23.4 )

XML

Securities

12 Months Ended

Dec. 31, 2011

Securities

Note 4 – Securities

Securities Available for Sale. The following tables summarize the amortized cost, fair values, and remaining maturities of securities available for sale.

RECONCILIATION OF AMORTIZED COST TO FAIR VALUES OF SECURITIES AVAILABLE FOR SALE	DECEMBER 31, 2011
(In Millions)	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES		FAIR VALUE
U.S. Government	$	3,965.9	$	63.5	$	—	$	4,029.4
Obligations of States and Political Subdivisions		14.9		.9		—		15.8
Government Sponsored Agency		16,702.6		86.1		17.3		16,771.4
Corporate Debt		2,677.7		4.7		5.7		2,676.7
Non-U.S. Government Debt		173.7		—		—		173.7
Residential Mortgage-Backed		196.1		—		32.3		163.8
Other Asset-Backed		1,606.8		1.3		3.3		1,604.8
Certificates of Deposit		2,418.2		.2		.3		2,418.1
Auction Rate		186.5		4.3		12.5		178.3
Other		2,150.2		12.8		2.5		2,160.5
Total	$	30,092.6	$	173.8	$	73.9	$	30,192.5
	DECEMBER 31, 2010
(In Millions)	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES		FAIR VALUE
U.S. Government	$	667.2	$	1.0	$	9.8	$	658.4
Obligations of States and Political Subdivisions		35.4		.9		–		36.3
Government Sponsored Agency		11,937.0		47.0		13.3		11,970.7
Corporate Debt		2,547.7		7.8		1.5		2,554.0
Non-U.S. Government Debt		440.6		–		–		440.6
Residential Mortgage-Backed		308.0		.9		54.3		254.6
Other Asset-Backed		1,606.5		1.5		2.3		1,605.7
Certificates of Deposit		1,402.5		–		–		1,402.5
Auction Rate		357.0		14.2		3.4		367.8
Other		610.8		4.2		3.7		611.3
Total	$	19,912.7	$	77.5	$	88.3	$	19,901.9

REMAINING MATURITY OF SECURITIES AVAILABLE FOR SALE	DECEMBER 31, 2011
(In Millions)	AMORTIZED COST		FAIR VALUE
Due in One Year or Less	$	9,468.8	$	9,469.6
Due After One Year Through Five Years		18,464.6		18,555.1
Due After Five Years Through Ten Years		1,326.7		1,333.7
Due After Ten Years		832.5		834.1
Total	$	30,092.6	$	30,192.5

Mortgage-backed and asset-backed securities are included in the above table taking into account anticipated future prepayments.

Securities Held to Maturity. The following tables summarize the amortized cost, fair values and remaining maturities of securities held to maturity.

RECONCILIATION OF AMORTIZED COST TO FAIR VALUES OF SECURITIES HELD TO MATURITY	DECEMBER 31, 2011
(In Millions)	AMORTIZED COST		GROSSUNREALIZED GAINS		GROSS UNREALIZED LOSSES		FAIR VALUE
Obligations of States and Political Subdivisions	$	529.4	$	24.6	$	.1	$	553.9
Government Sponsored Agency		156.8		4.3		.1		161.0
Other		113.0		.1		10.9		102.2
Total	$	799.2	$	29.0	$	11.1	$	817.1
	DECEMBER 31, 2010
(In Millions)	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES		FAIR VALUE
Obligations of States and Political Subdivisions	$	635.0	$	26.2	$	.4	$	660.8
Government Sponsored Agency		169.3		4.6		.2		173.7
Other		117.9		–		10.6		107.3
Total	$	922.2	$	30.8	$	11.2	$	941.8

REMAINING MATURITY OF SECURITIES HELD TO MATURITY	DECEMBER 31, 2011
(In Millions)	AMORTIZED COST		FAIR VALUE
Due in One Year or Less	$	199.5	$	200.9
Due After One Year Through Five Years		355.4		365.5
Due After Five Years Through Ten Years		215.5		226.1
Due After Ten Years		28.8		24.6
Total	$	799.2	$	817.1

Mortgage-backed and asset-backed securities are included in the above table taking into account anticipated future prepayments.

Investment Security Gains and Losses. Net investment security losses totaling $23.9 million, $20.4 million, and $23.4 million were recognized in 2011, 2010, and 2009, respectively, and included OTTI losses of $23.3 million, $21.2 million, and $26.7 million, respectively. There were $.6 million of other realized net security losses in 2011 and $.8 million and $3.3 million of realized net security gains in 2010 and 2009, respectively.

Securities with Unrealized Losses. The following tables provide information regarding securities that have been in a continuous unrealized loss position for less than 12 months, and for 12 months or longer, as of December 31, 2011 and December 31, 2010.

SECURITIES WITH UNREALIZED LOSSES AS OF DECEMBER 31, 2011	LESS THAN 12 MONTHS				12 MONTHS OR LONGER				TOTAL
(In Millions)	FAIR VALUE		UNREALIZED LOSSES		FAIR VALUE		UNREALIZED LOSSES		FAIR VALUE		UNREALIZED LOSSES
Obligations of States and Political Subdivisions	$	2.7	$	.1	$	—	$	—	$	2.7	$	.1
Government Sponsored Agency		5,492.5		14.1		470.1		3.3		5,962.6		17.4
Corporate Debt		1,027.5		4.1		123.6		1.6		1,151.1		5.7
Residential Mortgage-Backed		4.7		.9		158.8		31.4		163.5		32.3
Other Asset-Backed		824.6		2.3		205.7		1.0		1,030.3		3.3
Certificates of Deposit		1,019.9		.3		—		—		1,019.9		.3
Auction Rate		61.0		7.3		52.6		5.2		113.6		12.5
Other		634.9		4.3		144.9		9.1		779.8		13.4
Total	$	9,067.8	$	33.4	$	1,155.7	$	51.6	$	10,223.5	$	85.0

SECURITIES WITH UNREALIZED LOSSES AS OF DECEMBER 31, 2010	LESS THAN 12 MONTHS				12 MONTHS OR LONGER				TOTAL
(In Millions)	FAIR VALUE		UNREALIZED LOSSES		FAIR VALUE		UNREALIZED LOSSES		FAIR VALUE		UNREALIZED LOSSES
U.S. Government	$	492.9	$	9.8	$	–	$	–	$	492.9	$	9.8
Obligations of States and Political Subdivisions		3.0		–		3.2		.4		6.2		.4
Government Sponsored Agency		980.7		11.0		328.7		2.5		1,309.4		13.5
Corporate Debt		930.6		1.1		475.2		.4		1,405.8		1.5
Residential Mortgage-Backed		–		–		248.8		54.3		248.8		54.3
Other Asset-Backed		513.5		2.2		27.0		.1		540.5		2.3
Auction Rate		77.6		3.3		.7		.1		78.3		3.4
Other		482.2		6.8		36.5		7.5		518.7		14.3
Total	$	3,480.5	$	34.2	$	1,120.1	$	65.3	$	4,600.6	$	99.5

As of December 31, 2011, 386 securities with a combined fair value of $10.2 billion were in an unrealized loss position, with their unrealized losses totaling $85.0 million. Unrealized losses on residential mortgage-backed securities totaling $32.3 million reflect the impact of credit and liquidity spreads on the valuations of 25 residential mortgage-backed securities, with $31.4 million having been in an unrealized loss position for more than 12 months. Residential mortgage-backed securities rated below double-A at December 31, 2011 represented 84% of the total fair value of residential mortgage-backed securities, were comprised primarily of sub-prime and Alt-A securities, and had a total amortized cost and fair value of $168.6 million and $137.4 million, respectively. Securities classified as “other asset-backed” at December 31, 2011 were predominantly floating rate with average lives less than 5 years, and 100% were rated triple-A.

Unrealized losses of $17.4 million related to government sponsored agency securities are primarily attributable to changes in market rates since their purchase. The majority of the $13.4 million of unrealized losses in securities classified as “other” at December 31, 2011 relate to securities which Northern Trust purchases for compliance with the Community Reinvestment Act (CRA). Unrealized losses on these CRA related other securities are attributable to their purchase at below market rates for the purpose of supporting institutions and programs that benefit low to moderate income communities within Northern Trust’s market area. Unrealized losses of $12.5 million related to auction rate securities primarily reflect reduced market liquidity as a majority of auctions continue to fail preventing holders from liquidating their investments at par. Unrealized losses of $5.7 million within corporate debt securities primarily reflect widened credit spreads; 66% of the corporate debt portfolio is backed by guarantees provided by U.S. and non-U.S. governmental entities. The remaining unrealized losses on Northern Trust’s securities portfolio as of December 31, 2011 are attributable to changes in overall market interest rates, increased credit spreads, or reduced market liquidity. As of December 31, 2011, Northern Trust does not intend to sell any investment in an unrealized loss position and it is not more likely than not that Northern Trust will be required to sell any such investment before recovery of its amortized cost basis, which may be maturity.

Security impairment reviews are conducted quarterly to identify and evaluate securities that have indications of possible OTTI. A determination as to whether a security’s decline in market value is other-than-temporary takes into consideration numerous factors and the relative significance of any single factor can vary by security. Factors Northern Trust considers in determining whether impairment is other-than-temporary include, but are not limited to, the length of time which the security has been impaired; the severity of the impairment; the cause of the impairment and the financial condition and near-term prospects of the issuer; activity in the market of the issuer which may indicate adverse credit conditions; Northern Trust’s intent regarding the sale of the security as of the balance sheet date; and the likelihood that it will not be required to sell the security for a period of time sufficient to allow for the recovery of the security’s amortized cost basis. For each security meeting the requirements of Northern Trust’s internal screening process, an extensive review is conducted to determine if OTTI has occurred.

While all securities are considered, the following describes Northern Trust’s process for identifying credit impairment within non-agency residential mortgage-backed securities, the security type for which Northern Trust has previously recognized OTTI. To determine if an unrealized loss on a non-agency residential mortgage-backed security is other-than-temporary, economic models are used to perform cash flow analyses by developing multiple scenarios in order to create reasonable forecasts of the security’s future performance using available data including servicers’ loan charge off patterns, prepayment speeds, annualized default rates, each security’s current delinquency pipeline, the delinquency pipeline’s growth rate, the roll rate from delinquency to default, loan loss severities and historical performance of like collateral, along with Northern Trust’s outlook for the housing market and the overall economy. If the present value of future cash flows projected as a result of this analysis is less than the current amortized cost of the security, a credit-related OTTI loss is recorded to earnings equal to the difference between the two amounts.

Expected losses on non-agency residential mortgage-backed securities are influenced by a number of factors, including but not limited to, U.S. economic and housing market performance, security credit enhancement level, insurance coverage, year of origination, and type of collateral. The factors used in developing the expected loss on non-agency residential mortgage-backed securities vary by year of origination and type of collateral. As of December 31, 2011, the expected losses on subprime, Alt-A, prime and 2nd lien collateral portfolios were developed using default roll rates, determined primarily by the stage of delinquency of the underlying instrument, that generally assumed ultimate default rates approximating 5% to 30% for current loans; 30% for loans 30 to 60 days delinquent; 80% for loans 60 to 90 days delinquent; 90% for loans delinquent greater than 90 days; and 100% for OREO properties and loans that are in foreclosure.

Information regarding amortized cost, weighted average ultimate default rates, and loss severity rates for the December 31, 2011 non-agency residential mortgage-backed securities portfolio, by security type, are provided in the following table.

	DECEMBER 31, 2011
						LOSS SEVERITY RATES
(In Millions)	AMORTIZED COST		WEIGHTED AVERAGE ULTIMATE DEFAULT RATES			LOW			HIGH			WEIGHTED AVERAGE
Prime	$	24.0		14.7	%		38.6	%		66.0	%		51.1	%
Alt-A		32.9		41.9			54.3			70.6			68.2
Subprime		105.2		51.7			67.1			85.4			73.3
2nd Lien		34.0		33.8			98.7			100.0			99.4
Total Non-Agency Residential Mortgage-Backed Securities	$	196.1		42.2	%		38.6	%		100.0	%		74.2	%

During the year ended December 31, 2011, performance metrics specific to Alt-A and subprime loans remained weak resulting in the recognition of OTTI losses on non-agency residential mortgage-backed securities totaling $23.3 million. OTTI losses totaled $21.2 million for the year ended December 31, 2010 and $26.7 million for the year ended December 31, 2009.

Credit Losses on Debt Securities. The table below provides information regarding total other-than-temporarily impaired securities, including noncredit-related amounts recognized in other comprehensive income and net impairment losses recognized in earnings, for the years ended December 31, 2011, 2010 and 2009.

	DECEMBER 31,
(In Millions)	2011			2010			2009
Changes in Other-Than-Temporary Impairment Losses*	$	(1.1	)	$	(.8	)	$	(93.4	)
Noncredit-related Losses Reclassified from OCI**	$	(22.2	)		(20.4	)		66.7
Net Impairment Losses Recognized in Earnings	$	(23.3	)		(21.2	)		(26.7	)

* For initial other-than-temporary impairments in the respective year, the balance includes the excess of the amortized cost over the fair value of the impaired securities. For subsequent impairments of the same security, the balance includes any additional changes in fair value of the security subsequent to its most recently recorded OTTI.

** For initial other-than-temporary impairments in the respective year, the balance includes the portion of the excess of amortized cost over the fair value of the impaired securities that was recorded in OCI. For subsequent impairments of the same security, the balance includes additional changes in OCI for that security subsequent to its most recently recorded OTTI.

Provided in the table below are the cumulative credit-related losses recognized in earnings on debt securities other-than-temporarily impaired.

	YEAR ENDED DECEMBER 31,
($ In Millions)	2011			2010
Cumulative Credit-Related Losses on Securities Held – Beginning of Year	$	94.2		$	73.0
Plus: Losses on Newly Identified Impairments		1.5			3.3
Additional Losses on Previously Identified Impairments		21.8			17.9
Less: Losses on Securities Sold During the Year		(49.3	)		—
Cumulative Credit-Related Losses on Securities Held – End of Year	$	68.2		$	94.2

The table below provides information regarding debt securities held as of December 31, 2011 and 2010, for which an OTTI loss had been recognized in the years presented or previously.

	DECEMBER 31,
(In Millions)	2011			2010
Fair Value	$	73.6		$	79.9
Amortized Cost Basis		96.8			113.3
Noncredit-related Losses Recognized in OCI		(23.2	)		(33.4	)
Tax Effect		8.6			12.2
Amount Recognized in OCI	$	(14.6	)	$	(21.2	)

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Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value Measurements

Note 3 – Fair Value Measurements

Fair value under GAAP is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Fair Value Hierarchy. The following describes the hierarchy of valuation inputs (Levels 1, 2, and 3) used to measure fair value and the primary valuation methodologies used by Northern Trust for financial instruments measured at fair value on a recurring basis. Observable inputs reflect market data obtained from sources independent of the reporting entity; unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information available. GAAP requires an entity measuring fair value to maximize the use of observable inputs and minimize the use of unobservable inputs and establishes a fair value hierarchy of inputs. Financial instruments are categorized within the hierarchy based on the lowest level input that is significant to their valuation.

Level 1 – Quoted, active market prices for identical assets or liabilities. Northern Trust’s Level 1 assets and liabilities include available for sale investments in U.S. treasury securities and U.S. treasury securities held to fund employee benefit and deferred compensation obligations.

Level 2 – Observable inputs other than Level 1 prices, such as quoted active market prices for similar assets or liabilities, quoted prices for identical or similar assets in inactive markets, and model-derived valuations in which all significant inputs are observable in active markets. Northern Trust’s Level 2 assets include available for sale and trading account securities. Their fair values are determined by external pricing vendors.

Level 2 assets and liabilities also include derivative contracts which are valued using widely accepted income-based models that incorporate inputs readily observable in actively quoted markets and reflect the contractual terms of the contracts. Observable inputs include foreign exchange rates and interest rates for foreign exchange contracts; credit spreads, default probabilities, and recovery rates for credit default swap contracts; interest rates for interest rate swap contracts and forward contracts; and interest rates and volatility inputs for interest rate option contracts. Northern Trust evaluates the impact of counterparty credit risk and its own credit risk on the valuation of its derivative instruments. Factors considered include the likelihood of default by Northern Trust and its counterparties, the remaining maturities of the instruments, net exposures after giving effect to master netting agreements, available collateral, and other credit enhancements in determining the appropriate fair value of derivative instruments. The resulting valuation adjustments have not been considered material. Level 2 other assets represent investments in mutual and collective trust funds held to fund employee benefit and deferred compensation obligations. These investments are valued at the funds’ net asset values based on a market approach.

Level 3 – Valuation techniques in which one or more significant inputs are unobservable in the marketplace. Northern Trust’s Level 3 assets consist of auction rate securities. To estimate their fair value, Northern Trust developed an internal income-based model. The lack of activity in the auction rate security market has resulted in a lack of observable market inputs to incorporate within the model. Therefore, significant inputs to the model include Northern Trust’s own assumptions about future cash flows and appropriate discount rates, both adjusted for credit and liquidity factors. In developing these assumptions, Northern Trust incorporated the contractual terms of the securities, the types of collateral, any credit enhancements available, and relevant market data, where available. Level 3 liabilities include acquisition related contingent purchase considerations and indemnification obligations related to litigation involving Visa Inc. (Visa), discussed in further detail in Note 25 – Contingent Liabilities, and standby letters of credit, discussed in Note 27 – Off-Balance Sheet Financial Instruments. The fair value of contingent purchase consideration liabilities is determined using an income-based (discounted cash flow) model that incorporates Northern Trust’s own assumptions about future cash flows and appropriate discount rates. The fair value of the net estimated liability for Visa related indemnifications is based on a market approach, but requires management to exercise significant judgment given the limited number of market transactions involving identical or comparable liabilities. Northern Trust’s recorded liability for standby letters of credit, reflecting the obligation it has undertaken, is measured as the amount of unamortized fees on these instruments.

Northern Trust believes its valuation methods for its assets and liabilities carried at fair value are appropriate; however, the use of different methodologies or assumptions, particularly as applied to Level 3 assets and liabilities, could have a material effect on the computation of their estimated fair values.

The following presents assets and liabilities measured at fair value on a recurring basis as of December 31, 2011 and 2010, segregated by fair value hierarchy level.

	DECEMBER 31, 2011
(In Millions)	LEVEL  1		LEVEL 2		LEVEL 3		NETTING  *			ASSETS/ LIABILITIES AT FAIR VALUE
Securities
Available for Sale
U.S. Government	$	4,029.4	$	–	$	–	$	–		$	4,029.4
Obligations of States and Political Subdivisions		–		15.8		–		–			15.8
Government Sponsored Agency		–		16,771.4		–		–			16,771.4
Corporate Debt		–		2,676.7		–		–			2,676.7
Non-U.S. Government		–		173.7		–		–			173.7
Residential Mortgage-Backed		–		163.8		–		–			163.8
Other Asset-Backed		–		1,604.8		–		–			1,604.8
Certificates of Deposit		–		2,418.1		–		–			2,418.1
Auction Rate		–		–		178.3		–			178.3
Other		–		2,160.5		–		–			2,160.5
Total		4,029.4		25,984.8		178.3		–			30,192.5
Trading Account		–		8.0		–		–			8.0
Total		4,029.4		25,992.8		178.3		–			30,200.5
Other Assets
Derivatives
Foreign Exchange Contracts		–		3,087.3		–		–			3,087.3
Interest Rate Swaps		–		338.3		–		–			338.3
Credit Default Swaps		–		.7		–		–			.7
Total		–		3,426.3		–		(2,243.7	)		1,182.6
All Other		71.4		35.1		–		–			106.5
Total		71.4		3,461.4		–		(2,243.7	)		1,289.1
Total Assets at Fair Value		4,100.8		29,454.2		178.3		(2,243.7	)		31,489.6
Other Liabilities
Derivatives
Foreign Exchange Contracts		–		2,991.6		–		–			2,991.6
Interest Rate Swaps		–		231.9		–		–			231.9
Credit Default Swaps		–		.1		–		–			.1
Total		–		3,223.6		–		(2,281.0	)		942.6
All Other		–		–		100.6		–			100.6
Total Liabilities at Fair Value	$	–	$	3,223.6	$	100.6	$	(2,281.0	)	$	1,043.2

* Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting agreements exist between Northern Trust and the counterparty. As of December 31, 2011, derivative assets and liabilities shown above also include reductions of $220.1 million and $257.4 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties.

	DECEMBER 31, 2010
(In Millions)	LEVEL 1		LEVEL 2		LEVEL 3		NETTING *			ASSETS/ LIABILITIES AT FAIR VALUE
Securities
Available for Sale
U.S. Government	$	658.4	$	–	$	–	$	–		$	658.4
Obligations of States and Political Subdivisions		–		36.3		–		–			36.3
Government Sponsored Agency		–		11,970.7		–		–			11,970.7
Corporate Debt		–		2,554.0		–		–			2,554.0
Non-U.S. Government		–		440.6		–		–			440.6
Residential Mortgage-Backed		–		254.6		–		–			254.6
Other Asset-Backed		–		1,605.7		–		–			1,605.7
Certificates of Deposit		–		1,402.5		–		–			1,402.5
Auction Rate		–		–		367.8		–			367.8
Other		–		611.3		–		–			611.3
Total		658.4		18,875.7		367.8		–			19,901.9
Trading Account		–		6.8		–		–			6.8
Total		658.4		18,882.5		367.8		–			19,908.7
Other Assets
Derivatives
Foreign Exchange Contracts		–		5,792.8		–		–			5,792.8
Interest Rate Swaps		–		285.8		–		–			285.8
Interest Rate Options		–		.1		–		–			.1
Forward Contracts		–		.5		–		–			.5
Total		–		6,079.2		–		(4,770.9	)		1,308.3
All Other		65.9		37.4		–		–			103.3
Total		65.9		6,116.6		–		(4,770.9	)		1,411.6
Total Assets at Fair Value		724.3		24,999.1		367.8		(4,770.9	)		21,320.3
Other Liabilities
Derivatives
Foreign Exchange Contracts		–		5,781.3		–		–			5,781.3
Interest Rate Swaps		–		163.7		–		–			163.7
Interest Rate Options		–		.1		–		–			.1
Credit Default Swaps		–		2.8		–		–			2.8
Forward Contracts		–		.2		–		–			.2
Total		–		5,948.1		–		(4,106.4	)		1,841.7
All Other		–		–		58.6		–			58.6
Total Liabilities at Fair Value	$	–	$	5,948.1	$	58.6	$	(4,106.4	)	$	1,900.3

* Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting agreements exist between Northern Trust and the counterparty. As of December 31, 2010, derivative assets and liabilities shown above also include reductions of $2,952.7 million and $2,288.2 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties.

The following presents the changes in Level 3 assets for the years ended December 31, 2011 and 2010.

	AUCTION RATE SECURITIES
(In Millions)	2011			2010
Fair Value at January 1	$	367.8		$	427.7
Total Realized and Unrealized
Losses (Gains) Included in Earnings		(10.7	)		(3.7	)
Gains (Losses) Included in Other Comprehensive Income		(19.0	)		(7.2	)
Purchases, Issuances, Sales, and Settlements
Sales		(1.5	)		(.3	)
Settlements		(158.3	)		(48.7	)
Fair Value at December 31	$	178.3		$	367.8

As of December 31, 2011 and 2010, auction rate securities had a net unrealized loss of $8.2 million ($5.1 million net of tax) and a net unrealized gain of $10.8 million ($6.8 million net of tax), respectively. Realized gains of $10.7 million in 2011 include $10.6 million from redemptions by issuers and $.1 million from sales of securities. Realized gains of $3.7 million in 2010 include $3.4 million from redemptions by issuers and $.3 million from sales of securities. Gains on redemptions and sales are included in interest income and investment security gains (losses), net, respectively, within the consolidated statement of income.

The following presents the changes in Level 3 liabilities for the years ended December 31, 2011 and 2010.

	OTHER LIABILITIES
(In Millions)	2011			2010
Fair Value at January 1	$	58.6		$	94.4
Total Realized and Unrealized (Gains) Losses
Included in Earnings		(.6	)		(4.5	)
Included in Other Comprehensive Income		–			–
Purchases, Issuances, Sales, and Settlements
Issuances		68.4			3.4
Settlements		(25.8	)		(34.7	)
Fair Value at December 31		100.6		$	58.6
Unrealized Gains (Losses) Included in Earnings Related to Financial Instruments Held at December 31	$	–		$	–

Balances include contingent purchase considerations and a net estimated liability for Visa related indemnifications (refer to Note 25) and standby letters of credit (refer to Note 27).

All realized and unrealized gains and losses related to Level 3 liabilities are included in other operating income or other operating expense with the exception of those related to the Visa indemnification liability, which have been presented separately in the consolidated statement of income. As of December 31, 2011, the Visa indemnification liability had been eliminated in its entirety.

Carrying values of assets and liabilities that are not measured at fair value on a recurring basis may be adjusted to fair value in periods subsequent to their initial recognition, for example, to record an impairment of an asset. GAAP requires entities to separately disclose these subsequent fair value measurements and to classify them under the fair value hierarchy.

The following provides information regarding those assets measured at fair value on a nonrecurring basis at December 31, 2011 and 2010, segregated by fair value hierarchy level.

(In Millions)	LEVEL  1		LEVEL  2		LEVEL  3		TOTAL FAIR VALUE
December 31, 2011
Loans (1)	$	–	$	–	$	64.3	$	64.3
Other Real Estate Owned (2)		–		–		3.8		3.8
Total Assets at Fair Value	$	–	$	–	$	68.1	$	68.1
December 31, 2010
Loans (1)	$	–	$	–	$	72.4	$	72.4
Other Real Estate Owned (2)		–		–		13.5		13.5
Total Assets at Fair Value	$	–	$	–	$	85.9	$	85.9

(1) Northern Trust provided an additional $11.3 million and $22.5 million of specific allowances to reduce the fair value of these loans during the years ended December 31, 2011 and 2010, respectively.

(2) Northern Trust charged $1.5 million and $4.9 million through other operating expenses during the years ended December 31, 2011 and 2010, respectively, to reduce the fair values of these Other Real Estate Owned (OREO) properties.

The fair values of loan collateral and OREO properties were estimated using a market approach typically supported by third party appraisals, and were subject to adjustments to reflect management’s judgment as to their realizable value.

Fair Value of Financial Instruments. GAAP requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate fair value. It excludes from this requirement nonfinancial assets and liabilities, as well as a wide range of franchise, relationship, and intangible values that add value to Northern Trust. Accordingly, the required fair value disclosures provide only a partial estimate of the fair value of Northern Trust. Financial instruments recorded at fair value on Northern Trust’s consolidated balance sheet are discussed above. The following methods and assumptions were used in estimating the fair values of financial instruments that are not carried at fair value.

Held to Maturity Securities. The fair values of held to maturity securities were modeled by external pricing vendors or, in limited cases, modeled internally, using widely accepted models which are based on an income approach that incorporates current market yield curves and assumptions regarding anticipated prepayments and defaults.

Loans (excluding lease receivables). The fair value of the loan portfolio was estimated using a discounted cash flow methodology based on current market rates offered by Northern Trust as of the date of the consolidated financial statements. The fair values of all loans were adjusted to reflect current assessments of loan collectibility.

Federal Reserve and Federal Home Loan Bank Stock. The fair values of Federal Reserve and Federal Home Loan Bank stock are equal to their carrying values which represent redemption value.

Affordable Housing Investments. Affordable housing investments are valued at cost, which approximates fair value.

Savings Certificates and Other Time Deposits. The fair values of these instruments were estimated using an income approach (discounted cash flow) that incorporates market interest rates offered by Northern Trust.

Senior Notes, Subordinated Debt, and Floating Rate Capital Debt. Fair values were determined using a market approach based on quoted market prices, when available. If quoted market prices were not available, fair values were based on quoted market prices for comparable instruments.

Federal Home Loan Bank Borrowings. The fair values of these instruments were estimated using an income approach (discounted cash flow) that incorporates market interest rates available to Northern Trust.

Loan Commitments. The fair values of loan commitments represent the amount of unamortized fees on these instruments.

Financial Instruments Valued at Carrying Value. Due to their short maturity, the carrying values of certain financial instruments approximated their fair values. These financial instruments include cash and due from banks; federal funds sold and securities purchased under agreements to resell; interest-bearing deposits with banks; federal reserve deposits and other interest-bearing assets; client security settlement receivables; non-U.S. offices interest-bearing deposits; federal funds purchased; securities sold under agreements to repurchase; and other borrowings (includes term federal funds purchased and other short-term borrowings). As required by GAAP, the fair values required to be disclosed for demand, noninterest-bearing, savings, and money market deposits must equal the amounts disclosed in the consolidated balance sheet, even though such deposits are typically priced at a premium in banking industry consolidations.

The following table summarizes the fair values of financial instruments.

	DECEMBER 31
	2011				2010
(In Millions)	BOOK  VALUE		FAIR  VALUE		BOOK VALUE		FAIR VALUE
ASSETS
Cash and Due from Banks	$	4,315.3	$	4,315.3	$	2,818.0	$	2,818.0
Federal Funds Sold and Resell Agreements		121.3		121.3		160.1		160.1
Interest-Bearing Deposits with Banks		16,696.4		16,696.4		15,351.3		15,351.3
Federal Reserve Deposits and Other Interest-Bearing		13,448.6		13,448.6		10,924.6		10,924.6
Securities
Available for Sale		30,192.5		30,192.5		19,901.9		19,901.9
Held to Maturity		799.2		817.1		922.2		941.8
Trading Account		8.0		8.0		6.8		6.8
Loans (excluding Leases)
Held for Investment		27,782.7		27,913.7		26,747.8		26,814.2
Held for Sale		9.3		9.3		2.2		2.2
Client Security Settlement Receivables		778.3		778.3		701.3		701.3
Other Assets
Federal Reserve and Federal Home Loan Bank Stock		172.9		172.9		185.5		185.5
Affordable Housing Investments		290.8		290.8		265.4		265.4
All Other		106.5		106.5		103.3		103.3
LIABILITIES
Deposits
Demand, Noninterest-Bearing, Savings and Money Market		43,751.2		43,751.2		24,810.3		24,810.3
Savings Certificates and Other Time		3,058.3		3,065.5		3,913.0		3,929.7
Non-U.S. Offices Interest-Bearing		35,868.0		35,868.0		35,472.4		35,472.4
Federal Funds Purchased		815.3		815.3		3,691.7		3,691.7
Securities Sold under Agreements to Repurchase		1,198.8		1,198.8		954.4		954.4
Other Borrowings		931.5		931.5		347.7		347.7
Senior Notes		2,126.7		2,197.3		1,896.1		1,936.5
Long Term Debt (excluding Leases)
Subordinated Debt		1,033.4		1,040.0		1,148.7		1,177.2
Federal Home Loan Bank Borrowings		1,055.0		1,082.1		1,532.5		1,613.5
Floating Rate Capital Debt		276.9		211.6		276.9		223.2
Other Liabilities
Financial Guarantees		43.8		43.8		58.6		58.6
Contingent Consideration		56.8		56.8		—		—
Loan Commitments		28.9		28.9		32.4		32.4
DERIVATIVE INSTRUMENTS
Asset/Liability Management
Foreign Exchange Contracts
Assets		25.2		25.2		44.9		44.9
Liabilities		31.8		31.8		51.4		51.4
Interest Rate Swaps
Assets		149.6		149.6		134.6		134.6
Liabilities		47.3		47.3		15.3		15.3
Credit Default Swaps
Assets		.7		.7		–		–
Liabilities		.1		.1		2.8		2.8
Forward Contracts
Assets		–		–		.5		.5
Liabilities		–		–		.2		.2
Client-Related and Trading
Foreign Exchange Contracts
Assets		3,062.1		3,062.1		5,747.9		5,747.9
Liabilities		2,959.8		2,959.8		5,729.9		5,729.9
Interest Rate Swaps
Assets		188.7		188.7		151.2		151.2
Liabilities		184.6		184.6		148.4		148.4
Interest Rate Option
Assets		–		–		.1		.1
Liabilities		–		–		.1		.1

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Postretirement Health Care Net Periodic Postretirement Benefit Expense (Detail) (Other Postretirement Benefit Plans, Defined Benefit, USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Other Postretirement Benefit Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Service Cost	$ 0.4	$ 0.8	$ 1.7
Interest Cost	2.8	2.8	3.7
Amortization
Net Loss	1.6	2.0	0.5
Transition Obligation			0.5
Prior Service Benefit	(5.2)	(5.2)	(0.1)
Net Periodic Pension Expense (Benefit)	$ (0.4)	$ 0.4	$ 6.3

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Accumulated Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2011

Accumulated Other Comprehensive Income (Loss)

Note 15 – Accumulated Other Comprehensive Income (Loss)

The following table summarizes the components of accumulated other comprehensive income (loss) at December 31, 2011, 2010, and 2009, and changes during the years then ended.

	PERIOD CHANGE
(In Millions)	BEGINNING BALANCE (NET OF TAX)			BEFORE TAX AMOUNT			TAX  EFFECT			ENDING BALANCE (NET OF TAX)
DECEMBER 31, 2011
Noncredit-Related Unrealized Losses on Securities OTTI	$	(21.2	)	$	10.2		$	(3.6	)	$	(14.6	)
Other Unrealized Gains (Losses) on Securities Available for Sale, net		7.7			61.6			(23.4	)		45.9
Reclassification Adjustments		–			13.5			(5.0	)		8.5
Net Unrealized Gains (Losses) on Securities Available for Sale		(13.5	)		85.3			(32.0	)		39.8
Unrealized Gains (Losses) on Cash Flow Hedge Designations		11.4			(23.6	)		8.8			(3.4	)
Reclassification Adjustments		–			(5.6	)		2.0			(3.6	)
Net Unrealized Gains (Losses) on Cash Flow Hedge Designations		11.4			(29.2	)		10.8			(7.0	)
Foreign Currency Translation Adjustments		(7.0	)		18.7			(21.2	)		(9.5	)
Pension and Other Postretirement Benefit Adjustments
Net Actuarial (Loss) Gain		(299.5	)		(158.2	)		61.3			(396.4	)
Prior Service (Cost) Benefit		3.3			7.7			(2.9	)		8.1
Reclassification Adjustments		–			30.2			(10.8	)		19.4
Total Pension and Other Postretirement Benefit Adjustments		(296.2	)		(120.3	)		47.6			(368.9	)
Accumulated Other Comprehensive Income (Loss)	$	(305.3	)	$	(45.5	)	$	5.2		$	(345.6	)
DECEMBER 31, 2010
Noncredit-Related Unrealized Losses on Securities OTTI	$	(42.0	)	$	33.0		$	(12.2	)	$	(21.2	)
Other Unrealized Gains (Losses) on Securities Available for Sale, net		.3			(8.8	)		3.4			(5.1	)
Reclassification Adjustments		–			20.2			(7.4	)		12.8
Net Unrealized Gains (Losses) on Securities Available for Sale		(41.7	)		44.4			(16.2	)		(13.5	)
Unrealized Gains (Losses) on Cash Flow Hedge Designations		(26.2	)		46.7			(17.1	)		3.4
Reclassification Adjustments		–			12.6			(4.6	)		8.0
Net Unrealized Gains (Losses) on Cash Flow Hedge Designations		(26.2	)		59.3			(21.7	)		11.4
Foreign Currency Translation Adjustments		11.3			4.0			(22.3	)		(7.0	)
Pension and Other Postretirement Benefit Adjustments
Net Actuarial (Loss) Gain		(310.5	)		(16.4	)		9.3			(317.6	)
Prior Service (Cost) Benefit		5.5			–			–			5.5
Reclassification Adjustments		–			25.0			(9.1	)		15.9
Total Pension and Other Postretirement Benefit Adjustments		(305.0	)		8.6			.2			(296.2	)
Accumulated Other Comprehensive Income (Loss)	$	(361.6	)	$	116.3		$	(60.0	)	$	(305.3	)
DECEMBER 31, 2009
Cumulative Effect of Applying FSP FAS 115-2 (ASC 320-10)	$	–		$	(15.0	)	$	5.5		$	(9.5	)
Noncredit-Related Unrealized Losses on Securities OTTI		–			(66.4	)		24.4			(42.0	)
Other Unrealized Gains (Losses) on Securities Available for Sale, net		(212.9	)		374.7			(137.5	)		24.3
Reclassification Adjustments		–			(22.9	)		8.4			(14.5	)
Net Unrealized Gains (Losses) on Securities Available for Sale		(212.9	)		270.4			(99.2	)		(41.7	)
Unrealized Gains (Losses) on Cash Flow Hedge Designations		(20.7	)		8.2			(3.0	)		(15.5	)
Reclassification Adjustments		–			(16.9	)		6.2			(10.7	)
Net Unrealized Gains (Losses) on Cash Flow Hedge Designations		(20.7	)		(8.7	)		3.2			(26.2	)
Foreign Currency Translation Adjustments		12.8			(38.1	)		36.6			11.3
Pension and Other Postretirement Benefit Adjustments
Net Actuarial (Loss) Gain		(266.5	)		(64.0	)		8.8			(321.7	)
Prior Service (Cost) Benefit		(6.4	)		17.6			(6.4	)		4.8
Transition Obligation		(1.2	)		1.4			(.5	)		(.3	)
Reclassification Adjustments		–			19.4			(7.2	)		12.2
Total Pension and Other Postretirement Benefit Adjustments		(274.1	)		(25.6	)		(5.3	)		(305.0	)
Accumulated Other Comprehensive Income (Loss)	$	(494.9	)	$	198.0		$	(64.7	)	$	(361.6	)

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Goodwill and Other Intangibles

12 Months Ended

Dec. 31, 2011

Goodwill and Other Intangibles

Note 11 – Goodwill and Other Intangibles

Changes in the carrying amount of goodwill by business unit for the years ended December 31, 2011 and 2010 were as follows:

(In Millions)	CORPORATE AND INSTITUTIONAL SERVICES			PERSONAL FINANCIAL SERVICES			TOTAL
Balance at December 31, 2009	$	334.7		$	66.9		$	401.6
Goodwill Acquired		–			4.6			4.6
Other Changes*		(5.2	)		(.1	)		(5.3	)
Balance at December 31, 2010	$	329.5		$	71.4		$	400.9
Goodwill Acquired		131.4			—			131.4
Other Changes*		(.3	)		—			(.3	)
Balance at December 31, 2011	$	460.6		$	71.4		$	532.0

* Includes the effect of foreign exchange rates on non-U.S. dollar denominated goodwill.

Other intangible assets are included in other assets in the consolidated balance sheet. The gross carrying amount and accumulated amortization of other intangible assets subject to amortization as of December 31, 2011 and 2010 were as follows:

OTHER INTANGIBLE ASSETS-SUBJECT TO AMORTIZATION *

	DECEMBER 31
(In Millions)	2011		2010
Gross Carrying Amount	$	251.2	$	164.2
Accumulated Amortization		127.8		111.0
Net Book Value	$	123.4	$	53.2

* Includes the effect of foreign exchange rates on non-U.S. dollar denominated intangible assets.

Other intangible assets consist primarily of the value of acquired client relationships. Amortization expense related to other intangible assets was $16.8 million, $14.8 million, and $16.2 million for the years ended December 31, 2011, 2010, and 2009, respectively. Amortization expense for the years 2012, 2013, 2014, 2015 and 2016 is estimated to be $20.8 million, $20.5 million, $20.4 million, $11.7 million, and $9.1 million, respectively.

In June 2011, Northern Trust completed its acquisition of the fund administration, investment operations outsourcing and custody business of Bank of Ireland Securities Services. The purchase price, which is subject to certain performance-related adjustments over a one year period after the acquisition date, totaled $84.4 million and was comprised of $71.0 million of cash and $13.4 million of contingent consideration. Goodwill and other intangible assets associated with the acquisition totaled $30.0 million and $45.0 million, respectively. The estimated fair value of the contingent purchase consideration at December 31, 2011 was $11.4 million.

In July 2011, Northern Trust completed its acquisition of Omnium LLC, a hedge fund administrator. The purchase price, which is subject to certain performance-related adjustments over a five year period after the acquisition date, totaled $145.1 million and was comprised of $101.6 million of cash and $43.5 million of contingent consideration. Goodwill and other intangible assets associated with the acquisition totaled $101.4 million and $43.9 million, respectively. The estimated fair value of the contingent purchase consideration at December 31, 2011 was $45.4 million.

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Book Values, Ultimate Default Rates, and Loss Severity Rates for Non-Agency Residential Mortgage-Backed Securities Portfolio, by Security Type (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Schedule of Available-for-sale Securities [Line Items]
AMORTIZED COST	$ 30,092.6	$ 19,912.7
Non-Agency RMBS
Schedule of Available-for-sale Securities [Line Items]
AMORTIZED COST	196.1
WEIGHTED AVERAGE ULTIMATE DEFAULT RATES	42.20%
LOSS SEVERITY RATES - WEIGHTED AVERAGE	74.20%
Non-Agency RMBS | Lower Limit
Schedule of Available-for-sale Securities [Line Items]
LOSS SEVERITY RATES	38.60%
Non-Agency RMBS | Upper Limit
Schedule of Available-for-sale Securities [Line Items]
LOSS SEVERITY RATES	100.00%
Non-Agency RMBS | Prime
Schedule of Available-for-sale Securities [Line Items]
AMORTIZED COST	24.0
WEIGHTED AVERAGE ULTIMATE DEFAULT RATES	14.70%
LOSS SEVERITY RATES - WEIGHTED AVERAGE	51.10%
Non-Agency RMBS | Prime | Lower Limit
Schedule of Available-for-sale Securities [Line Items]
LOSS SEVERITY RATES	38.60%
Non-Agency RMBS | Prime | Upper Limit
Schedule of Available-for-sale Securities [Line Items]
LOSS SEVERITY RATES	66.00%
Non-Agency RMBS | Alt-A
Schedule of Available-for-sale Securities [Line Items]
AMORTIZED COST	32.9
WEIGHTED AVERAGE ULTIMATE DEFAULT RATES	41.90%
LOSS SEVERITY RATES - WEIGHTED AVERAGE	68.20%
Non-Agency RMBS | Alt-A | Lower Limit
Schedule of Available-for-sale Securities [Line Items]
LOSS SEVERITY RATES	54.30%
Non-Agency RMBS | Alt-A | Upper Limit
Schedule of Available-for-sale Securities [Line Items]
LOSS SEVERITY RATES	70.60%
Non-Agency RMBS | Subprime
Schedule of Available-for-sale Securities [Line Items]
AMORTIZED COST	105.2
WEIGHTED AVERAGE ULTIMATE DEFAULT RATES	51.70%
LOSS SEVERITY RATES - WEIGHTED AVERAGE	73.30%
Non-Agency RMBS | Subprime | Lower Limit
Schedule of Available-for-sale Securities [Line Items]
LOSS SEVERITY RATES	67.10%
Non-Agency RMBS | Subprime | Upper Limit
Schedule of Available-for-sale Securities [Line Items]
LOSS SEVERITY RATES	85.40%
Non-Agency RMBS | 2nd Lien
Schedule of Available-for-sale Securities [Line Items]
AMORTIZED COST	$ 34.0
WEIGHTED AVERAGE ULTIMATE DEFAULT RATES	33.80%
LOSS SEVERITY RATES - WEIGHTED AVERAGE	99.40%
Non-Agency RMBS | 2nd Lien | Lower Limit
Schedule of Available-for-sale Securities [Line Items]
LOSS SEVERITY RATES	98.70%
Non-Agency RMBS | 2nd Lien | Upper Limit
Schedule of Available-for-sale Securities [Line Items]
LOSS SEVERITY RATES	100.00%

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Allowance for Credit Losses

12 Months Ended

Dec. 31, 2011

Allowance for Credit Losses

Note 7 – Allowance for Credit Losses

The allowance for credit losses, which represents management’s estimate of probable losses related to specific borrower relationships and inherent in the loan and lease portfolios, unfunded commitments, and standby letters of credit, is determined by management through a disciplined credit review process. Northern Trust’s accounting policies related to the estimation of the allowance for credit losses and the charging off of loans, leases and other extensions of credit deemed uncollectible are consistent across both loan and lease segments.

Northern Trust’s Loan Loss Allowance Committee assesses a common set of qualitative factors in establishing the inherent portion of the allowance for credit losses. The risk characteristics underlying these qualitative factors, and management’s assessments as to the relative importance of a qualitative factor, can vary between loan segments and between classes within loan segments. Factors evaluated include those related to external matters, such as economic conditions and changes in collateral value, and those related to internal matters, such as changes in asset quality metrics and loan review activities. Risk characteristics such as portfolio delinquencies, percentage of portfolio on the watch list and on nonperforming status, and average borrower ratings are also assessed in the determination of the inherent allowance.

Loan-to-value levels are considered for collateral-secured loans and leases in both the personal and commercial segments. Borrower debt service coverage is evaluated in the personal segment, and cash flow coverage is analyzed in the commercial segment. Similar risk characteristics by type of exposure are analyzed when determining the allowance for unfunded commitments and standby letters of credit. These qualitative factors, together with historical loss rates, serve as the basis for the allowance for credit losses.

Loans, leases and other extensions of credit deemed uncollectible are charged to the allowance for credit losses. Subsequent recoveries, if any, are credited to the allowance. Determinations as to whether an uncollectible loan is charged-off or a specific allowance is established are based on management’s assessment as to the level of certainty regarding the amount of loss.

Changes in the allowance for credit losses by segment were as follows:

	2011									2010									2009
(In Millions)	COMMERCIAL			PERSONAL			TOTAL			COMMERCIAL			PERSONAL			TOTAL			COMMERCIAL			PERSONAL			TOTAL
Balance at Beginning of Year	$	256.7		$	100.6		$	357.3		$	252.2		$	88.4		$	340.6		$	185.6		$	65.5		$	251.1
Charge-Offs		(56.3	)		(60.0	)		(116.3	)		(76.2	)		(73.9	)		(150.1	)		(53.1	)		(79.2	)		(132.3	)
Recoveries		21.5			11.4			32.9			3.6			3.3			6.9			3.1			3.4			6.5
Net Charge-Offs		(34.8	)		(48.6	)		(83.4	)		(72.6	)		(70.6	)		(143.2	)		(50.0	)		(75.8	)		(125.8	)
Provision for Credit Losses		(10.9	)		65.9			55.0			77.2			82.8			160.0			116.3			98.7			215.0
Effect of Foreign Exchange Rates		–			–			–			(.1	)		–			(.1	)		.3			–			.3
Balance at End of Year	$	211.0		$	117.9		$	328.9		$	256.7		$	100.6		$	357.3		$	252.2		$	88.4		$	340.6
Allowance for Credit Losses Assigned to:
Loans and Leases	$	178.6		$	116.2		$	294.8		$	220.7		$	98.9		$	319.6		$	222.9		$	86.3		$	309.2
Unfunded Commitments and Standby Letters of Credit		32.4			1.7			34.1			36.0			1.7			37.7			29.3			2.1			31.4
Total Allowance for Credit Losses	$	211.0		$	117.9		$	328.9		$	256.7		$	100.6		$	357.3		$	252.2		$	88.4		$	340.6

The following tables provide information regarding the recorded investments in loans and leases and the allowances for credit losses by segment as of December 31, 2011 and 2010.

(In Millions)	COMMERCIAL		PERSONAL		TOTAL
DECEMBER 31, 2011
Loans and Leases:
Specifically Evaluated for Impairment	$	121.2	$	158.2	$	279.4
Evaluated for Inherent Impairment		12,233.1		16,551.4		28,784.5
Total Loans and Leases		12,354.3		16,709.6		29,063.9
Allowance for Credit Losses on Credit Exposures:
Specifically Evaluated for Impairment		22.9		9.9		32.8
Evaluated for Inherent Impairment		155.7		106.3		262.0
Allowance assigned to loans and leases		178.6		116.2		294.8
Allowance assigned to unfunded commitments and standby letters of credit		32.4		1.7		34.1
Total Allowance for Credit Losses	$	211.0	$	117.9	$	328.9

(In Millions)	COMMERCIAL		PERSONAL		TOTAL
DECEMBER 31, 2010
Loans and Leases:
Specifically Evaluated for Impairment	$	180.5	$	120.7	$	301.2
Evaluated for Inherent Impairment		11,432.9		16,397.9		27,830.8
Total Loans and Leases		11,613.4		16,518.6		28,132.0
Allowance for Credit Losses on Credit Exposures:
Specifically Evaluated for Impairment		49.3		2.4		51.7
Evaluated for Inherent Impairment		171.4		96.5		267.9
Allowance assigned to loans and leases		220.7		98.9		319.6
Allowance assigned to unfunded commitments and standby letters of credit		36.0		1.7		37.7
Total Allowance for Credit Losses	$	256.7	$	100.6	$	357.3

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Weighted-Average Assumptions Used for Options Granted (Detail) (Stock Options)	12 Months Ended
	Dec. 31, 2011 Year	Dec. 31, 2010 Year	Dec. 31, 2009 Year
Stock Options
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items]
Expected Term (in Years)	7.7	7.4	6.8
Dividend Yield	4.56%	4.38%	3.51%
Expected Volatility	43.20%	41.50%	40.70%
Risk Free Interest Rate	2.94%	2.64%	2.46%

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Restructuring, Acquisition and Integration Related Charges (Tables)

12 Months Ended

Dec. 31, 2011

Amounts and Associated Expense Categories of Charges Recorded

The following table details the amounts and associated expense categories of the charges recorded.

(In Millions)	YEAR ENDED DECEMBER 31, 2011
Compensation	$	50.2
Employee Benefits		4.3
Outside Services		16.8
Equipment and Software		10.9
Occupancy		6.4
Other Operating Expense		3.0
Total Charges	$	91.6

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Status of Outstanding Stock and Stock Unit Awards under Plan and 1992 Plan (Detail) (Restricted Stock Units, USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011
Restricted Stock Units
NUMBER
Stock and Stock Unit Awards Outstanding, at beginning of the year	2,144,510
Granted	995,176
Distributed	(179,812)
Forfeited	(45,309)
Stock and Stock Unit Awards Outstanding, at the end of the year	2,914,565
Units Convertible, at the end of the year	105,498
AGGREGATE INTRINSIC VALUE
Stock and Stock Unit Awards Outstanding, at beginning of the year	$ 118.8
Stock and Stock Unit Awards Outstanding, at the end of year	115.6
Units Convertible, at the end of year	$ 4.2

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Goodwill and Other Intangibles - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended			1 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Jun. 30, 2011 Bank of Ireland Securities Services (BoISS)	Jul. 31, 2011 Omnium LLC
Goodwill and Intangible Assets Disclosure [Line Items]
Amortization expense related to other intangible assets	$ 16.8	$ 14.8	$ 16.2
Estimated future amortization expense for 2012	20.8
Estimated future amortization expense for 2013	20.5
Estimated future amortization expense for 2014	20.4
Estimated future amortization expense for 2015	11.7
Estimated future amortization expense for 2016	9.1
Business acquisition purchase price adjustment period				1 year	5 years
Business acquisition purchase price				84.4	145.1
Business acquisition cash paid				71.0	101.6
Business acquisition contingent consideration				13.4	43.5
Business acquisition purchase price allocated to goodwill				30.0	101.4
Business acquisition purchase price allocated to other intangible assets				45.0	43.9
Business acquisition fair value of contingent purchase consideration	$ 56.8			$ 11.4	$ 45.4

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Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase

12 Months Ended

Dec. 31, 2011

Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase

Note 5 – Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase

Securities purchased under agreements to resell and securities sold under agreements to repurchase are recorded at the amounts at which the securities were acquired or sold plus accrued interest. To minimize any potential credit risk associated with these transactions, the fair value of the securities purchased or sold is monitored, limits are set on exposure with counterparties, and the financial condition of counterparties is regularly assessed. It is Northern Trust’s policy to take possession of securities purchased under agreements to resell.

The following tables summarize information related to securities purchased under agreements to resell and securities sold under agreements to repurchase.

SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL	DECEMBER 31
($ In Millions)	2011			2010
Balance at December 31	$	74.7		$	152.1
Average Balance During the Year		246.3			277.3
Average Interest Rate Earned During the Year		.07	%		.17	%
Maximum Month-End Balance During the Year		424.2			578.0

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE	DECEMBER 31
($ In Millions)	2011			2010
Balance at December 31	$	1,198.8		$	954.4
Average Balance During the Year		815.8			626.8
Average Interest Rate Paid During the Year		.08	%		.17	%
Maximum Month-End Balance During the Year		1,479.3			954.4

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Loans and Leases

12 Months Ended

Dec. 31, 2011

Loans and Leases

Note 6 – Loans and Leases

Amounts outstanding for loans and leases, by segment and class, are shown below.

	DECEMBER 31
(In Millions)	2011			2010
Commercial
Commercial and Institutional	$	6,918.7		$	5,914.5
Commercial Real Estate		2,981.7			3,242.4
Lease Financing, net		978.8			1,063.7
Non-U.S.		1,057.5			1,046.2
Other		417.6			346.6
Total Commercial		12,354.3			11,613.4
Personal
Residential Real Estate		10,708.9			10,854.9
Private Client		5,651.4			5,423.7
Other		349.3			240.0
Total Personal		16,709.6			16,518.6
Total Loans and Leases	$	29,063.9		$	28,132.0
Allowance for Credit Losses Assigned to Loans and Leases		(294.8	)		(319.6	)
Net Loans and Leases	$	28,769.1		$	27,812.4

Included within the non-U.S., commercial-other, and personal-other classes are short duration advances, primarily related to the processing of custodied client investments, that totaled $1.6 billion and $1.4 billion at December 31, 2011 and 2010, respectively. Demand deposits reclassified as loan balances totaled $191.6 million and $76.6 million at December 31, 2011 and 2010, respectively. Loans classified as held for sale totaled $9.3 million at December 31, 2011 and $2.2 million at December 31, 2010.

The components of the net investment in direct finance and leveraged leases are as follows:

	DECEMBER 31
(In Millions)	2011			2010
Direct Finance Leases:
Lease Receivable	$	156.3		$	148.4
Residual Value		149.2			176.1
Initial Direct Costs		2.9			1.8
Unearned Income		(44.1	)		(44.9	)
Investment in Direct Finance Leases	$	264.3		$	281.4
Leveraged Leases:
Net Rental Receivable		326.0			353.0
Residual Value		622.7			743.8
Unearned Income		(234.2	)		(314.5	)
Investment in Leveraged Leases	$	714.5		$	782.3
Lease Financing, net	$	978.8		$	1,063.7

The following schedule reflects the future minimum lease payments to be received over the next five years under direct finance leases:

(In Millions)	FUTURE MINIMUM LEASE PAYMENTS
2012	$	33.9
2013		28.9
2014		25.1
2015		21.4
2016		15.6

Credit Quality Indicators. Credit quality indicators are statistics, measurements or other metrics that provide information regarding the relative credit risk of loans and leases. Northern Trust utilizes a variety of credit quality indicators to assess the credit risk of loans and leases at the segment, class, and individual credit exposure levels.

As part of its credit process, Northern Trust utilizes an internal borrower risk rating system to support identification, approval, and monitoring of credit risk. Borrower risk ratings are used in credit underwriting, management reporting, and the calculation of credit loss allowances and economic capital.

Risk ratings are used for ranking the credit risk of borrowers and the probability of their default. Each borrower is rated using one of a number of ratings models that consider both quantitative and qualitative factors. The ratings models vary among classes of loans and leases in order to capture the unique risk characteristics inherent within each particular type of credit exposure. Provided below are the more significant performance indicator attributes considered within Northern Trust’s borrower rating models, by loan and lease class.

_Ÿ Commercial and Institutional: leverage, profit margin, liquidity, return on assets, asset size, and capital levels;

_Ÿ Commercial Real Estate: debt service coverage, leasing status, loan-to-value, loan-to-cost, and guarantor support;

_Ÿ Lease Financing and Commercial-Other: leverage and profit margin levels;

_Ÿ Non-U.S.: entity type, liquidity, size, and leverage;

_Ÿ Residential Real Estate: payment history and cash flow-to-debt and net worth ratios;

_Ÿ Private Client: cash flow-to-debt, net worth, and leverage; and

_Ÿ Personal-Other: cash flow-to-debt and net worth ratios.

While the criteria vary by model, the objective is for borrower ratings to be consistent in both the measurement and ranking of risk. Each model is calibrated to a master rating scale to support this consistency. Ratings for borrowers not in default range from “1” for the strongest credits to “7” for the weakest non-defaulted credits. Ratings of “8” or “9” are used for defaulted borrowers. Borrower risk ratings are monitored and are revised when events or circumstances indicate a change is warranted. Risk ratings are validated at least annually.

Loan and lease segment and class balances at December 31, 2011 and December 31, 2010 are provided below, segregated by borrower ratings into “1 to 3”, “4 to 5”, and “6 to 9”(watch list), categories.

	DECEMBER 31, 2011								DECEMBER 31, 2010
(In Millions)	1 TO 3 CATEGORY		4 TO 5 CATEGORY		6 TO 9 CATEGORY (WATCH LIST)		TOTAL		1 TO 3 CATEGORY		4 TO 5 CATEGORY		6 TO 9 CATEGORY (WATCH LIST)		TOTAL
Commercial
Commercial and Institutional	$	3,681.8	$	3,029.1	$	207.8	$	6,918.7	$	2,821.5	$	2,849.8	$	243.2	$	5,914.5
Commercial Real Estate		1,247.1		1,467.2		267.4		2,981.7		1,232.8		1,594.3		415.3		3,242.4
Lease Financing, net		547.7		422.3		8.8		978.8		571.6		473.0		19.1		1,063.7
Non-U.S.		519.0		527.3		11.2		1,057.5		430.0		596.5		19.7		1,046.2
Other		241.4		176.2		–		417.6		209.5		137.1		–		346.6
Total Commercial		6,237.0		5,622.1		495.2		12,354.3		5,265.4		5,650.7		697.3		11,613.4
Personal
Residential Real Estate		2,777.1		7,501.0		430.8		10,708.9		2,896.0		7,586.9		372.0		10,854.9
Private Client		3,390.6		2,245.9		14.9		5,651.4		3,326.5		2,064.1		33.1		5,423.7
Other		162.3		187.0		–		349.3		78.1		161.9		–		240.0
Total Personal		6,330.0		9,933.9		445.7		16,709.6		6,300.6		9,812.9		405.1		16,518.6
Total Loans and Leases	$	12,567.0	$	15,556.0	$	940.9	$	29,063.9	$	11,566.0	$	15,463.6	$	1,102.4	$	28,132.0

Loans and leases in the “1 to 3” category are expected to exhibit minimal to modest probabilities of default and are characterized by borrowers having the strongest financial qualities, including above average financial flexibility, cash flows and capital levels. Borrowers assigned these ratings are anticipated to experience very little to moderate financial pressure in adverse down cycle scenarios.

Loans and leases in the “4 to 5” category are expected to exhibit moderate to acceptable probabilities of default and are characterized by borrowers with less financial flexibility than those in the “1 to 3” category. Cash flows and capital levels are generally sufficient to allow for borrowers to meet current requirements, but have reduced cushion in adverse down cycle scenarios.

Loans and leases in the watch list category have elevated credit risk profiles that are monitored through internal watch lists, and consist of credits with borrower ratings of “6 to 9”. These credits, which include all nonperforming loans and leases, are expected to exhibit minimally acceptable probabilities of default, elevated risk of default, or are currently in default. Borrowers associated with these risk profiles that are not currently in default have limited financial flexibility. Cash flows and capital levels range from acceptable to potentially insufficient to meet current requirements, particularly in adverse down cycle scenarios.

The following tables provide balances and delinquency status of performing and nonperforming loans and leases by segment and class, as well as the total other real estate owned and nonperforming asset balances, as of December 31, 2011 and December 31, 2010.

(In Millions)	CURRENT		30 – 59 DAYS PAST DUE		60 – 89 DAYS PAST DUE		90 DAYS OR MORE PAST DUE		TOTAL PERFORMING		NONPERFORMING		TOTAL LOANS AND LEASES
DECEMBER 31, 2011
Commercial
Commercial and Institutional	$	6,869.2	$	15.0	$	2.7	$	.5	$	6,887.4	$	31.3	$	6,918.7
Commercial Real Estate		2,878.2		10.8		10.3		2.9		2,902.2		79.5		2,981.7
Lease Financing, net		978.8		–		–		–		978.8		–		978.8
Non-U.S.		1,057.5		–		–		–		1,057.5		–		1,057.5
Other		417.6		–		–		–		417.6		–		417.6
Total Commercial		12,201.3		25.8		13.0		3.4		12,243.5		110.8		12,354.3
Personal
Residential Real Estate		10,428.0		67.7		27.6		8.0		10,531.3		177.6		10,708.9
Private Client		5,623.0		15.7		5.7		1.7		5,646.1		5.3		5,651.4
Other		349.3		–		–		–		349.3		–		349.3
Total Personal		16,400.3		83.4		33.3		9.7		16,526.7		182.9		16,709.6
Total Loans and Leases	$	28,601.6	$	109.2	$	46.3	$	13.1	$	28,770.2	$	293.7	$	29,063.9
								Total Other Real Estate  Owned			$	21.2
								Total Nonperforming Assets			$	314.9

(In Millions)	CURRENT		30 – 59 DAYS PAST DUE		60 – 89 DAYS PAST DUE		90 DAYS OR MORE PAST DUE		TOTAL PERFORMING		NONPERFORMING		TOTAL LOANS AND LEASES
DECEMBER 31, 2010
Commercial
Commercial and Institutional	$	5,831.2	$	16.3	$	8.2	$	.8	$	5,856.5	$	58.0	$	5,914.5
Commercial Real Estate		3,076.7		24.2		15.7		9.4		3,126.0		116.4		3,242.4
Lease Financing, net		1,063.7		–		–		–		1,063.7		–		1,063.7
Non-U.S.		1,046.2		–		–		–		1,046.2		–		1,046.2
Other		346.6		–		–		–		346.6		–		346.6
Total Commercial		11,364.4		40.5		23.9		10.2		11,439.0		174.4		11,613.4
Personal
Residential Real Estate		10,607.4		76.1		17.2		.9		10,701.6		153.3		10,854.9
Private Client		5,367.8		35.7		13.0		1.9		5,418.4		5.3		5,423.7
Other		240.0		–		–		–		240.0		–		240.0
Total Personal		16,215.2		111.8		30.2		2.8		16,360.0		158.6		16,518.6
Total Loans and Leases	$	27,579.6	$	152.3	$	54.1	$	13.0	$	27,799.0	$	333.0	$	28,132.0
								Total Other Real Estate Owned			$	45.5
								Total Nonperforming Assets			$	378.5

The following tables provide information related to impaired loans by segment and class.

	AS OF DECEMBER 31, 2011						AS OF DECEMBER 31, 2010
(In Millions)	RECORDED INVESTMENT		UNPAID PRINCIPAL BALANCE		SPECIFIC ALLOWANCE		RECORDED INVESTMENT		UNPAID PRINCIPAL BALANCE		SPECIFIC ALLOWANCE
With no related specific allowance:
Commercial and Institutional	$	21.4	$	24.0	$	–	$	17.9	$	26.1	$	–
Commercial Real Estate		46.5		68.0		–		43.7		62.4		–
Residential Real Estate		134.4		162.6		–		111.9		138.1		–
Private Client		1.6		1.9		–		3.7		3.9		–
With a related specific allowance:
Commercial and Institutional		11.9		20.5		8.8		41.7		47.8		19.8
Commercial Real Estate		41.4		50.1		14.1		77.2		88.9		29.5
Residential Real Estate		18.9		26.2		8.9		5.1		5.1		2.4
Private Client		3.3		3.6		1.0		–		–		–
Total:
Commercial		121.2		162.6		22.9		180.5		225.2		49.3
Personal		158.2		194.3		9.9		120.7		147.1		2.4
Total	$	279.4	$	356.9	$	32.8	$	301.2	$	372.3	$	51.7

	YEAR ENDED DECEMBER 31, 2011
(In Millions)	AVERAGE RECORDED INVESTMENT		INTEREST INCOME RECOGNIZED
With no related specific allowance:
Commercial and Institutional	$	18.3	$	.1
Commercial Real Estate		33.0		.5
Residential Real Estate		111.8		2.1
Private Client		2.2		–
With a related specific allowance:
Commercial and Institutional		23.6		–
Commercial Real Estate		59.8		–
Residential Real Estate		9.7		–
Private Client		2.0		–
Total:
Commercial		134.7		.6
Personal		125.7		2.1
Total	$	260.4	$	2.7

Note: Average recorded investments in impaired loans are calculated as the average of the month-end impaired loan balances for the period.

Interest income that would have been recorded on nonperforming loans in accordance with their original terms totaled approximately $15.4 million in 2011, $16.0 million in 2010, and $8.0 million in 2009.

The average recorded investment in impaired loans was $253.8 million for the year ended December 31, 2010.

There were $9.7 million and $16.3 million of unfunded loan commitments and standby letters of credit at December 31, 2011 and 2010, respectively, issued to borrowers whose loans were classified as nonperforming or impaired.

Troubled Debt Restructurings. As of December 31, 2011 and December 31, 2010, there were $72.2 million and $33.4 million, respectively, of nonperforming TDRs and $41.1 million and $22.9 million, respectively, of performing TDRs, included within impaired loans.

The following table provides, by segment and class, the number of loans and leases modified in TDRs during the year ended December 31, 2011, and their total recorded investments and unpaid principal balances as of December 31, 2011.

($ In Millions)	NUMBER OF LOANS AND LEASES		RECORDED INVESTMENT		UNPAID PRINCIPAL BALANCE
Commercial
Commercial and Institutional		6	$	10.4	$	12.1
Commercial Real Estate		16		34.0		42.6
Total Commercial		22		44.4		54.7
Personal
Residential Real Estate		148		32.6		40.4
Private Client		1		–		–
Total Personal		149		32.6		40.4
Total Loans and Leases		171	$	77.0	$	95.1

Note: Period end balances reflect all paydowns and charge-offs during the year.

TDR modifications primarily involve interest rate concessions, extensions of term, deferrals of principal, and other modifications. Other modifications typically reflect other nonstandard terms which Northern Trust would not offer to non-troubled borrowers. During the year ended December 31, 2011, TDR modifications of loans within the commercial and institutional class were primarily interest rate concessions, deferrals of principal and other modifications; modifications of commercial real estate loans were primarily interest rate concessions, extensions of term and other modifications; and modifications of residential real estate loans were primarily interest rate concessions, deferrals of principal and extensions of term.

The following table provides, by segment and class, the number of loans and leases modified in troubled debt restructurings during the previous 12 months which subsequently became nonperforming during the year ended December 31, 2011 as well as their total recorded investments and unpaid principal balances as of December 31, 2011.

($ In Millions)	NUMBER OF LOANS AND LEASES		RECORDED INVESTMENT		UNPAID PRINCIPAL BALANCE
Commercial
Commercial and Institutional		1	$	–	$	.4
Total Commercial		1		–		.4
Personal
Residential Real Estate		8		2.1		2.6
Private Client		1		.8		1.1
Total Personal		9		2.9		3.7
Total Loans and Leases		10	$	2.9	$	4.1

Note: Period end balances reflect all paydowns and charge-offs during the year.

All loans and leases modified in TDRs are evaluated for impairment. The nature and extent of impairment of TDRs, including those which have experienced a subsequent default, is considered in the determination of an appropriate level of allowance for credit losses.

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Change in Benefit Obligation (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
United States Pension Plans of US Entity, Defined Benefit
Schedule of Defined Benefit Plan Change in Benefit Obligation [Line Items]
Beginning Balance	$ 762.9	$ 642.0
Service Cost	42.8	37.9	33.1
Interest Cost	40.8	36.9	33.4
Actuarial Loss (Gain)	108.8	80.7
Benefits Paid	(41.3)	(34.6)
Plan Amendment	(9.4)
Ending Balance	904.6	762.9	642.0
Foreign Pension Plans, Defined Benefit
Schedule of Defined Benefit Plan Change in Benefit Obligation [Line Items]
Beginning Balance	116.1	134.4
Service Cost		1.8	3.8
Interest Cost	6.5	6.9	6.7
Actuarial Loss (Gain)	8.0	(2.1)
Plan Curtailment		(11.4)
Benefits Paid	(2.5)	(5.9)
Foreign Exchange Rate Changes	(1.0)	(7.6)
Ending Balance	127.1	116.1	134.4
Supplemental Employee Retirement Plans, Defined Benefit
Schedule of Defined Benefit Plan Change in Benefit Obligation [Line Items]
Beginning Balance	86.9	85.9
Service Cost	3.2	3.2	2.6
Interest Cost	4.4	4.8	3.9
Actuarial Loss (Gain)	15.4	5.0
Benefits Paid	(11.3)	(12.0)
Plan Amendment	1.7
Ending Balance	$ 100.3	$ 86.9	$ 85.9

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Earnings Contribution of Northern Trust's Business Units (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Segment Reporting Information [Line Items]
Fully taxable equivalent basis adjustments	$ 40.2	$ 39.1	$ 40.2

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Concentrations of Credit Risk

12 Months Ended

Dec. 31, 2011

Concentrations of Credit Risk

Note 8 – Concentrations of Credit Risk

Concentrations of credit risk exist if a number of borrowers or other counterparties are engaged in similar activities and have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. The fact that a credit exposure falls into one of these groups does not necessarily indicate that the credit has a higher than normal degree of credit risk. These groups are: commercial real estate, residential real estate, and banks and bank holding companies.

Commercial Real Estate. The commercial real estate portfolio consists of commercial mortgages and construction, acquisition and development loans extended primarily to highly experienced developers and/or investors well known to Northern Trust. Underwriting standards generally reflect conservative loan-to-value ratios and debt service coverage requirements. Recourse to borrowers through guarantees is also commonly required. Commercial mortgage financing is provided for the acquisition or refinancing of income producing properties. Cash flows from the properties generally are sufficient to amortize the loan. These loans average approximately $1.3 million each and are primarily located in the Illinois, Florida, California, and Arizona markets. Construction, acquisition and development loans provide financing for commercial real estate prior to rental income stabilization. The intent is generally that the borrower will sell the project or refinance the loan through a commercial mortgage with Northern Trust or another financial institution upon completion.

The table below provides additional detail regarding commercial real estate loan types:

(In Millions)	2011		2010
Commercial Mortgages:
Office	$	615.6	$	605.3
Apartment/ Multi-family		656.3		572.4
Retail		523.1		517.8
Industrial/ Warehouse		357.7		383.7
Other		133.3		193.7
Total Commercial Mortgages		2,286.0		2,272.9
Construction, Acquisition and Development Loans		450.1		591.8
Single Family Investment		161.4		246.8
Other Commercial Real Estate Related		84.2		130.9
Total Commercial Real Estate Loans	$	2,981.7	$	3,242.4

Residential Real Estate. At December 31, 2011, residential real estate loans totaled $10.7 billion, or 38% of total U.S. loans at December 31, 2011, compared with $10.9 billion or 40% at December 31, 2010. Residential real estate loans consist of conventional home mortgages and equity credit lines, which generally require a loan to collateral value of no more than 65% to 80% at inception. Revaluations of supporting collateral are obtained upon refinancing or default or when otherwise considered warranted. Collateral revaluations for mortgages are performed by independent third parties. Of the total $10.7 billion in residential real estate loans, $4.0 billion were in the greater Chicago area, $2.8 billion were in Florida, and $1.5 billion were in California, with the remainder distributed throughout the other geographic regions within the U.S. served by Northern Trust. Legally binding commitments to extend residential real estate credit, which are primarily equity credit lines, totaled $2.2 billion at December 31, 2011 and $2.5 billion at December 31, 2010.

Banks and Bank Holding Companies. On-balance sheet credit risk to banks and bank holding companies, both U.S. and non-U.S., consists primarily of interest bearing deposits with banks, federal funds sold, and securities purchased under agreements to resell, which totaled $16.8 billion and $15.5 billion at December 31, 2011 and 2010, respectively, and noninterest-bearing demand balances maintained at correspondent banks, which totaled $4.2 billion and $2.7 billion at December 31, 2011 and 2010, respectively. Credit risk associated with U.S. and non-U.S. banks and bank holding companies deemed to be counterparties by Credit Policy is managed by the Counterparty Risk Management Committee. Credit risk associated with other U.S. banks and bank holding companies that maintain commercial credit relationships with Northern Trust is managed by the relevant Credit Approval Committee and/or the Senior Credit Committee. Credit limits are established through a review process that includes an internally prepared financial analysis, use of an internal risk rating system and consideration of external ratings from rating agencies. Northern Trust places deposits with banks that have strong internal and external credit ratings and the average life to maturity of deposits with banks is maintained on a short-term basis in order to respond quickly to changing credit conditions.

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Derivative Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2011

Notional and Fair Value Amounts of Client-related and Trading Derivative Financial Instruments

The following table shows the notional amounts of client-related and trading derivative financial instruments. Notional amounts of derivative financial instruments do not represent credit risk, and are not recorded in the consolidated balance sheet. They are used merely to express the volume of this activity. Northern Trust’s credit-related risk of loss is limited to the positive fair value of the derivative instrument, which is significantly less than the notional amount.

	DECEMBER 31, 2011						DECEMBER 31, 2010
(In Millions)	NOTIONAL VALUE		FAIR VALUE ASSET		LIABILITY		NOTIONAL VALUE		FAIR VALUE ASSET		LIABILITY
Foreign Exchange Contracts	$	239,901.3	$	3,062.1	$	2,959.8	$	242,007.1	$	5,747.9	$	5,729.9
Interest Rate Option Contracts		100.5		—		—		126.1		.1		.1
Interest Rate Swap Contracts		4,570.4		188.7		184.6		4,301.7		151.2		148.4
Total	$	244,572.2	$	3,250.8	$	3,144.4	$	246,434.9	$	5,899.2	$	5,878.4

Cash Flow Hedge Derivative Gains and Losses Recognized in AOCI and the Amounts Reclassified to Earnings

The following table provides cash flow hedge derivative gains and losses recognized in AOCI and the amounts reclassified to earnings during the years ended December 31, 2011 and 2010.

	2011			2010
(In Millions)	FOREIGN EXCHANGE CONTRACTS			FOREIGN EXCHANGE CONTRACTS
Net Gain/(Loss) Recognized in AOCI	$	(23.6	)	$	46.7
Net Gain/(Loss) Reclassified from AOCI to Earnings
Trust, Investment and Other Servicing Fees		.6			7.2
Other Operating Income		(.1	)		.2
Interest Income		(1.2	)		1.7
Interest Expense		0			.1
Compensation		3.0			(8.2	)
Employee Benefits		.9			(2.1	)
Equipment and Software Expense		0			(.1	)
Occupancy Expense		.5			(1.1	)
Other Operating Expense		1.9			(4.0	)
Total	$	5.6		$	(6.3	)

Net Investment Hedge Gains and Losses Recognized in AOCI

The following table provides net investment hedge gains and losses recognized in AOCI during the years ended December 31, 2011 and 2010.

(In Millions)	AMOUNT OF HEDGING INSTRUMENT GAIN/(LOSS) RECOGNIZED IN AOCI (BEFORE TAX)
	2011		2010
Foreign Exchange Contracts	$	25.2	$	40.6
Sterling Denominated Subordinated Debt		.5		9.8
Sterling Denominated Senior Debt		0		10.5
Total	$	25.7	$	60.9

Types and Classifications of Risk Management Derivative Instruments Not Formally Designated as Hedges, Including Notional and Fair Values

The following table identifies the types and classifications of risk management derivative instruments not formally designated as hedges, their notional and fair values, and the respective risks addressed.

			DECEMBER 31, 2011						DECEMBER 31, 2010
					FAIR VALUE						FAIR VALUE
(In Millions)	DERIVATIVE INSTRUMENT	RISK CLASSIFICATION	NOTIONAL VALUE		ASSET		LIABILITY		NOTIONAL VALUE		ASSET		LIABILITY
Commercial Loans and Loan Commitments	Credit Default Swap Contracts	Credit	$	60.5	$	.7	$	.1	$	149.5	$	–	$	2.8
Loan Commitments	Forward Contracts	Interest Rate		0		0		.0		14.3		.5		.2
Forecasted Foreign Currency Denominated Transactions	Foreign Exchange Contracts	Foreign Currency		127.3		2.1		2.6		616.1		12.3		16.2
Commercial Loans	Foreign Exchange Contracts	Foreign Currency		84.3		1.3		.3		60.6		.1		.9
Net Investments in Non-U.S. Affiliates	Foreign Exchange Contracts	Foreign Currency		63.5		.4		.2		61.3		.2		.8
Total			$	335.6		4.5	$	3.2	$	901.8		13.1	$	20.9

Client Related and Trading

Gains/Losses of Derivative Financial Instruments

The following table shows the location and amount of gains and losses recorded in the consolidated statement of income for the years ended December 31, 2011 and 2010.

	LOCATION OF DERIVATIVE GAIN/(LOSS) RECOGNIZED IN INCOME	AMOUNT OF DERIVATIVE GAIN/ (LOSS) RECOGNIZED IN INCOME
(In Millions)		DECEMBER 31,  2011		DECEMBER 31, 2010
Foreign Exchange Contracts	Foreign Exchange Trading Income	$	324.5	$	382.2
Interest Rate Swap Contracts	Security Commissions and Trading Income		5.9		9.3
Total		$	330.4	$	391.5

Designated as Hedging Instrument

Types and Classifications of Derivative Instruments

The following table identifies the types and classifications of derivative instruments designated as hedges and used by Northern Trust to manage risk, their notional and fair values, and the respective risks addressed.

			DECEMBER 31, 2011						DECEMBER 31, 2010
					FAIR VALUE						FAIR VALUE
(In Millions)	DERIVATIVE INSTRUMENT	RISK CLASSIFICATION	NOTIONAL VALUE		ASSET		LIABILITY		NOTIONAL VALUE		ASSET		LIABILITY
FAIR VALUE HEDGES
Available for Sale Investment Securities	Interest Rate Swap Contracts	Interest Rate	$	2,172.0	$	2.6	$	46.8	$	860.0	$	4.8	$	14.9
Senior Notes and Long-Term Subordinated Debt	Interest Rate Swap Contracts	Interest Rate		1,100.0		147.0		.5		1,100.0		129.8		.4
CASH FLOW HEDGES
Forecasted Foreign Currency Denominated Transactions	Foreign Exchange Contracts	Foreign Currency		932.9		9.4		27.2		935.3		19.3		15.2
NET INVESTMENT HEDGES
Net Investments in Non-U.S. Affiliates	Foreign Exchange Contracts	Foreign Currency		1,554.7		12.0		1.5		1,390.1		13.0		18.3
Total			$	5,759.6	$	171.0	$	76.0	$	4,285.4	$	166.9	$	48.5

Nondesignated

Gains/Losses of Derivative Financial Instruments

The following table provides the location and amount of gains and losses recorded in the consolidated statement of income for the years ended December 31, 2011 and 2010.

			2011			2010
(In Millions)	LOCATION OF DERIVATIVE GAIN/(LOSS) RECOGNIZED IN INCOME		AMOUNT RECOGNIZED IN INCOME			AMOUNT RECOGNIZED IN INCOME
Credit Default Swap Contracts		Other Operating Income	$	.9		$	(1.7	)
Forward Contracts		Other Operating Income		.2			.3
Foreign Exchange Contracts		Other Operating Income		(7.0	)		(19.7	)
Total			$	(5.9	)	$	(21.1	)

FAIR VALUE HEDGES

Gains/Losses of Derivative Financial Instruments

The following table shows the location and amount of derivative gains and losses recorded in the consolidated statement of income related to fair value hedges for the years ended December 31, 2011 and 2010.

	DERIVATIVE INSTRUMENT	LOCATION OF DERIVATIVE GAIN/(LOSS) RECOGNIZED IN INCOME	AMOUNT OF DERIVATIVE GAIN/ (LOSS) RECOGNIZED IN INCOME
(In Millions)			DECEMBER 31, 2011			DECEMBER 31, 2010
Available for Sale Investment Securities	Interest Rate Swap Contracts	Interest Income		(56.6	)		(13.3	)
Senior Notes and Long-Term Subordinated Debt	Interest Rate Swap Contracts	Interest Expense		194.4			78.8
Total				137.8			65.5

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Computations of Net Income Per Common Share (Detail) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
BASIC NET INCOME PER COMMON SHARE
Average Number of Common Shares Outstanding	241,401,310	242,028,776	235,511,879
Net Income	$ 603.6	$ 669.5	$ 864.2
Less: Dividends on Preferred Stock			(111.1)
Net Income Applicable to Common Stock	603.6	669.5	753.1
Less: Earnings Allocated to Participating Securities	7.1	5.6	5.3
Earnings Allocated to Common Shares Outstanding	596.5	663.9	747.8
Basic Net Income Per Common Share	$ 2.47	$ 2.74	$ 3.18
DILUTED NET INCOME PER COMMON SHARE
Average Number of Common Shares Outstanding	241,401,310	242,028,776	235,511,879
Plus Stock Option Dilution	410,074	473,755	904,150
Average Common and Potential Common Shares	241,811,384	242,502,531	236,416,029
Earnings Allocated to Common and Potential Common Shares	$ 596.5	$ 663.9	$ 747.8
Diluted Net Income Per Common Share	$ 2.47	$ 2.74	$ 3.16

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Credit Related Impairment Losses Recognized in Earnings on Other Than Temporarily Impaired Securities (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Changes in Other-Than-Temporary Impairment Losses	$ (1.1)	[1]	$ (0.8)	[1]	$ (93.4)	[1]
Noncredit-related Losses Reclassified from OCI	(22.2)	[2]	(20.4)	[2]	66.7	[2]
Net Impairment Losses Recognized in Earnings	$ (23.3)		$ (21.2)		$ (26.7)

[1] For initial other-than-temporary impairments in the respective year, the balance includes the excess of the amortized cost over the fair value of the impaired securities. For subsequent impairments of the same security, the balance includes any additional changes in fair value of the security subsequent to its most recently recorded OTTI.

[2] For initial other-than-temporary impairments in the respective year, the balance includes the portion of the excess of amortized cost over the fair value of the impaired securities that was recorded in OCI. For subsequent impairments of the same security, the balance includes additional changes in OCI for that security subsequent to its most recently recorded OTTI.

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Business Units and Related Information (Tables)

12 Months Ended

Dec. 31, 2011

Earnings Contribution of Northern Trust's Business Units

The following tables show the earnings contribution of Northern Trust’s business units for the years ended December 31, 2011, 2010, and 2009.

CORPORATE AND INSTITUTIONAL SERVICES RESULTS OF OPERATIONS

(In Millions)	2011			2010			2009
NONINTEREST INCOME
Trust, Investment and Other Servicing Fees	$	1,196.4		$	1,175.1		$	1,236.8
Other		485.4			522.7			571.3
Net Interest Income (FTE)*		282.5			271.8			416.0
Revenue (FTE)*		1,964.3			1,969.6			2,224.1
Provision for Credit Losses		(20.5	)		(16.1	)		30.7
Noninterest Expense		1,522.4			1,328.9			1,200.6
Income before Income Taxes*		462.4			656.8			992.8
Provision for Income Taxes*		168.3			222.4			350.8
Net Income	$	294.1		$	434.4		$	642.0
Percentage of Consolidated Net Income		49	%		65	%		74	%
Average Assets	$	47,533.7		$	38,749.3		$	38,117.1

PERSONAL FINANCIAL SERVICES RESULTS OF OPERATIONS

(In Millions)	2011			2010			2009
NONINTEREST INCOME
Trust, Investment and Other Servicing Fees	$	973.1		$	906.8		$	847.0
Other		128.5			133.3			138.7
Net Interest Income (FTE)*		613.7			591.8			538.1
Revenue (FTE)*		1,715.3			1,631.9			1,523.8
Provision for Credit Losses		75.5			176.1			184.3
Noninterest Expense		1,214.9			1,103.0			1,044.6
Income before Income Taxes*		424.9			352.8			294.9
Provision for Income Taxes*		168.7			132.8			112.4
Net Income	$	256.2		$	220.0		$	182.5
Percentage of Consolidated Net Income		42	%		33	%		21	%
Average Assets	$	23,861.5		$	23,564.5		$	24,534.8

TREASURY AND OTHER RESULTS OF OPERATIONS

(In Millions)	2011			2010			2009
Other Noninterest Income	$	(22.6	)	$	(8.9	)	$	(6.7	)
Net Interest Income (FTE)*		153.1			94.2			85.9
Revenue (FTE)*		130.5			85.3			79.2
Visa Indemnification Benefits		(23.1	)		(33.0	)		(17.8	)
Noninterest Expense (Excluding Visa Indemnification Benefits)		117.0			99.0			89.3
Income before Income Taxes*		36.6			19.3			7.7
Provision (Benefit) for Income Taxes*		(16.7	)		4.2			(32.0	)
Net Income	$	53.3		$	15.1		$	39.7
Percentage of Consolidated Net Income		9	%		2	%		5	%
Average Assets	$	20,552.7		$	13,694.4		$	11,662.3

CONSOLIDATED FINANCIAL INFORMATION

(In Millions)	2011			2010			2009
NONINTEREST INCOME
Trust, Investment and Other Servicing Fees	$	2,169.5		$	2,081.9		$	2,083.8
Other		591.3			647.1			703.3
Net Interest Income (FTE)*		1,049.3			957.8			1,040.0
Revenue (FTE)*		3,810.1			3,686.8			3,827.1
Provision for Credit Losses		55.0			160.0			215.0
Visa Indemnification Benefits		(23.1	)		(33.0	)		(17.8	)
Noninterest Expense (Excluding Visa Indemnification Benefits)		2,854.3			2,530.9			2,334.5
Income before Income Taxes*		923.9			1,028.9			1,295.4
Provision for Income Taxes*		320.3			359.4			431.2
Net Income	$	603.6		$	669.5		$	864.2
Average Assets	$	91,947.9		$	76,008.2		$	74,314.2

* Stated on an FTE basis. The consolidated figures include $40.2 million, $39.1 million, and $40.2 million, of FTE adjustment for 2011, 2010, and 2009, respectively.

Distribution of Total Assets and Operating Performance

DISTRIBUTION OF TOTAL ASSETS AND OPERATING PERFORMANCE

(In Millions)	TOTAL ASSETS		TOTAL REVENUE*		INCOME BEFORE INCOME TAXES		NET  INCOME
2011
Non-U.S.	$	28,625.2	$	1,084.8	$	284.4	$	199.3
U.S.		71,598.5		2,685.1		599.3		404.3
Total	$	100,223.7	$	3,769.9	$	883.7	$	603.6
2010
Non-U.S.	$	24,472.9	$	980.9	$	325.1	$	229.3
U.S.		59,371.0		2,666.8		664.7		440.2
Total	$	83,843.9	$	3,647.7	$	989.8	$	669.5
2009
Non-U.S.	$	19,253.2	$	1,086.9	$	445.4	$	305.8
U.S.		62,888.3		2,700.0		809.8		558.4
Total	$	82,141.5	$	3,786.9	$	1,255.2	$	864.2

* Revenue is comprised of net interest income and noninterest income.

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Commercial Real Estate Loan Types (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Commercial Mortgages:
Office	$ 615.6	$ 605.3
Apartment/ Multi-family	656.3	572.4
Retail	523.1	517.8
Industrial/ Warehouse	357.7	383.7
Other	133.3	193.7
Total Commercial Mortgages	2,286.0	2,272.9
Construction, Acquisition and Development Loans	450.1	591.8
Single Family Investment	161.4	246.8
Other Commercial Real Estate Related	84.2	130.9
Total Commercial Real Estate Loans	$ 2,981.7	$ 3,242.4

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Share-Based Compensation Plans (Tables)

12 Months Ended

Dec. 31, 2011

Compensation Expense for Share-Based Payment Arrangements and Associated Tax Impacts

Total compensation expense for share-based payment arrangements and the associated tax impacts were as follows for the periods presented:

	FOR THE YEAR ENDED DECEMBER 31,
(In Millions)	2011		2010		2009
Stock Options	$	34.1	$	27.6	$	27.9
Stock and Stock Unit Awards		36.2		25.1		19.7
Performance Stock Units		—		—		(22.2	)
Total Share-Based Compensation Expense	$	70.3	$	52.7	$	25.4
Tax Benefits Recognized	$	26.5	$	19.3	$	9.3

Weighted-average Assumptions Used for Options Granted

The weighted-average assumptions used for options granted during the years ended December 31 are as follows:

	2011			2010			2009
Expected Term (in Years)		7.7			7.4			6.8
Dividend Yield		4.56	%		4.38	%		3.51	%
Expected Volatility		43.2			41.5			40.7
Risk Free Interest Rate		2.94			2.64			2.46

Information Pertaining to Stock Options Granted, Vested, and Exercised

The following table provides information about stock options granted, vested, and exercised in the years ended December 31.

(In Millions, Except Per Share Information)	2011		2010		2009
Weighted Average Grant-Date Per Share Fair Value of Stock Options Granted	$	15.26	$	14.45	$	16.94
Grant-Date Fair Value of Stock Options Vested		27.9		26.7		18.4
Stock Options Exercised:
Intrinsic Value as of Exercise Date		1.5		5.0		11.3
Cash Received		5.4		16.9		38.9
Tax Deduction Benefits Realized		.5		1.7		3.6

Status of Stock Options Under Plan and 1992 Plan

A summary of the status of stock options under the Plan and the 1992 Plan at December 31, 2011, and changes during the year then ended, are presented in the table below.

($ In Millions Except Per Share Information)	SHARES			WEIGHTED AVERAGE EXERCISE PRICE PER  SHARE		WEIGHTED AVERAGE REMAINING CONTRACTUAL TERM (YEARS)		AGGREGATE INTRINSIC VALUE
Options Outstanding, December 31, 2010		16,407,354		$	53.78
Granted		2,380,933			51.73
Exercised		(149,385	)		38.66
Forfeited, Expired or Cancelled		(1,637,487	)		66.65
Options Outstanding, December 31, 2011		17,001,415		$	52.39		5.0	$	9.1
Options Exercisable, December 31, 2011		11,653,068		$	51.80		3.5	$	9.0

Status of Outstanding Stock and Stock Unit Awards under Plan and 1992 Plan

A summary of the status of outstanding stock and stock unit awards under the Plan and the 1992 Plan at December 31, 2011, and changes during the year then ended, is presented in the table below.

($ In Millions)	NUMBER			AGGREGATE INTRINSIC VALUE
Stock and Stock Unit Awards Outstanding, December 31, 2010		2,144,510		$	118.8
Granted		995,176
Distributed		(179,812	)
Forfeited		(45,309	)
Stock and Stock Unit Awards Outstanding, December 31, 2011		2,914,565		$	115.6
Units Convertible, December 31, 2011		105,498		$	4.2

Unvested Options

Changes in Nonvested Stock

The following is a summary of changes in nonvested stock options for the year ended December 31, 2011.

NONVESTED SHARES	SHARES			WEIGHTED- AVERAGE GRANT- DATE FAIR VALUE PER SHARE
Nonvested as December 31, 2010		4,735,065		$	15.89
Granted		2,380,933			15.26
Vested		(1,713,989	)		16.30
Forfeited or Cancelled		(53,662	)		15.43
Nonvested at December 31, 2011		5,348,347		$	15.48

Stock and Stock Unit Awards

Changes in Nonvested Stock

The following is a summary of nonvested stock and stock unit awards at December 31, 2011, and changes during the year then ended.

NONVESTED STOCK AND STOCK UNITS	NUMBER			WEIGHTED AVERAGE GRANT- DATE FAIR VALUE PER UNIT		WEIGHTED AVERAGE REMAINING VESTING TERM (YEARS)
Nonvested at December 31, 2010		2,038,244		$	54.41		2.7
Granted		995,176			50.79
Vested		(179,044	)		66.81
Forfeited		(45,309	)		54.99
Nonvested at December 31, 2011		2,809,067		$	52.33		2.4

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Types and Classifications of Derivative Instruments Designated as Hedges (Detail) (Asset And Liability Management, USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Derivative [Line Items]
NOTIONAL VALUE	$ 5,759.6	$ 4,285.4
ASSET FAIR VALUE	171.0	166.9
LIABILITY FAIR VALUE	76.0	48.5
FAIR VALUE HEDGES | Senior Notes and Long- Term Subordinated Debt | Interest Rate Swap Contracts
Derivative [Line Items]
NOTIONAL VALUE	1,100.0	1,100.0
ASSET FAIR VALUE	147.0	129.8
LIABILITY FAIR VALUE	0.5	0.4
FAIR VALUE HEDGES | Available for Sale Investment Securities | Interest Rate Swap Contracts
Derivative [Line Items]
NOTIONAL VALUE	2,172.0	860.0
ASSET FAIR VALUE	2.6	4.8
LIABILITY FAIR VALUE	46.8	14.9
CASH FLOW HEDGES | Forecasted Foreign Currency Denominated Transactions | Foreign Exchange Contracts
Derivative [Line Items]
NOTIONAL VALUE	932.9	935.3
ASSET FAIR VALUE	9.4	19.3
LIABILITY FAIR VALUE	27.2	15.2
NET INVESTMENT HEDGES | Net Investments in Non-U.S. Affiliates | Foreign Exchange Contracts
Derivative [Line Items]
NOTIONAL VALUE	1,554.7	1,390.1
ASSET FAIR VALUE	12.0	13.0
LIABILITY FAIR VALUE	$ 1.5	$ 18.3

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Components of Net Investments in Direct Finance and Leverage Leases (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Direct Finance Leases:
Lease Receivable	$ 156.3	$ 148.4
Residual Value	149.2	176.1
Initial Direct Costs	2.9	1.8
Unearned Income	(44.1)	(44.9)
Investment in Direct Finance Leases	264.3	281.4
Leveraged Leases:
Net Rental Receivable	326.0	353.0
Residual Value	622.7	743.8
Unearned Income	(234.2)	(314.5)
Investment in Leveraged Leases	714.5	782.3
Lease Financing, net	$ 978.8	$ 1,063.7

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Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Deferred Tax Liability Not Recognized [Line Items]
Beginning Balance	$ 89.9	$ 88.9
Additions for Tax Positions Taken in Current Year		0.2
Additions for Tax Positions Taken in Prior Years	2.2	7.1
Reductions for Tax Positions Taken in Prior Years	(5.2)	(6.0)
Reductions Resulting from Expiration of Statutes	(0.9)	(0.3)
Reductions Resulting from Settlements with Taxing Authorities	(68.2)
Ending Balance	$ 17.8	$ 89.9

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Derivative Financial Instruments

12 Months Ended

Dec. 31, 2011

Derivative Financial Instruments

Note 26 – Derivative Financial Instruments

Northern Trust is a party to various derivative financial instruments that are used in the normal course of business to meet the needs of its clients; as part of its trading activity for its own account; and as part of its risk management activities. These instruments include foreign exchange contracts, interest rate contracts, and credit default swap contracts.

Northern Trust’s primary risks associated with these instruments is the possibility that interest rates, foreign exchange rates, or credit spreads could change in an unanticipated manner, resulting in higher costs or a loss in the underlying value of the instrument. These risks are mitigated by establishing limits, monitoring the level of actual positions taken against such established limits, and monitoring the level of any interest rate sensitivity gaps created by such positions. When establishing position limits, market liquidity and volatility, as well as experience in each market, are all taken into account.

The estimated credit risk associated with derivative instruments relates to the failure of the counterparty and the failure of Northern Trust to pay based on the contractual terms of the agreement, and is generally limited to the unrealized fair value gains and losses on these instruments, respectively. The amount of credit risk will increase or decrease during the lives of the instruments as interest rates, foreign exchange rates, or credit spreads fluctuate. This risk is controlled by limiting such activity to an approved list of counterparties and by subjecting such activity to the same credit and quality controls as are followed in lending and investment activities. Credit Support Annex agreements are currently in place with a number of counterparties which mitigate the aforementioned credit risk associated with derivative activity conducted with those counterparties by requiring that significant net unrealized fair value gains be supported by collateral placed with Northern Trust.

All derivative financial instruments, whether designated as hedges or not, are recorded on the consolidated balance sheet at fair value within other assets or other liabilities. As noted in the discussions below, the manner in which changes in the fair value of a derivative is accounted for in the consolidated statement of income depends on whether the contract has been designated as a hedge and qualifies for hedge accounting under GAAP. Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting agreements exist between Northern Trust and the counterparty. Derivative assets and liabilities recorded on the consolidated balance sheet were each reduced by $2,023.6 million and $1,818.2 million as of December 31, 2011 and 2010, respectively, as a result of master netting agreements in place. Derivative assets and liabilities recorded at December 31, 2011 also reflect reductions of $220.1 million and $257.4 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties. This compares with reductions of derivative assets and liabilities of $2,622.3 million and $2,962.2 million, respectively, at December 31, 2010. Additional cash collateral received from and deposited with derivative counterparties totaling $72.3 million and $47.8 million, respectively, of as of December 31, 2011, and $9.9 million and $.5 million, respectively, as of December 31, 2010, were not offset against derivative assets and liabilities on the consolidated balance sheet as the amounts exceeded the net derivative positions with those counterparties.

Certain master netting agreements Northern Trust enters into with derivative counterparties contain credit-risk-related contingent features in which the counterparty has the option to declare Northern Trust in default and accelerate cash settlement of the net derivative liabilities with the counterparty in the event Northern Trust’s credit rating falls below specified levels. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position was $.2 billion and $3.3 billion on December 31, 2011 and 2010, respectively. Cash collateral amounts deposited with derivative counterparties on those dates included $.1 billion and $2.9 billion, respectively, posted against these liabilities, resulting in a net maximum amount of termination payments that could have been required at December 31, 2011 and 2010 of $121.6 million and $387.1 million, respectively. Accelerated settlement of these liabilities would not have a material effect on the consolidated financial position or liquidity of Northern Trust.

Foreign Exchange Contracts are agreements to exchange specific amounts of currencies at a future date, at a specified rate of exchange. Foreign exchange contracts are entered into primarily to meet the foreign exchange needs of clients. Foreign exchange contracts are also used for trading purposes and risk management. For risk management purposes, Northern Trust currently uses foreign exchange contracts to reduce its exposure to changes in foreign exchange rates relating to certain forecasted non-functional currency denominated revenue and expenditure transactions, foreign currency denominated assets and liabilities, and net investments in non-U.S. affiliates.

Interest Rate Contracts include swap, option, and forward contracts. Interest rate swap contracts involve the exchange of fixed and floating rate interest payment obligations without the exchange of the underlying principal amounts. Northern Trust enters into interest rate swap contracts on behalf of its clients and also utilizes such contracts to reduce or eliminate the exposure to changes in the cash flows or fair value of hedged assets or liabilities due to changes in interest rates. Interest rate option contracts consist of caps, floors, and swaptions, and provide for the transfer or reduction of interest rate risk in exchange for a fee. Northern Trust enters into option contracts primarily as a seller of interest rate protection to clients. Northern Trust receives a fee at the outset of the agreement for the assumption of the risk of an unfavorable change in interest rates. This assumed interest rate risk is then mitigated by entering into an offsetting position with an outside counterparty. Northern Trust may also purchase option contracts for risk management purposes. Northern Trust enters into interest rate forward contracts to lend funds to a potential borrower at a specified interest rate within a specified period of time. These forward contracts are derivative instruments if the loans that will result from the exercise of the commitments will be held for sale.

Credit Default Swap Contracts are agreements to transfer credit default risk from one party to another in exchange for a fee. Northern Trust enters into credit default swaps with outside counterparties where the counterparty agrees to assume the underlying credit exposure of a specific Northern Trust commercial loan or loan commitment.

Client-Related and Trading Derivative Instruments. In excess of 97% of Northern Trust’s derivatives outstanding at December 31, 2011 and 2010, measured on a notional value basis, relate to client-related and trading activities. These activities consist principally of providing foreign exchange services to clients in connection with Northern Trust’s global custody business. However, in the normal course of business, Northern Trust also engages in trading of currencies for its own account.

The following table shows the notional amounts of client-related and trading derivative financial instruments. Notional amounts of derivative financial instruments do not represent credit risk, and are not recorded in the consolidated balance sheet. They are used merely to express the volume of this activity. Northern Trust’s credit-related risk of loss is limited to the positive fair value of the derivative instrument, which is significantly less than the notional amount.

	DECEMBER 31, 2011						DECEMBER 31, 2010
(In Millions)	NOTIONAL VALUE		FAIR VALUE ASSET		LIABILITY		NOTIONAL VALUE		FAIR VALUE ASSET		LIABILITY
Foreign Exchange Contracts	$	239,901.3	$	3,062.1	$	2,959.8	$	242,007.1	$	5,747.9	$	5,729.9
Interest Rate Option Contracts		100.5		—		—		126.1		.1		.1
Interest Rate Swap Contracts		4,570.4		188.7		184.6		4,301.7		151.2		148.4
Total	$	244,572.2	$	3,250.8	$	3,144.4	$	246,434.9	$	5,899.2	$	5,878.4

Changes in the fair value of client-related and trading derivative instruments are recognized currently in income. The following table shows the location and amount of gains and losses recorded in the consolidated statement of income for the years ended December 31, 2011 and 2010.

	LOCATION OF DERIVATIVE GAIN/(LOSS) RECOGNIZED IN INCOME	AMOUNT OF DERIVATIVE GAIN/ (LOSS) RECOGNIZED IN INCOME
(In Millions)		DECEMBER 31,  2011		DECEMBER 31, 2010
Foreign Exchange Contracts	Foreign Exchange Trading Income	$	324.5	$	382.2
Interest Rate Swap Contracts	Security Commissions and Trading Income		5.9		9.3
Total		$	330.4	$	391.5

Risk Management Instruments. Northern Trust uses derivative instruments to hedge its exposure to foreign currency, interest rate, and credit risk. Certain hedging relationships are formally designated and qualify for hedge accounting under GAAP as fair value, cash flow, or net investment hedges. Other derivatives that are entered into for risk management purposes as economic hedges are not formally designated as hedges and, therefore, are accounted for as trading instruments.

In order to qualify for hedge accounting, a formal assessment is performed on a calendar quarter basis to verify that derivatives used in designated hedging transactions continue to be highly effective in offsetting the changes in fair value or cash flows of the hedged item. If a derivative ceases to be highly effective, matures, is sold, or is terminated, or if a hedged forecasted transaction is no longer expected to occur, hedge accounting is terminated and the derivative is treated as if it were a trading instrument.

The following table identifies the types and classifications of derivative instruments designated as hedges and used by Northern Trust to manage risk, their notional and fair values, and the respective risks addressed.

			DECEMBER 31, 2011						DECEMBER 31, 2010
					FAIR VALUE						FAIR VALUE
(In Millions)	DERIVATIVE INSTRUMENT	RISK CLASSIFICATION	NOTIONAL VALUE		ASSET		LIABILITY		NOTIONAL VALUE		ASSET		LIABILITY
FAIR VALUE HEDGES
Available for Sale Investment Securities	Interest Rate Swap Contracts	Interest Rate	$	2,172.0	$	2.6	$	46.8	$	860.0	$	4.8	$	14.9
Senior Notes and Long-Term Subordinated Debt	Interest Rate Swap Contracts	Interest Rate		1,100.0		147.0		.5		1,100.0		129.8		.4
CASH FLOW HEDGES
Forecasted Foreign Currency Denominated Transactions	Foreign Exchange Contracts	Foreign Currency		932.9		9.4		27.2		935.3		19.3		15.2
NET INVESTMENT HEDGES
Net Investments in Non-U.S. Affiliates	Foreign Exchange Contracts	Foreign Currency		1,554.7		12.0		1.5		1,390.1		13.0		18.3
Total			$	5,759.6	$	171.0	$	76.0	$	4,285.4	$	166.9	$	48.5

In addition to the above, Sterling denominated debt, totaling $241.2 million and $241.8 million at December 31, 2011 and 2010, respectively, was designated as a hedge of the foreign exchange risk associated with the net investment in certain non-U.S. affiliates.

Derivatives are designated as fair value hedges to limit Northern Trust’s exposure to changes in the fair value of assets and liabilities due to movements in interest rates. For a fair value hedge, changes in the fair value of the derivative instrument and changes in the fair value of the hedged asset or liability attributable to the hedged risk are recorded currently in income.

The following table shows the location and amount of derivative gains and losses recorded in the consolidated statement of income related to fair value hedges for the years ended December 31, 2011 and 2010.

	DERIVATIVE INSTRUMENT	LOCATION OF DERIVATIVE GAIN/(LOSS) RECOGNIZED IN INCOME	AMOUNT OF DERIVATIVE GAIN/ (LOSS) RECOGNIZED IN INCOME
(In Millions)			DECEMBER 31, 2011			DECEMBER 31, 2010
Available for Sale Investment Securities	Interest Rate Swap Contracts	Interest Income		(56.6	)		(13.3	)
Senior Notes and Long-Term Subordinated Debt	Interest Rate Swap Contracts	Interest Expense		194.4			78.8
Total				137.8			65.5

Northern Trust applies the “shortcut” method of accounting, available under GAAP, to substantially all of its fair value hedges, which assumes there is no ineffectiveness in a hedge. As a result, changes recorded in the fair value of the hedged item are equal to the offsetting gain or loss on the derivative and are reflected in the same line item as the gain or loss. For fair value hedges that do not qualify for the “shortcut” method of accounting, Northern Trust utilizes regression analysis, a “long-haul” method of accounting, in assessing whether the hedging relationships are highly effective at inception and on an ongoing basis. There were $.3 million and $.2 million of changes recorded in the fair values of outstanding hedged items for such “long-haul” hedges during the years ended December 31, 2011 and 2010, respectively. There was $.9 million and $.1 million ineffectiveness recorded during the years ended December 31, 2011 and 2010, respectively, and no ineffectiveness recorded during the year ended December 31, 2009, for available for sale investment securities, senior notes, and subordinated debt.

Derivatives are also designated as cash flow hedges in order to minimize the variability in cash flows of earning assets or forecasted transactions caused by movements in interest or foreign exchange rates. The effective portion of changes in the fair value of such derivatives is recognized in AOCI, a component of stockholders’ equity, and there is no change to the accounting for the hedged item. When the hedged forecasted transaction impacts earnings, balances in AOCI are reclassified to the same income or expense classification as the hedged item. Northern Trust assesses effectiveness using regression analysis for cash flow hedges of available for sale securities. Ineffectiveness is measured using the hypothetical derivative method. For cash flow hedges of forecasted foreign currency denominated revenue and expenditure transactions, Northern Trust closely matches all terms of the hedged item and the hedging derivative at inception and on an ongoing basis which limits hedge ineffectiveness. To the extent all terms are not perfectly matched, effectiveness is assessed using the dollar-offset method and any ineffectiveness is measured using the hypothetical derivative method. There was no ineffectiveness recognized in earnings for cash flow hedges during the years ended December 31, 2011, 2010 or 2009. As of December 31, 2011, twenty-three months is the maximum length of time over which the exposure to variability in future cash flows of forecasted foreign currency denominated transactions is being hedged.

The following table provides cash flow hedge derivative gains and losses recognized in AOCI and the amounts reclassified to earnings during the years ended December 31, 2011 and 2010.

	2011			2010
(In Millions)	FOREIGN EXCHANGE CONTRACTS			FOREIGN EXCHANGE CONTRACTS
Net Gain/(Loss) Recognized in AOCI	$	(23.6	)	$	46.7
Net Gain/(Loss) Reclassified from AOCI to Earnings
Trust, Investment and Other Servicing Fees		.6			7.2
Other Operating Income		(.1	)		.2
Interest Income		(1.2	)		1.7
Interest Expense		0			.1
Compensation		3.0			(8.2	)
Employee Benefits		.9			(2.1	)
Equipment and Software Expense		0			(.1	)
Occupancy Expense		.5			(1.1	)
Other Operating Expense		1.9			(4.0	)
Total	$	5.6		$	(6.3	)

During the year ended December 31, 2011 and 2010, none and $6.3 million, respectively, of net foreign exchange contract losses were reclassified into earnings as a result of the discontinuance of cash flow hedges as it was no longer probable that the original forecasted transactions would occur. It is estimated that a net loss of $10.3 million will be reclassified into earnings within the next twelve months relating to cash flow hedges.

Certain foreign exchange contracts and qualifying nonderivative instruments are designated as net investment hedges to minimize Northern Trust’s exposure to variability in the foreign currency translation of net investments in non-U.S. branches and subsidiaries. The effective portion of changes in the fair value of the hedging instrument is recognized in AOCI consistent with the related translation gains and losses of the hedged net investment. For net investment hedges, all critical terms of the hedged item and the hedging instrument are matched at inception and on an ongoing basis to eliminate hedge ineffectiveness. As a result, no ineffectiveness was recorded for these hedges during the year ended December 31, 2011, 2010 or 2009. Amounts recorded in AOCI are reclassified to earnings only upon the sale or liquidation of an investment in a non-U.S. branch or subsidiary.

The following table provides net investment hedge gains and losses recognized in AOCI during the years ended December 31, 2011 and 2010.

(In Millions)	AMOUNT OF HEDGING INSTRUMENT GAIN/(LOSS) RECOGNIZED IN AOCI (BEFORE TAX)
	2011		2010
Foreign Exchange Contracts	$	25.2	$	40.6
Sterling Denominated Subordinated Debt		.5		9.8
Sterling Denominated Senior Debt		0		10.5
Total	$	25.7	$	60.9

Derivatives not formally designated as hedges under GAAP are entered into for the purpose of managing the foreign currency risk of non-U.S. dollar denominated assets and liabilities, forecasted foreign currency denominated transactions and the credit risk and interest rate risk of loans and loan commitments. The following table identifies the types and classifications of risk management derivative instruments not formally designated as hedges, their notional and fair values, and the respective risks addressed.

			DECEMBER 31, 2011						DECEMBER 31, 2010
					FAIR VALUE						FAIR VALUE
(In Millions)	DERIVATIVE INSTRUMENT	RISK CLASSIFICATION	NOTIONAL VALUE		ASSET		LIABILITY		NOTIONAL VALUE		ASSET		LIABILITY
Commercial Loans and Loan Commitments	Credit Default Swap Contracts	Credit	$	60.5	$	.7	$	.1	$	149.5	$	–	$	2.8
Loan Commitments	Forward Contracts	Interest Rate		0		0		.0		14.3		.5		.2
Forecasted Foreign Currency Denominated Transactions	Foreign Exchange Contracts	Foreign Currency		127.3		2.1		2.6		616.1		12.3		16.2
Commercial Loans	Foreign Exchange Contracts	Foreign Currency		84.3		1.3		.3		60.6		.1		.9
Net Investments in Non-U.S. Affiliates	Foreign Exchange Contracts	Foreign Currency		63.5		.4		.2		61.3		.2		.8
Total			$	335.6		4.5	$	3.2	$	901.8		13.1	$	20.9

Changes in the fair value of derivative instruments not formally designated as hedges are recognized currently in income. The following table provides the location and amount of gains and losses recorded in the consolidated statement of income for the years ended December 31, 2011 and 2010.

			2011			2010
(In Millions)	LOCATION OF DERIVATIVE GAIN/(LOSS) RECOGNIZED IN INCOME		AMOUNT RECOGNIZED IN INCOME			AMOUNT RECOGNIZED IN INCOME
Credit Default Swap Contracts		Other Operating Income	$	.9		$	(1.7	)
Forward Contracts		Other Operating Income		.2			.3
Foreign Exchange Contracts		Other Operating Income		(7.0	)		(19.7	)
Total			$	(5.9	)	$	(21.1	)

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Postretirement Health Care Amounts Included in Accumulated Other Comprehensive Income (Detail) (Other Postretirement Benefit Plans, Defined Benefit, USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Other Postretirement Benefit Plans, Defined Benefit
Net Actuarial Loss	$ 10.9	$ 13.0
Prior Service Benefit	(8.0)	(13.0)
Gross Amount in Accumulated Other Comprehensive Income	2.9
Income Tax Effect	1.1
Net Amount in Accumulated Other Comprehensive Income	$ 1.8

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Risk-Based Capital Amounts and Ratios for Northern Trust and for Each of its U.S. Subsidiary Banks Whose Net Income for 2011 or 2010 Exceeded 10% of the Consolidated Total (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Consolidated Entities
Total Capital to Risk-Weighted Assets
ACTUAL AMOUNT	$ 8,065	$ 8,036
ACTUAL RATIO	14.20%	15.60%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT	5,667	5,147
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO	10.00%	10.00%
Tier 1 Capital to Risk-Weighted Assets
ACTUAL AMOUNT	7,105	6,977
ACTUAL RATIO	12.50%	13.60%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT	3,400	3,088
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO	6.00%	6.00%
Tier 1 Capital (to Fourth Quarter Average Assets)
ACTUAL AMOUNT	7,105	6,977
ACTUAL RATIO	12.50%	13.60%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT	3,400	3,088
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO	6.00%	6.00%
Consolidated Entities | Fourth Quarter Average Assets
Tier 1 Capital to Risk-Weighted Assets
ACTUAL AMOUNT	7,105	6,977
ACTUAL RATIO	7.30%	8.80%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT	4,685	3,983
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO	5.00%	5.00%
Tier 1 Capital (to Fourth Quarter Average Assets)
ACTUAL AMOUNT	7,105	6,977
ACTUAL RATIO	7.30%	8.80%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT	4,685	3,983
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO	5.00%	5.00%
The Northern Trust Company
Total Capital to Risk-Weighted Assets
ACTUAL AMOUNT	7,763	6,440
ACTUAL RATIO	13.80%	16.20%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT	5,631	3,978
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO	10.00%	10.00%
Tier 1 Capital to Risk-Weighted Assets
ACTUAL AMOUNT	6,603	5,293
ACTUAL RATIO	11.70%	13.30%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT	3,378	2,387
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO	6.00%	6.00%
Tier 1 Capital (to Fourth Quarter Average Assets)
ACTUAL AMOUNT	6,603	5,293
ACTUAL RATIO	11.70%	13.30%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT	3,378	2,387
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO	6.00%	6.00%
The Northern Trust Company | Fourth Quarter Average Assets
Tier 1 Capital to Risk-Weighted Assets
ACTUAL AMOUNT	6,603	5,293
ACTUAL RATIO	6.80%	8.00%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT	4,852	3,323
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO	5.00%	5.00%
Tier 1 Capital (to Fourth Quarter Average Assets)
ACTUAL AMOUNT	6,603	5,293
ACTUAL RATIO	6.80%	8.00%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT	4,852	3,323
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO	5.00%	5.00%
Northern Trust, NA
Total Capital to Risk-Weighted Assets
ACTUAL AMOUNT		1,461
ACTUAL RATIO		13.90%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT		1,050
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO		10.00%
Tier 1 Capital to Risk-Weighted Assets
ACTUAL AMOUNT		1,301
ACTUAL RATIO		12.40%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT		630
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO		6.00%
Tier 1 Capital (to Fourth Quarter Average Assets)
ACTUAL AMOUNT		1,301
ACTUAL RATIO		12.40%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT		630
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO		6.00%
Northern Trust, NA | Fourth Quarter Average Assets
Tier 1 Capital to Risk-Weighted Assets
ACTUAL AMOUNT		1,301
ACTUAL RATIO		10.80%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT		602
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO		5.00%
Tier 1 Capital (to Fourth Quarter Average Assets)
ACTUAL AMOUNT		1,301
ACTUAL RATIO		10.80%
MINIMUM TO QUALIFY AS WELL CAPITALIZED AMOUNT		$ 602
MINIMUM TO QUALIFY AS WELL CAPITALIZED RATIO		5.00%

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Goodwill and Other Intangibles (Tables)

12 Months Ended

Dec. 31, 2011

Changes in Carrying Amounts of Goodwill by Business Unit

Changes in the carrying amount of goodwill by business unit for the years ended December 31, 2011 and 2010 were as follows:

(In Millions)	CORPORATE AND INSTITUTIONAL SERVICES			PERSONAL FINANCIAL SERVICES			TOTAL
Balance at December 31, 2009	$	334.7		$	66.9		$	401.6
Goodwill Acquired		–			4.6			4.6
Other Changes*		(5.2	)		(.1	)		(5.3	)
Balance at December 31, 2010	$	329.5		$	71.4		$	400.9
Goodwill Acquired		131.4			—			131.4
Other Changes*		(.3	)		—			(.3	)
Balance at December 31, 2011	$	460.6		$	71.4		$	532.0

* Includes the effect of foreign exchange rates on non-U.S. dollar denominated goodwill.

Other Intangible Assets Subject to Amortization

OTHER INTANGIBLE ASSETS-SUBJECT TO AMORTIZATION *

	DECEMBER 31
(In Millions)	2011		2010
Gross Carrying Amount	$	251.2	$	164.2
Accumulated Amortization		127.8		111.0
Net Book Value	$	123.4	$	53.2

* Includes the effect of foreign exchange rates on non-U.S. dollar denominated intangible assets.

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Floating Rate Capital Debt

12 Months Ended

Dec. 31, 2011

Floating Rate Capital Debt

Note 13 – Floating Rate Capital Debt

In January 1997, the Corporation issued $150 million of Floating Rate Capital Securities, Series A, through a statutory business trust wholly-owned by the Corporation (“NTC Capital I”). In April 1997, the Corporation also issued, through a separate wholly-owned statutory business trust (“NTC Capital II”), $120 million of Floating Rate Capital Securities, Series B. The sole assets of the trusts are Subordinated Debentures of Northern Trust Corporation that have the same interest rates and maturity dates as the corresponding distribution rates and redemption dates of the Floating Rate Capital Securities. The Series A Securities were issued at a discount to yield 60.5 basis points above the three-month London Interbank Offered Rate (LIBOR) and are due January 15, 2027. The Series B Securities were issued at a discount to yield 67.9 basis points above the three-month LIBOR and are due April 15, 2027. Both Series A and B Securities currently qualify as tier 1 capital for regulatory purposes. Under the provisions of The Dodd-Frank Wall Street Reform and Consumer Protection Act, the tier 1 regulatory capital treatment of these securities will be phased out over a three-year period beginning on January 1, 2013. The specifics of the phaseout of tier 1 capital treatment have not yet been established by bank regulators.

The Corporation has fully, irrevocably and unconditionally guaranteed all payments due on the Series A and B Securities. The holders of the Series A and B Securities are entitled to receive preferential cumulative cash distributions quarterly in arrears (based on the liquidation amount of $1,000 per Security) at an interest rate equal to the rate on the corresponding Subordinated Debentures. The interest rate on the Series A and Series B securities is equal to three-month LIBOR plus .52% and .59%, respectively. Subject to certain exceptions, the Corporation has the right to defer payment of interest on the Subordinated Debentures at any time or from time to time for a period not exceeding 20 consecutive quarterly periods provided that no extension period may extend beyond the stated maturity date. If interest is deferred on the Subordinated Debentures, distributions on the Series A and B Securities will also be deferred and the Corporation will not be permitted, subject to certain exceptions, to pay or declare any cash distributions with respect to the Corporation’s capital stock or debt securities that rank the same as or junior to the Subordinated Debentures, until all past due distributions are paid. The Subordinated Debentures are unsecured and subordinated to substantially all of the Corporation’s existing indebtedness.

The Corporation has the right to redeem the Series A and Series B Subordinated Debentures, in whole or in part, at a price equal to the principal amount plus accrued and unpaid interest. The following table summarizes the book values of the outstanding Subordinated Debentures as of December 31, 2011 and 2010:

	DECEMBER 31
(In Millions)	2011		2010
NTC Capital I Subordinated Debentures due January 15, 2027	$	153.8	$	153.8
NTC Capital II Subordinated Debentures due April 15, 2027		123.1		123.1
Total Subordinated Debentures	$	276.9	$	276.9

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Floating Rate Capital Debt - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	1 Months Ended	12 Months Ended			1 Months Ended	12 Months Ended
	Jan. 31, 1997 NTC Capital I Subordinated Debentures Due January 15th 2027	Dec. 31, 2011 NTC Capital I Subordinated Debentures Due January 15th 2027	Jan. 31, 1997 NTC Capital I Subordinated Debentures Due January 15th 2027 Basis points above three-month London Interbank Offered Rate (LIBOR)	Jan. 31, 1997 NTC Capital I Subordinated Debentures Due January 15th 2027 Interest rate equal to three-month LIBOR	Apr. 30, 1997 NTC Capital II Subordinated Debentures Due April 15th 2027	Dec. 31, 2011 NTC Capital II Subordinated Debentures Due April 15th 2027	Apr. 30, 1997 NTC Capital II Subordinated Debentures Due April 15th 2027 Basis points above three-month London Interbank Offered Rate (LIBOR)	Apr. 30, 1997 NTC Capital II Subordinated Debentures Due April 15th 2027 Interest rate equal to three-month LIBOR
Debt Instrument [Line Items]
Floating Rate Capital Securities, issued	$ 150				$ 120
Floating Rate Capital Securities, terms of issue	The Series A Securities were issued at a discount to yield 60.5 basis points above the three-month London Interbank Offered Rate (LIBOR) and are due January 15, 2027.				The Series B Securities were issued at a discount to yield 67.9 basis points above the three-month LIBOR and are due April 15, 2027.
Debt instrument, basis spread on variable rate			0.605%	0.52%			0.679%	0.59%
Floating Rate Capital Securities, due date	Jan. 15, 2027				Apr. 15, 2027
Phased out period for tier 1 regulatory capital treatment of securities		3 years				3 years
Start date of phased out period for tier 1 regulatory capital treatment of securities		2013-01-01				2013-01-01
Liquidation amount per Security	$ 1,000				$ 1,000
Interest rate on the securities	Three-month LIBOR plus .52%				Three-month LIBOR plus .59%
Maximum consecutive periods on the deferred payment of interest	20Q				20Q

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Other Operating Income

12 Months Ended

Dec. 31, 2011

Other Operating Income

Note 18 – Other Operating Income

The components of other operating income were as follows:

(In Millions)	2011		2010		2009
Loan Service Fees	$	68.9	$	60.3	$	52.1
Banking Service Fees		54.9		57.3		53.1
Other Income		34.3		28.7		31.6
Total Other Operating Income	$	158.1	$	146.3	$	136.8

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Condensed Statement of Income (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
OPERATING INCOME
Total Operating Income	$ 3,769.9	[1]	$ 3,647.7	[1]	$ 3,786.9	[1]
OPERATING EXPENSES
Interest Expense	(399.5)		(378.0)		(406.2)
Other Operating Expenses	(267.1)		(270.0)		(136.3)
Benefit (Expense) for Income Taxes	(280.1)		(320.3)		(391.0)
Net Income	603.6		669.5		864.2
Net Income Applicable to Common Stock	603.6		669.5		753.1
Parent Company
OPERATING INCOME
Intercompany Interest and Other Charges	19.8		11.4		10.1
Interest and Other Income	13.3		6.9		13.7
Total Operating Income	538.2		85.5		459.4
OPERATING EXPENSES
Interest Expense	66.9		50.8		45.7
Other Operating Expenses	12.6		15.4		(93.2)
Total Operating Expenses	79.5		66.2		(47.5)
Income (Loss) before Income Taxes and Equity in Undistributed Net Income of Subsidiaries	458.7		19.3		506.9
Benefit (Expense) for Income Taxes	24.8		23.0		(25.0)
Income (Loss) before Equity in Undistributed Net Income of Subsidiaries	483.5		42.3		481.9
Net Income	603.6		669.5		864.2
Equity in Undistributed Net Income of Subsidiaries	120.1		620.9		382.2
Net Income Applicable to Common Stock	603.6		669.5		753.1
Parent Company | Banks Industry
OPERATING INCOME
Dividends from Subsidiaries	500.0				410.0
OPERATING EXPENSES
Equity in Undistributed Net Income of Subsidiaries	71.0		636.9		364.7
Parent Company | Nonbank Subsidiaries
OPERATING INCOME
Dividends from Subsidiaries	5.1		67.2		25.6
OPERATING EXPENSES
Equity in Undistributed Net Income of Subsidiaries	$ 49.1		$ (9.7)		$ 17.6

[1] Revenue is comprised of net interest income and noninterest income.

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Contractual Amounts of Commitments and Letters of Credit (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Commitments to Extend Credit
Commitments and Letters of Credit [Line Items]
Legally Binding Commitments to Extend Credit	$ 28,702.2	[1]	$ 27,229.5	[1]
Standby Letters of Credit
Commitments and Letters of Credit [Line Items]
Commitments and Letters of Credit	4,293.4	[2]	4,344.7	[2]
Commercial Letters of Credit
Commitments and Letters of Credit [Line Items]
Commitments and Letters of Credit	$ 23.4		$ 32.8

[1] These amounts exclude $.5 billion and $1.6 billion of commitments participated to others at December 31, 2011 and 2010, respectively.

[2] These amounts include $608.2 million and $602.3 million of standby letters of credit secured by cash deposits or participated to others as of December 31, 2011 and 2010, respectively. The weighted average maturity of standby letters of credit was 27 months at December 31, 2011 and 20 months at December 31, 2010.

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Balances and Delinquency Status of Performing and Nonperforming Loans and Leases by Segment and Class as well as Total Other Real Estate Owned and Nonperforming Asset Balances (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	$ 29,063.9	$ 28,132.0
Total Other Real Estate Owned	21.2	45.5
Total Nonperforming Assets	314.9	378.5
Commercial
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	12,354.3	11,613.4
Commercial | Commercial and Institutional
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	6,918.7	5,914.5
Commercial | Commercial Real Estate
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	2,981.7	3,242.4
Commercial | Lease Financing, net
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	978.8	1,063.7
Commercial | Non-U.S.
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	1,057.5	1,046.2
Commercial | Other
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	417.6	346.6
Personal
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	16,709.6	16,518.6
Personal | Residential Real Estate
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	10,708.9	10,854.9
Personal | Private Client
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	5,651.4	5,423.7
Personal | Other Member
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	349.3	240.0
Performing Financing Receivable
Financing Receivable, Recorded Investment [Line Items]
CURRENT	28,601.6	27,579.6
30 - 59 DAYS PAST DUE	109.2	152.3
60 - 89 DAYS PAST DUE	46.3	54.1
90 DAYS OR MORE PAST DUE	13.1	13.0
TOTAL LOANS AND LEASES	28,770.2	27,799.0
Performing Financing Receivable | Commercial
Financing Receivable, Recorded Investment [Line Items]
CURRENT	12,201.3	11,364.4
30 - 59 DAYS PAST DUE	25.8	40.5
60 - 89 DAYS PAST DUE	13.0	23.9
90 DAYS OR MORE PAST DUE	3.4	10.2
TOTAL LOANS AND LEASES	12,243.5	11,439.0
Performing Financing Receivable | Commercial | Commercial and Institutional
Financing Receivable, Recorded Investment [Line Items]
CURRENT	6,869.2	5,831.2
30 - 59 DAYS PAST DUE	15.0	16.3
60 - 89 DAYS PAST DUE	2.7	8.2
90 DAYS OR MORE PAST DUE	0.5	0.8
TOTAL LOANS AND LEASES	6,887.4	5,856.5
Performing Financing Receivable | Commercial | Commercial Real Estate
Financing Receivable, Recorded Investment [Line Items]
CURRENT	2,878.2	3,076.7
30 - 59 DAYS PAST DUE	10.8	24.2
60 - 89 DAYS PAST DUE	10.3	15.7
90 DAYS OR MORE PAST DUE	2.9	9.4
TOTAL LOANS AND LEASES	2,902.2	3,126.0
Performing Financing Receivable | Commercial | Lease Financing, net
Financing Receivable, Recorded Investment [Line Items]
CURRENT	978.8	1,063.7
TOTAL LOANS AND LEASES	978.8	1,063.7
Performing Financing Receivable | Commercial | Non-U.S.
Financing Receivable, Recorded Investment [Line Items]
CURRENT	1,057.5	1,046.2
TOTAL LOANS AND LEASES	1,057.5	1,046.2
Performing Financing Receivable | Commercial | Other
Financing Receivable, Recorded Investment [Line Items]
CURRENT	417.6	346.6
TOTAL LOANS AND LEASES	417.6	346.6
Performing Financing Receivable | Personal
Financing Receivable, Recorded Investment [Line Items]
CURRENT	16,400.3	16,215.2
30 - 59 DAYS PAST DUE	83.4	111.8
60 - 89 DAYS PAST DUE	33.3	30.2
90 DAYS OR MORE PAST DUE	9.7	2.8
TOTAL LOANS AND LEASES	16,526.7	16,360.0
Performing Financing Receivable | Personal | Residential Real Estate
Financing Receivable, Recorded Investment [Line Items]
CURRENT	10,428.0	10,607.4
30 - 59 DAYS PAST DUE	67.7	76.1
60 - 89 DAYS PAST DUE	27.6	17.2
90 DAYS OR MORE PAST DUE	8.0	0.9
TOTAL LOANS AND LEASES	10,531.3	10,701.6
Performing Financing Receivable | Personal | Private Client
Financing Receivable, Recorded Investment [Line Items]
CURRENT	5,623.0	5,367.8
30 - 59 DAYS PAST DUE	15.7	35.7
60 - 89 DAYS PAST DUE	5.7	13.0
90 DAYS OR MORE PAST DUE	1.7	1.9
TOTAL LOANS AND LEASES	5,646.1	5,418.4
Performing Financing Receivable | Personal | Other Member
Financing Receivable, Recorded Investment [Line Items]
CURRENT	349.3	240.0
TOTAL LOANS AND LEASES	349.3	240.0
Nonperforming Financing Receivable
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	293.7	333.0
Nonperforming Financing Receivable | Commercial
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	110.8	174.4
Nonperforming Financing Receivable | Commercial | Commercial and Institutional
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	31.3	58.0
Nonperforming Financing Receivable | Commercial | Commercial Real Estate
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	79.5	116.4
Nonperforming Financing Receivable | Personal
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	182.9	158.6
Nonperforming Financing Receivable | Personal | Residential Real Estate
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	177.6	153.3
Nonperforming Financing Receivable | Personal | Private Client
Financing Receivable, Recorded Investment [Line Items]
TOTAL LOANS AND LEASES	$ 5.3	$ 5.3

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Buildings and Equipment (Tables)

12 Months Ended

Dec. 31, 2011

Buildings and Equipment

A summary of buildings and equipment is presented below.

	DECEMBER 31, 2011
(In Millions)	ORIGINAL COST		ACCUMULATED DEPRECIATION		NET BOOKVALUE
Land and Improvements	$	32.6	$	.8	$	31.8
Buildings		252.2		127.0		125.2
Equipment		391.0		209.1		181.9
Leasehold Improvements		298.5		180.5		118.0
Buildings Leased under Capital Leases		83.9		46.3		37.6
Total Buildings and Equipment	$	1,058.2	$	563.7	$	494.5

The charge for depreciation, which includes depreciation of assets recorded under capital leases, amounted to $89.2 million in 2011, $93.5 million in 2010, and $95.7 million in 2009.

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Lease Commitments - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Schedule of Finance Lease Obligations [Line Items]
Future minimum lease payments, term	1 year
One of the buildings and related land utilized for Chicago operations	In the event of sale or refinancing, the Bank would anticipate receiving full repayment of any outstanding loans plus 42% of any proceeds in excess of the original project costs.
Percentage of proceeds in excess of original project costs the bank would anticipate to receive, in addition to full repayment of outstanding loan, in the event of sale or refinancing	42.00%
Net rental expense	$ 84.2	$ 68.1	$ 70.2
Restructuring, acquisition and integration related charges
Schedule of Finance Lease Obligations [Line Items]
Net rental expense	$ 6.4

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Northern Trust Corporation (Corporation only)

12 Months Ended

Dec. 31, 2011

Northern Trust Corporation (Corporation only)

Note 33 – Northern Trust Corporation (Corporation only)

Condensed financial information is presented below. Investments in wholly-owned subsidiaries are carried on the equity method of accounting.

CONDENSED BALANCE SHEET	DECEMBER 31
(In Millions)	2011			2010
ASSETS
Cash on Deposit with Subsidiary Bank	$	6.5		$	6.8
Time Deposits with Subsidiary Banks		1,269.2			1,561.2
Securities		97.1			118.2
Advances to Wholly-Owned Subsidiaries – Banks		1,035.0			285.0
– Nonbank		5.0			5.0
Investments in Wholly-Owned Subsidiaries – Banks		6,890.6			6,855.1
– Nonbank		152.6			121.2
Buildings and Equipment		3.4			3.4
Other Assets		373.3			339.5
Total Assets	$	9,832.7		$	9,295.4
LIABILITIES
Long-Term Debt	$	2,126.7		$	1,896.1
Floating Rate Capital Debt		276.9			276.9
Other Liabilities		311.8			292.1
Total Liabilities		2,715.4			2,465.1
STOCKHOLDERS’ EQUITY
Common Stock		408.6			408.6
Additional Paid-in Capital		977.5			920.0
Retained Earnings		6,302.3			5,972.1
Accumulated Other Comprehensive Loss		(345.6	)		(305.3	)
Treasury Stock		(225.5	)		(165.1	)
Total Stockholders’ Equity		7,117.3			6,830.3
Total Liabilities and Stockholders’ Equity	$	9,832.7		$	9,295.4

CONDENSED STATEMENT OF INCOME	FOR THE YEAR ENDED DECEMBER 31
(In Millions)	2011		2010			2009
OPERATING INCOME
Dividends – Bank Subsidiaries	$	500.0	$	–		$	410.0
– Nonbank Subsidiaries		5.1		67.2			25.6
Intercompany Interest and Other Charges		19.8		11.4			10.1
Interest and Other Income		13.3		6.9			13.7
Total Operating Income		538.2		85.5			459.4
OPERATING EXPENSES
Interest Expense		66.9		50.8			45.7
Other Operating Expenses		12.6		15.4			(93.2	)
Total Operating Expenses		79.5		66.2			(47.5	)
Income (Loss) before Income Taxes and Equity in Undistributed Net Income of Subsidiaries		458.7		19.3			506.9
Benefit (Expense) for Income Taxes		24.8		23.0			(25.0	)
Income (Loss) before Equity in Undistributed Net Income of Subsidiaries		483.5		42.3			481.9
Equity in Undistributed Net Income of Subsidiaries – Banks		71.0		636.9			364.7
– Nonbank		49.1		(9.7	)		17.6
Net Income	$	603.6	$	669.5		$	864.2
Net Income Applicable to Common Stock	$	603.6	$	669.5		$	753.1

CONDENSED STATEMENT OF CASH FLOWS	FOR THE YEAR ENDED DECEMBER 31
(In Millions)	2011			2010			2009
OPERATING ACTIVITIES:
Net Income	$	603.6		$	669.5		$	864.2
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:
Equity in Undistributed Net Income of Subsidiaries		(120.1	)		(620.9	)		(382.2	)
Decrease in Prepaid Expenses		.2			1.2			2.0
Client Support-Related Charges (Benefit)		—			—			(109.3	)
Capital Support Agreement Payments		—			—			(204.8	)
Increase (Decrease) in Accrued Income Taxes		28.5			61.8			283.6
Other, net		(41.2	)		(13.3	)		20.4
Net Cash Provided by Operating Activities		471.0			98.3			473.9
INVESTING ACTIVITIES:
Net Increase in Time Deposits with Banks		292.1			(77.2	)		(268.0	)
Purchases of Securities – Available for Sale		(91.4	)		(109.7	)		—
Proceeds from Sale, Maturity and Redemption of Securities – Available for Sale		105.4			4.7			411.8
Net Increase in Capital Investments in Subsidiaries		(.5	)		(204.8	)		(42.0	)
Advances to Wholly-Owned Subsidiaries		(750.0	)		—			—
Other, net		—			(.9	)		(7.9	)
Net Cash Provided by (Used in) Investing Activities		(444.4	)		(387.9	)		93.9
FINANCING ACTIVITIES:
Net Increase in Senior Notes		250.0			497.2			500.0
Proceeds from Common Stock Issuance		—			—			834.1
Redemption of Preferred Stock – Series B		—			—			(1,576.0	)
Cash Dividends Paid on Preferred Stock		—			—			(46.6	)
Repurchase of Warrant to Purchase Common Stock		—			—			(87.0	)
Treasury Stock Purchased		(79.0	)		(5.9	)		(10.7	)
Cash Dividends Paid on Common Stock		(273.7	)		(273.2	)		(260.3	)
Net Proceeds from Stock Options		75.6			70.6			38.9
Other, net		.1			1.2			23.8
Net Cash Provided by (Used in) Financing Activities		(27.0	)		289.9			(583.8	)
Net Change in Cash on Deposit with Subsidiary Bank		(.4	)		.3			(16.0	)
Cash on Deposit with Subsidiary Bank at Beginning of Year		6.8			6.5			22.5
Cash on Deposit with Subsidiary Bank at End of Year	$	6.4		$	6.8		$	6.5

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Future Minimum Lease Payments for Capital Leases (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011
Schedule of Capital Lease Obligations [Line Items]
2012	$ 7.9
2013	8.1
2014	8.4
2015	8.2
2016	8.0
Later Years	23.6
Total Minimum Lease Payments, net	64.2
Less: Amount Representing Interest	19.3
Net Present Value under Capital Lease Obligations	$ 44.9

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Net Income	$ 603.6	$ 669.5	$ 864.2
Cumulative Effect Adjustment from New Accounting Standard			(9.5)
Other Comprehensive Income (Loss) (Net of Tax and Reclassifications)
Net Unrealized Gains on Securities Available for Sale	53.3	28.2	180.7
Net Unrealized Gains (Losses) on Cash Flow Hedges	(18.4)	37.6	(5.5)
Foreign Currency Translation Adjustments	(2.5)	(18.3)	(1.5)
Pension and Other Postretirement Benefit Adjustments	(72.7)	8.8	(30.9)
Other Comprehensive Income (Loss)	(40.3)	56.3	133.3
Comprehensive Income	$ 563.3	$ 725.8	$ 997.5

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Securities Purchased Under Agreements to Resell (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Securities Financing Transaction [Line Items]
Balance at End of Year	$ 74.7	$ 152.1
Average Balance During the Year	246.3	277.3
Average Interest Rate Earned During the Year	0.07%	0.17%
Maximum Month-End Balance During the Year	$ 424.2	$ 578.0

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Recent Accounting Pronouncements

12 Months Ended

Dec. 31, 2011

Recent Accounting Pronouncements

Note 2 – Recent Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-11, “Disclosures about Offsetting Assets and Liabilities”. The ASU requires disclosure of information about offsetting and related arrangements to enable users of the financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position, including the effect or potential effect of rights of setoff associated with certain financial instruments and derivative instruments. The provisions of the ASU are effective for annual reporting periods beginning on or after January 1, 2013. The adoption of this ASU by Northern Trust, effective January 1, 2013, will result in additional disclosures, but is not expected to have an impact on its consolidated financial position or results of operations.

In December 2011, the FASB issued ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05”. The ASU indefinitely defers the provisions of ASU No. 2011-05, “Presentation of Comprehensive Income” (ASU 2011-05) which require reclassification adjustments out of accumulated other comprehensive income to be presented in the consolidated statement of income. The provisions of the ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, concurrently with the provisions of ASU 201.51-05. Since this ASU addresses financial statement presentation only, its adoption will not impact Northern Trust’s consolidated financial position or results of operations.

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Pledged and Restricted Assets - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2011
Financial Instruments Owned and Pledged as Collateral [Line Items]
Amount of securities and loans pledged	$ 27,900,000,000
Available for sale securities, pledged as collateral	1,200,000,000
Fair value of accepted collateral	74,700,000
Amount of securities repledged or sold collateral	0
Average deposits maintained to meet Federal Reserve Bank reserve requirements	429,900,000
US Government Corporations and Agencies Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Amount of securities and loans pledged	21,500,000,000
Obligations of States and Political Subdivisions
Financial Instruments Owned and Pledged as Collateral [Line Items]
Amount of securities and loans pledged	460,200,000
Loans
Financial Instruments Owned and Pledged as Collateral [Line Items]
Amount of securities and loans pledged	6,000,000,000
Collateral Requirements
Financial Instruments Owned and Pledged as Collateral [Line Items]
Amount of securities and loans pledged	$ 4,800,000,000

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Cash Flow Hedge Derivative Gains and Losses Recognized in AOCI and the Amounts Reclassified to Earnings (Detail) (Asset And Liability Management, Foreign Exchange Contracts, USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Asset And Liability Management | Foreign Exchange Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Net Gain/(Loss) Recognized in AOCI	$ (23.6)	$ 46.7
Net Gain/(Loss) Reclassified from AOCI to Earnings
Trust, Investment and Other Servicing Fees	0.6	7.2
Other Operating Income	(0.1)	0.2
Interest Income	(1.2)	1.7
Interest Expense	0	0.1
Compensation	3.0	(8.2)
Employee Benefits	0.9	(2.1)
Equipment and Software Expense	0	(0.1)
Occupancy Expense	0.5	(1.1)
Other Operating Expense	1.9	(4.0)
Total	$ 5.6	$ (6.3)

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Other Operating Income (Tables)

12 Months Ended

Dec. 31, 2011

Total Other Operating Income

The components of other operating income were as follows:

(In Millions)	2011		2010		2009
Loan Service Fees	$	68.9	$	60.3	$	52.1
Banking Service Fees		54.9		57.3		53.1
Other Income		34.3		28.7		31.6
Total Other Operating Income	$	158.1	$	146.3	$	136.8

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Securities - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011 Investment	Dec. 31, 2010	Dec. 31, 2009
Schedule of Trading Securities and Other Trading Assets [Line Items]
Realized securities losses	$ 23.9	$ 20.4	$ 23.4
Realized securities gains (losses)	(0.6)	0.8	3.3
Net Impairment Losses Recognized in Earnings	23.3	21.2	26.7
Number of securities in an unrealized loss position	386
Total Fair Value	10,223.5	4,600.6
Total Unrealized Losses	85.0	99.5
12 MONTHS OR LONGER UNREALIZED LOSSES	51.6	65.3
Residential Mortgage-Backed
Schedule of Trading Securities and Other Trading Assets [Line Items]
Net Impairment Losses Recognized in Earnings	23.3	21.2	26.7
Number of securities in an unrealized loss position for more than 12 months	25
Total Unrealized Losses	32.3
12 MONTHS OR LONGER UNREALIZED LOSSES	31.4
Residential Mortgage-Backed | Sub-prime and Alt-A Mortgage Backed Securities
Schedule of Trading Securities and Other Trading Assets [Line Items]
Credit Rating	Below double-A
Residential mortgage-backed securities total amortized cost	168.6
Residential mortgage-backed securities fair value	137.4
Residential Mortgage-Backed | AA Credit Rating | Sub-prime and Alt-A Mortgage Backed Securities
Schedule of Trading Securities and Other Trading Assets [Line Items]
Percentage of residential mortgage backed securities rated below double-A	84.00%
Other Asset-Backed | Floating Rate Securities
Schedule of Trading Securities and Other Trading Assets [Line Items]
Percentage of "other asset-backed" securities rated triple-A	100.00%
Credit Rating	AAA
Other Asset-Backed | Floating Rate Securities | Upper Limit
Schedule of Trading Securities and Other Trading Assets [Line Items]
Average life	5
Non-Agency RMBS
Schedule of Trading Securities and Other Trading Assets [Line Items]
Net Impairment Losses Recognized in Earnings		21.2	26.7
Non-Agency RMBS | Sub-prime and Alt-A Mortgage Backed Securities
Schedule of Trading Securities and Other Trading Assets [Line Items]
Net Impairment Losses Recognized in Earnings	23.3
Non-Agency RMBS | Financing Receivable, Current | Upper Limit
Schedule of Trading Securities and Other Trading Assets [Line Items]
Expected loss on subprime, Alt-A, prime and 2nd lien portfolios developed using default roll rate	30.00%
Non-Agency RMBS | Financing Receivable, Current | Lower Limit
Schedule of Trading Securities and Other Trading Assets [Line Items]
Expected loss on subprime, Alt-A, prime and 2nd lien portfolios developed using default roll rate	5.00%
Non-Agency RMBS | Financing Receivable, 30 to 59 Days Past Due
Schedule of Trading Securities and Other Trading Assets [Line Items]
Expected loss on subprime, Alt-A, prime and 2nd lien portfolios developed using default roll rate	30.00%
Non-Agency RMBS | Financing Receivable, 60 to 89 Days Past Due
Schedule of Trading Securities and Other Trading Assets [Line Items]
Expected loss on subprime, Alt-A, prime and 2nd lien portfolios developed using default roll rate	80.00%
Non-Agency RMBS | Financing Receivable, 90 Days and Greater Past Due
Schedule of Trading Securities and Other Trading Assets [Line Items]
Expected loss on subprime, Alt-A, prime and 2nd lien portfolios developed using default roll rate	90.00%
Non-Agency RMBS | Other Real Estate Owned and Loans in Foreclosure
Schedule of Trading Securities and Other Trading Assets [Line Items]
Expected loss on subprime, Alt-A, prime and 2nd lien portfolios developed using default roll rate	100.00%
Government Sponsored Agency
Schedule of Trading Securities and Other Trading Assets [Line Items]
Total Unrealized Losses	17.4
Others | Community Reinvestment Act CRA
Schedule of Trading Securities and Other Trading Assets [Line Items]
Total Unrealized Losses	13.4
Auction Rate Securities
Schedule of Trading Securities and Other Trading Assets [Line Items]
Total Unrealized Losses	12.5
Corporate Debt
Schedule of Trading Securities and Other Trading Assets [Line Items]
Total Unrealized Losses	$ 5.7
Percent of corporate debt unrealized losses	66.00%

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Future Minimum Lease Payments for Non-Cancelable Operating Leases (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011
Operating Leased Assets [Line Items]
2012	$ 86.9
2013	85.8
2014	72.1
2015	67.3
2016	53.3
Later Years	380.2
Total Minimum Lease Payments	$ 745.6

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2011 Year
Significant Accounting Policies [Line Items]
Number of primary business units that generate majority of revenues	2
Maximum limit of individual homogeneous loans collective evaluation for impairment and excluded from impaired loan disclosures	250,000
Computer Software, Intangible Asset
Significant Accounting Policies [Line Items]
Software, useful life, minimum	3
Software, useful life, maximum	10
Building
Significant Accounting Policies [Line Items]
Charge for depreciation, range of life, minimum	10
Charge for depreciation, range of life, maximum	30
Equipment
Significant Accounting Policies [Line Items]
Charge for depreciation, range of life, minimum	3
Charge for depreciation, range of life, maximum	10
Leasehold Improvements
Significant Accounting Policies [Line Items]
Charge for depreciation, range of life, maximum	15
Range of life, minimum	The shorter of the lease term or 15 years
Lower Limit
Significant Accounting Policies [Line Items]
Days contractually past due for interest and principal and the loan is not well-secured and in the process of collection	90 days
Period for which troubled debt restructurings with modified terms is performing before ceasing to be classified as impaired loan	6 months
Upper Limit
Significant Accounting Policies [Line Items]
Current loans and leases policy period	29 days
Personal Financial Services
Significant Accounting Policies [Line Items]
Services provided by business units, states	18

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Other Operating Expense

12 Months Ended

Dec. 31, 2011

Other Operating Expense

Note 19 – Other Operating Expense

The components of other operating expense were as follows:

(In Millions)	2011		2010		2009
Business Promotion	$	82.1	$	81.0	$	66.6
FDIC Insurance Premiums		29.3		33.9		54.1
Staff Related		37.6		37.4		31.3
Other Intangibles Amortization		17.5		14.4		16.2
Capital Support Agreements		–		–		(109.3	)
Other Expenses		100.6		103.3		77.4
Total Other Operating Expense	$	267.1	$	270.0	$	136.3

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Stockholders' Equity - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended					1 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	May 01, 2009	Nov. 30, 2008 Year	Dec. 31, 2009 Series B Preferred Stock	Aug. 26, 2009 Series B Preferred Stock	Nov. 30, 2008 Series B Preferred Stock	Nov. 14, 2008 Series B Preferred Stock	Jun. 17, 2009 Series B Preferred Stock
Stockholders Equity Note [Line Items]
Preferred stock, authorized shares	10,000,000	10,000,000
Preferred stock, no par value	$ 0
Preferred stock, outstanding	0	0
Common stock, issued				17,250,000
Common Stock, Par Value	$ 1.6667	$ 1.6667		$ 1.6667
Additional shares authorized for repurchase	5,600,000
Average price paid per share for common stock repurchased	$ 49.63	$ 52.33	$ 55.05
Issued shares of Series B Preferred Stock									1,576,000
Proceeds from shares of Series B Preferred Stock and a warrant issued									$ 1,576.0
Payment to repurchase preferred share investment										1,576.0
Repurchase of warrant			87.0				87.0
Series B Preferred Stock, par value								$ 0
Series B Preferred Stock, liquidation preference per share								$ 1,000
Dividend payment terms								Cumulative dividends on the Series B Preferred Stock accrued on the liquidation preference at a rate of 5% per annum for the first five years, and at a rate of 9% per annum thereafter.
Dividends liquidation preference percentage, within next five years								5.00%
Dividends liquidation preference percentage, thereafter								9.00%
Discounted cash flow model for fair value of preferred dividends, assumed market yield								12.00%
Discounted cash flow model for fair value of preferred dividends, assumed effective yield								6.13%
Discounted cash flow model for fair value of preferred dividends, estimated life (years)								5 years
Dividends on the preferred stock and the related accretion of the discount						$ 111.1
Warrant to purchase shares of common stock					3,824,624
Warrant Exercise price					61.81
Warrant term (years)					10 years
Fair value assumption for warrant to purchase common stock, life (years)					10
Fair value assumption for warrant to purchase common stock, dividend yield					2.19%
Fair value assumption for warrant to purchase common stock, stock price volatility					36.06%
Fair value assumption for warrant to purchase common stock, risk free interest rate					3.98%

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Types and Classifications of Risk Management Derivative Instruments Not Formally Designated as Hedges, Including Notional and Fair Values (Detail) (Nondesignated, USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Derivative [Line Items]
NOTIONAL VALUE	$ 335.6	$ 901.8
ASSET FAIR VALUE	4.5	13.1
LIABILITY FAIR VALUE	3.2	20.9
Credit Default Swap Contracts | Commercial Loans and Loan Commitments
Derivative [Line Items]
NOTIONAL VALUE	60.5	149.5
ASSET FAIR VALUE	0.7
LIABILITY FAIR VALUE	0.1	2.8
Forward Contracts | Loan Commitments
Derivative [Line Items]
NOTIONAL VALUE	0	14.3
ASSET FAIR VALUE	0	0.5
LIABILITY FAIR VALUE	0	0.2
Foreign Exchange Contracts | Net Investments in Non-U.S. Affiliates
Derivative [Line Items]
NOTIONAL VALUE	63.5	61.3
ASSET FAIR VALUE	0.4	0.2
LIABILITY FAIR VALUE	0.2	0.8
Foreign Exchange Contracts | Forecasted Foreign Currency Denominated Transactions
Derivative [Line Items]
NOTIONAL VALUE	127.3	616.1
ASSET FAIR VALUE	2.1	12.3
LIABILITY FAIR VALUE	2.6	16.2
Foreign Exchange Contracts | Commercial Loans
Derivative [Line Items]
NOTIONAL VALUE	84.3	60.6
ASSET FAIR VALUE	1.3	0.1
LIABILITY FAIR VALUE	$ 0.3	$ 0.9

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Components of Consolidated Provision for Income Taxes (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Current Tax Provision:
Federal	$ 113.6	$ 220.0	$ 124.6
State	15.1	21.8	(7.1)
Non-U.S.	54.2	66.4	89.7
Total	182.9	308.2	207.2
Deferred Tax Provision:
Federal	84.0	6.2	162.9
State	11.3	5.2	24.1
Non-U.S.	1.9	0.7	(3.2)
Total	97.2	12.1	183.8
Provision for Income Taxes	$ 280.1	$ 320.3	$ 391.0

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Amounts and Associated Expense Categories of Charges Recorded (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Restructuring Acquisition and Integration Charges [Line Items]
Compensation	$ 1,267.2	$ 1,108.0	$ 1,099.7
Employee Benefits	258.2	237.6	242.1
Outside Services	552.8	460.4	424.5
Equipment and Software	328.1	287.1	261.1
Occupancy	180.9	167.8	170.8
Other Operating Expense	267.1	270.0	136.3
Restructuring Acquisition and Integration Charges
Restructuring Acquisition and Integration Charges [Line Items]
Compensation	50.2
Employee Benefits	4.3
Outside Services	16.8
Equipment and Software	10.9
Occupancy	6.4
Other Operating Expense	3.0
Total Charges	$ 91.6

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Changes in Level 3 Liabilities (Detail) (Other Liabilities, USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Other Liabilities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Liabilities Beginning Balance	$ 58.6	$ 94.4
Total Realized and Unrealized (Gains) Losses
Included in Earnings	(0.6)	(4.5)
Included in Other Comprehensive Income
Purchases, Issuances, Sales, and Settlements
Issuances	68.4	3.4
Settlements	(25.8)	(34.7)
Fair Value Liabilities Ending Balance	100.6	58.6
Unrealized Gains (Losses) Included in Earnings Related to Financial Instruments Held at Period End

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Contingent Liabilities - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Commitments and Contingencies Disclosure [Line Items]
Possible loss in future periods in excess of accrual	$ 32
Gain on redemption of Visa common stock				167.9
Remaining Visa shares held by Northern Trust, original cost basis				0
Visa indemnified litigation benefit (charges) recorded	23.1	33.0	17.8	76.1	(150.0)
Fair value of net Visa indemnification liability		23.1
Fair value of contingent consideration	$ 56.8

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Restrictions on Subsidiary Dividends and Loans or Advances

12 Months Ended

Dec. 31, 2011

Restrictions on Subsidiary Dividends and Loans or Advances

Note 30 – Restrictions on Subsidiary Dividends and Loans or Advances

Provisions of state and federal banking laws restrict the amount of dividends that can be paid to the Corporation by its banking subsidiaries. Under applicable state and federal laws, at a minimum no dividends may be paid in an amount greater than the net or undivided profits (as defined by regulatory agencies) then on hand, subject to other applicable and potentially more restrictive laws that may vary from state to state. Federal Reserve Board rules provide that no state bank that is a Federal Reserve System member may declare or pay a dividend if the total of all dividends declared during the calendar year, including the proposed dividend, exceeds its net profits for that year, combined with its retained net profits for the preceding two years, unless the dividend has been approved by the Federal Reserve Board. The Bank is subject to this requirement. The Bank is also prohibited under federal law from paying any dividends if the Bank is undercapitalized or if the payment of the dividends would cause the Bank to become undercapitalized. In addition, the federal regulatory agencies are authorized to prohibit a bank or bank holding company from engaging in an unsafe or unsound banking practice. The payment of dividends could, depending on the financial condition of the Bank, be deemed to constitute an unsafe or unsound practice. In addition, state laws may restrict to different degrees the amount of dividends that may be paid without state regulatory approval. Based on these restrictions, the Corporation’s banking subsidiaries, without regulatory approval, could declare dividends during 2012 equal to their 2012 eligible net profits (as defined by regulatory agencies) plus $1.26 billion. The ability of each banking subsidiary to pay dividends to the Corporation may be further restricted going forward as a result of regulatory policies and guidelines, including regulations issued pursuant to the Dodd-Frank Act, relating to dividend payments and capital adequacy.

On November 22, 2011, the Federal Reserve Board issued a final rule implementing the requirement of the Dodd-Frank Act that top-tier bank holding companies domiciled in the U.S. with total consolidated assets of $50 billion or more, including the Corporation, submit annual capital plans to the Federal Reserve Board for review. Under the final rule, the Federal Reserve Board will annually evaluate institutions’ capital adequacy, internal capital adequacy assessment processes, and their plans to make capital distributions, such as dividend payments or stock repurchases. The Federal Reserve Board will approve dividend increases or other capital distributions only for companies whose capital plans are approved by supervisors and are able to demonstrate sufficient financial strength to operate as successful financial intermediaries under stressed macroeconomic and financial market scenarios, after making the desired capital distributions.

State and federal laws limit the transfer of funds by the Bank to the Corporation and certain of its affiliates in the form of loans or extensions of credit, investments, derivative transactions, repurchase agreements, reverse repurchase agreements, securities lending or borrowing transactions or purchases of assets. Transfers of this kind to the Corporation or a nonbanking subsidiary by the Bank are each limited to 10% of the Bank’s capital and surplus with respect to each affiliate and to 20% in the aggregate, and are also subject to certain collateral requirements and other restrictions on covered transactions. These transactions, as well as other transactions between the Bank and the Corporation or its affiliates, must also be on terms substantially the same as, or at least as favorable as, those prevailing at the time for comparable transactions with non-affiliated companies or, in the absence of comparable transactions, on terms, or under circumstances, including credit standards, that would be offered to, or would apply to, non-affiliated companies.

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Senior Notes and Long-Term Debt

12 Months Ended

Dec. 31, 2011

Senior Notes and Long-Term Debt

Note 12 – Senior Notes and Long-Term Debt

Senior Notes. A summary of senior notes outstanding at December 31 is presented below.

($ In Millions)	RATE			2011		2010
Corporation-Senior Notes (a) (d)
Fixed Rate Due Aug. 2011 (f)		5.30	%	$	—	$	249.9
Fixed Rate Due Nov. 2012 (g) (l)		5.20			206.9		214.6
Fixed Rate Due Aug. 2013 (h) (l)		5.50			422.4		432.2
Fixed Rate Due May 2014		4.63			500.0		500.0
Fixed Rate Due Nov. 2020 (j)		3.45			499.5		499.4
Fixed Rate Due Aug. 2021 (k)		3.38			497.9		–
Total Senior Notes				$	2,126.7	$	1,896.1

Long-Term Debt. A summary of long-term debt outstanding at December 31 is presented below.

($ In Millions)	2011		2010
Bank-Subordinated Debt (a) (d)
6.30% Notes due March 2011 (b)	$	–	$	150.0
4.60% Notes due Feb. 2013 (b)		200.0		200.0
5.85% Notes due Nov. 2017 (b) (l)		241.5		229.5
6.50% Notes due Aug. 2018 (b) (i) (l)		360.8		337.6
5.375% Sterling Denominated Notes due March 2015 (e)		231.1		231.6
Total Bank-Subordinated Debt		1,033.4		1,148.7
Federal Home Loan Bank Borrowings
One Year or Less (Average Rate at Year End – 4.64% in 2011; 4.18% in 2010)		670.0		426.4
One to Three Years (Average Rate at Year End – 4.08% in 2011; 4.46% in 2010)		335.0		870.0
Three to Five Years (Average Rate at Year End – None in 2011; 4.40% in 2010)		–		135.0
Five to Ten Years (Average Rate at Year End – 6.29% in 2011; 6.38% in 2010)		50.0		101.1
Total Federal Home Loan Bank Borrowings		1,055.0		1,532.5
Capital Lease Obligations (c)		44.9		48.1
Total Long-Term Debt	$	2,133.3	$	2,729.3
Long-Term Debt Qualifying as Risk-Based Capital	$	678.9	$	765.8

(a) Not redeemable prior to maturity.

(b) Under the terms of its current Offering Circular dated August 23, 2011, the Bank has the ability to offer from time to time its senior bank notes in an aggregate principal amount of up to $4.5 billion at any one time outstanding and up to an additional $1.0 billion of subordinated notes. Each senior note will mature from 30 days to fifteen years, and each subordinated note will mature from five years to fifteen years, following its date of original issuance. Each note will mature on such date as selected by the initial purchaser and agreed to by the Bank.

(c) Refer to Note 10.

(d) Debt issue costs are recorded as an asset and amortized on a straight-line basis over the life of the Note.

(e) Notes issued at a discount of .484%.

(f) Notes issued at a discount of .035%.

(g) Notes issued at a discount of .044%.

(h) Notes issued at a discount of .09%.

(i) Notes issued at a discount of .02%

(j) Notes issued at a discount of .117%

(k) Notes issued at a discount of .437%

(l) Interest rate swap contracts were entered into to modify the interest expense on these senior and subordinated notes from fixed rates to floating rates. The swaps are recorded as fair value hedges and at December 31, 2011, increases in the carrying values of the senior and subordinated notes outstanding of $29.9 million and $102.6 million, respectively, were recorded. As of December 31, 2010, increases in the carrying values of senior and subordinated notes outstanding of $47.8 million and $67.4 million, respectively, were recorded.

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Concentrations of Credit Risk - Additional Information (Detail) (USD $)	Dec. 31, 2011	Dec. 31, 2010
Commercial Real Estate [Line Items]
Average commercial mortgage financing loan amount	$ 2,286,000,000	$ 2,272,900,000
Residential real estate	10,700,000,000	10,900,000,000
Residential real estate loans as percentage of total U.S. loans	38.00%	40.00%
Lower limit of generally required loan to collateral value for residential real estate loans	65.00%
Upper limit of generally required loan to collateral value for residential real estate loans	80.00%
Legally binding commitments to extend credit	2,200,000,000	2,500,000,000
Money Market Funds
Commercial Real Estate [Line Items]
Credit risk to banks - money market assets	16,800,000,000	15,500,000,000
Demand Deposits
Commercial Real Estate [Line Items]
Credit risk to banks - non-interest bearing balances held at banks	4,200,000,000	2,700,000,000
Greater Chicago Area
Commercial Real Estate [Line Items]
Residential real estate	4,000,000,000
Florida
Commercial Real Estate [Line Items]
Residential real estate	2,800,000,000
California State
Commercial Real Estate [Line Items]
Residential real estate	1,500,000,000
Commercial Real Estate | Commercial
Commercial Real Estate [Line Items]
Average commercial mortgage financing loan amount	$ 1,300,000