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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-Q

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

For the quarterly period ended September 30, 2001

Commission File Number 0-23642

LOGO

NORTHWEST AIRLINES CORPORATION(Exact name of registrant as specified in its charter)

DELAWARE(State or other jurisdiction of
incorporation or organization)

41-1905580(I.R.S. Employer
Identification No.)


2700 Lone Oak Parkway, Eagan, Minnesota 55121(Address of principal executive offices)
(Zip Code)

(612) 726-2111(Registrant's telephone number, including area code)

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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 / /

At
September 30, 2001, there were 85,304,300 shares of the registrant's Common Stock outstanding.

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Northwest Airlines Corporation

|PART I. FINANCIAL INFORMATION |  | Page No.                                                                                                                                                                                
|----------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                              |  | Item 1.                                                                                                                                                                                 
|                              |  |                                                                                                                                                                                         
|                              |  |                                                                                                                                                                                         
|                              |  |                                                                                                                                                                                         
|                              |  |                                                                                                                                                                                         
|                              |  | The Computations of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges and Preferred Stock Requirements, are attached hereto and filed as Exhibits 12.1 and 12.2.
|                              |  | Item 2.                                                                                                                                                                                 
|                              |  | Item 3.                                                                                                                                                                                 
|PART II. OTHER INFORMATION    |  |                                                                                                                                                                                         
|                              |  | Item 1.                                                                                                                                                                                 
|                              |  | Item 6.                                                                                                                                                                                 
|SIGNATURE                     |  | 22                                                                                                                                                                                      
|EXHIBIT INDEX                 |  | 22                                                                                                                                                                                      

2

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Northwest Airlines Corporation

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

|                                  |                                                              | Three Months Ended
September 30 |                              | Nine Months Ended
September 30 |  
|--------------------------------- | ------------------------------------------------------------ | ------------------------------- | ---------------------------- | ------------------------------ | -
|
|
|Operating Revenues                |                                                              |                                 |                              |                                |  
|                                  | Passenger                                                    |                                 | $                            | 2,272                          |  
|                                  | Cargo                                                        |                                 |                              | 177                            |  
|                                  | Other                                                        |                                 |                              | 145                            |  
|                                  |                                                              |                                 |                              |                                |  
|                                  |                                                              |                                 | Total operating revenues     |                                |  
|Operating Expenses                |                                                              |                                 |                              |                                |  
|                                  | Salaries, wages and benefits                                 |                                 |                              | 1,024                          |  
|                                  | Aircraft fuel and taxes                                      |                                 |                              | 454                            |  
|                                  | Aircraft maintenance materials and repairs                   |                                 |                              | 156                            |  
|                                  | Commissions                                                  |                                 |                              | 135                            |  
|                                  | Other rentals and landing fees                               |                                 |                              | 136                            |  
|                                  | Depreciation and amortization                                |                                 |                              | 172                            |  
|                                  | Aircraft rentals                                             |                                 |                              | 113                            |  
|                                  | Other                                                        |                                 |                              | 559                            |  
|                                  |                                                              |                                 |                              |                                |  
|                                  |                                                              |                                 | Total operating expenses     |                                |  
|                                  |                                                              |                                 |                              |                                |  
|Operating Income (Loss)           |                                                              |                                 | (155                         | )                              |  
|Other Income (Expense)            |                                                              |                                 |                              |                                |  
|                                  | Airline Stabilization Act funds                              |                                 |                              | 249                            |  
|                                  | Interest expense, net                                        |                                 |                              | (89                            | )
|                                  | Interest of mandatorily redeemable preferred security holder |                                 |                              | (6                             | )
|                                  | Investment income                                            |                                 |                              | 15                             |  
|                                  | Foreign currency gain (loss)                                 |                                 |                              | (6                             | )
|                                  | Other                                                        |                                 |                              | 17                             |  
|                                  |                                                              |                                 |                              |                                |  
|                                  |                                                              |                                 | Total other income (expense) |                                |  
|                                  |                                                              |                                 |                              |                                |  
|Income (Loss) Before Income Taxes |                                                              |                                 | 25                           |                                |  
|Income tax expense (benefit)      |                                                              |                                 | 6                            |                                |  
|                                  |                                                              |                                 |                              |                                |  
|Net Income (Loss)                 |                                                              | $                               | 19                           |                                | $
|                                  |                                                              |                                 |                              |                                |  
|Earnings (loss) per common share: |                                                              |                                 |                              |                                |  
|                                  | Basic                                                        |                                 | $                            | .22                            |  
|                                  |                                                              |                                 |                              |                                |  
|                                  | Diluted                                                      |                                 | $                            | .20                            |  
|                                  |                                                              |                                 |                              |                                |  

See accompanying notes.

3

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Northwest Airlines Corporation

CONDENSED CONSOLIDATED BALANCE SHEETS

|(Unaudited, in millions)                                                                                      |                                                                    | September 30
2001 |                                            | December 31
2000 |  
|------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | ----------------- | ------------------------------------------ | ---------------- | -
|Assets                                                                                                        |                                                                    |                   |                                            |                  |  
|Current Assets                                                                                                |                                                                    |                   |                                            |                  |  
|                                                                                                              | Cash and cash equivalents                                          |                   | $                                          | 2,814            |  
|                                                                                                              | Restricted short-term investments                                  |                   |                                            | 80               |  
|                                                                                                              | Accounts receivable, net                                           |                   |                                            | 361              |  
|                                                                                                              | Flight equipment spare parts, net                                  |                   |                                            | 295              |  
|                                                                                                              | Prepaid expenses and other                                         |                   |                                            | 404              |  
|                                                                                                              |                                                                    |                   |                                            |                  |  
|                                                                                                              |                                                                    |                   | Total current assets                       |                  |  
|Property and Equipment                                                                                        |                                                                    |                   |                                            |                  |  
|                                                                                                              | Flight equipment, net                                              |                   |                                            | 4,995            |  
|                                                                                                              | Other property and equipment, net                                  |                   |                                            | 1,073            |  
|                                                                                                              |                                                                    |                   |                                            |                  |  
|                                                                                                              |                                                                    |                   | Total property and equipment               |                  |  
|Flight Equipment Under Capital Leases, net                                                                    |                                                                    |                   | 549                                        |                  |  
|Other Assets                                                                                                  |                                                                    |                   |                                            |                  |  
|                                                                                                              | International routes, net                                          |                   |                                            | 640              |  
|                                                                                                              | Investments in affiliated companies                                |                   |                                            | 240              |  
|                                                                                                              | Other                                                              |                   |                                            | 1,786            |  
|                                                                                                              |                                                                    |                   |                                            |                  |  
|                                                                                                              |                                                                    |                   | 2,666                                      |                  |  
|                                                                                                              |                                                                    |                   |                                            |                  |  
|                                                                                                              |                                                                    |                   | Total Assets                               |                  | $
|                                                                                                              |                                                                    |                   |                                            |                  |  
|Liabilities and Stockholders' Equity                                                                          |                                                                    |                   |                                            |                  |  
|Current Liabilities                                                                                           |                                                                    |                   |                                            |                  |  
|                                                                                                              | Air traffic liability                                              |                   | $                                          | 1,438            |  
|                                                                                                              | Accounts payable and other liabilities                             |                   |                                            | 2,466            |  
|                                                                                                              | Current maturities of long-term debt and capital lease obligations |                   |                                            | 249              |  
|                                                                                                              |                                                                    |                   |                                            |                  |  
|                                                                                                              |                                                                    |                   | Total current liabilities                  |                  |  
|Long-Term Debt                                                                                                |                                                                    |                   | 4,737                                      |                  |  
|Long-Term Obligations Under Capital Leases                                                                    |                                                                    |                   | 530                                        |                  |  
|Deferred Credits and Other Liabilities                                                                        |                                                                    |                   |                                            |                  |  
|                                                                                                              | Deferred income taxes                                              |                   |                                            | 1,142            |  
|                                                                                                              | Pension and postretirement benefits                                |                   |                                            | 1,357            |  
|                                                                                                              | Other                                                              |                   |                                            | 539              |  
|                                                                                                              |                                                                    |                   |                                            |                  |  
|                                                                                                              |                                                                    |                   | 3,038                                      |                  |  
|Mandatorily Redeemable Preferred Security of Subsidiary Which Holds Solely Non-Recourse Obligation of Company |                                                                    |                   | 539                                        |                  |  
|Redeemable Preferred Stock                                                                                    |                                                                    |                   | 227                                        |                  |  
|Common Stockholders' Equity                                                                                   |                                                                    |                   |                                            |                  |  
|                                                                                                              | Common stock                                                       |                   |                                            | 1                |  
|                                                                                                              | Additional paid-in capital                                         |                   |                                            | 1,459            |  
|                                                                                                              | Accumulated deficit                                                |                   |                                            | (302             | )
|                                                                                                              | Accumulated other comprehensive income (loss)                      |                   |                                            | (62              | )
|                                                                                                              | Treasury stock                                                     |                   |                                            | (1,083           | )
|                                                                                                              |                                                                    |                   |                                            |                  |  
|                                                                                                              |                                                                    |                   | 13                                         |                  |  
|                                                                                                              |                                                                    |                   |                                            |                  |  
|                                                                                                              |                                                                    |                   | Total Liabilities and Stockholders' Equity |                  | $
|                                                                                                              |                                                                    |                   |                                            |                  |  

See accompanying notes.

4

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Northwest Airlines Corporation

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                 |                                                                    | Nine Months Ended
September 30 |                                                    
|------------------------------------------------ | ------------------------------------------------------------------ | ------------------------------ | ---------------------------------------------------
|
|
|Net Cash Provided by Operating Activities        |                                                                    | $                              | 657                                                
|Cash Flows From Investing Activities             |                                                                    |                                |                                                    
|                                                 | Capital expenditures                                               |                                |                                                    
|                                                 | Net increase in short-term investments                             |                                |                                                    
|                                                 | Proceeds from sale of investment in Continental Airlines, Inc.     |                                |                                                    
|                                                 | Other, net                                                         |                                |                                                    
|                                                 |                                                                    |                                |                                                    
|                                                 |                                                                    |                                | Net cash used in investing activities              
|Cash Flows From Financing Activities             |                                                                    |                                |                                                    
|                                                 | Proceeds from issuance of short-term borrowings and long-term debt |                                |                                                    
|                                                 | Payment of short-term borrowings                                   |                                |                                                    
|                                                 | Proceeds from sale and leaseback transactions                      |                                |                                                    
|                                                 | Payments of long-term debt and capital lease obligations           |                                |                                                    
|                                                 | Other, net                                                         |                                |                                                    
|                                                 |                                                                    |                                |                                                    
|                                                 |                                                                    |                                | Net cash provided by (used in) financing activities
|Increase in Cash and Cash Equivalents            |                                                                    |                                | 2,121                                              
|Cash and cash equivalents at beginning of period |                                                                    |                                | 693                                                
|                                                 |                                                                    |                                |                                                    
|Cash and cash equivalents at end of period       |                                                                    | $                              | 2,814                                              
|                                                 |                                                                    |                                |                                                    
|Available to be borrowed under credit facilities |                                                                    | $                              | 2                                                  
|                                                 |                                                                    |                                |                                                    

See accompanying notes.

5

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Northwest Airlines Corporation

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





6

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Three months ended
September 30

Nine months ended
September 302001

2000

2001

2000Domestic

$
1,677

$
1,980

$
5,332

$
5,648Pacific, principally Japan


629


804


1,745


2,018Atlantic


288


357


843


869Total operating revenues

$
2,594

$
3,141

$
7,920

$
8,535




7

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|             |                                                                                                     | Three months ended
September 30                       |   | Nine months ended
September 30
|------------ | --------------------------------------------------------------------------------------------------- | ----------------------------------------------------- | - | ------------------------------
|
|Numerator:   |                                                                                                     |                                                       |   |                               
|             | Net income (loss) (in millions)                                                                     |                                                       | $ | 19                            
|             |                                                                                                     |                                                       |   |                               
|Denominator: |                                                                                                     |                                                       |   |                               
|             | Weighted-average shares outstanding for basic earnings per share                                    |                                                       |   | 84,503,281                    
|             | Effect of dilutive securities:                                                                      |                                                       |   |                               
|             |                                                                                                     | Series C Preferred Stock                              |   |                               
|             |                                                                                                     | Shares held in non-qualified rabbi trusts             |   |                               
|             |                                                                                                     | Employee stock options and unvested restricted shares |   |                               
|             |                                                                                                     |                                                       |   |                               
|             | Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share |                                                       |   | 92,182,619                    
|             |                                                                                                     |                                                       |   |                               



8

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Condensed Consolidating Statements of Operations for the three months ended September 30 (in millions):

|                           |  | Northwest |       | Other
Subsidiaries |   | Consolidating
Adjustments |  | NWA Corp.
Consolidated |     
|-------------------------- |  | --------- | ----- | ------------------ | - | ------------------------- |  | ---------------------- | ----
|2001:                      |  |           |       |                    |   |                           |  |                        |     
|Operating revenues         |  | $         | 2,483 |                    | $ | 147                       |  | $                      | (36 
|Operating expenses         |  |           | 2,649 |                    |   | 132                       |  |                        | (32 
|                           |  |           |       |                    |   |                           |  |                        |     
|Operating income (loss)    |  |           | (166  | )                  |   | 15                        |  |                        | (4  
|Other income               |  |           | 173   |                    |   | 37                        |  |                        | (30 
|                           |  |           |       |                    |   |                           |  |                        |     
|Income before income taxes |  |           | 7     |                    |   | 52                        |  |                        | (34 
|Income tax expense         |  |           | 6     |                    |   |                          |  |                        |    
|                           |  |           |       |                    |   |                           |  |                        |     
|Net income                 |  | $         | 1     |                    | $ | 52                        |  | $                      | (34 
|                           |  |           |       |                    |   |                           |  |                        |     
|2000:                      |  |           |       |                    |   |                           |  |                        |     
|Operating revenues         |  | $         | 3,045 |                    | $ | 140                       |  | $                      | (44 
|Operating expenses         |  |           | 2,699 |                    |   | 129                       |  |                        | (41 
|                           |  |           |       |                    |   |                           |  |                        |     
|Operating income           |  |           | 346   |                    |   | 11                        |  |                        | (3  
|Other income (expense)     |  |           | (53   | )                  |   | 637                       |  |                        | (596
|                           |  |           |       |                    |   |                           |  |                        |     
|Income before income taxes |  |           | 293   |                    |   | 648                       |  |                        | (599
|Income tax expense         |  |           | 111   |                    |   | 24                        |  |                        |    
|                           |  |           |       |                    |   |                           |  |                        |     
|Net income                 |  | $         | 182   |                    | $ | 624                       |  | $                      | (599
|                           |  |           |       |                    |   |                           |  |                        |     

Condensed Consolidating Statements of Operations for the nine months ended September 30 (in millions):

|                                  |  | Northwest |       | Other
Subsidiaries |   | Consolidating
Adjustments |   | NWA Corp.
Consolidated |     
|--------------------------------- |  | --------- | ----- | ------------------ | - | ------------------------- | - | ---------------------- | ----
|2001:                             |  |           |       |                    |   |                           |   |                        |     
|Operating revenues                |  | $         | 7,556 |                    | $ | 508                       |   | $                      | (144
|Operating expenses                |  |           | 8,005 |                    |   | 475                       |   |                        | (133
|                                  |  |           |       |                    |   |                           |   |                        |     
|Operating income (loss)           |  |           | (449  | )                  |   | 33                        |   |                        | (11 
|Other income (expense)            |  |           | 39    |                    |   | (648                      | ) |                        | 696 
|                                  |  |           |       |                    |   |                           |   |                        |     
|Income (loss) before income taxes |  |           | (410  | )                  |   | (615                      | ) |                        | 685 
|Income tax expense (benefit)      |  |           | (143  | )                  |   | 10                        |   |                        |    
|                                  |  |           |       |                    |   |                           |   |                        |     
|Net income (loss)                 |  | $         | (267  | )                  | $ | (625                      | ) | $                      | 685 
|                                  |  |           |       |                    |   |                           |   |                        |     
|2000:                             |  |           |       |                    |   |                           |   |                        |     
|Operating revenues                |  | $         | 8,236 |                    | $ | 471                       |   | $                      | (172
|Operating expenses                |  |           | 7,638 |                    |   | 455                       |   |                        | (161
|                                  |  |           |       |                    |   |                           |   |                        |     
|Operating income                  |  |           | 598   |                    |   | 16                        |   |                        | (11 
|Other income (expense)            |  |           | (146  | )                  |   | 1,019                     |   |                        | (939
|                                  |  |           |       |                    |   |                           |   |                        |     
|Income before income taxes        |  |           | 452   |                    |   | 1,035                     |   |                        | (950
|Income tax expense                |  |           | 176   |                    |   | 36                        |   |                        |    
|                                  |  |           |       |                    |   |                           |   |                        |     
|Net income                        |  | $         | 276   |                    | $ | 999                       |   | $                      | (950
|                                  |  |           |       |                    |   |                           |   |                        |     

9

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Condensed Consolidating Balance Sheets as of September 30, 2001 (in millions):

|                                             |                                                                    | Northwest                                  |       | Other
Subsidiaries |        | Consolidating
Adjustments |     | NWA Corp.
Consolidated
|-------------------------------------------- | ------------------------------------------------------------------ | ------------------------------------------ | ----- | ------------------ | ------ | ------------------------- | --- | ----------------------
|Assets                                       |                                                                    |                                            |       |                    |        |                           |     |                       
|Current Assets                               |                                                                    |                                            |       |                    |        |                           |     |                       
|                                             | Cash, cash equivalents and restricted short-term investments       |                                            | $     | 2,829              |        | $                         | 65  |                       
|                                             | Accounts receivable, net                                           |                                            |       | 345                |        |                           | 16  |                       
|                                             | Other current assets                                               |                                            |       | 561                |        |                           | 180 |                       
|                                             |                                                                    |                                            |       |                    |        |                           |     |                       
|                                             |                                                                    | Total current assets                       |       |                    | 3,735  |                           |     | 261                   
|Property and Equipment                       |                                                                    |                                            | 5,717 |                    |        | 351                       |     |                       
|Flight Equipment Under Capital Leases, net   |                                                                    |                                            | 549   |                    |        |                          |     |                       
|Other Assets                                 |                                                                    |                                            | 2,457 |                    |        | 3,801                     |     |                       
|                                             |                                                                    |                                            |       |                    |        |                           |     |                       
|                                             |                                                                    | Total Assets                               |       | $                  | 12,458 |                           | $   | 4,413                 
|                                             |                                                                    |                                            |       |                    |        |                           |     |                       
|Liabilities and Stockholders' Equity         |                                                                    |                                            |       |                    |        |                           |     |                       
|Current Liabilities                          |                                                                    |                                            |       |                    |        |                           |     |                       
|                                             | Air traffic liability                                              |                                            | $     | 1,397              |        | $                         | 46  |                       
|                                             | Accounts payable and other liabilities                             |                                            |       | 2,427              |        |                           | 77  |                       
|                                             | Current maturities of long-term debt and capital lease obligations |                                            |       | 222                |        |                           | 27  |                       
|                                             |                                                                    |                                            |       |                    |        |                           |     |                       
|                                             |                                                                    | Total current liabilities                  |       |                    | 4,046  |                           |     | 150                   
|Long-Term Debt and Capital Lease Obligations |                                                                    |                                            | 5,008 |                    |        | 259                       |     |                       
|Deferred Income Taxes                        |                                                                    |                                            |      |                    |        | 1,142                     |     |                       
|Other Liabilities                            |                                                                    |                                            | 1,897 |                    |        | 46                        |     |                       
|Mandatorily Redeemable Preferred Security    |                                                                    |                                            | 539   |                    |        |                          |     |                       
|Redeemable Preferred Stock                   |                                                                    |                                            |      |                    |        | 227                       |     |                       
|Common Stockholders' Equity                  |                                                                    |                                            | 968   |                    |        | 2,589                     |     |                       
|                                             |                                                                    |                                            |       |                    |        |                           |     |                       
|                                             |                                                                    | Total Liabilities and Stockholders' Equity |       | $                  | 12,458 |                           | $   | 4,413                 
|                                             |                                                                    |                                            |       |                    |        |                           |     |                       

10

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Condensed Consolidating Statements of Cash Flows for the nine months ended September 30 (in millions):

|                                                 |  | Northwest |        | Other
Subsidiaries |   | Consolidating
Adjustments |   | NWA Corp.
Consolidated |   
|------------------------------------------------ |  | --------- | ------ | ------------------ | - | ------------------------- | - | ---------------------- | --
|2001:                                            |  |           |        |                    |   |                           |   |                        |   
|Net cash from operating activities               |  | $         | 517    |                    | $ | 140                       |   | $                      |  
|Net cash flows from investing activities         |  |           | (1,053 | )                  |   | 577                       |   |                        | (3
|Net cash flows from financing activities         |  |           | 2,647  |                    |   | (707                      | ) |                        | 3 
|                                                 |  |           |        |                    |   |                           |   |                        |   
|Increase in cash and cash equivalents            |  |           | 2,111  |                    |   | 10                        |   |                        |  
|Cash and cash equivalents at beginning of period |  |           | 659    |                    |   | 34                        |   |                        |  
|                                                 |  |           |        |                    |   |                           |   |                        |   
|Cash and cash equivalents at end of period       |  | $         | 2,770  |                    | $ | 44                        |   | $                      |  
|                                                 |  |           |        |                    |   |                           |   |                        |   
|2000:                                            |  |           |        |                    |   |                           |   |                        |   
|Net cash from operating activities               |  | $         | 736    |                    | $ | 134                       |   | $                      |  
|Net cash flows from investing activities         |  |           | (386   | )                  |   | (18                       | ) |                        | (2
|Net cash flows from financing activities         |  |           | (113   | )                  |   | (103                      | ) |                        | 2 
|                                                 |  |           |        |                    |   |                           |   |                        |   
|Increase in cash and cash equivalents            |  |           | 237    |                    |   | 13                        |   |                        |  
|Cash and cash equivalents at beginning of period |  |           | 735    |                    |   | 14                        |   |                        |  
|                                                 |  |           |        |                    |   |                           |   |                        |   
|Cash and cash equivalents at end of period       |  | $         | 972    |                    | $ | 27                        |   | $                      |  
|                                                 |  |           |        |                    |   |                           |   |                        |   

11

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

For the quarter ended September 30, 2001, the Company reported net income of $19 million and an operating loss of $155 million. Diluted
earnings per common share were $.20 compared with $2.23 for the third quarter of 2000.

In
the third quarter of 2001 the Company recorded net non-recurring pre-tax charges of $61 million related to the events of September 11, 2001.
These charges are comprised of fleet impairments for non-operating aircraft of $35 million and employee severance costs of $26 million. The Company also recorded other income
of $249 million related to financial assistance from the U.S. Government under the Airline Stabilization Act. The third quarter of 2000 included non-recurring net gains of
$25 million, comprised of the Company's share of an affiliate's arbitration settlement and a gain on the sale of a software license. Diluted earnings (loss) per share, excluding these
non-recurring items, was ($1.18) and $2.06 for the third quarter of 2001 and 2000, respectively.

On
September 11, 2001, terrorists hijacked and intentionally crashed four commercial aircraft operated by two U.S. air carriers, causing substantial loss of life and property.
While these aircraft were neither owned nor operated by the Company, these events had an immediate and severe impact on the U.S. airline industry's passenger traffic and yields. Immediately following
these events, the Federal Aviation Administration ("FAA") ordered all aircraft operating in the U.S. to be grounded, an order that remained in place for over 48 hours. The Company was only able
to operate a limited portion of its scheduled flights for several days after the grounding order was lifted as it repositioned displaced aircraft and crews. Passenger traffic and yields on both
domestic and international flights declined significantly when flights were permitted to resume, and the number of tickets refunded was substantially above normal. The Company has continued to
experience significantly lower revenue and has incurred additional costs (e.g. higher security and insurance premiums) as compared to periods prior to September 11, 2001. In addition to
increased insurance rates, aviation insurers have also significantly reduced the maximum amount of insurance coverage available to commercial air carriers for liability to persons other than employees
or passengers for claims resulting from acts of terrorism, war or similar events.

On
September 21, 2001, Congress passed, and the President subsequently signed into law, the Airline Stabilization Act which provides, in part, (i) $5 billion in
payments to compensate U.S. air carriers for losses incurred by the airline industry as a result of the terrorist attacks on the U.S. that occurred on September 11, 2001;
(ii) $10 billion of federal credit instruments (loan guarantees) to U.S. air carriers to guarantee loans from lenders, subject to certain conditions and fees, including the potential
requirement that the Government be issued warrants or other equity instruments in connection with such loan guarantees; (iii) limitations on air carrier officer and employee compensation if the
air carrier receives federal loan guarantees; (iv) provisions designed to ensure the continuity of air service to
communities, including Government subsidized essential air service to small communities; (v) reimbursement to U.S. air carriers by the Government of certain increased insurance costs for the
operation of aircraft incurred by air carriers; (vi) deferral of the deposits by U.S. air carriers for payments on certain taxes; and (vii) limitations of liability for U.S. air
carriers, and establishment of a federal victims compensation fund and claims procedure, relating to the terrorist attacks of September 11, 2001, and, at the discretion of the Secretary of
Transportation, limitations of liability for U.S. air carriers for acts of terrorism committed during a 180-day period following enactment of the Airline Stabilization Act.

Under
the Airline Stabilization Act, each air carrier is entitled to receive the lesser of (i) its direct and incremental pre-tax losses for the period of
September 11, 2001 to December 31, 2001 or (ii) its available seat mile and/or revenue ton mile allocation of the $5 billion compensation available under the Airline
Stabilization Act. The Company had received a total of $230 million as of September 30,

12

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2001 and subsequently received $19 million in early October. The Company expects to receive approximately $250 million of additional funds under the Airline Stabilization Act.

The
Company expects the decreased passenger traffic and yields to continue for the foreseeable future as the airline industry makes the necessary changes to operations and procedures.
In response, the Company has taken several steps to mitigate the impact on its results of operations and financial condition. These steps include an approximate 20% reduction in scheduled capacity on
an available seat mile basis, a reduction in its work force related to the decrease in capacity, and deferrals and cancellations of discretionary and other non-operationally critical
spending. The reduction in capacity resulted in 24 aircraft being temporarily removed from scheduled service. Carrying values of these aircraft will be evaluated based on anticipated future cash
flows, which are dependent on future demand for air travel and related yields. In addition, the downturn in passenger revenue will require the Company to review its operating aircraft and intangible
assets for impairment. Due to the present lack of predictability of future traffic and yields, the Company at this time is not able to reasonably estimate future cash flows generated by these
long-lived assets and therefore will perform impairment reviews once this information is more predictable. The magnitude of any potential charge is not presently known but may be
significant.

While
the Company expects that these actions will mitigate the financial impact of the events of September 11, certain of these actions do not necessarily result in the
immediate reduction of costs. For example, the lower capacity may not result in lower airport facility charges due to the fixed nature of these costs and the reduction in work force may result in a
re-measurement of the pension liability in the fourth quarter. A re-measurement may show that additional pension liability should be recognized and may have a significant
negative non-cash impact on pension expense and accumulated other comprehensive income. Despite these actions, the Company is unable to determine at this time the full impact of
September 11 or its aftermath. Consequently, these events could still cause a material adverse effect on the financial condition and results of operations of the Company in the future. The
Company will continue to evaluate its operations and financial position in light of the future operating environment and will take additional steps it deems necessary.

Substantially
all of the Company's results of operations are attributable to Northwest and the following discussion pertains primarily to Northwest. The Company's results of
operations for interim periods are not necessarily indicative of the results for an entire year due to seasonal factors as well as competitive and general economic conditions. The Company's second and
third quarter operating results have historically been more favorable due to increased leisure travel on domestic and international routes during the spring and summer months.

13

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Information with respect to the Company's operating statistics follows(1):

|                                                                                               |                                             | Three months ended
September 30 |        |       |        | Nine months ended
September 30 |       |        |       
|---------------------------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------- | ------ | ----- | ------ | ------------------------------ | ----- | ------ | ------
|
|Scheduled service:                                                                             |                                             |                                 |        |       |        |                                |       |        |       
|                                                                                               | Available seat miles (ASM) (millions)       |                                 | 26,018 |       | 27,577 |                                | (5.7  | )      | 77,238
|                                                                                               | Revenue passenger miles (millions)          |                                 | 19,731 |       | 21,968 |                                | (10.2 | )      | 58,444
|                                                                                               | Passenger load factor (percent)             |                                 | 75.8   |       | 79.7   |                                | (3.9  | ) pts. | 75.7  
|                                                                                               | Revenue passengers (thousands)              |                                 | 14,296 |       | 15,950 |                                | (10.4 | )      | 42,708
|                                                                                               | Yield per revenue passenger mile (cents)    |                                 | 11.24  |       | 12.44  |                                | (9.6  | )      | 11.51 
|                                                                                               | Passenger revenue per scheduled ASM (cents) |                                 | 8.53   |       | 9.91   |                                | (13.9 | )      | 8.71  
|Operating revenue per total ASM (cents)(2)                                                     |                                             | 9.18                            |        | 10.63 |        | (13.6                          | )     | 9.39   |       
|Operating expense per total ASM (cents)(2)                                                     |                                             | 9.45                            |        | 9.29  |        | 1.7                            |       | 9.77   |       
|Operating expense excluding provision for AMFA retro pay and benefits per total ASM (cents)(2) |                                             |                                 |        |       |        |                                |       | 9.65   |       
|Cargo ton miles (millions)                                                                     |                                             | 534                             |        | 635   |        | (15.9                          | )     | 1,642  |       
|Cargo revenue per ton mile (cents)                                                             |                                             | 33.11                           |        | 34.76 |        | (4.7                           | )     | 33.10  |       
|Fuel gallons consumed (millions)                                                               |                                             | 539                             |        | 565   |        | (4.5                           | )     | 1,596  |       
|Average fuel cost per gallon, excluding fuel tax (cents)                                       |                                             | 78.85                           |        | 90.57 |        | (12.8                          | )     | 82.62  |       
|Number of operating aircraft at end of period                                                  |                                             |                                 |        |       |        |                                |       | 427    |       
|Full-time equivalent employees at end of period                                                |                                             |                                 |        |       |        |                                |       | 48,166 |       

---

Results of OperationsThree months ended September 30, 2001 and 2000

Operating loss was $155 million in 2001 compared with operating income of $354 million in 2000. A decline in revenue of $547 million was
primarily caused by the significant decrease in passenger traffic and yields after the terrorist attacks that occurred on September 11, 2001 as well as sluggish U.S. and Asian economic
conditions that have continued to negatively impact corporate travel and yields industry-wide.

Operating Revenues.Operating revenues decreased 17.4% ($547 million). System passenger revenues (excluding
Express) decreased 18.8% ($515 million). The decrease in system passenger revenue was primarily attributable to a 9.6% decrease in yield and a 10.2% decrease in revenue passenger miles ("RPM"),
resulting in a 13.9% decrease in passenger revenue per scheduled ASM ("RASM"). Express revenues increased 45.9% ($17 million) to $54 million, due to increased capacity from 17 additional
CRJ aircraft.

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The following analysis by market is based on information reported to the Department of Transportation ("DOT") and excludes Express:

|                                  |                                  | System  |       | Domestic |       | Pacific |        | Atlantic |      
|--------------------------------- | -------------------------------- | ------- | ----- | -------- | ----- | ------- | ------ | -------- | -----
|2001                              |                                  |         |       |          |       |         |        |          |      
|                                  | Passenger revenues (in millions) |         | $     | 2,218    |       | $       | 1,434  |          | $    
|Increase (Decrease) from 2000:    |                                  |         |       |          |       |         |        |          |      
|                                  | Passenger revenues (in millions) |         |       | (515     | )     |         | (326   | )        |      
|                                  |                                  | Percent |       |          | (18.8 | )%      |        | (18.5    | )%   
|Scheduled service ASMs (capacity) |                                  |         | (5.7  | )%       |       | (4.9    | )%     |          | (10.0
|Passenger load factor             |                                  |         | (3.9  | ) pts.   |       | (3.5    | ) pts. |          | (4.2 
|Yield                             |                                  |         | (9.6  | )%       |       | (10.2   | )%     |          | (8.8 
|Passenger RASM                    |                                  |         | (13.9 | )%       |       | (14.3   | )%     |          | (13.3

Domestic passenger revenues decreased due to lower yields, passenger load factor and capacity. Northwest continued to experience the impact of
the slowing U.S. economy in the third quarter as well as a decline in business and leisure travel due to the events of September 11, 2001. Approximately 57% of the decrease in domestic
passenger revenue occurred after the terrorist attacks on September 11, 2001. In response to the resulting decline in demand for air travel after the terrorist attacks, domestic fourth quarter
capacity was reduced 15%, as compared to 2000, on an available seat mile basis.

Pacific
passenger revenues decreased due to lower yields, passenger load factor and capacity. The introduction of a reconfigured World Business Class product, which improved seat
pitch from 48 inches to 60 inches and eliminated international first class, further reduced capacity before September 11, 2001.
Passenger load factors and yield have declined primarily due to slowing Asian economies and the events of September 11, 2001. In response to the significant decline in Pacific revenues before
September 11, 2001, the Company suspended flights between Osaka and the following cities: Seattle, Kuala Lumpur, Kaohsiung, Los Angeles and Manila. Approximately 37% of the decrease in Pacific
passenger revenue occurred after the terrorist attacks on September 11, 2001. In response to the reduced demand for air travel after the terrorist attacks, Pacific fourth quarter capacity was
reduced 18%, as compared to 2000, on an available seat mile basis. The average yen per U.S. Dollar exchange rates for the three months ended September 30, 2001 and 2000 were 121 and 108,
respectively, a 10.7% weakening of the yen. Additional information regarding the Company's yen exposure and currency hedging activities is provided under the caption "Foreign Currency" within
"Management's Discussion and Analysis of Financial Condition and Results of OperationsOther Information".

Atlantic
passenger revenues decreased due to a decline in yields and passenger load factor. In response to the reduced demand for air travel after the terrorist attacks, Atlantic
fourth quarter capacity was reduced 15%, as compared to 2000, on an available seat mile basis.

Cargo
revenues decreased 19.5% ($43 million) to $177 million due to a 4.7% decline in yield per ton mile and 15.9% fewer cargo ton miles. These decreases result
primarily from reduced U.S. demand for Asian goods, the weakened yen per U.S. dollar exchange rate and the temporary suspension of cargo shipments carried on passenger aircraft immediately following
the events of September 11, 2001. Service began in July 2001 under a new five-year agreement with DHL Worldwide Express to provide daily freighter service from its U.S. hub
operations in Cincinnati to various points in Asia. The Company's eleventh and twelfth freighters have been placed in revenue service to support this agreement.

Other
revenue decreased 4.0% ($6 million) due primarily to a decrease in KLM joint venture alliance settlements, partially offset by increases in charter and other
miscellaneous revenue.

Operating Expenses.Operating expenses decreased 1.4% ($38 million). Operating expense per total ASM increased
1.7% as operating capacity declined 5.6% to 26.08 billion total service ASMs,

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which resulted from the FAA grounding order and reduced capacity compared to levels before September 11, 2001.

Salaries,
wages and benefits rose 8.6% ($81 million), due primarily to wage rate and benefit increases related to the Aircraft Mechanics Fraternal Association collective
bargaining agreement reached earlier in the year, $26 million for employee severance costs related to the reduction in capacity following the events of September 11, 2001, and
$7 million of severance costs recorded earlier in the quarter. Aircraft fuel and taxes decreased 16.1% ($87 million) as a result of a 12.9% decrease in average fuel cost per gallon and a
4.5% decrease in fuel gallons used. Commissions decreased by 22.0% ($38 million)
primarily due to lower passenger revenue and a lower percentage of commissionable transactions. Depreciation and amortization increased 39.8% ($49 million), which largely represents a charge of
$35 million related to reductions in the estimated market value of non-operating aircraft.

Other Income and Expense.Other non-operating income increased by $192 million, due to
$249 million recognized under the Airline Stabilization Act partially offset by $10 million of higher interest expense and $25 million in gains recorded in 2000.

Results of OperationsNine months ended September 30, 2001 and 2000

Operating loss was $427 million in 2001 compared with operating income of $603 million in 2000. A decrease in revenue of $615 million was
primarily caused by weaker U.S. and Asian economic conditions that have negatively impacted corporate travel and yields industry-wide as well as the terrorist attacks that occurred on
September 11, 2001. Increases in operating expenses of $415 million are due primarily to additional wage and benefit costs and increases in aircraft maintenance costs.

Operating Revenues.Operating revenues decreased 7.2% ($615 million). System passenger revenues (excluding
Express revenues of $143 million and $89 million for 2001 and 2000, respectively) decreased 8.8% ($647 million). The decrease in system passenger revenues was primarily
attributable to a decrease in yield of 5.4%, a 3.5% decrease in revenue passenger miles and a decrease in the passenger load factor of 1.7 points, resulting in a 7.5% decline in RASM.

The
following analysis by market is based on information reported to the DOT and excludes Express:

|                               |                                   | System  |   | Domestic |        | Pacific |       | Atlantic |   
|------------------------------ | --------------------------------- | ------- | - | -------- | ------ | ------- | ----- | -------- | --
|2001                           |                                   |         |   |          |        |         |       |          |   
|                               | Passenger revenues (in millions)  |         | $ | 6,727    |        | $       | 4,582 |          | $ 
|Increase (Decrease) from 2000: |                                   |         |   |          |        |         |       |          |   
|                               | Passenger revenues (in millions)  |         |   | (647     | )      |         | (401  | )        |   
|                               |                                   | Percent |   |          | (8.8   | )%      |       | (8.0     | )%
|                               | Scheduled service ASMs (capacity) |         |   | (1.3     | )%     |         | (1.6  | )%       |   
|                               | Passenger load factor             |         |   | (1.7     | ) pts. |         | (2.0  | ) pts.   |   
|                               | Yield                             |         |   | (5.4     | )%     |         | (3.9  | )%       |   
|                               | Passenger RASM                    |         |   | (7.5     | )%     |         | (6.6  | )%       |   

Domestic passenger revenues decreased primarily due to lower yields, passenger load factor and capacity. The reconfiguration of first class
seating and labor related cancellations both restricted capacity growth. In the nine months ending September 30, 2001, Northwest experienced a weak U.S. economy that has continued to negatively
impact corporate travel and yields industry-wide. The events of September 11, 2001 further reduced demand in both business and leisure travel in the last half of September and the
Company expects this reduced demand to continue into the foreseeable future.

Pacific
passenger revenues were lower due to reduced yields and capacity. The introduction of a reconfigured World Business Class product, which improved seat pitch from 48 inches to
60 inches and eliminated international first class, was the primary reason for the decline in capacity. The events of

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September 11, 2001 further reduced demand in both business and leisure travel in the last half of September and the Company expects this reduced demand to continue into the foreseeable future.
The average yen per U.S. dollar exchange rates for the nine months ended September 30, 2001 and 2000 were 121 and 107, respectively, an 11.6% weakening of the yen. Additional information
regarding the Company's yen exposure and currency hedging activities is provided under the caption "Foreign Currency" within "Management's Discussion and Analysis of Financial Condition and Results of
OperationsOther Information".

Atlantic
passenger revenues were lower due to lower yields and passenger load factor offset by an increase in capacity. Capacity increased as a result of new flying, including the
initiation of Miami-Amsterdam service, as well as increases in both Detroit and Minneapolis/St. Paul-Amsterdam service and Amsterdam-India service, but was partially offset by the World
Business Class product reconfiguration.

Cargo
revenues decreased 10.4% ($63 million) due to a 10.3% decline in cargo ton miles resulting from reduced U.S. demand for Asian goods. Other revenue increased 8.8%
($41 million) due primarily to increased revenue from MLT Inc. and frequent flyer program partnership revenue.

Operating Expenses.Operating expenses increased 5.2% ($415 million). Operating capacity decreased 1.3% to
77.36 billion total service ASMs. Operating expense per total ASM increased 5.4%.

Salaries,
wages and benefits increased 13.2% ($354 million), due largely to wage rate and benefit increases, which included a non-recurring charge for retroactive
pay and benefits of $94 million related to the Aircraft Mechanics Fraternal Association collective bargaining agreement, as well as $39 million in severance costs for furloughed workers.
Aircraft maintenance materials and repairs increased 10.1% ($49 million) primarily due to a higher level of scheduled work within the routine engine and airframe maintenance cycle. Commissions
decreased by 18.0% ($92 million) primarily due to lower passenger revenue, lower commission rates and a lower percentage of commissionable transactions. Depreciation and amortization increased
17.5% ($64 million) due principally to a charge of $35 million related to reductions in the estimated market value of non-operating aircraft. Aircraft rentals increased 6.1%
($19 million) due to additional leased aircraft. Other expenses increased .7% ($12 million) largely resulting from a higher volume of business for MLT Inc., increased claims,
personnel and selling and marketing fees.

Other Income and Expense.Other non-operating income increased $153 million, primarily due to
$249 million recognized under the Airline Stabilization Act and a $27 million gain recorded in 2001 on the sale of the Company's remaining investment in Continental Airlines, Inc.
("Continental"), partially
offset by $83 million of gains recorded in 2000 primarily from the sale of a portion of the Company's investment inpriceline.com.

Liquidity and Capital Resources

At September 30, 2001, the Company had cash and cash equivalents of $2.814 billion and borrowing capacity of $2.0 million under its
revolving credit facilities, providing total available liquidity of $2.816 billion.

Net
cash provided by operating activities for the nine months ended September 30, 2001 was $657 million, a $213 million decrease compared with the nine months
ended September 30, 2000, due primarily to decreased operational performance and reduced revenue related to the events of September 11, 2001.

Investing
activities in the nine months ended September 30, 2001 consisted primarily of the purchase of 13 Airbus A319 aircraft, four Boeing 757-200 aircraft, one
Airbus A320 aircraft, costs to commission aircraft before entering revenue service, aircraft modifications and aircraft deposits. These expenditures were partially offset by the January sale of
6.7 million shares of Continental Class A

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Common Stock and the remaining 2.6 million shares of Continental Class B Common Stock held by the Company for $582 million. Investing activities in the nine months ended
September 30, 2000 consisted primarily of the purchase of seven AVRO RJ85 aircraft, eight Airbus A319 aircraft and two Boeing 747-200 aircraft which were converted to freighters in
2001, costs to commission aircraft before entering revenue service, aircraft modifications and aircraft deposits, partially offset by the sale of a portion of the Company's investment in priceline.com.

Financing
activities in the nine months ended September 30, 2001 consisted primarily of the Company's draw in March and subsequent repayment in May of $1.10 billion
under its revolving credit facilities, the draw on September 11 of $1.12 billion under its revolving credit facilities, the issuance of $300 million of 8.875% unsecured notes due
2006, the financing of: (i) 13 Airbus A319 aircraft; seven of which were financed with funds from pass-through certificates and six with long-term bank debt;
(ii) four Boeing 757-200 aircraft with long-term bank debt; (iii) one Airbus A320 with long-term bank debt; and (iv) the payment of debt and
capital lease obligations. Financing activities for the nine months ended September 30, 2000 consisted primarily of the sale and leaseback of ten Airbus A319 aircraft and three AVRO RJ85
aircraft and payment of debt and capital lease obligations.

In
addition to the purchased aircraft discussed above, the Company took delivery of 16 Bombardier CRJ200 aircraft during the nine months ended September 30, 2001. These
aircraft were financed with long-term leveraged operating leases provided by the manufacturer.

In
June 2001, the Company completed an offering of $581 million of pass-through certificates due in 2022 at a blended fixed coupon rate of 7.18% to finance
the acquisition of nine new Airbus A319 aircraft, three new Boeing 757-300 aircraft and two new Boeing 747-400 aircraft scheduled to be delivered from February 2002
through October 2002. In July 2001, the Company completed an offering of $396 million of floating rate European Enhanced Equipment Trust Certificates due in 2013 at a blended
floating rate of 60 basis points over LIBOR (initially set at 4.45%) to finance the acquisition of nine new Airbus A319 aircraft and five new Airbus A320 aircraft scheduled to be delivered from
November 2001 through July 2002.

The
cash proceeds from the two offerings of certificates are invested and held in escrow with a depositary bank and enable the Company to finance (through either leveraged leases or
secured debt financing) the acquisition of these aircraft. If leveraged leases are obtained for these aircraft, under which the aircraft will be sold and leased back to Northwest, the debt will not be
direct obligations of the Company or Northwest.

The
current aircraft delivery schedule provides for the acquisition of 99 aircraft over the next five years, all with committed financing. See Note 6 to the Condensed
Consolidated Financial Statements for additional discussion of aircraft capital and finance commitments.

In
the second quarter, the Company completed two long-term airport bond financings of $136 million and $64 million related to airport improvements in
Minneapolis/St. Paul and Seattle, respectively. These financings were for periods of 25 and 29 years at fixed rates of 7.27% and 7.49%, respectively, and will be recorded as other property and
equipment and long-term obligations under capital leases when the funds are drawn for construction purposes. See Note 9 to the Condensed Consolidated Financial Statements for
additional discussion of airport construction financing.

The
impact of the terrorist attacks of September 11, 2001 and their aftermath on the Company and the sufficiency of its financial resources to absorb that impact will depend on
a number of factors, including: (i) the magnitude and duration of the adverse impact of the terrorist attacks on the economy in general, and the airline industry in particular; (ii) the
Company's ability to reduce its operating costs and conserve its financial resources, taking into account the increased costs it will incur as a consequence of the attacks, including higher costs
associated with new airline security directives, any other increased regulation of air carriers and significantly higher costs of aircraft insurance coverage for

18

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future claims caused by acts of war, terrorism, sabotage, hijacking and other similar perils, and the extent to which such insurance will continue to be available; (iii) the Company's ability
to raise additional financing; (iv) the price and availability of jet fuel, and the availability to the Company of fuel hedges in light of current industry conditions; (v) any resulting
declines in the values of the aircraft in the Company's fleet and any aircraft or other assets (including routes, slots, gates and other intangibles) which may be subject to impairment charges;
(vi) the extent of the benefits received by the Company under the Airline Stabilization Act, taking into account any challenges to and interpretations or amendments of the Airline Stabilization
Act or regulations issued pursuant thereto; and (vii) the Company's ability to retain its management and other employees in light of current industry conditions and their impact on compensation
and morale.

At
this point, due in part to the lack of predictability of future traffic and yields, the Company is unable to fully estimate the impact on it of the events of September 11,
2001 and their consequences and the sufficiency of its financial resources to absorb that impact, taking into account the mitigating effects of the Airline Stabilization Act and the Company's
aggressive actions to reduce its costs. However, given the magnitude of these unprecedented events and the possible subsequent effects, the Company expects that the adverse impact to the Company's
financial condition, its operations and its prospects may be material.

Other Information

Foreign Currency.The Company is exposed to the effect of foreign currency exchange rate fluctuations on the U.S.
dollar value of foreign currency-denominated operating revenues and expenses. The Company's largest exposure comes from the Japanese yen. The Company's effective average yen per U.S. dollar exchange
rate, including hedge activity for both the three months ended September 30, 2001 and 2000, was 100. From time to time the Company uses financial instruments to hedge its exposure to the
Japanese yen. As of September 30, 2001, the Company has recorded $10 million, net of tax, of unrealized gains in accumulated other comprehensive income associated with forward contracts
purchased to hedge a portion of its 2001 and 2002 yen-denominated sales at an average forward rate of 100 and 114 yen per dollar, respectively. Hedging gains or losses are recorded in
revenue when transportation is provided. During the three months ended September 30, 2001, the Company realized pre-tax gains of $37 million associated with forward contracts
purchased to hedge its yen-denominated sales. At September 30, 2001, the Company has hedged approximately 40% of its anticipated yen-denominated sales for the remainder
of 2001 and 59% of 2002 anticipated yen-denominated sales.

New Accounting Standards.In June 2001, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards ("SFAS") No. 142,Goodwill and Other Intangible Assets. SFAS 142 requires that companies test goodwill and indefinite
lived intangible assets for impairment on an annual basis rather than amortize them. The Company will adopt SFAS 142 in the first quarter of 2002, and as a result, anticipates that it will no
longer amortize its indefinite lived intangible assets and goodwill. Amortization of these assets was $24 million in 2000. During 2002, the Company will perform the
required impairment tests of goodwill and indefinite lived intangible assets and therefore, the effect, if any, of these tests on the earnings and financial position of the Company has not yet been
determined.

Forward-Looking Statements.Some of the statements made in this section and elsewhere in this report are
forward-looking and are based upon information available to the Company on the date hereof. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the
Company is hereby identifying important factors that could cause actual results to differ materially from those contained in any forward-looking statement made by or on behalf of the Company. Any such
statement is qualified by reference to the following cautionary statements and any cautionary statements made in connection with such forward-looking statements.

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It is not reasonably possible to itemize all of the many factors and specific events that could affect the outlook of an airline operating in the global economy. As noted elsewhere in
this report, such risks and uncertainties include, among others, the future level of air travel demand, the Company's future load factors and yields, the airline pricing environment, increased costs
for security, the cost and availability of aviation insurance coverage and war risk coverage, the general economic condition of the U.S. and other regions of the world, the price and availability of
jet fuel, labor negotiations both at the Company and other carriers, low-fare carrier expansion, capacity decisions of other carriers, actions of the U.S. and foreign governments, foreign
currency exchange rate fluctuation, inflation and other factors discussed herein. Additional information with respect to the factors and events that could cause differences between forward-looking
statements and future actual results is contained in "Risk Factors Related to Northwest and NWA Corp." and "Risk Factors Related to the Airline Industry" in Item 1 of the Company's Annual Report on
Form 10-K for 2000.

Developments
in any of these areas, as well as other risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings, could cause the
Company's results to differ from results that have been or may be projected by or on behalf of the Company. The Company cautions that the foregoing list of important factors is not inclusive. The
Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements deal with the
Company's expectations about the future and are subject to a number of factors that could cause actual results to differ materially from the Company's expectations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Information required by this item is provided under the caption "Foreign Currency" within "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in this Quarterly Report on Form 10-Q. Also see "Item 7a. Quantitative and Qualitative Disclosures About Market Risk" within the Company's Annual Report on
Form 10-K for 2000.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Reference is made to "Item 3. Legal Proceedings" in the Company's Annual Report on Form 10-K for 2000. In addition, in the ordinary course
of its business, the Company is party to various other legal actions which the Company believes are incidental to the operation of its business. The Company believes that the outcome of the
proceedings to which it is currently a party will not have a material adverse effect on the Company's consolidated financial statements taken as a whole.

Item 6. Exhibits and Reports on Form 8-K

| |  | (a) |  | Exhibits:                     
| |  | --- |  | ------------------------------
| |  |     |  | 10.1                          
| |  |     |  | 12.1                          
| |  |     |  | 12.2                          
| |  | (b) |  | Reports on Form 8-K:          
| |  |     |  | Form 8-K dated August 21, 2001

21

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|Dated: November 14, 2001 |  | NORTHWEST AIRLINES CORPORATION
|------------------------ |  | ------------------------------
|                         |  | By:                           

EXHIBIT INDEX

|Exhibit No. |  | Description                                                                                                                                                                                                                   
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1        |  | Bombardier CRJ440 Purchase Agreement between Bombardier Inc. and Northwest Airlines, Inc. dated as of July 6, 2001 (The Company has applied to the Commission for confidential treatment of certain portions
of this exhibit).
|12.1        |  | Computation of Ratio of Earnings to Fixed Charges.                                                                                                                                                                            
|12.2        |  | Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Requirements.                                                                                                                                           

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