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**UNITED STATES**

**SECURITIES AND EXCHANGECOMMISSION**

**Washington, D.C. 20549**

** **

**FORM 10-Q**

** **

**QUARTERLY REPORT PURSUANTTO SECTION 13 OR 15(d)**

**OF THE SECURITIESEXCHANGE ACT OF 1934**

** **

**Forthe quarterly period ended**March 31,2009

** **

**Commission File Number:**1-15285

** **

**NORTHWESTAIRLINES CORPORATION**

**(Exactname of registrant as specified in its charter)**

** **

| **Delaware**                                                         | ** ** | **41-1905580**                            |
|----------------------------------------------------------------------|------------|-------------------------------------------|
| **(State or other jurisdiction of  incorporation or  organization)** | ** ** | **(I.R.S. Employer Identification  No.)** |
| ** **                                                           | ** ** | ** **                                |
| **2700  Lone Oak Parkway, Eagan, Minnesota**                         | ** ** | **55121**                                 |
| **(Address of principal executive  offices)**                        | ** ** | **(Zip Code)**                            |

** **

**(612) 726-2111**

**(Registrant’stelephone number, including area code)**

** **

**Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days. Yes **x      Noo

** **

**Note: The registrant is no longer subject to the filingrequirements of Section 13 or 15(d) of the Securities Exchange Act of1934 and is now a voluntary filer.**

** **

**Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer.  See definitionsof “large accelerated filer,”  “acceleratedfiler” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.**

** **
| **Large accelerated filer**x | ** ** | **Accelerated filer**o | ** ** | **Non-accelerated  filer**o  (Do  not check if a smaller  reporting company) | ** ** | **Smaller reporting company**o |
|------------------------------|------------|------------------------|------------|------------------------------------------------------------------------------|------------|--------------------------------|

** **

**Indicate by a check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).**

**Yes **o     Nox

** **

**Indicateby check mark whether the registrant has filed all documents and reportsrequired to be filed by Sections 12, 13 or 15(d) of the SecuritiesExchange Act of 1934 subsequent to the distribution of securities under a planconfirmed by a court.**

**Yes **x     Noo

** **

**The registrant is a whollyowned subsidiary of Delta Air Lines, Inc., a Delaware corporation, andthere is no market for the registrant’s common stock, par value $0.01 pershare.  As of April 20, 2009, therewere 1,000 shares of the registrant’s Common Stock outstanding.**

** **

**The registrant meets the conditions setforth in General Instruction H(1)(a) and (b) of Form 10-Q and istherefore filing this Form with the reduced disclosure format permitted byGeneral Instruction H(2).**

 

 

 

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**NORTHWESTAIRLINES CORPORATION**

 
|                                | **Page No.**                                                                            |
|-------------------------------------|----------------------------------------------------------------------------------------------|
| PART I.  FINANCIAL INFORMATION |                                                                                         |
|                                |                                                                                         |   |
| Item 1.                             | Financial Statements.                                                                        |   |
|                                |                                                                                         |   |
|                                | Condensed  Consolidated Statements of Operations                                             | 3 |
|                                |                                                                                         |   |
|                                | Condensed Consolidated Balance Sheets                                                        | 4 |
|                                |                                                                                         |   |
|                                | Condensed Consolidated Statements of Cash Flows                                              | 5 |
|                                |                                                                                         |   |
|                                | Notes to Condensed Consolidated Financial Statements                                         | 6 |
|                                |                                                                                         |   |
| Item 2.                             | Management’s  Discussion and Analysis of Financial Condition and Results of Operations. | 20 |
|                                |                                                                                         |   |
| Item 3.                             | Quantitative  and Qualitative Disclosures About Market Risk.                                 | 24 |
|                                |                                                                                         |   |
| Item 4.                             | Controls and  Procedures.                                                                    | 24 |
|                                |                                                                                         |   |
| PART II. OTHER  INFORMATION    |                                                                                         |
|                                |                                                                                         |   |
| Item 1.                             | Legal Proceedings.                                                                           | 24 |
|                                |                                                                                         |   |
| Item  1A.                           | Risk Factors.                                                                                | 24 |
|                                |                                                                                         |   |
| Item  6.                            | Exhibits.                                                                                    | 24 |
|                                |                                                                                         |   |
| SIGNATURE                           | 25                                                                                           |
|                                |                                                                                         |
| EXHIBIT INDEX                       | 25                                                                                           |

 

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PART I. FINANCIAL INFORMATION

**Item 1. Financial Statements.**

 

**NORTHWESTAIRLINES CORPORATION**

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 
| ** **                                                                            | ** ** | **Post-Merger**       | ** ** | **Pre-Merger**    | ** ** |
|---------------------------------------------------------------------------------------|------------|-----------------------|------------|-------------------|------------|
| ** **                                                                            | ** ** | **Three Months** | ** ** | Three Months | ** ** |
| ** **                                                                            | ** ** | **Ended**             | ** ** | Ended             | ** ** |
| ** **                                                                            | ** ** | **March 31,**    | ** ** | March 31,    | ** ** |
| ***(Unaudited, in millions except per share amounts)*** | ** ** | **2009**              | ** ** | 2008              | ** ** |
| **Operating  Revenues**                                                               |       |                  | ** ** |              |       |
| Passenger                                                                             | ** ** | **$**                 | **1,794**  | ** **        | $          | 2,302 |   |
| Regional carrier  revenues                                                            | ** ** | **443**               | ** ** | 406               |       |
| Cargo                                                                                 | ** ** | **92**                | ** ** | 197               |       |
| Other                                                                                 | ** ** | **269**               | ** ** | 229               |       |
| Total operating  revenues                                                             | ** ** | **2,598**             | ** ** | 3,134             |       |
|                                                                                  |       |                  | ** ** |              |       |
| **Operating  Expenses**                                                               |       |                  | ** ** |              |       |
| Aircraft fuel  and related taxes                                                      | ** ** | **586**               | ** ** | 1,115             |       |
| Salaries and  related costs                                                           | ** ** | **748**               | ** ** | 728               |       |
| Contract carrier  arrangements                                                        | ** ** | **190**               | ** ** | 264               |       |
| Depreciation and  amortization                                                        | ** ** | **127**               | ** ** | 148               |       |
| Aircraft  maintenance materials and outside repairs                                   | ** ** | **155**               | ** ** | 209               |       |
| Contracted  services                                                                  | ** ** | **222**               | ** ** | 206               |       |
| Passenger  commissions and other selling expenses                                     | ** ** | **175**               | ** ** | 215               |       |
| Landing fees and  other rents                                                         | ** ** | **148**               | ** ** | 129               |       |
| Passenger  service                                                                    | ** ** | **53**                | ** ** | 59                |       |
| Aircraft rent                                                                         | ** ** | **58**                | ** ** | 54                |       |
| Goodwill and  other indefinite-lived intangibles impairment                           | ** ** | **—**            | ** ** | 3,917             |       |
| Restructuring  and merger related                                                     | ** ** | **53**                | ** ** | —            |       |
| Other, net                                                                            | ** ** | **103**               | ** ** | 143               |       |
| Total operating  expenses                                                             | ** ** | **2,618**             | ** ** | 7,187             |       |
|                                                                                  |       |                  | ** ** |              |       |
| **Operating  Income (Loss)**                                                          | ** ** | **(20**               | **)**      | (4,053            | )          |
| ** **                                                                            | ** ** | ** **            | ** ** |              |       |
| **Other  Income (Expense)**                                                           |       |                  | ** ** |              |       |
| Interest expense                                                                      | ** ** | **(173**              | **)**      | (114              | )          |
| Investment  income                                                                    | ** ** | **4**                 | ** ** | 36                |       |
| Other, net                                                                            | ** ** | **6**                 | ** ** | (8                | )          |
| Total other  income (expense)                                                         | ** ** | **(163**              | **)**      | (86               | )          |
|                                                                                  | ** ** | ** **            | ** ** |              |       |
| **Income  (Loss) Before Income Taxes**                                                | ** ** | **(183**              | **)**      | (4,139            | )          |
| Income tax  expense (benefit)                                                         | ** ** | **—**            | ** ** | —            |       |
|                                                                                  | ** ** | ** **            | ** ** |              |       |
| **Net  Income (Loss)**                                                                | ** ** | **$**                 | **(183**   | **)**             | $          | (4,139 | ) |
| ** **                                                                            | ** ** | ** **            | ** ** |              |       |
| Earnings (loss)  per common share:                                                    | ** ** | ** **            | ** ** |              |       |
| *Basic  and Diluted*                                                                  | ** ** | **N/A**               | ** ** | $                 | (15.78     | ) |
| * *                                                                              | ** ** | ** **            | ** ** |              |       |
| Average shares  used in computation:                                                  | ** ** | ** **            | ** ** |              |       |
| *Basic  and Diluted*                                                                  | ** ** | **N/A**               | ** ** | 262               |       |

 

*Seeaccompanying notes.*

 

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**NORTHWEST AIRLINES CORPORATION**

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 
| ** **                                                                                                              | ** ** | **Post-Merger**    | ** ** | **Post-Merger**   | ** ** |
|-------------------------------------------------------------------------------------------------------------------------|------------|--------------------|------------|-------------------|------------|
| ** **                                                                                                              | ** ** | **March 31,** | ** ** | December 31, | ** ** |
| ***(Unaudited, in millions except share data)***                                               | ** ** | **2009**           | ** ** | 2008              | ** ** |
|                                                                                                                    |       |               | ** ** |              |       |
| **Assets**                                                                                                              |       |               | ** ** |              |       |
|                                                                                                                    |       |               | ** ** |              |       |
| **Current  Assets**                                                                                                     |       |               | ** ** |              |       |
| Cash and cash  equivalents                                                                                              | ** ** | **$**              | **2,548**  | ** **        | $          | 2,068 |   |
| Unrestricted  short-term investments                                                                                    | ** ** | **16**             | ** ** | 49                |       |
| Restricted cash,  cash equivalents and short-term investments                                                           | ** ** | **168**            | ** ** | 196               |       |
| Accounts  receivable, less allowance (2009—$6, 2008—$6)                                                       | ** ** | **567**            | ** ** | 659               |       |
| Hedge margin  receivable                                                                                                | ** ** | **179**            | ** ** | 526               |       |
| Expendable parts  and supplies inventories, less allowance (2009—$8, 2008—$3)                                 | ** ** | **153**            | ** ** | 152               |       |
| Deferred income  taxes                                                                                                  | ** ** | **70**             | ** ** | 131               |       |
| Prepaid expenses  and other                                                                                             | ** ** | **276**            | ** ** | 232               |       |
| Total current  assets                                                                                                   | ** ** | **3,977**          | ** ** | 4,013             |       |
|                                                                                                                    |       |               | ** ** |              |       |
| **Property  and Equipment, Net**                                                                                        | ** ** | **8,595**          | ** ** | 8,683             |       |
|                                                                                                                    |       |               | ** ** |              |       |
| **Other  Assets**                                                                                                       |       |               | ** ** |              |       |
| Goodwill                                                                                                                | ** ** | **4,570**          | ** ** | 4,572             |       |
| Identifiable  intangibles, less accumulated amortization (2009—$18; 2008—$8)                                  | ** ** | **2,684**          | ** ** | 2,694             |       |
| Other noncurrent  assets                                                                                                | ** ** | **184**            | ** ** | 236               |       |
| Total other  assets                                                                                                     | ** ** | **7,438**          | ** ** | 7,502             |       |
| **Total  Assets**                                                                                                       | ** ** | **$**              | **20,010** | ** **        | $          | 20,198 |   |
|                                                                                                                    |       |               | ** ** |              |       |
| **Liabilities  and Stockholder’s Equity**                                                                          |       |               | ** ** |              |       |
|                                                                                                                    |       |               | ** ** |              |       |
| **Current  Liabilities**                                                                                                |       |               | ** ** |              |       |
| Current  maturities of long-term debt and capital lease obligations                                                     | ** ** | **$**              | **1,141**  | ** **        | $          | 383 |   |
| Air traffic  liability                                                                                                  | ** ** | **1,483**          | ** ** | 1,451             |       |
| Frequent flyer  deferred revenue                                                                                        | ** ** | **524**            | ** ** | 522               |       |
| Accounts payable                                                                                                        | ** ** | **843**            | ** ** | 903               |       |
| Hedge  derivatives liability                                                                                            | ** ** | **231**            | ** ** | 560               |       |
| Accrued salaries  and related benefits                                                                                  | ** ** | **456**            | ** ** | 455               |       |
| Taxes payable                                                                                                           | ** ** | **228**            | ** ** | 199               |       |
| Due to parent  company                                                                                                  | ** ** | **550**            | ** ** | 200               |       |
| Other accrued  liabilities                                                                                              | ** ** | **139**            | ** ** | 113               |       |
| Total current  liabilities                                                                                              | ** ** | **5,595**          | ** ** | 4,786             |       |
|                                                                                                                    |       |               | ** ** |              |       |
| **Noncurrent  Liabilities**                                                                                             |       |               | ** ** |              |       |
| Long-term debt  and capital leases                                                                                      | ** ** | **4,492**          | ** ** | 5,382             |       |
| Pension,  postretirement and related benefits                                                                           | ** ** | **5,544**          | ** ** | 5,476             |       |
| Frequent flyer  deferred revenue                                                                                        | ** ** | **1,477**          | ** ** | 1,500             |       |
| Deferred income  taxes, net                                                                                             | ** ** | **1,022**          | ** ** | 1,094             |       |
| Other noncurrent  liabilities                                                                                           | ** ** | **463**            | ** ** | 533               |       |
| Total noncurrent  liabilities                                                                                           | ** ** | **12,998**         | ** ** | 13,985            |       |
|                                                                                                                    |       |               | ** ** |              |       |
| **Common  Stockholder’s Equity**                                                                                   |       |               | ** ** |              |       |
| Post-Merger  Common stock, $0.01 par value; shares issued—1,000 at March 31, 2009 and  December 31, 2008 |       | **—**         | ** ** | —            |       |
| Additional  paid-in capital                                                                                             | ** ** | **3,659**          | ** ** | 3,605             |       |
| (Accumulated  deficit) retained earnings                                                                                | ** ** | **(722**           | **)**      | (539              | )          |
| Accumulated  other comprehensive (loss) income                                                                          | ** ** | **(1,520**         | **)**      | (1,639            | )          |
| Total  stockholder’s equity                                                                                        | ** ** | **1,417**          | ** ** | 1,427             |       |
| **Total  Liabilities and Stockholder’s Equity**                                                                    | ** ** | **$**              | **20,010** | ** **        | $          | 20,198 |   |

 

*See accompanying notes.*

 

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**NORTHWEST AIRLINES CORPORATION**

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 
| ** **                                                                           | ** ** | **Post-Merger**       | ** ** | **Pre-Merger**    | ** ** |
|--------------------------------------------------------------------------------------|------------|-----------------------|------------|-------------------|------------|
| ** **                                                                           | ** ** | **Three Months** | ** ** | Three Months | ** ** |
| ** **                                                                           | ** ** | **Ended**             | ** ** | Ended             | ** ** |
| ** **                                                                           | ** ** | **March 31,**    | ** ** | March 31,    | ** ** |
| ***(Unaudited, in millions)***                                             | ** ** | **2009**              | ** ** | 2008              | ** ** |
|                                                                                 |       |                  | ** ** |              |       |
| **Net  cash provided by (used in) operating activities**                             | ** ** | **$**                 | **261**    | ** **        | $          | 362 |   |
|                                                                                 |       |                  | ** ** |              |       |
| **Cash  Flows from Investing Activities**                                            |       |                  | ** ** |              |       |
| Capital  expenditures                                                                | ** ** | **(29**               | **)**      | (366              | )          |
| Decrease  (increase) in unrestricted short-term investments                          | ** ** | **17**                | ** ** | 55                |       |
| Decrease  (increase) in restricted cash, cash equivalents and short-term investments |       | **11**                | ** ** | 240               |       |
| Proceeds from  sale of property, equipment and other assets                          | ** ** | **72**                | ** ** | 1                 |       |
| Investment in  affiliated companies                                                  | ** ** | **—**            | ** ** | (213              | )          |
| Proceeds from  the sale of investment in affiliated companies                        | ** ** | **—**            | ** ** | 20                |       |
| Net cash  provided by (used in) investing activities                                 | ** ** | **71**                | ** ** | (263              | )          |
|                                                                                 |       |                  | ** ** |              |       |
| **Cash  Flows from Financing Activities**                                            |       |                  | ** ** |              |       |
| Proceeds from  long-term debt                                                        | ** ** | **30**                | ** ** | 246               |       |
| Payments of  long-term debt and capital lease obligations                            | ** ** | **(232**              | **)**      | (96               | )          |
| Proceeds from  intercompany loan                                                     | ** ** | **350**               | ** ** | —            |       |
| Other, net                                                                           | ** ** | **—**            | ** ** | (1                | )          |
| Net cash  provided by (used in) financing activities                                 | ** ** | **148**               | ** ** | 149               |       |
|                                                                                 |       |                  | ** ** |              |       |
| **Increase  (Decrease) in Cash and Cash Equivalents**                                | ** ** | **480**               | ** ** | 248               |       |
|                                                                                 |       |                  | ** ** |              |       |
| Cash and cash  equivalents at beginning of period                                    | ** ** | **2,068**             | ** ** | 2,939             |       |
| Cash and cash  equivalents at end of period                                          | ** ** | **$**                 | **2,548**  | ** **        | $          | 3,187 |   |
|                                                                                 |       |                  | ** ** |              |       |
| Available to be  borrowed under credit facilities                                    | ** ** | **$**                 | **700**    | ** **        | $          | 117 |   |
|                                                                                 |       |                  | ** ** |              |       |
| Cash and cash  equivalents and unrestricted short-term investments at end of period  | ** ** | **$**                 | **2,564**  | ** **        | $          | 3,227 |   |
|                                                                                 |       |                  | ** ** |              |       |
| Supplemental  Cash Flow Information:                                                 |       |                  | ** ** |              |       |
| Interest paid                                                                        | ** ** | **$**                 | **91**     | ** **        | $          | 114 |   |

 

*See accompanying notes.*

 

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** **

**NORTHWESTAIRLINES CORPORATION**

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

**Note 1 – Basis of Presentation**

 

The condensed consolidated financial statements ofNorthwest Airlines Corporation (“NWA Corp.”), the direct parent corporation ofNorthwest Airlines, Inc. (“Northwest”), include the accounts of NWA Corp.and all consolidated subsidiaries (collectively, the “Company”).  On October 29, 2008 (the “Closing Date”),Nautilus Merger Corporation (“Merger Sub”), a wholly owned subsidiary of DeltaAir Lines, Inc. (“Delta”), merged with and into NWA Corp. (the “Merger”)in accordance with the Agreement and Plan of Merger, dated as of April 14,2008 (the “Announcement Date”), among Delta, Merger Sub and NWA Corp. (the “MergerAgreement”).  As a result of the Merger,NWA Corp. and its subsidiaries became wholly-owned subsidiaries of Delta andthe shares of NWA Corp., which traded under the symbol “NWA”, ceased tradingon, and were delisted from, the New York Stock Exchange (“NYSE”).

 

As a result of theapplication of purchase accounting in accordance with Financial AccountingStandards Board (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 141,*Business Combinations* (“SFAS No. 141”),the financial statements prior to October 30, 2008 are not comparable withthe financial statements for periods on or after October 30, 2008.  References to “Post-Merger” refer to theCompany on or after October 30, 2008, after giving effect to theapplication of purchase accounting. References to “Pre-Merger” refer to the Company prior to October 30,2008.

 

Unless otherwiseindicated, the terms “we,” “us,” and “our” refer to NWA Corp. and allconsolidated subsidiaries.  The condensedconsolidated financial statements included herein have been prepared pursuantto the rules and regulations of the Securities and Exchange Commission (“SEC”).  The information and footnote disclosuresnormally included in annual financial statements prepared in accordance withU.S. Generally Accepted Accounting Principles (“GAAP”) have been condensed oromitted as permitted by such rules and regulations. These financialstatements and related notes should be read in conjunction with the financialstatements and notes included in the Company’s audited consolidated financialstatements, which are provided in the Company’s Annual Report on Form 10-Kfor the year ended December 31, 2008 (the “2008 Form 10-K”).

 

Northwest’soperations account for approximately 99% of the Company’s consolidatedoperating revenues and expenses. Northwest is a major air carrier engaged principally in the commercialtransportation of passengers and cargo. Northwest’s global airline network includes domestic hubs at Detroit,Minneapolis/St. Paul and Memphis, an extensive Pacific route system with a hubin Tokyo, a transatlantic joint venture with KLM Royal Dutch Airlines (“KLM”),which operates through a hub in Amsterdam, a domestic and internationalalliance with Continental Airlines, Inc. (“Continental”) and Delta,membership in SkyTeam, a global airline alliance with KLM, Continental, Delta,Air France, Aeroflot, Alitalia, Aeromexico, China Southern, CSA Czech Airlinesand Korean Air, exclusive marketing agreements with three domestic regionalcarriers, Pinnacle Airlines, Inc. (“Pinnacle”), Mesaba Aviation, Inc.(“Mesaba”), a wholly-owned subsidiary, and Compass Airlines, Inc. (“Compass”),a wholly-owned subsidiary, which currently operate as Delta Connection carriersand a cargo business that includes a dedicated fleet of freighter aircraft thatoperate through hubs in Anchorage and Tokyo.

 

Continental hasprovided written notice to the Company and Delta of its decision to terminatethe three-way alliance agreement with the Company and Delta effective July 30,2009.  Codesharing and certain otheraspects of the relationship will continue until October 24, 2009, which isalso the date of Continental’s planned exit from SkyTeam.

 

The Company has decidedto discontinue its dedicated freighter fleet and remove the remaining Boeing747F aircraft from service by December 31, 2009.  The Company performed an impairment test inaccordance with SFAS No. 144, *Accountingfor the Impairment or Disposal of Long-Lived Assets*(“SFAS No. 144”),and determined that no material impairment currently exists related to theseaircraft.

 

The Company maintains aWeb site at *http://www.nwa.com*.  Information contained on the Company’s Website is not incorporated into this quarterly report on Form 10-Q.  Annual reports on Form 10-K, quarterlyreports on Form 10-Q, current reports on Form 8-K, and all amendmentsto those reports are available free of charge through the SEC Web site at *http://idea.sec.gov* as soon as reasonablypracticable after those reports are electronically filed with or furnished tothe SEC.

 

Inthe opinion of management, the interim financial statements reflectadjustments, consisting of normal recurring accruals, unless otherwise noted,which are necessary to present fairly the Company’s financial position, resultsof operations and cash flows for the periods indicated.

 

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The Company’s resultsof operations for interim periods are not necessarily indicative of the resultsfor an entire year due to seasonal factors as well as competitive and generaleconomic conditions.  The Company’ssecond and third quarter operating results have historically been morefavorable due to increased leisure travel on domestic and international routesduring the spring and summer months.

 

Certain prior yearamounts have been reclassified to conform to the current year financialstatement presentation.

 

*BankruptcyClaims Resolution Process*.  On September 14, 2005 (the “PetitionDate”), NWA Corp. and 12 of its direct and indirect subsidiaries (collectively,the “Debtors”) filed voluntary petitions for relief under Chapter 11 of theUnited States Bankruptcy Code with the United States Bankruptcy Court for theSouthern District of New York (the “Bankruptcy Court”).  Subsequently, on September 30, 2005, NWAAircraft Finance, Inc., an indirect subsidiary of NWA Corp., also filed avoluntary petition for relief under Chapter 11. On May 18, 2007, the Bankruptcy Court entered an order approvingand confirming the Debtors’ First Amended Joint and Consolidated Plan ofReorganization Under Chapter 11 of the Bankruptcy Code (as confirmed, the “Plan”or “Plan of Reorganization”).  The Planbecame effective and the Debtors emerged from bankruptcy protection on May 31,2007 (the “Effective Date”).  On theEffective Date, the Company implemented fresh-start reporting in accordancewith the American Institute of Certified Public Accountants Statement ofPosition 90-7, *Financial Reporting byEntities in Reorganization Under the Bankruptcy Code* (“SOP 90-7”).

 

Pursuant to terms of the Plan of Reorganization,approximately 225.8 million shares of the Pre-Merger Company’s common stock willbe issued to holders of allowed general unsecured claims and 8.6 million shareswill be issued to holders who also held a guaranty claim from the Debtors.  Once a claim is allowed consistent with theclaims resolution process as provided in the Plan, the claimant is entitled toa distribution of new common stock.  Pursuant to the terms of the MergerAgreement, each outstanding share of Northwest common stock (including sharesissuable pursuant to Northwest’s Plan of Reorganization) was converted into andbecame exchangeable for 1.25 shares of Delta common stock.  Approximately 228.0 million shares of thePre-Merger Company’s common stock (or 285.1 million Post-Merger shares of Deltacommon stock) have been issued and distributed through March 31, 2009, inrespect of valid unsecured and guaranty claims. In total, there are approximately 6.4 million remaining shares of thePre-Merger Company’s new common stock (or 8.0 million Post-Merger shares ofDelta common stock) held in reserve under the terms of the Plan ofReorganization.

 

TheCompany estimates that its unsecured claims to be allowed will not exceed $8.2billion.  Differences between claimamounts filed and the Company’s estimates are being investigated and will beresolved in connection with the claims resolution process.  However, there will be no further financialimpact to the Company associated with the settlement of such unsecured claims,as the holders of all allowed unsecured claims against the Pre-Merger Companywill receive, under the Plan of Reorganization, Delta common stock based on thepro-rata amount of Northwest shares held in reserve.  Secured claims were deemed unimpaired underthe Plan and were satisfied upon either reinstatement of the obligations in thePre-Merger Company, surrendering the collateral to the secured party, or bymaking full payment in cash.

 

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**Note 2 – Goodwill and Intangibles**

 

The Company determined that the announcedMerger on April 14, 2008 (the “Announcement Date”) was a triggering eventunder SFAS No. 142, requiring the Company to further evaluate the carryingvalue of its goodwill.  As a result ofthis evaluation, the Company recorded a net goodwill impairment charge of $3.2billion during the first and second quarters of 2008 to reduce the book valueof Northwest’s equity to its implied fair value as of the AnnouncementDate.  Based on the 5-day average closingprice of Delta’s common stock around the Announcement Date, the right toreceive 1.25 shares of Delta stock for each share of NWA Corp. common stock,and the projected number of NWA Corp.’s common shares to be converted intoDelta common stock on the Closing Date, the implied fair value of NWA Corp.’sequity on the Announcement Date was $3.35 billion.  Additionally, Northwest recorded a net $1.1billion of impairment charges in the second quarter of 2008 related to certainflight equipment, definite-lived and indefinite-lived intangible assets,investments in affiliated companies, and the related deferred tax effects.

 

The Company recorded a goodwill impairmentcharge of $3.9 billion for the quarter ended March 31, 2008.  Northwest finalized the impairment tests ofgoodwill and long-lived assets during the second quarter of 2008, resulting inan additional net charge of $547 million, which includes an adjustment ofestimated goodwill from $2.2 billion to the implied fair value of goodwill of$2.9 billion. The adjustment to goodwill resulted in the reversal of $674million of impairment expense recorded in the first quarter of 2008 which isclassified as Goodwill and other indefinite-lived intangibles impairmentexpense.  Additionally, Northwestrecorded $624 million in depreciation and amortization related to impairment ofcertain flight equipment and definite-lived intangibles, $598 million ofimpairment expense in goodwill and other indefinite-lived intangiblesimpairment expense related to indefinite-lived intangibles, $213 million inother non-operating expense related to other than temporary impairment oninvestments in affiliated companies and $214 million in income tax benefitrelated to the reversal of deferred tax liabilities related to certain of theindefinite-lived intangible assets.

 

Adjustments to goodwillduring the three months ended March 31, 2009 are shown in the table below:

 
| ***(In  millions)***                        |       |    |       |
|---------------------------------------------|------------|---------|------------|
| Balance as of  beginning of period          | ** ** | **$**   | **4,572**  | ** ** |
| Adjustments  related to property taxes      | ** ** | **14**  | ** ** |
| Adjustments  related to deferred tax assets | ** ** | **(12** | **)**      |
| Other                                       | ** ** | **(4**  | **)**      |
| Balance as of  end of period                | ** ** | **$**   | **4,570**  | ** ** |

 

**Note 3 – Fair Value Measurements**

 

SFAS No. 157, *Fair ValueMeasurements*(“SFAS No. 157”) defines fair value, establishes aconsistent framework for measuring fair value and expands disclosurerequirements for each major asset and liability category measured at fair valueon either a recurring or nonrecurring basis. SFAS No. 157 clarifies that fair value is an exit price,representing the amount that would be received to sell an asset or paid totransfer a liability in an orderly transaction between marketparticipants.  As such, fair value is amarket-based measurement that should be determined based on assumptions thatmarket participants would use in pricing an asset or liability.  As a basis for considering such assumptions,SFAS No. 157 establishes a three-tier fair value hierarchy, whichprioritizes the inputs used in measuring fair value as follows: (1) Quotedprices in active markets for identical assets - Level 1, (2) Significantother observable inputs — Level 2, and (3) Significant unobservable inputs— Level 3.

 

Thevaluation techniques that may be used to measure fair value are describedbelow:

 

(A)      Market approach – Uses pricesand other relevant information generated by market transactions involvingidentical or comparable assets or liabilities. Prices may be indicated by pricing guides, sale transactions, markettrades, or other sources;

(B)        Cost approach – Based on theamount that currently would be required to replace the service capacity of anasset (replacement cost); and

(C)        Income approach – Usesvaluation techniques to convert future amounts to a single present amount basedon current market expectations about the future amounts (includes present valuetechniques, option-pricing models, and excess earnings method).  Net present value is an income approach wherea stream of expected cash flows is discounted at an appropriate market interestrate.  Excess earnings method is avariation of the income approach where the value of a specific asset isisolated from its contributory assets.

 

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*Measured on a Recurring Basis.*  For assets and liabilities measured at fairvalue on a recurring basis during the period, SFAS No. 157 requiresquantitative disclosures about the fair value measurements separately for eachmajor category.

 

Assetsand liabilities itemized below were measured at fair value during the periodusing the market and income approaches:

 
| ** **                                                     | ** ** | **Post-Merger** | ** ** |
|----------------------------------------------------------------|------------|-----------------|------------|
| ** **                                                     | ** ** | **Assets**      | ** ** |
| ** **                                                     | ** ** | ** **      | ** ** | **Quoted** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                     | ** ** | ** **      | ** ** | **Prices** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                     | ** ** | ** **      | ** ** | **in Active** | ** ** | **Significant** | ** ** | ** ** | ** ** |
| ** **                                                     | ** ** | ** **      | ** ** | **Markets for** | ** ** | **Other** | ** ** | **Significant** | ** ** |
| ** **                                                     | ** ** | **As of**  | ** ** | **Identical** | ** ** | **Observable** | ** ** | **Unobservable** | ** ** |
| ** **                                                     | ** ** | **March**       | ** ** | **Assets** | ** ** | **Inputs** | ** ** | **Inputs** | ** ** |
| ***(In  millions)***                                           | ** ** | **31, 2009**    | ** ** | **(Level  1)** | ** ** | **(Level  2)** | ** ** | **(Level  3)** | ** ** |
| Cash and cash  equivalents                                     |       | **$**           | **2,548**  |   | **$** | **2,548** |   | **N/A** |   | **N/A** |   |
| Unrestricted  short-term investments                           |       | **16**          |       | **N/A** |   | **N/A** |   | **16** |   |
| Restricted cash,  cash equivalents, and short-term investments |       | **168**         |       | **168** |   | **N/A** |   | **N/A** |   |
| Long-term  investments                                         | ** ** | **55**          | ** ** | **N/A** | ** ** | **N/A** | ** ** | **55** |   |
| Hedge  derivatives asset - current                             |       | **3**           |       | **N/A** |   | **3** |   | **N/A** |   |
| Hedge  derivatives asset - long-term                           |       | **10**          |       | **N/A** |   | **10** |   | **—** |   |
| Total                                                          | ** ** | **$**           | **2,800**  | ** ** | **$** | **2,716** | ** ** | **$** | **13** | ** ** | **$** | **71** |   |
|                                                                |            |                 |            |  |  |  |  |  |  |  |  |  |  |

 
| ** **                               | ** ** | **Post-Merger** | ** ** |
|------------------------------------------|------------|-----------------|------------|
| ** **                               | ** ** | **Liabilities** | ** ** |
| ** **                               | ** ** | ** **      | ** ** | **Quoted** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                               | ** ** | ** **      | ** ** | **Prices** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                               | ** ** | ** **      | ** ** | **in Active** | ** ** | **Significant** | ** ** | ** ** | ** ** |
| ** **                               | ** ** | ** **      | ** ** | **Markets for** | ** ** | **Other** | ** ** | **Significant** | ** ** |
| ** **                               | ** ** | **As of**       | ** ** | **Identical** | ** ** | **Observable** | ** ** | **Unobservable** | ** ** |
| ** **                               | ** ** | **March**       | ** ** | **Assets** | ** ** | **Inputs** | ** ** | **Inputs** | ** ** |
| ***(In  millions)***                     | ** ** | **31, 2009**    | ** ** | **(Level  1)** | ** ** | **(Level  2)** | ** ** | **(Level  3)** | ** ** |
| Hedge derivatives  liability - current   |       | **$**           | **168**    | ** ** | **N/A** | ** ** | **$** | **6** | ** ** | **$** | **162** |   |
| Hedge  derivatives liability - long-term |       | **50**          | ** ** | **N/A** | ** ** | **—** | ** ** | **50** |   |
| Total                                    | ** ** | **$**           | **218**    | ** ** | **N/A** | ** ** | **$** | **6** | ** ** | **$** | **212** |   |

 

Valuation techniques forassets and liabilities within the level 3 hierarchy are based on the incomeapproach using (1) a discounted cash flow model for the Reserve Primary Fundand auction rate securities, (2) an option pricing model for fuel hedge optioncontracts and (3) a market approach for interest rate cash flow hedges.

 

Areconciliation of the beginning and ending balances of assets and liabilitiesmeasured at fair value on a recurring basis using Level 3 inputs is presentedin the table below:

 
| ** **                               | ** ** | **Post-Merger**  | ** ** |
|------------------------------------------|------------|------------------|------------|
| ** **                               | ** ** | **Assets**       | ** ** | **Liabilities** | ** ** |
| ** **                               | ** ** | **Level 3** | ** ** | **Level 3** | ** ** |
| ** **                               | ** ** | **Unrestricted** | ** ** | ** ** | ** ** | **Hedge** | ** ** |
| ** **                               | ** ** | **Short-Term**   | ** ** | **Long-Term** | ** ** | **Derivatives** | ** ** |
| ***(In millions)***                 | ** ** | **Investments**  | ** ** | **Investments** | ** ** | **Liability, Net** | ** ** |
| Balance as of  January 1, 2009      | ** ** | **$**            | **49**     | ** ** | **$** | **38** | ** ** | **$** | **549** | ** ** |
| Purchases,  sales, and settlements (net) | ** ** | **(16**          | **)**      | **—** | ** ** | **(289** | **)** |
| Unrealized loss  (gain) recorded in AOCI | ** ** | **—**       | ** ** | **—** | ** ** | **(48** | **)** |
| Transfer to long-term  investments       | ** ** | **(17**          | **)**      | **17** | ** ** | **—** | ** ** |
| Balance as of  March 31, 2009       | ** ** | **$**            | **16**     | ** ** | **$** | **55** | ** ** | **$** | **212** | ** ** |

 

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*Measured ona Non-Recurring Basis. *For assets and liabilities measured on anon-recurring basis during the period, SFAS No. 157 requires quantitativedisclosures about the fair value measurements separately for each majorcategory.   During the first quarter of2009, the Company did not remeasure assets or liabilities at fair value on anon-recurring basis.

 

InMarch 2008, as part of a revised fleet plan, the Company determined thatit would remove three Boeing 747F aircraft and two DC9-30 aircraft fromscheduled service during the remainder of 2008 and the first quarter of2009.  As a result, the Company recorded,as additional depreciation expense, impairment charges of $17.2 millionassociated with these aircraft and related inventory during the first quarterof 2008.

 

TheCompany also recorded a goodwill impairment charge in other operating expenseto reduce the book value of Northwest’s equity to its implied fair value as ofthe Announcement Date.  The goodwillmeasurement described below was an estimate and was adjusted based on thecompletion of Step 2 of the goodwill impairment test during the second quarterof 2008, as described more fully in “Note 2 — Goodwill and Intangibles.”  The assets itemized below were measured atfair value on a non-recurring basis during the first quarter of 2008 using amarket approach:

 
| ** **                    | ** ** | **Successor Assets** | ** ** |
|-------------------------------|------------|---------------------------|------------|
| ** **                    | ** ** | ** **                | ** ** | ** ** | ** ** | **Quoted Prices** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                    | ** ** | ** **                | ** ** | ** ** | ** ** | **in Active** | ** ** | **Significant** | ** ** | ** ** | ** ** |
| ** **                    | ** ** | ** **                | ** ** | ** ** | ** ** | **Markets for** | ** ** | **Other** | ** ** | ** ** | ** ** |
| ** **                    | ** ** | ** **                | ** ** | ** ** | ** ** | **Identical** | ** ** | **Observable** | ** ** | **Total** | ** ** |
| ** **                    | ** ** | **Month of**         | ** ** | **Fair Value** | ** ** | **Assets** | ** ** | **Inputs** | ** ** | **Gains** | ** ** |
| ***(In millions)***      | ** ** | **Measurement**           | ** ** | **Measurement** | ** ** | **(Level 1)** | ** ** | **(Level 2)** | ** ** | **(Losses)** | ** ** |
| Flight equipment  spare parts |       | March 2008           | ** ** | **$** | **—** | ** ** | **$** | **—** | ** ** | **$** | **—** | ** ** | **$** | **(2** | **)** |
| Flight equipment,  net        |       | March 2008           | ** ** | **4** | ** ** | **—** | ** ** | **4** | ** ** | **(15** | **)** |
| Goodwill                      |       | March 2008           | ** ** | **2,199** | ** ** | **—** | ** ** | **2,199** | ** ** | **(3,917** | **)** |
| ** **                    |       |                      |       |   |   |   |   |   |   | **$** | **(3,934** | **)** |
|                               |            |                           |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

**Note 4 — Derivative Financial Instruments**

 

In March 2008, the FASB issued SFAS No. 161,*Disclosures about Derivative Instruments andHedging Activities—an amendment to FASB Statement No. 133* (“SFASNo. 161”).  SFAS No. 161changes the disclosure requirements for derivative instruments and hedgingactivities.  Entities are required toprovide enhanced disclosures about (1) how and why an entity usesderivative instruments, (2) how derivative instruments and related hedgeditems are accounted for under SFAS No. 133, *Accounting for Derivative Instruments and Hedging Activities*(“SFAS No. 133”), and (3) how derivative instruments and related hedgeditems affect an entity’s financial position, financial performance and cashflows.  SFAS No. 161 is effectivefor fiscal years and interim periods beginning after November 15,2008.  The Company adopted SFAS No. 161on January 1, 2009.

 

Our results of operations are materially impacted bychanges in aircraft fuel prices, interest rates and foreign currency exchangerates.  In an effort to manage ourexposure to these risks, we periodically enter into various derivativeinstruments, including fuel, interest rate and foreign currency hedges.  In accordance with SFAS No. 133, we arerequired to recognize all derivative instruments as either assets orliabilities at fair value on our Condensed Consolidated Balance Sheets and torecognize certain changes in the fair value of derivative instruments on ourCondensed Consolidated Statements of Operations.

 

We believe our hedge contracts will be highlyeffective during their term in offsetting changes in cash flow or fair valueattributable to the hedged risk.  Weperform, at least quarterly, both a prospective and retrospective assessment ofthe effectiveness of our hedge contracts, including assessing the possibilityof counterparty default.  If we determinethat a derivative is no longer expected to be highly effective, we discontinuehedge accounting prospectively and recognize subsequent changes in the fairvalue of the hedge to earnings.  As aresult of our effectiveness assessment at March 31, 2009, we believe ourderivative contracts that are designated and qualify for hedge accounting underSFAS No. 133 will continue to be highly effective in offsetting changes incash flow or fair value attributable to the hedged risk.

 

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*Cash flow hedges. *For derivative instruments that are designated and qualify as cash flowhedges under SFAS No. 133, the effective portion of the gain or loss onthe derivative is reported as a component of Accumulated other comprehensive (loss)income (“OCI”) and reclassified into earnings in the same period during whichthe hedged transaction affects earnings. The effective portion of the derivative represents the change in fairvalue of the hedge that offsets the change in fair value of the hedgeditem.  To the extent the change in thefair value of the hedge does not perfectly offset the change in the fair valueof the hedged item, the ineffective portion of the hedge is immediately recognizedin Other income (expense) on our Condensed Consolidated Statements ofOperations.  The following tablesummarizes the accounting treatment and classification of our cash flow hedgeson our Condensed Consolidated Financial Statements:

 
| ** **                                                                                       | ** ** | ** **                                   | ** ** | **Impact of Unrealized Gains and Losses**                                                               |
|--------------------------------------------------------------------------------------------------|------------|----------------------------------------------|------------|---------------------------------------------------------------------------------------------------------|
| ** **                                                                                       | ** ** | ** **                                   | ** ** | **Condensed Consolidated**                                                                              | ** ** | **Condensed Consolidated** |
| ** **                                                                                       | ** ** | ** **                                   | ** ** | **Balance Sheets**                                                                                      | ** ** | **Statements of Operations** |
| **Derivative  Instrument (1)**                                                                   | ** ** | **Hedged Risk**                              | ** ** | **Effective Portion**                                                                                   | ** ** | **Ineffective Portion** |
| **Designated  under SFAS No. 133:**                                                         | ** ** | ** **                                   | ** ** | ** **                                                                                              | ** ** | ** ** |
| Fuel  hedges consisting of crude oil, heating oil, and jet fuel swaps, collars and  call options |       | Volatility  in jet fuel prices               |       | Effective  portion of hedge is recorded in Accumulated other comprehensive income                       |   | Excess,  if any, over effective portion of hedge is recorded in Other income (expense) |
|                                                                                             |       |                                         |       |                                                                                                    |   |   |
| Interest  rate swaps and call options                                                            |       | Changes  in interest rates                   |       | Entire  hedge is recorded in Accumulated other comprehensive income                                     |   | Expect  hedge to fully offset hedged risk; no ineffectiveness recorded |
|                                                                                             |       |                                         |       |                                                                                                    |   |   |
| Foreign  currency forwards and collars                                                           |       | Foreign  currency exchange rate fluctuations |       | Entire  hedge is recorded in Accumulated other comprehensive income                                     |   | Expect  hedge to fully offset hedged risk; no ineffectiveness recorded |
|                                                                                             |       |                                         |       |                                                                                                    |   |   |
| **Not qualifying or not designated under SFAS No. 133:**                                    | ** ** | ** **                                   | ** ** | ** **                                                                                              | ** ** | ** ** |
| Fuel  hedges consisting of crude oil, heating oil, and jet fuel swaps, and  three-way collars    |       | Volatility  in jet fuel prices               |       | Entire  amount of change in fair value of hedge is recorded in Aircraft fuel and related  taxes expense |

 

----

(1)     Ineffectiveness on fuel hedge option contractsis calculated using a “perfectly effective” hypothetical derivative, which actsas a proxy for the fair value of the change in expected cash flows from thepurchase of aircraft fuel.

 

The followingtables reflect the estimated fair value gain (loss) position of our hedgederivatives at March 31, 2009:

 
| ** **                                                   | ** ** | **Estimated Fair Value Gain (Loss)** | ** ** | ** **     | ** ** |
|--------------------------------------------------------------|------------|----------------------------------------------------------|------------|----------------|------------|
| ** **                                                   | ** ** | ** **                                               | ** ** | ** **     | ** ** | **Accounts** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                   | ** ** | **Prepaid**                                              | ** ** | **Other**      | ** ** | **Payable** | ** ** | **Hedge** | ** ** | **Other** | ** ** | **Hedge** | ** ** |
| ** **                                                   | ** ** | **Expenses**                                             | ** ** | **Noncurrent** | ** ** | **and Other** | ** ** | **Derivatives** | ** ** | **Noncurrent** | ** ** | **Margin** | ** ** |
| ***(In millions)***                                     | ** ** | **and Other**                                       | ** ** | **Assets**     | ** ** | **Liabilities** | ** ** | **Liability** | ** ** | **Liabilities** | ** ** | **Receivable (1)** | ** ** |
| Fuel hedge  swaps, collars and call options                  |       |                                                     |       |           |       |   |   |   |   |   |   |   |   |
| Hedges  designated under SFAS No. 133                   |       | $                                                        | —     |           | $          | — |   | $ | (36 | ) | $ | (58 | ) | $ | — |   |   |   |
| Undesignated  hedges                                         |       | 63                                                       |       | —         |       | (89 | ) | (134 | ) | — |   |   |   |
| Total fuel hedge  swaps, collars and call options            |       | $                                                        | 63         |           | $          | — |   | $ | (125 | ) | $ | (192 | ) | $ | — |   |   |   |   |
|                                                         |       |                                                     |       |           |       |   |   |   |   |   |   |   |   |
| Interest rate  swaps and caps designated as cash flow hedges |       | —                                                   |       | —         |       | — |   | (33 | ) | (50 | ) |   |   |
|                                                         |       |                                                     |       |           |       |   |   |   |   |   |   |   |   |
| Foreign currency  forwards and collars                       |       | 3                                                        |       | 10             |       | — |   | (6 | ) | — |   |   |   |
|                                                         |       |                                                     |       |           |       |   |   |   |   |   |   |   |   |
| Total hedge  derivatives                                     |       | $                                                        | 66         |           | $          | 10 |   | $ | (125 | ) | $ | (231 | ) | $ | (50 | ) | $ | 179 |   |

 

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(1)  Represents the margin postings associated withthe open position of our fuel hedge derivative contracts and fuel hedge contractsettlements payable.

 

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*HedgeMargin. *In accordance with our fuel hedgeagreements, counterparties may require us to fund the margin associatedwith our loss position on these contracts. The amount of the margin, if any, is periodically adjusted based on thefair value of the fuel hedge contracts. The margin requirements are intended to mitigate a party’s exposure tomarket volatility and the associated contracting party risk.  We do not offset margin funded tocounterparties against fair value amounts recorded for our hedge contracts.

 

The fuel hedge margin we provide to counterparties isrecorded in Hedge margin receivable on our Condensed Consolidated BalanceSheets.  All cash flows associated withpurchasing and settling fuel hedge contracts are classified as operating cashflows on our Condensed Consolidated Statements of Cash Flows.

 

*Foreign Currency. *The Company is exposed to the effect offoreign currency exchange rate fluctuations on the U.S. dollar value of foreigncurrency-denominated operating revenues and expenses.  The Company’s largest exposure comes from theJapanese Yen and Canadian Dollar.  Fromtime to time, the Company uses financial instruments such as forward contracts,collars, or put options to hedge its anticipated foreign currency sales.  The changes in market value of suchinstruments have historically been highly effective at offsetting exchange ratefluctuations.  Hedging gains or lossesare recorded in Accumulated other comprehensive (loss) income until theassociated transportation is provided, at which time they are recognized as anincrease or decrease in revenue.

 

Counterparties to these financial instruments expose the Company tocredit loss in the event of nonperformance, but the Company does not expect anyof the counterparties to fail to meet their obligations.  The amount of such credit exposure isgenerally the unrealized gains, if any, in such contracts.  To manage credit risks, the Company selectscounterparties based on credit ratings, limits exposure to any singlecounterparty and monitors the market position with each counterparty.  It is the Company’s practice to participatein foreign currency hedging transactions with a maximum span of 36 months.

 

As of March 31, 2009,our open foreign currency hedge positions for the years ending December 31,2009 through 2011 were as follows:

 
| ** **                               | ** ** | **Remainder**    | ** **   | ** ** | ** ** | ** **   | ** ** | ** ** | ** **   | **Contract Fair Value (USD)** | ** ** |
|------------------------------------------|------------|------------------|--------------|------------|------------|--------------|------------|------------|--------------|----------------------------------------------|------------|
| ***(In millions)***                 | ** ** | **of 2009** | ** **   | **2010**   | ** ** | **2011**     | ** ** | **Total**  | ** **   | **Assets**                                   | ** ** | **Liabilities** | ** ** | **Total** | ** ** |
| Amount of Yen  denominated sales hedged: |       |             |         |       |       |         |       |       |         |                                         |       |   |   |   |   |
| Forward  contracts                       |       | ¥           |  30,600 |       | ¥     |  27,040 |       | ¥     |  20,280 |                                         | ¥     |  77,920 |   | $ | 13 |   | $ | (5 | ) | $ | 8 |   |
| Collars                                  |       | 4,500            |         | —     |       | —       |       | 4,500      |         | —                                       |       | (1 | ) | (1 | ) |
| Total                                    |       | ¥           |  35,100 |       | ¥     |  27,040 |       | ¥     |  20,280 |                                         | ¥     |  82,420 |   | $ | 13 |   | $ | (6 | ) | $ | 7 |   |

 
| ** **                                   | ** ** | ** **       | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **Average Hedged Rate** | ** **  |
|----------------------------------------------|------------|------------------|------------|------------|------------|------------|------------|------------|------------|-----------------------------------|-------------|
| ** **                                   | ** ** | **Remainder**    | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **Call Options/**            | ** **  | ** ** | ** ** |
| ** **                                   | ** ** | **of 2009** | ** ** | **2010**   | ** ** | **2011**   | ** ** | **Total**  | ** ** | **Forwards**                      | ** **  | **Put** | ** ** |
| Percentage of  Yen denominated sales hedged: | ** ** | ** **       | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** **                        | ** **  | ** ** |   |
| Forward  contracts                           |       | 30.2%            |       | 21.0%      |       | 15.7%      |       | 21.7%      |       | ¥                            |  96.94 |   | n/a |   |
| Collars                                      |       | 4.5%             |       | —     |       | —     |       | 1.3%       |       | ¥                            |  99.52 |   | ¥ |  103.50 |   |
| Total                                        |       | 34.7%            |       | 21.0%      |       | 15.7%      |       | 23.0%      |       |                              |        |   |   |
|                                              |            |                  |            |            |            |            |            |            |            |                                   |             |  |  |  |  |

 

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Gains (losses) recorded on our Condensed Consolidated Statements ofOperations for the three months ended March 31, 2009 related to ourforeign currency hedge contracts were as follows:

 
| ** **                     | ** ** | **OCI Balance**       | ** ** | ** **            | ** ** | **Effective Portion** | ** ** | **OCI Balance**    | ** ** |
|--------------------------------|------------|-----------------------|------------|-----------------------|------------|-----------------------|------------|--------------------|------------|
| ** **                     | ** ** | **as of**             | ** ** | **Effective Portion** | ** ** | **Reclassified**      | ** ** | **as of**          | ** ** |
| ** **                     | ** ** | **December 31,** | ** ** | **Recorded in**       | ** ** | **from OCI into**     | ** ** | **March 31,** | ** ** |
| ***(In millions)***            | ** ** | **2008**              | ** ** | **OCI**               | ** ** | **Revenue (1)**       | ** ** | **2009**           | ** ** |
| Type of Hedge:                 |       |                  |       |                  |       |                  |       |               |       |
| Settled Yen  hedge contracts   |       |                  |       |                  |       |                  |       |               |       |
| Forwards                       | ** ** | **$**                 | **2**      | ** **            | **$**      | **—**            | ** ** | **$**              | **(2**     | **)** | **$** | **—** | ** ** |
| Collars                        | ** ** | **(1**                | **)**      | **3**                 | ** ** | **(2**                | **)**      | **—**         | ** ** |
| Unsettled Yen  hedge contracts |       |                  |       |                  |       |                  |       |               |       |
| Forwards                       | ** ** | **(20**               | **)**      | **41**                | ** ** | **—**            | ** ** | **21**             | ** ** |
| Collars                        | ** ** | **(3**                | **)**      | **4**                 | ** ** | **—**            | ** ** | **1**              | ** ** |
| Total                          | ** ** | **$**                 | **(22**    | **)**                 | **$**      | **48**                | ** ** | **$**              | **(4**     | **)** | **$** | **22** | ** ** |

 

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(1)     Amounts recorded to revenue are allocated between Passenger revenue andCargo revenue on the Company’s Condensed Consolidated Statements of Operations.

** **

During the first quarter of2009, ineffectiveness related to the Company’s yen hedges was immaterial.

 

The Company expects toreclassify $12 million in unrealized gains from OCI into revenue during the next12 months.

 

*AircraftFuel.*  The Company is exposed to the effect ofchanges in the price and availability of aircraft fuel.  In order to provide a measure of control overprice and supply, the Company trades and ships fuel and maintains fuel storagefacilities to support its flight operations. To further manage the price risk of fuel costs, the Company primarilyutilizes futures contracts traded on regulated futures exchanges, swapagreements and options.

 

Inaccordance with SFAS No. 133, we record the fair value of our fuel hedgecontracts on our Condensed Consolidated Balance Sheets.  Prior to the Merger, the Company had no fuelderivative contracts outstanding that were designated for special hedgeaccounting treatment under SFAS No. 133, and therefore had no relatedunrealized gains (losses) in Accumulated other comprehensive (loss) income.  On the Closing Date, certain existing fuelderivative contracts were designated as cash flow hedges which qualify forspecial hedge accounting treatment.

 

We believe thesedesignated fuel hedge contracts will be highly effective during the remainderof their term in offsetting changes in cash flow attributable to the hedged risk.  We perform both a prospective andretrospective assessment to this effect at least quarterly, including assessingthe possibility of a counterparty default. If we determine that a derivative is no longer expected to be highlyeffective, we discontinue hedge accounting prospectively and recognizesubsequent changes in fair value of the hedge to Other income (expense) on ourCondensed Consolidated Statements of Operations rather than deferring suchamounts in Accumulated other comprehensive (loss) income on our CondensedConsolidated Balance Sheets.

 

The Company also participatesin a fuel hedge program sponsored by Delta, whereby Delta enters into fuelhedges to manage the price risk of fuel costs associated with the estimatedconsolidated fuel consumption of Delta and the Company.  In associationwith the terms of this program, Delta records the fair value of all relatedfuel hedges on its Condensed Consolidated Balance Sheets, and a pro-ratapercentage of the hedge gains or losses are pushed down to the Company and recordedon the Company’s Condensed Consolidated Statements of Operations. The Companyexpects to reclassify $61 million in unrealized losses currently recorded inOCI on Delta’s Condensed Consolidated Balance Sheets into Aircraft fuel expenseand related taxes during the next 12 months.

 

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As of March 31, 2009,our open fuel hedge contract positions (including contracts held by Delta andallocated to the Company) were as follows:

 
| ** **                         | ** ** | **Percentage**          | ** ** | ** **                         | ** ** | ** **             | ** ** | ** ** | ** ** | ** **          | ** ** |
|------------------------------------|------------|-------------------------|------------|------------------------------------|------------|------------------------|------------|------------|------------|---------------------|------------|
| ** **                         | ** ** | **of Remaining**   | ** ** | **Average Contract**          | ** ** | ** **             | ** ** |
| ** **                         | ** ** | **Projected Fuel** | ** ** | **Rates ($/per barrel)** | ** ** | ** **             | ** ** |
| ** **                         | ** ** | **Requirements**        | ** ** | ** **                         | ** ** | **Call Options/** | ** ** | ** ** | ** ** | **Contract**        | ** ** |
| ***(In millions)***           | ** ** | **Hedged**              | ** ** | **Put**                            | ** ** | **Swaps**              | ** ** | **Cap**    | ** ** | **Fair Value** | ** ** |
| Type of Hedge:                     | ** ** | ** **              | ** ** | ** **                         | ** ** | ** **             | ** ** | ** ** | ** ** | ** **          | ** ** |
| 2009 Contracts                     | ** ** | ** **              | ** ** | ** **                         | ** ** | ** **             | ** ** | ** ** | ** ** | ** **          | ** ** |
| Northwest  contracts               | ** ** | ** **              | ** ** | ** **                         | ** ** | ** **             | ** ** | ** ** | ** ** | ** **          | ** ** |
| Crude oil  two-way collars         | ** ** | **5.5**                 | **%**      | **$**                              | **90.00**  | ** **             | **$**      | **111.68** | ** ** | **n/a**             | ** ** | **$** | **(58** | **)** |
| Crude oil  three-way collars       | ** ** | **3.9**                 | ** ** | **117.50**                         | ** ** | **134.75**             | ** ** | **168.00** | ** ** | **(71**             | **)**      |
| Total Northwest  contracts         | ** ** | **9.4**                 | ** ** | ** **                         | ** ** | ** **             | ** ** | ** ** | ** ** | **(129**            | **)**      |
| Delta allocated  contracts         | ** ** | ** **              | ** ** | ** **                         | ** ** | ** **             | ** ** | ** ** | ** ** | ** **          | ** ** |
| Jet Fuel swaps                     | ** ** | **18.0**                | ** ** | **n/a**                            | ** ** | **69.36**              | ** ** | **n/a**    | ** ** | **(38**             | **)**      |
| Crude oil  options                 | ** ** | **4.7**                 | ** ** | **n/a**                            | ** ** | **56.43**              | ** ** | **n/a**    | ** ** | **6**               | ** ** |
| Heating oil  swaps                 | ** ** | **4.4**                 | ** ** | **n/a**                            | ** ** | **67.24**              | ** ** | **n/a**    | ** ** | **(9**              | **)**      |
| Crude oil swaps                    | ** ** | **3.8**                 | ** ** | **n/a**                            | ** ** | **59.37**              | ** ** | **n/a**    | ** ** | **(2**              | **)**      |
| Heating oil  options               | ** ** | **3.7**                 | ** ** | **n/a**                            | ** ** | **79.73**              | ** ** | **n/a**    | ** ** | **4**               | ** ** |
| Total Delta  allocated contracts   | ** ** | **34.6**                | ** ** | ** **                         | ** ** | ** **             | ** ** | ** ** | ** ** | **(39**             | **)**      |
| ** **                         | ** ** | ** **              | ** ** | ** **                         | ** ** | ** **             | ** ** | ** ** | ** ** | ** **          | ** ** |
| Total 2009  Contracts              | ** ** | **44.0**                | **%**      | ** **                         | ** ** | ** **             | ** ** | ** ** | ** ** | **$**               | **(168**   | **)** |
| ** **                         | ** ** | ** **              | ** ** | ** **                         | ** ** | ** **             | ** ** | ** ** | ** ** | ** **          | ** ** |
| 2010 Contracts                     |       |                    |       |                               |       |                   |       |       |       |                |       |
| Delta allocated  crude oil options | ** ** | **5.3**                 | **%**      | **n/a**                            | ** ** | **58.62**              | ** ** | **n/a**    | ** ** | **$**               | **21**     | ** ** |
|                                    |            |                         |            |                                    |            |                        |            |            |            |                     |            |  |  |  |

 

Gains (losses) recorded on our Condensed Consolidated Statements ofOperations for the three months ended March 31, 2009 related to our fuelhedge contracts were as follows:

 
| ** **                                         | ** ** | ** **             | ** ** | **Effective Portion**        | ** ** | ** **             | ** ** | ** **                    | ** ** |
|----------------------------------------------------|------------|------------------------|------------|-----------------------------------|------------|------------------------|------------|-------------------------------|------------|
| ** **                                         | ** ** | **Recognized on** | ** ** | **Reclassified from**        | ** ** | **Total**              | ** ** | **Ineffective Portion**  | ** ** |
| ** **                                         | ** ** | **Undesignated**       | ** ** | **OCI or intercompany** | ** ** | **Gain/(Loss)**        | ** ** | **Recognized**                | ** ** |
| ** **                                         | ** ** | **Contracts as**  | ** ** | **payables into**            | ** ** | **Recognized as** | ** ** | **in Other Income** | ** ** |
| ***(In millions)***                           | ** ** | **Fuel Expense**  | ** ** | **Fuel Expense**             | ** ** | **Fuel Expense**  | ** ** | **(Expense)**                 | ** ** |
| Northwest hedge  contracts                         | ** ** | ** **             | ** ** | ** **                        | ** ** | ** **             | ** ** | ** **                    | ** ** |
| Settled fuel  hedge contracts                      | ** ** | **$**                  | **(21**    | **)**                             | **$**      | **(62**                | **)**      | **$**                         | **(83**    | **)** | **$** | **(1** | **)** |
| Unsettled fuel  hedge contracts                    | ** ** | **(2**                 | **)**      | **—**                        | ** ** | **(2**                 | **)**      | **—**                    | ** ** |
| Total Northwest  fuel hedge contracts              | ** ** | **(23**                | **)**      | **(62**                           | **)**      | **(85**                | **)**      | **(1**                        | **)**      |
| Delta allocated intercompany  fuel hedge contracts | ** ** | ** **             | ** ** | ** **                        | ** ** | ** **             | ** ** | ** **                    | ** ** |
| Settled fuel  hedge contracts                      | ** ** | **—**             | ** ** | **(7**                            | **)**      | **(7**                 | **)**      | **—**                    | ** ** |
| Unsettled fuel  hedge contracts                    | ** ** | **—**             | ** ** | **—**                        | ** ** | **—**             | ** ** | **(2**                        | **)**      |
| Total Delta  allocated fuel hedge contracts        | ** ** | **—**             | ** ** | **(7**                            | **)**      | **(7**                 | **)**      | **(2**                        | **)**      |
| Total                                              | ** ** | **$**                  | **(23**    | **)**                             | **$**      | **(69**                | **)**      | **$**                         | **(92**    | **)** | **$** | **(3** | **)** |

 

Gains (losses) deferred in Accumulated other comprehensive (loss) incomeon our Condensed Consolidated Balance Sheets for the three months ended March 31,2009 related to our fuel hedge contracts were as follows:

 
| ** **                                      | ** ** | **OCI Balance**  | ** ** | ** **                 | ** ** | **Effective Portion**  | ** ** | **OCI Balance** | ** ** |
|-------------------------------------------------|------------|-----------------------|------------|----------------------------|------------|-----------------------------|------------|----------------------|------------|
| ** **                                      | ** ** | **as of**        | ** ** | **Effective Portion** | ** ** | **Reclassified**            | ** ** | **as of**       | ** ** |
| ** **                                      | ** ** | **December 31,** | ** ** | **Recorded in**       | ** ** | **from OCI into** | ** ** | **March 31,**   | ** ** |
| ***(In millions)***                        | ** ** | **2008**              | ** ** | **OCI**                    | ** ** | **Fuel Expense**       | ** ** | **2009**             | ** ** |
| Fuel hedge  contracts settled during the period |       | **$**                 | **(48**    | **)**                      | **$**      | **(14**                     | **)**      | **$**                | **62**     | ** ** | **$** | **—** | ** ** |
| Unsettled fuel hedge  contracts                 | ** ** | **(23**               | **)**      | **(1**                     | **)**      | **—**                  | ** ** | **(24**              | **)**      |
| Total fuel hedge  contracts                     | ** ** | **$**                 | **(71**    | **)**                      | **$**      | **(15**                     | **)**      | **$**                | **62**     | ** ** | **$** | **(24** | **)** |

 

TheCompany expects to reclassify the remaining unrealized losses related to fuelhedge contracts from OCI into Aircraft fuel and related taxes expense duringthe remainder of 2009.

 

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*Interest********Rates.*  The Company’s earnings are also affected bychanges in interest rates due to the impact those changes have on its interestexpense from floating rate debt instruments. To manage the exposure to interest rates, the Company has entered intointerest rate cap and swap hedges.  Theobjective of the interest rate cap and swap hedges is to protect theanticipated payments of interest (cash flows) on the designated debtinstruments from adverse market interest rate changes.  The maturity date of each of the interestrate cap and swap hedges corresponds exactly with the maturity dates of thedesignated debt instruments.

 

Gains (losses) deferred in Accumulated othercomprehensive (loss) income on our Condensed Consolidated Balance Sheets forthe three months ended March 31, 2009 related to our interest rate hedgecontracts were as follows:

 
| ** **               | ** ** | **Notional**       | ** ** | **Weighted**            | ** ** | ** **       | ** **       | **Post-Merger**         | ** ** |
|--------------------------|------------|--------------------|------------|-------------------------|------------|------------------|------------------|-------------------------|------------|
| ** **               | ** ** | **Amount of** | ** ** | **Average**             | ** ** | **Maturity**     | ** **       | **Contract**            | ** ** |
| ***(In millions)*** | ** ** | **Debt**           | ** ** | **Interest Rates** | ** ** | **Dates**        | ** **       | **Fair Value (1)** | ** ** |
| Type of Hedge:           | ** ** | ** **         | ** ** | ** **              | ** ** | ** **       | ** **       | ** **              | ** ** |
| Interest rate  swaps     | ** ** | **$**              | **1,349**  | ** **              | **5.4%**   | ** **       | **2009 -  2019** | ** **              | **$**      | **(83** | **)** |
| Interest rate caps       | ** ** | **351**            | ** ** | **2.3%**                | ** ** | **2012 -  2014** | ** **       | **—**              | ** ** |
| Total                    | ** ** | **$**              | **1,700**  | ** **              | ** ** | ** **       | ** **       | ** **              | **$**      | **(83** | **)** |

 

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(1)          As of March 31, 2009, the Company reduced the liability for itsinterest rate derivative instruments based on the guidance of SFAS No. 157,which states that the fair value of liabilities should consider the Company’sown credit risk in its determination of fair value.  As a result, the Company recorded a reductionto these liabilities of $10 million, and an offsetting credit to Accumulatedother comprehensive (loss) income.

 
| ** **           | ** ** | **OCI Balance**       | ** ** | ** **            | ** ** | **Effective Portion** | ** ** | **OCI Balance**    | ** ** |
|----------------------|------------|-----------------------|------------|-----------------------|------------|-----------------------|------------|--------------------|------------|
| ** **           | ** ** | **as of**             | ** ** | **Effective Portion** | ** ** | **Reclassified**      | ** ** | **as of**          | ** ** |
| ** **           | ** ** | **December 31,** | ** ** | **Recorded in**       | ** ** | **from OCI into**     | ** ** | **March 31,** | ** ** |
| ***(In millions)***  | ** ** | **2008**              | ** ** | **OCI**               | ** ** | **Interest Expense**  | ** ** | **2009**           | ** ** |
| Type of Hedge:       |       |                  |       |                  |       |                  |       |               |       |
| Interest rate  swaps | ** ** | **$**                 | **(93**    | **)**                 | **$**      | **12**                | ** ** | **$**              | **—** | ** ** | **$** | **(81** | **)** |
| Interest rate  caps  | ** ** | **(2**                | **)**      | **—**            | ** ** | **—**            | ** ** | **(2**             | **)**      |
| Total                | ** ** | **$**                 | **(95**    | **)**                 | **$**      | **12**                | ** ** | **$**              | **—** | ** ** | **$** | **(83** | **)** |

 

Duringthe first quarter of 2009, the Company’s interest rate hedges fully offset thehedged risk; therefore, no ineffective portion is recorded.

 

The Company expects to reclassify $1 million inunrealized losses from OCI into Interest expense during the next 12 months.

 

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**Note 5 —Restructuring and Merger Related Expenses**

 

During the first quarter of 2009, the companyrecorded the following items to Restructuring and merger related expense on theCondensed Consolidated Statements of Operation:

 
| ** **                                       | ** ** | **Post-Merger**          | ** ** |
|--------------------------------------------------|------------|--------------------------|------------|
| ** **                                       | ** ** | **Three Months**         | ** ** |
| ** **                                       | ** ** | **Ended March 31,** | ** ** |
| ***(In millions)***                              | ** ** | **2009**                 | ** ** |
| Severance and  related costs (1)                 | ** ** | **$**                    | **28**     | ** ** |
| Other merger  related expenses (2)               | ** ** | **25**                   | ** ** |
| Total  restructuring and merger related expenses | ** ** | **$**                    | **53**     | ** ** |

 

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(1)   Includes costs associated with voluntary workforce reductionprograms for U.S. non-pilot employees announced in December 2008.  During the first quarter of 2009, the Companyrecorded a $28 million charge associated with the workforce reduction program,including $6 million of special termination benefits related to retireehealthcare benefits.  The portion of thecharge related to the voluntary programs includes approximately 900 of the 1,500program participants.  Severance liabilitiesinitially valued and recorded in connection with the Merger in the fourthquarter of 2008 previously contemplated the elimination of 600 positions.  The Company expects any additional charges tobe incurred in connection with these programs will be immaterial.

 

(2)   Includes costs associated with integrating the operations ofNorthwest into Delta, including costs related to information technology,employee relocation and training, and re-branding of aircraft and stations.

 

Thefollowing table shows the balances for these restructuring charges as of March 31,2009, and the activity for the three months then ended.  The table also shows the balances for therestructuring charges related to the Merger as of March 31, 2009, and theactivity for the three months then ended.

** **
| ** **                       | ** ** | **Liability**         | ** ** | ** **     | ** ** | ** **      | ** ** | ** **   | ** ** | **Liability**      | ** ** |
|----------------------------------|------------|-----------------------|------------|----------------|------------|-----------------|------------|--------------|------------|--------------------|------------|
| ** **                       | ** ** | **Balance as of**     | ** ** | **Additional** | ** ** | **Purchase**    | ** ** | ** **   | ** ** | **Balance as of**  | ** ** |
| ** **                       | ** ** | **December 31,** | ** ** | **Costs and**  | ** ** | **Accounting**  | ** ** | ** **   | ** ** | **March 31,** | ** ** |
| ***(In millions)***              | ** ** | **2008**              | ** ** | **Expenses**   | ** ** | **Adjustments** | ** ** | **Payments** | ** ** | **2009**           | ** ** |
| Severance and  related costs (1) | ** ** | **$**                 | **47**     | ** **     | **$**      | **22**          | ** ** | **$**        | **—** | ** **         | **$**      | **(10** | **)** | **$** | **59** | ** ** |
| Facilities and  other (1)        | ** ** | **32**                | ** ** | **—**     | ** ** | **(4**          | **)**      | **—**   | ** ** | **28**             | ** ** |
| Total                            | ** ** | **$**                 | **79**     | ** **     | **$**      | **22**          | ** ** | **$**        | **(4**     | **)**              | **$**      | **(10** | **)** | **$** | **87** | ** ** |

 

----

(1)   The liability balance atDecember 31, 2008 includes liabilities recorded in connection with the Merger.

 

**Note 6 — Earnings (Loss) Per Share Data**

 

On the Closing Date, theCompany became a wholly owned subsidiary of Delta and the shares of NWA Corp.,which traded under the symbol “NWA”, ceased trading on, and were delisted fromthe NYSE.  As a result, the Company isnot presenting Post-Merger Company earnings (loss) per share data for thequarter ended March 31, 2009.

 

*Pre-Merger EPS*.   Inaccordance with SFAS No. 128, *Earningsper Share* (“SFAS No. 128”), basic and diluted earnings pershare were computed by dividing the net loss by the weighted-average number ofshares of common stock outstanding for the three months ended March 31,2008.  SFAS No. 128 requires thatthe entire 234 million shares to be issued to holders of unsecured and guarantyclaims pursuant to the Plan of Reorganization be considered outstanding forpurposes of calculating earnings per share as these shares will ultimately beissued to unsecured creditors once the allocation of disputed unsecured claimsis completed.

 

AtMarch 31, 2008, approximately 16 million in restricted stock units andstock options to purchase shares of the Pre-Merger Company’s common stock wereoutstanding but excluded from the computation of diluted earnings per sharebecause the effect of including the shares would have been anti-dilutive.

 

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**Note 7** -**Long-Term Debt**

 

The Company is a party to a $904 million seniorcorporate credit facility (the “Bank Credit Facility”) and a $500 millionrevolving credit facility (the “$500 Million Revolving Credit Facility”).  The Bank Credit Facility was fully drawn atMarch 31, 2009 and December 31, 2008. The Company did not have any outstanding borrowings under the $500Million Revolving Credit Facility at March 31, 2009 or December 31, 2008.

 

The final maturity date for borrowings under the BankCredit Facility and the $500 Million Revolving Credit Facility is the earlierof (1) the date that Northwest is no longer a separate legal entity, includingwhen it is merged with and into Delta; or (2) December 31, 2010 for the BankCredit Facility, and October 29, 2009 and October 29, 2011 for the $300 millionand $200 million tranches, respectively, under the $500 Million RevolvingCredit Facility.

 

To integrate the operations of Northwest and Delta, asingle operating certificate must be obtained for the two airlines from theFederal Aviation Administration.  Whenthe single operating certificate is received, key assets of the two companiesmust be combined into a single entity. In order for this to occur, Delta intends to merge Northwest with andinto Delta.  As of March 31, 2009, weexpect this merger to occur within the next 12 months.  As a result, we reclassified the borrowingsunder the Bank Credit Facility from Long-term debt and capital leases toCurrent maturities of long-term debt and capital lease obligations on theCondensed Consolidated Balance Sheet at March 31, 2009.  In addition, we shortened the amortizationperiod from December 2010 to March 2010 of the fair value adjustment (debtdiscount) recorded during purchase accounting on the debt, which will result inhigher interest expense for the remainder of 2009.

 

*Accounts Receivable Financing Facility. *In November 2007, the Company entered into an accounts receivablefinancing facility.  On December 16,2008, the Company renewed its accounts receivable financing facility, dated November 29,2007. This facility, originally scheduled to mature on November 28, 2008,was renewed and subsequently amended to April 2009 and the facility sizewas reduced from $150 million to $125 million. As of March 31, 2009, the entire $90 million available to be drawnunder this facility was outstanding. While any portion of the facility remains undrawn, the Company pays acommitment fee on the undrawn amount.

 

The Company was in compliancewith covenants in our financing agreements at March 31, 2009.

 

**Note 8 — Comprehensive Income (Loss)**

 

Comprehensive income (loss) consisted of thefollowing:

 
| ** **                            | ** ** | **Deferred**         | ** ** | **Pension, Other**      | ** ** | **Unrealized**       | ** ** | **Accumulated**        | ** ** |
|---------------------------------------|------------|----------------------|------------|------------------------------|------------|----------------------|------------|------------------------|------------|
| ** **                            | ** ** | **Gain (Loss)** | ** ** | **Postretirement**           | ** ** | **Gain (Loss)** | ** ** | **Other**              | ** ** |
| ** **                            | ** ** | **on Hedging**  | ** ** | **and Long-Term**       | ** ** | **on**               | ** ** | **Comprehensive**      | ** ** |
| ***(In millions)***              | ** ** | **Activities**       | ** ** | **Disability Benefits** | ** ** | **Investments**      | ** ** | **Income (Loss)** | ** ** |
| *Balance  at December 31, 2008*  |       | $                    | (199       | )                            | $          | (1,433               | )          | $                      | (7         | ) | $ | (1,639 | ) |
|                                  |       |                 |       |                         |       |                 |       |                   |       |
| Before tax  amount                    |       | 113                  |       | 6                            |       | —               |       | 119                    |       |
| Tax Effect                            |       | —               |       | —                       |       | —               |       | —                 |       |
| Net-of-tax  amount                    |       | 113                  |       | 6                            |       | —               |       | 119                    |       |
|                                  |       |                 |       |                         |       |                 |       |                   |       |
| ***Balance  at March 31, 2009*** | ** ** | **$**                | **(86**    | **)**                        | **$**      | **(1,427**           | **)**      | **$**                  | **(7**     | **)** | **$** | **(1,520** | **)** |

 

17

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**Note 9 — Pension and Other Postretirement Health CareBenefits**

 

The Company has severaldefined benefit pension plans and defined contribution 401(k)-type planscovering substantially all of its employees. Northwest froze future benefit accruals for its defined benefit PensionPlans for Salaried Employees, Pilot Employees, and Contract Employees effectiveAugust 31, 2005, January 31, 2006, and September 30, 2006,respectively.  Replacement coverage wasprovided for these employees through 401(k)-type defined contribution plans or,in the case of the International Association of Machinists and AerospaceWorkers (“IAM”) represented employees, the IAM National Multi-Employer Plan.

 

Northwest also sponsors various contributory medicaland dental benefit plans covering certain eligible retirees and theirdependents.  The expected future cost ofproviding such postretirement benefits is accrued over the service lives ofactive employees.  Retired employees arenot offered Company-paid medical and dental benefits after age 64, with theexception of certain employees who retired prior to 1987 and receive lifetimeCompany subsidized medical and non-subsidized dental benefits.  Prior to age 65, the retiree share of thecost of medical and dental coverage is based on a combination of years ofservice and age at retirement.  Medicaland dental benefit plans are unfunded and costs are paid as incurred.

 

The Pension Protection Act of 2006 (“2006 Pension Act”)allows commercial airlines to elect special funding rules for definedbenefit plans that are frozen.  Theunfunded liability for a frozen defined benefit plan may be amortized over afixed 17-year period. The unfunded liability is defined as the actuarial liabilitycalculated using an 8.85% interest rate minus the fair market value of planassets.  Northwest elected the specialfunding rules for frozen defined benefit plans under the 2006 Pension Acteffective October 1, 2006.  As aresult of this election (1) the funding waivers that Northwest receivedfor the 2003 plan year contributions were deemed satisfied under the 2006Pension Act, and (2) the funding standard account for each Plan wasreduced to zero as of September 30, 2006. New contributions that came due under the 2006 Pension Act funding rules werepaid while Northwest was in bankruptcy and must continue to be paid goingforward.  If the new contributions arenot paid, the future funding deficiency that would develop will be based on theregular funding rules rather than the special funding rules.

 

***Components of net periodic benefit cost of definedbenefit plans and defined contribution plan costs:***

*** ***
| ** **                                      | ** ** | **Pension Benefits**     | ** ** | **Other Benefits**   | ** ** |
|-------------------------------------------------|------------|-------------------------------|------------|---------------------------|------------|
| ** **                                      | ** ** | **Post-Merger**               | ** ** | **Pre-Merger**            | ** ** | **Post-Merger** | ** ** | **Pre-Merger** | ** ** |
| ** **                                      | ** ** | **Three Months**         | ** ** | Three Months         | ** ** | **Three Months** | ** ** | Three Months | ** ** |
| ** **                                      | ** ** | **Ended March 31,** | ** ** | Ended March 31, | ** ** | **Ended March 31,** | ** ** | Ended March 31, | ** ** |
| ***(In millions)***                        | ** ** | **2009**                      | ** ** | 2008                      | ** ** | **2009** | ** ** | 2008 | ** ** |
| Defined benefit  plan costs                     |       |                          | ** ** |                      |       |   | ** ** |   |   |
| Service cost                                    | ** ** | **$**                         | **2**      | ** **                | $          | 6 | ** ** | **$** | **4** | ** ** | $ | 6 |   |
| Interest cost                                   | ** ** | **138**                       | ** ** | 141                       | ** ** | **9** | ** ** | 12 |   |
| Expected return  on plan assets                 | ** ** | **(80**                       | **)**      | (140                      | )          | **—** | ** ** | — |   |
| Recognized net  actuarial loss and other events |       | **7**                         | ** ** | —                    | ** ** | **—** | ** ** | — |   |
| Net periodic  benefit cost                      | ** ** | **67**                        | ** ** | 7                         | ** ** | **13** | ** ** | 18 |   |
|                                            |       |                          | ** ** |                      |       |   | ** ** |   |   |
| Defined  contribution plan costs                | ** ** | **29**                        | ** ** | 28                        | ** ** | **—** | ** ** | — |   |
|                                            |       |                          | ** ** |                      |       |   | ** ** |   |   |
| Total benefit  cost                             | ** ** | **$**                         | **96**     | ** **                | $          | 35 | ** ** | **$** | **13** | ** ** | $ | 18 |   |

 

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**Note 10 — Related Party Transactions**

 

*Delta Air Lines, Inc. *Subsequent to the Merger, the Company entered into a $300 millionintercompany credit facility with Delta (the “Delta Credit Facility”).  On February 4, 2009, the Company amendedthe size of the Delta Credit Facility from $300 million to $750 million.  During the first quarter 2009, the Companydrew an additional $350 million for a total of $550 million outstanding as of March 31,2009.  The Delta Credit Facilitycurrently matures on December 21, 2009 and bears interest at the rate of1.78% per annum.  Interest on unpaidprincipal is paid quarterly.  The Companypaid $1.9 million in interest in the first quarter 2009.  The Company had receivables of $72.5 millionand payables of $606.3 million for a net payable position of $533.8 million asof March 31, 2009.  Included in the$606.3 million of payables to Delta is the $550 million which was drawn on theDelta Credit Facility and classified in Due to parent company on the CondensedConsolidated Balance Sheets.  Thefollowing is a summary of the changes in the net payable position with Deltafor the period from January 1 to March 31, 2009:

 
| ** **                                   | ** ** | **Post-Merger**               | ** ** |
|----------------------------------------------|------------|-------------------------------|------------|
| ** **                                   | ** ** | **Three months**         | ** ** |
| ** **                                   | ** ** | **Ended March 31,** | ** ** |
| ***(In millions)***                     | ** ** | **2009**                      | ** ** |
| Balance at  beginning of period              | ** ** | **$**                         | **(185**   | **)** |
| Net cash  remitted to (received from) parent | ** ** | **(379**                      | **)**      |
| Net intercompany  (purchases) sales          | ** ** | **30**                        | ** ** |
| Balance at end  of period                    | ** ** | **$**                         | **(534**   | **)** |

 

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**Item 2.****       ****Management’s Discussion andAnalysis of Financial Condition and Results of Operations.**

 

**Overview**

 

Northwest Airlines Corporation (“NWA Corp.” and, together with itssubsidiaries, the “Company”) is the direct parent corporation of NorthwestAirlines, Inc. (“Northwest”).  TheCondensed Consolidated Financial Statements include the accounts of NWA Corp.and all consolidated subsidiaries. Substantially all of the Company’s results of operations areattributable to its operating subsidiary, Northwest, which accounted forsubstantially all of the Company’s first quarter 2009 consolidated operatingrevenues and expenses.  The Company’sresults of operations also include other subsidiaries of which MLT Inc. (“MLT”)is the most significant.  MLT developsand markets Worry-Free Vacations that include air transportation, hotelaccommodations and car rentals.  Inaddition to its Worry-Free Vacations charter programs, MLT markets and supportsNorthwest’s WorldVacations travel packages to destinations throughout the U.S.,Canada, Mexico, the Caribbean, Europe and Asia, primarily on Northwest.  These vacation programs, in addition toproviding a competitive and quality tour product, increase the sale ofNorthwest services and promote and support new and existing Northwestdestinations. The following discussion pertains primarily to Northwest and,where indicated, MLT.

 

On October 29, 2008 (the “Closing Date”),Nautilus Merger Corporation (“Merger Sub”), a wholly owned subsidiary of DeltaAir Lines, Inc. (“Delta”), merged with and into NWA Corp. (the “Merger”)in accordance with the Agreement and Plan of Merger, dated as of April 14,2008 (the “Announcement Date”), among Delta, Merger Sub and NWA Corp. (the “MergerAgreement”).  As a result of the Merger,NWA Corp. and its subsidiaries became wholly-owned subsidiaries of Delta andthe shares of NWA Corp., which traded under the symbol “NWA”, ceased tradingon, and were delisted from, the New York Stock Exchange (“NYSE”).

 

As a result of theapplication of purchase accounting in accordance with Statement of FinancialAccounting Standards (“SFAS”) No. 141, *BusinessCombinations* (“SFAS No. 141”), the financial statements priorto October 30, 2008 are not comparable with the financial statements forperiods on or after October 30, 2008. References to “Post-Merger” refer to the Company on or after October 30,2008, after giving effect to the application of purchase accounting.  References to “Pre-Merger” refer to theCompany prior to October 30, 2008.

 

**FirstQuarter 2009 Results**

 

For the quarter ended March 31, 2009, theCompany recorded a net loss of $183 million, which includes a $1.8 million lossassociated with marking-to-market out-of-period fuel hedges. This compares to afirst quarter 2008 net loss of $4.1 billion, which included a $3.9 billiongoodwill impairment charge and a $13.4 million loss associated withmarking-to-market out-of-period fuel hedges.

 

Operating revenues in the first quarter of 2009decreased 17.1 percent versus the first quarter of 2008 to $2.6 billion.  System consolidated passenger revenuedecreased 17.4 percent to $2.2 billion. Operating expenses in the quarter decreased 63.6 percent year-over-yearto $2.6 billion.

 

At March 31, 2009, the Company had cash andcash equivalents of $2.5 billion and unrestricted short-term investments of$15.6 million, providing total available liquidity of $2.6 billion.  This amount excludes $167.8 million ofrestricted short-term investments (which may include amounts held as cash).

 

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**Results of Operations — Three months ended March 31,2009 and 2008**

 

*Operating Revenues*.  Operating revenues decreased17.1 percent ($536 million), as a result of reduction in passenger revenue andcargo revenue, partially offset by an increase in regional carrier revenue andother revenue.

 

*System Passenger Revenues.*  Mainline passenger revenuesdecreased by 22.1 percent, due to the year-over-year decreases in capacity,passenger load factor, and yield.  In thefollowing analysis by region, mainline statistics exclude regional carriers,which is consistent with how the Company reports statistics to the Departmentof Transportation (“DOT”)

 
| ** **                          | ** ** | **Mainline** | ** ** | **Total**   | ** ** | ** **   | ** ** |
|-------------------------------------|------------|--------------|------------|-------------|------------|--------------|------------|
| ** **                          | ** ** | **Domestic** | ** ** | **Pacific** | ** ** | **Atlantic** | ** ** | **Mainline** | ** ** | **Consolidated** | ** ** |
| **2009**                            |       |         |       |        |       |         |       |   |   |   |   |
| Passenger  revenues (in millions)   |       | $            | 1,091      |        | $          | 494          |       | $ | 209 |   | $ | 1,794 |   | $ | 2,237 |   |
|                                |       |         |       |        |       |         |       |   |   |   |   |
| **Increase  (Decrease) from 2008:** |       |         |       |        |       |         |       |   |   |   |   |
| Passenger  revenues (in millions)   |       | $            | (340       | )           | $          | (59          | )          | $ | (109 | ) | $ | (508 | ) | $ | (471 | ) |
| Percent                             |       | (23.8        | )%         | (10.6       | )%         | (34.2        | )%         | (22.1 | )% | (17.4 | )% |

 

*Regional Carrier Revenues*.  Regional carrier revenuesincreased 9.1 percent ($37 million) to $443 million primarily due to a 35.7percent increase in available seat miles associated with the delivery of new 76seat regional aircraft and an increase in yield.

 

*Cargo Revenues*.  Cargo revenues decreased 53.3percent ($105 million) to $92 million due primarily to a 48.2 percent decreasein volume and a 9.4 percent decrease in yield.

 

*Other Revenue. *Otherrevenue increased 17.5 percent ($40 million) to $269 million due primarily toincreased charter and partner revenues.

 

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*Operating Expenses*.  Operating expenses decreased63.6 percent ($4.6 billion) for the three months ended March 31,2009.  The following table and notespresent operating expenses for the three months ended March 31, 2009 and2008 and describe significant year-over-year variances:

** **
| ** **                                                  | ** ** | **Three Months Ended** | ** ** | **Increase**   | ** ** | ** **         | ** ** | ** ** | ** ** |
|-------------------------------------------------------------|------------|----------------------------------|------------|----------------|------------|--------------------|------------|------------|------------|
| ** **                                                  | ** ** | **March 31**                | ** ** | **(Decrease)** | ** ** | **Percent**        | ** ** | ** ** | ** ** |
| ***(In millions)***                                    | ** ** | **2009**                         | ** ** | **2008**       | ** ** | **from 2008** | ** ** | **Change** | ** ** | **Note** | ** ** |
| **Operating  Expenses**                                     |       |                             |       |           |       |               |       |       |       |   |   |
| Aircraft fuel  and related taxes                            | ** ** | **$**                            | **586**    |           | $          | 1,115              |       | $          | (529       | ) | (47.4 | )% | A |   |
| Salaries and  related costs                                 | ** ** | **748**                          |       | 728            |       | 20                 |       | 2.7        |       | B |   |
| Contract carrier  arrangements                              | ** ** | **190**                          |       | 264            |       | (74                | )          | (28.0      | )          | D |   |
| Depreciation and  amortization                              | ** ** | **127**                          |       | 148            |       | (21                | )          | (14.2      | )          | F |   |
| Aircraft  maintenance materials and repairs                 | ** ** | **155**                          |       | 209            |       | (54                | )          | (25.8      | )          | E |   |
| Contracted  services                                        | ** ** | **222**                          |       | 206            |       | 16                 |       | 7.8        |       | B |   |
| Passenger  commissions and other selling expenses           |       | **175**                          |       | 215            |       | (40                | )          | (18.6      | )          | E |   |
| Landing fees and  other rents                               | ** ** | **148**                          |       | 129            |       | 19                 |       | 14.7       |       | C |   |
| Passenger  service                                          | ** ** | **53**                           |       | 59             |       | (6                 | )          | (10.2      | )          | B |   |
| Aircraft rent                                               | ** ** | **58**                           |       | 54             |       | 4                  |       | 7.4        |       | B |   |
| Goodwill and  other indefinite-lived intangibles impairment |       | **—**                       |       | 3,917          |       | (3,917             | )          | (100.0     | )          | G |   |
| Restructuring  and merger related                           | ** ** | **53**                           |       | —         |       | 53                 |       | n/m        |       | H |   |
| Other, net                                                  | ** ** | **103**                          |       | 143            |       | (40                | )          | (28.0      | )          | I |   |
| Total operating  expenses                                   | ** ** | **$**                            | **2,618**  |           | $          | 7,187              |       | $          | (4,569     | ) | (63.6 | )% |   |   |

 

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A.    Aircraftfuel and taxes for the first quarter of 2009 includes $91.9 million in net fuelderivative contract losses, consisting of a $1.8 million loss associated withmarking-to-market out-of-period fuel hedges and $90.1 million of losses forcontracts settled during the current period. Fuel expense for the first quarter of 2008 includes $5.3 million in netfuel derivative contract gains, consisting of a $12.3 million loss associated withmarking-to-market out-of-period fuel hedges and $17.6 million of gains forcontracts settled in the first quarter of 2008.

B.    Salariesand related costs, contracted services, landing fees and other rents, passengerservice, and aircraft rent, were relatively flat year-over-year.

C.    Landing Fees and other rents increasedyear-over-year primarily due to increased facilities rent expense.

D.    Contractcarrier arrangements decreased year-over-year primarily due to lower fuelcosts.

E.     Passengercommissions and other selling expenses and aircraft maintenance and repairsdecreased year-over-year primarily due to the year-over-year decrease incapacity and related grounding of aircraft.

F.     Depreciationand amortization decreased year-over-year primarily due to the impairment oftwo DC9-30 aircraft and three 747F airframes, engines and related inventoryduring the first quarter of 2008.

G.    Duringthe first quarter of 2008, the Company recorded a non-cash goodwill impairmentcharge to reduce the book value of Northwest’s equity to its implied fair valueas of the Announcement Date.  See “Item1. Financial Statements, Note 2 — Goodwill and Intangibles” for additionalinformation.

H.    Duringthe first quarter of 2009, the Company recorded expenses related to voluntaryworkforce reductions and the Merger.  See“Note 5 — Restructuringand Merger Related Expenses” for additionalinformation.

I.      Otherexpenses decreased primarily due to reduced professional fee expenses.

 

*Other Income and Expense.*  The Company recorded non-operating expense of$163 million in the first quarter of 2009 as compared to non-operating expenseof $86 million in the first quarter of 2008. The increase in non-operating expense is primarily due to the debtdiscount amortization recorded in Interest expense on the Condensed ConsolidatedStatements of Operations as a result of purchase accounting.

 

*Tax Expense (Benefit).*  Given its recent loss experience, the Companyprovides a valuation allowance against tax benefits, principally for netoperating losses in excess of its deferred tax liability.  It is more likely than not that futuredeferred tax assets will require a valuation allowance to be recorded to fullyreserve against the uncertainty that those assets would be realized. 

 

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**Other Information**

 

*Forward-LookingStatements.*  Certain ofthe statements made throughout Management’s Discussion and Analysis ofFinancial Condition and Results of Operations and elsewhere in this quarterlyreport are not purely historical facts, including statements regarding ourbeliefs, expectations, intentions or strategies for the future, may be “forward-lookingstatements” under the Private Securities Litigation Reform Act of 1995.  All forward-looking statements involve a numberof risks and uncertainties that could cause actual results to differ materiallyfrom the plans, intentions and expectations reflected in or suggested by theforward-looking statements.  For examplesof such risks and uncertainties, please see the cautionary statements containedin “Item 1A. Risk Factors” of the Company’s 2008 Form 10-K.  All forward looking statements speak only asof the date made, and we undertake no obligation to update any forward-lookingstatements to reflect events or circumstances that may arise after the date ofthis release.

 

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**Item 3.****   ****Quantitativeand Qualitative Disclosures About Market Risk.**

 

Omittedunder the reduced disclosure format permitted by General Instruction H(2)(c) ofForm 10-Q.

 

**Item 4.****   ****Controlsand Procedures.**

 

**Evaluationof Disclosure Controls and Procedures —** Asof March 31, 2009, managementperformed an evaluation under the supervision and with the participation of theCompany’s President and Chief Operating Officer and Vice President and ChiefFinancial Officer of the effectiveness of the design and operation of theCompany’s disclosure controls and procedures covered in this Quarterly Reporton Form 10-Q.  Based on thatevaluation, the Company’s President and Chief Operating Officer and VicePresident and Chief Financial Officer concluded that the Company’s disclosurecontrols and procedures are effective in alerting them in a timely manner tomaterial information required to be disclosed in the Company’s periodic reportfiled with the SEC as of the end of such period.

 

**Changes in Internal Control —** There was no change in the Company’s internal control over financial reportingthat occurred during the Company’s fiscal first quarter ended March 31,2009 that has materially affected, oris reasonably likely to materially affect, the Company’s internal control overfinancial reporting.  Management willcontinue to evaluate our internal control over financial reporting as weexecute merger integration activities because integration activities couldmaterially affect the internal control over financial reporting.

 

PART II. OTHER INFORMATION

 

**Item 1.****   ****LegalProceedings.**

 

Reference is made to “Item 3. Legal Proceedings” inthe Company’s 2008 Form 10-K for a discussion of other legalproceedings.

 

*Northwest Airlines, Inc. v.Filipas, et al (U.S. Dist. Ct. Minnesota, Case 07-CIV-4803 (JNE/JJG)). *On December 12,2007, Northwest Airlines, Inc. filed a declaratory judgment action againstsix of its employee pilots seeking a declaration that its recently implementedTarget Benefit Pension Plan (collectively bargained for with the Air LinePilots Association) does not violate any applicable prohibitions against agediscrimination, including under ERISA.  The court has certified adefendant class of all employee pilots who will receive less under the newtarget plan than they would have received under the predecessor plan that providedbenefits to pilots on a “flat percentage” or “pro rata to pay” basis.  On January 26, 2009, the District Courtgranted summary judgment in favor of Northwest on its claim as well as thedefendants’ counterclaims.  Claims by theemployee pilots against the Air Line Pilots Association remain pending in thecase and consequently no final order has been entered.

 

**Item 1A. Risk Factors.**

 

SeePart I, Item 1A., “Risk Factors,” of the Company’s 2008 Form 10-K fora detailed discussion of the risk factors affecting the Company.  There have been no material changes from therisk factors described in the Company’s 2008 Form 10-K.

 

**Item 6.****   ****Exhibits.**

 

(a)   Exhibits:

 
| 10.1   | Fourth  Amendment to Airline Operating Agreement and Terminal Building Lease  Minneapolis-St. Paul International Airport dated as of February 6, 2009  by and between the Metropolitan Airports Commission and Northwest  Airlines, Inc.                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                    |
| 10.2   | Second  Amendment dated as of March 30, 2009 to the Credit Agreement dated as of  October 29, 2008 among Northwest Airlines, Inc., Northwest Airlines  Corporation, certain subsidiaries of Northwest Airlines, Inc., various  lenders and U.S. Bank National Association, as Administrative Agent. |
|   |                                                                                                                                                                                                                                                                                                                    |
| 31.1   | Rule 13a-14(a)/15d-14(a) Certification  of Chief Executive Officer.                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                    |
| 31.2   | Rule 13a-14(a)/15d-14(a) Certification  of Chief Financial Officer.                                                                                                                                                                                                                                           |

 

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SIGNATURE

 

Pursuant to the requirements of Section 13 or15(d) of the Securities Exchange Act of 1934, the Registrant has dulycaused this report to be signed on its behalf by the undersigned, thereuntoduly authorized this 24th day of April 2009.

 
|     | NORTHWEST AIRLINES  CORPORATION |
|----------|---------------------------------|
|     |                            |
|     | By                              | /s/ Anna M. Schaefer |   |
|     |                            | Anna M. Schaefer |   |
| * * |                            | *Vice President — Finance and  Chief Accounting Officer  (principal accounting officer)* |

 

EXHIBIT INDEX

 
| **Exhibit No.** | ** ** | **Description**                                                                                                                                                                                                                                                                                                         |
|----------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |       |                                                                                                                                                                                                                                                                                                                    |
| 10.1                 |       | Fourth  Amendment to Airline Operating Agreement and Terminal Building Lease  Minneapolis-St. Paul International Airport dated as of February 6, 2009  by and between the Metropolitan Airports Commission and Northwest  Airlines, Inc.                                                                      |
|                 |       |                                                                                                                                                                                                                                                                                                                    |
| 10.2                 |       | Second  Amendment dated as of March 30, 2009 to the Credit Agreement dated as of  October 29, 2008 among Northwest Airlines, Inc., Northwest Airlines  Corporation, certain subsidiaries of Northwest Airlines, Inc., various  lenders and U.S. Bank National Association, as Administrative Agent. |
|                 |       |                                                                                                                                                                                                                                                                                                                    |
| 31.1                 |       | Rule 13a-14(a)/15d-14(a) Certification  of Chief Executive Officer.                                                                                                                                                                                                                                           |
|                 |       |                                                                                                                                                                                                                                                                                                                    |
| 31.2                 |       | Rule 13a-14(a)/15d-14(a) Certification  of Chief Financial Officer.                                                                                                                                                                                                                                           |

 

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