Northwest files disclosure statement

Northwest Airlines
Corporation has announced that it and certain of
its subsidiaries have filed their Disclosure Statement with the United
States Bankruptcy Court for the Southern District of New York. The
disclosure statement provides additional information and details
regarding the company’s Plan of Reorganization, filed with the court
on January 12, 2007, and amended with today’s filing.

  The disclosure statement provides an overview of Northwest’s
business plan, which is built on the work the airline has done to
reposition the company for long-term success. Initial results of these
efforts, which included implementation of a competitive global network
carrier cost structure, allowed the company to report in 2006, its
first profitable year since 2000.

  The disclosure statement also outlines how Northwest employees
will share in the company’s financial success through profit sharing,
as well as realizing the value of unsecured claims that they hold.

  Doug Steenland, Northwest Airlines president and chief executive
officer, said, “Today’s submission provides further evidence of the
progress we have made toward realizing the three overarching goals put
in place when we filed for Chapter 11 protection: to achieve a
competitive cost structure, a more efficient business model and a
revitalized balance sheet. While we have made substantial progress in
our restructuring, and we remain on track to emerge from bankruptcy in
the second quarter of this year, we still have work ahead of us.”

  Steenland added, “Our employees have contributed to this
transformation through their personal sacrifices and continued
dedication to our customers. Our employees will continue to play a
critical role in Northwest’s future success.”

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  “A key element of our restructuring plan has always been to find
ways for employees to participate in the success of a profitable
Northwest. Our plan re-affirms that employees will receive unsecured
claims related to new, ratified collective bargaining agreements as
well as to participate in a profit sharing plan.”

  “Through the claims and profit sharing, our employees would have
the equivalent of a 20 percent economic interest in the airline.
During the 2006-2010 period of the business plan, Northwest forecasts
that the claims and profit sharing would result in employees receiving
$1.5 billion in distributions.”

  “The business plan calls for pre-tax margins to increase
year-over-year to 9.9 percent by 2010. Revenue is forecast to grow to
more than $14 billion by 2010. The plan also outlines the introduction
of new, 76-seat regional jets and the new-generation Boeing 787 during
the next four years,” Steenland added.

  Included in the disclosure statement is a valuation analysis of
Northwest prepared by Seabury Securities LLC, which estimates a range
of equity value of the company with a midpoint of approximately $7
billion, before any new common stock sales. The aggregate amount of
allowed general unsecured claims against Northwest are estimated to be
$8.75 billion to $9.5 billion. Recovery for unsecured creditors—in
the form of new common stock in Northwest Airlines Corporation—would
be substantial.

  In addition, the plan provides for the sale of $750 million in new
common stock in Northwest, pursuant to a fully underwritten equity
rights offering. A substantial portion of that amount will be raised
by offering unsecured creditors the opportunity to purchase additional
new common stock in the airline through a rights offering underwritten
by J.P. Morgan Securities Inc.

  “Our ability to raise $750 million of new equity demonstrates not
only our desire to ensure that creditors share in the airline’s future
success, but it also underscores the market’s confidence in
Northwest’s future,” Steenland added.

  Under the plan, allowed administrative, priority and secured
claims will receive a full cash recovery. Creditors with allowed
unsecured claims against debtor entities other than Northwest Airline,
Inc., NWA Corp., Northwest Airlines Holdings Corporation, and NWA
Inc., will also receive payment in full in cash, without interest.
Distributions to all creditors due to receive a recovery will begin on
the date that Northwest’s plan becomes effective.

  Because not all unsecured creditor claims will be satisfied in
full, the pre-petition equity holders’ interests in Northwest’s common
and preferred stock will be cancelled, and those holders will not
receive a distribution.

  “We are confident that our plan treats our creditors fairly, and
we look forward to working with them to obtain their support for our
reorganization plan so that they can receive their recovery as quickly
as possible and Northwest can move forward on a sound economic
footing,” Steenland added.

  The company anticipates that a hearing on the adequacy of its
disclosure statement will be held in bankruptcy court on March 26. At
that hearing, Bankruptcy Court Judge Allan L. Gropper will determine
whether the disclosure statement provides the information necessary
for Northwest’s creditors to make an informed decision on the
company’s proposed reorganization plan. Approval of the disclosure
statement by the court will allow Northwest to begin solicitation of
votes for confirmation of the Plan of Reorganization.

  The company remains on track to emerge from bankruptcy protection
during the second quarter of 2007.
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