================================================================= NORTHWEST AIRLINES BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2005 (ISSN XXXX-XXXX) September 15, 2005 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 215-945-7000 FAX 215-945-7001 ----------------------------------------------------------------- NORTHWEST AIRLINES BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 572 Fernwood Lane, Fairless Hills, Pennsylvania 19030, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtors' case. New issues are prepared by Catherine L. Gutib, Christopher G. Patalinghug, Frauline S. Abangan and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any re-mailing of NORTHWEST AIRLINES BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO NORTHWEST AIRLINES BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF NORTHWEST AIRLINES CORP. [00002] NORTHWEST AIRLINES' BALANCE SHEET AT JUNE 30, 2005 [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING [00004] NORTHWEST AIRLINES' CHAPTER 11 DATABASE [00005] LIST OF NORTHWEST'S 100 LARGEST UNSECURED CREDITORS [00006] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF CASES [00007] MOODY'S DOWNGRADES NORTHWEST AIRLINES RATINGS [00008] PARTIES COMMENT ON NORTHWEST AIRLINES BANKRUPTCY FILING KEY DATE CALENDAR ----------------- 09/14/05 Northwest's Voluntary Petition Date 09/29/05 Deadline for Northwest's Schedules of Assets & Debts 09/29/05 Deadline for Northwest's Statement of Financial Affairs 09/29/05 Deadline for Northwest's Lists of Leases and Contracts 10/04/05 Deadline for Northwest's to provide Utilities Deposits 11/13/05 Deadline to make Sec. 1110 aircraft lease decisions 11/13/05 Northwest's Deadline to make Lease Disposition Decisions 12/13/05 Northwest's Deadline to remove actions under FRBP 9027 01/12/06 Expiration of Northwest's Exclusive Plan Proposal Period 03/13/06 Expiration of Northwest's Exclusive Solicitation Period 09/14/07 Deadline for Northwest's to Commence Avoidance Actions Organizational Meeting to form Northwest Committees First Meeting of Creditors under 11 USC Sec. 341 Bar Date for filing Proofs of Claim against Northwest ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO NORTHWEST AIRLINES BANKRUPTCY NEWS ----------------------------------------------------------------- NORTHWEST AIRLINES BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' chapter 11 proceeding. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of NORTHWEST AIRLINES BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. To continue receiving NORTHWEST AIRLINES BANKRUPTCY NEWS, please complete the form below and return it by fax or e-mail to: Bankruptcy Creditors' Service, Inc. 572 Fernwood Lane Fairless Hills, PA 19030 Telephone (215) 945-7000 Fax (215) 945-7001 E-mail: peter@bankrupt.com We have published similar newsletters tracking billion-dollar insolvency proceedings since 1990, starting with Federated Department Stores. Currently, we provide similar coverage about the restructuring proceedings involving Delta Air Lines, US Airways, UAL Corporation and United Airlines, VARIG, S.A., ATA Airlines, ASARCO LLC, Solutia, W.R. Grace & Co., Owens Corning, Armstrong World Industries, USG Corporation, Anchor Glass Container Corp., Allied Holdings, Inc., Collins & Aikman Corporation, Meridian Automotive Systems, Inc., Tower Automotive Inc., Federal-Mogul Corporation, Saint Vincent Catholic Medical Centers, Integrated Health Services, Mariner Post-Acute & Mariner Health, TECO Energy Inc.'s Panda Gila River and Union Power subsidiaries, Winn-Dixie Store, Inc., Kmart Corp., Ames Department Stores, Spiegel, Inc. (and its Eddie Bauer and Newport News subsidiaries), Mirant Corp., PG&E National Energy Group, Pacific Gas and Electric Company, Enron Corp., NRG Energy, ANC Rental, the Roman Catholic Church in the United States, Trump Hotels & Casino Resorts, Inc., Interstate Bakeries Corporation, Pegasus Satellite, Adelphia Communications and Adelphia Business Solutions, WorldCom, Winstar, 360networks, Laidlaw, Parmalat Finanziaria, S.p.A., Bethlehem Steel, Kaiser Aluminum, WestPoint Stevens, Burlington Industries, Exide Technologies, National Century Financial Enterprises, Reliance Group Holdings & Reliance Financial, and Loewen Group. ================================================================= [ ] YES! Please enter my personal subscription to NORTHWEST AIRLINES BANKRUPTCY NEWS at US$45 per issue until I tell you to cancel my subscription. Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) NORTHWEST AIRLINES BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' chapter 11 proceeding. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of NORTHWEST AIRLINES BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF NORTHWEST AIRLINES CORP. ----------------------------------------------------------------- NORTHWEST AIRLINES CORPORATION 2700 Lone Oak Parkway Eagan, Minnesota 55121 Telephone (612) 726-2111 Fax (612) 726-7123 http://www.nwa.com/ Northwest Airlines Corporation, which began operations in 1926, operates the world's fourth largest airline as measured by revenue passenger miles. As of June 30, 2005, Northwest had approximately 39,000 employees, operated a fleet of 433 aircraft and directly served, together with its regional carriers, more than 232 destinations in 25 countries in North America, Asia and Europe. Together with its SkyTeam alliance and its other travel partners, Northwest provides a global network to over 900 cities in more than 160 countries on six continents. The Business Northwest's business focuses on the development of a global airline network through its strategic assets that include domestic hubs at Detroit, Minneapolis/St. Paul and Memphis; an extensive Pacific route system with a hub in Tokyo; a transatlantic joint venture with KLM Royal Dutch Airlines, which operates through a hub in Amsterdam; a domestic and international alliance with Continental Airlines, Inc. and Delta Air Lines, Inc.; membership in SkyTeam, a global airline alliance with KLM, Continental, Delta, Air France, Alitalia, Aeromexico, CSA Czech Airlines and Korean Air; exclusive marketing agreements with two domestic regional carriers, Pinnacle Airlines, Inc. and Mesaba Aviation, Inc., both of which operate as Northwest Airlink; and a cargo business that operates 12 dedicated freighter aircraft through hubs in Anchorage and Tokyo. Corporate Structure & Units (A) NWA Corp., Holdings and NWA Inc. Northwest Airlines Corporation is the parent corporation of Northwest Airlines Holdings Corporation, which, in turn, is the parent corporation of NWA, Inc. NWA Inc. is the parent corporation of Northwest Airlines, Inc., and the indirect parent corporation of the other Debtors as well as certain non-Debtor entities. (B) Northwest Airlines Northwest Airlines, Inc., is the principal operating subsidiary of NWA Corp. Together with the other Debtors, Northwest Airlines operates and manages a consolidated global business with employees, assets and creditors located all over the world. (C) NFS NWA Fuel Services Corporation, a New York corporation with offices located at 1270 Avenue of the Americas, 6th floor, New York, New York, operates a jet fuel supply and trading business. In the course of its business, NFS purchases jet fuel directly from numerous fuel suppliers and supplies the fuel to Northwest and to other airlines. NFS supplies fuel directly to Northwest Airlines' operations at airports by truck. In addition, NFS arranges for fuel to be shipped through common carrier pipelines across the United States to various third party storage facilities located in proximity to Northwest Airlines' major terminal hubs. NFS primarily relies upon revenues obtained from Northwest Airlines to sustain its business operations. (D) MLT MLT Inc. is among the largest vacation wholesale companies in the United States. MLT develops and markets Worry-Free Vacations that include air transportation, hotel accommodations, car rentals, ground transportation and leisure activities. In addition to its Worry-Free Vacations charter program, MLT develops, markets and supports Northwest's WorldVacations travel packages to destinations throughout the U.S., Canada, Mexico, the Caribbean, Europe and Asia, with air transportation provided primarily on Northwest or its codeshare partners. During the fiscal year ended December 31, 2004, MLT had revenues of $469,000,000. (E) NATCO Northwest Aerospace Training Corp. provides training and aircraft simulation services primarily to pilots for Northwest. NATCO makes all unused time available for sale by a third party to other airlines, governments and corporations. The NATCO training facility includes 18 full- flight simulators and four fixed-base training devices. In 2004, NATCO had approximately $3,565,000 in revenue from the sale of idle time. Shareholders As of August 18, 2005, Northwest has 87,753,336 shares of common stock issued and outstanding. The largest known shareholders are: NWA 5% Common Shareholders Number of Shares -------------------------- ---------------- Trust for Pilots 4,363,478 FMR Corp. 11,249,336 Wellington Management Company, LLP 8,826,658 State Street Bank & Trust Company 7,834,370 Marathon Asset Management Ltd. 5,828,919 Deutsche Bank AG 5,594,020 S.A.C. Capital Advisors, LLC et al. 4,980,000 Ziff Management, L.P. et al. 5,270,000 Losing Battle with LCCs Douglas M. Steenland, the President and Chief Executive Officer of NWA Corp. and Northwest Airlines, explains that the competitive pressures on Legacy Carriers, like Northwest, have dramatically intensified in recent years due to the increasingly rapid growth of low cost carriers, which have much lower labor and operating costs than the Legacy Carriers and can profitably charge much lower fares. According to Mr. Steenland, Legacy Carriers have been forced to match these fares to stay competitive even though the fares are below their costs. Largely as a result, Legacy Carriers, as a group, have lost almost $35 billion since January 1, 2001, and their long-term debt has increased from $26 billion to almost $56 billion as of June 30, 2005. During the same period, Mr. Steenland reports that Northwest has lost $3.6 billion and its long-term debt has increased from approximately $4.0 billion to $9.0 billion; its unfunded pension liabilities have swelled from a deficit of $486 million to a deficit of $3.8 billion; and its shareholders' equity has eroded from $231 million of positive equity to a $3.7 billion deficit. Other Problems The effect of these competitive changes has been amplified by a corresponding change in the airline distribution system, Mr. Steenland says. Tickets are being purchased over the Internet rather than through traditional travel agencies. These Internet travel sites use sophisticated search engines, which can instantly scan millions of airline fares and then display those fares based on various criteria, including price. The result is a significant increase in the transparency of airline pricing with a concomitant emphasis on each airline's matching the lowest available price in the market. The efforts of Northwest -- and of all the Legacy Carriers -- to restructure their operations to cope with the radical changes in the airline industry brought about by the growth of the LCCs have been significantly complicated by the enormous increase in the price of jet fuel. According to Mr. Steenland, Northwest expects that its fuel bill for 2005 will be approximately $3.3 billion. This compares to $2.2 billion for 2004 and $1.6 billion for 2003 -- that is, Northwest's fuel bill will have more than doubled in two years. Because the price of jet fuel is approximately 15% higher than it was only a little more than two months ago, Mr. Steenland says it is apparent that there is no clear end in sight to these very high fuel prices. There have been numerous attempts by various Legacy Carriers to raise fares to recoup these fuel expenses but, because of the competitive pressure asserted by the LCCs, most of these attempts have been either unsuccessful or only partially successful. In fact, the industry's domestic yields have declined 2.7% since 2003. Out-of-Court Restructuring Attempts Northwest has been attempting to restructure its business to respond to the competitive market environment. Northwest has aggressively cut non-labor expenses and since 2003 has been seeking to negotiate concessionary labor agreements with its unions. In recent months, as losses have mounted to almost $4 million per day, Northwest has intensified its efforts to negotiate new labor agreements to obtain the cost savings it so desperately needs. Northwest has also overcome a strike by its mechanics who refused to accept the pay rates and work rules the company sought. Although Northwest has made some progress, it has not reached its cost reduction goals, Mr. Steenland tells the Court. Confronted with a host of external factors it cannot control, Mr. Steenland says the company simply has run out of time to continue the restructuring effort outside of bankruptcy protection. "Northwest has determined that it must file chapter 11 now to be sure that it will have enough liquidity to enable it to reorganize successfully," Mr. Steenland says. Nail in the Coffin In a regulatory filing with the Securities and Exchange Commission on September 13, 2005, Northwest disclosed that it failed to make a scheduled $19 million semi-monthly payment for amounts due under the terms of its airline services agreement with Mesaba Aviation, Inc., a subsidiary of MAIR Holdings, Inc. Mesaba operates flights for Northwest under the "Northwest Airlink" brand using Avro regional jet aircraft and Saab 340 turboprop aircraft. The non-payment triggered a one-week cure period to avoid termination of the agreement. Northwest also disclosed its decision not to pay approximately $23 million relating primarily to outstanding equipment trust certificate aircraft financings. The EETC payments were due on September 10, 11 and 12, 2005. Those non-payments triggered 5 to 10-day day grace periods. Northwest was also obligated to make a $65 million pension contribution payment on September 15, 2005. A lien would automatically arise against the company's assets if it failed to make the payment and wasn't under chapter 11 protection. Three Major Goals in Chapter 11 Mr. Steenland tells the Court that the Chapter 11 process will allow Northwest to realize three major goals essential to the transformation of the company: 1. A competitive cost structure including both labor and non-labor costs; 2. A more efficient business model that will allow the company to continue to deliver superior choice and service to customers; and 3. A strengthened balance sheet with debt and equity levels consistent with long term profitability. According to Mr. Steenland, approximately half of Northwest's fleet, including the 211 regional aircraft flown by partners, have financing associated with them. The aggregate present value of those obligations is approximately $5 billion and involves approximately 300 aircraft. The debt associated with financed aircraft is well in excess of their fair market value. Northwest plans to convert some of its debt into equity and to restructure and reschedule the remaining debt. About $1.7 billion of Northwest's debt is unsecured. With respect to its aircraft-related debt, Northwest intends to utilize the Chapter 11 process to renegotiate above-market aircraft leases or, in cases where this is not possible, to return the affected aircraft. Although returning aircraft will reduce the size of the company's operations, Mr. Steenland notes that Northwest's analysis indicates that the resulting airline, albeit smaller, will be more profitable. From surplus in 2000, Northwest's defined benefit pension plans are now underfunded by $3.8 billion. Pursuant to the Employee Retirement Income Security Act, the company is required to contribute $3.3 billion from 2005 through 2008 to fund the pension shortfall. Without legislative relief, Mr. Steenland says Northwest's annual pension contributions will grow from $420 million in 2005, to $800 million in 2006, and $1.7 billion in 2007. Working with its unions, particularly the Air Line Pilots Association, Northwest has been seeking favorable pension legislation that would allow it to fund its pension shortfall over a reasonable number of years on terms that it could afford. 30-Day Cash Requirements Neal S. Cohen serves as Executive Vice President and Chief Financial Officer for Northwest Airlines Corporation. Mr. Cohen tells Judge Gropper that Northwest projects positive cash flow in the next 30 days: Estimated Cash Receipts & Disbursements for the 30-Day Period following Sept. 14, 2005 Estimated Cash Receipts $864,900,000 Estimated Cash Disbursements (798,200,000) ------------ Estimated Net Cash Gain $66,700,000 ============ The bulk of Northwest's cash disbursements will be on account of payroll obligations to its employees. Northwest's gross payroll obligations run approximately $158 million per week. Mr. Cohen estimates Northwest's Uncollected Receivables 30 days from now $649,900,000, and projects that the carrier's Accrued & Unpaid Obligations will total $514,800,000 30 days from today. ----------------------------------------------------------------- [00002] NORTHWEST AIRLINES' BALANCE SHEET AT JUNE 30, 2005 ----------------------------------------------------------------- NORTHWEST AIRLINES CORPORATION Unaudited Consolidated Balance Sheets At June 30, 2005 ASSETS Current assets: Cash and cash equivalents $585,000,000 Unrestricted short-term investments 1,559,000,000 Restricted cash, cash equivalents & short-term investments 496,000,000 Accounts receivable, net 630,000,000 Flight equipment spare parts, net 129,000,000 Prepaid expenses & other 467,000,000 --------------- Total current assets 3,866,000,000 Property and equipment: Flight equipment, net 7,509,000,000 Other property & equipment, net 760,000,000 --------------- Total property & equipment 8,269,000,000 Flight Equipment under capital leases, net 141,000,000 Other assets: Intangible pension asset 671,000,000 International routes 634,000,000 Investments in affiliated companies 60,000,000 Other 711,000,000 --------------- Total other assets 2,076,000,000 --------------- Total assets $14,352,000,000 =============== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Air traffic liability $1,977,000,000 Accounts payable & other liabilities 2,469,000,000 Current maturities of long-term debt & capital lease obligations 812,000,000 --------------- Total current liabilities 5,258,000,000 Long-term debt 7,806,000,000 Long-term obligations under capital leases 331,000,000 Deferred Credits & other liabilities: Long-term pension & postretirement Health care benefits 3,656,000,000 Other 864,000,000 --------------- Total deferred credits & other liabilities 4,520,000,000 Preferred redeemable stock 277,000,000 Common Stockholders' Equity (Deficit) Common stock 1,000,000 Additional paid-in capital 1,478,000,000 Accumulated deficit (2,772,000,000) Accumulated other comprehensive income (loss) (1,542,000,000) Treasury stock (1,005,000,000) --------------- Total common stockholders' equity (deficit) (3,840,000,000) --------------- Total liabilities & stockholders' equity (deficit) $14,352,000,000 =============== ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING ----------------------------------------------------------------- Northwest Airlines Files for Chapter 11 Reorganization to Facilitate Restructuring -- Normal operations continue -- Skyrocketing fuel costs overtake voluntary restructuring plan -- Goals: competitive costs, efficient business model and strong balance sheet -- $1.5 billion in cash and investments available for use EAGAN, Minnesota -- September 14, 2005 -- Northwest Airlines Corporation (Nasdaq: NWAC), the world's fourth largest airline, announced today that it and certain of its subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. The company emphasized that it will continue to operate normally to serve customers, honor tickets, fly its competitive schedule and continue the WorldPerks frequent flyer and WorldPerks Visa programs. In addition, its tour subsidiary, MLT, will also continue normal operations. "As we have consistently stated, the airline industry has changed permanently," said Doug Steenland, Northwest president and chief executive officer. "Northwest must significantly lower its costs to compete with other carriers. Many of these are legacy carriers that have already used the bankruptcy process to achieve changes in their cost structures or newer, low-cost carriers which have much lower labor and operating costs than legacy carriers." "We had developed a plan to restructure Northwest outside of Chapter 11 and have been implementing that plan," Steenland added. "Unfortunately, in addition to an uncompetitive cost structure, our efforts have been overtaken by skyrocketing fuel costs. We can no longer continue to incur sizable losses and reductions in liquidity as we attempt to complete implementation of the plan. By filing for Chapter 11 now, we ensure that we have the means to complete the transformation of Northwest quickly and effectively." Northwest expects that its fuel bill for 2005 will be approximately $3.3 billion. This compares to $2.2 billion for 2004 and $1.6 billion for 2003. "The Chapter 11 process will allow us to realize three major goals essential to the transformation of Northwest Airlines: first, a competitive cost structure including both labor and non- labor costs; second, a more efficient business model which will allow us to continue to deliver superior choice and service to our customers; and third, a strengthened balance sheet with debt and equity levels consistent with long-term profitability." "We have many valuable assets that position us well in today's marketplace, including our highly-skilled, dedicated employees, strong hub and spoke network, domestic and international alliances, world-class airport facilities, valuable cargo business, strong presence in U.S. Heartland markets and extensive trans-Pacific and trans-Atlantic international routes. Once our reorganization has been completed and a competitive cost structure is in place, Northwest will emerge as a strong competitor with a solid future." Steenland said the decision to file for Chapter 11 protection was unrelated to the ongoing strike by members of the airline's mechanics union. He stressed that the airline's operations are working well and that the company has experienced no adverse impact on its operational performance. In addition to its other labor cost restructuring, Northwest said that it must continue its transition from defined benefit pension plans to defined contribution plans. Absent any changes to ERISA, particularly the deficit reduction contribution provisions, Northwest is required to contribute $3.3 billion to its defined benefit plans from 2006 through 2008. Notwithstanding having filed its Chapter 11 petition, the airline will continue to seek favorable pension legislation. As of September 14, the company's unrestricted cash and short-term investments balance was $1.5 billion. Steenland concluded, "Although this filing will change the process of our restructuring, two things will not change. We will continue to provide safe, reliable air transportation to the more than 55 million passengers carried annually to their destinations around the world. And we will continue to work toward consensual collective bargaining agreements with all of our employees represented by labor unions." For further information regarding Northwest's reorganization, visit Northwest's Web site at http://www.nwa.com/ ----------------------------------------------------------------- [00004] NORTHWEST AIRLINES' CHAPTER 11 DATABASE ----------------------------------------------------------------- Lead Debtor: Northwest Airlines Corporation 5101 Northwest Drive St. Paul, Minnesota 55111-3034 Bankruptcy Case No.: 05-17930 Debtor affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- NWA Fuel Services Corporation 05-17925 Northwest Airlines, Inc. 05-17933 Northwest Airlines Holdings Corporation 05-17938 NWA Inc. 05-17940 Northwest Aerospace Training Corp. 05-17944 MLT Inc. 05-17948 Northwest Airlines Cargo, Inc. 05-17949 NWA Retail Sales Inc. 05-17950 Montana Enterprises, Inc. 05-17952 NW Red Baron LLC 05-17953 Aircraft Foreign Sales, Inc. 05-17955 NWA Worldclub, Inc. 05-17956 Petition Date: September 14, 2005 U.S. Bankruptcy Court: United States Bankruptcy Court Southern District of New York Alexander Hamilton Custom House One Bowling Green, 5th Floor New York, New York 10004-1408 Telephone (212) 668-2870 Bankruptcy Judge: The Honorable Allan L. Gropper Debtors' Counsel: Bruce R. Zirinsky, Esq. Gregory M. Petrick, Esq. Cadwalader, Wickersham & Taft LLP One Word Financial Center New York, New York 10281 Tel: (212) 504-6000 Fax: (212) 504-6666 - and - Mark C. Ellenberg, Esq. Cadwalader, Wickersham & Taft LLP 1201 F. Street Northwest, Suite 1100 Washington, D.C. 20004 Tel: (202) 862-2200 Fax: (202) 862-2400 Debtors' Special Labor Counsel: Arnold & Porter LLP Debtors' Strategic & Financial Advisor: Seabury Group LLC Debtors' Accounting & Restructuring Consultants: Huron Consulting Group, Debtors' Special Employee Benefits Counsel: Groom Law Group, Chartered Debtors' Special Corporate & Litigation Counsel: Simpson Thacher & Bartlett LLP Debtors' Anti-Trust & Litigation Counsel: Boies, Schiller & Flexner LLP Debtors' ERISA, Antitrust Litigation, Employment Law & Commercial Law Counsel: Dorsey & Whitney LLP Debtors' Special Labor & Employment Law Counsel: Paul, Hastings, Janofsky & Walker, LLP Debtors' Bankruptcy Conflicts Counsel: Curtis, Mallet-Prevost, Colt & Mosle LLP U.S. Trustee: Carolyn S. Schwartz United States Trustee for Region 2 33 Whitehall Street, Suite 2100 New York, NY 10004 Telephone (212) 510-0500 Total Assets: $14,352,000,000 Total Debts: $17,915,000,000 ----------------------------------------------------------------- [00005] LIST OF NORTHWEST'S 100 LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Bank National Notes - 10% Sr. $300,000,000 Association Notes Due 2009 Attn: Donald Smith 1 Federal Street Boston, MA 02110 Tel: (617) 603-6561 U.S. Bank National Notes - 9.875% Sr. $300,000,000 Association Notes Due 2007 Attn: Donald Smith 1 Federal Street Boston, MA 02110 Tel: (617) 603-6561 U.S. Bank National Notes - 8.875% Sr. $270,027,000 Association Notes Due 2006 Attn: Donald Smith 1 Federal Street Boston, MA 02110 Tel: (617) 603-6561 U.S. Bank National Notes - 7.625% $225,000,000 Association Convertible Sr. Attn: Donald Smith Notes Due 2023 1 Federal Street Boston, MA 02110 Tel: (617) 603-6561 State Street Bank & Trust Series C Preferred $211,684,707 Company (held for non- 200 Newport Avenue, Q3N qualified trusts North Quincy, MA 02171 for ground employees and flight attendants and other employees) U.S. Bank National Notes - 7.875% Sr. $200,000,000 Association Notes Due 2008 Attn: Donald Smith 1 Federal Street Boston, MA 02110 Tel: (617) 603-6561 U.S. Bank National Notes - 6.625% $150,000,000 Association Convertible Sr. Attn: Donald Smith Notes Due 2023 1 Federal Street Boston, MA 02110 Tel: (617) 603-6561 U.S. Bank National Notes - 9.5% Sr. $142,500,000 Association Quarterly Interest Attn: Donald Smith Bonds Due 2039 1 Federal Street Boston, MA 02110 Tel: (617) 603-6561 U.S. Bank National Notes - 8.7% Sr. $100,000,000 Association Notes Due 2007 Attn: Donald Smith 1 Federal Street Boston, MA 02110 Tel: (617) 603-6561 State Street Bank & Trust Series C Preferred $64,770,008 Company (held for non- 200 Newport Avenue, Q3N qualified trusts North Quincy, MA 02171 for ground employees and flight attendants and other employees) Koninklijke Luchtvaart Alliance Partner $64,121,983 Maatschappij N.V. (KLM) Attn: Peter Schelvis SVP Finance & Control P.O. Box 7700 1117 Z1 Schiphol Airport The Netherlands Pinnacle Airlines Inc. Regional Carrier $28,050,539 1689 Nonconnah Parkway Suite 111 Memphis, TN 38132 Tel: (901) 348-4100 Mesaba Aviation Inc. Regional Carrier $23,128,832 1000 Blue Gentian Road Suite 200 Eagan, MN 55121 American Express Travel Trade Debt - $19,182,704 Related Services Company Agency Commissions Attn: Patrick J. Corbett VP-Supplier Management & Procurement 2901 Wilcrest Drive Suite 400 Houston, TX 77042 Tel: (713) 954-7615 Blue Cross Blue Shield Insurance - $18,370,278 85 North Danny Thomas Blvd. Benefits Memphis, TN 38103-2398 Worldspan Global Distribution $14,870,693 Attn: Kevin Ficco System Vice President - Airline Distribution & Business Development 300 Galleria Parkway, N.W. Atlanta, GA 30339-3196 Tel: (770) 563-7277 SNECMA Trade Debt - $13,279,733 Attn: Jean-Lin Fournereax Parts and Service 2 Boulevard du General Martial Valin 75724 Paris, Cedex 15 France Tel: (33) 1-6414-8460 United Healthcare Insurance - $13,203,253 P.O. Box 1459 Benefits Minneapolis, MN 55440-1459 Tel: (800) 328-5979 Pacific Gas Turbine Center Engine Leases/ $12,025,695 7007 Consolidated Way Overhaul San Diego, CA 92121 Tel: (858) 877-2800 Kemper Insurance Companies Insurance - $8,431,408 1 Kemper Drive Benefits Long Grove, IL 60049-0002 Galileo International Global Distribution $8,051,006 Attn: Steven Diffley System Group Vice President - Supplier Services 9700 West Higgins Road Rosemont, IL 60018 Tel: (847) 518-4047 Sabre Global Distribution $7,473,703 Attn: Todd Wallace System Managing Director - Airline Distribution & Marketing 3150 Sabre Drive MD 8311 Southlake, TX 76092 Tel: (682) 605-2689 Eurocontrol Overfly Charges $5,464,133 Rue De LA Fusee, 96 Brussels B-1130, Belgium Tel: (32) 2729-3865 Jetran International Ltd. Spare Engine Leases $5,221,711 12400 Highway 281 North Suite 150 San Antonio, TX 78216 Tel: (210) 495-7766 Pratt & Whitney Trade Debt - $5,050,963 400 Main Street Parts & Service East Hartford, CT 06108 Tel: (860) 565-4321 Amsterdam Airport Schiphol Airport/ Government $4,776,601 Attn: Peter Verboom Authorities CFO Schiphol Postbus/P.O. Box 7501 1118 ZG Luchthaven Schiphol The Netherlands Tel: 011-31-20-601-2384 FINOVA Capital Corporation Spare Engine Leases $4,755,313 Attn: Jim Wifler 4800 North Scottsdale Road Scottsdale, AZ 85251-7623 Tel: (480) 636-6728 Israel Aircraft Industries Trade Debt - $4,732,267 1700 North Moore Street Parts & Service Suite 1210 Arlington, VA 22209 Carlson Travel Group, Inc. Agency Commissions $4,167,586 & Carlson Travel Network Associates, Inc. P.O. Box 96258 Chicago, IL Tel: (612) 540-5561 Civil Aviation Airport/Government $4,129,172 Bureau of Japan Authorities Mr. Takashi (Narita) Administration Division Aerodome Department Civil Aviation Bureau Ministry of Land Infrastructure & Transport 2-1-3, Kasumigaseki Chiyoda-ku Tokyo, Japan 100-8919 Tel: 81-3-5253-8111 Fax: 81-3-5253-1658 AON Risk Services Companies Insurance - Broker $3,915,908 200 East Randolph Street Chicago, IL 60601 U.S. Department of Homeland Airport/Government $3,895,222 Security Authorities Washington, DC 20528 HAECO (Hong Kong Aircraft Trade Debt - $3,792,842 Engineering Company Ltd.) Engineering/ Attn: Albert C.H. Leung Maintenance MSc., General Manager 80 South Perimeter Road Hong Kong Internat'l Airport Lantau, Hong Kong Tel: (852) 2767-6694 Honeywell Trade Debt - $3,791,701 Attn: Peter M. Kreindler Parts & Service Senior Vice President & General Counsel 101 Columbia Road Morristown, NJ 07962 Tel: (973) 455-2000 Amadeus Global Distribution $3,538,689 Attn: David Doctor System Director - Airline Marketing and Sales Salvador De Madariaga, Madrid, E-28027 Spain Tel: (34) 915-820-110 Merck Insurance - $2,829,250 One Merck Drive Benefits P.O. Nox 100 Whitehouse Station, NJ 08889-0100 Tel: (908) 423-1000 A I Leasing IV Inc. Financing/Leasing $2,603,131 593 Herndon Way Herndon, VA 20170 Tel: (703) 834-3495 LSG Sky Chefs Trade Debt - $2,398,406 Attn: Rick Pike Catering Global Credit & Collections Manager 6191 North State Highway 161 Irving, TX 75038 Tel: (972) 793-9290 Chimes Corporation Trade Debt - $2,328,330 P.O. Box 35429 Software Newark, NJ 07193 Tel: (888) 339-2421 World Travel Partners Agency Commissions $2,238,694 1055 Lenox Park Blvd., #420 Atlanta, GA 30319 Tel: (404) 923-9442 Delta Dental Insurance - $2,020,004 Attn: Valerie Sorneson, Benefits VP-Sales & Marketing 3560 Delta Dental Drive Eagan, MN 55122 Tel. No: (651) 406-5901 General Electric Co. Engine Leases $1,924,111 3135 Easton Turnpike Fairfield, CT 06828 Tel. No: (203) 373-2211 NAV Canada Overfly Charges $1,918,524 Attn: Louise Patnaude, AR & Collections Manager 77 Metcalfe Street Ottawa, ON K1P 5L6, Canada Tel. No: (613) 563-4520 Travelocity Agency Commissions $1,854,169 Attn: Simon Bramley, Vice President 3150 Sabre Dr. Southlake, TX 76092 Tel. No: (682) 605-2398 Hawker Pacific Aerospace Trade Debt $1,660,966 Attn: Klaus Koester 11230 Sherman Way Sun Valley, CA 91352 Tel. No: (818) 765-6201 Affiliated Computer Service Trade Debt $1,653,591 P.O. Box 200790 Dallas, TX Aviance UK Limited Trade Debt $1,639,306 Attn: Paul Williams, Commercial Manager 3rd Floor, First Point, Buckingham Gate, Gatwick Airport West Sussex, RH6 0NT United Kingdom Tel. No: 011 44 1293 502 240 CIT Group Financing/Leasing $1,604,183 Attn: Frederick E. Wolfert Vice President- Commercial Finance 1 CIT Drive Livingston, NJ 07039 Tel. No: (973) 740-5000 SITA Trade Debt $1,550,000 Attn: John Decost, Global Account Director 3100 Cumberland Blvd. Atlanta, GA 30339 Tel. No: (770) 612-2280 Medica Insurance - Benefits $1,525,864 P.O. Box 9310 Minneapolis, MN 55440 PEMCO World Air Services Trade Debt - Aircraft $1,471,958 Attn: Accounts Receivable Maintenance 100 Pemco Drive Dothan, AL 36303 Tel. No: (334) 983-4571 ICTS Europe Holdings B.V. Trade Debt $1,436,795 Burg Stramanweg 102 1101 AA Amsterdam The Netherlands TQ3Navigant Trade Debt $1,376,589 Attn: Robert Griffith, CFO 84 Inverness Circle East Englewood, CO 80112 Tel. No: (303) 706-0800 Wayne County Airport Airport/Government $1,307,010 Authority Authorities Detroit Metropolitan L. C. Smith Terminal Mezzanine Airport Finance Detroit, MI 48242 Tel. No: (734) 942-3550 Goodrich Corporation Trade Debt - $1,279,419 Attn: Terrence G. Linnert Parts and Service Executive Vice President, Administration and General Counsel Four Coliseum Centre 2730 West Tyvola Rd. Charlotte, NC 28217 Triumph Air Repair, Inc. Trade Debt $1,257,364 Attn: John B. Wright, II Vice President- General Counsel & Secretary 1550 Liberty Ridge Drive Suite 100 Wayne, PA 19087 Tel. No. (610) 251-1000 Prospect Airport Services Trade Debt - $1,230,000 1900 Lee St. Terminal/Airplane Des Plaines, IL 60018 Services Tel. No: (847) 299-3636 Swissport USA Inc. Trade Debt - $1,211,283 45025 Aviation Drive Aviation Services Suite 350 Dulles, VA 20166 Tel No: (703) 742-4381 AMTECH Financing/Leasing $1,202,569 8081 NW 31st St. Miami, FL 33122 Tel. No: (305) 591-1553 Bank of America Financing/Leasing $1,163,470 Comm Fin Corp. 555 California Street 4th Floor San Francisco, CA 94104 Vanguard Car Rental USA Trade Debt - $1,154,577 6929 North Lakewood MLT - Rental Cars Avenue, Suite 100 Tulsa, OK 74117 Tel: (918) 401-6000 Val-Pak Direct Trade Debt $1,149,423 Attn: Gina Medlin Marketing System 8605 Large Lake Drive Largo, FL 33773 ASIG Aircraft Service Trade Debt $1,143,225 International Group P.O. Box 910701 Dallas, TX 75391 Globe Ground Trade Debt $1,103,153 North America LLC Servisair/GlobeGround 111 Great Neck Road, Suite 600 P.O. Box 355 Great Neck, NY 11022-0355 Tel: (516) 487-8610 SIA Engineering Co. Trade Debt - $1,094,479 SIA Engineering Aircraft Maintenance Company Hangar 31, Airline Road Singapore 819831 Riu Hotels Riu Centre Trade Debt - $1,092,269 Calle Llaud s/n MLT - Hotels 07610-Playa de Palma, Majorca Cathay Kansai Trade Debt $1,065,879 Terminal Services Company Limited Rinku International Logistics Center 2-21 Rinku-orai kita, Izumisano City, Osaka 598-0048 Japan Tel: (81)-(724)-69-4915 Gateway Travel & Tour Agency Commission $1,062,163 Suite 202 4100 Spring Valley Road Dallas, TX 75244 Tel: (214) 960-2000 Hagemeyer Trade Debt - $1,018,467 North America Inc. Parts Supplier P.O. Box 790405 St Louis, MO 63179-0405 Tel: (678) 746-2770 Tel: (678) 746-2400 British Airport Authorities Airport/Government $962,230 Attn: Karen Russel, Authorities Property Asset Manager Paul Griffith, Managing Director BAA Business Support Centre Limited Invoice To Cash Process Team P.O. Box 3000, Glasgow, G52 4YG United Kingdom Tel No: 011 44 7839 504 044 Diversified Distribution Trade Debt - $945,851 Systems Incorporated Distributor Northwest 7940 P.O. Box 1450 Minneapolis, MN 55485 ARINC Incorporated Trade Debt - $928,345 2551 Riva Road Transportation Annapolis, MD 21401 Communications Tel: (800) 633-6882 Fax: (410) 573-3300 Worldwide Flight Services Trade Debt - $906,869 P.O. Box 3831 Aviation Services Commerce Court Postal Station Toronto, ON M5L 1K1 Canada Tel No: (514) 636-7874 AT&T Trade Debt - $897,574 Attn: George Potter, Telecommunications Signature Client Director 1050 West County Road Shoreview, MN 55126 Tel No: (612) 376-5469 Mainami Trade Debt $895,204 (Mainami Kuko Service Co. Ltd) 373 Hillcrest 4F, 1-7-8, Moto-Akasaka Minato-Ku, Tokyo, 107-0051 Japan Tel: 03-3796-6633 Palace Resorts Trade Debt - $849,202 8725 NW 18th Terrace, MLT - Hotels Suite 301 Miami, FL 33172 Shanghai Pudong Cargo Trade Debt $815,541 Terminal Room 309, Shanghai Pudong International Airport Cargo Terminal 168 Suhang Road, Shanghai Pudong International Airport, Shanghai 201202, P.R. of China Tel: 86 21 6834-1982 Mill-Run Tours, Inc. Trade Debt $805,914 12th Floor 424 Madison Avenue New York, NY Das Air Engineering Trade Debt $797,978 Attn: Martin Greenfield, General Manager, Maintenance Hangar 3, Maintenance Area 1 Perimeter Road Southlondon Gatwick Airportwest Sussex, Rh6 0Lp, United Kingdom Tel: 011 44 1293 557 823 Jeppesen Sanderson Trade Debt $787,252 Attn: General Counsel 55 Inverness Drive East Englewood, CO 80112-5498 Tel: (303) 799-9090 ACS Tradeone Marketing Inc. Trade Debt $787,252 Attn: Jeff Jacobson 7901 Flying Cloud Drive Eden Prairie, MN 55344 Tel: (507) 385-5312 Alitalia Airport S.P.A. Airport/Government $766,757 Attn: Simone Mangani Authorities Commercial & Systems, Sales & Customer Support Manager Viale A. Marchette, III 00148 Rome, Italy Tel: 011 39 06 6563 6109 Unisys Corporation Trade Debt $758,736 Attn: John F. Zimmerman Client Executive 3199 Pilot Knob Road Eagan, MN 55121 CIGNA Corp. Insurance $746,201 One Liberty Place Benefits 1650 Market Street Philadelphia, PA 19192 Tel: 215-761-1000 C&H International Trade Debt $744,282 4751 Wilshire Blvd. Ste 201 Los Angeles, CA Tel: (213) 933-2288 International Air Trade Debt $739,414 Cargo Terminal Co., Ltd. 2121 Aza Tennamino Komaino Narita-Shi, Chiba-Ken Japan Thales Avionics Trade Debt- $738,350 7810 Collection Center Drive Aircraft Equipment Chicago, IL GS Caltex Corporation Trade Debt- $721,842 135-985 LG Kangnam Tower Fuel Services 679 Yoksam-dong Kangnam-gu Seoul, South Korea Petron Corporation Trade Debt- $708,361 16800 Glendale Drive Lubricant Supplier New Berlin, WI 53151 Tel No: (632) 886-3122 U.S. Bank National Financing/Leasing $665,295 Association Attn: Donald Smith 1 Federal Street Boston, MA 02110 Tel: (617) 603-6561 Detroit Metropolitan Airport Airport/ $664,920 Attn: Lester W. Robinson Government CEO Authorities Wayne County Airport Authority Detroit Metropolitan Airport Smith Terminal - Mezzanine Level Detroit, MI 48242 Massachusetts Port Authority Airport/ $659,309 P.O. Box 3741 Government Boston, MA Authorities Orbitz Agency Commissions $656,033 200 So Wacker Ste 1900 Chicago, IL 60606-5857 Boeing Commercial Trade Debt $642,102 Airplane Group Attn: General Counsel Boeing World Headquarters 100 North Riverside Chicago, Illinois 60606 Tel: (312) 544-2000 MGM Mirage Trade Debt $627,437 3600 Las Vegas Boulevard South Las Vegas, NV 89109 Tel: (702) 693-7120 Oks Co Ltd. KIX Airport/ $621,199 Airport Authority Government Kansai International Airport Authorities I-Banchi, Senshu-kuko Kita, Izumisano-Shi Osaka 549-8501, Japan Tel: 81 724-22-2500 Jasco Heat Treating Inc. Trade Debt $617,010 P.O. Box 188 Fairport, NY 14450 Atlas Air Entertainment Trade Debt $577,776 410 West Arden Ave Suite 206 Glendale, CA 91203 Abacus Distribution Trade Debt $565,918 Systems Pte. Attn: Aileen Chan Acct. Manager-Airline Sales Abacus Plaza 3 Tampines Central 1, #08-01 Singapore 529540 Globe Services Trade Debt $565,000 Globe Ground Services P.O. Box 9647 Uniondale, NY 11555 ----------------------------------------------------------------- [00006] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF CASES ----------------------------------------------------------------- Northwest Airlines Corporation and its 12-debtor subsidiaries sought and obtained an order from Judge Gropper directing joint administration of their separate Chapter 11 cases. Northwest explained to Judge Gropper that: (a) the companies that filed for bankruptcy are affiliates. NWA Corp. owns, directly or indirectly, all stock of, or other controlling ownership interest in, certain of the other Debtors; (b) the businesses of certain of the Debtors are managed at the parent level; (c) certain of the Debtors share common management and creditors; and (d) the finances of certain of the Debtors are significantly related that the joint administration of the cases will expedite and foster each of the Debtors' reorganization efforts. Bruce R. Zirinsky, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, argues that the joint administration of the Debtors' Chapter 11 cases is necessary because: (a) the Debtors will be able to optimally and economically service their pending Chapter 11 cases, given that: -- many of the motions, hearings and orders that will be involved in their Chapter 11 cases will affect each and every Debtor; -- the Debtors will reduce fees and costs; and -- the Debtors will be eased from having to file multiple documents; (b) rights of all creditors will be enhanced by the reduced costs resulting from joint administration; (c) the Court will be relieved of the burden of entering duplicative orders and maintaining duplicative files; and (d) the Office of the United States Trustee will simplify the supervision of the administrative aspects of the Debtors' Chapter 11 cases. Accordingly, at the Debtors' behest, the Court consolidates their Chapter 11 cases for procedural purposes only, pursuant to Rule 1015 of the Federal Rules of Bankruptcy Procedure. Judge Gropper directs that all pleadings and papers filed in Northwest's chapter 11 cases be captioned: UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ----------------------------------------x : In re: : Chapter 11 : Case No. 05-17930 NORTHWEST AIRLINES CORPORATION, et al., : : Debtors. : Jointly Administered : ----------------------------------------x Judge Gropper makes it clear that nothing in his Order will be deemed or construed as directing, precluding, or otherwise effecting any substantive consolidation of any of the Debtors' estates. ----------------------------------------------------------------- [00007] MOODY'S DOWNGRADES NORTHWEST AIRLINES RATINGS ----------------------------------------------------------------- NEW YORK, New York -- September 14, 2005 -- Moody's Investors Service downgraded the debt ratings of Northwest Airlines Corporation and its primary operating subsidiary, Northwest Airlines, Inc. The Corporate Family Rating was lowered to Caa2 from Caa1, and the Senior Unsecured rating was downgraded to C from Caa3. Ratings assigned to Enhanced Equipment Trust Certificates were downgraded. In addition, the company's Speculative Grade Liquidity Rating was downgraded to SGL-4 from SGL-3. The outlook is negative. The rating actions reflect a combination of continued operating losses, deterioration of balance sheet liquidity and the company's stated need to analyze and reorganize its short and long term obligations as part of a transformation plan. Northwest did not make $23 million of scheduled payments on outstanding debt obligations which became due on September 10, 11 and 12, and indicated that the company will likely seek to restructure these obligations. Additionally, Northwest did not make a scheduled semi-monthly payment of $19 million on its airline services agreement with Mesaba Aviation, Inc. which became due September 12. The ratings actions affecting the EETC transactions consider the underlying financial risk of Northwest and the increased likelihood of default on its obligations to make payments to the trustee of the EETC's, the availability of liquidity facilities supporting interest payments for up to 18 months in the event of a Northwest default, existing collateral values and the ability to apply proceeds from the sale of aircraft to reduce outstanding principal. In Moody's view, the junior classes of the certificates have a higher risk of loss in reorganization due to the exclusivity and control afforded to the senior classes following a default. While collateral values are expected to provide full recovery for the senior tranches of the EETC's, risk associated with achieving that recovery is greater. The downgrade of the ratings of the junior tranches reflects that, in Moody's opinion, full recovery of principal outstanding is less likely. The ratings could be further downgraded if there are any negative changes in the underlying market values of the collateral and/or depending on which EETC's Northwest elects to affirm or reject should the company elect to file for bankruptcy protection as part of its plan of reorganization. The downgrade of the SGL rating reflects Northwest's ongoing losses, deterioration of cash balances and substantial debt maturities, pension obligations and capital expenditures which could further utilize available liquidity. Northwest continues to incur significant near-term losses and has forecasted a net loss of $350 million to $400 million for third quarter of 2005 driven by high labor and fuel costs. Northwest's operating cash inflow was $14 million in the second quarter of 2005, or $406 million less than in the prior-year period. As airlines' cash balances are typically replenished during their seasonally stronger spring and summer months, the company's relatively weak internal cash generation in the second quarter of 2005 portends a significant drain on cash occurring in late 2005 and early 2006. Ratings affected include: (a) Northwest Airlines Corporation -- * Corporate Family (previously called Senior Implied) rating: to Caa2 from Caa1 * Speculative Grade Liquidity Rating: to SGL-4 from SGL-3 * Guaranteed Convertible Notes to C from Caa3. (b) Northwest Airlines, Inc. -- * Senior Unsecured debt: to C from Caa3. * Senior Unsecured and Subordinated debt to be issued under the multiple seniority shelf: to (P)C / (P)C from (P)Caa3 / (P)C. * Secured Bank Credit Facility: Term Loan A: to Caa1 from B3 Term Loan B: to Caa1 from B3 Term Loan C: to Caa1 from B3 * Industrial Revenue Bonds (Series 1997): to C from Caa3 (c) Enhanced Equipment Trust Certificates, except for Aaa ratings supported by monoline insurance policies have been downgraded as follows: * All Class A tranches have been downgraded to rating levels ranging from Ba2 to Caa2 * All Class B tranches have been downgraded to rating levels ranging from B3 to Ca * All Class C tranches have been downgraded to rating levels ranging from Caa1 to C * All Class D tranches have been downgraded to rating levels ranging from Ca to C For further details related to the ratings of Enhanced Equipment Trust Certificates, please go to http://www.Moodys.com/ Northwest Airlines Corporation and Northwest Airlines, Inc. are headquartered in Eagan, MN. ----------------------------------------------------------------- [00008] PARTIES COMMENT ON NORTHWEST AIRLINES BANKRUPTCY FILING ----------------------------------------------------------------- AMFA Saw It Coming LACONIA, New Hampshire -- September 14, 2005 -- Aircraft Mechanics Fraternal Association National Director O.V. Delle- Femine issued the following statement about Northwest Airlines' filing today for chapter 11 bankruptcy protection: "Speaking on behalf of our members who have spent most or all of their careers working to make Northwest Airlines successful, we are saddened for our airline company but not surprised that the current management has filed for bankruptcy protection. We said earlier on that management's refusal to negotiate with us in good faith, or to agree to binding arbitration, showed that they intended all along to declare bankruptcy in the hope that a bankruptcy judge would impose the unreasonable terms Northwest knew it could never get through the normal negotiating process. But the terms of Northwest's last offer were harsher than the terms a bankruptcy judge granted to United Airlines with respect to AMFA. As we also said earlier, we would rather take our chances with a bankruptcy judge than submit to management's proposed terms and working conditions that would have been devastating economically and contrary to AMFA's commitment to quality maintenance." AMFA's craft union represents aircraft maintenance technicians and related support personnel at Alaska Airlines, ATA, Horizon Air, Independence Airlines, Mesaba Airlines, Northwest Airlines, Southwest Airlines and United Airlines. AMFA's credo is "Safety in the air begins with quality maintenance on the ground." To learn more about AMFA, visit http://www.amfanatl.org/ IAM Will Defend Members' Interests WASHINGTON, D.C. -- September 14, 2005 -- "The IAM is prepared to defend our members and their interests throughout the bankruptcy process," said Robert Roach, Jr., General Vice President of Transportation for the International Association of Machinists and Aerospace Workers (IAM) following the announcement that Northwest Airlines has filed for Chapter 11 bankruptcy reorganization. "Today's filing is unfortunate, but not unexpected to anyone familiar with the airline," said Roach. "We have assembled a team of attorneys, economists and IAM Representatives with a wealth of airline bankruptcy experience and resources to ensure our members are treated fairly and their rights protected both in the courtroom and at the bargaining table." "The IAM will not allow Northwest's bankruptcy to alter our goal of reaching a fair and equitable agreement for our members," said IAM District 143 President Bobby DePace. "We want Northwest to succeed, but not at an unreasonable cost to our members." The Machinists Union's collective bargaining agreements with Northwest Airlines became amendable on February 25, 2003, and the IAM has been in mediated negotiations with Northwest Airlines since August 26, 2003. IAM District 143 represents 14,200 Northwest Airlines employees in the Equipment Service, Office & Clerical, Passenger Service, Plant Protection and Flight Simulator Operator classifications. More information about the Machinists Union at Northwest Airlines is available on the District 143 Web site, http://www.iam143.org/ CIT Discloses $57,000,000 Exposure NEW YORK, New York -- September 14, 2005 -- CIT Group, Inc. (NYSE: CIT), a leading provider of commercial and consumer finance solutions, disclosed its current financing relationship with Northwest Airlines, Inc. Today, Northwest announced that the Company and certain of its subsidiaries had filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Under existing lease agreements, Northwest has operating leases on three CIT-owned aircraft. In addition, CIT has debt exposure against four aircraft operated by Champion Air, a former affiliate of Northwest, which transactions are guaranteed by Northwest's corporate parent. CIT's total exposure is approximately $57 million. Management believes, based on its current assessment of lease equipment carrying values, Northwest credit exposure, and corresponding reserves that the Northwest filing will not have a material adverse impact on our financial results. About CIT CIT Group Inc. (NYSE: CIT), a leading commercial and consumer finance company, provides clients with financing and leasing products and advisory services. Founded in 1908, CIT has nearly $60 billion in assets under management and possesses the financial resources, industry expertise and product knowledge to serve the needs of clients across approximately 30 industries. CIT, a Fortune 500 company and a component of the S&P 500 Index, holds leading positions in vendor financing, factoring, equipment and transportation financing, Small Business Administration loans, and asset-based lending. With its Global Headquarters in New York City and Corporate Offices in Livingston, New Jersey, CIT has approximately 6,000 employees in locations throughout North America, Europe, Latin and South America, and the Pacific Rim. For more information, visit http://www.cit.com/ Airport Commission to Protect Public Investment MINNEAPOLIS & ST. PAUL, Minnesota -- September 14, 2005 -- Metropolitan Airports Commission Chairwoman Vicki Tigwell today provided the following statement regarding Northwest Airlines' Chapter 11 bankruptcy filing: "On behalf of the Metropolitan Airports Commission, I wish Northwest Airlines and its employees the very best as the air carrier moves through the Chapter 11 bankruptcy process. "Northwest Airlines remains an important business partner at Minneapolis-St. Paul International Airport and a vital force in Minnesota's economy. As difficult as a bankruptcy filing is for any company, I am confident Northwest Airlines will develop a financial plan that enables the carrier to emerge a strong company poised for future growth and success. "During this process, the Metropolitan Airports Commission will make every effort to safeguard the public's investment in Minneapolis-St. Paul International Airport. We will work closely with Northwest and other airlines as well as with the bankruptcy court to ensure the public's interests in MSP are well served. My hope is that the bankruptcy filing will have little long-term impact on the Metropolitan Airports Commission or on access to plentiful, safe, cost-competitive air service at Minneapolis-St. Paul International Airport. "My expectation is that Northwest Airlines will work as swiftly as possible to develop a plan to emerge from bankruptcy and that hub service at MSP will remain an integral part of the airline's business plan for decades to come." *** End of Issue No. 1 ***