Starbucks Reports First Quarter Fiscal 2008 Results

SEATTLE–(BUSINESS WIRE)–Fiscal First Quarter 2008 Highlights:

• Consolidated net revenues of $2.8 billion, a 17 percent increase from Q1 of 2007
• Operating margin contracted 160 basis points to 12.0 percent
• Earnings per share of $0.28, compared to $0.26 per share in Q1 of 2007
• Comparable store sales growth of one percent

Starbucks Corporation (NASDAQ:SBUX) today announced financial results for its fiscal first quarter ended December 30, 2007. Consolidated net revenues increased 17 percent to $2.8 billion for the first quarter of 2008, compared to $2.4 billion for the first quarter of 2007. For the 13-week period ended December 30, 2007, net earnings totaled $208.1 million versus $205.0 million for the same period a year ago, a two percent increase. The slight increase in net income includes the negative impact of incremental interest expense as a result of the company’s inaugural senior notes offering during the fourth quarter of fiscal 2007. Earnings per share for the quarter rose eight percent to $0.28 from $0.26 in the prior year period.

“Over the coming months, our management team will focus on building a long-term model to realize our transformation agenda, and drive long-term shareholder value,” said Howard Schultz, chairman, president and ceo. “We will do that by being laser focused on delivering what our customers want and expect, and providing our partners with the tools to help them exceed our customers’ expectations. Our actions will dramatically change the business, which will enable us to offer a renewed Starbucks Experience to our customers, while systematically building the foundation for strong, sustainable growth in fiscal 2009 and beyond.”

Schultz continued, “With a keen discipline around execution and profitability, we have already slowed the pace of store growth in the U.S. to approximately 1,175 stores for this fiscal year, down from a revised target of 1,600 stores, and increased the store opening target in International markets to approximately 975 stores. By reducing the number of openings, we expect to optimize our resources and potentially reduce cannibalization of our existing stores.”

Schultz went on to say, “We will unveil additional details of our transformation plan, including bold innovations that will reassert our coffee leadership, redefine the in-store experience and introduce core brand-building initiatives, on March 19, 2008, at the company’s Annual Meeting of Shareholders. Given all the work underway, we view 2008 as a year of refocus and renewal for Starbucks.”

The company said that in light of the ongoing implementation of its transformation agenda, and the continued macroeconomic weakness, it expects low double digit EPS expansion for this fiscal year. “We are confident that our actions will get us back on track in redefining the customer experience and further expanding the differentiation between us and others in the coffee business,” commented Schultz. “In addition, when Starbucks reports second quarter fiscal 2008 results on April 30, 2008, we plan to provide longer-term financial targets by which we and the financial community can measure our performance as we grow our business.”

In line with its announcement on January 7, 2008, Starbucks has reduced its fiscal 2008 global net new store opening target to approximately 2,150 stores, down from an adjusted 2,500 net new stores. This includes the closure of around 100 underperforming stores in the U.S. and the opening of approximately 75 additional net new stores in International markets. Net new store openings are expected to be approximately 650 company-operated locations and 525 licensed in the United States and approximately 975 stores in international markets. For 2009, Starbucks plans to open more than 1,000 stores internationally and less than 1,000 locations in the United States, approximately 500 of which will be company-operated stores.

Continued Solid Revenue Growth

The 17 percent growth in consolidated net revenues in the first quarter 2008 was primarily driven by the U.S. business, which contributed 77 percent of total net revenue. For the quarter, U.S. total net revenues increased by $266.3 million, or 14 percent, to $2.1 billion driven by the opening of 1,077 company-operated retail stores in the last 12 months. International total net revenues expanded 33 percent, or $135.7 million, to $540.8 million for the 13 weeks ended December 30, 2007 as the company continued to expand and strengthen its store presence in its 42 existing markets outside the U.S. The increase in International total net revenues resulted primarily from opening 285 new company-operated retail stores in the last 12 months, favorable foreign currency exchange for the Canadian dollar and the British pound sterling, and comparable store sales growth of five percent. For the Global Consumer Products Group (CPG), total net revenues increased by $9.9 million, or 11 percent, to $100.6 million for the first quarter fiscal 2008, primarily due to increased royalties and product sales in the international ready-to-drink business.

Consolidated company-operated retail revenues increased 17 percent to $2.4 billion in first quarter 2008, from $2.0 billion for the same period in fiscal 2007, primarily driven by new store openings in the U.S. and international markets. For the first quarter of fiscal 2008, United States company-operated retail revenues increased 14 percent to $1.9 billion, while International company-operated retail revenues increased 33 percent to $461.2 million in the period.

In the last 12 months, 1,362 new company-operated retail stores were opened, an increase of 16 percent over openings in the previous 12-month period. Company-operated store openings in the last 12 months were comprised of 1,077 in the U.S. and 285 in international markets.

Consolidated comparable store sales grew one percent in the first quarter, which included a two percent increase in the average value per transaction and a one percent transaction decline. The softness in consolidated comparable store sales growth was driven by the U.S. business. For the first quarter, U.S. comparable store sales contracted one percent, due to a three percent decline in transactions partially offset by a two percent rise in the average value per transaction, which included the impact of a price increase taken in late July 2007. The International segment continued to show strength, with comparable store sales growth for the first quarter of five percent, with a three percent increase in transactions and a two percent increase in the average value per transaction.

Specialty revenues in the first quarter 2008 increased 19 percent to $416.1 million, driven by licensing revenues, which increased 20 percent to $304.8 million. The growth in licensing revenues resulted from higher product sales and royalty revenues from the opening of 1,226 new licensed retail stores in the last 12 months, 690 of which were in the U.S. and 536 in international markets, and 11 percent revenue growth in the CPG segment, primarily due to increased royalties and product sales in the international ready-to-drink business.

Leveraging G&A Amid Higher Cost Environment

Cost of sales including occupancy costs increased 110 basis points to 42.9 percent of total net revenues for the 13 weeks ended December 30, 2007, compared to 41.8 percent in the corresponding period in fiscal 2007. The increase was primarily due to increased dairy costs and a shift in sales to higher cost products.

Store operating expenses as a percentage of related company-operated retail revenues increased 90 basis points to 39.4 percent in the first quarter 2008, from 38.5 percent for the prior year period. The increase was primarily due to higher payroll expenditures as a percentage of revenues in the U.S. segment, driven by softer sales from U.S. company-operated stores and wage increases, partially offset by the impact of labor optimization initiatives in the stores.

Other operating expenses (expenses associated with the company’s specialty operations) rose 30 basis points to 20.6 percent of related total specialty revenues for the 13 weeks ended December 30, 2007, compared to 20.3 percent for the same period a year ago. The increase in expense was primarily due to higher international payroll-related expenditures as a percentage of related revenues in support of the continued expansion of the segment into new and existing markets.

General and administrative expenses as a percentage of total net revenues improved 50 basis points to 4.5 percent for the first quarter 2008, from 5.0 percent for the corresponding period of fiscal 2007. The company continues to focus on leveraging its scale and infrastructure, as well as implementing systematic changes that are expected to better position Starbucks back-end infrastructure to deliver more efficient service to the field.

Operating Income Impacted By Higher Costs in U.S. Business

Consolidated operating income increased four percent to $333.1 million for the 13 weeks ended December 30, 2007. Operating margin contracted 160 basis points to 12.0 percent of total net revenues in the first quarter, from 13.6 percent for the same period a year ago. Higher cost of sales including occupancy costs and store operating expenses as a percentage of total net revenues were only partially offset by lower general and administrative expenses as a percentage of revenues.

For first quarter fiscal 2008, United States operating income declined by four percent to $310.9 million. Operating margin contracted 290 basis points to 14.6 percent of related revenues from 17.5 percent in the corresponding period of fiscal 2007. The decrease was driven by higher cost of sales including occupancy costs and higher store operating expenses as a percentage of total net revenues, partially offset by lower general and administrative expenses as a percentage of revenues. Higher dairy costs contributed approximately 100 basis points to the decline.

International operating income grew 63 percent to $54.1 million for the first quarter 2008. Operating margin increased 180 basis points to 10.0 percent of related revenues from 8.2 percent in the first quarter of fiscal 2007. The primary reasons for this improvement were lower cost of sales including occupancy costs partially due to lower leasing costs in the United Kingdom and improved leverage on store operating expenses overall.

Operating income for the CPG segment increased to $50.6 million for the 13 weeks ended December 30, 2007, a 22 percent increase over first quarter 2007. Operating margin increased to 50.3 percent of related revenues from 45.9 percent for the prior year period, primarily due to a decrease in the cost of sales expense as a percentage of revenues.

Capital Structure Aligned With Strategy

For the 13 weeks ended December 30, 2007, net cash flow from operating activities totaled $807.6 million, compared to $678.4 million in the same period a year ago.

During the first quarter, the company repurchased a total of 12.2 million shares at a cost of $295 million, and had 1.3 million shares remaining available for repurchase under the authorization in place at the end of the period. On January 29, 2008, Starbucks Board of Directors authorized the repurchase of up to 5 million additional shares of the company’s common stock.

Comments on Recent Test of $1 Brewed Coffee Short Cup

In response to recent inquiries about the test of a $1 brewed coffee short cup, the company commented that Starbucks is built on premium coffee and a premium experience. Schultz observed, “Similar to other leading global consumer brands, we believe there are opportunities to create segmentation, provide an entry point for new customers, and generate trial in a way that will also maintain the value of the core brand proposition we offer. It also recognizes the economic pressures our customers are under. We intend to reaffirm our position as the coffee authority and maintain our leadership position while broadening our appeal. But this offering is just a test, and we will be listening intently to customer feedback, as well as evaluating whether such a product advances our business objectives, elevates further the premium coffee experience, and creates value for us.”

Conference Call

Starbucks will be holding a conference call today at 2:00 p.m. PST, which will be hosted by Howard Schultz, chairman, president and ceo, Martin Coles, chief operating officer, and Pete Bocian, executive vice president and chief financial officer. The call will be broadcast live over the Internet and can be accessed at the company’s web site address of http://investor.starbucks.com. A replay of the call will be available via telephone through 5:30 p.m. PST on Wednesday, February 6, 2008, by calling 1-800-642-1687, reservation number 22248459. A posting of speaker remarks and a replay of the call will also be available via the Investor Relations page on Starbucks.com through approximately 5:00 p.m. PST on Friday, February 29, 2008, at the following URL: http://investor.starbucks.com.

The company’s consolidated statements of earnings, operating segment results, and other additional information have been provided on the following pages in accordance with current year classifications. This information should be reviewed in conjunction with this press release. Please refer to the company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2007 for additional information.

About Starbucks

Starbucks Coffee Company provides an uplifting experience that enriches people’s lives one moment, one human being, one extraordinary cup of coffee at a time. To share in the experience, visit www.starbucks.com.

Forward-Looking Statements

This release includes forward-looking statements about certain company initiatives and plans, as well as trends in or expectations regarding net new store openings, capital expenditures and earnings per share. These forward-looking statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors including, but not limited to, coffee, dairy and other raw material prices and availability, successful execution of internal plans and initiatives, fluctuations in U.S. and international economies and currencies, the impact of competition, the effect of legal proceedings, and other risks detailed in the company’s filings with the Securities and Exchange Commission, including the “Risk Factors” section of Starbucks Annual Report on Form 10-K for the fiscal year ended September 30, 2007. The company assumes no obligation to update any of these forward-looking statements.

STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
						13 Weeks Ended											13 Weeks Ended
						Dec 30,				Dec 31,				%			Dec 30,				Dec 31,
						2007				2006				Change			2007				2006
						(in millions, except per share data)
																	As a % of total net revenues
Net revenues:
		Company-operated retail				$	2,351.5			$	2,006.8			17.2	%		85.0		%		85.2		%
		Specialty:
			Licensing				304.8				253.9			20.0			11.0				10.8
			Foodservice and other				111.3				95.0			17.2			4.0				4.0
				Total specialty			416.1				348.9			19.3			15.0				14.8
Total net revenues							2,767.6				2,355.7			17.5			100.0				100.0
Cost of sales including occupancy costs							1,186.0				984.8			20.4			42.9				41.8
Store operating expenses(a)							927.3				772.0			20.1			33.5				32.8
Other operating expenses(b)							85.7				70.9			20.9			3.1				3.0
Depreciation and amortization expenses							133.2				110.2			20.9			4.8				4.7
General and administrative expenses							125.9				116.8			7.8			4.5				5.0
			Subtotal operating expenses				2,458.1				2,054.7			19.6			88.8				87.2
Income from equity investees							23.6				18.7			26.2			0.9				0.8
			Operating income				333.1				319.7			4.2			12.0				13.6
Interest income and other, net							10.7				13.5						0.4				0.6
Interest expense							(17.1	)			(7.0	)					(0.6	)			(0.3	)
			Earnings before income taxes				326.7				326.2			0.2			11.8				13.8
Income taxes(c)							118.6				121.2						4.3				5.1
			Net earnings			$	208.1			$	205.0			1.5			7.5		%		8.7		%
Net earnings per common share - diluted						$	0.28			$	0.26			7.7	%
Weighted avg. shares outstanding - diluted							744.9				782.8
(a)		As a percentage of related company-operated retail revenues, store operating expenses were 39.4 percent for the 13 weeks ended December 30, 2007, and 38.5 percent for the 13 weeks ended December 31, 2006.
(b)		As a percentage of related total specialty revenues, other operating expenses were 20.6 percent for the 13 weeks ended December 30, 2007, and 20.3 percent for the 13 weeks ended December 31, 2006.
(c)		The effective tax rates were 36.3 percent for the 13 weeks ended December 30, 2007, and 37.2 percent for the 13 weeks ended December 31, 2006.

Segment Results

The tables below present reportable segment results net of intersegment eliminations (in millions):

United States						Dec 30,			Dec 31,			%				Dec 30,		Dec 31,
						2007			2006			Change				2007		2006
13 Weeks Ended																As a % of U.S. total net revenues
Net revenues:
		Company-operated retail				$	1,890.3		$	1,660.3		13.9		%		88.9	%	89.3	%
		Specialty:
			Licensing				137.9			113.3		21.7				6.5		6.1
			Foodservice and other				98.0			86.3		13.6				4.6		4.6
				Total specialty			235.9			199.6		18.2				11.1		10.7
Total net revenues							2,126.2			1,859.9		14.3				100.0		100.0
Cost of sales including occupancy costs							872.9			731.1		19.4				41.1		39.3
Store operating expenses(a)							764.9			648.4		18.0				36.0		34.9
Other operating expenses(b)							59.0			52.2		13.0				2.8		2.8
Depreciation and amortization expenses							98.4			81.4		20.9				4.6		4.4
General and administrative expenses							20.5			21.7		(5.5	)			1.0		1.2
			Total operating expenses				1,815.7			1,534.8		18.3				85.4		82.5
Income from equity investees							0.4			-						-		-
			Operating income			$	310.9		$	325.1		(4.4	)	%		14.6	%	17.5	%
(a)		As a percentage of related company-operated retail revenues, store operating expenses were 40.5 percent for the 13 weeks ended December 30, 2007, and 39.1 percent for the 13 weeks ended December 31, 2006.
(b)		As a percentage of related total specialty revenues, other operating expenses were 25.0 percent for the 13 weeks ended December 30, 2007, and 26.2 percent for the 13 weeks ended December 31, 2006.

International						Dec 30,				Dec 31,				%				Dec 30,				Dec 31,
						2007				2006				Change				2007				2006
13 Weeks Ended																		As a % of International total net revenues
Net revenues:
		Company-operated retail				$	461.2			$	346.5			33.1		%		85.3		%		85.5		%
		Specialty:
			Licensing				66.3				49.9			32.9				12.3				12.3
			Foodservice and other				13.3				8.7			52.9				2.5				2.1
				Total specialty			79.6				58.6			35.8				14.7				14.5
Total net revenues							540.8				405.1			33.5				100.0				100.0
Cost of sales including occupancy costs							260.0				200.1			29.9				48.1				49.4
Store operating expenses(a)							162.4				123.6			31.4				30.0				30.5
Other operating expenses(b)							20.8				14.1			47.5				3.8				3.5
Depreciation and amortization expenses							25.7				20.5			25.4				4.8				5.1
General and administrative expenses							29.9				21.7			37.8				5.5				5.4
			Total operating expenses				498.8				380.0			31.3				92.2				93.8
Income from equity investees							12.1				8.0			51.3				2.2				2.0
			Operating income			$	54.1			$	33.1			63.4		%		10.0		%		8.2		%
(a)		As a percentage of related company-operated retail revenues, store operating expenses were 35.2 percent for the 13 weeks ended December 30, 2007, and 35.7 percent for the 13 weeks ended December 31, 2006.
(b)		As a percentage of related total specialty revenues, other operating expenses were 26.1 percent for the 13 weeks ended December 30, 2007, and 24.1 percent for the 13 weeks ended December 31, 2006.
Global Consumer Products Group (CPG)
						Dec 30,				Dec 31,				%				Dec 30,				Dec 31,
						2007				2006				Change				2007				2006
13 Weeks Ended																		As a % of CPG total net revenues
Net revenues:
		Specialty:
			Licensing			$	100.6			$	90.7			10.9		%		100.0		%		100.0		%
				Total specialty			100.6				90.7			10.9				100.0				100.0
Cost of sales							53.1				53.6			(0.9	)			52.8				59.1
Other operating expenses							5.9				4.6			28.3				5.9				5.1
General and administrative expenses							2.1				1.6			31.3				2.1				1.8
			Total operating expenses				61.1				59.8			2.2				60.7				65.9
Income from equity investees							11.1				10.7			3.7				11.0				11.8
			Operating income			$	50.6			$	41.6			21.6		%		50.3		%		45.9		%
Unallocated Corporate
						Dec 30,				Dec 31,				%				Dec 30,				Dec 31,
						2007				2006				Change				2007				2006
13 Weeks Ended																		As a % of total net revenues
Depreciation and amortization expenses						$	9.1			$	8.3			9.6		%		0.3		%		0.4		%
General and administrative expenses							73.4				71.8			2.2				2.7				3.0
			Operating loss			$	(82.5	)		$	(80.1	)		3.0		%		(3.0	)	%		(3.4	)	%

STARBUCKS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions, except per share data)
(unaudited)
				December 30,			September 30,
				2007			2007
ASSETS
Current assets:
	Cash and cash equivalents			$	349.3		$	281.3
	Short-term investments - available-for-sale securities				113.2			83.8
	Short-term investments - trading securities				72.9			73.6
	Accounts receivable, net				316.2			287.9
	Inventories				580.9			691.7
	Prepaid expenses and other current assets				144.7			148.8
	Deferred income taxes, net				160.4			129.4
		Total current assets			1,737.6			1,696.5
Long-term investments – available-for-sale securities					-			21.0
Equity and other investments					270.3			258.9
Property, plant and equipment, net					2,993.0			2,890.4
Other assets					247.0			219.4
Other intangible assets					42.4			42.1
Goodwill					216.1			215.6
	TOTAL ASSETS			$	5,506.4		$	5,343.9
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
	Commercial paper and short-term borrowings			$	529.5		$	710.3
	Accounts payable				340.8			390.8
	Accrued compensation and related costs				341.9			332.3
	Accrued occupancy costs				78.1			74.6
	Accrued taxes				187.6			92.5
	Other accrued expenses				261.8			257.4
	Deferred revenue				512.7			296.9
	Current portion of long-term debt				0.8			0.8
		Total current liabilities			2,253.2			2,155.6
Long-term debt					550.0			550.1
Other long-term liabilities					450.0			354.1
		Total liabilities			3,253.2			3,059.8
Shareholders’ equity:
	Common stock ($0.001 par value) - authorized, 1,200 million shares; issued and outstanding, 727.6 and 738.3 million shares, respectively, (includes 3.4 common stock units in both periods)				0.7			0.7
	Other additional paid-in-capital				39.4			39.4
	Retained earnings				2,148.6			2,189.4
	Accumulated other comprehensive income				64.5			54.6
		Total shareholders’ equity			2,253.2			2,284.1
	TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			$	5,506.4		$	5,343.9

STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in millions)
					13 Weeks Ended
					Dec 30,				Dec 31,
					2007				2006
OPERATING ACTIVITIES:
Net earnings					$	208.1			$	205.0
Adjustments to reconcile net earnings to net cash provided by operating activities:
		Depreciation and amortization				139.9				116.1
		Provision for impairments and asset disposals				4.9				3.5
		Deferred income taxes, net				(22.1	)			(21.3	)
		Equity in income of investees				(11.0	)			(9.0	)
		Distributions from equity investees				9.2				18.8
		Stock-based compensation				24.3				24.4
		Tax benefit from exercise of stock options				1.1				3.4
		Excess tax benefit from exercise of stock options				(3.0	)			(29.6	)
		Net amortization of (discount)/premium on securities				(0.1	)			0.2
		Cash provided/(used) by changes in operating assets and liabilities:
			Inventories			111.9				91.3
			Accounts payable			(42.6	)			(64.2	)
			Accrued taxes			124.6				109.8
			Deferred revenue			215.6				191.2
			Other operating assets and liabilities			46.8				38.8
Net cash provided by operating activities						807.6				678.4
INVESTING ACTIVITIES:
	Purchase of available-for-sale securities					(41.9	)			(148.4	)
	Maturity of available-for-sale securities					-				115.2
	Sale of available-for-sale securities					33.8				-
	Acquisitions, net of cash acquired					-				(47.3	)
	Net purchases of equity, other investments and other assets					(2.1	)			(15.7	)
	Net additions to property, plant and equipment					(263.6	)			(270.6	)
Net cash used by investing activities						(273.8	)			(366.8	)
FINANCING ACTIVITIES:
	Repayments of commercial paper					(21,910.3	)			-
	Proceeds from issuance of commercial paper					21,729.5				-
	Repayments of short-term borrowings					-				(359.0	)
	Proceeds from short-term borrowings					-				24.0
	Proceeds from issuance of common stock					21.6				65.5
	Excess tax benefit from exercise of stock options					3.0				29.6
	Principal payments on long-term debt					(0.2	)			(0.2	)
	Repurchase of common stock					(311.3	)			(115.2	)
Net cash used by financing activities						(467.7	)			(355.3	)
Effect of exchange rate changes on cash and cash equivalents						1.9				2.0
Net increase/(decrease) in cash and cash equivalents						68.0				(41.7	)
CASH AND CASH EQUIVALENTS:
Beginning of period						281.3				312.6
End of the period					$	349.3			$	270.9
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
	Interest, net of capitalized interest				$	8.6			$	8.3
	Income taxes				$	16.4			$	40.6

Fiscal First Quarter 2008 Store Data

The company’s store data for the periods presented are as follows:

			Net stores opened during the 13 weeks ended				Stores open as of
			Dec 30,		Dec 31,		Dec 30,		Dec 31,
			2007		2006		2007		2006
United States:
	Company-operated Stores		294		282		7,087		6,010
	Licensed Stores		190		223		4,081		3,391
			484		505		11,168		9,401
International:
	Company-operated Stores		84		76		1,796		1,511
	Licensed Stores		177		147		2,792		2,256
			261		223		4,588		3,767
Total			745		728		15,756		13,168

© 2008 Starbucks Coffee Company. All rights reserved.

Wave Uranium Board Cancels 15 Million Shares

LAS VEGAS–(BUSINESS WIRE)–Wave Uranium (OTCBB: WAVU) today announced a decision by the management and Board by unanimous vote to cancel 15 million shares.

This cancellation of outstanding shares will bring total shares outstanding down to 55,120,005 from the current outstanding total of 70,120,005. Management has made this decision to help earnings per share and to increase shareholder value.

About Wave Uranium:

Wave Uranium is a Las Vegas, Nevada based exploration and development uranium company. The Company is actively acquiring world class uranium properties in prolific mining areas in North America.

Wave Uranium has assembled a team of geologists and directors with proven track records in areas of mineral exploration, mining programs and accessing global capital markets.

Northwest Airlines Reports Full Year 2007 Results

EAGAN, Minn.–(BUSINESS WIRE)–Northwest Airlines Corporation (NYSE: NWA) today reported a 2007 pre-tax profit of $764 million before reorganization items, a 154 percent improvement over its 2006 pre-tax income of $301 million before reorganization items.

For the fourth quarter 2007, Northwest reported a net loss of $8 million, or $0.03 cents per diluted share. Results for the fourth quarter include a $14 million pre-tax loss associated with the sale of its remaining equity interest in Pinnacle Airlines. Excluding this item, Northwest’s results were break-even for the fourth quarter of 2007. In the fourth quarter of 2006, Northwest reported a $267 million net loss, or $3.06 per diluted share.

Doug Steenland, Northwest Airlines’ president and chief executive officer, said, “This marks our second consecutive year of profitability and the third highest pre-tax profit in Company history. Excluding reorganization items, Northwest’s 2007 results improved by $463 million over 2006 and over $2.1 billion when compared to 2005. Our 2007 pre-tax margin of 6.1 percent is also the highest among the network carriers. I want to recognize the hard work of our employees and management team for delivering these industry-leading results.”

Steenland added, “Our front-line employees and flight crews deserve great credit for running a very reliable airline during the peak travel periods in November and December, despite the significant winter weather challenges. As a result of our employees’ efforts and commitment over the course of the year, the Company will have paid out to them $125 million in profit sharing, performance incentives and reliability payments. This will be the highest employee incentives payout in Company history, nearly a 175 percent improvement over 2006.”

REVENUE IMPROVEMENTS

Northwest’s operating revenues for the fourth quarter rose to $3.1 billion, up 3.9 percent from last year.

Consolidated passenger revenue per available seat mile (RASM) increased by 4.8 percent versus the fourth quarter of 2006. Excluding the impact of fresh-start accounting, consolidated RASM increased 5.9 percent on a 1.5 percent decrease in available seat miles (ASMs). The RASM performance was driven by a 5.1 percent improvement in yield on a 0.6 percentage point improvement in load factor during the quarter.

“We saw unit revenue accelerate throughout the year as we continued to make disciplined capacity decisions. We are confident that we can build on this solid performance in 2008. In fact, our bookings remain strong across the system and we have seen no evidence of slowing demand,” said Tim Griffin, Northwest’s executive vice president marketing and distribution.

COST DRIVERS

Fourth quarter operating expenses were up $123 million, or 4.3 percent, year-over-year to $3.0 billion. Excluding fuel costs, operating expenses were down by $6 million year-over-year. Also, excluding fuel costs and unusual items, Northwest’s fourth quarter unit costs per available seat mile (CASM) increased 5.1 percent versus the fourth quarter of 2006 primarily due to significantly reduced capacity, as well as higher profit sharing, employee incentive programs and certain non-cash emergence-related items.

For the full year 2007, CASM excluding fuel costs and unusual items decreased 2 percent versus 2006.

Northwest’s single largest expense continues to be fuel. For the quarter, Northwest paid $2.35 per gallon of jet fuel, excluding taxes and before out of period hedge gains. This was nearly 42 cents, or 21.7 percent, higher than fourth quarter of 2006.

Northwest had previously hedged approximately 50 percent of its fuel exposure for the quarter using a combination of collars and swaps.

Northwest ended the quarter with $3.0 billion in unrestricted cash and $725 million in restricted cash. This restricted cash balance includes $213 million placed in escrow to fund the pending acquisition of a minority position in Midwest Airlines. Northwest’s 2006 year-end unrestricted cash was $2.1 billion.

Dave Davis, executive vice president and chief financial officer said, “The fact that Northwest delivered full-year pre-tax income of $764 million, and ended the year with $3.0 billion in unrestricted cash despite the highest fuel prices in history, illustrates the earnings power of the Northwest Airlines franchise.”

NORTHWEST HIGHLIGHTS

In discussing the airline’s achievements for the fourth quarter, Steenland noted, “Northwest continues to establish itself as an industry leader with investments in our employees, our fleet and the communities we serve. All of these initiatives contribute to making Northwest a world-class airline.”

A. Employee Investments

• Northwest accrued $22 million in profit sharing payments to employees for the fourth quarter and nearly $80 million for the full year.
• Northwest also accrued $4 million in performance incentive plan payouts during the quarter and $19 million for the full year.
• Northwest will pay out $14 million as part of its fourth quarter holiday reliability plan, of which $12 million was accrued in the fourth quarter. Northwest had previously paid out $12 million as part of the summer reliability initiative.
• Northwest made $127 million in employee pension and retirement plan payments in 2007.

B. Operational Excellence

• In November, Northwest announced its “20 Point Holiday Travel Reliability Plan” as part of the airline’s commitment to provide the best possible service to our customers. For example, during the peak five day Thanksgiving travel period, the plan helped Northwest achieve three 100 percent completion factor days with only three flight cancellations.

C. New Routes

• Northwest and its joint venture partner KLM Royal Dutch Airlines will inaugurate six new routes to Europe in the spring of 2008:

• Portland, Ore. - Amsterdam beginning March 29
• Minneapolis/St. Paul - London Heathrow beginning March 29
• Dallas/Fort Worth - Amsterdam beginning March 30
• Minneapolis/St. Paul - Paris beginning April 8
• Detroit - London Heathrow beginning May 1
• Seattle - London Heathrow beginning June 1

D. Anniversary of Northwest/KLM Joint Venture

• Northwest and its joint venture partner, KLM Royal Dutch Airlines, celebrated the 10^th Anniversary of the joint venture in the fourth quarter – marking a major milestone for one of the most successful partnerships in the history of the airline industry.

E. Fleet renewal

• As part of its $6 billion re-fleeting program, in the fourth quarter, Northwest took delivery of its 32^nd A330 aircraft. Northwest now operates the world’s largest A330 fleet, the youngest international fleet and youngest transatlantic fleet of any U.S. carrier.
• Northwest’s regional jet fleet also grew in the fourth quarter with the delivery of six Bombardier CRJ-900s and five Embraer EMB-175s, bringing the airline’s year-end total to 13 CRJ-900s and nine EMB-175s.
• In the first quarter 2008, Northwest plans to take delivery of six additional CRJ-900s and eight more EMB-175s.
• By the end of 2008, Northwest’s scheduled deliveries will bring its regional jet fleet to 36 EMB-175s and 36 CRJ-900s.
• Northwest’s 2008 flying plan includes a reduction of its DC9 fleet over the course of the year, with the largest reduction coming after the peak summer travel months. By the end of 2008, Northwest intends to operate a fleet of 68 DC9 aircraft, including 34 DC9-50s, 12 DC9-40s and 22 DC9-30s.

F. New Environmental Initiatives

• In December 2007, Northwest launched its EarthCares environmental program with a $1 million gift on behalf of the airline’s employees and customers to its founding partner, The Nature Conservancy.
• Later this year, Northwest customers will have the option of contributing to wildlife and land conservation projects around Northwest’s hubs in Minneapolis/St. Paul, Detroit, and Memphis as well as China’s First National Park. Customers will also be able to purchase carbon offset credits when they book their travel online.
• Northwest has reduced its own carbon emissions by 25 percent since the year 2000 through its transition to newer, more fuel-efficient aircraft.

FORWARD-LOOKING STATEMENTS

Statements in this news release that are not purely historical facts, including statements regarding our beliefs, expectations, intentions or strategies for the future, may be “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the plans, intentions and expectations reflected in or suggested by the forward-looking statements. Such risks and uncertainties include, among others, the ability of the company to operate pursuant to the terms of its financing facilities (particularly the related financial covenants), the ability of the company to attract, motivate and/or retain key executives and associates, the future level of air travel demand, the company’s future passenger traffic and yields, the airline industry pricing environment, increased costs for security, the cost and availability of aviation insurance coverage and war risk coverage, the general economic condition of the U.S. and other regions of the world, the price and availability of jet fuel, the war in Iraq, the possibility of additional terrorist attacks or the fear of such attacks, concerns about Severe Acute Respiratory Syndrome (SARS) and other influenza or contagious illnesses, labor strikes, work disruptions, labor negotiations both at other carriers and the company, low cost carrier expansion, capacity decisions of other carriers, actions of the U.S. and foreign governments, foreign currency exchange rate fluctuations and inflation. Additional information with respect to the factors and events that could cause differences between forward-looking statements and future actual results is contained in the company’s Securities and Exchange Commission filings, including the company’s Annual Report on Form 10-K for the year ended December 31, 2006 and subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. We undertake no obligation to update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.

Northwest Airlines is one of the world’s largest airlines with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world’s most extensive global networks. Northwest and its travel partners serve more than 1,000 cities in excess of 160 countries on six continents.

NORTHWEST AIRLINES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in millions except per share amounts)
		Successor (a)				Predecessor
		Three Months				Three Months
		Ended				Ended				%
		December 31,				December 31,				Incr
		2007				2006				(Decr)
OPERATING REVENUES
Passenger		$	2,222			$	2,202			0.9
Regional carrier revenues			370				306			20.9
Cargo			241				242			(0.4	)
Other			263				230			14.3
Total operating revenues			3,096				2,980			3.9
OPERATING EXPENSES
Aircraft fuel and taxes (b)			937				808			16.0
Salaries, wages and benefits			676				610			10.8
Aircraft maintenance materials and repairs			234				254			(7.9	)
Selling and marketing			186				176			5.7
Other rentals and landing fees			116				126			(7.9	)
Depreciation and amortization			128				129			(0.8	)
Aircraft rentals			94				52			80.8
Regional carrier expenses			193				318			(39.3	)
Other unusual items (c)			-				23			(100.0	)
Other			445				390			14.1
Total operating expenses			3,009				2,886			4.3
OPERATING INCOME (LOSS)			87				94			(7.4	)
Operating margin			2.8	%			3.2	%		(0.4	)	pts.
OTHER INCOME (EXPENSE)
Interest expense, net			(126	)			(142	)		(11.3	)
Investment income			36				36			0.0
Foreign currency gain (loss)			(4	)			(3	)		33.3
Other unusual items (d)			(14	)			-			n/m
Other			7				8			(12.5	)
Total other income (expense)			(101	)			(101	)		0.0
INCOME (LOSS) BEFORE REORGANIZATION ITEMS AND INCOME TAXES			(14	)			(7	)
Reorganization items, net (e)			-				(295	)
INCOME (LOSS) BEFORE INCOME TAXES			(14	)			(302	)
Income tax expense (benefit)			(6	)			(35	)
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS		$	(8	)		$	(267	)
Earnings (Loss) per common share: (f)
Basic		$	(0.03	)		$	(3.06	)
Diluted		$	(0.03	)		$	(3.06	)
Average shares used in computation:
Basic			262				87
Diluted			262				87
See accompanying consolidated notes.

NORTHWEST AIRLINES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in millions except per share amounts)
		Successor				Predecessor				Combined (a)				Predecessor
		Period From				Period From				Twelve Months				Twelve Months
		June 1 to				January 1 to				Ended				Ended				%
		December 31,				May 31,				December 31,				December 31,				Incr
		2007				2007				2007				2006				(Decr)
OPERATING REVENUES
Passenger		$	5,660			$	3,768			$	9,428			$	9,230			2.1
Regional carrier revenues			884				521				1,405				1,399			0.4
Cargo			522				318				840				946			(11.2	)
Other			538				317				855				993			(13.9	)
Total operating revenues			7,604				4,924				12,528				12,568			(0.3	)
OPERATING EXPENSES
Aircraft fuel and taxes (b)			2,089				1,289				3,378				3,386			(0.2	)
Salaries, wages and benefits			1,541				1,027				2,568				2,639			(2.7	)
Aircraft maintenance materials and repairs			508				303				811				796			1.9
Selling and marketing			436				315				751				759			(1.1	)
Other rentals and landing fees			304				235				539				562			(4.1	)
Depreciation and amortization			289				206				495				519			(4.6	)
Aircraft rentals			218				160				378				226			67.3
Regional carrier expenses			434				342				776				1,406			(44.8	)
Other unusual items (c)			-				-				-				23			(100.0	)
Other			1,044				684				1,728				1,512			14.3
Total operating expenses			6,863				4,561				11,424				11,828			(3.4	)
OPERATING INCOME (LOSS)			741				363				1,104				740			49.2
Operating margin			9.7	%			7.4	%			8.8	%			5.9	%		2.9		pts.
OTHER INCOME (EXPENSE)
Interest expense, net			(273	)			(219	)			(492	)			(555	)		(11.4	)
Investment income			105				56				161				109			47.7
Foreign currency gain (loss)			(5	)			-				(5	)			(7	)		(28.6	)
Other unusual items (d)			(14	)			-				(14	)			-			n/m
Other			12				(2	)			10				14			(28.6	)
Total other income (expense)			(175	)			(165	)			(340	)			(439	)		(22.6	)
INCOME (LOSS) BEFORE REORGANIZATION ITEMS AND INCOME TAXES			566				198				764				301
Reorganization items, net (e)			-				1,551				1,551				(3,165	)
INCOME (LOSS) BEFORE INCOME TAXES			566				1,749				2,315				(2,864	)
Income tax expense (benefit)			224				(2	)			222				(29	)
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS		$	342			$	1,751			$	2,093			$	(2,835	)
Earnings (Loss) per common share: (f)
Basic		$	1.30			$	20.03							$	(32.48	)
Diluted		$	1.30			$	14.28							$	(32.48	)
Average shares used in computation:
Basic			262				87								87
Diluted			262				113								87
See accompanying consolidated notes.

NORTHWEST AIRLINES CORPORATION
CONSOLIDATED NOTES
(Unaudited)
(a)		Northwest Airlines Corporation (”NWA Corp.” or the “Company”) is a holding company whose operating subsidiary is Northwest Airlines, Inc. (”Northwest”). In September 2005, NWA Corp. and Northwest, along with certain direct and indirect subsidiaries filed Chapter 11 petitions for relief in the U.S. Bankruptcy Court for the Southern District of New York. On May 31, 2007, the Company emerged from Chapter 11.
		In connection with its emergence from Chapter 11, the Company adopted fresh-start reporting in accordance with American Institute of Certified Public Accountants’ Statement of Position 90-7, Financial Reporting by Entities in Reorganization under the Bankruptcy Code (”SOP 90-7″). References to “Successor” refer to NWA Corp. on or after June 1, 2007, after giving effect to the application of fresh-start reporting. References to “Predecessor” refer to NWA Corp. prior to June 1, 2007. Thus, the consolidated financial statements prior to June 1, 2007 reflect results based upon the historical cost basis of the Company while the post-emergence consolidated financial statements reflect the new basis of accounting incorporating the fair value adjustments made in recording the effects of fresh-start reporting. Therefore, the post-emergence periods are not comparable to the pre-emergence periods. However, for discussions on the results of operations, the Company has compared the Successor Company’s results for the three months ended December 31, 2007 to the Predecessor Company’s results for the three months ended December 31, 2006, as well as combined the results for the five months ended May 31, 2007 and the seven months ended December 31, 2007 to compare with the Predecessor Company’s results for the twelve months ended December 31, 2006.
		In addition to the fair value adjustments required for fresh-start reporting, the Company changed its presentation of certain regional carrier related revenue and expense items, acquired Mesaba Aviation, Inc. and changed its policies pertaining to the accounting for frequent flyer obligations and breakage of passenger tickets. See the table of year-over-year variance reconciliations for further details.
(b)		During both the three and twelve months ended December 31, 2007, the Company recorded $20.4 million in mark-to-market gains related to fuel derivative contracts that will settle in future periods. During both the three and twelve months ended December 31, 2006, the Company recorded $2.7 million in mark-to-market losses related to fuel derivative contracts that settled in 2007.
(c)		During the quarter ended December 31, 2006, the Company recorded $23 million in severance charges related to its November 6, 2006 ratified contract agreement with the Aircraft Mechanics Fraternal Association (”AMFA”).
(d)		During the quarter ended December 31, 2007, the Company sold its entire interest in Pinnacle Airlines Corp. common stock for $32.9 million, resulting in a loss of $14.2 million.
(e)		In connection with its bankruptcy proceedings and adoption of fresh-start reporting, the Company recorded largely non-cash reorganization income (expense) and, in accordance with GAAP, these items are separately classified in the Condensed Consolidated Statements of Operations.
(f)		Successor EPS. The Plan contemplated the issuance of approximately 277 million shares of new common stock by the Successor Company (out of the 400 million shares of new common stock authorized under its amended and restated certificate of incorporation). The new common stock was listed on the New York Stock Exchange (“NYSE”) and began trading under the symbol “NWA” on May 31, 2007. The distributions of the Successor Company’s common stock, subject to certain holdbacks as described in the Plan, were generally made as follows:
		— 234.4 million shares of common stock were issuable to holders of certain general unsecured claims and holders of guaranty claims;
		— 27.8 million shares of common stock were issued in the Rights Offering and Equity Commitment Agreement; and
		— 15.2 million shares of common stock are subject to awards under a management equity plan.
		In accordance with Statement of Financial Accounting Standards No. 128, Earnings per Share (”SFAS No. 128″), basic and diluted earnings per share were computed by dividing net income by the weighted-average number of shares of common stock outstanding for the applicable reporting period presented. SFAS No. 128 requires that the entire 234.4 million shares to be issued to holders of unsecured and guaranty claims be considered outstanding for purposes of calculating earnings per share as these shares will ultimately be issued to unsecured creditors once the allocation of disputed unsecured claims is completed. The 15.2 million shares subject to awards under the management equity plan were excluded from the computation of diluted earnings per share because the effect of including the shares would have been anti-dilutive.
		Predecessor EPS. Predecessor basic earnings per share was computed based on the Predecessor’s final weighted average shares outstanding. Dilutive earnings per share included approximately 25.3 million dilutive securities related to the Company’s Series C Preferred Stock and convertible debt.

NORTHWEST AIRLINES CORPORATION
RECONCILIATION OF YEAR-OVER-YEAR VARIANCES
(Unaudited, in millions)
As a result of the adoption of fresh-start reporting, the Company’s financial statements on or after June 1, 2007 are not comparable with its pre-emergence financial statements because they are, in effect, those of a new entity. In addition to the fair value adjustments required for fresh-start reporting, the Company changed its policies pertaining to the accounting for frequent flyer obligations and breakage of passenger tickets. The effects of fresh-start reporting, the policy changes and the impact of exit-related stock compensation expense on the Company’s Condensed Consolidated Statement of Operations are itemized below in column (A).
On April 24, 2007, Mesaba Aviation, Inc. was acquired by the Company and became a wholly-owned consolidated subsidiary. The impact on the Company’s year-over-year variance as a result of this consolidation is itemized in column (B).
In conjunction with the Amended Airline Services Agreement with Pinnacle Airlines, Inc. and the Stock Purchase and Reorganization Agreement with Mesaba Aviation, Inc., the Company changed its presentation of certain regional carrier related revenue and expense items effective January 1, 2007. This change in presentation had no impact on the Company’s operating income for the three months and twelve months ended December 31, 2007 and is itemized in column (C).
During the quarter ended December 31, 2006, the Company recorded $23 million in severance charges related to its November 6, 2006 ratified contract agreement with the AMFA. See column (D).
Excluding the items listed above, the comparable year-over-year operating performance variances are itemized in column (E). System passenger revenue increased 4.4 percent due primarily to a 5.9 percent improvement on unit revenue. Other revenue increased primarily due to favorable partner and charter revenues.
		Successor				Predecessor									(A)				(B)				(C)				(D)				(E)
															Increase (Decrease) Due To:
		Three Months Ended December 31, 2007				Three Months Ended December 31, 2006				Total Incr (Decr)					Fresh-Start/ Exit-Related Stk Comp. Exp.				Mesaba Net of Elim				Rgnl Carrier Reclass				AMFA Severance				Operations				Total Incr (Decr)
OPERATING REVENUES
Passenger		$	2,222			$	2,202			$	20				$	(30	)		$	-			$	-			$	-			$	50			$	20
Regional carrier revenues			370				306				64					3				-				-				-				61				64
Cargo			241				242				(1	)				-				-				-				-				(1	)			(1	)
Other			263				230				33					23				5				(50	)			-				55				33
Total operating revenues			3,096				2,980				116					(4	)			5				(50	)			-				165				116
OPERATING EXPENSES
Aircraft fuel and taxes			937				808				129					-				4				-				-				125				129
Salaries, wages and benefits			676				610				66					11				32				-				-				23				66
Aircraft maintenance materials and repairs			234				254				(20	)				-				8				-				-				(28	)			(20	)
Selling and marketing			186				176				10					(4	)			-				-				-				14				10
Other rentals and landing fees			116				126				(10	)				-				4				-				-				(14	)			(10	)
Depreciation and amortization			128				129				(1	)				(2	)			3				-				-				(2	)			(1	)
Aircraft rentals			94				52				42					-				-				46				-				(4	)			42
Regional carrier expenses			193				318				(125	)				-				(53	)			(96	)			-				24				(125	)
Other unusual items			-				23				(23	)				-				-				-				(23	)			-				(23	)
Other			445				390				55					-				13				-				-				42				55
Total operating expenses			3,009				2,886				123					5				11				(50	)			(23	)			180				123
OPERATING INCOME (LOSS)			87				94				(7	)				(9	)			(6	)			-				23				(15	)			(7	)
Operating margin			2.8	%			3.2	%			(0.4	)	pts.

NORTHWEST AIRLINES CORPORATION
EBITDAR CALCULATION
(Unaudited, in millions)
		Successor				Combined
		Three Months				Twelve Months
		Ended				Ended
		December 31,				December 31,
		2007				2007
Operating income (loss)		$	87			$	1,104
Depreciation and amortization			128				495
Aircraft rentals			94				378
EBITDAR (1)			309				1,977
EBITDAR margin			10.0	%			15.8	%
(1) EBITDAR is defined as operating income excluding depreciation, amortization and aircraft rents. The Company believes that EBITDAR is a useful financial measure when comparing the Company’s financial results to those of the industry.

NORTHWEST AIRLINES CORPORATION
PASSENGER AND REGIONAL CARRIER REVENUES AND STATISTICAL RESULTS
(Unaudited)
		Three Months Ended										Percent					Twelve Months Ended										Percent
		December 31,										Change					December 31,										Change
		2007					2006										2007					2006
Scheduled Service - Consolidated: (1)
Available seat miles (ASM) (millions)			22,890					23,231					(1.5	)				93,328					92,944				0.4
Revenue passenger miles (RPM) (millions)			18,866					18,992					(0.7	)				78,320					78,044				0.4
Passenger load factor			82.4		%			81.8		%			0.6		pts.			83.9		%			84.0		%		(0.1	)	pts.
Revenue passengers (millions)			16.1					16.6					(3.0	)				66.4					67.6				(1.8	)
Passenger revenue per RPM (yield)			13.74		¢			13.21		¢			4.0					13.83		¢			13.62		¢		1.5
Passenger revenue per RPM (yield) excluding fresh-start			13.88		¢			13.21		¢			5.1					13.95		¢			13.62		¢		2.4
Passenger revenue per ASM (RASM)			11.32		¢			10.80		¢			4.8					11.61		¢			11.44		¢		1.5
Passenger revenue per ASM (RASM) excluding fresh-start			11.44		¢			10.80		¢			5.9					11.71		¢			11.44		¢		2.4
Scheduled Service - Mainline: (2)
Available seat miles (ASM) (millions)			20,964					21,505					(2.5	)				86,142					85,603				0.6
Revenue passenger miles (RPM) (millions)			17,406					17,735					(1.9	)				72,924					72,606				0.4
Passenger load factor			83.0		%			82.5		%			0.5		pts.			84.7		%			84.8		%		(0.1	)	pts.
Revenue passengers (millions)			12.7					13.6					(6.6	)				53.7					54.8				(2.0	)
Passenger revenue per RPM (yield)			12.77		¢			12.42		¢			2.8					12.93		¢			12.71		¢		1.7
Passenger revenue per RPM (yield) excluding fresh-start			12.94		¢			12.42		¢			4.2					13.07		¢			12.71		¢		2.8
Passenger revenue per ASM (RASM)			10.60		¢			10.24		¢			3.5					10.94		¢			10.78		¢		1.5
Passenger revenue per ASM (RASM) excluding fresh-start			10.74		¢			10.24		¢			4.9					11.06		¢			10.78		¢		2.6
PASSENGER AND REGIONAL CARRIER REVENUES
(Unaudited)
		Domestic					Pacific					Atlantic					Mainline					Consolidated
As reported:
Fourth Quarter 2007
Passenger revenues (in millions)		$	1,373				$	520				$	329				$	2,222				$	2,592
Increase (Decrease) from 2006:
Passenger revenues			(2.6	)	%			3.2		%			14.2		%			0.9		%			3.4		%
Scheduled service ASMs (capacity)			(6.3	)	%			(4.2	)	%			16.8		%			(2.5	)	%			(1.5	)	%
Scheduled service RPMs (traffic)			(4.6	)	%			(3.3	)	%			11.7		%			(1.9	)	%			(0.7	)	%
Passenger load factor			1.5		pts.			0.8		pts.			(3.8	)	pts.			0.5		pts.			0.6		pts.
Yield			2.0		%			6.8		%			2.2		%			2.8		%			4.0		%
Passenger RASM			3.9		%			7.8		%			(2.3	)	%			3.5		%			4.8		%
Excluding fresh-start:
Fourth Quarter 2007
Passenger revenues (in millions)		$	1,392				$	532				$	328				$	2,252				$	2,619
Increase (Decrease) from 2006:
Passenger revenues			(1.3	)	%			5.6		%			13.9		%			2.3		%			4.4		%
Yield			3.4		%			9.2		%			2.2		%			4.2		%			5.1		%
Passenger RASM			5.3		%			10.2		%			(2.3	)	%			4.9		%			5.9		%
(1) Consolidated statistics include Northwest Airlink regional carriers.
(2) Mainline statistics exclude Northwest Airlink regional carriers, which is consistent with how the Company reports statistics to the Department of Transportation (“DOT”).

NORTHWEST AIRLINES CORPORATION
MAINLINE OPERATING STATISTICAL RESULTS (1)
(Unaudited)
			Three Months Ended										Percent			Twelve Months Ended										Percent
			December 31,										Change			December 31,										Change
			2007					2006								2007					2006
Total operating ASM (millions)				21,062					21,551				(2.3	)			86,310					85,738				0.7
Passenger service operating expense per total ASM (2) (3)				11.47		¢			10.66		¢		7.6				10.75		¢			10.95		¢		(1.8	)
Unusual items per total ASM (4)				-		¢			0.11		¢		n/m				-		¢			0.03		¢		n/m
Mainline fuel expense per total ASM				3.81		¢			3.26		¢		16.9				3.41		¢			3.43		¢		(0.6	)
Mainline fuel expense per total ASM excluding mark-to-market adjustments related to fuel derivative contracts that settle in future periods				3.88		¢			3.25		¢		19.4				3.43		¢			3.43		¢		0.0
Cargo ton miles (CTM) (millions)				577					566				1.9				2,067					2,269				(8.9	)
Cargo revenue per ton mile				41.92		¢			42.77		¢		(2.0	)			40.65		¢			41.71		¢		(2.5	)
Fuel gallons consumed (millions)				378					397				(4.8	)			1,545					1,593				(3.0	)
Average fuel cost per gallon, excluding fuel taxes				230.29		¢			193.92		¢		18.8				205.41		¢			202.47		¢		1.5
Average fuel cost per gallon, excluding fuel taxes and mark-to-market adjustments related to fuel derivative contracts that settle in future periods				235.10		¢			193.25		¢		21.7				206.59		¢			202.30		¢		2.1
Number of operating aircraft at end of period																	356					371				(4.0	)
Full-time equivalent employees at end of period																	30,306					30,484				(0.6	)
(1) Mainline statistics exclude Northwest Airlink regional carriers, which is consistent with how the Company reports statistics to the Department of Transportation (“DOT”).
(2) This financial measure excludes non-passenger service expenses. The Company believes that providing financial measures directly related to passenger service operations allows investors to evaluate and compare the Company’s core operating results to those of the industry.
(3) Passenger service operating expense excludes the following items unrelated to passenger service operations:
			Three Months Ended													Twelve Months Ended
			December 31,													December 31,
(In millions)			2007					2006								2007					2006
Regional carrier expenses			$	360				$	318							$	1,259				$	1,406
Freighter operations				194					222								654					804
MLT Inc. - net of intercompany eliminations				31					36								177					193
Other				8					14								56					43
(4) During the quarter ended December 31, 2006, the Company recorded $23 million in severance charges related to its November 6, 2006 ratified contract agreement with the AMFA.

NORTHWEST AIRLINES CORPORATION
SELECTED BALANCE SHEET DATA
(Unaudited, in millions)
		Successor						Predecessor
		December 31,						December 31,
		2007						2006
Cash and cash equivalents		$	2,939					$	1,461
Unrestricted short-term investments			95						597
Restricted cash, cash equivalents and short-term investments			725						424
Total assets			24,517						13,215
Total debt and capital leases, including current maturities			7,088						8,899			(1	)
Total liabilities			17,140						20,929
Total common stockholders’ equity (deficit)			7,377						(7,991)
(1) Includes certain debt and capital lease obligations classified as subject to compromise as of December 31, 2006.
FIRST QUARTER 2008 AND 2008 FULL YEAR GUIDANCE
		1Q 2008 Forecast						2008 Forecast
		(year-over-year change)						(year-over-year change)
Scheduled service ASMs (capacity)
Domestic (1)		(4%) - (5%)						(5.5%) - (6.5%)
International		3% - 4%						8% - 9%
Mainline (1)		(1%) - (2%)						(0.5%) - 0.5%
Regional		35% - 40%						50% - 55%
Consolidated (2)		1% - 2%						3% - 4%
Passenger service operating expense per total ASM excluding fuel (1)		3.5% - 4.5%						1% - 2%
		1Q 2008 Forecast						2008 Forecast
Average fuel cost per gallon, excluding fuel taxes (1)		$2.63						$2.57
Fuel gallons consumed (millions)		371						1,533
(1) Mainline statistics exclude Northwest Airlink regional carriers, which is consistent with how the Company reports statistics to the DOT.
(2) Consolidated statistics include Northwest Airlink regional carriers.
ESTIMATED FRESH-START AND EXIT-RELATED STOCK COMPENSATION EXPENSE
(In millions)
		Inc (Decr)
		1Q 2008
		Estimate
OPERATING REVENUES
Passenger and regional carrier revenues		$	(30	)
Other			23
Total operating revenues			(7	)
OPERATING EXPENSES
Salaries, wages and benefits			9
Selling and marketing			-
Depreciation and amortization			(2	)
Total operating expenses			7
OPERATING INCOME (LOSS)		$	(14	)