NORTHWEST AIRLINES, INC. 
Total Operating Revenues 
Operating Income 
. -et Earn in gs for the Year 
Per Common Share 
Stockholders Equity 
Per Comm,on Share 
Dividends Paid 
Operating Expenses- 
Per Available Ton-Mile 
Per Recenue Ton-Mile 
Revenue Traffic- 
Passengers Carried 
Passenger-\:files Flown 
Ton-\files, ~laiL Freight 
and Express 
Common Shares at Year End 
0 Reflecting two-for-one split 
in 1964 
1964 
$211,610,431 
$ 53,131,117 
$ 26,785,523 
$5.86 
$122,959,586 
$26.91 
$ 2,601.682 
18.5 
39.7 
3,663,077 
2,668,812,000 
93,356,000 
4,568,634 
Employees at Year End . . . . . . . . 6,671 
1963 
$168,788,040 
$ 25,915,517 
$ 10,452,957 
$2.861) 
$ 68,435,947 
$18.761) 
$ 1,822,656 
21.7 
46.8 
2,911,914 
2,179,208,000 
73,082,000 
3,648,904~ 
6,090 
1964 
Highlights 
 TO THE STOCKHOLDERS : 
from 
the 
president 
W e are pleased to report the highly successful results achieved by 
Northwest Airlines in 1964. During the year, substantial progress was made 
in strength ning the Company in every facet of its operation. 
W e grew strong through greatly increa ed revenues, passing by good 
margin the $200 million mark for the first time. W gained competitive 
strength by exceeding the industry rate of passenger traffic growth. 
Our 22.5 per cent increase carried us well over 2.5 billion revenue passenger- 
miles. Cargo traffic spurred our revenue growth with a 40 per cent in- 
crease to more than 50 million ton-miles. 
Net earnings of $26,786,000 resulted from the favorable relationship 
of record revenues and well-controlled cost level . Operating expenses 
required only 75 of each revenue dollar and our unit cost measures 
showed marked decline from 1963 figures. 
During 1964 -orthwest Airlines broadened its fin ancial structure by 
increasing the equity base of the Company to , 123 million. This sound 
move toward attainment of a stronger financial condition will insure 
even greater development of your Company in the years ahead. 
-otable gains were achieved in our service capability in 1964. We 
added nin e new fan-jets to our excellent fleet, spanning the full range of 
modern aircraft with three new long-range 707-320C's, thr e intermediate 
720B's, and three shorter range trijet 727's. At year-end we had on order 
five more 320C' and 17 additional 727-type jets. 
i\orthwest Airlines improved its operating authority with new routes 
awarded by the Civil Aeronautics Board in 1964. In October we began 
flights between Chicago and Cleveland and are ready to commence service 
in the D etroit-Philadelphia and Cl veland-Philadelphia markets on April 1 
of this year. The new route s gments will increase our total traffic and 
will provide more convenient access to these important eastern cities 
from many of the cities on our system. 
Your Company will continue to devote itself to ever-improved service to 
the public. We look forward to forth r progress as one of the nation's 
leading airlines, and with the continu ed loyal support of our stockholders 
we will meet our goals. 
Sincerely, 
March, 1965 
1 
 2 
Continued growth at a rate which paced the air- 
line industry keynoted the progress of orthwest 
Airlines in 1964. Favorable traffic response to the 
improved quality and frequency of our schedules 
brought marked revenue gains during the year. In 
turn, the stronger financial position attained by 
s und, profitable growth has permitted us to assume 
an even more significant role in the economic prog- 
ress of the communities we serve. 
Likewise, Northv,rest's sound financial position is 
of immeasurable importance in enabling us to carry 
out the national interest responsibilities inherent in 
operation of our major international route to the 
Far East. Financial ability to purchase and operate 
additional modern aircraft has enabled Northwest 
to strengthen this bridge to the nations of the 
Orient which are so vital to the interests of the 
United States. 
Financial Results 
Net earnings of $26,785,523 in 1964 amounted to 
$5.86 per share of common stock, compared with 
net earnings of $10,452,957 or $2.86 per share in 
1963 ( the latter figure adjusted to reflect the two- 
for-one split of common stock in 1964 ). 
Record high revenues of $211,610,431 in 1964 
resulted, after operating expenses of $158,479,314, 
in operating net income of $53,131,117. on-operat- 
ing charges in 1964 included interest expense of 
$2,187,578. Disposals of property produced a net 
gain before taxes in the amount of $912,656. This 
figure compared with a loss before taxes from dis- 
posal of property in 1963 in the amount of $307,732. 
All of the foregoing reflect marked improvement 
over the results for 1963, including a 25 per cent 
increase in total operating revenues compared v.ith 
an increase of 11 per cent in total operating ex- 
penses. Favorable financial results permitted re- 
duction in interest expense to further improve 
Northwest's net earnings result. 
In the treatment of our income tax provision, we 
are continuing the practice of amortizing over an 
eight-year period the net income benefit of the in- 
vestment tax credit. Such credits included in net 
earnings amounted to $682,800 in 1964, an increase 
over the amount of $105,600 credited to income in 
1963. There remains an unamortized investment 
credit of $6,581,900 to be included in future years' 
income. All investment credit amounts available to 
the airline as a result of equipment purchases 
 through 1964 have been realized in cash by reduction of current 
income taxes ( See table, Page 15 ). 
Operations in 1964 generated a cash flow of $57,865,000 from net 
earnings, depreciation and amortization, and the tax reductions 
from deferred taxes and the investment credit. An additional amount of 
$30,337,000 was realized from the sale of common stock in 1964. 
Other cash generation included $6,779,000 from sale of flight equipment 
and other property. 
The major application of funds during the year consisted of additions 
to fleet and advance deposits for aircraft on order, which totalled 
$71,194,000. In addition, long-term debt was reduced by approximately 
$20,000,000. Other applications included cash dividends paid to 
stockholders in the amount of $2,602,000. 
Stockholder Dividends and Net Worth 
Quarterly cash dividends of 15 per share ( after two-for-one stock 
split ) were paid on common stock during 1964. 
On February 22, 1965, your directors authorized an increase in the 
quarterly dividend to 20 per share, payable on March 31, 1965. 
This is the third increase in dividend since the close of 1962 and, at 
an annual rate of $.80 per share, represents an actual doubling of the 
dividend rate paid through 1962. With the March, 1965, dividend 
Torthwest Airlines will have completed 10 years of consecutive quarterly 
cash dividends. 
Stockholders' equity increased from $68,436,000 to $122,960,000 during 
the year just ended, reflecting both the issue of additional equity and 
retained earnings for the year. Book value per share of common stock 
increased from $18.76 at D ecember 31, 1963, to $26.91 at the 
end of 1964. 
Financial Position 
Long-term debt arrangements remained essentially unchanged during 
1964 and outstanding debt at the close of the year amounted to 
$45,000,000. 
During 1964, our bank credit agreement was revised to place the 
maximum credit line at $40,000,000 of which $5,000,000 was borrowed 
at year-end. Under the revolving feature of this agreement, the credit line 
may be repaid and reborrowed with reductions in maximum credit 
to $33,500,000 at December 31, 1966, and thereafter in a series of steps to 
fin al maturity at June 30, 1969. During 1964 your Company repaid in 
full the conditional contracts of sale for Lockheed Electras and the 
subordinated note payable to The Boeing Company. 
The note purchase agreements with insurance companies reflect 
$40,000,000 in outstanding debt. This loan is subject to repayment 
heginning October 1, 1966, with a payment of $3,000,000, and 
annual payments thereafter in the same amount to a final payment of 
M,000,000 at October 1, 1978. 
At year-end Korthwest Airlines had on order five Boeing 707-320C 
long-range convertible fan-jet aircraft and 17 Boeing 727 trijet aircraft. 
Financing for these aircraft will be available from existing credit 
and from internal cash generation. 
3 
 4 
Operating Revenues 
MILLIONS OF DOLLARS 
225 - - - - - - - - - - - - - - - -- - - - - - 
55 56 57 58 59 60 61 62 63 64 
Break-Even Passenger Load Factor 
PER CENT 
60 - - - - - - - - - - - - - - - - - - - - - - 
55 
50 
45 
40 
35 
~ 
0 _ _,___...___.___.,____.____.____.__.....____.__.....___.___.____._____.___._......____._~~~- 
55 56 57 58 59 60 61 62 63 64 
Expense per Available Ton-Mile 
CENTS 
30 - - - - - - - - - - - - - - - - - - - - - - 
28 
26 
24 
22 
20 
18 
M 
0 
55 56 57 58 59 60 61 62 63 64 
1964 
OPERATIONS 
S rvice improvements along our varied route 
structure with an expanded fleet included, in 1964, 
the offering of additional sch dules and increased 
capacity. During the year a 15 per cent increase 
in revenue plan -miles brought an increase of slight- 
ly more than 19 per cent in available seat-miles and 
26 per cent in available ton-miles. The latter in- 
crease reflects the larger weight capacity in our 
growing j t fie t which, in varying configurations of 
convertible pas enger-cargo capability, serves to 
improve the cargo lift ratio of our schedules. Traffic 
respons to these service increases was in favorable 
proportion, as the traffic-carried elements rose by 
high r p rcentages than reflected in capacity in- 
creases. 
Passenger Traffic and Revenues 
In 1964, orthwe t Airlines surpass d the 2.5 
billion passenger-mile mark for the first time, re- 
cording a total of 2,668,812,000 system revenue pas- 
senger-mile in scheduled service. This was an in- 
crease of 22.5 per cent over 1963. Major traffic gains 
w re realized on our domestic routes with pas- 
enger-rniles up more than 25 per cent, far greater 
than the darn stic trunk industry gain of 14 per 
cent. Among our major cities showing greater-than- 
average rates of increase in passenger boardings 
wer highly competitive markets such as Detroit, 
Clev land, New York-Newark, Chicago, Milwaukee 
and Miami-Fort Lauderdale. As a result of such 
gains our proportionate share of U. S. total traffic 
increased o that one of every 20 domestic trunk 
pa ng r-mil s in 1964 was flown on Northwest 
Airlines. 
Our irnprov d passenger traffic also reflected it- 
elf in another important economic measure, with 
a gain in system pa seng r load factor from 50.6 
per cent in 1963 to 52.0 per cent in 1964. 
System passenger revenues of $163,807,000 were 
21 per cent more than in 1963. Our over-all yield 
per passeng r-rnile declined slightly from 6.20 in 
1963 to 6.14 in 1964. The passenger fare structure 
gen rally was stable during the past year despite 
the continuance of a number of promotional fares, 
and our small drop in average yield came primarily 
from a larger percentage of total passenger-miles in 
coach or economy service-79.1 per cent in 1964 
compared with 74.4 per cent in 1963. 
 Cargo and Charter Revenues 
Our largest percentage traffic gains were realized in the carriage 
of cargo. Freight and express ton-miles increased almost 40 per cent 
during 1964, reflecting a growing use of our gr ater capacity to 
handl large volume shipments of all sizes. The largest gain was 
r alized in international air freight with an increase of 50 per cent 
over ton-miles carri d in 1963. Mail revenues showed a smaller 
increase, due in part to r duced rates for international air mail made 
effective by CAB action on October 1, 1964. 
Th importanc of cargo in our total r venues is highlighted by the 
fact that in 1964, rev nues from mail, freight, express and excess 
baggage on chedul d s rvices totalled mor than $33,700,000, or about 
on dollar for ev ry fiv of pa s nger revenu . 
During 1964 w continu d to serve the military establishment with 
an xt n ive chart r contract in the Pacific. Rev nues from th se 
military passeng r and cargo flights and from other charters more than 
doubl d in 1964, reaching a n w high of $12,965,000. The current 
contract with the military extends to Jun 30, 1965, and orthwest 
irlin s will se k r n wal in fiscal 1966. 
Operating Expenses 
D espit further upward tr nds in wage rates and other co ts of 
providing service, total op rating exp nses increased only 10.9 per cent 
in 1964 in contrast to larg r increas in available seat-miles and 
avaHabl ton-miles. Our total operating exp nses for the year 
amounted to $158,479,314 including depreciation and amortization of 
~22, 51,790. Exp ns in 196.3 were $142, 72,523, with depreciation 
and amortization of $19,1.5 , 99. 
Total op rating cost xpr s d in units of capacity declin d 
from 21.7  per availabl ton-mil in 1963 to 18.5 in 1964. 
Cost per revenue ton-mil of traffic carri d was 39.7  in 1964, down 
from 46.8 in 196.3, and th pass nger break-ev n load factor 
requir d to cover operating xpenses and int rest declined again in 
1964 to 35.8 per cent from th level of 41.6 per c nt realized in 1963. 
, orthw st Airlines add d approximat ly 10 p r c nt to its labor force 
in 1964 to meet the n ds of growing traffic, to implement our 
n w dam stic rout and to improv our s rvic to the public. 
Furth r increases will be made in our work force as our expanding 
r ic s d v lop the n d for such additions. 
\ will continue to monitor costs in careful fashion to develop 
the low st pos ible operating cost levels consist nt with our goal of 
maintaining the finest standards of safe, fficient and comfortable service. 
Distribution of Our Revenue Dollar 
In 1964 employ es' wages and other benefits absorbed 24.5 of each 
revenu dollar. Other principal applications of revenue were taxes 
(including income tax s), 13.5; rentals, landing fees and 
purchased services, 11.0 ; depreciation, 10.8; fuel, 10.0; and various 
other xpenses, 16.5. Dividends and interest accounted for 2.3 of 
ach re nue dollar. Th remainder of 11.4 p r dollar was 
r inv t d to provide for necessary broadening of our finan cial 
tructur , to insure continu d growth in services to the public and 
a sound conomic future for your Company. 
5 
 NORTHWEST AIRLINES, INC. 
10 YEAR SUMMARY and 
SUBSIDIARY 
( D ollars in thou and except per hare fi gures ) 
Operating Revenues 1964 1963 1962 1961' 1960 1959 1958 1957 1956 1955 
Passeng r $163,807 $135,222 $121,781 $ 85,971 $ 97,680 $100,641 $ 81,116 $ 66,674 $ 60,264 $ 57,253 
\fail 15,313 14,233 14,228 11,701 10,711 11,219 10,228 8,350 7,858 7,090 
Fr ight, Exr ress and Excess Baggage 18,402 13,745 11,828 8,443 11,368 11,881 8,667 7,541 7,155 6,124 
Chart r and Other Transportation 12,965 6,442 2,646 1,482 823 526 1,237 226 816 111 
!\on transport 1,123 (854) (30) 3,456 2,780 1,763 709 641 386 510 
Total Operating Revenues $211,610 $168,788 $150,453 $111,053 $123,362 $126,030 $101,957 $ 83,432 $ 761479 $ 711088 
Operating Expenses 
D precia tion and Amortization $ 22,852 $ 19,159 $ 18,445 $ 17,118 $ 14,413 $ 11,310 $ 8,638 $ 5,851 $ 6,996 $ 6,455 
0th r 135,627 123,713 112,802 84,213 104,455 103,811 81,281 72,597 64,888 60,216 
Total Operating Expenses $158,479 $142,872 $131,247 $101,331 $118,868 $115,121 $ 89,919 $ 78,448 $ 71,884 $ 66,671 
Op rating Incom $ .53,131 $ 25,916 $ 19,206 $ 9,722 $ 4,494 $ 10,909 $ 12,038 $ 4,984 $ 4,595 $ 4,417 
0th r Incom and (Deductions)- et (1,125) (4,166) (4,578) (2,828) (1,882) 335 (559) 2,247 1,306 (131) 
Earnings B fore Taxes $ 52,006 $ 21,750 $ 14,628 $ 6,894 $ 2,612 $ 11,244 $ 11,479 $ 7,231 $ 5,901 $ 4,286 
Incorn Taxes 25,220 11,297 7,398 3,233 986 5,530 5,865 2,412 2,675 2,170 
et Earnings $ 26,786 $ 10,453 $ 7,230 $ 3,661 $ 1,626 $ 5,714 $ 5,614 $ 4,819 $ 3,226 $ 2,116 
Earnings p r Shar O 0 $ 5.86 $ 2.86 $ 1.99 $ 1.01 $ .45 $ 1.57 $ 2.04 $ 1.73 $ 1.15 $ .75 
Stockhold r ' Equity 122,960 68,436 59,712 54,177 52,193 52,267 48,224 33,065 30,172 28,228 
Book alu per Share00 
. 
26.91 18.76 16.40 14.88 14.35 14.37 13.39 11.90 10.79 10.02 
Cash Dividends 2,602 1,823 1,702 1,701 1,700 1,714 1,110 1,117 1,110 939 
A set and Long-Term Debt 
F light Prop rty at Cost . . . . $219,523 $176,655 $169,413 $170,772 $121,441 $104,389 $ 90,608 $ 71,716 $ 51,669 $ 51,109 
Flight Prop rty at Ke t Book Value 160,925 127,074 122.980 133,485 86,957 76,647 56,461 43,023 21,692 23,791 
Total As et 237,226 196,765 186,887 189,103 148,698 130,097 105,061 76,222 58,337 55,515 
Long-Term D bt . 45,000 64,996 74,968 90,286 68,500 50,000 34,250 27,000 13,800 14,500 
nit Expen es 
P r Available Ton-Mile 18.5 21.7 23.9 27.6 27.8 26.5 26.1 27.4 28.2 28.4 
P r R v nu Ton- 1ile 39.7 46.8 50.2 54.2 54.2 51.0 49.0 50.4 48.5 50.0 
p r en t of Operating Revenues 74.9% 84.6% 87.2% 91.2% 96.4% 91.3% 88.2% 94.0% 94.0% 93.8% 
tati tics-Scheduled Services 
R v nu Plane Miles (000) . 52,157 45,356 41,821 31,143 46,671 47,568 39,113 34,742 31,421 30,097 
vailabl Seat Mil s (000) 5,129,944 4,305,147 3,697,796 2,611,840 3,073,400 3,149,000 2,574,848 2,125,505 1,807,337 1,746,149 
R v nuc Passeng r Miles (000) 2,668,812 2,179,208 1,904,112 1,361,790 1,653,966 1,738,138 1,408,743 1,205,765 1,094,121 1,017,400 
Pass ng r Load Factor 52.0% 50.6% 51.5% 52.1% 53.8% 55.2% 54.7% 56.7% 60.5% 58.3% 
R nu Passeng r Carried 3,663,077 2,911,914 2,437,342 1,723,667 2,139,547 2,138,970 1,827,129 1,574,035 1,427,063 1,343,337 
Freight and Express Ton-Miles (000) 55,100 39,417 35,179 23,035 32,480 31,377 22,285 19,714 18,825 16,341 
Total Hevenu ' Ton-M il s (000) 351,886 284,732 254,033 182,704 217,722 225,110 181,678 155,323 145,135 133,531 
0 Aff cc:t d by major strik . 
0 0 Pcr c.;har figur s r fl ec:l two-for-one stock split in 1964 and con- 
version of prcferre<l ~tock a applic< bl in y ar prior to 1963. 
6 7 
 8 
FLEET & FACILITIES 
Northwest Airlines in 1964 continued to enhance the competi- 
tive excellence of its fleet of aircraft. 
ine new fan-jets-three more 720B' , three 707-320C's and 
three 72Ts- were delivered to th airline by The Boeing Com- 
pany. Orders were placed for delivery in 1965 of five additional 
320C's and for delivery in 1965 and '66 of 17 more of the three- 
engined 727 and 727C, short-to-medium-range fan-jets. 
At December 31, rorthwest's well balanced fie t comprised 
five 707-320B's and three 707-320C's, for transcontinental and 
trans-Pacific passenger and cargo service; 16 medium-range 
720B's; three 72Ts; 16 Electra jet-propellor airliners; and six 
piston-engined DC-7C and DC-7CF transports. 
As part of the airline's program for orderly disposal of older 
aircraft, the four remaining pi ton-engined DC-6B's have been 
sold and the last will be phased out of -orthwest's operations 
and delivered to its buyer in May. 
Approval was obtained for operation of 320B and 320C air- 
craft on trans-Pacific and Hawaii routes using the Doppler air- 
borne radar and self-contained navigation system. With' this 
system, the pilot is provided with continuous position ground 
speed and drift data, enabling him to conduct hi flight with 
maximum safety and efficiency. 
Ground Fac ilities 
Continued improvement of ground facilities to provide for 
greater efficiency and customer convenience kept pace with 
Northwest's developments in the air during 1964. 
Additional gate facilities and another Top Flight Loader- 
providing terminal to jet aircraft passenger boarding protected 
from the weather-were installed at Seattle-Tacoma irport, 
along with a new passenger lounge. Two Top Flight Loaders to 
keep Portland passengers out of the weather whil boarding 
Northwest fan-jets were completed early in 1965, and two addi- 
tional similar facilities are under construction at Minneapolis- 
St. Paul. 
New reservations space and a new city ticket office were com- 
pleted in Atlanta and a new larg r and more convenient air 
cargo facility was occupied at the Atlanta Airport. At Cleve- 
land's airport, l WA reworked its facilities in order to handl 
increased traffic resulting from new Cleveland route authority. 
New Computer 
Throughout 1964, communications facilities were improved, 
with the addition of more reservations telephone circuits to 
accommodate increasing pas enger traffic. Service to Northwest's 
customers will be speeded even more through use of a new 
Univac 490 Real-Time Computer System, which went "on lin " 
on March 1, 1965. This computer, which replaced the nivac 
File Computer in use for reservations since 1959, op rates 10 
times faster than the old unit and in addition will take over the 
automatic switching center fnnctions of i\orthwest's teletype 
network. Additional computer applications are planned. 
 AIRCRAFT 
TYPE 
JET 
707-3208 
& 320C 
7208 
727 & 
727C 
Total Jet 
PROP-JET 
Electra 
PISTON 
DC-7C 
DC-68 
Total Fleet 
0 All DC-6B aircraft have been sold for delivery in 1965. 
December 
31, 1964 
8 
16 
3 
27 
16 
6 
4* 
53 
On Order 
5 
17 
22 
J 
22 11:~ 1111 1111 .. 11 11:= 11:~ II INI 
II:~!~;~ 
\__ 
9 
 10 
HONG <ONG 
 
KOREA 
~EOUL .._ 
THE PHILIPPINES 
ALASKA 
ANCHORAGE 
HAWAII 
SYSTEM MAP 
NORTHWEST ~.~t~N"!! 
CANADA 
UNITED STATES 
NEW YORK 
NEWARK 
PHILA DEL PHIA 
WASHINGTON 0. C 
11 
 12 
Ii 
I! 
I: 
I ' 
I, 
I, 
I I 
PHILADELPHIA'S historic Independence Hall, 
birthplace of the United States. Northwest 
Airlines inaugurates service to the City of 
Brotherly Love on April 1, 1965. 
ROUTES 
New route authority granted Northwest Airlines 
in 1964 in the Eastern part of the United States will 
increase our participation in traffic to and from this 
area of heavy population. 
As a result of action by the Civil Aeronautics 
Board in the United Air Lines Competitive Service 
Investigation, Northwest was authorized to add a 
new city-Philadelphia-and three new segments 
to its route structure east of Chicago. The new 
markets are Chicago-Cleveland, Cleveland-Phila- 
delphia and Detroit-Philadelphia. 
Northwest inaugurated service between Chicago 
and Cleveland on October 5, 1964, the effective 
date of the Board's route award. An all-fan-jet 
schedule pattern will be inaugurated in the Phila- 
delphia markets on April 1, 1965, after completion 
of ground facilities at this new station. 
During 1964, the Board initiated a proceeding 
to determine the need for new, one-carrier long- 
haul service linking the Pacific Northwest with the 
Southwest. Northwest is one of a number of ap- 
plicant airlines seeking such route authority. As 
established by the Board, the proceeding will in- 
volve new route authority between the Pacific 
Northwest cities now served by NWA on the one 
hand, via Salt Lake City and Denver, and major 
cities in Texas, Louisiana, Oklahoma, Kansas, New 
Mexico and Southeast Colorado and the cities of 
St. Louis and Kansas City, Mo., on the other hand. 
While definite procedural dates have not been as- 
signed, it is expected the hearing before the Ex- 
aminer will be completed in 1965. 
The proceeding is of great importance to North- 
west Airlines because new, direct routings from 
these Southern points to Seattle-Tacoma would 
enhance Northwesf s ability to attract Orient traffic 
originating and terminating in this growing area. 
In an investigation to determine possible revisions 
in the airline route structure between the Pacific 
Northwest and Alaska, a CAB Examiner has rec- 
ommended against any restriction on Northwest 
Airlines' operating authority between Seattle-Ta- 
coma and Anchorage. Northwest vigorously had 
opposed any restrictions on its rights in the mar- 
ket. The case now is awaiting Board decision. 
In the Service to Spokane Case, despite North- 
west's opposition, the CAB awarded West Coast 
Airlines nonstop authority between Spokane and 
Seattle, competitive with Northwest's service in this 
market. In addition, United Air Lines received non- 
stop rights from Spokane to Salt Lake City and 
Denver. The case has been re-opened for further 
proceedings to determine the possible need for 
additional nonstop authorizations between Spokane 
and Portland. Northwest opposed such awards at a 
hearing held early in 1965 and will continue to do 
so in further stages of the proceeding. 
The Postmaster General early in 1964 petitioned 
for a reduction of approximately 50 per cent in the 
service rates for international priority mail includ- 
ing the .Pacific. The Board's decision, effective 
October 1, 1964, included a reduction of about 24 
per cent on routes operated by T 
orthwest. In De- 
cember, 1964, the Postmaster General petitioned 
for reductions in domestic service mail rates. This 
petition is awaiting Board action. 
 SERVICES 
orthwest Airlines' sales force merchandised a wide variety of 
expanded and improved customer services in 1964. 
On the Orient route, for example, addition by mid-year of three 
intercontinental-range 707-320C's to the previous fleet of five 320B's 
enabled orthwest to increase its trans-Pacific frequencies by 50 per 
cent. Your airline now operates 12 round trips each week over the shorter 
orth Pacific route between ew York/ Chicago and Japan-eight 
on a non-stop routing between Seattle-Tacoma and Tokyo and the four 
others via Anchorage, Alaska. In addition, several extra flights 
were operated to Tokyo during the Olympic Games, including two 
which orthwest operated as an official United States carrier 
for American team members. 
Cargo Services 
Since all of our intercontinental fan-jets are equipped with large 
forward cargo doors giving access to the airliners' main decks, orthwest's 
capability to lift volume shipments of cargo was increased 
substantially. A concentrated advertising, public relations and ales 
program-coupled with a cargo-development contest among 
domestic stations-called public attention to these large-door 
combination passenger and cargo planes, as well as l orthwest's well 
rounded pattern of other freight services, with a resulting 
substantial increase in freight traffic. 
Also in the area of cargo services, orthwest designed and put into 
service on the 320C fleet early in 1965 "igloo" containers which attach 
to the cabin-width cargo pallets and expedite the loading of 
smaller items of freight. 
Domestic and Hawaii Schedules 
Delivery during 1964 of additional shorter-range fan-jet aircraft 
enabled orthwest Airlines to up-grade its domestic passenger and 
cargo services as well. 
Inauguration of scheduled service with the new 727's on 
January 1, 1965, marked the beginning of an all-fan-jet service on 
the route between the Midwe t and Florida; during the peak of the winter 
vacation season T 
orthwest is operating nine round trips daily 
between Chicago and Miami, with intermediate service to Atlanta, 
Tampa-St. Petersburg and Fort Lauderdale. orthwest now is the 
only domestic airline serving Miami with an all-fan-jet operation. 
Piston-engined DC-6B's were phased out of Pacific 
Northwest operations and replaced with Electras-giving such cities as 
Bozeman, Butte and Helena turbine-powered service and a choice of 
both first-class and tourist fares. Northwest thus extended the benefits 
of economical coach fares to every city on its route system. 
An eighth fan-jet frequency each week was provided during the peak 
travel s a son between the Pacific Northwest and Hawaii, in addition to 
daily through-plane round trips from ew York and Chicago to Honolulu. 
S rvice to and from the ew York area was increased to 
handle the traffic demand created by the World's Fair. 
A pattern of 15 flights daily between Chicago and Cleveland was 
inaugurated October 5, 1964, and plans have been completed 
 14 
for the start of service in the Cleveland-Philadelphia and Detroit- 
Philadelphia markets on April 1, 1965. 
Promotion 
orthwest continued to enhance its reputation for providing 
the finest in-flight cuisine and beverage service in the airline 
industry. Additional luxury items were placed on the menu 
for the Regal Imperial flights to Florida and similar embellish- 
ments were provided in the meal service on other routes. In 
trans-Pacific first-class service, plans developed during 1964 were 
culminated in January, 1965, with food service from silver trays 
on luxurious aisle carts and fine china plates for the passengers. 
A number of specific sales programs during the year com- 
plemented orthwest's effective mepia advertising. Special 
Hawaii, Alaska and Orient tour seminars were conducted for 
personnel of travel agencies and connecting airlines. Detailed 
presentations were made to travel agents during the fall on 
winter schedules to Florida. Special cargo seminars were con- 
ducted for air freight customers. 
Group tours via orthwest to the Orient, Hawaii and other 
vacation destinations were sold by a number of newspapers and 
radio-television stations. Both traffic and additional identity for 
the airline resulted from promotion of these tours by the par- 
ticipating media. 
ow in the final planning stage is a program for expanded use 
of a new T 
orthwest Airlines credit card. In addition, we have 
concluded agreements with American Express, Carte Blanche 
and Diners Club, for use of these credit cards for online travel. 
Maintenance 
Provision of convenient and dependable customer service 
during the year was supported by Northwest's efficient main- 
tenance organization. The continuing high reliability of orth- 
west's aircraft and engines was illustrated by further govern- 
ment-approved extensions of the time between required over- 
hauls for turbine engines. 
For the first time in history, overhaul of all piston engines was 
phased out during the last months of the year. Concurrently, 
work progressed toward establishment early in 1965 of a pro- 
duction line for the JT8D fan-jet engines on the new 727's. 
Personnel 
The year 1964 was one of stability in labor relations. In the 
first half of the year, agreements were consummated with nine 
classes or crafts of employees, assuring reasonable rates of pay, 
rules and working conditions. 
At the end of 1964, orthwest employed a total of 6,671 per- 
ans at more than 50 locations in the United States, Canada, 
and overseas-a net increase of 581 over the number employed 
at the end of 1963. 
 Source and Application of Funds 
for the years ended December 31, 1964 and 1963 
SOURCE OF FUNDS: 
et Earnings . . . . . . . 
Depreciation and Amortization . 
Deferred Taxes . . . . . . 
Unamortized Investment Credit 
Total from Operations . . . 
Sale of Common Stock . . . 
Disposals of Operating Property 
Other . . . . 
Total of Sources . . . . 
APPLICATION OF FUNDS: 
Flight Equipment and Other Property Additions . 
Advance Deposits on Aircraft . 
Reduction of Long-Term Debt 
Cash Dividends . . . 
Other . . . . . . 
Total of Applications 
Net Increase (Decrease ) in Working Capital 
1964 
$26,785,523 
22,851,790 
3,796,200 
4,431,500 
$57,865,013 
30,337,228 
6,779,257 
96,305 
$95,077,803 
$52,201,424 
18,992,339 
19,995,515 
2,601,682 
1,672,776 
$95,463,736 
$ (385,933 ) 
Application of Investment Tax Credit 
for the years 1962-1963-1964 
1963 
$10,452,957 
19,158,899 
2,690,500 
1,868,400 
$34,170,756 
95,593 
21,738,798 
215,339 
$56,220,486 
$36,031,451 
8,699,753 
9,972,013 
1,822,656 
1,517,136 
$58,043,009 
$ ( 1,822,523 ) 
Realization of Investment Credit 
Tax Credit Utilized to 
Reduce Taxes 
Credit Reflected 
In Net Earnings 
Year 
1962 
1963 
1964 
Total 
Available 
$ 300,000 
2,930,800 
4,157,500 
$7,388,300 
$ 300,000 
1,974,000 
5,114,300 
$7,388,300 
806,400 
To be amortized to income in future years $6,581,900 
( 8-yr. Amortization) 
$ 18,000 
105,600 
682,800 
$806,400 
15 
 16 
STATEMENT OF FINANCIAL 
ASSETS 
CURRENT ASSETS 
Ca h . . . . .. . . . . . . . . . . .. . 
.1. 
ote r c ivabl from sale of aircraft . . . . . . . 
Trad r ivabl s, I ss allowance (1964-$120,000; 1963- 
$105,000) . . . . . . . . . . . . . . . . 
Flight quipm nt part , at av rage cost, l s al1owance 
for depre iation (1964-$3,365,312; 1963-$2,765,206) 
faint nance and op rating supplies at average cost . . 
Prepaid expenses . . . . . . . . . . . . . . . 
TOTAL CURRENT ASSETS 
INVESTMENTS AND OTHER ASSETS at cost 
Related industry inveshnen ts and other advances 
PROPE RTY AND EQU IPMENT at cost 
Flight equipm nt . . . . . 
L ss allowanc for depreciation . 
dvanc s on purcha  ontract - ote D 
0th r property and quipm nt . 
L  allowanc s for d preciation 
DEFERRED CHARGES 
namortizecl training and oth r costs in conn ction with 
aircraft fl ts 
R ntals . . . . . . . . . . . . . . . . . . 
December 31 
1964 
$ 14,437,075 
19,369,385 
5,285,295 
2,136,884 
2,171,652 
$ 43,400,291 
$ 544,881 
$219,522,697 
58,597,808 
$160,924,889 
18,992,339 
$179,917,228 
$ 21,673,570 
12,613,130 
$ 9,060,440 
$188,977,668 
$ 3,232,258 
1,071,207 
$ 4,303 465 
$237,226,305 
1963 
$ 12,866,565 
6,911,619 
15,248,025 
6,100,076 
2,176,335 
2,706,816 
- - - 
$ 46,009,436 
$ 638,615 
$176,654,741 
49,580,630 
$127,074,111 
8,699,753 
$135,773,864 
$ 21,523,556 
12,031,320 
- - - - 
$ 9,492,236 
$145,266,100 
$ 3,885,157 
965,385 
$ 4,850,542 
$196,764,693 
===-==---------- 
POSITION 
NORTHWEST AIRLINES, INC. 
and 
SUBSIDIARY 
LIABILITIES AND STOCKHOLDERS' EQUITY 
CURRENT LIABILITIES 
Accounts payable . . . . 
Salaries, wage and vacations 
Air travel card depo its 
Unr d cmed ticket liability . 
Income taxes . . . . . . 
Current maturiti s of long-term debt . 
TOTAL CURRENT LIABILITIES 
LONG-TERM DEBT, less curr nt maturities-Note A 
ot s payabl to in urance companies 
Not s payable to banks 
Other (paid in 1964) . . . . . . 
DEFERRED CREDITS- ote F 
In om taxes-arising principally from accelerat d d pre- 
ciation methods 
Inv stm nt er dit 
0th r . . . . . 
STOCKHOLDERS' EQUITY- ot B 
Cumulativ Preferred Stock, $25 par valu , authorized 
1,000,000 shar s, outstanding non . . . . . . . . 
Common Stock, aft r giving effect to two-for-one stock 
split in 1964, $5 par value; authorized 10,000,000 shar . ; 
issu d and outstanding 1964- 4,568,634 shares; 1963- 
3,648,904 shares-Not C 
Capital surplus 
Retained earnings . 
COMMITMENTS- ot D 
Decembe r 31 
1964 
$ 15,472,568 
5,516,467 
1,211,675 
2,286,999 
13,071,972 
$ 37,559,681 
$ 40,000,000 
5,000,000 
$ 45,000,000 
$ 23,780,800 
6,581,900 
1,344,338 
$ 31,707,038 
$ 
22,843,170 
39,328,261 
60,788,155 
$122,959,586 
- - - 
$237,226,305 
1963 
$ 14,466,973 
7,764,811 
1,195,100 
1,865,862 
6,750,302 
7,739,845 
$ 39,782,893 
$ 40,000,000 
19,000,000 
5,995,515 
$ 64,995,515 
$ 19,984,600 
2,150,400 
1,415,338 
$ 23,550,338 
$ 
18,244 520 
13,587,113 
36,604,314 
$ 68,435,947 
$196,764,693 
See notes to financial statements. 
17 
 NORTHWEST AIRLINES, INC. 
and ST A TEMENT OF EARNINGS 
. 
. 
SUBSIDIARY 
OPERATING REVENUES 
Transport: 
Passenger . . 
United States mail 
Foreign mail . . 
Excess baggage . 
Freight and express . 
Charter and other transportation 
Kon transport: 
Federal mail subsidy 
Other . . . . . . 
OPERA Tl NG EXPENSES 
Flying operations . 
Maintenance . . . 
Passenger service . 
Aircraft and traffic servicing 
Reservations, sales and advertising 
Administrative and general 
Depreciation and amortization . 
OTHER INCOME AND (DEDUCTIONS) 
Interest on long-term debt 
Disposals of property . 
Other income . . . . 
EARNINGS BEFORE TAXES 
TAXES ON EARNINGS, including deferred taxes and in- 
vestment credit- ote F . . . . . . . . . . 
NET EARNINGS FOR THE YEAR 
See notes to financial statements. 
18 
Year Ended December 31 
1964 1963 
$163,807,113 $135,222,118 
14,032,937 12,917,441 
1,280,673 1,316,118 
1,200,868 1,146,730 
17,201,103 12,597,528 
12,964,989 6,441,700 
$210,487,683 $169,641,635 
1,833,123 ) 
1,122,748 979,528 
$211,610,431 $168,788,040 
$ 48,367,765 $ 42,906,211 
26,557,091 26,203,309 
14,194,368 11,412,619 
21,558,723 19,690,557 
19,557,196 16,985,125 
5,392,381 6,515,803 
22,851,790 19,158,899 
$158,479,314 $142,872,523 
$ 53,131,117 $ 25,915,517 
($ 2,187,578) ($ 3,876,789 ) 
912,656 ( 307,732 ) 
149,828 19,261 
($ 1,125,094 ) ($ 4,165,260) 
$ 52,006,023 $ 21,750,257 
25,220,500 11,297,300 
$ 26,785,523 $ 10,452,957 
 CAPITAL SURPLUS AND RETAINED EARNINGS 
Year Ended December 31 
CAPITAL SURPLUS 1964 1963 
Balance at beginning of year 
Additions arising from: 
$ 13,587,113 $ 6,612,905 
Sale of shares of Common Stock in public offering 
(less expenses of $784,671), in excess of par value . 
Sale of shares of Common Stock under option agree- 
ments, in excess of par value . 
Redemption of shares of Preferred Stock and con- 
version into shares of Common Stock 
Balance at end of year . 
RETAINED EARNINGS 
Balance at beginning of year 
Add net earnings for the year 
Deduct cash dividends on Common Stock ( after g1vmg 
effect to two-for-one stock split in 1964) 1964-$.60 a 
share; 1963-$.50 a share 
Balance at end of year . 
ACCOUNTANTS' REPORT 
To the Stockholders and Board of Directors 
orthwest Airlines, Inc. 
Saint Paul, Minnesota 
25,674,465 
64,118 
2,565 
$ 39,328,261 
$ 36,604,314 
26,785,523 
$ 63,389,837 
2,601,682 
$ 60,788,155 
58,213 
6,915,995 
$ 13,587,113 
$ 27,974,013 
10,452,957 
$ 38,426,970 
1,822,656 
$ 36,604,314 
We have examined the statement of financial position of Northwest Airlines, Inc. and subsidiary 
as of December 31, 1964 and the related statements of earnings, capital surplus and retained earn- 
ings for the year then ended. Our examination was made in accordance with generally accepted 
auditing standards, and accordingly included such tests of the accounting records and such other 
auditing procedures as we considered necessary in the circumstances. We have previously made a 
similar examination for the prior year. 
In our opinion, the accompanying statements of financial position, earnings, capital surplus and re- 
tained earnings present fairly the consolidated financial position of Northwest Airlines, Inc. and sub- 
sidiary at December 31, 1964 and the consolidated results of their operations for the year then 
ended, in conformity with generally accepted accounting principles applied on a basis consistent with 
that of the preceding year. 
Saint Paul, Minnesota 
February ] 5, 1965 Certified Public Accountant 
See_ notes to financial statements . 
.,.,,,.,-  l  I  
19 
 20 
NOTES TO FINANCIAL STATEMENTS 
NORTHWEST AIRLINES, INC. and SUBSIDIARY 
December 31, 1964 
Note A-Long-Tem1 Debt 
Under Note Purcha e Agreements with twelve insur- 
ance companies the Company has borrowed $40,000,000 
at 6% payable $3,000,000 annually beginning October 
1, 1966 and a final payment of $4,000,000 on October 
1, 1978. Certain optional prepayments at par are per- 
mitted. The Agreements contain certain other pro- 
Yision with respect to redemption as a whole, but not 
from borrowed funds, at premiums ranging from 5% 
to 1% 
. 
Under the Amendatory Credit Agreement with fifteen 
bank the Company has outstanding $5,000,000. This 
Agreement provides for revolving credit of $40,000,000 
reducing to $33,500,000 by December 31, 1966, to 
$20,500,000 by December 31, 1967, to $7,000,000 by 
December 31, 1968, and terminating on June 30, 1969. 
Interest on funds borrowed is 4~~%. 
Under provisions of long-term debt agreements the 
Company has agreed, among other things, that it will 
not permit its working capital at any time to be less 
than certain pecified amounts and its funded debt to 
exceed certain percentages of net tangible assets, of 
net worth and of depreciated value of flight equipment, 
a those terms are defined in the agreements. At 
December 31, 1964 the Company had complied with 
the covenant then in effect. 
Note B-Restrictions on Stockholders' Equity 
The Note Purchase Agreements and the Amendatory 
Credit Agreement establish an aggregate dollar maxi- 
mum for the declaration and payment of cash dividends 
on Common Stock, and for the distribution on, redemp- 
tion, purchase or other acquisition of shares of any 
clas of capital stock. The amount of retained earnings 
unre tricted for such purposes at December 31, 1964 
wa $23,042,485. 
Note C-Common Stock Options and 
Reservation 
At December 31, 1964, 6,179 unissued shares of 
Common Stock were subject to outstanding options, 
exercisable by Company officers and employees at 
S13.73 a hare which price was not less than 95% of 
the market when the options were granted in 1962. 
Options for 800 shares expire in 1965 and for 5,379 
shares in 1966. Options for 7,345 shares at $13.73 were 
exercised during the year. The foregoing options have 
been adjusted for the two-for-one stock split in 1964. 
An additional 150,000 shares are reserved for options 
which may be granted to officers and employees in the 
future. 
Note D-Commitments 
The Company has contracted to purchase from The 
Boeing Company five 320C, eleven 727 and six 727C 
turbo-jet aircraft for delivery in 1965 and 1966, which 
with spare parts and equipment will require expendi- 
tures of $122,354,000. Of this amount, $18,992,000 
had been deposited with manufacturers at December 
31, 1964 and approximately $71,519,000 and $31,843,- 
000 become payable in 1965 and 1966, respectively. 
Annual rental payments of approximately $3,165,000 
are required under various lease agreements for periods 
up to thirty-four years covering airport facilities, ticket 
office , etc. 
Note E-Mail Transportation Compensation 
No final determination of total mail compensation 
has been made by the Civil Aeronautics Board on inter- 
national and domestic routes for 1951. The ultimate 
effect of any redetermination i not known at this time. 
Note F-Taxes on Earnings 
The provision for taxes on earnings consists of the 
following: 
Year Ended December 31 
1964 1963 
Current prov1 
s10n ................ $16,992,800 $ 6,738,400 
Deferred taxes ....... ............. .. 3,796,200 2,690,500 
Deferred investment credit.. 5,114,300 1,974,000 
$25,903,300 
Less a mortization of de- 
f erred investment credit 
over eight years ............... . 682,800 
$25,220,500 
$11,402,900 
105,600 
$11,297,300 
Amounts for 1963 have been reclassified to conform 
to changes adopted under provisions of the Revenue 
Act of 1964. 
 Northwest Airlines, Inc. 
General Offices 
Minneapolis-St. Paul International Airport/ St. Paul, Minn. 55111 
DIRECTORS':, 
CROIL HU.\'TER 
Chairman of the Board,  orthwest Airlines, Inc. 
St. Paul. .\Iinnesota 
JA.\IES H. BL cER 
 Pre:ident. Hone, well Inc. 
~f inneapoli. . .\I innesota 
HADLEY CASE 
President, Case, Pomeroy & Company, Inc. 
. ew York, . ew York 
. 10RTOX H. FRY 
Senior Partner. Riter & Company 
.e" York . . ew York 
JOSEPH T. JOH. so .. 
Retired Chairman of the Board 
The .\Iilwaukee Company 
.\Iifo,'.mkee. \\7 iscon:in 
.\IALCODf S . .\L-\.CK.-\Y 
President. Foothill Company 
Roscoe . .\fontana 
CLYDE B . .\IORGA. T 
Chairman of the Board. Rayonier Incorporated 
. e\,. York, . ew York 
DO. -ALD \\' .. "YROP 
President 
P:\TL L. BE.\'SCOTER 
\"ice President-Transportation Ser.ices 
ROBERT A .. EBERT 
\'ice President-Personnel 
A. E. FLOA .. 
\'i.ce President and Secretary 
BK ].-\.\IL - G. GRIGGS. JR. 
Yice President-Flid1t Operations 
DO. ALD H. HARDESTY 
\'ice President-Finance and Treasurer 
\\":.I. E. Hl'SKL s. JR. 
\'ice President- Orient Region 
0 As of Jfarch 1. 1965 
DO. 'ALD W ... YROP 
Pre.ide:rt .... 'orthwe_t Airlines. Inc. 
St Paul, .\finne:ot,1 
ALO. zo PETTEYS 
Prt.ident. F,umers State B,mk 
Bm h, Colorado 
C. FR:\. 'K REA \'I,~ 
Partner, Re::n i  and  cGrath 
 ew York .. \'\\ Yllrk 
ALBERT C. RFDPATH 
P.1rtner. .\u hindo . P.uker & Redpath 
. ew YorL ...  e\\ York 
L \ .\1.A.  E. \Y.-\1:EFIELD, JR. 
Yict Pre. ident. Fict ational Bank of .\finneapolis 
. linnt,lpoli , .\linm. ota 
ALBERT T. \\'EA THERHEAD. TR. 
Preid.ent, The Weatherhead company 
Cle, eland, Ohio 
FR.\. K C. _Tl'DD 
\"ict Pre 1dent-\Imntt:n,1nce ,1 
nd Engineenng 
.\1. JOSEPH LAPE. :KY 
ComptrnllL'r 
RO. .-\LD \I<. \'!Gf-::AR 
A ,i,Lmt YiCt' Pres;Jcnt 
DALE ~1ERHIC1: 
\'i-.l Prc,ident-Pro11erties 
DIOR\ T. ;\l. . 'ELEY. JR 
\"kc Presi It nt and Gt neral Coumel 
C. L STEWART 
\'icT Pre,idcnt-Economic Planning 
ROBERT J. \\'RIGHT 
Yice President-Sales 
REGISTRAR: The Chase Manhattan Bank, New York, N. Y. STOCK LISTED: Common Stock listed on New York Stock Exchange 
TRANSFER AGENT: Bankers Trust Company, New York, N. Y. and Midwest Stock Exchange 
 ANCHORAGE 
ATLANTA 
BILLINGS 
BISMARCK 
BOZEMAN 
BUTTE 
CHICAGO 
CLEARWATER 
CLEVELAND 
DETROIT 
FARGO 
FT. LAUDERDALE 
GRAND FORKS 
GREAT FALLS 
HELENA 
HOLLYWOOD 
HONOLULU 
JAMESTOWN 
MADISON 
MANDAN 
MANILA 
MILWAUKEE 
MINNEAPOLIS 
MISSOULA 
MOORHEAD 
NEW YORK 
NEWARK 
OKINAWA 
PHILADELPHIA 
PITTSBURGH 
PORTLAND 
ROCHESTER 
ST. PAUL 
ST. PETERSBURG 
SEATTLE 
SEOUL 
SPOKANE 
TACOMA 
TAIPEI 
TAMPA 
TOKYO 
WASHINGTON, D. C. 
MIAMI WiNNIPEG 
YAKIMA