NO I EST ORIENT IRLI -S 1970 ANNUAL REPORT TABLE OF CONTENTS Pre idcnt' Me age ..... Page 4-5 1970 Highlights ..... Page 6-7 inancial Review ..... Page 8-9 Northwest Orient' Jet Fleet .. . ... Page 10 Financial Report. .. Pages 11-19 Route Map ... Pages 20-21 Officer and Director . . .... Page 23 Front over: A ortlnvesl Orie,11 747 poised f or take-o/r Below: Gro1111rl support eq11ip111e11I liner/ up al Tokyo Jntematio11al Airport to service 011e of 1ortlnvest Orie111' 1e11 7../7's. Total Operating Revenues .................. . ... . Operating Income . . ........................... . Net Earnings for th Year . ..................... . Per Common Share ................. . ...... . Stockholder ' Equity . .. .. . . . ... . . ... .. . . . .. . ... . Per ommon Share ... . ........ . ....... . ... . Dividend Paid .. . . ... .. .. . ........ . . . .. . .... . . . Operating xpcn e - Per Available Ton-Mile .............. . ...... . Per Revenue Ton-Mile .. . ..... .. ..... . ..... . Revenue Traffic- Pa engers Carried ..... . ... . .. . ...... . . .... . Pa enger-Miles Flow'n . . ... .. .. . .. . .... . .. . . Ton-Mile , Mail, reight and Ex pres .. ... .. . . ommon hare al Year End . ... .. . .. .. .. .... . . . HIGHLIGHTS OF 1970 1970* $ 379,040,136 51,082,622 44,439,469 2.1 1 465,210,190 22.00 9,464,532 18.0 43.5 4,682,812 4,506,256,000 204,714,000 2 l, 149,756 1969 $ 467,937,999 82,126,009 5 I ,465,53 1 2.55 426,796,925 20.41 9,117,379 15.2 34.5 7,517,780 6 208,725,000 341 ,584,000 20,914,272 *Operating re ult , in 1970 ajjecte I by a BRA C strike which extended.from July 8 through December 14. 4 44th Annual Report to the Stockholders From the President: Earnings Leadership For the third consecutive year, your Company led all U. S. air carriers in net earnings with an after-tax profit of $44,439,469 in the calendar year 1970. et earnings were down $7,026,062 from the prior year. How- ever, your Management considers that the 1970 performance was effective in view of the five-month strike and the substantial reduction in the profit results of the U. S. airline industry. Strike Cut Earnings The strike fr m July 8 through December 14, 1970 by the Brother- hood of Railway and Airline Clerks union cut into gross revenue receipts and reduced earnings. During the first six months of 1970 the net profit was $24,595,000-an increa e over the same period a year earlier. During the third and fourth quarters profits declined from a year earlier. The impact of the strike was re- duced by the deci ion of your Com- pany to continue flight operations to the extent possible with available employees and supervisors and with the funds derived from the Mutual Aid Agreement. The initial July operation during the trike consisted of 22 daily long- haul flight and operations were expanded each month so that by December 14, i970 the Company had 52 daily flights in operation. The expan ion wa made possible by the decision of a number of em- ployee rep re ented by the B RAC to return to work and by exten ive use of upervi ory and management per onnel. Continuing operations provided several important benefits: 1. We continued service to a num- ber of cities which were most dependent on us for air service - Fargo and Bismarck, orth Dakota; Billings and Great Falls, Montana; and Winnipeg, Canada, as examples. 2. We continued to provide employ- ment for nearly 4,000 of our em- ployees-almost one-third of our total work force. 3. We maintained our identity as an airline in key markets like Chicago, ew York, Seattle, Tokyo, Seoul, Hong Kong, Manila, Okinawa, Tai pei, San Francisco and Honolulu. The Boeing 7 47 Ten Boeing 747's were delivered during 1970 and placed into operation on both the domestic and international routes of the Company. The first of these remarkable new-generation air- planes was introduced into cheduled service on June 22, 1970. orthwest Boeing 747' now fly from ew York Chicago, Minneapolis /St. Paul Miami , Seattle, Los Angele San Franci co, Hawaii, Tokyo, Taipei Manila and Hong Kong. The capital expenditure for these 10 airplanes and spare engines and equipment in 1970 was approximately $245,000 000. During 1971 the Company will take delivery of five Boeing 747B airplanes. The "B Model" will have an increased operating range of approximately 1,000 nautical miles. 1ew Ground Facilities The arrival of the Boeing 747 into the aircraft fleet and the expansion of our freight and passenger busines required the planning and construc- tion of new facilities. In Seattle and in Minneapoli /St. Paul new 747 hangars and mainte- nance shops have been built at a cost of 23,800,000. A new flight services building to handle air freight and pro- vide space for pilot training has also been completed in Minneapolis /St. Paul at a cost of $3,500,000. ew facilities for the comfort and convenience of our passengers were completed in 1970. A sparkling new satellite terminal building constructed for us at the Wash ington ational Airport give orthwest Airline a very real marketing advantage in this important market. ew Routes Boston and Baltimore became citie on our route tructure on August 10, 1970 under authority granted us by the Civil Aeronautics Board in the Twin Cities-Milwaukee Long-Haul- Investigation. Inauguration of service to these cities from Minneapolis /St. Paul and Milwaukee has been delayed because of the BRAC strike and the necessity to first restore service to our existing route structure. Plans now call for introduction of Boston service on June 1, 1971. Increased competition on orth- west's routes was evident in 1970 as two airlines began nonstop opera- tions from Milwaukee to ew York -Western Airlines began Minne- apolis /St. Paul service to Seattle and Portland and United Airlines began nonstop service from Minneapolis / St. Paul to ew York. Merger Abandoned orthwest Airlines announced on March 10, 1971 that the agreement of merger between orthwest and orth- east Airlines, Inc., had been terminated by the WA Board of Directors. The merger agreement filed with the Civil Aeronautics Board in Jan- uary 1970 provided that the merger would not become effective if the CAB imposed conditions that would adversely and materially affect the surviving corporation, orthwest Air- lines, Inc. The CAB on December 31 , 1970 conditioned the approval of the mer- ger by prohibiting the operation of Segment 7 of Route 27 between Miami and Los Angele by orthwest Air- line and, in addition, proposed to initiate a new proceeding to determine whether that roule segment should be tran ferred to some other air carrier. ortheast Airlines and orthwest Airlines filed peLition for recon ider- ation with the CAB on January 15, 1971, seeking a reconsideration by the CAB and the removal of limiting conditions concerning route authori- zations. On March 1, 1971 the Civil Aero- nautics Board rejected the petitions for reconsideration. The Year Ahead With our costs in hand and the prospect of an upward across-the- board adjustment in fares being ap- proved by the Civil Aeronautics Board, we look ahead to recover from the adverse effects of the BRAC strike. The impact of sharply increased labor costs and rising prices for fuel, materials and services will certainly be felt in the year ahead. A resurgence in the U. S. economy could provide the stimulus needed for the regenera- tion of growth in the airline industry. In summary, your Management views 1971 as a year both of challenge -and of opportunity. March 19, 1977 Donald W. yrop President 5 B 1970 ... Highlights of the year in review The delivery of ten Boeing 747 super-jets-a nd their introduction into cheduled ervice-was without question one of the highlights of the year 1970. Arrival of the first of the $22.5 mil- lion aircraft on April 30, 1970, trig- gered th e imple menta ti o n o f th e planning that had gone on for more than a year in advance. 747 Service A fter flight training fo r initial crews wa completed, fi rst scheduled 747 service was introduced on June 22 with a daily round trip between the T win Citie and ew York. On Ju ly 1, 7 4 7 se rvice was ex - panded to provide a daily ew York- Chicago-Seattle-Tokyo round trip, a second Twin Cities- ew York daily round tri p and a once-weekly ew York-Chicago-Honolulu ro und trip. With delivery of additional aircraft, 747 ervice was extended to other sy tern cities including Miam i, H ong K ong, Taipei and Manila. In 1971, 747 service is planned fo r Los Angeles, San Francisco Hono- lulu and A nchorage as well. ew Facilities The heer size of the Boeing 747 re- quired con truction of new facilities for maintenance, overhaul and pas- enger handling. Project now completed, or nearing completion, include the 747 hangar exten ion in Seattle, a new 747 ter- minal addition at Minneapo lis /St. Paul International Airport, a major $1 million expansion of maintenance shop and con truction of two new 74 7 hangars in the Twin Ci tie . Other major project completed in 1970, not directly related to the op- eration of the 747, included a triking new atellite pa enger terminal at Wa hington ational airport, comple- tion of a new dining room, coffee hop and cocktail Joung in Anchorage, la ka, and a nev flight service building in t he T in Cit i e ho u in g pi! t training and air cargo facilitie ew Ideas Th arri al f the 747 m ant new appr a he had to b developed in a numb r of area . Northwest Airlines brought a new concept for cabin service to the 747, called "Zone Group" . This method provides individual service to pas- sengers in each cabin, yet permits overall coordination of passenger service in the airplane. This method is also applied to emergency proce- dures for the 747 and its value was proven when orthwest became the first airline to successfully evacuate passengers for the required Federal Aviation Administration demonstra- tion on the first attempt. To expedite customs clearance of in bound 747 passengers from the Ori- ent through Seattle, orthwest per- suaded th e Customs, Immigration and Public Health Service to convert to a screening /inspection system in late 1970 which materially reduced the time required. New Computer Services The change-over from the U nivac 490 to the U nivac 494 computer sys- tem was completed on Februa ry 1, 1970. In addition, the second phase of the I ST A-RES program was put into operation on October 15, 1970. This computerized reservations sys- tem, the most modern and compre- hensive in use by any airline today, provides reservation, sales a nd air- port agents the a bility to create, re- trieve a nd amend passenger-n a me- record (P R) by use of keyboard act ivated co nsoles which resemble miniature TV sets. This capa bility is added to the earlier a bility to view sched ules, seat inventories, fares and other pertinent information-and to make instant reservatio ns for the cus- tomer and have them confirmed. Other benefits afforded by the new Univac 494 system include enhance- ments to communications message witching weather analysis, data col- lection, payroll processing and jet engine monitoring programs. Environmental Concern Ccntinuing leadership in the field of noi e abatement was demonstrated b the Flight Operation Department of orthwe t Orient and the Com- pany' pilot during 1970. Advanced anti-noise take-off pro- cedure were de eloped and imple- mented which meet the requirement of all airports into which orthwest operates. Evidence of W A's leadership in this field has come in recognition given us by the Federal Aviation Ad- ministration and by the Metropolita n Aircraft Sound Abatement Council in the Twin Cities. The modification program on the JT8D jet engines to incorporate the new anti-pollution smokeless burner cans was also begun in 1970, although delayed by the strike. Orient Region Firsts Growth continued in the Orient R egion during 1970 with a number of 'firsts' being recorded. First service from Tokyo-Honolulu- Los A~geles was begun in January, 1970 with Seoul-Hong Kong service begun in April, 1970. First 747 flights into T aipei a nd M a nila were also reco rd ed by o rthwest within the year. ew facilities completed included ticket offices in T okyo's Imperial H o- tel, K yoto International H otel a nd ew D elhi's Janpath H otel. Addi- tionally, a new 74 7 gate with d ual loadi ng bridges was constructed at Tokyo International Airpo rt a nd a new cargo faci lity co nstructed at Osaka Airport. Affirmative Action Program orthwe t Airline continued it active participation in equal oppor- tunity activities in the citie it erves through it Affirmative Action Pro- gram _and cooperated with minority agenc1e and the 1ational Alliance of Bu ine smen to fulfill it announced objective . 3 5 2 1. A fish e; e 1 iew of one of rw A's three ff igh r simulators al I now housed in the neH flight services fa- cility in Min11eapolis Sr. Paul. A 747 flighr simulator costing S3 mil- lion was recently i11sta/led. 2. U11der co11structio11 and sched- uled for completio11 in rhe last half of 1971, ortlrn est Orie11t's new 747 satellite pier at Twin Cities Internatio11al Airport. 3. The nell' 53 million fli0 ht serv- ices faciliry in rhe Tll'in Cities house W As air freight head- quarter a11d is rhe center of flight training as ll'el/. 4. Two new 747 hangar are nearing complerion a parr of the I mil- lion e.Y.pan ion pro ram of Norrh- ll'e (s maimenance and orerhaul base in rhe T11i11 Citie . 5. Aerial riew of .\"orrhwest Orient Airline headquarter in the Twin Cirie of .Hi11neapoli t. Paul. 4 B Financial review of 1970 Revenues Total operating revenue for 1970 amounted to $379,040 136 compared with 467,937,999 for 1969. Thi re- duction in operating re enue is pri- maril the re ult of the strike by the Brotherhood of Railway and Airline Cl rk (B R C) from Jul 8 1970 through December 14, 1970. Operating re enue included mu- tual aid-net of payment to other - of 46,324 695. The Ci it Aeronau- tic Board on ovem ber 23, 1970 is ued a n Order remanding for review only the amended portion of the Mu- tual Aid Agreement which provided for increa ed le el of supplemental pa ment . The Order tate that con- ideration will be gi en to ma king any modification to thi agreement pro- spective onl . The y tern pa enger-mile yield in- crea ed to 5. 7 ~ or 2.3 percent over the i Id of 5.65 in 1969. Thi yield impro ement ov r the prior ear was the re ult of fare increa e placed into effect b the Ci ii Aeronautic Board in February a nd October of 1969. In I 970 the CAB in tituted a Dome tic Pa enger Fare lnve tigation which ha proceeded on an expedited basi to determine the level and tructure of pa enger fare within the 4 tate . nder thi accelerated chedule, the Board anticipate deci i n in virtual! all area of the inve tigation by April 197 l. In addition, certain court ac- tion ha e cau d the CAB to initiate rat proceeding bearing on the r nab! ne f the genera l I el of tic fa r effecti e between Oc- tober I, 1969 and Oct ber 14, 1970. proc dur ha e b n et in th nev d ck 10 determination an be made at thi - time of the out- om roe eding . T o in tituted an in- e ti air freight d d th rat for addition, the prio d been Ida igati dm -u due strike. Revenue for charter and other transportation declined to $20,800,298 in 1970 compared with $35,089,363 in 1969. This reduction was primarily due to the military's decreased re- quirement of commercial services for charter operations, which amounted to 17,478,295 in 1970, or a decrease of 4 l.9 percent from 30 059,792 in 1969. The Military Airlift Command contract extend to June 30, 1971, and we will seek a renewal contract for the Government's fiscal year 1972. Expenses Operating expen es in 1970 were 327,957 514 compared with $385,- 811 ,990 in 1969. This operating ex- pense reduction from 1969 is a result of the reduced flying operations and the company's efforts to minimize all other operating costs during the lengthy B RAC trike. Productivity a nd efficiency comparison with the full prior year are of limited value due to thi interruption of operations. Depreciation and amortization ex- pen es amounted to $69,173,449 in 1970 compared with $60,833,257 in 1969. This increa ed expense is pri- maril the re ult of the adding of ten Boeing 747 aircraft to our fleet. orthwe t Airlines, as well as the indu try a a whole, ha experienced a spiraling inflationary trend in wages, materials, ervice and fuel and oil co ts, Your Company ha emphasized continual effort in co t control pro- cedures and while unit costs for 1970 including the trike period, were 18.0G: per available ton-mile, normal opera- tion for the fir t ix month preceding the trike had a unit cost of 16.1 ~ per a ai la ble ton-mile compared to 15.2 per a ai lable ton-mile for th year 1969. 1et Earnings et earning for 1970 amounted to 44,439,469, or 2.11 per average hare of common tock o ut randing. Thi compare with $51,465,531, or $2.55 per hare in 1969. Op rating income amounted to 51 ,0 2 62_ in 1970 down from 2,- 126,009 in 1969. Thi reduction in perating incom reflect the effect of th BR C trike the oftening in the .. e on my and re ultant ~fall-off in air tra el and th effect f th co t price queeze. Other income and de- ductions include interest on long-term debt of $6,295,259, up from $2,334,634 in 1969, income of$739,108 on the dis- posal of property and other deduc- tions of $966,302 compared with an income of $429,850 in 1969. This change in other deductions was due primarily to the exchange loss of $1,272,000 on Philippine blocked cur- rency, released early this year at the then current market rate of exchange. Taxes on Earnings Taxes on earnings for 1970 totaled $120,700 compared to $29,507,200 for last year. This substantially reduced income tax amount is made up of a normal tax provision including cur- rent and deferred taxes amounting to $21,574,600 less inve tment tax credit of $21,453,900. The normal tax provision reflected the reduction in tax surcharge from 10 percent in 1969 to an effective rate in 1970 of 2.5 percent. The Company adopted the flow-through method of accounti ng for the investment tax credit effective January 1, 1969, and has used this method for both 1969 and 1970. Investment tax credit flow- through in 1970 amounted to $16,- 969,500. Of this amount $443,300 wa applied agai nst current year taxes and $16,526,200 was carried back to prior years. Continued amortization of the deferred investment tax credit balance as of December 31 1968 amounted 55% 50% 45% 40% 35% BREAK-EVEN AND ACTUAL PAYLOAD FACTOR I 3:: 1963 (STRIKE) 1967 1968 1969 1970 (STRIKE) to $4,484,400 in 1970. At December 31 1970 there remained 15,373 300 to be amortized over future years. All investment ta credit available to orthwest to date, as a re ult of equipment purchases, has been u ed to reduce current income taxes. Cash Flow Fund of 129,014 218 were gen- erated in 1970 from operation which included net earnings, depreciation and amortization, deferred income taxes and inve tment tax credit. Other source of fun ds included net pro- ceed from the ale of common stock through the Employee Stock Pur- cha e Plan of $3,438,328, increa e in long-term debt of $148,914 635 and di po al of operating property amounting to $2,725,579. Application of funds included flight equipment and property addition of $176,256,285, advance depo its for aircraft on order of $38,049,353, de- ferred Boeing 747 training costs of $2,786,927 and in addition ca h divi- den ds of $9,464,532 were paid to stockholders in quarterly payments during 1970 at an annual dividend rate of 45 cent per common hare. Your Company has completed six- teen years of consecutive dividend payments on its common stock. Traffic and Capacity orthwest Airlines' traffic re ults OPERATING REVENUES AND EXPENSES MILLIONS OF DOLLARS 500 REVENUES EXPENSES 400 300 200 100 1966 1967 1968 1969 1970 'STRIKE) lSTRIKE) in 1970 reflected the effects of the BRAC trike. The Company contin- ued partial operations durin g the strike and flew approximately 29 per- cent of the cheduled available seat- mile during that period. The industry in total was affected by the slowing of the U.S. economy and a re ultant de- cline in the u e of air travel. Sy tern re enue plane-mile flown in scheduled operation decrea ed 32.9 percent and available seat-miles operated decreased only 24.2 percent. This reflects uspension of all-cargo operation during the trike and the addition of the Boeing 747 aircraft into revenue ervice with increa ed seating capacity. Scheduled ervice revenue passenger-mile decreased 27.4 percent and the passenger load factor declined to 44.03 percent from 45.98 percent in 1969. Financial Condition The financial condition of orth- west Airlines continues its high rank- ing among the strongest in the airline indu try. Stockholder equity at year end amounted to $465,210,190 up from $426 796,925 at December 31 1969. Book value per common hare increased to S22.00 at the end of 1970 compared to S20.41 last year. Ou tstanding d ebt at year end amounted to $278 914,635 or 60 per- cent of stockholder equity which repre ents a very favorable debt ratio compared to the balance of the air- line indu try. The out tanding debt includes 25 ,000 ,000 from ote Purchase Agreements with twelve insurance companies, $15 ,000,000 from the Fourth Amendatory Credit Agree- ment with fifteen banks and 215,- 000 000 from a Credit Agreement with twenty-four banks which provide for a re olving credit of 250,000 000. As of December 31 , 1970 this agreement make available at any time an addi- tional 35,000,000 for working capital and other purpo es. In addition to the above agree- ments, your Company ha borrowed 23 914 635 in credit agreements with aircraft and aircraft engine manufac- turer providing for financing of pur- cha e from those manufacturers on five-year note . These agreement with manufacturers provide for a maxi- mum of S60 000,000, which makes available at December 31 , 1970 36 - 085,365 for future purchases. The Company has on order from the Boeing Company and the Mc- Donnell Douglas Corporation nine- teen additional aircraft, which with spare engines will require expendi- tures of S408 368 000. Of this amount $63,335,000 has been deposited with the manufacturers at December 31 , 1970. These aircraft are scheduled for delivery in 1971 through 1973. 5.0% U.S. AND SOURCE AND DISTRIBUTION OF REVENUES 5.5% FOREIGN CHARTER MAIL AND OTHER .7% TRANSPORT OTHER PASSENGER AND MUTUAL AID 80.9% SOURCE 11 .7% 7 0 EA:!~GS 0/' o/~1> 11.3% FUEL AND OIL 1a.21, DEPRECIATION AND AMORTIZATION 31.0% MATERIALS AND SERVICES 27.7% EMPLOYEE WAGES AND BENEFITS DISTRIBUTION 8 10 Northwest Orient's current fan-jet fleet 32 BOEING 727-100 FAN-JETS Statistics: length, I 33 fr.; range, 2,380 miles with 93 passengers; cruisina peed, 570 mph; cruising altitude, 42,00() ft . max. ++++++++ ++++++++ ++++++++ ++++++++ 24 BOEING 727-200 FAN-JETS Statistics: length, 153 ft.; range, 1,760 miles with 122 passengers; cruising speed, 570 mph; cruising altitude, 42,000 ft. max. ++++++++ ++++++++ ++++++++ 16 BOEING 720B FAN-JETS Sratisric : length, 137 ft.; range 3,600 mile 1l'ith 109 passengers ; crui ing speed, 565 mph ; cruising altitude 42,000 ft. max. 10 BOEING 747 FAN-JETS Statistics: Length, 231 ft.; range 5,850 miles with 362 passengers; cruising speed, 585 mph; cruising altitude, 45,000 feet max. 36 BOEING 707-320B/C FAN-JETS Statistics: length, J 53 ft.; range, 5,620 miles with 142 passengers; cruising speed, 550 mph; cruising altitude, 42,000 Ji. max. TOTAL 118 AS OF DECEMBER 31, 1970 NORTHWEST AIRLINES, JNC. AND SUBSIDIARlES Operating Revenues Passenger .......................................... . Cargo ............................................. . Mail ............................................... . Charter and other transportation ...................... . Mutual Aid Agreement-Note H ...................... . Nontransport ....................................... . Operating Expenses Flying operations ................................... . Maintenance ....................................... . Passenger service .................................... . Aircraft and traffic servicing ......................... . Reservations, sales and advertising .................... . Administrative and general ........................... . Depreciation and amortization-Note F ............... . Other Income and (Deductions) Interest on long-term debt ............................ . Disposals of property ................................ . Other .............................................. . Earnings Before Taxes .................................. . Taxes on Earnings, including deferred taxes and investment credit-Note D ....................... . Net Earnings for the Year ................................ . Average shares of Common Stock outstanding during the year ........................... . Earnings per share of Common Stock ..................... . *Operating results in J 970 were affected by a BRAC strike which extended from July 8 through December 14, l 970. See Note H. See notes to financial statements. Year Ended December 31 1970* 1969 $260,335,218 $350,504,331 30,052,685 51,006,242 18,958,456 29,386,081 20,800,298 35,089,363 46,324,695 (508,861) 2,568,784 2,460,843 379,040,136 467,937,999 87,899,274 117,876,029 41,240,434 52,362,726 31,383,737 41,074,486 49,183,105 59,009,092 36,706,873 42,735,394 12,370,642 11,921,006 69,173,449 60,833,257 327,957,514 385,811,990 51,082,622 82,126,009 (6,295,259) (2,334,634) 739,108 751,506 (966,302) 429,850 (6,522,453) (1,153,278) 44,560,169 80,972,731 120,700 29,507,200 $ 44,439,469 $ 51,465,531 21,023,949 20,166,280 $2.11 $2.55 NORTHWEST AIRLINES, INC. AND SUBSIDIARIES ASSETS Current Assets Cash ............................................... . Accounts receivable .................................. . Recoverable federal income tax ....................... . Flight equipment spare parts, at average cost, less allowances for depreciation of $5,544,776 (1969-$5,267,576) ... .' ............................ . Maintenance and operating supplies at average cost ...... . Prepaid expenses ..................................... . Total Current Assets Property and Equipment Flight equipment at cost .............................. . Less allowances for depreciation ....................... . Advance payments on new flight equipment-Note C ..... . Other property and equipment at cost .................. . Less allowances for depreciation ....................... . Deferred Charges and Other Assets Training and development costs-Note F ............... . Rentals ............................................. . Other ............................................... . December 31 1970 $ 51,525,395 32,906,579 16,526,200 14,850,678 4,088,318 2,149,483 122,046,653 929,180,892 261,051,456 668,129,436 64,134,857 732,264,293 84,755,904 25,621,826 59,134,078 791,398,371 4,944,297 2,619,231 2,117,304 9,680,832 $923,125,856 1969 $ 26,819,462 44,587,468 10,885,810 3,744,291 1,686,939 87,723,970 697,937,880 205,696,727 492,241,153 120,654,204 612,895,357 56,189,979 22,268,715 33,921,264 646,816,621 3,300,000 2,420,845 2,470,217 8,191,062 $742,731,653 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable ..... . ............................... . Employee compensation .............................. . Air travel card deposits ............................... . Unredeemed ticket liability ............................ . Income taxes ........................................ . Current maturities of long-term debt .................. . Total Current Liabilities Long-Term Debt-Note A ................................ . Deferred Credits-Note D Income taxes-arising principally from accelerated depreciation methods ................ . .. . Investment credit .................................... . Stockholders' Equity-Note B Common Stock $1.25 par value; authorized 40,000,000 shares; issued and outstanding 21,149,756 shares (1969-20,914,272 shares) .......................... . Capital surplus ...................................... . Retained earnings ......................... . .......... . Commitments-Note C See notes to financial statements. December 31 1970 $ 38,376,415 12,345,069 1,104,150 2,133,669 530,328 18,000,000 72,489,631 260,914,635 109,138,100 15,373,300 124,511,400 26,437,195 116,987,969 321,785,026 465,210,190 $923,125,856 1969 s; 48,649,676 13,619,054 1,130,925 5,843,370 7,581,603 18,000,000 94,824,628 112,000,000 89,252,400 19,857,700 109,110,100 26,142,840 113,843,996 286,810,089 426,796,925 $742,731 ,653 NORTHWEST AIRLINES, INC. AND SUBSIDIARIES Common Stock Shares Amount Balance January 1, 1969 ................ ......... 9,149,628 Sale of shares, less expenses......... . . . . . . . . . 1,307,508 Two-for-one stock split ..................... 10,457,136 Net earnings for the year ................... . Cash dividends-$.45 a share .............. . . - - -- Balance December 31, 1969 . ..................... 20,914,272 Shares issued pursuant to Employee Stock Purchase Plan, less expenses. . . . . . . . . . 235,484 Net earnings for the year. .................. . Cash dividends-$.45 a share ............ . .. . - - - - Balance December 31, 1970 . .... . ........... _ .... 21,149,756 See notes to financial statements. $22,874,070 3,268,770 26,142,840 294,355 $26,437,195 Capital Surplus $ 39,381,100 74,462,896 113,843,996 3,143,973 $116,987,969 Retained Earnings $244,461,937 51,465,531 ( 9;117,379) 286,810,089 44,439,469 ( 9,464,532) $321,785,026 Available and Reflected in December 31 Period Utilized* Net Earnings t Aircr~ft Type 1969 1970 On Order 1962-1969 ............. $44,985,500 $25,127,800 JET: 1970 ................. 16,969,500 21,453,900 707-320B & 320C ...... 36 36 Total. ................ $61,955,000 $46,581,700 720B ................. 16 16 To Net Earnings ....... 46,581,700 .. I 727 & 727C-100 ....... 32 32 727-200 .............. 24 24 To Be Amortized ...... $15,373,300 747 .................. 10 5 * All investment credit amounts generated 1962-1970 have been utilized DC-10 ............... 14 to reduce income taxes. - t income benefits of investment credit generated in 1962-1968 are Total Jet ............. 108 118 19 amortized over an eight year period. The flow-through method of PROP-JET: Electra ...... 9 6 accounting was adopted for investment credit generated after 1968 Total Fleet ..... . ..... 117 124 19 and the income benefits have been reflected in the year generated. NORTHWEST AIRLINES, INC. AND SUBSIDIARIES Year Ended December 31 Source of Funds 1970 1969 Net earnings ........................................ . $ 44,439,469 $ 51,465,531 Depreciation and amortization ........................ . 69,173,449 60,833,257 Deferred income taxes ................................ . 19,885,700 16,933,300 Deferred investment credit. ........................... . ( 4,484,400) ( 4,525,700) Total from Operations 129,014,218 124,706,388 Proceeds from sale of Common Stock, less expenses ...... . 3,438,328 77,731,666 Increase in long-term debt ............................ . 148,914,635 Disposals of operating property ....................... . 2,725,579 2,000,971 Total of Sources 284,092,760 204,439,025 Application of Funds Flight equipment and other property additions .......... . 176,256,285 117,340,010 Advance deposits on aircraft .......................... . 38,049,353 56,666,196 Deferred Boeing 747 training costs ..................... . 2,786,927 Decrease in long-term debt ........................... . 48,000,000 Cash dividends ...................................... . 9,464,532 9,117,379 Other .............................................. . 877,983 796,889 Total of Applications 227,435,080 231,920,474 Increase (Decrease) in Working Capital-Note A ............. . 56,657,680 ( 27,481,449) Working capital at beginning of year . ....................... . ( 7,100,658) 20,380,791 Working capital at end of year . ............................ . $ 49,557,022 ($ 7,100,658) See notes of financial statements. NOTICE TO STOCKHOLDERS OF NORTHWEST AIRLINES, INC. A new rule adopted by the Civil Aeronautics Board, effec- tive August 1, 1970, requires that any person who owns, as of December 31 of any year, or acquires ownership either beneficially or as trustee, more than five percent, in the aggregate, of the capital stock or capital of the air carrier, shall file a report with the CAB containing information required by Section 245.13 of the CAB Economic Regula- tions. This report must be filed on or before April 1 of each year as to capital stock or capital owned as of December 31 of the preceding year. The regulation also provides that a report must be filed by any person acquiring more than five percent of the capital stock or capital within ten days of acquisition. Any stockholder who believes he may be required to file such a report may obtain further information by writing to the Director, Bureau of Operating Rights, Civil Aeronau- tics Board, Washington, D. C. 20428. NORTHWEST AIRLINES, INC. AND SUBSIDIARIES (Dollars in thousands except per share figures) Operating Revenues 1970t 1969 1968 1967 1966t 1965 1964 1963 1962 1961t Passenger ......................................... $ 260,335 $ 350,504 $ 301,277 $ 275,873 $ 216,239 $ 198,457 $ 163,807 $ 135,222 $ 121,781 $ 85,971 Cargo ............................................ 30,053 51,006 43,902 38,118 29,515 24,779 18,402 13,745 11,828 8,443 Mail ............................................. 18,958 29,386 28,605 26,898 22,557 17,421 15,313 14,233 14,228 11,701 Charter and Other Transportation ................... 20,800 35,090 41,060 41,799 39,205 21,851 12,965 6,442 2.646 1,482 Mutual Aid Agreement. ............................ 46,325 (509) 2,491 (717) (21) (12) (858) 2,563 Nontransport ..................................... 2,569 2,461 1,446 1,291 1,312 1,207 1,144 (842) 828 893 Total Operating Revenues $ 379,040 $ 467,938 Operating Expenses $ 416,290 $ 383,979 $ 311,319 $ 262,998 $ 211,610 $ 168,788 $ 150,453 $ 111,053 Depreciation and Amortization ...................... $ 69,173 $ 60,833 $ 49,817 $ 41,252 $ 33,195 $ 24,011 $ 22,852 $ 19,159 $ 18,445 $ 17,118 Other ............................................ 258,784 324,979 268,529 229,969 177,469 153,140 135,627 123,713 I 12,802 84,213 Total Operating Expenses $ 327,957 $ 385,812 $ 318,346 $ 271,221 $ 210,664 $ 177,151 $ 158,479 $ 142,872 $ 131,247 $ 101,331 Operating Income .................................... $ 51,083 $ 82,126 $ 97,944 $ 112,758 $ 100,655 $ 85,847 $ 53,131 $ 25,916 $ 19,206 $ 9,722 Other Income and (Deductions)-Net. .................. (6,523) (1,153) (3,220) (2,391) (1,243) 224 (1,125) (4,166) (4,578) (2,828) Earnings Before Taxes ................................ $ 44,560 $ 80,973 $ 94,724 $ 110,367 $ 99,412 $ 86,071 $ 52,006 $ 21,750 $ 14,628 $ 6,894 Income Taxes ........................................ 121 29,507 44,673 51,651 46,276 40,377 25,220 11,297 7,398 3,233 Net Earnings ......................................... $ 44,439 $ 51,466 $ 50,05 l $ 58,716 $ 53,136 $ 45,694 $ 26,786 $ 10,453 $ 7,230 $ 3,661 Earnings per Average Share As Reported Each Year<') ..... $ 2.11 $ 2.55 $ 5.47 $ 6.42 $ 5.81 $ 9.99 $ 5.86 $ 5.73 $ 3.97 $ 2.01 Cash Dividends ...................................... 9,465 9,117 7,320 6,405 5,490 3,657 2,602 1,823 1,702 1,701 Dividends per Share As Paid Each Year ................ .45 .45 .80 .70 .60 .80 .60 1.00 .80 .80 Stockholders' Equity .................................. 465,210 426,797 306,717 263,986 212,727 165,081 122,960 68,436 59,712 54,177 Number of Shares Outstanding at End of Year .......... 21,149,756 20,914,272 9,149,628 9,149,626 9,149,626 4,574,813 4,568,634 1,824,452 1,820,714 1,820,214 Book Value per Share at End of Year(l) ................. $ 22.00 $ 20.41 $ 33.52 $ 28.85 $ 23.25 $ 36.08 $ 26.91 $ 37.51 $ 32.80 $ 29.76 - Recomputed per Share Figures After Stock Splits :<2 ) Earnings per Average Share<2 ) . . 2.11 2.55 2.74 3.21 2.90 2.50 1.47 .72 .50 .25 Dividends per Share<2 ) .... .45 .45 .40 .35 .30 .20 .15 .12 .10 .10 Book Value per Share at End of Year (2) ............. 22.00 20.41 16.76 14.43 11.62 9.02 6.73 4.69 4.10 3.72 Assets and Long-Term Debt Flight Property at Cost. ............................... $ 929,181 $ 697,938 $ 582,646 $ 467,859 $ 401,476 $ 304,072 $ 219,523 $ 176,655 $ 169,413 $ 170,772 Flight Property at Net Book Value ..................... 668,129 492,241 424,522 346,029 311,803 233,858 160,925 127,074 122,980 133,485 Total Assets ......................................... 923,126 742,732 627,538 481,206 422,040 333,311 237,226 196,765 186,887 189,103 Long-Term Debt ..................................... 260,915 i 12,000 160,000 85,000 96,000 72,000 45,000 64,996 74,968 90,286 Unit Expenses Per Available Ton-Mile ............................ 18.0 15.2 14.6 14.5 15.6 16.4 I 8.5 21.7 23.9 27.6 Per Revenue Ton-Mile . . ........................... 43.5 34.5 30.8 30.3 30.1 33.0 , 39.7 46.8 50.2 54.2 Per Cent of Operating Revenues ..................... 86.5% 82.4% 76.5% 70.6% 67.7% 67.4% 74.9% 84.6% 87.2% 91.2% Statistics-Scheduled Services Revenue Plane Miles (000) .......................... 83,177 123,966 107,646 93,395 67,780 61,653 52,157 45,356 41,821 31,143 Available Seat Miles (000) .......................... 10,234,060 13,504,111 10,840,758 9,198,150 6,773,257 6,140,7)7 5,129,944 4,305,147 3,697,796 2,611,840 Revenue Passenger Miles (000) ...................... 4,506,256 6,208,725 5,458,128 4,901,520 3,699,851 3,303,809 2,668,812 2,179,208 1,904,112 1,361,790 Passenger Load Factor ............................. 44.0% 46.0% 50.3% 53.3% 54.6% 53.8% 52.0% 50.6% 51.5% 52.1% Revenue Passengers Carried ........................ 4,682,812 7,517,780 7,173,805 6,489,295 4,963,275 4,593,462 3,663,077 2,911,914 2,437,342 1,723,667 Freight and Express Ton-Miles (000) .. . ... ........... 110,215 198,494 169,416 141,175 108,914 82,715 55,100 39,417 35,179 23,035 Total Revenue Ton-Miles (000) ...................... 655,339 942,050 836,085 709,165 533,556 452,553 351,886 284,732 254,033 182,704 Statistics-Total Operations Revenue Plane Miles (000) .. ........................ 89,938 135,563 121,077 106,197 77,715 67,125 55,477 47,207 42,718 31,658 Available Ton-Miles (000) .......................... 1,819,439 2,535,137 2,186,234 1,864,128 1,348,983 1,079,832 856,612 657,761 548,159 367,301 tAtfected by major strikes in 1961, 1966 and 1970. 1 J J Per share figures reflect the increase in outstanding shares resulting from stock issues in 1964, 1969 and l 970 and from the conversion of preferred stock as applicable in years prior to J 963. (2) The stock v.as split "two-for-one" in 1964. 1966 and 1969. The recomputations in this section are shown to provide comparability on an adjusted basis and follow the form recommended by the Accounting Principles Board. These figures, of course, do not reflect the way the corporation was operated. - - NORTHWEST AIRLINES, INC. AND SUBSIDIARIES Years Ended December 31, 1970 and 1969 December 31 Note A-Long-Term Debt 1970 Note purchase agreements with twelve insurance companies payable $3,000,000 annually and $4,000,000 on October 1, 1978 plus interest at 6% per annum. Certain optional pre- payments at par are permitted. The agreements contain certain other provisions with respect to redemption as a whole, but not from borrowed funds, at premiums ranging from 5% to 1 % -. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,000,000 The Fourth Amendatory Credit Agreement with fifteen banks providing for credit which is payable $5,000,000 quarterly and terminates October 1, 1971. Interest on funds borrowed is at 4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 A credit agreement with twenty-four banks providing for a revolving credit of $250,000,000 reducing to $230,000,000 by October I, 1972, to $210,000,000 by October 1, 1973, to $90,000,000 by October l, 1974 and terminating July 1, 1975. Interest on funds borrowed is at the prime commercial loan rate to December 31 , 1970 and at% above the prime commercial loan rate thereafter. As of December 31 , 1970 the agreement makes available at any time an additional $35,000,000 (1969-$183,000,000) for working capital and other purposes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,000,000 Credit agreements with aircraft and aircraft engine manufacturers providing for financing of purchases from those manufacturers through the issuance of five-year notes to aggre- gate not more than $60,000,000 .. . ... ... ............ . ... . .. . .... . ............. . Less amounts due within one year included in current liabilities .............. . .. . ... . 23,914,635 278,914,635 18,000,000 $260,914,635 The Company had complied with the covenants of the debt agreements at the end of both years. 1969 $ 28,000,000 35,000,000 67,000,000 130,000,000 18,000,000 $112,000,000 The aggregate repayment of the outstanding long-term debt over the years 1972 through 1975 is $3,000,000, $8,000,000, $123,000,000 and $116,914,635, respectively. Note B-Stockholders' Equity Cumulative Preferred StQck, $25 par value: Authorized . . ... .. .. . .. . ...... ...... . .. ..... . . .. ... ... . . ...... . .. . .... . .. . . . . Issued December 31 .. . . ... ... .... . .. . ..... .. . . ..... . . .. . .... . .. . ... ... ... . .. . Common Stock Options for officers and employees at prices ranging from $32.375/36.625 a share which were not less than 100% of market at date of grant: Outstanding .. . .. . .. . . . . . .. ..... ..... .. . .. ..... . . . ..... . . .. .. . .. ... . ...... . Became exercisable during year . .. . .... . ..... . . . . . ..... . ... .. . .... . .. . .. . ... . Exercisable at end of year . ... . ....... .... . ...... . . . .. .. . . . . ..... .. .. ... .... . Common shares reserved for additional stock options and/ or the Employee Stock Purchase Plan at December 31 .. .. .. .. . . . ... . .. .. . . . . .. . . .. ... ... ... . .. ..... . .. ....... . Shares 1970 1,000,000 None 71,768 24,167 43,301 792,748 1969 1,000,000 None 71 ,768 19,866 19,134 1,028,232 The Northwest Airlines 1968 Employee Stock Purchase Plan provides for the sale of Common Stock to eligible employees through payroll deductions of up to 10% of their salary not to exceed $3,000 a year. The sales price is 90% of the highest price of the stock on the New York Stock Exchange on specified annual dates. Note C-Commitments At December 31, 1970, the Company has contracted to purchase jet aircraft for delivery in 1971 through 1973 which, with spare engines, will require expenditures of $408,368,000 ($597,446,000 at December 31, 1969). Of this amount, $63,335,000 has been deposited with manufacturers at December 31, 1970 and approximately $95,135,000, $64,338,000 and $185,560,000 become payable during the next three years, respectively. As of December 31, 1970 annual rental payments of approximately $7,800,000 (1969-$5,500,000) were required under various lease agreements for periods up to forty years covering airport facilities, ticket offices, etc. Note D-Taxes on Earnings Effective January 1, 1969 the Company adopted the flow-through method of accounting for the investment credit and has used that method for both 1969 and _ 1970. No change has been made in accounting for the deferred investment credits arising in prior years which will continue to be amortized over eight years from the dates the credits arose. The provision for taxes on earnings consists of the following: Current .............. ... . ..... ....... . .. ... ....... ....................... . Deferred ........................... . ................... .. . ............... . Investment credit: Amortization over eight years ............................................. . Flow-through ........................................................... . Carryback to prior years . .......... .... .... . ............................. . Total ............................................................ . Note E-Pension Plans Year Ended December 31 1970 1969 $ 1,688,900 $26,139,600 19,885,700 16,933,300 ( 4,484,400) ( 443,300) ( 16,526,200) $ 120,700 ( 4,525,700) ( 9,040,000) $29,507,200 The Company has several pension plans covering substantially all of their employees. The total pension expense was $5,348,098 (1969-$6,360,218) and includes, as to new plans in 1970, amortization of prior service costs over a period of forty years. There were no unfunded prior service costs at December 31, 1969. It is the Company's policy to fund pension costs accrued. As of the latest valuation date, the total amount of fund assets was sufficient to cover vested benefits. Note F-Depreciation and Amortization Policies Provision for depreciation of aircraft and related flight equipment approximated $62,993,000 (1969-$55,473,000) and was computed on the straight line method assuming ten year lives and 15% residual values, except as to 747 aircraft as to which the life is fifteen years and residual value of 10% . Included in deferred charges are SST development costs being amortized over five years and 7 4 7 aircraft training costs being amortized over seven years. Note G-Proposed Merger The proposed Northwest- ortheast merger was terminated on March 10, 1971. Note H-Mutual Aid Agreement The Company was struck by the Brotherhood of Railway and Airline Clerks (BRAC) on July 8, 1970 and the strike con- tinued through December 14, 1970. For this period the Company received payments from other carriers under the Mutual Aid Agreement. The Civil Aeronautics Board on November 23, 1970 issued an Order remanding for review only the amended portion of the Mutual Aid Agreement which provided for increased level of supplemental payments. The Order states that consideration will be given to making any modifications to this agreement prospective only. In the opinion of management of the Company, there is no reason to believe that the modification to the Agreement will not be approved and the total amount received by the Company during the strike period will be retained. ACCOUNTANTS' REPORT To the Stockholders and Board of Directors Northwest Airlines, Inc. Saint Paul, Minnesota We have examined the financial statements of Northwest Airlines, Inc. and subsidiaries for the years ended December 31, i 970 and 1969. Our examinations were 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. ln our opinion, the accompanying statements of financial position, earnings, stockholders' equity and source and appli- cation of funds present fairly the consolidated financial position of Northwest Airlines, Inc. and subsidiaries at December 31, 1970 and 1969 and the consolidated results of their operations, the changes in stockholders' equity. and source and application of funds for years ended those dates, in conformity with generally accepted accounting principles applied on a consistent basis. Saint Paul, Minnesota March I, 1971 except for Notes Band G for which the date is March 10, 1971. Cer1ified Public Acco11ma111s - 20 TAIPEI OSAKA ,,._, OKINAWA NORTHWEST ORIENT SYSTEM MAP HONOLULU . The 53 cities served by Northwest Orient: Anchorage Helena Missoula St. Paul Atlanta Hilo Moorhead St. Petersburg Billings Hollywood New York Seattle Bismarck Hong Kong Newark Seoul Bozeman Honolulu Oakland Spokane Butte Jamestown Okinawa Tacoma Chicago Long Beach Ontario Taipei Clearwater Los Angeles Osaka Tampa Cleveland Madison Philadelphia Tokyo Detroit Mandan Pittsburgh Washington, D.C. Fargo Manila Portland Winnipeg Ft. Lauderdale Miami Rochester Grand Forks Milwaukee San Francisco Great Falls Minneapolis San Jose BOSTON W YORK WARK DELPHIA GH New services and cities in 1970 New Cities in '70 gun between California-Hawaii and Boston was added to Northwest the Far East. In June, nonstop serv- Orient's route system in August of ice between Montana and Chicago 1970. Lnauguration of service has been was increased to two round trips daily. delayed due to the strike and the Route Cases Pending necessity to first restore service to our existing route structure. Pacific Islands Local Service NW A seeks a route from Hawaii to New Service in '70 Okinawa via the Trust Territory and Guam. Briefs have been fi led with the In January, we inaugurated Los Angeles-Hawaii-Tokyo passenger Civil Aeronautics Board (CAB) and service on a daily basis and began the the case is awaiting decision. first direct jet service between Atlanta Cleveland /Detroit /Cincinnati / and Madi on-Rochester. Atlanta In April, all-cargo service was be- We have applied for a direct route linking our existing Detroit, Cleve- la nd and Atlanta stations. The case is now before the CAB awaiting decision. East Coast Points-Europe A route from Boston, Hartford, Philadelphia, Washington and Balti- more on the one hand and Norway, Sweden, Denmark, Finland, Nether- lands, Belgium, Luxembourg, Switzer- land, Austria, Yugoslavia, Greece and Turkey on the other is being sought by NWA. Chicago /Atlanta-Jamaica Northwest has applied for exten- sion of its route through Chicago to Jamaica. Omaha /Des Moines The company is seeking a route from Omaha and Des Moines to New York and Washington /Baltimore in the east and Los Angeles and San Francisco in the west. T his case is awaiting final action by the CAB on petitions for reconsideration. Flying Tiger Additional Points Authority for all-cargo service be- tween the Twin Cities and Boston is being sought by NWA. The case awaits a CAB decision. Ohio /Indiana Points Nonstop NWA has applied for routes be- tween Philadelphia in the east and Los Angeles in the west via Columbus Cincinnati, Dayton and Indianapoli~ and Indianapolis-Cleveland /Pitts- burgh ervice. This case awaits CAB action. Spokane-Los Angeles A nonstop route between Spokane and Los Angeles is involved. Direct exh ibits have been filed but the case has not been set for hearing. 21 22 New Washington National Terminal A gleaming new satellite terminal was opened by Northwest Orient at Washington's ational airport in June, 1970. Built at a cost of $7 million, the facility embraces the latest in functional design and has the capacity to handle eight jet aircraft at one time. The striking architectural features are well illustrated in the photos on this page. DIRECTORS* JAMES H. BI T GER Chairman of the Board, Honeywell Inc. Minneapolis, Minne ota HADLEY CASE President, Case, Pomeroy & Company Inc. ew York, ew York A.E.FLOA Secretary, orthwest Airlines, Inc. St. Paul, Minnesota MORTO H. FRY Senior Partner, Riter, Pyne, Kendall and Hollister MALCOLM S. MACKAY President, Foothills Company Roscoe, Montana DO ALD G. Mc EEL Y President, Space Center, Inc. St. Paul, Minnesota DO ALD W . YROP President, orthwest Airlines Inc. St. Paul innesota C. FRA K REA VIS Partner R eavis and cGrath ew York, ew York ALBERT G. REDP TH Vice President, Thomson and McKinnon, Auchincloss Inc. ew York, ew York L YMA E. K EFIELD JR. Vice Pre ident Piper, Jaffray and Hopwood inneapolis, Minnesota REGI TRAR: The Chase Manhattan Bank, ew York, ew York TR SFER GE T: Banker Tru t Company ew York, ev York STOCK LISTED: Common Stock listed on e York Stock E change Pacific oast Stock Exchange and Midwe t Stock E change * of a rch I , 1971 NORTHWEST , , ORIENT ~-, AIRLINES ~ General Offices Minneapolis-St. Paul International Airport St. Paul , Minnesota 55111 Area Code 612 726-2111 OFFICER * DO ALD President YROP JA ES . ABBOTT Vice President-Legal CLA YTO1 R. BR DT Vice President-Purchasing and Store ROBERT . CA PBELL ice President-Budgets J. ILLIA CA PIO Vice President-Regulatory Proceeding ROL D . CH BER Assistant ice President-Properties ROBERT . EBERT Vice President-Personnel ROY K. ERICKSO Vice President-Public Relations A.E.FLOA Secretary BE T JAMI G. GRIGG JR. ice President-Assistant to the Pre ident DO T ALD H. HARDE TY ice President-Finance and Treasurer KI).TS JR. REGI r LD C. JE1 KI S Vice President Orient Region FRA T K C. J DD and Computer Ser ices ice Pre ident- aintenance and Engineering . JOSEPH L PE KY ice President-Economic Planning RO LD c ICK R ice President BRY G. d ertising ROBERT J. PHILLIP ice President-Comptroller C. L. TE RT ice President-Tran portation Ser ice ROBERT J. \ RIGHT ice Pre ident-Sale 23