Delta Air Lines (DAL) 10-K risk factor changes: FY2018 vs FY2017

Over the last decade, fuel prices have increased substantially at times and have been highly [removed: volatile during the last several years.][added: volatile.]

In 2017, our average fuel price per [removed: gallon, including the impact of fuel hedges,] [added: gallon] was $1.68, a 12.8% increase from our average fuel price in 2016.

Fuel costs represented [removed: 19.2%, 18.3%] [added: 23.0%, 19.2%] and [removed: 23.0%] [added: 18.3%] of our operating expense in [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015,] [added: 2016,] respectively.

[removed: Because] [added: In addition, because] passengers often purchase tickets well in advance of their travel, a significant rapid increase in fuel price may result in the fare charged not covering that increase.

[removed: We] [added: To the extent that we] may [added: reduce the financial impact of changes in the price of jet fuel through a hedging program, we may] utilize different contract and commodity types in [removed: this] [added: the] program and test their economic effectiveness against our financial targets.

We closely monitor [removed: the] [added: any] hedge portfolio and rebalance the portfolio based on market conditions, which may result in locking in gains or losses on hedge contracts prior to their settlement dates.

[removed: Our] [added: Any] hedging program may not be successful in providing price protection due to market conditions and the choice of hedging instruments.

To the extent that the operations of any of these carriers are disrupted over an extended period of time or their actions subject us to the consequences of failure to comply with laws and [removed: regulations,] [added: regulations or adversely affect] our [added: operations, our] results of operations may be adversely affected.

Our information systems [added: and those of our service providers] are subject to an increasing threat of continually evolving cybersecurity risks.

Unauthorized parties may attempt to gain access to our systems or [removed: information,] [added: information or those of our service providers,] including through fraud or other means of deception.

Hardware or software we [removed: develop or] [added: develop,] acquire [added: or use in connection with our systems] may contain defects that could unexpectedly compromise information security.

As a result of these types of risks and regular [removed: attacks,] [added: attacks on our systems,] we regularly review and update procedures and processes to prevent and protect against unauthorized access to our systems and information and inadvertent misuse of data.

While we have in place initiatives to prevent disruptions and disaster recovery plans [added: (including the creation of a back-up data center since 2016)] and continue to invest in improvements to these initiatives and plans, these measures may not be adequate to prevent a business disruption and its adverse financial and reputational consequences to our business.

For example, we have made and continue to make significant investments in customer facing technology such as delta.com, mobile device applications, check-in kiosks, customer service applications, [added: application of biometric technology,] airport information displays and related initiatives, including security for these initiatives.

Our [added: primary] credit [removed: facilities have] [added: facility has] various financial and other covenants that require us to [removed: maintain, depending on the particular agreement,] [added: maintain a] minimum fixed charge coverage [removed: ratios, minimum liquidity and/or] [added: ratios and a] minimum [removed: collateral] [added: asset] coverage [removed: ratios.][added: ratio.]

As of December 31, [removed: 2017,] [added: 2018,] approximately 19% of our workforce, primarily pilots, was unionized.

In addition, demand for air travel is typically higher in the June and September quarters, particularly in [added: our] international markets, because there is more vacation travel during these periods than during the remainder of the year.

We utilize the services of third parties in a number of areas in support of our operations that are integral to our business, including third-party carriers in the Delta Connection [removed: program.][added: program and ground operations at some airports.]

To the extent that a significant disruption in services occurs because third party [removed: providers, including regional carriers,] [added: providers] are unable to perform their obligations over an extended period of time, our revenue may be reduced or our expenses may be [removed: increased] [added: increased,] resulting in a material adverse effect on our results of operations.

Because [removed: the refinery operated by] Monroe [removed: does not blend] [added: blends only a small amount of] renewable fuels, it must purchase [added: the majority of] its RINs requirement in the secondary market or obtain a waiver from the EPA.

Terrorist attacks, geopolitical conflict or security events, or fear of [removed: such] [added: any of these] events, could have a significant adverse effect on our business.

Terrorist attacks, geopolitical conflict or security events, or fear of [removed: such] [added: any of these] events, even if not made directly on or involving the airline industry, could have significant negative impact on us by discouraging passengers from flying, leading to decreased ticket sales and increased refunds.

The airline industry is highly competitive, marked by significant competition with respect to routes, fares, schedules (both timing and frequency), services, products, customer service and [removed: frequent flyer] [added: loyalty] programs.

Consolidation in the airline industry, the rise of [removed: well-funded] [added: subsidized] government sponsored international carriers, changes in international alliances and the creation of immunized joint ventures have altered and will continue to alter the competitive landscape in the industry, resulting in the formation of airlines and alliances with increased financial resources, more extensive global networks and competitive cost structures.

Our domestic operations are subject to competition from traditional network carriers, including American Airlines and United Airlines, national point-to-point carriers, including Alaska Airlines, JetBlue Airways and Southwest Airlines, and [added: other] discount [added: or ultra low-cost] carriers, [added: including Spirit Airlines and Allegiant Air,] some of which may have lower costs than we do and provide service at low fares to destinations served by us.

Point-to-point, discount and ultra low-cost [removed: carriers, including Spirit Airlines and Allegiant Air,] [added: carriers] place significant competitive pressure on network carriers in the domestic market.

[removed: As a result,] [added: In particular,] we face significant competition at our domestic hub and [removed: gateway] [added: key] airports either directly at those airports or at the hubs of other airlines that are located in close proximity to our hubs and [removed: gateways.][added: key airports.]

Competition [removed: is significant] from government-owned and [removed: -funded] [added: subsidized] carriers in the Gulf region, including Emirates, Etihad Airways and Qatar [removed: Airways.][added: Airways, is significant.]

These carriers have large numbers of international widebody aircraft on order and [removed: are increasing] [added: have increased] service to the U.S. [removed: from their hubs] [added: These carriers are government-subsidized, which has allowed them to grow quickly, reinvest] in [added: their product and expand their global presence at] the [removed: Middle East.][added: expense of U.S. airlines.]

An extended interruption or disruption at an airport where we have significant operations could have a material impact on our business, financial condition and results of [removed: operation.][added: operations.]

In addition to the heightened level of concern regarding privacy of passenger data in the U.S., certain European government agencies [removed: are reviewing airline] [added: have recently updated] privacy [removed: practices.][added: regulations applicable to private industry, including airlines.]

[removed: Compliance] [added: Ongoing compliance] with these [added: evolving] regulatory regimes is expected to result in additional operating costs and could impact our operations and any future expansion.

[removed: Prolonged periods] [added: Because] of [removed: stagnant or weak] [added: the global nature of our business, unfavorable global] economic conditions [added: or volatility in currency exchange rates] could have a material adverse effect on our business, financial condition and operating results.

Economic conditions [removed: and regulatory changes leading up to and] following the United Kingdom’s exit from the European Union could [removed: have a material adverse effect on] [added: adversely affect] our [removed: business and results of operations.][added: business.]

Following a referendum in June 2016 in which voters in the U.K. approved an exit from the European Union [removed: ("EU"),] [added: (often referred to as Brexit),] the [added: U.K.’s withdrawal is scheduled to become effective March 29, 2019 but there is substantial uncertainty regarding the terms of the withdrawal.]

In 2018, our average fuel price per gallon, including the impact of fuel hedges, was $2.20, a 31.0% increase from our average fuel price in 2017.

We were notified in 2018 that a third-party vendor of chat services for Delta and other companies determined it had been involved in a cyber incident for a short period in 2017.

We have incurred remedial, legal and other costs in connection with this incident but the costs are not material to our financial position or results of operations.

In addition to continuously risk assessing and reviewing our procedures, processes and technologies, we also continue to monitor, review and update the process and control requirements we expect our third parties and vendors to leverage and implement for the protection of Delta information that is in their care.

The costs to remediate breaches and similar system compromises that do occur could be material.

In addition, as cybercriminals become more sophisticated, the cost of proactive defensive measures may increase.

For example, we experienced a power outage at our data center in 2016 that disrupted our operations even though it was quickly addressed.

We have other smaller facilities, some of which are secured and also contain collateral coverage ratios.

A decline in the value of our assets supporting these facilities from factors that are not under our control could affect one or more of the ratios.

Airport slot access is subject to government regulation and changes in slot regulations or allocations could impose a significant cost on the airlines operating in airports subject to such regulations or allocations.

Regardless of what happens with Brexit, the U.S.-EU Open Skies air services agreement will remain in effect and the recently signed U.S.-U.K. Open Skies agreement will take effect, maintaining the current liberal air services regime in the transatlantic market.

The imposition of restrictions on flying rights between the EU and U.K. in connection with Brexit could negatively impact Virgin Atlantic, our joint venture partner in which we have 49% ownership, and could impact the planned integration of our transatlantic joint ventures.

The exit of the U.K. from the EU without agreement on matters such as trade, customs, financial services and the movement of goods and people between the EU and the U.K. could adversely impact the demand for air travel in the U.K. and increase costs for us and our joint venture partners.

Furthermore, post-Brexit ambiguity or changes in regulations could diminish the value of route authorities, slots or other assets owned by us or our joint venture partners and, therefore, could adversely impact on our business and results of operations.

In 2015, our average fuel price per gallon was $1.90, a 45.2% decrease from our average fuel price in 2014.

We have recently managed our fuel price risk through a hedging program intended to reduce the financial impact from changes in the price of fuel as fuel prices are subject to potential volatility.

The value of the collateral that has been pledged in each facility may change over time due to appraisals of collateral required by our credit agreements and indentures.

These changes could result from factors that are not under our control.

A decline in the value of collateral could result in a situation where it may be difficult to maintain the collateral coverage ratio.

Several of these carriers, along with carriers from China, India and Southeast Asia, are government-subsidized, which has allowed them to grow quickly, reinvest in their product and expand their global presence at the expense of U.S. airlines.

For example, the Aviation and Transportation Security Act mandates the federalization of certain airport security procedures and imposes security requirements on airports and airlines, most of which are funded by a per ticket tax on passengers and a tax on airlines.

Proposals to address congestion issues at certain airports or in certain airspace, particularly in the Northeast U.S., have included concepts such as "congestion-based" landing fees, "slot auctions" or other alternatives that could impose a significant cost on the airlines operating in those airports or airspace and impact the ability of those airlines to respond to competitive actions by other airlines.

U.K. government has initiated a process to leave the EU (often referred to as Brexit) and begun negotiating the terms of the U.K.’s future relationship with the EU.

The airline industry faces substantial uncertainty regarding the impact of the exit of the U.K. from the EU.

Adverse consequences such as deterioration in economic conditions, volatility in currency exchange rates or adverse changes in regulation of the airline industry or bilateral agreements governing air travel could have a negative impact on our operations, financial condition and results of operations.

Our pre-tax income for [removed: 2017] [added: 2018] was [removed: $5.7] [added: $5.2] billion, representing a [removed: $935] [added: $349] million decrease compared to the prior [removed: year] [added: year,] primarily [removed: due to] [added: resulting from] higher fuel [removed: costs,] [added: expense and] salaries and related [removed: costs and depreciation expense, which were partially] [added: costs,] offset by increased operating revenue.

Pre-tax income, adjusted [removed: for special items] (a non-GAAP financial measure) was [removed: $5.5] [added: $5.1] billion, a decrease of [removed: $621 million, or 10.2%.][added: $137 million compared to the prior year.]

[removed: Special items] [added: The adjustments to pre-tax income] were primarily related to [added: $53 million of] fuel hedge [removed: MTM] [added: mark-to-market ("MTM")] adjustments and settlements [removed: of $259 million] in [removed: 2017] [added: the current year] compared to [removed: $450] [added: $259] million in [removed: 2016.][added: the prior year.]

[removed: *Operating Expense.* Total operating expense increased $2.4 billion and our consolidated] [added: Our] operating cost per available seat mile ("CASM") increased [removed: 6.4% compared] [added: 7.5%] to [removed: 2016] [added: 14.87 cents compared] to [removed: 13.81 cents,] [added: 2017,] primarily due to higher fuel [removed: costs,] [added: expense and] salaries and related [removed: costs and depreciation expense.][added: costs.]

[removed: Including our regional carriers, fuel] [added: *Aircraft Fuel and Related Taxes.* Fuel] expense increased $771 million compared to the prior year due to a [removed: 22.3%] [added: 22%] increase in the market price per gallon of fuel, partially offset by reduced fuel hedge losses compared to the prior year and profits generated within our refinery segment.

[removed: Salaries] [added: *Salaries] and [added: Related Costs.* The increase in salaries and] related costs [removed: were higher] [added: is primarily] due to [added: pay rate] increases for eligible [removed: merit, ground and flight attendant] employees implemented [removed: in the June] [added: during] 2017 [removed: quarter.][added: and 2018.]

[added: *Aircraft Rent.*] The increase in [removed: depreciation expense] [added: aircraft rent] primarily results from new [added: leased] aircraft [removed: deliveries,] [added: deliveries since 2016,] including [removed: B-737-900ER, A321-200, A330-300 and A350-900 aircraft, fleet modifications and accelerated depreciation due to the planned retirement of our MD-88 fleet] [added: B-737-900ER] and [removed: two B-767-300ER] [added: A321-200] aircraft.

The non-GAAP financial measures [removed: for] pre-tax income, [removed: adjusted for special items,] [added: adjusted, TRASM, adjusted,] and CASM-Ex, [removed: including profit sharing, both] used above, are defined and reconciled in "Supplemental Information" below.

| (in millions) | [added: 2018 | | |] 2017 | | | 2016 | | | | [added: 2018 vs. 2017] | | | [added: 2017 vs. 2016] | [added: | |]

| Pacific | [removed: 2,366] [added: 2,469] | | | [removed: (9.6] [added: (8.8] | )% | (9.0 | )% | (7.7 | )% | [removed: (0.7] [added: 0.2] | [removed: )%] [added: %] | [removed: (2.0] [added: (1.2] | )% | (1.2 | ) | pts |

Passenger revenue increased [removed: $1.0] [added: $1.1] billion over the prior year.

PRASM increased [removed: 2.1%] [added: 2.2%] and passenger mile yield increased [removed: 0.9%] [added: 1.0%] on 1.0% higher capacity.

Load factor was [removed: 1.0] [added: 1] point higher than the prior year at 85.6%.

Unit revenues of the domestic region increased [removed: 1.7%,] [added: 1.6%,] resulting from our commercial initiatives, including [removed: differentiated products for our customers, known as Branded Fares,] [added: branded fares,] and an improving revenue environment.

We [removed: continue] [added: continued] to differentiate our product offerings and enable customer choice through segmentation, including offering Basic Economy throughout our domestic network.

We [removed: continue to see] [added: saw] improvements in business markets with 81 of the top 100 business markets producing positive yields during the December 2017 quarter, up from 50% [removed: from] earlier in the year.

During 2017, we continued to [removed: roll out the expansion of] [added: expand] our [removed: Branded Fares product] [added: branded fare products offered] throughout the international regions.

We [removed: continue] [added: continued] to leverage our alliance partners' hub positions in Europe's leading business markets of [removed: London, Amsterdam] [added: Amsterdam, London] and Paris to increase the volume of U.S. point-of-sale traffic.

During 2017, we reached an agreement to create a [removed: trans-Pacific] [added: transpacific] joint venture with Korean Air, offering an enhanced and expanded network, industry-leading products and service, and a seamless customer experience between the U.S. and Asia.

We also retired our last B-747-400 and introduced our new A350-900 with Delta One suites and the Delta Premium Select cabin on routes from Detroit to Tokyo-Narita and Seoul-Incheon, [removed: which are driving] [added: resulting in] improvements in both profitability and customer feedback.

These efforts [removed: are beginning] [added: began] to show results as the Pacific returned to positive PRASM growth during the December 2017 quarter for the first time in more than four years.

| | [removed: Year] [added: | | | Increase (Decrease) vs. Year] Ended December [removed: 31,] [added: 31, 2017] | | | | | | [removed: Increase (Decrease)] | | | [removed: % Increase (Decrease)] | | [added: | |]

| Ancillary businesses and refinery | [removed: 1,412 | | | 1,129 | |] [added: (0.64] | [removed: 283] | [added: )] | [added: (0.58] | [removed: 25.1] | [removed: %] [added: )] |

[removed: *Loyalty programs.* We sell] [added: *Sale of Mileage Credits.* Customers may earn] mileage credits [removed: to] [added: based on their spending with participating companies such as] credit card companies, hotels and car rental agencies [removed: under] [added: with which we have] marketing [removed: agreements.][added: agreements to sell mileage credits.]

We defer the [added: amount for award] travel [removed: component] [added: obligation] as part of [removed: frequent flyer] [added: loyalty program] deferred revenue and recognize [added: loyalty travel awards in] passenger revenue as the mileage credits are [removed: redeemed] [added: used] for travel.

Loyalty program [removed: revenue] [added: revenues] increased compared to 2016 related to growth in our co-brand credit card [removed: partnership] [added: relationship] with American Express.

[removed: Additional information about our frequent flyer program accounting policies can be found in] [added: For additional information, see] Note [removed: 1] [added: 10] of the Notes to the Consolidated Financial Statements.

*Ancillary [removed: businesses] [added: Businesses] and [removed: refinery.*] [added: Refinery.*] Ancillary businesses and refinery includes aircraft maintenance and staffing services [removed: we provide] [added: provided] to third parties, our vacation wholesale [added: operations, our private jet] operations and refinery sales to third parties.

| Aircraft fuel and related taxes | [removed: 5,733 | | | 5,133 | |] [added: (3.43] | [removed: 600] | [added: )] | [added: (2.66] | [removed: 11.7] | [removed: %] [added: )] |

| Aircraft maintenance materials and outside repairs | [removed: 1,992] [added: 1,575] | | | [removed: 1,823] [added: 1,591] | | | [removed: 169] [added: (16] | | [added: )] | [removed: 9.3] [added: (1.0] | [removed: %] [added: )%] |

| Passenger commissions and other selling expenses | [removed: 1,787] [added: 1,827] | | | [removed: 1,710] [added: 1,751] | | | [removed: 77] [added: 76] | | | [removed: 4.5] [added: 4.3] | % |

| Landing fees and other rents | [removed: 1,528] [added: 1,501] | | | [removed: 1,490] [added: 1,472] | | | [removed: 38] [added: 29] | | | [removed: 2.6] [added: 2.0] | % |

*Salaries and Related Costs.* The increase in salaries and related costs is primarily due to [added: pay rate] increases for eligible [removed: merit, ground and flight attendant employees implemented in the June 2017 quarter.][added: employees.]

*Aircraft Fuel and Related Taxes.* [removed: Including our regional carriers, fuel] [added: Fuel] expense increased [removed: $771 million] [added: $2.3 billion] compared to the prior year due to a [removed: 22.3%] [added: 31%] increase in the market price per gallon of [removed: fuel,] [added: fuel and a 3.6% capacity growth, which was] partially offset by [removed: reduced] [added: improved] fuel [removed: hedge losses compared to the prior year and profits generated within] [added: efficiency driven by] our [removed: refinery segment.][added: investment in new aircraft.]

| Aircraft fuel and related [removed: taxes(1)] [added: taxes] | [removed: $] [added: 9,020] | [removed: 5,733] | | [removed: $] [added: 6,756] | [removed: 5,133] | | [removed: $] [added: 2,264] | [removed: 600] | | [added: 33.5] | [added: %] |

| [removed: Total] [added: Aircraft] fuel [removed: expense | $] [added: and related taxes] | 6,756 | | [removed: $] | 5,985 | | [removed: $] | 771 | | [added: |] 12.9 | % |

| [removed: Airline segment fuel] [added: Fuel] hedge [removed: losses(2)] [added: impact(2)] | 33 | | | 281 | | | (248 | | ) | | 0.01 | | | 0.07 | | | (0.06 | | ) |

| (2) | Includes the impact of pricing arrangements between the airline and refinery segments with respect to the refinery's inventory price risk. For additional information regarding the refinery [removed: segment impact,] [added: segment,] see "Refinery Segment" below. |

| (3) | MTM adjustments and settlements include the effects of the derivative transactions discussed in Note [removed: 4] [added: 5] of the Notes to the Consolidated Financial Statements. For additional information and the reason for adjusting fuel expense, see "Supplemental Information" below. |

*Aircraft Maintenance Materials and Outside Repairs.* Aircraft maintenance materials and outside repairs consist of costs associated with the maintenance of aircraft used in our [removed: operations and costs associated with maintenance sales to third parties by our MRO business.][added: operations.]

Year in Review

Delta had a solid year in 2018 as the company maintained focus on its long-term strategy while also addressing the short-term challenges from higher fuel prices.

Our culture and solid foundation enabled the company to successfully offset the majority of the $2.3 billion increase in fuel during 2018.

Our strategic priorities for the year were (1) leveraging our strong brand to drive revenue growth, (2) improving our cost performance, (3) continuing to build our global franchise and (4) investing for the future.

Strong Brand Drives Revenue Growth

Compared to 2017, our operating revenue increased $3.3 billion, or 8.0%, with strong demand for our premium products and growth in revenues from non-ticket sources.

Total revenue per available seat mile ("TRASM") and TRASM, adjusted (a non-GAAP financial measure) increased 4.3% compared to the prior year, led by (1) unit revenue growth in each of our four geographic regions, (2) broad-based strength in both leisure and corporate demand and (3) double-digit growth in premium products and non-ticket revenues.

Improving Our Cost Performance

*Operating Expense.* Operating expense increased $4.0 billion, or 11.4%, primarily due to $2.3 billion higher fuel expense and higher wages and profit sharing for employees.

The increase in fuel expense primarily resulted from a 31% increase in the market price per gallon of fuel and our 3.6% capacity growth compared to 2017, which was partially offset by improved fuel efficiency driven by our investment in new aircraft.

Salaries and profit sharing were higher due to pay rate increases for eligible employees implemented during 2017 and 2018, along with an adjustment to our profit sharing plan in 2018.

Non-fuel unit costs ("CASM-Ex, a non-GAAP financial measure) increased 1.4% to 10.31 cents due to the pay rate increases discussed above.

*Non-Operating Expense.* Total non-operating expense was $113 million during 2018 compared to $466 million in 2017, primarily due to an increase in the pension benefit compared to the prior year, gains from investment-related transactions and lower interest expense.

Expanding Our Global Network

In 2018, international revenues grew 6.7% on a 0.9% increase in capacity.

We made significant progress in expanding our global reach, implementing a transpacific joint venture with Korean Air Lines, entering into a joint venture agreement with WestJet with respect to trans-border routes between the U.S. and Canada and reaching an agreement with Air France-KLM and Virgin Atlantic to combine our separate transatlantic joint ventures into a single three-party transatlantic joint venture.

The WestJet and three-party transatlantic joint venture agreements remain subject to receipt of required regulatory approvals.

Investing for the Future

Our $7.0 billion cash flows from operations funded $5.2 billion in capital expenditures for the business.

As part of our multi-year refleeting initiative, we took delivery of 68 new aircraft, including A321-200s, B-737-900ERs, A350-900s, A220-100s and CRJ-900s.

These deliveries allowed for the retirement of older, less efficient aircraft.

| Ticket - Main cabin | $ | 21,196 | | $ | 20,380 | | $ | 816 | | 4.0 | % |

| Ticket - Business cabin and premium products | 13,754 | | | 12,087 | | | 1,667 | | | 13.8 | % |

| Loyalty travel awards | 2,651 | | | 2,403 | | | 248 | | | 10.3 | % |

| Travel-related services | 2,154 | | | 2,077 | | | 77 | | | 3.7 | % |

| Total passenger revenue | $ | 39,755 | | $ | 36,947 | | $ | 2,808 | | 7.6 | % |

| Cargo | 865 | | | 744 | | | 121 | | | 16.3 | % |

| Other | 3,818 | | | 3,447 | | | 371 | | | 10.8 | % |

| Total operating revenue | $ | 44,438 | | $ | 41,138 | | $ | 3,300 | | 8.0 | % |

| TRASM (cents) | | 16.87 | ¢ | | 16.18 | ¢ | | 0.69 | ¢ | 4.3 | % |

| Third-party refinery sales(1) | (0.21 | | ) | (0.20 | | ) | (0.01 | | ) | NM | |

| TRASM, adjusted (cents) | | 16.66 | ¢ | | 15.98 | ¢ | | 0.68 | ¢ | 4.3 | % |

| (1) | For additional information on adjusting for third-party refinery sales, see "Supplemental Information" below. |

*Ticket and Loyalty Travel Awards Revenue*

Ticket, including both main cabin and business cabin and premium products, and loyalty travel awards revenue increased $2.5 billion and $248 million, respectively, compared to the year ended December 31, 2017, consistent with the discussion of passenger revenue by geographic region, below.

Business cabin and premium products ticket revenue includes revenues from fare products other than main cabin, including Delta One, Delta Premium Select, First Class and Comfort+.

The growth in this ticket revenue primarily results from an increased number of premium seats driven by new aircraft deliveries, the continued expansion of our branded fare products and strength in business demand.

*Passenger Revenue by Geographic Region*

| Domestic | $ | 28,159 | | 8.0 | % | 4.9 | % | 5.2 | % | 2.9 | % | 2.6 | % | (0.2 | ) | pts |

| Atlantic | 6,165 | | | 11.4 | % | 3.9 | % | 2.7 | % | 7.2 | % | 8.4 | % | 1.0 | | pt |

Financial Highlights - 2017 Compared to 2016

*Revenue.* Compared to 2016, our operating revenue increased $1.6 billion, or 4.0%, on 1.0% higher capacity combined with robust demand and strong revenue momentum, closing 2017 with three consecutive quarters of year-over-year passenger unit revenue growth.

Passenger revenue per available seat mile ("PRASM") increased 2.1% led by (1) strong domestic leisure yields, (2) expanded distribution of Branded Fares, (3) an improving business fare environment, (4) strength in the Atlantic region leveraged through U.S. point-of-sale traffic gains, along with business cabin traffic and yield growth, and (5) strong performance in the Caribbean, Central America, Brazil and Mexico leisure markets.

Other revenue increased 9.7% partially resulting from growth in our co-brand credit card partnership with American Express.

Non-fuel unit costs ("CASM-Ex, including profit sharing" a non-GAAP financial measure) increased 4.3% to 10.57 cents due to the pay rate increases and depreciation expense discussed above, which were partially offset by productivity gains from our fleet, technology and supply chain initiatives.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Passenger | $ | 34,819 | | $ | 33,777 | | 1,042 | | | 3.1 | % |

| Cargo | 729 | | | 668 | | | 61 | | | 9.1 | % |

| Other | 5,696 | | | 5,194 | | | 502 | | | 9.7 | % |

| Total | $ | 41,244 | | $ | 39,639 | | $ | 1,605 | | 4.0 | % |

| Mainline | $ | 18,878 | | 5.3 | % | 4.1 | % | 3.6 | % | 1.1 | % | 1.7 | % | 0.4 | | pts |

| Regional carriers | 5,714 | | | 0.8 | % | (2.5 | )% | (2.6 | )% | 3.4 | % | 3.4 | % | — | | pts |

| Domestic | 24,592 | | | 4.2 | % | 3.0 | % | 2.5 | % | 1.1 | % | 1.7 | % | 0.4 | | pts |

| Atlantic | 5,292 | | | 2.1 | % | 4.8 | % | 0.3 | % | (2.6 | )% | 1.7 | % | 3.6 | | pts |

| Latin America | 2,569 | | | 8.3 | % | 4.2 | % | 2.0 | % | 4.0 | % | 6.2 | % | 1.8 | | pts |

| Total | $ | 34,819 | | 3.1 | % | 2.2 | % | 1.0 | % | 0.9 | % | 2.1 | % | 1.0 | | pt |

| Loyalty programs | $ | 1,952 | | $ | 1,782 | | $ | 170 | | 9.5 | % |

| Administrative fees, club and on-board sales | 1,252 | | | 1,205 | | | 47 | | | 3.9 | % |

| Baggage fees | 908 | | | 881 | | | 27 | | | 3.1 | % |

| Other | 172 | | | 197 | | | (25 | | ) | (12.7 | )% |

| Total | $ | 5,696 | | $ | 5,194 | | $ | 502 | | 9.7 | % |

We allocate the consideration received from mileage credit sales to the individual products and services bundled with the sale based on their relative selling prices.

The revenue allocated to the remaining deliverables (such as lounge access, baggage fee waivers and brand usage) is recorded in other revenue.

We recognize the revenue for these services as they are performed.

The amount of loyalty program revenue changes based on the price paid for mileage credits, the volume of credits sold and our allocation of selling price to the individual products and services.

With the adoption of the new revenue recognition standard in 2018, we will increase the value we use to account for the travel component within mileage credit sales.

This new value for the travel component will cause a re-allocation of the consideration received from mileage credit sales.

The re-allocation will result in less revenue recognized for loyalty programs in other revenue and more revenue in passenger revenue as the frequent flyer awards are redeemed.

*Administrative fees, club and on-board sales.* These revenues primarily relate to travel-related services such as ticket changes and unaccompanied minors and also include amounts collected for on-board sales and Sky Club lounge memberships.

We recognize revenue as these services are performed.

A significant portion of these fees are travel-related and performed in conjunction with the passenger’s flight.

Therefore, the majority of these fees will be reclassified to passenger revenue with our adoption of the new revenue recognition standard in 2018.

Ancillary businesses and refinery revenues are not related to the generation of a seat mile.

Ancillary businesses and refinery sales primarily increased due to sales of non-jet fuel products to third parties by our oil refinery, consistent with stronger pricing of refined products throughout the oil industry.

*Baggage fees.* The revenue amount shown above represents baggage fees that were sold as a separate component of the passenger’s ticket.

Similar to administrative fees described above, baggage services are performed and earned in conjunction with the passenger’s flight, and these fees will be reclassified to passenger revenue with our adoption of the new revenue recognition standard in 2018.

| Salaries and related costs | $ | 10,436 | | $ | 10,034 | | $ | 402 | | 4.0 | % |

| Regional carriers expense | 4,503 | | | 4,311 | | | 192 | | | 4.5 | % |

| Depreciation and amortization | 2,235 | | | 1,902 | | | 333 | | | 17.5 | % |

In an effort to manage our exposure to these risks, we [added: may] enter into derivative contracts and may adjust our derivative portfolio as market conditions change.

At December 31, [removed: 2017,] [added: 2018,] we had [removed: $5.3] [added: $5.7] billion of fixed-rate long-term debt and [removed: $3.2] [added: $3.7] billion of variable-rate long-term debt.

An increase of 100 basis points in average annual interest rates would have decreased the estimated fair value of our fixed-rate long-term debt by [removed: $160] [added: $240] million at December 31, [removed: 2017] [added: 2018] and would have increased the annual interest expense on our variable-rate long-term debt by [removed: $32] [added: $37] million.

We are subject to foreign currency exchange rate risk because we have revenue and expense denominated in foreign [removed: currencies with our primary exposures being the Japanese yen and Canadian dollar.][added: currencies.]

At December 31, [removed: 2017,] [added: 2018,] we had open foreign currency forward contracts totaling a [removed: $17] [added: $1] million [removed: liability] [added: asset] position.

We estimate that a 10% depreciation or appreciation in the price of the Japanese yen [removed: and Canadian dollar] in relation to the U.S. dollar would change the projected cash settlement value of our open hedge contracts by a [removed: $34] [added: $6] million gain or [removed: $42] [added: $7] million loss, respectively, for the year ending December 31, [removed: 2018.][added: 2019.]

Our derivative contracts to hedge the financial risk from changing fuel prices are primarily related to Monroe’s refining margins.

We have recently managed our fuel price risk through a hedging program intended to reduce the financial impact from changes in the price of fuel as fuel prices are subject to potential volatility.

We [removed: provide] [added: are a major passenger airline, providing] scheduled air transportation for passengers and cargo throughout the United States ("U.S.") and around the world.

Our route network is centered around a system of [removed: hub, international gateway] [added: significant hubs] and key [added: markets at] airports [removed: that we operate] in Amsterdam, Atlanta, Boston, Detroit, London-Heathrow, Los Angeles, [added: Mexico City,] Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City, [removed: Seattle] [added: São Paulo, Seattle, Seoul-Incheon] and Tokyo-Narita.

Each of these operations includes flights that gather and distribute traffic from markets in the geographic region surrounding the hub or [removed: gateway] [added: key market] to domestic and international cities and to other hubs or [removed: gateways.][added: key markets.]

[removed: Other important characteristics of our route network include] [added: Through] our international joint ventures, our alliances with other foreign airlines, our membership in SkyTeam and agreements with multiple domestic regional carriers that operate as Delta [removed: Connection®.][added: Connection,® we are able to bring choice to customers worldwide.]

Our international alliance relationships [removed: with foreign carriers] are an important part of our business as they improve our access to international markets and enable us to market globally integrated air transportation services.

Our alliance arrangements also include reciprocal codesharing and reciprocal [removed: frequent flyer] [added: loyalty] program participation and airport lounge access arrangements.

[removed: These arrangements, for which we have received antitrust immunity from the U.S. Department] [added: Each] of [removed: Transportation ("DOT"), provide] [added: our joint venture arrangements provides] for joint commercial cooperation with [removed: our partners] [added: the relevant partner] within the geographic scope of [removed: those arrangements,] [added: the arrangement,] including the sharing of revenues and/or profits and losses generated by the parties on the joint venture routes, as well as joint marketing and sales, coordinated pricing and revenue management, network [removed: planning] and [removed: scheduling] [added: schedule planning] and other coordinated activities with respect to the parties' operations on joint venture routes.

Our [added: implemented] commercial joint ventures [removed: are:][added: consist of the following:]

| • | A transatlantic joint venture with Air France and KLM, both of which are subsidiaries of the same holding company, and Alitalia. [added: In addition to the joint venture, we own a non-controlling 9% ownership stake in the parent company of Air France and KLM.] |

| • | A joint venture with Virgin Atlantic [removed: Airways] with respect to operations on non-stop routes between the United Kingdom and North America. In addition to the joint venture, we own a non-controlling 49% equity stake in Virgin Atlantic Limited, the parent company of Virgin Atlantic Airways. |

| • | A joint venture with Aeroméxico with respect to trans-border operations on flights between the U.S. and Mexico. In addition to the joint venture, we [removed: acquired] [added: own] a non-controlling [removed: 49%] [added: 51%] equity stake in Grupo Aeroméxico, S.A.B. de C.V., the parent company of Aeroméxico. In addition, we and Aeroméxico have established a joint venture relating to an airframe maintenance, repair and overhaul operation located in Queretaro, Mexico. |

| • | A joint venture with Virgin Australia [removed: Airlines] and its affiliated carriers with respect to operations on transpacific routes between North America and Australia/New Zealand. |

| • | In [removed: 2017,] [added: 2018,] we [removed: entered into] [added: launched] a joint venture with Korean Air Lines with respect to operations on transpacific routes between the United States and certain countries in Asia. [removed: We have not yet implemented this joint venture as it remains subject to receipt of required regulatory approvals in Korea.] |

*Enhanced Commercial Agreements with Foreign Carriers.* We have a [removed: strategic equity investment] [added: 9% non-controlling ownership stake] in GOL Linhas Aéreas Inteligentes, S.A., the parent company of Gol Linhas Aéreas (a Brazilian air carrier), [added: with whom we have a strategic joint marketing] and [removed: an exclusive] commercial cooperation [removed: relationship with GOL,] [added: arrangement,] which includes reciprocal [removed: codesharing and frequent flyer] [added: codesharing, loyalty] program participation, airport lounge access [removed: arrangements] and joint sales cooperation.

Through alliance arrangements with other SkyTeam carriers, Delta is able to link its network with the route networks of the other member airlines, providing opportunities [removed: for increased] [added: to increase] connecting traffic while offering enhanced customer service through reciprocal codesharing and [removed: frequent flyer arrangements,] [added: loyalty program participation,] airport lounge access [removed: programs] and [removed: coordinated] cargo operations.

Approximately [removed: 16%] [added: 15%] of our passenger revenue in [removed: 2017] [added: 2018] was related to flying by these regional air carriers.

| • | Republic Airline, Inc. ("Republic"), a subsidiary of Republic Airways Holdings, Inc.; [added: and] |

| • | Compass Airlines, LLC ("Compass") and GoJet Airlines, LLC, both subsidiaries of Trans States Holdings, Inc. ("Trans States"); [removed: and] |

| • | Endeavor Air, Inc., [removed: which is] a wholly owned subsidiary of [removed: ours.] [added: ours;] |

Our SkyMiles® [removed: frequent flyer] [added: loyalty] program [removed: ("SkyMiles program")] is designed to retain and increase traveler loyalty by offering incentives to customers to increase travel on Delta.

The [removed: SkyMiles] [added: loyalty] program allows program members to earn mileage credit for travel awards by flying on Delta, its regional carriers and other participating airlines.

[removed: SkyMiles] [added: Loyalty] program mileage credits can be redeemed for air travel [added: (including upgrades)] on Delta and participating airlines, for membership in our Delta Sky Clubs® and for other [removed: program participant] awards.

In addition to jet fuel, the refinery's production consists of gasoline, diesel and other refined [added: petroleum] products ("non-jet fuel products").

In [removed: 2017,] [added: 2018,] the total revenue from these businesses was approximately $1 billion.

| • | In addition to providing maintenance and engineering support for our fleet of over [removed: 900] [added: 1,000] aircraft, our [removed: MRO] [added: aircraft maintenance, repair and overhaul ("MRO")] operation, known as Delta TechOps, serves aviation and airline customers from around the world. |

[removed: Distribution and Expanded] [added: Expanded] Product Offerings

An increasing number of our tickets are sold through Delta digital [removed: direct] channels, driving more direct, personalized interactions with our customers and reducing distribution costs.

We have [removed: transformed distribution to] a [removed: more] retail oriented, merchandised approach [removed: by introducing] [added: to distribution with] well-defined and differentiated products for our customers.

Delta OneTM, Delta Premium Select, First Class and Delta Comfort+TM include varying premium amenities and services while Main Cabin and Basic Economy allow varying levels of pre-travel flexibility as well as exceptional service [removed: once] onboard the aircraft.

We expect that these merchandising initiatives as implemented across [removed: all of Delta's] [added: our] distribution channels will allow customers to better understand our product offerings, make it easier to buy the products they desire and increase customer satisfaction.

The airline industry is highly competitive, marked by significant competition with respect to routes, fares, schedules (both timing and frequency), services, products, customer service and [removed: frequent flyer] [added: loyalty] programs.

Consolidation in the airline industry, the rise of [removed: well-funded] [added: subsidized] government sponsored international carriers, changes in international alliances and the creation of immunized joint ventures have altered, and will continue to alter, the competitive landscape in the industry, resulting in the formation of airlines and alliances with [removed: increased] [added: significant] financial resources, more extensive global networks and more competitive cost structures.

Our domestic operations are subject to competition from traditional network carriers, including American Airlines and United Airlines, national point-to-point carriers, including Alaska Airlines, JetBlue Airways and Southwest Airlines, and [added: other] discount [added: or ultra low-cost] carriers, [added: including Spirit Airlines and Allegiant Air,] some of which may have lower costs than we do and provide service at low fares to destinations served by us.

Point-to-point, discount and ultra low-cost [removed: carriers, including Spirit Airlines and Allegiant Air,] [added: carriers] place significant competitive pressure on network carriers in the domestic market.

In particular, we face significant competition at our domestic hub and [removed: gateway] [added: key] airports either directly at those airports or at the hubs of other airlines that are located in close proximity to our hubs and [removed: gateways.][added: key airports.]

Competition [removed: is increasing] from government-owned and [removed: -funded] [added: subsidized] carriers in the Gulf region, including Emirates, Etihad Airways and Qatar [removed: Airways.][added: Airways, is significant.]

These carriers have large numbers of international widebody aircraft on order and [removed: are increasing] [added: have increased] service to the U.S. These [removed: carriers are government-subsidized, which has] [added: carriers' government subsidies have] allowed them to grow quickly, reinvest in their product and expand their global presence at the expense of U.S. airlines.

The DOT also has authority to review certain joint venture agreements between domestic and international carriers and engages in regulation of economic matters such as [removed: slot transactions.][added: transactions involving allocation of "slots" or similar regulatory mechanisms which limit the rights of carriers to conduct operations at those airports.]

Labor relations in the airline industry, as discussed below, are generally governed by the Railway Labor [removed: Act.][added: Act with oversight by the National Mediation Board.]

Operations at three major domestic airports and certain foreign airports served by us are regulated by governmental entities through allocations of "slots" or similar regulatory [removed: mechanisms which limit the rights of carriers to conduct operations at those airports.][added: mechanisms.]

Through the dedication of our employees, we are committed to providing exceptional customer service through our global route network.

We are investing in our fleet, acquiring new, more efficient aircraft with increased premium seating to replace older aircraft.

Leveraging Technology to Improve Service and Efficiency

We continue to make technological improvements that personalize the travel experience for our customers and empower our employees.

We made significant progress in 2018 on the digital transformation to create a single view of the customer.

We delivered several capabilities that enable our front-line employees to personalize their interactions with our customers.

We also added self-service features on both the mobile app and delta.com and launched the first facial recognition biometric terminal for international travelers at the Atlanta airport.

Global Network

*Joint Venture Agreements.* We have implemented five separate joint venture arrangements with foreign carriers, each of which has been granted antitrust immunity from the U.S. Department of Transportation ("DOT").

In 2018, we entered into a joint venture agreement with WestJet with respect to trans-border routes between the U.S. and Canada, as well as an agreement with Air France-KLM and Virgin Atlantic to combine our separate existing transatlantic joint ventures into a single three-party transatlantic joint venture.

Both of these agreements remain subject to required regulatory approvals.

We also own a 3% equity interest in China Eastern, with whom we have a strategic joint marketing and commercial cooperation arrangement, which also includes reciprocal codesharing, loyalty program participation, airport lounge access and joint sales cooperation.

| • | SkyWest Airlines, Inc., a subsidiary of SkyWest, Inc. |

Loyalty Program

In 2018, 8.2% of revenue miles flown on Delta were from award travel, as program members redeemed miles in the loyalty program for 17.2 million award redemptions.

| 2018 | 4,113 | | $ | 9,020 | | $ | 2.20 | | 23.0 | % |

Our derivative contracts to hedge the financial risk from changing fuel prices are primarily related to Monroe’s refining margins.

We have several other businesses arising from our airline operations.

In December 2018, we sold DAL Global Services, LLC (“DGS”), which provides aviation-related, ground support equipment maintenance and professional security services, to a new subsidiary of Argenbright Holdings, LLC.

We received a non-controlling 49% equity stake in the new company and $40 million cash.

The new company will continue to service our customers and third parties, and is expected to continue operating at the same airport locations it currently serves.

We plan to submit our CORSIA Emissions Monitoring Plan to the FAA in 2019 and begin emissions monitoring for the 2019 baseline year.

However, exemption from the certification requirement could affect how these aircraft are treated under other programs governing CO2 emissions.

Market prices for RINs have been volatile, marked by periods of sharp increases and decreases.

| (1) | We are in discussions with representatives of these employee groups regarding terms of amendable collective bargaining agreements. |

William P.

Lentsch, Age 55: Executive Vice President - Flying/Air Operations of Delta since August 2018; Senior Vice President - Delta Connection and Delta Global Services, CEO - Endeavor Air (April 2017 - August 2018); Senior Vice President - Airport Customer Service and Airline Operations of Delta (September 2013 - April 2017); Senior Vice President - Minnesota Operations of Delta (June 2009 - September 2013); Senior Vice President - Flight Operations of Northwest Airlines, Inc. (October 2008 - June 2009); Vice President - Flight Operations of Northwest Airlines, Inc. (October 2007 - October 2008); Vice President - Customer Service - Minneapolis of Northwest Airlines, Inc. (May 2006 - October 2007); Vice President - Station Operations of Northwest Airlines, Inc. (July 2005 - May 2006).

General

Our global route network gives us a presence in every major domestic and international market.

*Joint Venture Agreements.* We currently operate four joint ventures with foreign carriers and have entered into an agreement to form a fifth.

We also own shares of China Eastern and entered into a joint marketing agreement with China Eastern in 2015 to expand our commercial cooperation and better connect the networks of the two airlines.

| • | ExpressJet Airlines, Inc. and SkyWest Airlines, Inc., both subsidiaries of SkyWest, Inc.; |

Frequent Flyer Program

In 2017, program members redeemed more than 345 billion miles in the SkyMiles program for 14.9 million award redemptions.

During this period, 7.9% of revenue miles flown on Delta were from award travel.

| 2015 | 3,988 | | $ | 7,579 | | $ | 1.90 | | 23.0 | % |

*Segments*.

Because the products and services of Monroe's refinery operations are discrete from our airline services, segment results are prepared for our airline segment and our refinery segment.

Financial information on our segment reporting can be found in Note 14 of the Notes to the Consolidated Financial Statements.

We have recently managed our fuel price risk through a hedging program intended to reduce the financial impact from changes in the price of fuel as fuel prices are subject to potential volatility.

In addition, we enter into derivatives with third parties to hedge financial risk related to Monroe’s refining margins.

We have several other businesses arising from our airline operations, including aircraft maintenance, repair and overhaul ("MRO"), staffing and other services, vacation wholesale operations and our private jet operations.

| • | Delta Global Services provides services to us and to third parties, including staffing services, aviation solutions, professional security and training services. |

Technology Transformation

Significant progress was made in 2017 in the transformation of our information technology function to improve operational reliability and enhance disaster recovery capabilities.

Most significantly, we opened a new data center to provide redundancy for our key systems and continue the enhancement of that facility.

We also reduced the risk of technology system failures to our operations through additional disaster recovery processes and heightened emphasis on our information security program including through the hiring of an experienced information security professional as our Chief Information Security Officer.

However, exemption from the certification requirement would provide no protection from taxation schemes based on CO2 emissions.

First Bag Fee Antitrust Litigation

In 2009, a number of purported class action antitrust lawsuits were filed against Delta and AirTran Airways ("AirTran"), alleging that Delta and AirTran engaged in collusive behavior in violation of Section 1 of the Sherman Act in November 2008 based upon certain public statements made in October 2008 by AirTran's CEO at an analyst conference concerning fees for the first checked bag, Delta's imposition of a fee for the first checked bag on November 4, 2008 and AirTran's imposition of a similar fee on November 12, 2008.

The plaintiffs sought to assert claims on behalf of an alleged class consisting of passengers who paid the first bag fee after December 5, 2008 and seek injunctive relief and unspecified treble damages.

All of these cases have been consolidated for pre-trial proceedings and remain pending in the Northern District of Georgia.

On July 12, 2016, the Court issued an order granting the plaintiffs' motion for class certification.

On October 7, 2016, the U.S. Court of Appeals for the Eleventh Circuit granted the defendants' petition for interlocutory review of this order, and that appeal remains pending.

On March 29, 2017, the District Court granted the defendants’ motions for summary judgment.

The plaintiffs have filed an appeal to the U.S. Court of Appeals, and that appeal remains pending.

For the fiscal year ended December 31, [removed: 2017][added: 2018]

[removed: ][added: ]

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Web site, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [removed: o]

| Large accelerated filer | þ | Accelerated filer | o | Non-accelerated filer | o | [removed: (Do not check if a smaller reporting company) |]

| Smaller reporting company | | | o | Emerging growth company | o | [removed: |]

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, [removed: 2017] [added: 2018] was approximately [removed: $38.9] [added: $34.2] billion.

On January 31, [removed: 2018,] [added: 2019,] there were outstanding [removed: 706,913,358] [added: 678,950,098] shares of the registrant's common stock.

| [Forward-Looking [removed: Statements](#s9C660AB1B5E751EFBFF1397E87FD0791)] [added: Statements](#s992AE06DC10A5115AB0073AC799CC986)] | [removed: [1](#s9C660AB1B5E751EFBFF1397E87FD0791)] [added: [1](#s992AE06DC10A5115AB0073AC799CC986)] |

| [ITEM 1. [removed: BUSINESS](#s66A82B80860656B8820C39C9C17CA57E)] [added: BUSINESS](#s951939D656A15495A4F8A79DA3064AE2)] | [removed: [2](#s66A82B80860656B8820C39C9C17CA57E)] [added: [2](#s951939D656A15495A4F8A79DA3064AE2)] |

| [Other [removed: Businesses](#s45A27AE74C145033A35B297B4A81B103)] [added: Businesses](#sA1381EE1928F5F8D8DBFF607E5485799)] | [removed: [5](#s45A27AE74C145033A35B297B4A81B103)] [added: [5](#sA1381EE1928F5F8D8DBFF607E5485799)] |

| [Regulatory [removed: Matters](#sC782BE645A155DA8B2EE353C79AE7BC1)] [added: Matters](#sE92B11F905C554719034E8F607390536)] | [removed: [7](#sC782BE645A155DA8B2EE353C79AE7BC1)] [added: [7](#sE92B11F905C554719034E8F607390536)] |

| [Employee [removed: Matters](#sBD975A0863655B52B28C9FA5B61AE7B0)] [added: Matters](#s0DB44555F9605C7C847B038F9521A76B)] | [removed: [10](#sBD975A0863655B52B28C9FA5B61AE7B0)] [added: [10](#s0DB44555F9605C7C847B038F9521A76B)] |

| [Executive Officers of the [removed: Registrant](#s0B106DB2E6B55E3CB3B43CC2376BBBAC)] [added: Registrant](#s2E49E5AF1ADE58ED928257385F14CF33)] | [removed: [11](#s0B106DB2E6B55E3CB3B43CC2376BBBAC)] [added: [11](#s2E49E5AF1ADE58ED928257385F14CF33)] |

| [Additional [removed: Information](#s7B7DE818733F58DA96F9608A56039F14)] [added: Information](#sCC85457095DD5CAB8222E2CC970AE619)] | [removed: [11](#s7B7DE818733F58DA96F9608A56039F14)] [added: [11](#sCC85457095DD5CAB8222E2CC970AE619)] |

| [ITEM 1A. RISK [removed: FACTORS](#s32E7B8D7CFCC5890893B5F4F82775D13)] [added: FACTORS](#sCABCD48666205E0AA9B39B7B979151B1)] | [removed: [12](#s32E7B8D7CFCC5890893B5F4F82775D13)] [added: [12](#sCABCD48666205E0AA9B39B7B979151B1)] |

| [Risk Factors Relating to [removed: Delta](#sFD6951C588F6530E8ECBDECBC6A23377)] [added: Delta](#sA7505CCFC67C537C8E22AACAC281DB74)] | [removed: [12](#sFD6951C588F6530E8ECBDECBC6A23377)] [added: [12](#sA7505CCFC67C537C8E22AACAC281DB74)] |

| [Risk Factors Relating to the Airline [removed: Industry](#sBF4C8C65F2BB55C7851B35F3865E141F)] [added: Industry](#s2464DEA1A1785C3D855CC8C880B9C4B6)] | [removed: [17](#sBF4C8C65F2BB55C7851B35F3865E141F)] [added: [17](#s2464DEA1A1785C3D855CC8C880B9C4B6)] |

| [ITEM 1B. UNRESOLVED STAFF [removed: COMMENTS](#s77E66D98E4845619A2CD8FB441C2CFA6)] [added: COMMENTS](#s1EC570684CE05EBDAAB75E51DB39FB1A)] | [removed: [19](#s77E66D98E4845619A2CD8FB441C2CFA6)] [added: [19](#s1EC570684CE05EBDAAB75E51DB39FB1A)] |

| [ITEM 2. [removed: PROPERTIES](#s0AD7CB6FEB815783A9E8B28434C131CF)] [added: PROPERTIES](#sC73BCBAC6072565E8038553B69452194)] | [removed: [20](#s0AD7CB6FEB815783A9E8B28434C131CF)] [added: [20](#sC73BCBAC6072565E8038553B69452194)] |

| [Flight [removed: Equipment](#sC1C036F535B35588AC93BF9E6D1C0E76)] [added: Equipment](#sA1DD9FDB21EC5F9286E8FADC7AF615FE)] | [removed: [20](#sC1C036F535B35588AC93BF9E6D1C0E76)] [added: [20](#sA1DD9FDB21EC5F9286E8FADC7AF615FE)] |

| [Ground [removed: Facilities](#sE2C1257B409C52ECB22BCAF98ED22CDB)] [added: Facilities](#sFED3F16F23DF5FFF804BEC12FBBAC7D2)] | [removed: [21](#sE2C1257B409C52ECB22BCAF98ED22CDB)] [added: [21](#sFED3F16F23DF5FFF804BEC12FBBAC7D2)] |

| [ITEM 3. LEGAL [removed: PROCEEDINGS](#sCF7D4DC11BAA544D8D73ED9D1939B71B)] [added: PROCEEDINGS](#s75100405F0735ECDA2365C696E2CC5A3)] | [removed: [22](#sCF7D4DC11BAA544D8D73ED9D1939B71B)] [added: [22](#s75100405F0735ECDA2365C696E2CC5A3)] |

| [ITEM 4. MINE SAFETY [removed: DISCLOSURES](#sEB1EEDF4445A5AE381FABA2ACB432666)] [added: DISCLOSURES](#s24C07B83713D5ECE9263429205106D20)] | [removed: [22](#sEB1EEDF4445A5AE381FABA2ACB432666)] [added: [22](#s24C07B83713D5ECE9263429205106D20)] |

| [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED [removed: STOCKHOLDER](#s699C4BCD54D2582DB52C9CF0568753E8)] [added: STOCKHOLDER](#s40BB2DD6A68B57E7BE9ED799E6854A9D)] [MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#s699C4BCD54D2582DB52C9CF0568753E8)] [added: SECURITIES](#s40BB2DD6A68B57E7BE9ED799E6854A9D)] | [removed: [23](#s699C4BCD54D2582DB52C9CF0568753E8)] [added: [23](#s40BB2DD6A68B57E7BE9ED799E6854A9D)] |

| [ITEM 6. SELECTED FINANCIAL [removed: DATA](#sCCB479AEF0535114A10D6CA240A00EC1)] [added: DATA](#s29B3E21F72545EBAB0B798847370F388)] | [removed: [25](#sCCB479AEF0535114A10D6CA240A00EC1)] [added: [25](#s29B3E21F72545EBAB0B798847370F388)] |

| [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION [removed: AND](#s2F0D246DA9B45245A4DC549A76EE901F)] [added: AND](#sF9178631131555C3ACFFA1302F494D71)] [RESULTS OF [removed: OPERATION](#s2F0D246DA9B45245A4DC549A76EE901F)S] [added: OPERATION](#sF9178631131555C3ACFFA1302F494D71)S] | [removed: [27](#s2F0D246DA9B45245A4DC549A76EE901F)] [added: [27](#sF9178631131555C3ACFFA1302F494D71)] |

| [Financial Highlights - [removed: 2017] [added: 2018] Compared to [removed: 2016](#s1854A5FE8DAC5CAE888D634B94649771)] [added: 2017](#sAC71E9E86EE1563FB49C4A2FF4AE660C)] | [removed: [27](#s1854A5FE8DAC5CAE888D634B94649771)] [added: [27](#sAC71E9E86EE1563FB49C4A2FF4AE660C)] |

| [Results of Operations - 2017 Compared to [removed: 2016](#sD85E84FAF2E65537B5DD04C6C6528673)] [added: 2016](#s37C7A0BF28F15DC680491D7D01D919F8)] | [removed: [28](#sD85E84FAF2E65537B5DD04C6C6528673)] [added: [32](#s37C7A0BF28F15DC680491D7D01D919F8)] |

| [Non-Operating [removed: Results](#s0A09F0A81F045F95B8DF4D8A7BAA539A)] [added: Results](#sDB4C82A4EC7F586F82CDA47E9700C836)] | [removed: [35](#s0A09F0A81F045F95B8DF4D8A7BAA539A)] [added: [36](#sDB4C82A4EC7F586F82CDA47E9700C836)] |

| [Income [removed: Taxes](#s17BD50889F5A5E6186EB54DD64F35FF5)] [added: Taxes](#s8BBAB25EE8DB5AF39058258F0D6D4D2A)] | [removed: [35](#s17BD50889F5A5E6186EB54DD64F35FF5)] [added: [36](#s8BBAB25EE8DB5AF39058258F0D6D4D2A)] |

| [Refinery [removed: Segment](#sE0CFF62740FC52E8886BC44A8733F418)] [added: Segment](#sD8625C5429955E819F66BB1508D86705)] | [removed: [35](#sE0CFF62740FC52E8886BC44A8733F418)] [added: [37](#sD8625C5429955E819F66BB1508D86705)] |

| [Financial Condition and [removed: Liquidity](#s6CCF7426EEE855BB8678A6A4CBE8E43E)] [added: Liquidity](#sC75F3EB758995CFA97709E27EEE2EC10)] | [removed: [36](#s6CCF7426EEE855BB8678A6A4CBE8E43E)] [added: [38](#sC75F3EB758995CFA97709E27EEE2EC10)] |

| [Contractual [removed: Obligations](#s941FC03B31535E0DA3F5818655FB4084)] [added: Obligations](#s88ED45F54B1A51A19F1ADBF9DCEDA98B)] | [removed: [39](#s941FC03B31535E0DA3F5818655FB4084)] [added: [41](#s88ED45F54B1A51A19F1ADBF9DCEDA98B)] |

| [Critical Accounting Policies and [removed: Estimates](#s7BFF24C2C6EB53D5ABAAC317CEEB0BC0)] [added: Estimates](#s17BE6D937AD252E5A9DEF51567CFFE0F)] | [removed: [40](#s7BFF24C2C6EB53D5ABAAC317CEEB0BC0)] [added: [43](#s17BE6D937AD252E5A9DEF51567CFFE0F)] |

| [Supplemental [removed: Information](#s4D59E3F454AD51738E180B190836FD4B)] [added: Information](#s395D4BF7969E556EBDD44F06CEDCB6E9)] | [removed: [45](#s4D59E3F454AD51738E180B190836FD4B)] [added: [48](#s395D4BF7969E556EBDD44F06CEDCB6E9)] |

| [Glossary of Defined [removed: Terms](#s65F846AB63565CF5A23E38097EDB2A73)] [added: Terms](#s2BAD2936462F568180B4874C54FDD165)] | [removed: [46](#s65F846AB63565CF5A23E38097EDB2A73)] [added: [49](#s2BAD2936462F568180B4874C54FDD165)] |

| [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#sEBBFC6FC966D57FE92763ED11BEB7DF0)] [added: RISK](#sBF7B5E7769935B81878F022C78613B0A)] | [removed: [47](#sEBBFC6FC966D57FE92763ED11BEB7DF0)] [added: [50](#sBF7B5E7769935B81878F022C78613B0A)] |

| [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#s64EDC3EA643158F9B7785EF1F17626AF)] [added: DATA](#sCAECD40F9F7754A88DF5F962B4B58248)] | [removed: [48](#s64EDC3EA643158F9B7785EF1F17626AF)] [added: [51](#sCAECD40F9F7754A88DF5F962B4B58248)] |

| [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING [removed: AND](#sA7A516179EA152B68F962E32D20A14CF)] [added: AND](#s6827A436637D578E9366E1AE5C504BFA)] [FINANCIAL [removed: DISCLOSURE](#sA7A516179EA152B68F962E32D20A14CF)] [added: DISCLOSURE](#s6827A436637D578E9366E1AE5C504BFA)] | [removed: [89](#sA7A516179EA152B68F962E32D20A14CF)] [added: [98](#s6827A436637D578E9366E1AE5C504BFA)] |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | | | |

| [General](#sB06D4D18CA6F5C638B45DB60E036DA0C) | [2](#sB06D4D18CA6F5C638B45DB60E036DA0C) |

| [Loyalty Program](#sFB5D2C88205A5A9682C09F8B28BDC9BA) | [4](#sFB5D2C88205A5A9682C09F8B28BDC9BA) |

| [Fuel](#s40C5E1D23A455059B4FA4CB869C3D356) | [5](#s40C5E1D23A455059B4FA4CB869C3D356) |

| [Competition](#s92C437AD391C517BA0176A9882DE3EA4) | [6](#s92C437AD391C517BA0176A9882DE3EA4) |

| [Results of Operations - 2018 Compared to 2017](#sB1C075CEFDCE5C209E68C6420354B0EC) | [28](#sB1C075CEFDCE5C209E68C6420354B0EC) |

| [SIGNATURES](#sCDAF1772359D5ECEB1BBD050FF9A051B) | [106](#sCDAF1772359D5ECEB1BBD050FF9A051B) |

| | |

(Check one):

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

A LETTER FROM OUR CEO TO OUR SHAREHOLDERS

Dear Delta shareholder:

Delta Air Lines had a strong year on many fronts in 2017, delivering solid results for our employees, customers and owners, while also making significant investments in Delta’s future.

We generated more than $5 billion in pre-tax income for the third consecutive year despite a number of challenges, including major weather events and a 12-hour power outage at our Atlanta hub.

Through it all, Delta people provided our customers the very best service in the industry - showing that they are our greatest asset.

Our top financial priority in 2017 was to return the business to unit revenue growth.

We took a number of actions to drive this result, including capping our capacity growth at 1% for the year.

We also made investments in our product and people that are contributing to higher net promoter scores, demonstrating better customer satisfaction and a sustainable revenue premium.

We enter 2018 with the best revenue momentum in years.

Domestic demand and yields remain robust and global economies are rebounding, allowing us to resume growth in our international business.

Limiting our capacity growth helped produce revenue momentum, but it also created heightened pressure on our unit costs.

Costs were further pressured by product investments, weather and accelerated depreciation on aircraft exiting our fleet.

These impacts combined for unsustainable unit cost growth in 2017, and we are determined to change this trajectory in 2018.

Our 2018 fleet additions are set to deliver some of the greatest efficiency gains in Delta’s history.

In addition, we have started a company-wide project to drive productivity by better leveraging our scale and rethinking the way we do business.

In recent years, we have invested more than $2 billion in partnerships with some of the finest airlines in the world.

These strong relationships allow us to offer more choices to our customers and expand globally in a more capital efficient way.

In 2017 alone, we acquired a 10% stake in Air France-KLM, acquired a 49% stake in Grupo Aeroméxico and announced plans for joint ventures with Korean Air and WestJet.

With these investments made, we have built the foundation to produce hundreds of millions of dollars in benefits in the coming years from serving some of the largest and fastest growing markets in the world.

As we look to 2018 and beyond, our focus is on delivering sustainable financial results by leveraging our five key competitive differentiators:

Our People and Culture - Our culture is the foundation of every decision we make at Delta and the key to every other competitive advantage that we have built.

Ensuring that the incentives of our people are aligned with those of our customers and shareholders is vital to our success, which is why we are proud to offer our people one of the most generous profit-sharing programs of any company.

Since we started our profit sharing program in 2007, it has paid out more than $6 billion, including at least $1 billion for each of the past four years.

Our culture is also one of giving back to the communities we serve - in 2017 we contributed over $40 million as part of our annual commitment to give 1 percent of net income to key charitable organizations.

Our Industry-Leading Operational Reliability - We are constantly focused on ways to run a better, more reliable, customer-focused airline.

We have made significant investments in our business and currently run the best operation in the global industry - in 2017 we ran 242 days without cancelling any mainline flights, including 90 days with no system cancellations on the entire Delta platform - a 10% increase from 2016.

These results led to Delta’s recognition by *FlightGlobal* as the most on-time global airline - the first time a U.S. airline has earned this award.

Our Network - Our domestic network combines a focus on the most desirable markets with a balanced footprint between East and West coasts, and is optimally structured to capture premium revenue.

Delta holds approximately 60% share in our four interior hubs (Atlanta, Minneapolis, Detroit and Salt Lake City), allowing us to take advantage of scale economies.

We have also streamlined our international network with a focus on major and developing markets around the world through global partnerships.

We are achieving many of the benefits of cross-border cooperation for our customers and our owners, with strong alliances in Europe, Latin America, Asia, Australia and Canada.

Our Customer Loyalty and Brand - During 2017, we achieved record customer satisfaction levels, with higher net promoter scores in every region and a 2-point improvement overall, including an all-time high in November 2017.

We will continue to build on this success, with more than $12 billion of airport facility projects planned in the next decade.

We are offering more customer choice through Branded Fares, including First Class upsell, Comfort+, Preferred Seats and Basic Economy, which combined generated nearly $2 billion of revenue in 2017.

We are also growing our relationship with American Express - our co-brand partnership contributed $3 billion in 2017, which we expect to grow to $4 billion by 2021.

Our Investment Grade Balance Sheet - Since 2009, we have reduced the principal amount of our debt by more than $9 billion, which has lowered our annual interest expense by approximately $900 million and resulted in an investment grade credit rating from all three agencies.

In addition, our pension funded status is at its highest level since the merger.

Our operating aircraft fleet, commitments and options at December 31, [removed: 2017] [added: 2018] are summarized in the following table:

| | Current Fleet(1) | | | | | Commitments | | [removed: |]

| Aircraft Type | Owned | [removed: Capital] [added: Finance] Lease | Operating Lease | Total | Average Age | Purchase | [removed: Lease |] Options |

| B-717-200 | 3 | [removed: 13] [added: 16] | [removed: 75] [added: 72] | 91 | [removed: 16.3 | —] [added: 17.3] | — | — |

| B-737-700 | 10 | — | — | 10 | [removed: 8.9 | —] [added: 9.9] | — | — |

| B-737-800 | 73 | 4 | — | 77 | [removed: 16.3 | —] [added: 17.3] | — | — |

| B-737-900ER | [removed: 52] [added: 18] | — | [removed: 37 | 89 | 2.3 | 41 |] — | — | [added: 18 |]

| B-757-200 | [removed: 88] [added: 89] | 9 | [removed: 3] [added: 2] | 100 | [removed: 20.4 | —] [added: 21.4] | — | — |

| B-757-300 | 16 | — | — | 16 | [removed: 14.9 | —] [added: 15.9] | — | — |

| B-767-300 | 2 | — | — | 2 | [removed: 24.5 | —] [added: 25.5] | — | — |

| B-767-300ER | 55 | [removed: 2] [added: 1] | — | [removed: 57 | 21.7] [added: 56] | [removed: —] [added: 22.6] | — | — |

| B-767-400ER | 21 | — | — | 21 | [removed: 17.0 | —] [added: 18.0] | — | — |

| B-777-200ER | 8 | — | — | 8 | [removed: 18.1 | —] [added: 19.1] | — | — |

| B-777-200LR | 10 | — | — | 10 | [removed: 8.8 | —] [added: 9.8] | — | — |

| A319-100 | 55 | — | 2 | 57 | [removed: 15.8 | —] [added: 16.8] | — | — |

| A320-200 | 55 | 3 | 4 | 62 | [removed: 22.4 | —] [added: 23.4] | — | — |

| A321-200 | [removed: 14 | — | 20 | 34] [added: 32] | [removed: 0.8] [added: 27] | [removed: 93] [added: 3] | — | [removed: —] [added: 62] |

| A321-200neo | — | — | — | — | — | 100 | [removed: — |] 100 |

| A330-200 | 11 | — | — | 11 | [removed: 12.8 | —] [added: 13.8] | — | — |

| A330-300 | 28 | — | 3 | 31 | [removed: 9.0 | —] [added: 9.9] | — | — |

| A330-900neo | — | — | — | — | — | [removed: 25 | —] [added: 35] | — |

| A350-900 | [removed: 6] [added: 2] | [removed: —] [added: 2] | — | [removed: 6 | 0.2 | 19 | —] [added: 10] | [removed: —] [added: 14] |

| (1) | Excludes certain aircraft we [removed: own or] [added: own,] lease [added: or have committed to purchase] that are operated by regional carriers on our behalf shown in the table below. |

The following table summarizes the aircraft fleet operated by [removed: our] regional carriers on our behalf at December 31, [removed: 2017:][added: 2018:]

| Endeavor Air, Inc.(1) | [removed: 50] [added: 42] | [removed: —] [added: 3] | [removed: 93] [added: 109] | — | — | [removed: 143] [added: 154] |

| [removed: ExpressJet] [added: SkyWest] Airlines, [removed: Inc.(2) | —] [added: Inc.] | [removed: 33] [added: 77] | [removed: 16] [added: 22] | [removed: —] [added: 41] | — | 49 | [added: 189 |]

| Republic Airline, Inc. | — | — | — | [removed: 20] [added: 21] | 16 | [removed: 36] [added: 37] |

Our purchase commitments for additional aircraft at December 31, [removed: 2017] [added: 2018] are detailed in the following table:

| Aircraft Purchase Commitments | [removed: 2018 |] 2019 | 2020 | [added: 2021 |] After [removed: 2020] [added: 2021] | Total |

| A321-200 | [removed: 31] [added: 37] | [removed: 32] [added: —] | [removed: 27] [added: 28] | [removed: 3] [added: 65] | [removed: 93] [added: 1.2] | [added: 62 | — |]

| A321-200neo | — | [removed: — |] 16 | [removed: 84] [added: 36] | [added: 48 |] 100 |

| A330-900neo | [removed: — | —] [added: 4] | 4 | [removed: 21] [added: 9] | [removed: 25] [added: 18] | [added: 35 |]

| A350-900 | [removed: 5] [added: 11] | [removed: 2] [added: —] | [removed: 2] [added: —] | [removed: 10] [added: 11] | [removed: 19] [added: 1.0] | [added: 14 | — |]

| B-737-900ER | [removed: 23 | 18] [added: 73] | — | [removed: —] [added: 39] | [removed: 41] [added: 112] | [added: 2.7 | 18 | — |]

Our largest aircraft maintenance base, various [removed: computer,] [added: equipment maintenance,] cargo, flight kitchen and training facilities and most of our principal offices are located at or near the Atlanta airport on land leased from the City of Atlanta.

We also lease aircraft [added: maintenance, equipment] maintenance and air cargo facilities at several airports.

We also lease [added: computer facilities,] marketing offices, reservations offices and other off-airport facilities in certain locations for varying terms.

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

| A220-100 | 4 | — | — | 4 | 0.1 | 36 | 50 |

| A220-300 | — | — | — | — | — | 50 | — |

| MD-88 | 71 | 13 | — | 84 | 28.1 | — | — |

| MD-90 | 43 | — | — | 43 | 21.8 | — | — |

| Total | 675 | 46 | 150 | 871 | 16.0 | 315 | 150 |

| Total | 119 | 47 | 157 | 21 | 101 | 445 |

As part of a multi-year effort, we have been investing in new aircraft to provide more premium products, an improved customer experience and better operating economics.

| A220-100 | 24 | 12 | — | — | 36 |

| A220-300 | — | 6 | 12 | 32 | 50 |

| CRJ-900 | 7 | 8 | — | — | 15 |

| Total | 87 | 75 | 60 | 108 | 330 |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| CS100 | — | — | — | — | — | 75 | — | 50 |

| MD-88 | 92 | 17 | — | 109 | 27.5 | — | — | — |

| MD-90 | 65 | — | — | 65 | 20.9 | — | — | — |

| Total | 664 | 48 | 144 | 856 | 16.7 | 353 | — | 150 |

| | |

| --- | --- |

| SkyWest Airlines, Inc. | 86 | 27 | 36 | — | 18 | 167 |

| Total | 136 | 82 | 152 | 20 | 70 | 460 |

| (2) | During 2017, we and ExpressJet Airlines, Inc. agreed to early terminate our relationship by the end of 2018. |

| CS100 | 15 | 25 | 16 | 19 | 75 |

| Total | 74 | 77 | 65 | 137 | 353 |

Our common stock is listed on the New York Stock Exchange [removed: ("NYSE").][added: ("NYSE") under the trading symbol DAL.]

As of January 31, [removed: 2018,] [added: 2019,] there were approximately [removed: 2,560] [added: 2,450] holders of record of our common stock.

Our Board of Directors initiated a quarterly dividend program in the September 2013 [removed: quarter] [added: quarter, with a payment] of $0.06 per share.

[removed: As reflected above, the] [added: The] Board has increased the quarterly dividend payment several times, most recently to [removed: $0.305] [added: $0.35] per share in the September [removed: 2017] [added: 2018] quarter.

The Board expects to be able to continue to pay cash dividends for the foreseeable future, subject to applicable limitations under Delaware [removed: law.][added: law and compliance with covenants in certain of our credit facilities.]

The following graph compares the cumulative total returns during the period from December 31, [removed: 2012] [added: 2013] to December 31, [removed: 2017] [added: 2018] of our common stock to the Standard & Poor's 500 Stock Index and the NYSE ARCA Airline Index.

The comparison assumes $100 was invested on December 31, [removed: 2012] [added: 2013] in each of our common stock and the indices and assumes that all dividends were reinvested.

[removed: ][added: ]

The following table presents information with respect to purchases of common stock we made during the December [removed: 2017] [added: 2018] quarter.

Some purchases [added: made in the December 2018 quarter] were made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934.

| October 2018 | 1,538,432 | | $ | 53.25 | | 1,538,432 | | | $ | 3,350 | |

| November 2018 | 2,188,178 | | $ | 56.38 | | 2,188,178 | | | $ | 3,225 | |

| December 2018 | 2,221,305 | | $ | 54.22 | | 2,221,305 | | | $ | 3,100 | |

| Total | 5,947,915 | | | | | 5,947,915 | | | | | |

The following table sets forth for the periods indicated the highest and lowest sales price for our common stock as reported on the NYSE and dividends declared during these periods.

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | Common Stock | | | | | | | | Cash Dividends Declared (per share) | | | |

| | High | | | | Low | | | | | | | |

| Fiscal 2017 | | | | | | | | | | | | |

| Fourth Quarter | | $ | 56.84 | | | $ | 47.90 | | | $ | 0.305 | |

| Third Quarter | | $ | 55.75 | | | $ | 44.59 | | | $ | 0.305 | |

| Second Quarter | | $ | 54.53 | | | $ | 43.81 | | | $ | 0.2025 | |

| First Quarter | | $ | 52.00 | | | $ | 44.47 | | | $ | 0.2025 | |

| Fiscal 2016 | | | | | | | | | | | | |

| Fourth Quarter | | $ | 52.76 | | | $ | 37.91 | | | $ | 0.2025 | |

| Third Quarter | | $ | 41.35 | | | $ | 34.08 | | | $ | 0.2025 | |

| Second Quarter | | $ | 49.80 | | | $ | 32.60 | | | $ | 0.135 | |

| First Quarter | | $ | 50.50 | | | $ | 40.03 | | | $ | 0.135 | |

In addition, our ability to pay future dividends is subject to compliance with covenants in several of our credit facilities.

| October 2017 | 1,382,740 | | $ | 52.67 | | 1,382,740 | | | $ | 4,925 | |

| November 2017 | 2,529,455 | | $ | 49.86 | | 2,529,455 | | | $ | 4,800 | |

| December 2017 | 2,321,176 | | $ | 54.34 | | 2,321,176 | | | $ | 4,675 | |

| Total | 6,233,371 | | | | | 6,233,371 | | | | | |

The following tables are derived from our audited Consolidated Financial Statements and present selected financial and operating data as of and for the five years ended December 31, [removed: 2017.][added: 2018.]

| (in millions, except share data) | [added: 2018 | | |] 2017 | | | 2016 | | | 2015 | | | 2014 | | | [removed: 2013 | | |]

| Operating revenue | $ | [removed: 41,244] [added: 44,438] | | $ | [removed: 39,639] [added: 41,138] | | $ | [removed: 40,704] [added: 39,450] | | $ | [removed: 40,362] [added: 40,704] | | $ | [removed: 37,773] [added: 40,362] | |

| Operating expense | [removed: 35,130] [added: 39,174] | | | [removed: 32,687] [added: 35,172] | | | [removed: 32,902] [added: 32,454] | | | [removed: 38,156] [added: 32,902] | | | [removed: 34,373] [added: 38,156] | | |

| Operating income | [removed: 6,114] [added: 5,264] | | | [removed: 6,952] [added: 5,966] | | | [removed: 7,802] [added: 6,996] | | | [removed: 2,206] [added: 7,802] | | | [removed: 3,400] [added: 2,206] | | |

| Non-operating expense, net | [removed: (413] [added: (113] | | ) | [removed: (316] [added: (466] | | ) | [removed: (645] [added: (643] | | ) | [removed: (1,134] [added: (645] | | ) | [removed: (873] [added: (1,134] | | ) |

| Income before income taxes | [removed: 5,701] [added: 5,151] | | | [removed: 6,636] [added: 5,500] | | | [removed: 7,157] [added: 6,353] | | | [removed: 1,072] [added: 7,157] | | | [removed: 2,527] [added: 1,072] | | |

| Income tax (provision) benefit | [removed: (2,124] [added: (1,216] | | ) | [removed: (2,263] [added: (2,295] | | ) | [removed: (2,631] [added: (2,158] | | ) | [removed: (413] [added: (2,631] | | ) | [removed: 8,013] [added: (413] | | [added: )] |

| Net income | $ | [removed: 3,577] [added: 3,935] | | $ | [removed: 4,373] [added: 3,205] | | $ | [removed: 4,526] [added: 4,195] | | $ | [removed: 659] [added: 4,526] | | $ | [removed: 10,540] [added: 659] | |

| Basic earnings per share | $ | [removed: 4.97] [added: 5.69] | | $ | [removed: 5.82] [added: 4.45] | | $ | [removed: 5.68] [added: 5.59] | | $ | [removed: 0.79] [added: 5.68] | | $ | [removed: 12.41] [added: 0.79] | |

| Diluted earnings per share | $ | [removed: 4.95] [added: 5.67] | | $ | [removed: 5.79] [added: 4.43] | | $ | [removed: 5.63] [added: 5.55] | | $ | [removed: 0.78] [added: 5.63] | | $ | [removed: 12.29] [added: 0.78] | |

| Cash dividends declared per share | $ | [removed: 1.02] [added: 1.31] | | $ | [removed: 0.68] [added: 1.02] | | $ | [removed: 0.45] [added: 0.68] | | $ | [removed: 0.30] [added: 0.45] | | $ | [removed: 0.12] [added: 0.30] | |

| (in millions) | [added: 2018 | | |] 2017 | | | 2016 | | | 2015 | | | 2014 | | | [removed: 2013 | | |]

| MTM adjustments and settlements | $ | [added: (53 | ) | $ |] 259 | | $ | 450 | | $ | 1,301 | | $ | (2,346 | ) | [removed: $ | 276 | |]

| Restructuring and other | — | | | — | | | [removed: (35] [added: —] | | [removed: )] | [removed: (716] [added: (35] | | ) | [removed: (424] [added: (716] | | ) |

| Loss on extinguishment of debt | — | | | — | | | — | | | [removed: (268] [added: —] | | [removed: )] | [removed: —] [added: (268] | | [added: )] |

| [removed: Investment] [added: Equity investment] MTM adjustments | [added: 29 | | |] (8 | | ) | 115 | | | 26 | | | (134 | | ) | [removed: — | | |]

| Tax Cuts and Jobs Act | [removed: (150] [added: —] | | [removed: )] | [removed: —] [added: (394] | | [added: )] | — | | | — | | | — | | |

| Total assets | $ | [removed: 53,292] [added: 60,266] | | $ | [removed: 51,261] [added: 53,671] | | $ | [removed: 53,134] [added: 51,850] | | $ | [removed: 54,005] [added: 53,134] | | $ | [removed: 52,104] [added: 54,005] | |

| Long-term debt and [removed: capital] [added: finance] leases (including current maturities) | [removed: $] [added: 9,771] | [added: | |] 8,834 | | [removed: $] | 7,332 | | [removed: $] | 8,329 | | [removed: $] | 9,661 | | [removed: $] | [removed: 11,194 | |]

| Stockholders' equity | [removed: $] [added: 13,687] | [removed: 13,910] | | [removed: $] [added: 12,530] | [removed: 12,287] | | [removed: $] [added: 11,277] | [removed: 10,850] | | [removed: $] [added: 10,850] | [removed: 8,813] | | [removed: $] [added: 8,813] | [removed: 11,643] | |

| Consolidated(1) | [added: 2018 | | |] 2017 | | | 2016 | | | 2015 | | | 2014 | | | [removed: 2013 | | |]

| Revenue passenger miles (in millions) | [added: 225,243 | | |] 217,712 | | | 213,098 | | | 209,625 | | | 202,925 | | | [removed: 194,988 | | |]

| Available seat miles (in millions) | [added: 263,365 | | |] 254,325 | | | 251,867 | | | 246,764 | | | 239,676 | | | [removed: 232,740 | | |]

| Passenger mile yield | | [removed: 15.99] [added: 17.65] | ¢ | | [removed: 15.85] [added: 16.97] | ¢ | | [removed: 16.59] [added: 16.81] | ¢ | | [removed: 17.22] [added: 16.59] | ¢ | | [removed: 16.89] [added: 17.22] | ¢ |

| Passenger revenue per available seat mile | | [removed: 13.69] [added: 15.09] | ¢ | | [removed: 13.41] [added: 14.53] | ¢ | | [removed: 14.10] [added: 14.22] | ¢ | | [removed: 14.58] [added: 14.10] | ¢ | | [removed: 14.15] [added: 14.58] | ¢ |

| Total revenue per available seat mile | | [removed: 16.22] [added: 16.87] | ¢ | | [removed: 15.74] [added: 16.18] | ¢ | | [removed: 16.50] [added: 15.66] | ¢ | | [removed: 16.84] [added: 16.50] | ¢ | | [removed: 16.23] [added: 16.84] | ¢ |

| Operating cost per available seat mile | | [removed: 13.81] [added: 14.87] | ¢ | | [removed: 12.98] [added: 13.83] | ¢ | | [removed: 13.33] [added: 12.89] | ¢ | | [removed: 15.92] [added: 13.33] | ¢ | | [removed: 14.77] [added: 15.92] | ¢ |

| Passenger load factor | [removed: 85.6] [added: 85.5] | | % | [removed: 84.6] [added: 85.6] | | % | [removed: 84.9] [added: 84.6] | | % | [removed: 84.7] [added: 84.9] | | % | [removed: 83.8] [added: 84.7] | | % |

| Fuel gallons consumed (in millions) | [added: 4,113 | | |] 4,032 | | | 4,016 | | | 3,988 | | | 3,893 | | | [removed: 3,828 | | |]

| Average price per fuel gallon(2) | $ | [removed: 1.68] [added: 2.20] | | $ | [removed: 1.49] [added: 1.68] | | $ | [removed: 1.90] [added: 1.49] | | $ | [removed: 3.47] [added: 1.90] | | $ | [removed: 3.00] [added: 3.47] | |

| Full-time equivalent employees, end of period | [added: 88,680 | | |] 86,564 | | | 83,756 | | | 82,949 | | | 79,655 | | | [removed: 77,755 | | |]

We adopted Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” using the full retrospective transition method and recast results from 2016 and 2017 including interim periods therein.

Results from periods prior to 2016 have not been recast for the adoption of this standard.

Supplemental Information

The supplemental information below represents the adjustments used in our non-GAAP financial measures.

See "Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations" where our non-GAAP financial measures are defined and reconciled.

Amounts presented below are stated before consideration of income taxes, except for the impact of the Tax Cuts and Jobs Act.

| Unrealized (gain)/loss on investments | (14 | | ) | — | | | — | | | — | | | — | | |

| (in millions) | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | |

Special Items

| Release of tax valuation allowance and intraperiod income tax allocation | — | | | — | | | — | | | — | | | 7,989 | | |

| Total income (loss) | $ | 101 | | $ | 565 | | $ | 1,292 | | $ | (3,464 | ) | $ | 7,841 | |

| [Report of Independent Registered Public Accounting [removed: Firm](#s37C86D7B414257A2B6A8399A99E9FC8F)] [added: Firm](#s69BD3F0E837257CF9AF7C5B69EFA0385)] | [removed: [49](#s37C86D7B414257A2B6A8399A99E9FC8F)] [added: [52](#s69BD3F0E837257CF9AF7C5B69EFA0385)] |

| [Consolidated Balance Sheets - December 31, [removed: 2017] [added: 2018] and [removed: 2016](#sF4827B882CC258A7BC0F5EF816EE93BD)] [added: 2017](#sD11FEE4059B050ADAEA7667A08B964C2)] | [removed: [50](#sF4827B882CC258A7BC0F5EF816EE93BD)] [added: [53](#sD11FEE4059B050ADAEA7667A08B964C2)] |

| [Consolidated Statements of Operations for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015](#sEFD1156E791E5A2FBC88EF5BAA7C95CF)] [added: 2016](#s04095BABD52359E8A64161BF1E3B83D6)] | [removed: [51](#sEFD1156E791E5A2FBC88EF5BAA7C95CF)] [added: [54](#s04095BABD52359E8A64161BF1E3B83D6)] |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015](#sEC59C522640E589EBED10AD09190C8F5)] [added: 2016](#s1352EC39BD1F57F9BF100B998B5BA38E)] | [removed: [52](#sEC59C522640E589EBED10AD09190C8F5)] [added: [55](#s1352EC39BD1F57F9BF100B998B5BA38E)] |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015](#sC6540297AF2E58A6B40F41C01FFC469D)] [added: 2016](#s7853F989C4AD56808B4DA3972397C721)] | [removed: [53](#sC6540297AF2E58A6B40F41C01FFC469D)] [added: [56](#s7853F989C4AD56808B4DA3972397C721)] |

| [Consolidated Statements of Stockholders' Equity for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015](#sA628F4E022D5525896416DD2E09BA54D)] [added: 2016](#s36850955D34953F38C0FDD3B66695463)] | [removed: [54](#sA628F4E022D5525896416DD2E09BA54D)] [added: [57](#s36850955D34953F38C0FDD3B66695463)] |

| [Notes to the Consolidated Financial [removed: Statements](#s18DD4BB7DFAA5A3FA1120C43548195C2)] [added: Statements](#s7A724D16EB4F5373A79A03DA80D7E01A)] | [removed: [55](#s18DD4BB7DFAA5A3FA1120C43548195C2)] [added: [58](#s7A724D16EB4F5373A79A03DA80D7E01A)] |

| [Note 1 - Summary of Significant Accounting [removed: Policies](#s6272D997B0305A34B27B86D5F0DE0885)] [added: Policies](#s5AE5368E8D0E5D1CBF66B4E067513C4F)] | [removed: [55](#s6272D997B0305A34B27B86D5F0DE0885)] [added: [58](#s5AE5368E8D0E5D1CBF66B4E067513C4F)] |

| [Note [removed: 2] [added: 3] - Fair Value [removed: Measurements](#s8B1B08A8004C57329F08B5647338C739)] [added: Measurements](#s8AD4252095AF551D97A05B72E4AEDB7F)] | [removed: [63](#s8B1B08A8004C57329F08B5647338C739)] [added: [68](#s8AD4252095AF551D97A05B72E4AEDB7F)] |

| [Note [removed: 3] [added: 4] - [removed: Investments](#s06E97823F8395E3EAA62B2462B5D7FEE)] [added: Investments](#sEFB1C6569B3051A489A5CFEF3760B0A5)] | [removed: [64](#s06E97823F8395E3EAA62B2462B5D7FEE)] [added: [70](#sEFB1C6569B3051A489A5CFEF3760B0A5)] |

| [Note [removed: 4] [added: 5] - Derivatives and Risk [removed: Management](#sF9E80B4682165B2BAAC3FDAD77FFFB8F)] [added: Management](#s037C0108F0495CD5850801392A1E5BB4)] | [removed: [66](#sF9E80B4682165B2BAAC3FDAD77FFFB8F)] [added: [72](#s037C0108F0495CD5850801392A1E5BB4)] |

| [Note [removed: 5] [added: 6] - Intangible [removed: Assets](#s861386D8F5EB58DD8F5C7A11CF580C41)] [added: Assets](#sD1A890B77980550990C23086312684BA)] | [removed: [68](#s861386D8F5EB58DD8F5C7A11CF580C41)] [added: [74](#sD1A890B77980550990C23086312684BA)] |

| [Note [removed: 6] [added: 7] - Long-Term [removed: Debt](#s2D186BF002795EFB9351D0E0B3BCAC51)] [added: Debt](#s2898FF2CB90B59D78BD59AB9FA251F4F)] | [removed: [69](#s2D186BF002795EFB9351D0E0B3BCAC51)] [added: [75](#s2898FF2CB90B59D78BD59AB9FA251F4F)] |

| [Note [removed: 8] [added: 9] - Airport [removed: Redevelopment](#s4dbc162a035540ea92e3ac147926c6f7)] [added: Redevelopment](#s00D3867C3A7057E8823BF79729ED312A)] | [removed: [72](#s4dbc162a035540ea92e3ac147926c6f7)] [added: [80](#s00D3867C3A7057E8823BF79729ED312A)] |

| [Note [removed: 9] [added: 10] - Employee Benefit [removed: Plans](#s7AE1F0C14CF0539EB6FB6DC999F24AA9)] [added: Plans](#sB3B3B334560B5CAAB32D461DF50FA60A)] | [removed: [73](#s7AE1F0C14CF0539EB6FB6DC999F24AA9)] [added: [82](#sB3B3B334560B5CAAB32D461DF50FA60A)] |

| [Note [removed: 10] [added: 11] - Commitments and [removed: Contingencies](#s4254C98A1B135498AF75CCBE0F888E86)] [added: Contingencies](#sD1260FDD0BD15EB89F86B4F328FB0669)] | [removed: [79](#s4254C98A1B135498AF75CCBE0F888E86)] [added: [87](#sD1260FDD0BD15EB89F86B4F328FB0669)] |

| [Note [removed: 11] [added: 12] - Income [removed: Taxes](#sFB23BCDBBE9E5580ABC6242401199726)] [added: Taxes](#s41EA66224DBE5861A62D7B47116D2124)] | [removed: [82](#sFB23BCDBBE9E5580ABC6242401199726)] [added: [90](#s41EA66224DBE5861A62D7B47116D2124)] |

| [Note [removed: 12] [added: 13] - Equity and Equity [removed: Compensation](#s57886DCDF75B565BB9AA107B01E386D8)] [added: Compensation](#s06F2008B00155AA2BD96797EDA90A8A1)] | [removed: [84](#s57886DCDF75B565BB9AA107B01E386D8)] [added: [92](#s06F2008B00155AA2BD96797EDA90A8A1)] |

| [Note [removed: 13] [added: 14] - Accumulated Other Comprehensive [removed: Loss](#s18AB3DEBCEDC5EC8A8223EBD70301FEA)] [added: Loss](#s4759ACD9C5E65877988796850EBE51E7)] | [removed: [85](#s18AB3DEBCEDC5EC8A8223EBD70301FEA)] [added: [93](#s4759ACD9C5E65877988796850EBE51E7)] |

| [Note [removed: 14] [added: 15] - Segments and Geographic [removed: Information](#s6CE4C35F7359550D8A8C14BD580D8C4E)] [added: Information](#sEF8845DEC87853DBB893F4E2B584A88C)] | [removed: [85](#s6CE4C35F7359550D8A8C14BD580D8C4E)] [added: [94](#sEF8845DEC87853DBB893F4E2B584A88C)] |

| [Note [removed: 15] [added: 16] - Restructuring and [removed: Other](#s3DEECA44F47759A1B656EF202423A7E9)] [added: Other](#s401F72D3ADE154999846EFD622159398)] | [removed: [87](#s3DEECA44F47759A1B656EF202423A7E9)] [added: [96](#s401F72D3ADE154999846EFD622159398)] |

| [Note [removed: 16] [added: 17] - Earnings Per [removed: Share](#sA681D467706152B6BCE8089F8E867F21)] [added: Share](#sD522B17DCBE8521EAF2A7473C0DC4E06)] | [removed: [88](#sA681D467706152B6BCE8089F8E867F21)] [added: [96](#sD522B17DCBE8521EAF2A7473C0DC4E06)] |

| [Note [removed: 17] [added: 18] - Quarterly Financial Data [removed: (Unaudited)](#s2F4EFA89AFBC52CFBAD06F1AC3BB974D)] [added: (Unaudited)](#s2656E5F19B1B5088ACD590919783D0ED)] | [removed: [88](#s2F4EFA89AFBC52CFBAD06F1AC3BB974D)] [added: [97](#s2656E5F19B1B5088ACD590919783D0ED)] |

We have audited the accompanying consolidated balance sheets of Delta Air Lines, Inc. (the Company) as of December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] and the related consolidated statements of operations, comprehensive income, cash flows, and stockholders' equity for each of the three years in the period ended December 31, [removed: 2017,] [added: 2018,] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2017,] [added: 2018,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February [removed: 23, 2018] [added: 15, 2019] expressed an unqualified opinion thereon.

| (in millions, except [added: per] share data) | [added: 2018] | [added: | | |] 2017 | | | | 2016 | | |

| Cash and cash equivalents | [added: $] | [added: 1,565 | | |] $ | 1,814 | | | $ | 2,762 | |

| Short-term investments | | [removed: 825] [added: 203] | | | | [removed: 487] [added: 825] | | |

| Accounts receivable, net of an allowance for uncollectible accounts of $12 [removed: and $15] at December 31, [removed: 2017] [added: 2018] and [removed: 2016, respectively] [added: 2017] | | [removed: 2,377] [added: 2,314] | | | | [removed: 2,064] [added: 2,377] | | |

| Fuel inventory | | [removed: 916] [added: 592] | | | | [removed: 519] [added: 916] | | |

| Expendable parts and supplies inventories, net of an allowance for obsolescence of [removed: $113] [added: $102] and [removed: $110] [added: $113] at December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] respectively | | [removed: 413] [added: 463] | | | | [removed: 372] [added: 413] | | |

| Prepaid expenses and other | | [removed: 1,499] [added: 1,203] | | | | [removed: 1,247] [added: 1,459] | | |

| Total current assets | | [removed: 7,844] [added: 6,340] | | | | [removed: 7,451] [added: 7,804] | | |

| [removed: Property] [added: Total property] and [removed: Equipment, Net: |] [added: equipment, net] | | [added: $] | [added: 28,335] | | [added: $] | [added: 26,563] | |

| Property and equipment, net of accumulated depreciation and amortization of [removed: $14,097] [added: $15,823] and [removed: $12,456] [added: $14,097] at December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] respectively | | [removed: 26,563] [added: 28,335] | | | | [removed: 24,375] [added: 26,563] | | |