Delta Air Lines (DAL) 10-K risk factor changes: FY2019 vs FY2018

In 2018, our average fuel price per [removed: gallon, including the impact of fuel hedges,] [added: gallon] was $2.20, a 31.0% increase from our average fuel price in [removed: 2017.][added: 2017 of $1.68.]

In [removed: 2016,] [added: 2019,] our average fuel price per [removed: gallon] [added: gallon, including the impact of fuel hedges,] was [removed: $1.49, a 21.6%] [added: $2.02, an 8.2%] decrease from our average fuel price in [removed: 2015.][added: 2018.]

Fuel costs represented [removed: 23.0%, 19.2%] [added: 21.1%, 23.0%] and [removed: 18.3%] [added: 19.2%] of our operating expense in [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively.

[removed: Our] [added: The competitive nature of the airline industry may affect our] ability to pass along rapidly increasing fuel costs to our [removed: customers may be affected by the competitive nature of the airline industry.][added: customers.]

Weather-related events, natural disasters, political disruptions or wars involving oil-producing countries, changes in governmental policy concerning aircraft fuel production, [removed: transportation, taxes] [added: transportation] or [removed: marketing,] [added: taxes,] changes in refining capacity, environmental concerns and other unpredictable events may impact crude oil and fuel supply and could result in shortages in the future.

An important part of our strategy to expand our global network has been to make significant investments in airlines in other parts of the world and expand our commercial relationships with these [removed: carriers.][added: carriers, including through joint ventures.]

These investments and relationships involve significant challenges and risks, including that we may not realize a satisfactory return on our [removed: investment, that they may distract management from our operations] [added: investment] or that they may not generate the expected [removed: revenue synergies.][added: financial results.]

These events could have a material adverse effect on our operating [removed: results or financial condition.][added: results.]

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

[removed: We also] [added: For example, we] may be subject to consequences from [removed: any] improper behavior of [added: our] joint venture partners, including for failure to comply with anti-corruption laws such as the [removed: United States] [added: U.S.] Foreign Corrupt Practices Act.

As a regular part of our ordinary business operations, we collect and store sensitive data, including [added: information necessary for our operations,] personal information of our passengers and employees and information of our business partners.

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.

[removed: We] [added: For example, 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.

However, the constantly changing nature of the threats means that we may not be able to prevent all [removed: data] [added: information] security breaches or misuse of data.

The compromise of our technology systems resulting in the loss, disclosure, misappropriation of, or access to, [removed: customers', employees'] [added: our information] or [added: that of our customers, employees or] business [removed: partners' information] [added: partners] or failure to comply with regulatory or contractual obligations with respect to such information could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, disruption to our operations and damage to our reputation, any or all of which could adversely affect our business.

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

Failure of our technology to perform effectively could have [removed: an] [added: a material] adverse effect on our business.

Our primary credit facility has various financial and other covenants that require us to maintain a minimum fixed charge coverage [removed: ratios] [added: ratio] and a minimum asset coverage ratio.

If an event of default were to occur, the lenders could, among other things, declare outstanding amounts due and [removed: payable.][added: payable and where applicable, repossess collateral, which may include aircraft or other valuable assets.]

Employee strikes and other labor-related disruptions may [removed: adversely affect] [added: have a material adverse effect on] our operations.

As of December 31, [removed: 2018,] [added: 2019,] approximately 19% of our workforce, primarily pilots, was unionized.

Strikes or labor disputes with our unionized employees may [removed: adversely affect] [added: have a material adverse effect on] our ability to conduct business.

Likewise, if third-party regional carriers with whom we have contract carrier agreements are unable to reach agreement with their unionized work groups in current or future negotiations regarding the terms of their collective bargaining agreements, those carriers may be subject to work interruptions or stoppages, subject to the requirements of the Railway Labor Act, which could have a [removed: negative impact] [added: material adverse effect] on our operations.

[removed: The failure or inability of insurance to cover a significant liability related to an] [added: An] environmental or other incident associated with the operation of the Monroe refinery could have a material adverse effect on our consolidated financial [removed: results.][added: results if insurance is unable to cover a significant liability.]

Failure to comply with environmental regulations or the enactment of additional regulation could have a [removed: negative impact] [added: material adverse effect] on our consolidated financial results.

Monroe could incur fines and other sanctions, cleanup costs and third-party claims as a result of violations of or liabilities under environmental, health and safety requirements, which if significant, could have a material adverse effect on our [added: consolidated] financial results.

Purchasing RINs at elevated prices could have a material impact on our [added: consolidated] results of operations and cash flows.

Increases in the volume of renewable fuels that must be blended into Monroe's products could limit the refinery's production if sufficient numbers of RINs are not available for purchase or relief from this requirement is not obtained, which could have [removed: an] [added: a material] adverse effect on our consolidated financial results.

If we lose senior management and other key employees and they are not replaced by individuals with comparable skills, our operating results could be [added: materially] adversely affected.

Our reputation and brand could be damaged if we are exposed to significant adverse [removed: publicity through social media.][added: publicity.]

We operate in a highly visible, public environment with significant exposure to [added: traditional and] social media.

Adverse publicity, whether justified or not, can rapidly [removed: spread] [added: spread, including] through social or digital media.

Significant damage to our overall reputation and brand image could have a [removed: negative impact] [added: material adverse effect] on our financial results.

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 other discount or ultra low-cost carriers, including Spirit [added: Airlines, Frontier] 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.

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

Extended interruptions or disruptions in service at major airports in which we operate [added: or the extended grounding of a type of aircraft or engine we operate] could have a material adverse [removed: impact] [added: effect] on our operations.

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

While the specific nature of future actions is hard to predict, new [removed: environmental] laws or regulations [added: related to environmental matters] adopted in the U.S. or other countries could impose significant additional costs on our [removed: operations, either through direct costs in our operations or through increases in costs that our suppliers pass along to us.][added: operations.]

We and other U.S. carriers are subject to [removed: domestic] [added: U.S.] and foreign laws regarding privacy of passenger and employee data that are not consistent in all countries in which we operate.

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

In certain circumstances, we also may be subject to consequences of the failure of these carriers to comply with laws and regulations, including U.S. laws to which they may be subject.

Such a result could have a material adverse effect on our operating results.

The collective bargaining agreement with our pilots became amendable on December 31, 2019 and we are in discussions with representatives of the pilots regarding terms of the collective bargaining agreement.

In addition, such an incident could damage our reputation.

In addition, because of our ownership of Monroe, the occurrence of an environmental or other incident could result in damage to our reputation, which could have a material adverse effect on our financial results.

Similarly, the airline industry is heavily dependent on a limited number of aircraft and engine manufacturers whose products are subject to extensive regulatory requirements.

The long-term grounding of an aircraft or engine type that we operate could have a significant impact on our operations if we are not able to substitute or replace the affected aircraft or engine type and could, in any event, have a material adverse effect on our financial condition and results of operations.

As an international carrier, we are subject to a wide variety of U.S. and foreign laws that affect trade, including tariff and trade policies, export requirements, taxes, monetary policies and other restrictions and charges.

On October 2, 2019, an arbitration tribunal of the World Trade Organization ruled in a long-standing dispute that the United States could impose $7.5 billion in retaliatory tariffs in response to European Union subsidies to Airbus.

Effective October 18, 2019, the U.S. Trade Representative imposed tariffs on certain products imported from the European Union, including an ad valorem duty of 10% on commercial aircraft originating in France and Germany.

Some of the Airbus aircraft that we have on order would be subject to these tariffs if imported as new aircraft.

We are pursuing strategies to minimize the impact of these tariffs on our aircraft deliveries but if we are unsuccessful or if the tariffs are increased, these tariffs could substantially increase the cost to us of the affected aircraft, which in turn could have a material adverse effect on our financial results.

In addition, some of our operations are in high-risk legal compliance environments.

Failure to comply with trade sanctions, the U.S. Foreign Corrupt Practices Act and other applicable laws or regulations could result in litigation, assessment of damages, imposition of penalties or other consequences, any or all of which could harm our reputation and have an adverse effect on our financial results.

The airline industry is subject to many forms of environmental regulation, including increased regulation to reduce emissions.

Failure to comply with environmental regulations or the enactment of additional regulation could have a material adverse effect on our financial results.

Many aspects of our operations are subject to increasingly stringent federal, state, local and international laws governing the protection of the environment.

Compliance with existing and future environmental laws and regulations can require significant expenditures and violations can lead to significant fines and penalties.

In order to address aircraft emissions, ICAO, a UN specialized agency, formally adopted a global, market-based emission offset program known as CORSIA.

This program establishes a medium-term goal for the aviation industry of achieving carbon-neutral growth in international aviation beginning in 2021, based on a 2019-2020 baseline.

Certain CORSIA program details remain to be developed and could potentially be affected by political developments in participating countries or the results of the pilot phase of the program, and thus the impact of CORSIA cannot be fully predicted.

However, CORSIA is expected to increase operating costs for airlines that operate internationally.

In addition to CORSIA, we may face additional regulation of aircraft emissions in the U.S. and abroad and become subject to further taxes, charges or additional requirements to obtain permits or purchase allowances or emission credits for greenhouse gas emissions in various jurisdictions.

Additional regulation could result in taxation, regulatory or permitting requirements from multiple jurisdictions for the same operations and significant costs for us and the airline industry.

In addition to direct costs, such regulation could result in increased fuel costs passed through from fuel suppliers affected by any such regulations.

A transition period will apply until the end of 2020 (or later, if extended) during which the pre-Brexit legal regime will continue to apply (including with respect to aviation) while the U.K. and European Union negotiate rules that will apply to their future relationship.

It is unknown how that future relationship will be structured.

Currently, it is uncertain what will be the terms of the future relationship between the U.K. and the European Union on matters such as trade, customs, financial services and the movement of goods and people.

As a result of the outbreak of a novel coronavirus first identified in Wuhan, Hubei Province, China, we have temporarily ceased operations in China and the continued spread of the virus could have a significant adverse impact on the demand for air travel and, as a result, our financial results.

In 2017, our average fuel price per gallon was $1.68, a 12.8% increase from our average fuel price in 2016.

Fuel hedging activities are intended to manage the financial impact of the volatility in the price of jet fuel.

The effects of rebalancing our hedge portfolio and mark-to-market adjustments may have a negative effect on our financial results.

To the extent that we may 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 the program and test their economic effectiveness against our financial targets.

Any hedging program may not be successful in providing price protection due to market conditions and the choice of hedging instruments.

We closely monitor 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.

In addition, we record mark-to-market adjustments ("MTM adjustments") on our fuel hedges.

MTM adjustments are based on market prices at the end of the reporting period for contracts settling in future periods.

Losses from rebalancing or MTM adjustments (or both) may have a negative impact on our financial results.

Our fuel hedge contracts may contain margin funding requirements, which require us to post margin to counterparties or cause counterparties to post margin to us as market prices in the underlying hedged items change.

If fuel prices decrease significantly from the levels existing at the time we enter into fuel hedge contracts, we may be required to post a significant amount of margin, which could have a material impact on the level of our unrestricted cash and cash equivalents and short-term investments.

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

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.

Total revenue per available seat mile ("TRASM") and TRASM, adjusted (a non-GAAP financial measure) increased [removed: 4.3%] [added: 1.2% and 2.8%, respectively,] compared to the prior year, led by (1) unit revenue growth in [removed: each of] our [removed: four geographic] [added: Domestic and Latin] regions, (2) [removed: broad-based] [added: demand] strength in both [removed: leisure] [added: business] and [removed: corporate demand] [added: leisure segments] and (3) [removed: double-digit] [added: strong] growth in premium products and non-ticket revenues.

[removed: Improving Our] [added: Solid] Cost Performance

*Operating Expense.* Operating expense increased [removed: $4.0] [added: $1.2] billion, or [removed: 11.4%,] [added: 3.1%,] primarily due to [removed: $2.3 billion] higher [removed: fuel expense] [added: revenue-] and [removed: higher] [added: capacity-related expenses including] wages and profit sharing for [removed: employees.][added: employees and contracted services expense.]

[removed: The increase in fuel] [added: *Aircraft Fuel and Related Taxes.* Fuel] expense [removed: primarily resulted from] [added: decreased $501 million compared to the prior year despite] a [removed: 31%] [added: 4.6%] increase in [added: capacity, due to an 8% decrease in] the market price per gallon of fuel and [removed: 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 [removed: profit sharing] [added: related costs] were higher due to pay rate increases for eligible employees implemented during [removed: 2017 and 2018, along with an adjustment to our] [added: 2019, while] profit sharing [removed: plan] [added: was higher due to increased profitability] in [removed: 2018.][added: 2019.]

Our operating cost per available seat mile ("CASM") [removed: increased 7.5%] [added: decreased 1.3%] to [removed: 14.87] [added: 14.67] cents compared to [removed: 2017,] [added: 2018,] primarily due to [removed: higher] [added: lower] fuel expense and [removed: salaries and related costs.][added: a 4.6% increase in capacity.]

Non-fuel unit costs [removed: ("CASM-Ex,] [added: ("CASM-Ex",] a non-GAAP financial measure) increased [removed: 1.4%] [added: 2.0%] to [removed: 10.31] [added: 10.52] cents due to the [removed: pay rate] [added: higher revenue- and capacity-related expense] increases discussed above.

*Non-Operating Expense.* Total non-operating expense was [removed: $113] [added: $420] million during [removed: 2018] [added: 2019] compared to [removed: $466] [added: $113] million in [removed: 2017,] [added: 2018,] primarily due to an increase in [removed: the] pension [removed: benefit] [added: and related expense] compared to the prior year, [added: partially offset by higher] gains [removed: from investment-related transactions and lower interest expense.][added: on investments.]

In [removed: 2018,] [added: 2019,] international revenues grew [removed: 6.7%] [added: 2.7%] on a [removed: 0.9%] [added: 3.3%] increase in capacity.

Our [removed: $7.0] [added: $8.4] billion [added: of] cash flows from operations [removed: funded $5.2] [added: helped fund $4.9] billion in capital expenditures for the business.

As part of our multi-year [removed: refleeting initiative,] [added: fleet transformation,] we took delivery of [removed: 68] [added: 88] new aircraft, including A321-200s, B-737-900ERs, A350-900s, [added: A330-900s,] A220-100s and CRJ-900s.

These deliveries allowed for the retirement of older, less [added: fuel] efficient [removed: aircraft.][added: aircraft, including the announced retirement of our MD-90 fleet by the end of 2022.]

The non-GAAP financial measures [removed: pre-tax income, adjusted,] [added: free cash flow,] TRASM, [removed: adjusted,] [added: adjusted] and [removed: CASM-Ex,] [added: CASM-Ex] used above, are defined and reconciled in "Supplemental Information" below.

Results of [removed: Operations - 2018 Compared to 2017][added: Operations]

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

| (in millions) | [added: | | 2019 | | |] 2018 | | | [removed: 2017] | | | | | | | | [added: |]

| Ticket - Main cabin | [added: | |] $ | [removed: 21,196] [added: 21,919] | | $ | [removed: 20,380] [added: 21,196] | | $ | [removed: 816] [added: 723] | | [removed: 4.0] [added: 3.4] | [added: |] % | [added: | | |]

| Ticket - Business cabin and premium products | [removed: 13,754] | | [added: 14,989] | [removed: 12,087] | | [added: 13,754] | [removed: 1,667] | | [added: 1,235] | [removed: 13.8] | [added: | 9.0 | |] % | [added: | | |]

| Loyalty travel awards | [removed: 2,651] | | [added: 2,900] | [removed: 2,403] | | [added: 2,651] | [removed: 248] | | [added: 249] | [removed: 10.3] | [added: | 9.4 | |] % | [added: | | |]

| Travel-related services | [removed: 2,154] | | [added: 2,469] | [removed: 2,077] | | [added: 2,154] | [removed: 77] | | [added: 315] | [removed: 3.7] | [added: | 14.6 | |] % | [added: | | |]

| Total passenger revenue | [added: | |] $ | [removed: 39,755] [added: 42,277] | | $ | [removed: 36,947] [added: 39,755] | | $ | [removed: 2,808] [added: 2,522] | | [removed: 7.6] [added: 6.3] | [added: |] % | [added: | | |]

| Total operating revenue | [added: | |] $ | [removed: 44,438] [added: 47,007] | | $ | [removed: 41,138] [added: 44,438] | | $ | [removed: 3,300] [added: 2,569] | | [removed: 8.0] [added: 5.8] | [added: |] % | [added: | | |]

| TRASM (cents) | | [removed: 16.87] | [removed: ¢ |] [added: 17.07] | [removed: 16.18] | ¢ | [added: 16.87] | [removed: 0.69] | ¢ | [removed: 4.3] | [removed: %] | [added: |]

| Third-party refinery [removed: sales(1)] [added: sales] | [removed: (0.21] | | [removed: )] [added: (0.04)] | [removed: (0.20] | | [removed: )] [added: (0.21)] | [removed: (0.01] | | [removed: )] | [removed: NM] | |

[removed: | (1) | For] [added: (1)For] additional information on [removed: adjusting for third-party refinery sales,] [added: adjustments to TRASM,] see "Supplemental Information" below. [removed: |]

[removed: Ticket,] [added: Ticket revenues,] including both main cabin and business cabin and premium [removed: products, and loyalty travel awards revenue] [added: products] increased [removed: $2.5] [added: $2.0] billion [removed: and $248 million, respectively,] compared to the year ended December 31, [removed: 2017, consistent with the discussion of passenger revenue by geographic region, below.][added: 2018.]

| | | | | [added: | |] Increase [removed: (Decrease) vs.] [added: (Decrease) vs.] Year Ended December 31, [removed: 2017] [added: 2018] | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | |]

| (in millions) | [added: | |] Year Ended December 31, [removed: 2018] [added: 2019] | | | Passenger Revenue | | [added: |] RPMs (Traffic) | | [added: |] ASMs (Capacity) | | [added: |] Passenger Mile Yield | | [added: |] PRASM | | [added: |] Load Factor | | | [added: | | | | | | | | | | | | | | | | | | | | |]

Passenger revenue increased [removed: $2.8] [added: $2.5] billion, or [removed: 7.6%,] [added: 6.3%,] compared to the prior year.

PRASM increased [removed: 3.9%] [added: 1.7%] and passenger mile yield increased [removed: 4.0%] [added: 0.8%] on [removed: 3.6%] [added: 4.6%] higher capacity.

Passenger revenue related to our international regions increased [removed: 6.7%] [added: 2.7%] year-over-year [removed: including growth in all three regions, despite reduced] [added: primarily due to] capacity [added: growth] in the [removed: Pacific] [added: Atlantic region] and [added: yield strength in the] Latin [removed: America.][added: America region.]

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

| Ancillary businesses and refinery | [removed: $] | [removed: 1,801] | [added: 1,297] | [removed: $] | [removed: 1,591] | [added: 1,801] | [removed: $] | [removed: 210] | [added: (504)] | [removed: 13.2] | [added: | (28.0) | |] % | [added: | | |]

| Total other revenue | [added: | |] $ | [removed: 3,818] [added: 3,977] | | $ | [removed: 3,447] [added: 3,818] | | $ | [removed: 371] [added: 159] | | [removed: 10.8] [added: 4.2] | [added: |] % | [added: | | |]

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

*Loyalty Program.* Loyalty program revenues relate [added: primarily] to brand usage by third parties and [removed: other performance obligations embedded in mileage credits sold, including] [added: include the] redemption of [removed: mileage credits] [added: miles] for non-travel awards.

*Miscellaneous.* Miscellaneous revenue is primarily composed of lounge access and codeshare [removed: revenues.][added: revenues, with lounge access revenue driving the majority of the $160 million increase compared to 2018.]

| Salaries and related costs | [added: | |] $ | [removed: 10,743] [added: 11,225] | | $ | [removed: 10,058] [added: 10,743] | | $ | [removed: 685] [added: 482] | | [removed: 6.8] [added: 4.5] | [added: |] % | [added: | | |]

| Aircraft fuel and related taxes | [removed: 9,020] | | [added: 8,519] | [removed: 6,756] | | [added: 9,020] | [removed: 2,264] | | [added: (501)] | [removed: 33.5] | [added: | (5.6) | |] % | [added: | | |]

| Regional carriers expense, excluding fuel | [added: | | 3,584 | | |] 3,438 | | | [removed: 3,466] [added: 146] | | | [removed: (28] [added: 4.2] | | [removed: )] [added: %] | [removed: (0.8] | [removed: )%] | [added: |]

This section of this Form 10-K does not address certain items regarding the year ended December 31, 2017.

Discussion and analysis of 2017 and year-to-year comparisons between 2018 and 2017 not included in this Form 10-K can be found in "Item 7.

Management's Discussion and Analysis" of our Annual Report on Form 10-K for the year ended December 31, 2018.

Delta had a strong year in 2019, delivering record financial results and making significant progress on strategic priorities.

We leveraged our brand momentum to drive strong revenue growth and improvement in pre-tax income, margin, earnings per share and free cash flow over 2018.

Strategic accomplishments during the year include our renewed agreement with American Express and announcing plans to enter into a strategic alliance with LATAM.

Our pre-tax income for 2019 was $6.2 billion, representing a $1 billion, or 20%, increase compared to the prior year.

Diluted earnings per share of $7.30 improved 29% over 2018.

Our $8.4 billion of cash flows from operations helped fund $4.9 billion in capital expenditures, resulting in free cash flow of $4.2 billion, representing a $1.8 billion improvement to the prior year.

We returned 72% of free cash flow, or $3 billion, to shareholders through share repurchases and dividends.

The improvement in earnings and cash flow primarily resulted from a $2.6 billion increase in revenue and lower fuel expense on an 8% decrease in the market price per gallon of fuel and improved fuel efficiency.

We continued to run the world’s most reliable airline and set a new record for zero cancel days with 165 cancel-free days across the system and 281 on our mainline operations.

Industry-leading operational performance, our culture of service and continued product investments supported record customer satisfaction scores.

In 2019, we increased net promoter scores in every geographic region, highlighted by a 5-point improvement in the Domestic region to 50%.

Compared to 2018, our operating revenue increased $2.6 billion, or 5.8%, on balanced growth across our diverse revenue streams, with premium product ticket revenue driving nearly half of the improvement, and strong growth in both loyalty and MRO revenue.

Total loyalty revenue grew 18% in 2019.

The increase in contracted services expense predominantly relates to services performed by Delta Global Services ("DGS") that were recorded in salaries and related costs prior to the sale of that business in December 2018.

These increases were partially offset by lower fuel expense on an 8% decrease in the market price per gallon of fuel and improved fuel efficiency driven by our ongoing fleet transformation.

We continued to make significant progress in expanding our global reach by acquiring an equity stake in Hanjin-KAL, the largest shareholder of Korean Air, and announcing plans to enter into a strategic alliance with LATAM and completing a tender offer to acquire a 20% equity stake which closed in January 2020.

Effective in January 2020, we combined our separate transatlantic joint venture agreements with Air France-KLM and Virgin Atlantic into a single three-party transatlantic joint venture.

In addition, we continue to make progress on our joint venture agreement with WestJet with respect to trans-border routes between the U.S. and Canada.

This agreement remains subject to required regulatory approvals.

We also made significant investments in cabin interior refurbishments, Sky Clubs and technology.

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

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

| Cargo | | | 753 | | | 865 | | | (112) | | | (12.9) | | % | | | |

| Other | | | 3,977 | | | 3,818 | | | 159 | | | 4.2 | | % | | | |

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

| TRASM (cents) | | | 17.07 | | ¢ | 16.87 | | ¢ | 0.20 | | ¢ | 1.2 | | % | | | |

| DGS sale adjustment(1) | | | — | | | (0.09) | | | 0.09 | | | NM | | | | | |

| TRASM, adjusted (cents) | | | 17.03 | | ¢ | 16.57 | | ¢ | 0.46 | | ¢ | 2.8 | | % | | | |

The growth in ticket revenue was driven by strength in the Delta brand and products, capitalizing on healthy industry business and leisure demand.

We continue to take delivery of new aircraft that include more premium seats, while also generating higher paid load factor for premium products.

Loyalty travel awards revenue increased $249 million compared to the year ended December 31, 2018 due to growth in mileage redemptions.

Travel-related services increased $315 million compared to the year ended December 31, 2018 primarily due to increases in checked baggage and ticket change revenues.

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

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

| Domestic | | | $ | 30,367 | | 7.8 | | % | 6.8 | | % | 5.3 | | % | 1.0 | | % | 2.4 | | % | 1.2 | | | pts | | | | | | | | | | | | | | | | | | | | |

| Atlantic | | | 6,381 | | | 3.5 | | % | 4.8 | | % | 4.4 | | % | (1.3) | | % | (0.9) | | % | 0.4 | | | pts | | | | | | | | | | | | | | | | | | | | |

| Latin America | | | 3,002 | | | 4.0 | | % | (0.1) | | % | (0.9) | | % | 4.0 | | % | 4.9 | | % | 0.7 | | | pts | | | | | | | | | | | | | | | | | | | | |

Our pre-tax income for 2018 was $5.2 billion, representing a $349 million decrease compared to the prior year, primarily resulting from higher fuel expense and salaries and related costs, offset by increased operating revenue.

Pre-tax income, adjusted (a non-GAAP financial measure) was $5.1 billion, a decrease of $137 million compared to the prior year.

The adjustments to pre-tax income were primarily related to $53 million of fuel hedge mark-to-market ("MTM") adjustments and settlements in the current year compared to $259 million in the prior year.

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.

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.

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.

Operating Revenue

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

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

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

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

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

| | |

| --- | --- |

Passenger Revenue

*Ticket and Loyalty Travel Awards Revenue*

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 |

| Latin America | 2,888 | | | 0.9 | % | (1.7 | )% | (0.5 | )% | 2.6 | % | 1.4 | % | (1.0 | ) | pt |

| Pacific | 2,543 | | | 3.0 | % | (1.8 | )% | (1.4 | )% | 4.9 | % | 4.5 | % | (0.3 | ) | pts |

| Total passenger revenue | $ | 39,755 | | 7.6 | % | 3.5 | % | 3.6 | % | 4.0 | % | 3.9 | % | (0.1 | ) | pts |

Load factor was slightly lower than the prior year period at 85.5%.

Unit revenues of the domestic region increased 2.6%, resulting from our commercial initiatives, including branded fares, strong demand and fare increases implemented throughout 2018 in response to higher fuel prices.

Our domestic operations have generated year-over-year unit revenue and business yield growth throughout 2018.

During the September 2018 quarter, we signed a definitive agreement with WestJet that, after regulatory approval, will create a U.S.-Canada trans-border joint venture, providing enhanced offerings and more choice for customers.

During 2018, we continued to expand our branded fare products and leveraged the relationships with our alliance partners to generate unit revenue increases across all three international regions.

In the Atlantic, unit revenues increased due to year-over-year yield strength from business cabin traffic and the benefit provided by foreign currency fluctuations.

Yield growth was particularly strong as we continued to leverage our alliance partners' hub positions in Europe's leading business markets of Amsterdam, London and Paris.

During 2018, we initiated service on our flagship A350-900 with Delta One suites and the Delta Premium Select cabin from Detroit to Amsterdam.

We also launched several new routes, including Los Angeles to Paris and Amsterdam, Indianapolis to Paris and Atlanta to Lisbon.

Unit revenues increased in Latin America principally as a result of yield growth, particularly in the Caribbean which has generated seven consecutive quarters of unit revenue growth.

Key destinations impacted by the 2017 hurricane damage continue to recover.

Our derivative contracts to hedge the financial risk from changing fuel prices are primarily related to Monroe’s [removed: refining margins.][added: inventory.]

Our exposure to market risk from adverse changes in interest rates is primarily associated with our [removed: long-term] debt obligations.

Market risk associated with our fixed and variable rate [removed: long-term] debt relates to the potential reduction in fair value and negative impact to future earnings, respectively, from an increase in interest rates.

At December 31, [removed: 2018,] [added: 2019,] we had [removed: $5.7] [added: $7.6] billion of fixed-rate [removed: long-term] debt and [removed: $3.7] [added: $2.9] billion of variable-rate [removed: 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 [removed: long-term] debt by [removed: $240] [added: $300] million at December 31, [removed: 2018] [added: 2019] and would have increased the annual interest expense on our variable-rate [removed: long-term] debt by [removed: $37] [added: $29] million.

We are subject to foreign currency exchange rate risk because we have [removed: revenue and] [added: revenue,] expense [added: and equity investments] denominated in foreign currencies.

At December 31, [removed: 2018,] [added: 2019,] we had open [removed: foreign] [added: a U.S. dollar-Euro cross] currency [removed: forward contracts] [added: swap contract] totaling a [removed: $1] [added: $9] million asset position.

We estimate that a 10% depreciation or appreciation in the price of the [removed: Japanese yen] [added: Euro] in relation to the U.S. dollar would [removed: change] [added: have changed] the projected cash settlement value of our open hedge [removed: contracts] [added: contract] by [removed: a $6 million gain or $7] [added: $45] million [removed: loss, respectively,] for the year ending December 31, 2019.

The U.K. Financial Conduct Authority announced in July 2017 that it intends to no longer compel banks to submit rates for the calculation of the London interbank offered rate ("LIBOR") after 2021.

To mitigate the possible impact, various regulators have proposed alternative reference rates.

The effect of any discontinuation or replacement of LIBOR cannot be predicted at this time, but we believe our risk would be limited to variable rate debt and variable rate finance leases which utilize this rate.

At December 31, 2019 we have approximately $2.1 billion of variable rate finance leases and variable rate debt maturing after 2021, that include provisions to update the applicable reference rate which are not expected to be materially different from LIBOR.

At December 31, 2019, we had open a U.S. dollar-South Korean won cross currency swap contract totaling a $3 million liability position.

We estimate that a 10% depreciation or appreciation in the price of the South Korean won in relation to the U.S. dollar would have changed the projected cash settlement value of our open hedge contract by $16 million for the year ending December 31, 2019.

Our network is supported by a fleet of [added: over 1,000] aircraft that is varied in size and capabilities, giving us flexibility to adjust aircraft to the network.

Our principal executive offices are located at [removed: Hartsfield-Jackson] [added: Hartsfield- Jackson] Atlanta International Airport in Atlanta, Georgia.

[removed: We] [added: Through improved product segmentation, we] offer distinct travel experiences with clear value propositions that enable customer choice.

[removed: Delta OneTM, Delta Premium Select, First Class and Delta Comfort+TM include varying premium amenities and services while] Main Cabin [removed: and] [added: products, including] Basic [removed: Economy allow] [added: Economy, represented approximately half of our revenue in 2019 and provide] varying levels of pre-travel flexibility as well as [added: our] exceptional service onboard the aircraft.

We are [removed: investing in] [added: currently refreshing] our fleet, acquiring new, more [added: fuel] efficient aircraft with increased premium [removed: seating] [added: seating,] to replace older aircraft.

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

[removed: Leveraging] [added: Innovative] Technology to Improve Service and Efficiency

This digital transformation [removed: will enhance] [added: is enhancing] interactions with our customers and [removed: allow us] [added: allows our people] to deliver more personalized service, further enhancing the customer experience and strengthening our [removed: brand and competitive position.][added: brand.]

We continue to [removed: make] [added: invest in] technological improvements that [removed: personalize the travel experience for] [added: support] our [removed: customers] [added: operations] and [removed: empower] [added: provide tools for] our employees.

[removed: Global Network][added: Our Global Network and Fleet]

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

[removed: | • | A joint venture with Virgin Atlantic 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 [removed: Airways. |][added: Airways and a non-controlling 9% ownership stake in the parent company of Air France and KLM.]

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

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

[removed: | • | In 2018, we launched a] [added: - A] joint venture with Korean Air [removed: Lines] with respect to [removed: operations on transpacific routes] [added: traffic flows] between the United States and certain countries in Asia. [removed: |]

*Enhanced Commercial Agreements with [removed: Foreign Carriers.*] [added: China Eastern.*] We [removed: have] [added: own] a [removed: 9% non-controlling ownership stake] [added: 3% equity interest] in [removed: GOL Linhas Aéreas Inteligentes, S.A., the parent company of Gol Linhas Aéreas (a Brazilian air carrier),] [added: China Eastern,] with whom we have a strategic joint marketing and commercial cooperation [removed: arrangement,] [added: arrangement covering traffic flows between China and the U.S.,] which includes reciprocal codesharing, loyalty program participation, airport lounge access and joint sales cooperation.

The other members of SkyTeam are Aeroflot, Aerolíneas Argentinas, Aeroméxico, Air Europa, Air France, Alitalia, China Airlines, China Eastern, [removed: China Southern,] CSA Czech Airlines, Garuda Indonesia, Kenya Airways, KLM, Korean Air, Middle East Airlines, Saudi Arabian Airlines, Tarom, Vietnam Airlines and Xiamen Airlines.

We have air service agreements with domestic regional air carriers that feed traffic to our route system by serving passengers primarily in small and medium-sized [removed: cities.][added: cities in the domestic market.]

Approximately 15% of our passenger revenue in [removed: 2018] [added: 2019] was related to flying by [removed: these] regional air carriers.

Through our regional carrier program, Delta [removed: Connection,] [added: Connection®,] we have contractual arrangements with regional carriers to operate aircraft using our "DL" designator code.

We [added: currently] have contractual arrangements with:

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

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

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

[removed: | • |] [added: -] SkyWest Airlines, Inc., a subsidiary of SkyWest, Inc. [removed: |]

These capacity purchase agreements are long-term agreements, usually with initial terms of at least [removed: 10] [added: ten] years, which grant us the option to extend the initial term.

[removed: Loyalty] [added: Customer Loyalty] Program

Our SkyMiles® loyalty program is designed to [removed: retain and increase traveler] [added: grow customer] loyalty by offering incentives to customers to increase travel on Delta.

The loyalty program allows program members to earn mileage credit [added: ("miles")] for [removed: travel awards] [added: award redemptions such as flights and upgrades,] by flying on Delta, [removed: its] [added: our] regional carriers and other participating airlines.

[removed: Mileage credit] [added: Miles] may also be earned by using certain services offered by program participants, such as credit card companies, [removed: hotels and] [added: hotels,] car rental [removed: agencies.][added: agencies and ridesharing companies.]

In addition, individuals may purchase [removed: mileage credits.][added: miles.]

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

[removed: Mileage credits] [added: Miles] are subject to certain transfer restrictions and travel awards on partner airlines are subject to capacity-controlled seating.

In [removed: 2018, 8.2%] [added: 2019, 8.9%] of revenue miles flown on Delta were from award travel, as program members redeemed miles in the loyalty program for [removed: 17.2] [added: 20] million award redemptions.

| Year | [added: | |] Gallons [removed: Consumed(1)] [added: Consumed(1)] (in millions) | | [removed: Cost(1)(2)] [added: | Cost(1)(2)] (in millions) | | | Average Price Per [removed: Gallon(1)(2)] [added: Gallon(1)(2)] | | | Percentage of Total Operating [removed: Expense(1)(2)] [added: Expense(1)(2)] | | [added: |]

| 2018 | [added: | |] 4,113 | | [added: |] $ | 9,020 | | $ | 2.20 | | 23.0 | [added: |] % |

| 2017 | [added: | |] 4,032 | | [added: |] $ | 6,756 | | $ | 1.68 | | 19.2 | [added: |] % |

[removed: | (1) | Includes] [added: (1)Includes] the operations of our regional carriers operating under capacity purchase agreements. [removed: |]

[removed: | (2) | Includes] [added: (2)Includes] the impact of fuel hedge activity and refinery segment results. [removed: |]

Our derivative contracts to hedge the financial risk from changing fuel prices are primarily related to Monroe’s [removed: refining margins.][added: inventory.]

We are the leading U.S. global airline serving 200 million customers every year.

We connect customers across our expansive global network to more than 300 destinations in over 50 countries.

We are the world’s largest airline by total revenues and the most profitable with five consecutive years of $5 billion or more in pre-tax income.

We are committed to industry-leading safety and reliability and are consistently among the industry’s best performers.

Our employees provide world-class travel experiences for our customers and give back to the communities where they live, work and serve.

Our people and service are our strongest competitive advantage creating significant customer satisfaction improvements.

Other key competitive advantages include operational reliability, our global network, customer loyalty and our investment grade balance sheet.

We have diversified revenue streams beyond the basic sale of an airline ticket in order to reduce the impact of cyclicality on our results.

Our growing partnership with American Express provides a co-brand revenue stream tied to broader consumer spending.

Our focus in recent years on premium products and customer segmentation has enhanced our revenue growth and reduced reliance on the most price sensitive customer segment.

We also maintain complementary portfolio businesses, such as our Maintenance, Repair and Overhaul (“MRO”) division, where we are well positioned for significant organic growth through contractual agreements with jet engine manufacturers.

The Delta Brand

We have the world’s most valuable airline brand, one that is mentioned not just among the best global airlines, but also alongside top consumer brands.

Over the last decade, we significantly improved the quality and reliability of our operations.

As a result, customer satisfaction scores have more than tripled.

With operational excellence and best-in-class service, we are earning our customers' trust and preference.

Our continued investment in operations, product, service, airports and technology are reshaping customer perception of our brand and driving increased customer loyalty.

We offer more than 5,000 daily departures and as many as 15,000 affiliated departures including the premier SkyTeam alliance, of which Delta is a founding member.

We generate over 70% of our passenger revenue from our domestic network, centered around high-margin core hubs in Atlanta, Minneapolis-St. Paul, Detroit and Salt Lake City.

These core hub positions complement strong coastal hub positions in Boston, Los Angeles, New York-LaGuardia, New York-JFK and Seattle.

We have agreements with domestic regional carriers that operate as Delta Connection® to feed traffic to our domestic hubs.

We serve the Transatlantic, Transpacific and Latin America markets directly on Delta and through joint ventures with global airline partners.

Internationally, we have significant hubs and market presence in Amsterdam, London-Heathrow, Mexico City, Paris-Charles de Gaulle and Seoul-Incheon.

We will become the largest U.S. carrier to Tokyo-Haneda in 2020 as we consolidate operations in Tokyo, the preferred airport for the local and corporate markets.

Through innovative alliances with Aeroméxico, Air France-KLM, China Eastern, Korean Air, Virgin Atlantic and Virgin Australia and alliances pending regulatory approval with LATAM Airlines and WestJet, we are bringing more choice to customers worldwide.

Our strategic relationships with these international airlines are an important part of our business as they improve our access to markets around the world and enable us to provide customers a more seamless global travel experience across our alliance network.

We and our alliance partners collectively serve over 140 countries and more than 900 destinations around the world, extending our network reach to cover approximately 98% of global gross domestic product.

In some cases, we have reinforced strategic alliances through equity investments where we have opportunity to create deep relationships and maximize commercial cooperation.

We are also reducing our fleet complexity with fewer aircraft types.

The evolution from a legacy fleet to a more optimal fleet suited to the scale of our network will provide substantial efficiency benefits and further efforts to reduce our carbon footprint.

Expanded Products and Services

Over the last decade we have fundamentally transformed our business.

We have invested in our people, our product and our reliability to alter the commodity-like nature of air travel.

In 2019, approximately one-third of our passenger revenues were from premium products, which include Delta One®, Delta Premium Select, First Class and Delta Comfort+®.

Our tickets are sold through various distribution channels, with 52% of tickets sold through direct channels.

These include digital channels, such as delta.com and the Fly Delta app, and our reservations specialists where we deliver more direct, personalized interactions with our customers at reduced distribution costs.

Indirect distribution channels include online travel agencies and traditional "brick and mortar" agencies.

Our objective is to make technology a strategic differentiator.

Through the development of innovative new technologies, we can better serve customers and give our employees the best tools.

For our customers, we are making investments in the Fly Delta app, in the airport and onboard our aircraft.

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

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

Our route network is centered around a system of significant hubs and key markets at airports in Amsterdam, Atlanta, Boston, Detroit, London-Heathrow, Los Angeles, Mexico City, Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City, 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 key market to domestic and international cities and to other hubs or key markets.

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 Connection,® we are able to bring choice to customers worldwide.

Expanded Product Offerings

Our tickets are sold through various distribution channels, including: (1) digital channels, such as delta.com and mobile applications/web, (2) telephone reservations, (3) online travel agencies and (4) traditional "brick and mortar" and other agencies.

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

We are engaged in a digital transformation by continuing to invest in technology that supports our operations and provides tools for our employees, with our long term goal to convert our technology into a competitive advantage.

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.

International Alliances

Our international alliance relationships 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 loyalty program participation and airport lounge access arrangements.

These alliance relationships also may present opportunities in other areas, such as airport ground handling arrangements, aircraft maintenance insourcing and joint procurement.

| | |

| --- | --- |

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

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.

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

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

| 2016 | 4,016 | | $ | 5,985 | | $ | 1.49 | | 18.3 | % |

Ancillary Businesses

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.

These agreements include separate agreements with the European Union and Japan.

The EPA has historically implemented air emissions control standards adopted by ICAO; therefore, the ICAO aircraft engine certification standards are expected to influence the development of any future EPA greenhouse gas emission standards for aircraft.

| | | | | | |

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

| Endeavor Air Dispatchers(1) | 60 | | | PAFCA | December 31, 2018 |

Executive Officers of the Registrant

[removed: FORM 10-K][added: FORM 10-K]

| [removed: þ] [added: ☑] | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2018][added: 2019]

| [removed: o] [added: ☐] | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | | | | |]

[removed: ][added: ]

| Delaware | [added: | |] 58-0218548 | [added: | |]

| (State or other jurisdiction of incorporation or organization) | [added: | |] (I.R.S. Employer Identification No.) | [added: | |]

| Post Office Box 20706 | | [added: | | | |]

| Atlanta, Georgia | [added: | |] 30320-6001 | [added: | |]

| (Address of principal executive offices) | [added: | |] (Zip Code) | [added: | |]

[removed: |] Registrant's telephone number, including area code: (404) 715-2600 [removed: | |]

| Title of each class | | [added: | | | | Trading Symbol | | | | | |] Name of each exchange on which registered | [added: | |]

| Common Stock, par value $0.0001 per share | | [added: | | | | DAL | | | | | |] New York Stock Exchange | [added: | |]

Yes [removed: o] [added: ☐] No þ

| Large accelerated filer | [removed: þ] | [added: | ☑ | | |] Accelerated filer | [removed: o] | [added: | ☐ | | |] Non-accelerated filer | [removed: o] | [added: | ☐ | | | | | | | | |]

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, [removed: 2018] [added: 2019] was approximately [removed: $34.2] [added: $36.9] billion.

On January 31, [removed: 2019,] [added: 2020,] there were outstanding [removed: 678,950,098] [added: 640,093,995] shares of the registrant's common stock.

| Table of Contents | | [added: | | | | | | |]

| | [added: | |] Page | [added: | | | | |]

| [Forward-Looking [removed: Statements](#s992AE06DC10A5115AB0073AC799CC986)] [added: Statements](#i_0_13)] | [removed: [1](#s992AE06DC10A5115AB0073AC799CC986)] | [added: | [1](#i_0_13) | | | | | |]

| PART I | | [added: | | | | | | |]

| [removed: [ITEM] [added: [ITEM] 1. [removed: BUSINESS](#s951939D656A15495A4F8A79DA3064AE2)] [added: BUSINESS](#i_0_19)] | [removed: [2](#s951939D656A15495A4F8A79DA3064AE2)] | [added: | [2](#i_0_19) | | | | | |]

| [removed: [General](#sB06D4D18CA6F5C638B45DB60E036DA0C)] [added: [General](#i_0_22)] | [removed: [2](#sB06D4D18CA6F5C638B45DB60E036DA0C)] | [added: | [2](#i_0_22) | | | | | |]

| [Executive Officers of the [removed: Registrant](#s2E49E5AF1ADE58ED928257385F14CF33)] [added: Registrant](#i_0_43)] | [removed: [11](#s2E49E5AF1ADE58ED928257385F14CF33)] | [added: | [12](#i_0_43) | | | | | |]

| [removed: [ITEM] [added: [ITEM] 1A. RISK [removed: FACTORS](#sCABCD48666205E0AA9B39B7B979151B1)] [added: FACTORS](#i_0_49)] | [removed: [12](#sCABCD48666205E0AA9B39B7B979151B1)] | [added: | [13](#i_0_49) | | | | | |]

| [Risk Factors Relating to [removed: Delta](#sA7505CCFC67C537C8E22AACAC281DB74)] [added: Delta](#i_0_52)] | [removed: [12](#sA7505CCFC67C537C8E22AACAC281DB74)] | [added: | [13](#i_0_52) | | | | | |]

| [Risk Factors Relating to the Airline [removed: Industry](#s2464DEA1A1785C3D855CC8C880B9C4B6)] [added: Industry](#i_0_55)] | [removed: [17](#s2464DEA1A1785C3D855CC8C880B9C4B6)] | [added: | [18](#i_0_55) | | | | | |]

| [removed: [ITEM] [added: [ITEM] 1B. UNRESOLVED STAFF [removed: COMMENTS](#s1EC570684CE05EBDAAB75E51DB39FB1A)] [added: COMMENTS](#i_0_58)] | [removed: [19](#s1EC570684CE05EBDAAB75E51DB39FB1A)] | [added: | [21](#i_0_58) | | | | | |]

| [removed: [ITEM] [added: [ITEM] 2. [removed: PROPERTIES](#sC73BCBAC6072565E8038553B69452194)] [added: PROPERTIES](#i_0_61)] | [removed: [20](#sC73BCBAC6072565E8038553B69452194)] | [added: | [22](#i_0_61) | | | | | |]

| [Flight [removed: Equipment](#sA1DD9FDB21EC5F9286E8FADC7AF615FE)] [added: Equipment](#i_0_64)] | [removed: [20](#sA1DD9FDB21EC5F9286E8FADC7AF615FE)] | [added: | [22](#i_0_64) | | | | | |]

| [Ground [removed: Facilities](#sFED3F16F23DF5FFF804BEC12FBBAC7D2)] [added: Facilities](#i_0_67)] | [removed: [21](#sFED3F16F23DF5FFF804BEC12FBBAC7D2)] | [added: | [23](#i_0_67) | | | | | |]

| [removed: [ITEM] [added: [ITEM] 3. LEGAL [removed: PROCEEDINGS](#s75100405F0735ECDA2365C696E2CC5A3)] [added: PROCEEDINGS](#i_0_70)] | [removed: [22](#s75100405F0735ECDA2365C696E2CC5A3)] | [added: | [24](#i_0_70) | | | | | |]

| [removed: [ITEM] [added: [ITEM] 4. MINE SAFETY [removed: DISCLOSURES](#s24C07B83713D5ECE9263429205106D20)] [added: DISCLOSURES](#i_0_73)] | [removed: [22](#s24C07B83713D5ECE9263429205106D20)] | [added: | [24](#i_0_73) | | | | | |]

| PART II | | [added: | | | | | | |]

| [removed: [ITEM] [added: [ITEM] 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED [removed: STOCKHOLDER](#s40BB2DD6A68B57E7BE9ED799E6854A9D) [MATTERS] [added: STOCKHOLDER](#i_0_79) [MATTERS] AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#s40BB2DD6A68B57E7BE9ED799E6854A9D)] [added: SECURITIES](#i_0_79)] | [removed: [23](#s40BB2DD6A68B57E7BE9ED799E6854A9D)] | [added: | [25](#i_0_79) | | | | | |]

| [removed: [ITEM] [added: [ITEM] 6. SELECTED FINANCIAL [removed: DATA](#s29B3E21F72545EBAB0B798847370F388)] [added: DATA](#i_0_91)] | [removed: [25](#s29B3E21F72545EBAB0B798847370F388)] | [added: | [27](#i_0_91) | | | | | |]

| [removed: [ITEM] [added: [ITEM] 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION [removed: AND](#sF9178631131555C3ACFFA1302F494D71) [RESULTS] [added: AND](#i_0_94) [RESULTS] OF [removed: OPERATION](#sF9178631131555C3ACFFA1302F494D71)S] [added: OPERATION](#i_0_94)S] | [removed: [27](#sF9178631131555C3ACFFA1302F494D71)] | [added: | [29](#i_0_94) | | | | | |]

| [Non-Operating [removed: Results](#sDB4C82A4EC7F586F82CDA47E9700C836)] [added: Results](#i_0_118)] | [removed: [36](#sDB4C82A4EC7F586F82CDA47E9700C836)] | [added: | [35](#i_0_118) | | | | | |]

| [Income [removed: Taxes](#s8BBAB25EE8DB5AF39058258F0D6D4D2A)] [added: Taxes](#i_0_121)] | [removed: [36](#s8BBAB25EE8DB5AF39058258F0D6D4D2A)] | [added: | [35](#i_0_121) | | | | | |]

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| [Financial Highlights](#i_0_97) | | | [29](#i_0_97) | | | | | |

| [Results of Operations](#i_0_100) | | | [31](#i_0_100) | | | | | |

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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.

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

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

| [Other Businesses](#sA1381EE1928F5F8D8DBFF607E5485799) | [5](#sA1381EE1928F5F8D8DBFF607E5485799) |

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

| [Regulatory Matters](#sE92B11F905C554719034E8F607390536) | [7](#sE92B11F905C554719034E8F607390536) |

| [Employee Matters](#s0DB44555F9605C7C847B038F9521A76B) | [10](#s0DB44555F9605C7C847B038F9521A76B) |

| [Additional Information](#sCC85457095DD5CAB8222E2CC970AE619) | [11](#sCC85457095DD5CAB8222E2CC970AE619) |

| [Financial Highlights - 2018 Compared to 2017](#sAC71E9E86EE1563FB49C4A2FF4AE660C) | [27](#sAC71E9E86EE1563FB49C4A2FF4AE660C) |

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

| [Results of Operations - 2017 Compared to 2016](#s37C7A0BF28F15DC680491D7D01D919F8) | [32](#s37C7A0BF28F15DC680491D7D01D919F8) |

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

Our operating aircraft fleet, commitments and options at December 31, [removed: 2018] [added: 2019] are summarized in the following table:

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

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

| B-717-200 | [removed: 3] | [removed: 16] | [removed: 72] [added: 13] | [added: | | 22 | | | 56 | | |] 91 | [removed: 17.3] | [added: | 18.3 | | |] — | [added: | |] — | [added: | | | | | | | | | | | | | |]

| B-737-700 | [added: | |] 10 | [added: | |] — | [added: | |] — | [added: | |] 10 | [removed: 9.9] | [added: | 11.0 | | |] — | [added: | |] — | [added: | | | | | | | | | | | | | |]

| B-737-800 | [added: | |] 73 | [added: | |] 4 | [added: | |] — | [added: | |] 77 | [removed: 17.3] | [added: | 18.3 | | |] — | [added: | |] — | [added: | | | | | | | | | | | | | |]

| B-757-200 | [removed: 89] | [removed: 9] | [removed: 2] [added: 91] | [added: | | 8 | | | 1 | | |] 100 | [removed: 21.4] | [added: | 22.4 | | |] — | [added: | |] — | [added: | | | | | | | | | | | | | |]

| B-757-300 | [added: | |] 16 | [added: | |] — | [added: | |] — | [added: | |] 16 | [removed: 15.9] | [added: | 16.9 | | |] — | [added: | |] — | [added: | | | | | | | | | | | | | |]

| B-767-300ER | [removed: 55] | [removed: 1] | [added: 56 | | |] — | [added: | | — | | |] 56 | [removed: 22.6] | [added: | 23.6 | | |] — | [added: | |] — | [added: | | | | | | | | | | | | | |]

| B-767-400ER | [added: | |] 21 | [added: | |] — | [added: | |] — | [added: | |] 21 | [removed: 18.0] | [added: | 19.0 | | |] — | [added: | |] — | [added: | | | | | | | | | | | | | |]

| B-777-200ER | [added: | |] 8 | [added: | |] — | [added: | |] — | [added: | |] 8 | [removed: 19.1] | [added: | 20.1 | | |] — | [added: | |] — | [added: | | | | | | | | | | | | | |]

| B-777-200LR | [added: | |] 10 | [added: | |] — | [added: | |] — | [added: | |] 10 | [removed: 9.8] | [added: | 10.8 | | |] — | [added: | |] — | [added: | | | | | | | | | | | | | |]

| A220-100 | [removed: 4] | [added: | 17 | | |] — | [added: | |] — | [removed: 4] | [removed: 0.1] | [removed: 36] [added: —] | [removed: 50] | [added: | 17 | | | | | | | | | | | | | | |]

| A220-300 | [added: | |] — | [added: | |] — | [added: | |] — | [added: | |] — | [added: | |] — | [added: | |] 50 | [removed: —] | [added: | 50 | | | | | | | | | | | | | | |]

| A319-100 | [added: | |] 55 | [added: | |] — | [added: | |] 2 | [added: | |] 57 | [removed: 16.8] | [added: | 17.9 | | |] — | [added: | |] — | [added: | | | | | | | | | | | | | |]

| A320-200 | [removed: 55] | [removed: 3] | [added: 58 | | | — | | |] 4 | [added: | |] 62 | [removed: 23.4] | [added: | 24.4 | | |] — | [added: | |] — | [added: | | | | | | | | | | | | | |]

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

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

| A330-200 | [added: | |] 11 | [added: | |] — | [added: | |] — | [added: | |] 11 | [removed: 13.8] | [added: | 14.8 | | |] — | [added: | |] — | [added: | | | | | | | | | | | | | |]

| A330-300 | [added: | |] 28 | [added: | |] — | [added: | |] 3 | [added: | |] 31 | [removed: 9.9] | [added: | 11.0 | | |] — | [added: | |] — | [added: | | | | | | | | | | | | | |]

| A330-900neo [added: (1)] | [removed: —] | [removed: —] | [removed: —] [added: 7] | [removed: —] | [removed: —] | [removed: 35] [added: 11] | [removed: —] | [added: | 8 | | | 7 | | | 33 | | | | | | | | | | | | | | |]

| A350-900 | [removed: 11] | [removed: —] | [removed: —] [added: 4] | [removed: 11] | [removed: 1.0] | [removed: 14] [added: 2] | [added: | |] — | [added: | | 10 | | | 16 | | | | | | | | | | | | | | |]

[removed: | (1) | Excludes] [added: (1)Excludes] certain aircraft we own, lease or have committed to purchase [added: (including six CRJ-900 aircraft)] that are operated by regional carriers on our behalf shown in the table below. [removed: |]

The following table summarizes the aircraft fleet operated by regional carriers on our behalf at December 31, [removed: 2018:][added: 2019:]

| | [added: | |] Fleet Type | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | |]

| Carrier | [added: | |] CRJ-200 | [added: | |] CRJ-700 | [added: | |] CRJ-900 | [added: | |] Embraer 170 | [added: | |] Embraer 175 | [added: | |] Total | [added: | | | | | | | | | | | | | |]

| Endeavor Air, [removed: Inc.(1)] [added: Inc. (1)] | [added: | |] 42 | [removed: 3] | [removed: 109] | [added: 11 | | | 111 | | |] — | [added: | |] — | [removed: 154] | [added: | 164 | | | | | | | | | | | | | | |]

| SkyWest Airlines, Inc. | [removed: 77] | [removed: 22] | [removed: 41] [added: 75] | [added: | | 11 | | | 43 | | |] — | [removed: 49] | [removed: 189] | [added: 56 | | | 185 | | | | | | | | | | | | | | |]

| Compass Airlines, [removed: LLC] [added: Inc. (2)] | [added: | |] — | [added: | |] — | [added: | |] — | [added: | |] — | [removed: 36] | [removed: 36] | [added: 24 | | | 24 | | | | | | | | | | | | | | |]

| Republic Airline, Inc. | [added: | |] — | [added: | |] — | [added: | |] — | [removed: 21] | [removed: 16] | [removed: 37] [added: 22] | [added: | | 28 | | | 50 | | | | | | | | | | | | | | |]

| GoJet Airlines, LLC [added: (3)] | [added: | |] — | [removed: 22] | [added: | 12 | | |] 7 | [added: | |] — | [added: | |] — | [removed: 29] | [added: | 19 | | | | | | | | | | | | | | |]

[removed: | (1) | Endeavor] [added: (1)Endeavor] Air, Inc. is a wholly owned subsidiary of Delta. [removed: |]

As part of a multi-year effort, we have been investing in new aircraft to provide more premium products, an improved customer [removed: experience] [added: experience, greater fuel efficiency] and better operating economics.

Our purchase commitments for additional aircraft at December 31, [removed: 2018] [added: 2019] are detailed in the following table:

| | [added: | |] Delivery in Calendar Years Ending | | | | | [added: | | | | | | | | | | | | | | | | | | | | | |]

| Aircraft Purchase Commitments | [removed: 2019] | [added: |] 2020 | [added: | |] 2021 | [added: | | 2022 | | |] After [removed: 2021] [added: 2022] | [added: | |] Total | [added: | | | | | | | | | | | | | |]

| A220-100 | [removed: 24] | [removed: 12] | [added: 27 | | | 1 | | |] — | [added: | | 28 | | | 0.6 | | | 17 | | |] — | [removed: 36] | [added: | | | | | | | | | | | | |]

| A220-300 | [removed: —] | [added: |] 6 | [added: | |] 12 | [removed: 32] | [added: | 18 | | | 14 | | |] 50 | [added: | | | | | | | | | | | | | |]

| A321-200 | [removed: 32] | [removed: 27] | [removed: 3] [added: 53] | [added: | | 12 | | | 31 | | | 96 | | | 1.7 | | | 31 | | |] — | [removed: 62] | [added: | | | | | | | | | | | | |]

| A321-200neo | [removed: —] | [removed: 16] | [removed: 36] [added: 1] | [removed: 48] | [added: | 41 | | | 40 | | | 18 | | |] 100 | [added: | | | | | | | | | | | | | |]

As part of our ongoing fleet transformation, during 2019 we took delivery of 79 mainline aircraft and nine CRJ-900 aircraft, and removed 52 aircraft from our active mainline fleet.

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

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

| MD-88 | | | 41 | | | 6 | | | — | | | 47 | | | 28.7 | | | — | | | — | | | | | | | | | | | | | | |

| MD-90 | | | 30 | | | — | | | — | | | 30 | | | 22.7 | | | — | | | — | | | | | | | | | | | | | | |

| Total | | | 705 | | | 54 | | | 139 | | | 898 | | | 14.9 | | | 247 | | | 150 | | | | | | | | | | | | | | |

We have agreed to acquire four A350 aircraft from LATAM, which are included as purchase commitments in the table above.

In addition, we plan to assume ten of LATAM's A350 purchase commitments from Airbus, with deliveries through 2025.

For more information regarding our planned strategic alliance with LATAM, see Note 4 of the Notes to the Consolidated Financial Statements.

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

| Total | | | 117 | | | 34 | | | 161 | | | 22 | | | 108 | | | 442 | | | | | | | | | | | | | | |

(2)In 2019, we and Compass Airlines, Inc., agreed not to renew our contract and to end our relationship by the end of 2020.

(3)In 2019, we and GoJet Airlines, LLC, agreed not to renew our CRJ-700 contract and to end those operations by the end of 2020.

In addition, in January 2020, we agreed not to renew our CRJ-900 contract and to end those operations by the end of 2020.

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

| Total | | | 72 | | | 66 | | | 66 | | | 49 | | | 253 | | | | | | | | | | | | | | |

(1) Includes two A330-900neo lease commitments with one in each of 2020 and 2021.

| | | | | | | | |

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

| B-737-900ER | 73 | — | 39 | 112 | 2.7 | 18 | — |

| B-767-300 | 2 | — | — | 2 | 25.5 | — | — |

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

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

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

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| --- | --- |

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

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

| | | | | | |

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

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

As of January 31, [removed: 2019,] [added: 2020,] there were approximately [removed: 2,450] [added: 2,300] holders of record of our common stock.

Our Board of Directors initiated a quarterly dividend program in the September 2013 [removed: quarter, with a] [added: quarter and has increased the quarterly dividend] payment [removed: of $0.06] [added: several times, most recently to $0.4025] per [removed: share.][added: share in the September 2019 quarter.]

Dividend payments [removed: will be] [added: are] dependent upon our results of operations, financial condition, cash requirements, future prospects and other factors deemed relevant by the Board of Directors.

The following graph compares the cumulative total returns during the period from December 31, [removed: 2013] [added: 2014] to December 31, [removed: 2018] [added: 2019] 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: 2013] [added: 2014] 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: 2018] [added: 2019] quarter.

Some purchases made in the December [removed: 2018] [added: 2019] quarter were made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934.

| Period | [added: | |] Total Number of Shares Purchased | | [added: |] Average Price Paid Per Share | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | [added: |] Approximate Dollar Value (in millions) of Shares That May Yet Be Purchased Under the Plan or Programs | | | | [added: | | | | |]

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

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

| October 2019 | | | 1,601,569 | | | $ | 54.35 | | 1,601,569 | | | | | | $ | 1,210 | | | | |

| November 2019 | | | 1,280,509 | | | $ | 56.64 | | 1,280,509 | | | | | | $ | 1,135 | | | | |

| December 2019 | | | 1,149,975 | | | $ | 57.35 | | 1,149,975 | | | | | | $ | 1,070 | | | | |

| Total | | | 4,032,053 | | | | | | 4,032,053 | | | | | | | | | | | |

The Board has increased the quarterly dividend payment several times, most recently to $0.35 per share in the September 2018 quarter.

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

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

| 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 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: 2018.][added: 2019.]

We adopted Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” using the full retrospective transition method [added: in 2018] and recast results from 2016 and 2017 including interim periods therein.

Results from [removed: periods prior to 2016] [added: 2015] have not been recast for the adoption of this standard.

| | [added: | |] Year Ended December 31, | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| (in millions, except share data) | [added: | | 2019 | | |] 2018 | | | 2017 | | | 2016 | | | 2015 | | | [removed: 2014] | | | [added: | | | | | | | | |]

| Operating revenue | [added: | |] $ | [added: 47,007 | | $ |] 44,438 | | $ | 41,138 | | $ | 39,450 | | $ | 40,704 | | [removed: $] | [removed: 40,362] | | [added: | | | | | | | | |]

| Operating expense | [added: | | 40,389 | | |] 39,174 | | | 35,172 | | | 32,454 | | | 32,902 | | | [removed: 38,156] | | | [added: | | | | | | | | |]

| Operating income | [added: | | 6,618 | | |] 5,264 | | | 5,966 | | | 6,996 | | | 7,802 | | | [removed: 2,206] | | | [added: | | | | | | | | |]

| Non-operating expense, net | [removed: (113] | | [removed: )] [added: (420)] | [removed: (466] | | [removed: )] [added: (113)] | [removed: (643] | | [removed: )] [added: (466)] | [removed: (645] | | [removed: )] [added: (643)] | [removed: (1,134] | | [removed: )] [added: (645)] | [added: | | | | | | | | | | | | | |]

| Income before income taxes | [added: | | 6,198 | | |] 5,151 | | | 5,500 | | | 6,353 | | | 7,157 | | | [removed: 1,072] | | | [added: | | | | | | | | |]

| Income tax [removed: (provision) benefit] [added: provision] | [removed: (1,216] | | [removed: )] [added: (1,431)] | [removed: (2,295] | | [removed: )] [added: (1,216)] | [removed: (2,158] | | [removed: )] [added: (2,295)] | [removed: (2,631] | | [removed: )] [added: (2,158)] | [removed: (413] | | [removed: )] [added: (2,631)] | [added: | | | | | | | | | | | | | |]

| Net income | [added: | |] $ | [added: 4,767 | | $ |] 3,935 | | $ | 3,205 | | $ | 4,195 | | $ | 4,526 | | [removed: $] | [removed: 659] | | [added: | | | | | | | | |]

| Basic earnings per share | [added: | |] $ | [added: 7.32 | | $ |] 5.69 | | $ | 4.45 | | $ | 5.59 | | $ | 5.68 | | [removed: $] | [removed: 0.79] | | [added: | | | | | | | | |]

| Diluted earnings per share | [added: | |] $ | [added: 7.30 | | $ |] 5.67 | | $ | 4.43 | | $ | 5.55 | | $ | 5.63 | | [removed: $] | [removed: 0.78] | | [added: | | | | | | | | |]

| Cash dividends declared per share | [added: | |] $ | [added: 1.51 | | $ |] 1.31 | | $ | 1.02 | | $ | 0.68 | | $ | 0.45 | | [removed: $] | [removed: 0.30] | | [added: | | | | | | | | |]

| (in millions) | [added: | | 2019 | | |] 2018 | | | 2017 | | | 2016 | | | 2015 | | | [removed: 2014] | | | [added: | | | | | | | | |]

| MTM adjustments and settlements [added: on hedges] | [added: | |] $ | [removed: (53] [added: 14] | [removed: )] | $ | [added: (53) | | $ |] 259 | | $ | 450 | | $ | 1,301 | | [removed: $] | [removed: (2,346] | [removed: )] | [added: | | | | | | | | |]

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

| Equity investment MTM adjustments | [added: | | (14) | | |] 29 | | | [removed: (8] [added: (8)] | | [removed: )] | 115 | | | 26 | | | [removed: (134] | | [removed: )] | [added: | | | | | | | | |]

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

| | [added: | |] December 31, | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Total assets | [added: | |] $ | [added: 64,532 | | $ |] 60,266 | | $ | 53,671 | | $ | 51,850 | | $ | 53,134 | | [removed: $] | [removed: 54,005] | | [added: | | | | | | | | |]

| [removed: Long-term debt] [added: Debt] and finance leases (including current maturities) | [added: | | 11,160 | | |] 9,771 | | | 8,834 | | | 7,332 | | | 8,329 | | | [removed: 9,661] | | | [added: | | | | | | | | |]

| Stockholders' equity | [added: | | 15,358 | | |] 13,687 | | | 12,530 | | | 11,277 | | | 10,850 | | | [removed: 8,813] | | | [added: | | | | | | | | |]

| [removed: Consolidated(1)] [added: Consolidated(1)] | [added: | | 2019 | | |] 2018 | | | 2017 | | | 2016 | | | 2015 | | | [removed: 2014] | | | [added: | | | | | | | | |]

| Revenue passenger miles (in millions) | [added: | | 237,680 | | |] 225,243 | | | 217,712 | | | 213,098 | | | 209,625 | | | [removed: 202,925] | | | [added: | | | | | | | | |]

| Available seat miles (in millions) | [added: | | 275,379 | | |] 263,365 | | | 254,325 | | | 251,867 | | | 246,764 | | | [removed: 239,676] | | | [added: | | | | | | | | |]

| Passenger mile yield | | [removed: 17.65] | [added: 17.79 | |] ¢ | [added: 17.65] | [removed: 16.97] | ¢ | [added: 16.97] | [removed: 16.81] | ¢ | [added: 16.81] | [removed: 16.59] | ¢ | [added: 16.59] | [removed: 17.22] | ¢ | [added: | | | | | | | | | | | |]

| Passenger revenue per available seat mile | | [removed: 15.09] | [added: 15.35 | |] ¢ | [added: 15.09] | [removed: 14.53] | ¢ | [added: 14.53] | [removed: 14.22] | ¢ | [added: 14.22] | [removed: 14.10] | ¢ | [added: 14.10] | [removed: 14.58] | ¢ | [added: | | | | | | | | | | | |]