Delta Air Lines (DAL) 10-K risk factor changes: FY2020 vs FY2019

[removed: Risk Factors Relating to Delta][added: Risk Factors*]

In certain circumstances, we also may be subject to consequences of the failure of [removed: these carriers] [added: our airline partners] to comply with laws and regulations, including U.S. laws to which they may be [removed: subject.][added: subject such as the FCPA.]

Failure to comply with [added: existing or future] environmental regulations or [added: to otherwise manage] the [removed: enactment] [added: risks] of [removed: additional regulation] [added: climate change effectively] could have a material adverse effect on our [removed: consolidated financial results.][added: business.]

Terrorist attacks, geopolitical conflict or security events may adversely affect our business, financial condition and [removed: operating results.][added: results of operations.]

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

We [added: rely on government provided threat intelligence and utilize private sources to] constantly monitor [added: for] threats from terrorist groups and individuals, including from violent extremists both internationally and domestically, with respect to direct threats against our operations and in ways not directly related to the airline industry.

Terrorist attacks, geopolitical conflict or security events, or [added: the] fear [added: or threat] of 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.

In addition, potential costs from these types of events include increased security costs, impacts from avoiding flight paths over areas in which conflict is [removed: occurring,] [added: occurring or could occur, such as flight redirections or cancellations,] reputational harm and other costs.

The global airline industry is highly competitive and, if we cannot successfully compete in the marketplace, our business, financial condition and [removed: operating] results [added: from operations] will be materially adversely affected.

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

Consolidation in the airline industry, [removed: the rise of subsidized government sponsored international carriers,] changes in international [removed: alliances and] [added: alliances,] the creation of immunized joint ventures [added: and the rise of subsidized government sponsored international carriers] 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 other discount or ultra low-cost carriers, including Spirit 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 [removed: us.][added: Delta.]

If we cannot maintain our costs at a competitive level, then our business, financial condition and [removed: operating] results [added: of operations] could be materially adversely affected.

Our international operations are subject to competition from both foreign and domestic [removed: carriers.][added: carriers, including from point-to-point carriers on certain international routes.]

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

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

Increased competition in both the domestic and international markets may have a material adverse effect on our business, financial condition and [removed: operating results.][added: results of operations.]

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

[removed: The long-term grounding of] [added: Any significant problems associated with] an aircraft or engine type that we [removed: operate] [added: operate, such as design defects, mechanical problems, contractual performance by the manufacturers or adverse perception by the public leading to customer avoidance or adverse actions by the FAA resulting in grounding] could have a [removed: significant] [added: negative] 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.

The airline industry is subject to extensive government regulation, [added: which is costly] and [removed: new regulations may increase] [added: could materially adversely affect] our [removed: operating costs.][added: business.]

Airlines are subject to extensive regulatory and legal compliance requirements that result in significant [removed: costs.][added: costs and may have material adverse effects on our business.]

Other laws, regulations, taxes and airport rates and charges have also been imposed from time to time that significantly increase the cost of airline [removed: operations or] [added: operations,] reduce [removed: revenues.][added: revenues or otherwise impact our business.]

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 [removed: allocations.][added: allocations or otherwise adversely affect an airline’s business.]

In addition, the failure of the federal government to upgrade the U.S. air traffic control [removed: system] [added: system, which is regulated by the FAA,] has resulted in delays and disruptions of air traffic during peak travel periods in certain congested markets.

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 [added: and import] requirements, taxes, monetary policies and other restrictions and charges.

We are pursuing strategies to minimize the [removed: impact] [added: impact, if any,] of these tariffs on our [removed: aircraft deliveries] [added: business,] but [removed: if we are unsuccessful] [added: they,] or [removed: if] the [removed: tariffs are increased, these tariffs could] [added: imposition of future tariffs, have the potential to] substantially increase the cost to [removed: us] [added: Delta] of the affected aircraft, which in turn could have a material adverse effect on our financial results.

Failure to comply with trade sanctions, the [removed: U.S.] Foreign Corrupt Practices Act [added: (the "FCPA")] 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.

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

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

The airline industry is subject to many forms of environmental regulation, including increased regulation to reduce [removed: emissions.][added: emissions and other risks associated with climate change.]

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

Compliance with existing and future environmental laws and regulations [removed: can] [added: could] require [removed: significant expenditures] [added: capital investment] and [added: increase operational costs, and] violations can lead to significant fines and [removed: penalties.][added: penalties and reputational harm.]

In order to address aircraft [added: carbon dioxide] emissions, [removed: ICAO,] [added: the International Civil Aviation Organization,] a [removed: UN] [added: United Nations] 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 [removed: 2019-2020] [added: 2019] 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 [removed: predicted.][added: predicted at this time.]

In addition to CORSIA, we may face [removed: additional] [added: a patchwork of] regulation of aircraft emissions in the U.S. and abroad and [added: could] 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 [removed: us and] the airline [removed: industry.][added: industry, including Delta.]

While the specific nature of future actions is hard to predict, new laws or regulations related to environmental matters adopted in the U.S. or other countries could impose significant additional costs on [added: or otherwise adversely affect] our operations.

Because of the global nature of our business, unfavorable [removed: global] economic [added: or political] conditions [added: in the markets in which we operate] or volatility in currency exchange rates could have a material adverse effect on our business, financial condition and [removed: operating results.][added: results of operation.]

Because we operate globally, [removed: with approximately 30% of] our [removed: revenues from operations outside of the U.S., our] business is subject to economic [added: and political] conditions throughout the world.

The COVID-19 pandemic could enhance the competitive dynamics within the industry, although we are unable to predict the duration or extent of this potentially increased pressure.

The airline industry also faces competition from surface transportation and technological alternatives such as “virtual” meetings or “teleconferencing,” and the intensity of this competition has likely increased, at least in the near term, as a result of the COVID-19 pandemic.

*Item 1A.

Certain of our hubs are among the most congested airports in the United States and have been, and could in the future be, the subject of regulatory action that might limit the number of flights and/or increase costs of operations at certain times or throughout the day.

Air traffic control inefficiencies can also enhance these pressures.

In connection with a dispute brought at the World Trade Organization against the EU and certain member states to address state subsidies in the large civil aircraft sector, the U.S. Trade Representative has imposed tariffs on certain products imported from the EU, including on certain new aircraft and certain airplane parts originating in France and Germany.

*Item 1A.

Risk Factors*

Certain airports have also adopted, and others could in the future adopt, greenhouse gas emission or climate-related goals and requirements that could impact our operations or require us to make changes or investments in our infrastructure.

Finally, there is uncertainty with respect to the future supply, demand and price of sustainable or lower carbon aircraft fuel, carbon offset credits and technologies that could allow us to reduce our emissions of carbon dioxide.

Our international operations are an important part of our route network.

Political disruptions and instability around the world can negatively impact the demand and network availability for air travel.

Additionally, any deterioration in global trade relations, such as increased tariffs or other trade barriers, could result in a decrease in the demand for international air travel.

We are at risk of losses and adverse publicity stemming from a serious accident involving our aircraft or aircraft of our airline partners.

An aircraft crash or other serious accident could expose us to significant liability.

Although we believe that our insurance coverage is appropriate, we may be forced to bear substantial losses from an accident in the event that the coverage was not sufficient.

In addition, any accident involving an aircraft that we operate or an aircraft that is operated by an airline that is one of our regional carriers or codeshare, alliance or joint venture partners could create a negative public perception about safety, which could harm our reputation, resulting in air travelers being reluctant to fly on our aircraft and therefore harm our business.

Breaches or lapses in the security of our technology systems and the data we store could compromise passenger or employee information and expose us to liability, possibly having a material adverse effect on our business.

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

The secure operation of the networks and systems on which this type of information is stored, processed and maintained is critical to our business operations and strategy.

Our information systems 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 information, or those of our service providers, including through fraud or other means of deception.

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

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.

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.

The methods used to obtain unauthorized access, disable or degrade service or sabotage systems are constantly evolving and may be difficult to anticipate or to detect for long periods of time.

As a result of these types of risks and regular 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.

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.

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

The compromise of our technology systems resulting in the loss, disclosure, misappropriation of, or access to, our information or that of our customers, employees or business 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.

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.

Disruptions of our information technology infrastructure could interfere with our operations, possibly having a material adverse effect on our business.

Disruptions in our information technology network could result from a technology error or failure impacting our internal systems, whether hosted internally at our data centers or externally at third-party locations, or large scale external interruption in technology infrastructure support on which we depend, such as power, telecommunications or the internet.

The operation of our technology systems and the use of related data may also be vulnerable to a variety of other sources of interruption, including natural disasters, terrorist attacks, computer viruses, hackers and other security issues.

A significant individual, sustained or repeated failure of our network, including third-party networks we utilize and on which we depend, could impact our customer service and result in increased costs.

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

Failure of our technology to perform effectively could have a material adverse effect on our business.

We are dependent on technology initiatives to provide customer service and operational effectiveness in order to compete in the current business environment.

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, application of biometric technology, airport information displays and related initiatives, including security for these initiatives.

We are also investing in significant upgrades to technology infrastructure and other supporting systems.

The performance, reliability and security of the technology are critical to our ability to serve customers.

If our technology does not perform effectively, our business and operations would be negatively affected, which could be material.

Our significant investments in airlines in other parts of the world and the commercial relationships that we have with those carriers may not produce the returns or results we expect.

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 carriers, including through joint ventures.

We expect to continue exploring ways to expand our relationships with other carriers as part of our global business strategy.

These investments and relationships involve significant challenges and risks, including that we may not realize a satisfactory return on our investment or that they may not generate the expected financial results.

These events could have a material adverse effect on our operating results.

In addition, we are dependent on these other carriers for significant aspects of our network in the regions in which they operate.

While we work closely with these carriers, we do not have control over their operations or business methods.

To the extent that the operations of any of these carriers are disrupted over an extended period or their actions have a significant adverse effect on our operations, our results of operations could be materially adversely affected.

For example, we may be subject to consequences from improper behavior of our joint venture partners, including for failure to comply with anti-corruption laws such as the U.S. Foreign Corrupt Practices Act.

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

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

| (in millions) | | | [removed: 2019 | | | 2018 | | | | | |] [added: 2020] | | | [added: 2019] | | |

| TRASM (cents) | | | [removed: 17.07 | | ¢ | 16.87] [added: 12.73] | | ¢ | [removed: 0.20] [added: 17.07] | | ¢ | [removed: 1.2 | | % | | | |]

| Third-party refinery [removed: sales(1) | | | (0.04) | | | (0.21) | | | 0.17] [added: sales] | | | [removed: NM] [added: (0.86)] | | | [added: (0.04)] | | |

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

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

| (in millions) | | | [removed: 2019] | | | [removed: 2018 | | |] [added: 2020] | | | | | | [added: 2019] | | |

Operating [removed: Expense][added: Expense, adjusted]

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

| (in millions) | | | [removed: 2019 | | | 2018 | | | | | |] [added: 2020] | | | [added: 2019] | | |

| Aircraft fuel and related taxes | | | [removed: 8,519 | | | 9,020 | | | (501) | | | (5.6)] [added: (2.36)] | | [removed: %] | [added: (3.10)] | | |

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

| MTM adjustments and settlements on [removed: hedges(3) | | | (14) | | | 53 | | | (67) | | | | | | — | | | 0.01] [added: hedges] | | | (0.01) | | | [removed: | | | | | | | | |] [added: (0.01)] | | |

[removed: See] [added: For additional information on our significant accounting policies related to defined benefit pension plans, see] Note 11 of the Notes to the Consolidated Financial [removed: Statements for additional information on the planned early retirement of our MD-90 fleet.][added: Statements.]

| | | | Year Ended December 31, | | | | | | [removed: | | | | | | Favorable (Unfavorable) | | |]

[removed: At December 31, 2019, we had approximately $1.9 billion of U.S.] [added: Our] federal [removed: pre-tax] net operating loss [removed: carryforwards, which] [added: carryforwards generated before 2018] do not begin to expire until 2027.

[removed: (1)For additional information, see] [added: See Note 2 of] the Notes to the Consolidated Financial Statements [removed: referenced in the table above.][added: for additional details regarding these impairments and related charges.]

[removed: Critical] [added: MD&A - Critical] Accounting [removed: Policies and Estimates][added: Estimates*]

As of December 31, [removed: 2019,] [added: 2020,] the unfunded benefit obligation for these plans recorded on our balance sheet was [removed: $5.4] [added: $6.1] billion.

We used a weighted average discount rate to value the obligations of [removed: 3.40%] [added: 2.62%] and [removed: 4.33%] [added: 3.40%] at December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively.

Our weighted average discount rate for net periodic benefit cost in each of the past three years has varied from the rate selected on our measurement date, ranging from [removed: 3.69%] [added: 3.40%] to 4.33%.

Our weighted average expected long-term rate of return on assets for net periodic benefit cost for the year ended December 31, [removed: 2019] [added: 2020] was 8.97%.

| Change in Assumption | | | Effect on [removed: 2020] [added: 2021] Pension Benefit Cost | | | | | | [removed: | | |] Effect on Accrued Pension Liability at December 31, [removed: 2019 | | |] [added: 2020] | | | | | |

| 0.50% decrease in weighted average discount rate | | | | | | $ | [removed: (13)] [added: (19)] | million | | | | $ | [removed: 1.3] [added: 1.4] | billion | [removed: | | | | | |]

| 0.50% increase in weighted average discount rate | | | | | | $ | [removed: 9] [added: 15] | million | | | | $ | [removed: (1.2)] [added: (1.3)] | billion | [removed: | | | | | |]

| 0.50% decrease in expected long-term rate of return on assets | | | | | | $ | [removed: 78] [added: 79] | million | | | | $ | — | | [removed: | | | | | |]

| 0.50% increase in expected long-term rate of return on assets | | | | | | $ | [removed: (78)] [added: (79)] | million | | | | $ | — | | [removed: | | | | | |]

*Credit Losses.* In 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." Under this [removed: ASU] [added: ASU,] an entity is required to utilize an [removed: “expected] [added: "expected] credit loss [removed: model”] [added: model"] on certain financial instruments, including trade and financing receivables.

The following table shows a reconciliation of TRASM (a GAAP measure) to TRASM, adjusted (a non-GAAP financial [removed: measure).]

We [added: also regularly] adjust [removed: TRASM] [added: pre-tax (loss)/income] for the following items to determine [removed: TRASM,] [added: pre-tax (loss)/income,] adjusted for the reasons described [removed: below][added: below:]

[removed: - *Third-party] [added: *•Third-party] refinery sales.* We adjust [removed: TRASM] [added: operating expense] for refinery sales to third parties [added: to determine operating expense, adjusted] because these [removed: revenues] [added: revenues, and related expenses,] are not related to our airline segment.

[removed: TRASM,] [added: Operating expense,] adjusted therefore provides a more meaningful comparison of [removed: revenue] [added: operating expenses] from our airline operations to the rest of the airline industry.

| Adjusted for: | | | | | | | | | [removed: | | |]

| Third-party refinery sales | | | [removed: (0.04) | | | (0.21)] [added: (0.86)] | | | [added: (0.04)] | | |

| [removed: TRASM,] [added: TRASM,] adjusted [removed: | | | 17.03] [added: reconciliation] | | [removed: ¢] | [removed: 16.57] | | [removed: ¢] | | | |

We [added: also] adjust CASM for the following items to determine CASM-Ex for the reasons described [removed: below:][added: below.]

The adjustment for aircraft fuel and related taxes allows investors to [added: better] understand and analyze our non-fuel costs and year-over-year financial performance.

| CASM (cents) | | | [removed: 14.67] [added: 22.01] | | ¢ | [removed: 14.87] [added: 14.67] | | ¢ | [removed: | | |]

| Adjusted for: | | | | | | | | | | | | [added: | | |]

| Profit sharing | | | [removed: (0.60) | | | (0.49)] [added: —] | | | [added: (0.60)] | | |

As a result of the COVID-19 pandemic and our response, we have removed certain aircraft from active service as of December 31, 2020, which includes owned and leased aircraft that are being retired early.

This resulted in impairment and other related charges of $4.4 billion, recorded in restructuring charges in our income statement.

These charges were calculated using Level 3 fair value inputs based primarily upon recent market transactions and third-party bids, which were corroborated with published pricing guides and our assessment of existing market conditions based on industry knowledge.

The effects of the COVID-19 pandemic in 2020 created additional estimation uncertainty as there is currently a limited market for aircraft and limited data on how the COVID-19 pandemic has affected the fair value of aircraft.

Following the impairment charges, the remaining aggregate net book value of these aircraft as of December 31, 2020 is approximately $500 million.

*Income Tax Valuation Allowance*

We periodically assess whether it is more likely than not that we will generate sufficient taxable income to realize our deferred income tax assets.

We establish valuation allowances if it is not likely we will realize our deferred income tax assets.

In making this determination, we consider available positive and negative evidence and make certain assumptions.

We consider, among other things, projected future taxable income, scheduled reversals of deferred tax liabilities, the overall business environment, our historical financial results and tax planning strategies.

In evaluating the likelihood of utilizing our net deferred income tax assets, the significant factors that we consider include (1) our recent history of profitability, (2) growth in the U.S. and global economies, (3) forecast of airline revenue trends, (4) estimate of future fuel prices and (5) future impact of taxable temporary differences.

At December 31, 2020 our net deferred tax asset balance was $2.0 billion, including a $460 million valuation allowance primarily related to capital loss carryforwards and state net operating losses.

Although we are in a three year cumulative loss position as of December 31, 2020, we have a recent history of significant earnings prior to the onset of the COVID-19 pandemic.

We expect to return to profitability as the effects of the pandemic subside and to generate sufficient taxable income to utilize our federal net operating loss carryforwards before any expire.

Under current tax law, federal net operating losses generated in 2020 do not expire.

Therefore, we have not recorded a valuation allowance on our deferred tax assets other than the capital loss carryforwards and state net operating losses that have short expiration periods.

We had no minimum funding requirements in 2019 or 2020, we have no such requirements in 2021, and based on our current projections, we do not expect any minimum required contributions until 2025.

As a part of our liquidity initiatives we suspended voluntary pension funding that we were previously planning in 2020.

We plan to contribute at least $500 million to these plans in 2021.

*Item 7.

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

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

| Benefit plan effects of change in assumptions used | | | | | | | | | | | | | | |

These investments valued using NAV as a practical expedient are typically valued on a monthly or quarterly basis by third-party administrators, valuation agents or fund managers with an annual audit performed by an independent third party, but certain of these investments have a lag in the availability of data.

We adopted this standard effective January 1, 2020 and due to the COVID-19 pandemic, we recorded reserves on certain receivables, which are discussed further in Note 5 of the Notes to the Consolidated Financial Statements.

*Income Taxes.* In 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This standard simplifies the accounting and disclosure requirements for income taxes by clarifying existing guidance to improve consistency in application of ASC 740.

This standard also removed the requirement to calculate income tax expense for the stand-alone financial statements of wholly owned subsidiaries.

We adopted the new standard effective January 1, 2020 with no impact on our Consolidated Financial Statements.

*Item 7.

MD&A - Supplemental Information*

Pre-Tax (Loss)/Income, adjusted

The following table shows a reconciliation of pre-tax (loss)/income (a GAAP measure) to pre-tax (loss)/income, adjusted (a non-GAAP financial measure).

In 2020, pre-tax (loss)/income, adjusted excludes the following items directly related to the impact of COVID-19 and our response for comparability with the prior period:

*•Restructuring charges.* We recognized restructuring charges following strategic business decisions in response to the COVID-19 pandemic.

These charges primarily include impairments and related charges from retirement decisions related to approximately 400 aircraft and the voluntary early retirement and separation programs.

- *Government grant recognition.* We recognized the full grant proceeds from the CARES Act payroll support program as a contra-expense in 2020.

We recognized the grant proceeds based on the periods that the funds were intended to benefit.

- *Impairments and equity method losses.* During 2020, we recognized charges and the related income tax impacts from write-downs of our investments in LATAM and Grupo Aeroméxico following their financial losses and separate Chapter 11 bankruptcy filings, and the write-down of our investment in Virgin Atlantic based on our share of its losses.

- *Pension settlement charges.* These charges were recognized in connection with the voluntary programs.

*•MTM adjustments and settlements on hedges.* Mark-to-market (*"*MTM") adjustments are defined as fair value changes recorded in periods other than the settlement period.

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.

Year in Review

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%.

Strong Brand Drives Revenue Growth

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 revenue per available seat mile ("TRASM") and TRASM, adjusted (a non-GAAP financial measure) increased 1.2% and 2.8%, respectively, compared to the prior year, led by (1) unit revenue growth in our Domestic and Latin regions, (2) demand strength in both business and leisure segments and (3) strong growth in premium products and non-ticket revenues.

Total loyalty revenue grew 18% in 2019.

Solid Cost Performance

*Operating Expense.* Operating expense increased $1.2 billion, or 3.1%, primarily due to higher revenue- and capacity-related expenses including wages and profit sharing for employees and contracted services expense.

Salaries and related costs were higher due to pay rate increases for eligible employees implemented during 2019, while profit sharing was higher due to increased profitability 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.

Our operating cost per available seat mile ("CASM") decreased 1.3% to 14.67 cents compared to 2018, primarily due to lower fuel expense and a 4.6% increase in capacity.

Non-fuel unit costs ("CASM-Ex", a non-GAAP financial measure) increased 2.0% to 10.52 cents due to the higher revenue- and capacity-related expense increases discussed above.

*Non-Operating Expense.* Total non-operating expense was $420 million during 2019 compared to $113 million in 2018, primarily due to an increase in pension and related expense compared to the prior year, partially offset by higher gains on investments.

Expanding Our Global Network

In 2019, international revenues grew 2.7% on a 3.3% increase in capacity.

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.

Investing for the Future

Our $8.4 billion of cash flows from operations helped fund $4.9 billion in capital expenditures for the business.

As part of our multi-year fleet transformation, we took delivery of 88 new aircraft, including A321-200s, B-737-900ERs, A350-900s, A330-900s, A220-100s and CRJ-900s.

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

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

The non-GAAP financial measures free cash flow, TRASM, adjusted and CASM-Ex used above, are defined and reconciled in "Supplemental Information" below.

Results of Operations

A one cent increase in the cost of jet fuel would result in approximately $40 million of additional annual fuel [removed: expense.][added: expense based on annual pre-COVID-19 pandemic consumption of approximately four billion gallons of jet fuel.]

At December 31, [removed: 2019,] [added: 2020,] we had [removed: $7.6] [added: $22.3] billion of fixed-rate debt and [removed: $2.9] [added: $5.9] billion of variable-rate debt.

An increase of 100 basis points in average annual interest rates would have decreased the estimated fair value of our fixed-rate debt by [removed: $300 million] [added: $1.2 billion] at December 31, [removed: 2019] [added: 2020] and would have increased the annual interest expense on our variable-rate debt [added: and variable-rate leases] by $29 million.

The U.K. Financial Conduct Authority announced in [removed: 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 [removed: impact,] [added: impact of this change,] 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 [removed: variable rate] [added: variable-rate] debt and [removed: variable rate] [added: variable-rate] finance leases which utilize [removed: this rate.][added: rates for which the settings are to be discontinued after June 2023 because we have an immaterial amount of contracts that utilize the settings to be discontinued immediately after December 2021.]

At December 31, [removed: 2019] [added: 2020] we [removed: have] [added: had] approximately [removed: $2.1] [added: $3.8] billion of [removed: variable rate] [added: variable-rate debt and variable-rate] finance leases [removed: and variable rate debt] maturing after [removed: 2021, that] [added: June 2023, all of which] include provisions to update the applicable reference [removed: rate which are] [added: rate, and we do] not [removed: expected] [added: expect this rate] to be materially different from LIBOR.

At December 31, [removed: 2019,] [added: 2020,] we had [removed: open] a U.S. [removed: dollar-Euro] [added: dollar-South Korean won] cross currency swap contract totaling a [removed: $9] [added: $13] million [removed: asset] [added: liability] position.

We estimate that a 10% depreciation or appreciation in the price of the [removed: Euro] [added: South Korean won] in relation to the U.S. dollar would have changed the projected cash settlement value of our open hedge contract by [removed: $45] [added: $17] million for the year ending December 31, [removed: 2019.][added: 2020.]

See Note 6 of the Notes to the Consolidated Financial Statements for further information on our derivative contracts.

As a result of the reduced capacity from the COVID-19 pandemic, our jet fuel consumption during 2020 of 1.9 billion gallons was significantly less than our historical and expected future consumption.

The rates used in our variable-rate debt are based on LIBOR, or another index rate, which in certain cases is subject to a floor.

In December 2020, the administrator of LIBOR proposed to cease publication of certain LIBOR settings after December 2021 and to cease publication of the remainder of the LIBOR settings after June 2023.

*Financial Statements*

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.

We [removed: continue to focus on increasing fuel efficiency as we replace older aircraft with more fuel-efficient jets and improve] [added: have improved] the [added: fuel] efficiency of our [removed: existing] aircraft through [removed: operational efforts.][added: the retirement of older aircraft and their replacement with newer, more fuel efficient aircraft.]

Our results of operations are significantly impacted by changes in the price [removed: and availability] of aircraft fuel.

[removed: We purchase most of our] [added: Our] aircraft fuel [removed: under] [added: purchase] contracts [removed: that establish the price based on various market indices and therefore] [added: alone] do not provide material protection against price increases [removed: or assure] [added: as these contracts typically establish] the [removed: availability of our fuel supplies.][added: price based on industry standard market price indices.]

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 [removed: result in future] [added: impact crude oil and] fuel supply [removed: shortages] and [removed: fuel price increases.][added: could result in shortages in the future.]

Environmental [added: Regulation and Related] Matters

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 [removed: 2019-2020] [added: 2019] baseline.

[removed: We] [added: However, Delta] submitted our CORSIA Emissions Monitoring Plan to the FAA in 2019 and [removed: are monitoring] [added: in 2020, submitted our verified] emissions [added: report] for [removed: the 2019-2020 baseline period.][added: 2019 international emissions.]

The new aircraft certification standards apply to new [removed: aircraft] [added: fleet] types in 2020 and to new in-production aircraft starting in 2023 but no later than 2028.

In 2016, the U.S. Environmental Protection Agency ("EPA") issued a final finding under the Clean Air Act that greenhouse gases threaten the public health and welfare, and further determined that [added: certain classes of] aircraft [added: engines] cause or contribute to greenhouse gases.

The endangerment finding [removed: does] [added: did] not establish standards, but [removed: triggers] [added: triggered] an obligation for the EPA to regulate greenhouse gas emissions from [removed: aircraft.][added: certain aircraft engines.]

[removed: We] [added: The airline industry] 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.

We are monitoring and evaluating the potential impact of such [removed: legislative and regulatory] developments.

[removed: We] [added: As part of this plan, we] seek to minimize the impact of carbon emissions from our operations [removed: through reductions in our fuel consumption] and [removed: other efforts, and have realized] [added: build on the] reductions [removed: in our carbon emission levels] [added: realized] since 2005.

We are also supporting efforts to develop [added: sustainable] alternative fuels and efforts to modernize the air traffic control system in the U.S. [removed: as part of our efforts] to [added: further] reduce our emissions and minimize our impact on the environment.

While we have had sufficient scheduling flexibility to accommodate local noise restrictions in the past, our operations could be adversely impacted if [removed: locally-imposed] [added: locally imposed] regulations become more restrictive or widespread.

Under the Energy [added: Policy Act of 2005, as expanded by the Energy] Independence and Security Act of [removed: 2005 and] 2007, the Renewable Fuel Standard ("RFS") was created, setting up specific targets of renewable fuel to be used in the U.S. economy by mandating the blending of renewable fuels into gasoline and on-road diesel ("Transportation Fuels").

A [removed: refiner] [added: refinery] may meet its obligation under RFS by blending the necessary volumes of renewable fuels with Transportation Fuels or by purchasing RINs in the open market or through a combination of blending and purchasing RINs.

Because Monroe [removed: blends] [added: is able to blend] only a small amount of renewable fuels, it must purchase the majority of its RINs requirement in the secondary [removed: market.][added: market or obtain a waiver from the EPA.]

We have agreed to make available under the CRAF Program a portion of our international aircraft during the contract period ending September 30, [removed: 2020.][added: 2022.]

[removed: Under] [added: Relations between air carriers and labor unions in] the [added: United States are governed by the] Railway Labor Act, [added: which provides that] a collective bargaining agreement between an airline and a labor union does not expire, but instead becomes amendable as of a stated date.

[removed: We] [added: The collective bargaining agreement with our pilots became amendable on December 31, 2019 and we] are in discussions with [removed: representatives] [added: the representative] of [removed: our] [added: the] pilots [removed: and Endeavor Air flight attendants] regarding terms of [removed: amendable collective bargaining agreements.][added: the agreement under the auspices of the NMB.]

We make available free of charge on our website at ir.delta.com our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports as soon as reasonably practicable after these reports are filed with or furnished to the Securities and Exchange [removed: Commission.][added: Commission ("SEC").]

The U.S. government has not yet enacted legislation to mandate that U.S. operators participate in CORSIA.

In January 2021, the EPA finalized greenhouse gas emission standards for new aircraft engines designed to implement the ICAO standards on the same timeframe contemplated by ICAO.

Like the ICAO standards, the final EPA standards would not apply to engines on in-service aircraft.

The final standards have been challenged by several states and environmental groups, and the Biden administration has announced plans to review these final standards along with others issued by the prior administration.

The outcome of the legal challenge and administrative review cannot be predicted at this time.

Certain airports have also adopted, and others could in the future adopt, greenhouse gas emission or climate-related goals and requirements that could impact our operations or require us to make changes or investments in our infrastructure.

In February 2020, we announced plans to invest $1 billion in the next ten years in our effort to achieve carbon neutrality.

Beyond carbon reduction efforts, we expect carbon removal through investment in innovative projects and technologies and stakeholder engagement through coalitions intended to advance carbon reduction to be important aspects of our journey to carbon neutrality.

*Item 1.

Business*

*Item 1A.

Risk Factors*

ITEM 1A.

RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the following material risk factors applicable to Delta.

As described below, these risks could materially affect our business, financial condition or results of operations in the future.

Risk Factors Relating to Delta

The rapid spread of the COVID-19 virus, the persistence of the resulting pandemic and measures implemented to combat it have had, and will continue to have, a material adverse effect on our business.

Moreover, the longer the pandemic persists, the more material the ultimate effects are likely to be.

It is likely that there will be future negative effects that we cannot presently predict, including near term effects.

The rapid spread of COVID-19 and the persistence of the resulting pandemic, as well as the measures governments and private parties have implemented in order to stem the spread of this pandemic, have had, and are continuing to have a material adverse effect on the demand for worldwide air travel, and consequently upon our business.

Among other effects of the COVID-19 pandemic affecting air travel and our business:

- In the United States, which is our primary market, the federal government has discouraged travel and encouraged social distancing efforts and limits on gathering size.

- Numerous travel advisories and restrictions have been implemented, some of which remain in place, between the United States and specific countries, and many foreign governments have placed restrictions or quarantines on citizens of other countries, including citizens of the U.S., flying into their countries.

For instance, the U.S. and numerous other countries are now requiring airline passengers to provide negative COVID-19 test results prior to travel into their countries.

- State and local governments have issued travel restrictions, quarantines and advisories and health-related curfews or “shelter in place” orders which dissuade or restrict air travel.

- Employers in both the public and private sectors have issued instructions to employees to work from home and/or are otherwise dissuading or restricting air travel.

- Business conventions and conferences, concerts and similar entertainment have been and continue to be cancelled.

Many popular tourist destinations have been, and remain, closed, or operations are curtailed.

Significant sporting events have been, and occasionally continue to be, cancelled or held with limited or no spectators.

All of these adjustments reduce the demand for both business air travel (which has historically driven our most profitable ticket sales) and leisure air travel.

- Travelers are discouraged from air travel to destinations where COVID-19 is particularly virulent.

- Widespread consumer confidence in air travel may not return until large-scale vaccination has occurred, and contagion or virus-related deaths linked or alleged to be linked to travel on aircraft, whether accurate or not, may hinder restoration of this confidence and, if related to our aircraft, injure our reputation.

- Travelers may be dissuaded from flying due to possible enhanced COVID-19-related screening measures, which have been implemented to varying degrees and in different ways across multiple markets we serve, or due to the concern that additional travel restrictions implemented between their departure and return may affect their ability to return to their homes.

These effects related to the COVID-19 pandemic are negatively impacting air travel in general, which in turn are materially adversely affecting our revenues, results of operations and financial condition.

Although certain of the restrictions above have eased in some places, the ongoing pandemic, including large outbreaks, resurgences of COVID-19 in various regions and appearances of new variants of the virus, has resulted, and may continue to result, in their reinstitution.

The effectiveness of the available vaccines against certain of these new variants is also unknown.

Moreover, additional currently unknown restrictions or other events dissuading air travel may occur in the future as a result of the pandemic (including possibly in the near term), lengthening the negative effects of the COVID-19 pandemic on our business.

For example, the federal government is contemplating whether to require COVID-19 testing in advance of domestic travel.

Our operations have been, and could in the future be, negatively affected further if our employees are quarantined or sickened as a result of exposure to COVID-19, or if they are subject to additional governmental COVID-19 curfews or “shelter in place” health orders or similar restrictions.

General

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.

We are incorporated under the laws of the State of Delaware.

Our principal executive offices are located at Hartsfield- Jackson Atlanta International Airport in Atlanta, Georgia.

Our telephone number is (404) 715-2600 and our internet address is www.delta.com.

Information contained on our website is not part of, and is not incorporated by reference in, this Form 10-K.

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.

Our Global Network and Fleet

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.

The most significant of these arrangements are commercial joint ventures that include joint sales and marketing coordination, co-location of airport facilities and other commercial cooperation arrangements.

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

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

We are currently refreshing our fleet, acquiring new, more fuel efficient aircraft with increased premium seating, to replace older aircraft.

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

*

For a discussion of certain environmental matters, see "Business-Regulatory Matters-Environmental Matters" in Item 1.

For the fiscal year ended December 31, [removed: 2019][added: 2020]

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

[removed: ][added: ]

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

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, [removed: 2019] [added: 2020] was approximately [removed: $36.9] [added: $17.9] billion.

On January 31, [removed: 2020,] [added: 2021,] there were outstanding [removed: 640,093,995] [added: 638,146,665] shares of the registrant's common stock.

Part III of this Form 10-K incorporates by reference certain information from the registrant's definitive Proxy Statement for its [added: 2021] Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission.

| Table of Contents | | | | | | [removed: | | |]

| | | | Page | | | [removed: | | |]

| [Forward-Looking [removed: Statements](#i_0_13) | | | [1](#i_0_13)] [added: Statements](#i9e520fbc9e094b64b139dd151a560bbf_10)] | | | [added: [1](#i9e520fbc9e094b64b139dd151a560bbf_10)] | | |

| PART I | | | | | | [removed: | | |]

| [ITEM 1. [removed: BUSINESS](#i_0_19) | | | [2](#i_0_19)] [added: BUSINESS](#i9e520fbc9e094b64b139dd151a560bbf_16)] | | | [added: [2](#i9e520fbc9e094b64b139dd151a560bbf_16)] | | |

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

| [ITEM 1A. RISK [removed: FACTORS](#i_0_49) | | | [13](#i_0_49)] [added: FACTORS](#i9e520fbc9e094b64b139dd151a560bbf_40)] | | | [added: [14](#i9e520fbc9e094b64b139dd151a560bbf_40)] | | |

| [Risk Factors Relating to [removed: Delta](#i_0_52) | | | [13](#i_0_52)] [added: Delta](#i9e520fbc9e094b64b139dd151a560bbf_43)] | | | [added: [14](#i9e520fbc9e094b64b139dd151a560bbf_43)] | | |

| [Risk Factors Relating to the Airline [removed: Industry](#i_0_55) | | | [18](#i_0_55)] [added: Industry](#i9e520fbc9e094b64b139dd151a560bbf_46)] | | | [added: [22](#i9e520fbc9e094b64b139dd151a560bbf_46)] | | |

| [ITEM 1B. UNRESOLVED STAFF [removed: COMMENTS](#i_0_58) | | | [21](#i_0_58)] [added: COMMENTS](#i9e520fbc9e094b64b139dd151a560bbf_49)] | | | [added: [24](#i9e520fbc9e094b64b139dd151a560bbf_49)] | | |

| [ITEM 2. [removed: PROPERTIES](#i_0_61) | | | [22](#i_0_61)] [added: PROPERTIES](#i9e520fbc9e094b64b139dd151a560bbf_52)] | | | [added: [25](#i9e520fbc9e094b64b139dd151a560bbf_52)] | | |

| [Flight [removed: Equipment](#i_0_64) | | | [22](#i_0_64)] [added: Equipment](#i9e520fbc9e094b64b139dd151a560bbf_55)] | | | [added: [25](#i9e520fbc9e094b64b139dd151a560bbf_55)] | | |

| [Ground [removed: Facilities](#i_0_67) | | | [23](#i_0_67)] [added: Facilities](#i9e520fbc9e094b64b139dd151a560bbf_58)] | | | [added: [27](#i9e520fbc9e094b64b139dd151a560bbf_58)] | | |

| [ITEM 3. LEGAL [removed: PROCEEDINGS](#i_0_70) | | | [24](#i_0_70)] [added: PROCEEDINGS](#i9e520fbc9e094b64b139dd151a560bbf_61)] | | | [added: [27](#i9e520fbc9e094b64b139dd151a560bbf_61)] | | |

| [ITEM 4. MINE SAFETY [removed: DISCLOSURES](#i_0_73) | | | [24](#i_0_73)] [added: DISCLOSURES](#i9e520fbc9e094b64b139dd151a560bbf_64)] | | | [added: [27](#i9e520fbc9e094b64b139dd151a560bbf_64)] | | |

| PART II | | | | | | [removed: | | |]

| [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED [removed: STOCKHOLDER](#i_0_79)] [added: STOCKHOLDER](#i9e520fbc9e094b64b139dd151a560bbf_70)] [MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#i_0_79) | | | [25](#i_0_79)] [added: SECURITIES](#i9e520fbc9e094b64b139dd151a560bbf_70)] | | | [added: [28](#i9e520fbc9e094b64b139dd151a560bbf_70)] | | |

| [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION [removed: AND](#i_0_94)] [added: AND](#i9e520fbc9e094b64b139dd151a560bbf_85)] [RESULTS OF [removed: OPERATION](#i_0_94)S | | | [29](#i_0_94)] [added: OPERATION](#i9e520fbc9e094b64b139dd151a560bbf_85)S] | | | [added: [30](#i9e520fbc9e094b64b139dd151a560bbf_85)] | | |

| [Financial [removed: Highlights](#i_0_97) | | | [29](#i_0_97)] [added: Highlights](#i9e520fbc9e094b64b139dd151a560bbf_88)] | | | [added: [30](#i9e520fbc9e094b64b139dd151a560bbf_88)] | | |

| [Results of [removed: Operations](#i_0_100) | | | [31](#i_0_100)] [added: Operations](#i9e520fbc9e094b64b139dd151a560bbf_91)] | | | [added: [34](#i9e520fbc9e094b64b139dd151a560bbf_91)] | | |

| [Non-Operating [removed: Results](#i_0_118) | | | [35](#i_0_118)] [added: Results](#i9e520fbc9e094b64b139dd151a560bbf_109)] | | | [added: [39](#i9e520fbc9e094b64b139dd151a560bbf_109)] | | |

| [Income [removed: Taxes](#i_0_121) | | | [35](#i_0_121)] [added: Taxes](#i9e520fbc9e094b64b139dd151a560bbf_112)] | | | [added: [39](#i9e520fbc9e094b64b139dd151a560bbf_112)] | | |

| [Refinery [removed: Segment](#i_0_124) | | | [36](#i_0_124)] [added: Segment](#i9e520fbc9e094b64b139dd151a560bbf_115)] | | | [added: [40](#i9e520fbc9e094b64b139dd151a560bbf_115)] | | |

| [Financial Condition and [removed: Liquidity](#i_0_127) | | | [37](#i_0_127)] [added: Liquidity](#i9e520fbc9e094b64b139dd151a560bbf_118)] | | | [added: [41](#i9e520fbc9e094b64b139dd151a560bbf_118)] | | |

| [Supplemental [removed: Information](#i_0_136) | | | [46](#i_0_136)] [added: Information](#i9e520fbc9e094b64b139dd151a560bbf_127)] | | | [added: [51](#i9e520fbc9e094b64b139dd151a560bbf_127)] | | |

| [Glossary of Defined [removed: Terms](#i_0_139) | | | [47](#i_0_139)] [added: Terms](#i9e520fbc9e094b64b139dd151a560bbf_130)] | | | [added: [55](#i9e520fbc9e094b64b139dd151a560bbf_130)] | | |

| [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#i_0_142) | | | [48](#i_0_142)] [added: RISK](#i9e520fbc9e094b64b139dd151a560bbf_133)] | | | [added: [56](#i9e520fbc9e094b64b139dd151a560bbf_133)] | | |

| [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#i_0_145) | | | [49](#i_0_145)] [added: DATA](#i9e520fbc9e094b64b139dd151a560bbf_136)] | | | [added: [57](#i9e520fbc9e094b64b139dd151a560bbf_136)] | | |

| [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING [removed: AND](#i_0_274)] [added: AND](#i9e520fbc9e094b64b139dd151a560bbf_265)] [FINANCIAL [removed: DISCLOSURE](#i_0_274) | | | [96](#i_0_274)] [added: DISCLOSURE](#i9e520fbc9e094b64b139dd151a560bbf_265)] | | | [added: [114](#i9e520fbc9e094b64b139dd151a560bbf_265)] | | |

| [ITEM 9A. CONTROLS AND [removed: PROCEDURES](#i_0_277) | | | [96](#i_0_277)] [added: PROCEDURES](#i9e520fbc9e094b64b139dd151a560bbf_268)] | | | [added: [114](#i9e520fbc9e094b64b139dd151a560bbf_268)] | | |

| [ITEM 9B. OTHER [removed: INFORMATION](#i_0_283) | | | [98](#i_0_283)] [added: INFORMATION](#i9e520fbc9e094b64b139dd151a560bbf_274)] | | | [added: [116](#i9e520fbc9e094b64b139dd151a560bbf_274)] | | |

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Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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| [Critical Accounting](#i9e520fbc9e094b64b139dd151a560bbf_124) [Estimates](#i9e520fbc9e094b64b139dd151a560bbf_124) | | | [46](#i9e520fbc9e094b64b139dd151a560bbf_124) | | |

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| [SIGNATURES](#i9e520fbc9e094b64b139dd151a560bbf_304) | | | [121](#i9e520fbc9e094b64b139dd151a560bbf_304) | | |

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*Item 1.

Business*

ITEM 1.

BUSINESS

As a global airline based in the U.S., we connect customers across our expansive global network.

In 2019, we served approximately 200 million customers and were 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 from 2015 through 2019.

In 2020, we made significant adjustments to our network and operations as a result of the unprecedented and widespread impact of COVID-19 and the related travel restrictions and social distancing measures that significantly reduced demand for air travel.

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| [ITEM 6. SELECTED FINANCIAL DATA](#i_0_91) | | | [27](#i_0_91) | | | | | |

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| [Contractual Obligations](#i_0_130) | | | [40](#i_0_130) | | | | | |

| [Critical Accounting Policies and Estimates](#i_0_133) | | | [41](#i_0_133) | | | | | |

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| [SIGNATURES](#i_0_313) | | | [103](#i_0_313) | | |

*Item 2.

Properties*

Our operating aircraft fleet, commitments and options at December 31, [removed: 2019] [added: 2020] are summarized in the following table:

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

| B-717-200 | | | [removed: 13] [added: 9] | | | [removed: 22] [added: 21] | | | [removed: 56] [added: 16] | | | [removed: 91] | | | [removed: 18.3] [added: —] | | | [removed: —] [added: 3] | | | [removed: —] [added: 1] | | | | | | [added: 50] | | | [added: 19.7] | | | [added: —] | | | [added: — | | |]

| B-737-800 | | | [removed: 73] [added: 68] | | | 4 | | | — | | | [removed: 77] | | | [removed: 18.3] [added: 5] | | | — | | | — | | | | | | [added: 77] | | | [added: 19.3] | | | [added: —] | | | [added: — | | |]

| B-737-900ER | | | [removed: 88] [added: 76] | | | — | | | [removed: 42] [added: 45] | | | [removed: 130] | | | [removed: 3.3] [added: 5] | | | — | | | [removed: —] [added: 4] | | | | | | [added: 130] | | | [added: 4.3] | | | [added: —] | | | [added: — | | |]

| B-757-200 | | | [removed: 91] [added: 75] | | | [removed: 8] [added: 7] | | | [removed: 1] [added: —] | | | [removed: 100] | | | [removed: 22.4] [added: 17] | | | [removed: —] [added: 1] | | | — | | | | | | [added: 100] | | | [added: 23.4] | | | [added: —] | | | [added: — | | |]

| B-757-300 | | | [removed: 16] [added: 15] | | | — | | | — | | | [removed: 16] | | | [removed: 16.9] [added: 1] | | | — | | | — | | | | | | [added: 16] | | | [added: 17.9] | | | [added: —] | | | [added: — | | |]

| B-767-300ER | | | [removed: 56] [added: 27] | | | — | | | — | | | [removed: 56] | | | [removed: 23.6] [added: 7] | | | — | | | — | | | | | | [added: 34] | | | [added: 23.4] | | | [added: —] | | | [added: — | | |]

| B-767-400ER | | | [removed: 21] [added: 19] | | | — | | | — | | | [removed: 21] | | | [removed: 19.0] [added: 2] | | | — | | | — | | | | | | [added: 21] | | | [added: 20.0] | | | [added: —] | | | [added: — | | |]

| A220-100 | | | [removed: 27] [added: 3] | | | [removed: 1] [added: 4] | | | — | | | [removed: 28 | | | 0.6 | | | 17 | | |] — | | | [removed: | | | | | | | | |] [added: 7] | | |

| A220-300 | | | [removed: — | | | — | | | — | | | — | | | — | | | 50 | | | 50] [added: 5] | | | [added: 7] | | | [added: 11] | | | [added: 22] | | | [added: 45] | | |

| A319-100 | | | [removed: 55] [added: 44] | | | — | | | [removed: 2] [added: —] | | | [removed: 57] | | | [removed: 17.9] [added: 11] | | | — | | | [removed: —] [added: 2] | | | | | | [added: 57] | | | [added: 18.9] | | | [added: —] | | | [added: — | | |]

| A320-200 | | | [removed: 58] [added: 42] | | | — | | | 4 | | | [removed: 62] | | | [removed: 24.4] [added: 6] | | | — | | | — | | | | | | [added: 52] | | | [added: 24.7] | | | [added: —] | | | [added: — | | |]

| A321-200 | | | [removed: 53 | | | 12 | | | 31 | | | 96 | | | 1.7 | | | 31] [added: 22] | | | — | | | [removed: | | |] [added: —] | | | [added: —] | | | [added: 22] | | |

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

| A330-200 | | | [removed: 11] [added: 5] | | | — | | | — | | | [removed: 11] | | | [removed: 14.8] [added: 6] | | | — | | | — | | | | | | [added: 11] | | | [added: 15.8] | | | [added: —] | | | [added: — | | |]

| A330-300 | | | [removed: 28] [added: 26] | | | — | | | [removed: 3] [added: —] | | | [removed: 31] | | | [removed: 11.0] [added: 2] | | | — | | | [removed: —] [added: 3] | | | | | | [added: 31] | | | [added: 12.0] | | | [added: —] | | | [added: — | | |]

| A330-900neo [added: (1)] | | | 3 | | | [removed: 1 | | | — | | | 4 | | | 0.5 | | | 33 | | | — | | |] [added: 8] | | | [added: 8] | | | [added: 10] | | | [added: 29] | | |

| A350-900 | | | [removed: 13 | | |] — | | | [removed: — | | | 13 | | | 1.8 | | | 16] [added: 2] | | | — | | | [removed: | | | | | |] [added: 18] | | | [added: 20] | | |

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

We have [removed: agreed to acquire four] [added: assumed 10 of LATAM's] A350 [removed: aircraft] [added: purchase commitments] from [removed: LATAM,] [added: Airbus, with deliveries through 2025,] which are included as purchase commitments in the [removed: table above.][added: above table.]

[removed: For more information regarding our planned strategic alliance with LATAM, see] [added: See] Note [removed: 4] [added: 5] of the Notes to the Consolidated Financial [removed: Statements.][added: Statements for further information on our strategic alliance with LATAM.]

The following table summarizes the [added: 340] aircraft [removed: fleet] operated by regional carriers on our behalf at December 31, [removed: 2019:][added: 2020.]

| | | | Fleet Type | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

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

| Endeavor Air, Inc. (1) | | | 42 | | | [removed: 11] [added: 18] | | | 111 | | | — | | | — | | | [removed: 164 | | | | | | | | | | | |] [added: 171] | | |

| SkyWest Airlines, Inc. | | | [removed: 75] [added: 12] | | | [removed: 11] [added: 6] | | | [removed: 43] [added: 39] | | | — | | | [removed: 56 | | | 185 | | | | | | | | |] [added: 64] | | | [added: 121] | | |

| Republic Airline, Inc. | | | — | | | — | | | — | | | [removed: 22 | | | 28 | | | 50 | | | | | |] [added: 18] | | | [added: 30] | | | [added: 48] | | |

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

Our purchase commitments for additional aircraft at December 31, [removed: 2019] [added: 2020] are detailed in the following table:

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

| Aircraft Purchase Commitments | | | [removed: 2020 | | |] 2021 | | | 2022 | | | [removed: After 2022 | | | Total | | | | | |] [added: 2023] | | | [added: After 2023] | | | [added: Total] | | |

| A220-100 | | | [removed: 17] [added: 26] | | | [added: 4 | | |] — | | | [added: | | | 8 | | |] — | | | — | | | [removed: 17] | | | [added: 38] | | | [added: 1.4] | | | [added: 7] | | | [added: —] | | |

| A220-300 | | | [removed: 6] [added: 5] | | | [removed: 12] [added: —] | | | [removed: 18] [added: —] | | | [removed: 14] | | | [removed: 50] [added: —] | | | [added: —] | | | [added: —] | | | | | | [added: 5] | | | [added: 0.3 | | | 45 | | | 50 | | |]

| A321-200 | | | [added: 54 | | | 14 | | |] 31 | | | [removed: —] | | | [removed: —] [added: 1] | | | — | | | [removed: 31] [added: 5] | | | | | | [added: 105] | | | [added: 2.5] | | | [added: 22] | | | [added: — | | |]

| A321-200neo | | | [removed: 1 | | | 41 | | | 40] [added: —] | | | 18 | | | [removed: 100 | | | | | |] [added: 20] | | | [added: 62] | | | [added: 100] | | |

| A330-900neo [removed: (1)] | | | [removed: 7] [added: 3] | | | [removed: 11] [added: 1] | | | [removed: 8] [added: 4] | | | [removed: 7] | | | [removed: 33] [added: —] | | | [added: —] | | | [added: —] | | | | | | [added: 8] | | | [added: 0.9 | | | 29 | | | — | | |]

| A350-900 | | | [removed: 4] [added: 13] | | | [added: — | | |] 2 | | | [added: | | |] — | | | [removed: 10] [added: —] | | | [removed: 16] [added: —] | | | | | | [added: 15] | | | [added: 2.5] | | | [added: 20] | | | [added: — | | |]

| CRJ-900 | | | [removed: 6] [added: 1] | | | — | | | — | | | — | | | [removed: 6 | | | | | | | | | | | |] [added: 1] | | |

We own our Atlanta reservations center, other real property in [removed: Atlanta,] [added: Atlanta] and reservations centers in Minot, North Dakota and Chisholm, Minnesota.

We have restructured our aircraft order books for future aircraft deliveries and as of December 31, 2020 removed from active service approximately 350 mainline and regional aircraft to align capacity with customer demand as a result of the COVID-19 pandemic.

As of December 31, 2020, approximately 125 mainline and regional aircraft were temporarily parked.

Additionally, 227 aircraft were permanently parked as a result of the early retirements described in Note 2 of the Notes to the Consolidated Financial Statements.

As we obtain greater clarity around the duration and extent of reduced demand and potentially execute further capacity adjustments, we will continue to evaluate our current fleet compared to network requirements and may decide to retire additional aircraft.

Future decisions regarding the timing of returning temporarily parked aircraft to service will be dependent on the evolution of the demand environment.

See Note 2 of the Notes to the Consolidated Financial Statements for additional information on our fleet retirements.

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| | | | Active Fleet(1) | | | | | | | | | | | | Temporarily Parked Fleet(1) | | | | | | | | | | | | | | | | | | Commitments(2) | | | | | |

| Total | | | 507 | | | 51 | | | 102 | | | | | | 71 | | | 4 | | | 15 | | | | | | 750 | | | 13.5 | | | 223 | | | 150 | | |

(2)Purchase commitments include one A330-900neo lease commitment in 2021 incremental to our order book with Airbus.

*Item 2.

Properties*

We have also temporarily parked approximately 35 regional aircraft as of December 31, 2020.

In 2020, Compass Airlines, Inc. ("Compass") and GoJet Airlines, LLC ("GoJet") ceased operations on our behalf.

Aircraft previously operated by Compass and GoJet are now being operated by our other regional carriers and are reflected in the table below.

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| Regional aircraft information by carrier | | | | | | | | | | | | | | | | | | | | |

| Total | | | 54 | | | 24 | | | 150 | | | 18 | | | 94 | | | 340 | | |

In 2020, we restructured our aircraft order books with Airbus and MHI RJ Aviation Group (manufacturer of CRJ aircraft) in an effort to better match the timing of aircraft deliveries with our network and financial needs over the next several years.

The restructuring reduced our aircraft purchase commitments by more than $2 billion in 2020 and by more than $5 billion through 2022.

The shift in delivery timing is intended to allow us to continue simplifying and modernizing our fleet while maintaining our Airbus order book.

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| Aircraft purchase commitments by fleet type | | | | | | | | | | | | | | | | | |

| Total | | | 34 | | | 39 | | | 39 | | | 112 | | | 224 | | |

(1) Includes one A330-900neo lease commitment in 2021 incremental to our order book with Airbus.

*Item 2.

Properties*

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.

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| | | | Current Fleet(1) | | | | | | | | | | | | | | | | | | | | | | | | Commitments | | | | | | | | |

| B-737-700 | | | 10 | | | — | | | — | | | 10 | | | 11.0 | | | — | | | — | | | | | | | | | | | | | | |

| B-777-200ER | | | 8 | | | — | | | — | | | 8 | | | 20.1 | | | — | | | — | | | | | | | | | | | | | | |

| B-777-200LR | | | 10 | | | — | | | — | | | 10 | | | 10.8 | | | — | | | — | | | | | | | | | | | | | | |

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

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

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

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

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

| Compass Airlines, Inc. (2) | | | — | | | — | | | — | | | — | | | 24 | | | 24 | | | | | | | | | | | | | | |

| GoJet Airlines, LLC (3) | | | — | | | 12 | | | 7 | | | — | | | — | | | 19 | | | | | | | | | | | | | | |

| 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.

*Item 5.

Market Information*

ITEM 5.

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

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

Holders

As of January 31, 2021, there were approximately 2,300 holders of record of our common stock.

Dividends

Our Board of Directors initiated a quarterly dividend program in the September 2013 quarter and had increased the quarterly dividend payment several times, most recently to $0.4025 per share in the September 2019 quarter.

In March 2020 we suspended future dividends due to the impact of the COVID-19 pandemic.

The CARES Act payroll support program initially restricted the payment of dividends through September 2021, which has been continued to March 2022 under the terms of the payroll support program extension.

Dividend payments beyond that time will be dependent upon our results of operations, financial condition, cash requirements, future prospects and other factors deemed relevant by the Board of Directors.

Stock Performance Graph

The following graph compares the cumulative total returns during the period from December 31, 2015 to December 31, 2020 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, 2015 in each of our common stock and the indices and assumes that all dividends were reinvested.


The following table presents information with respect to purchases of common stock we made during the December [removed: 2019] [added: 2020] quarter.

[removed: In addition, the] [added: The] table [removed: includes] [added: reflects] shares withheld from employees to satisfy certain tax obligations due in connection with grants of stock under the Delta Air Lines, Inc. Performance Compensation Plan (the "Plan").

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

In March 2020, we suspended our share repurchase program due to the impact of the COVID-19 pandemic and are restricted from conducting share repurchases through March 2022 under the payroll support program extension.

Therefore, there were no shares repurchased in the December 2020 quarter pursuant to our share repurchase program.

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| Shares purchased / withheld from employee awards during the December 2020 quarter | | | | | | | | | | | | | | | | | |

| October 2020 | | | 10,189 | | | $ | 31.80 | | 10,189 | | | $ | — | | | | |

| November 2020 | | | 5,726 | | | $ | 35.75 | | 5,726 | | | $ | — | | | | |

| December 2020 | | | 4,066 | | | $ | 41.21 | | 4,066 | | | $ | — | | | | |

| Total | | | 19,981 | | | | | | 19,981 | | | | | | | | |

Market Information

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

Holders

As of January 31, 2020, there were approximately 2,300 holders of record of our common stock.

Dividends

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

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

Dividend payments are dependent upon our results of operations, financial condition, cash requirements, future prospects and other factors deemed relevant by the Board of Directors.

Stock Performance Graph

The following graph compares the cumulative total returns during the period from December 31, 2014 to December 31, 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, 2014 in each of our common stock and the indices and assumes that all dividends were reinvested.


The total number of shares purchased includes shares repurchased pursuant to our $5 billion share repurchase program, which was publicly announced on May 11, 2017 and will terminate no later than December 31, 2020.

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

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

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

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

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

| [removed: Non-operating] [added: Total non-operating] expense, net | | | [removed: (420) | | | (113) | | | (466) | | | (643) | | | (645) | | |] [added: $] | [added: (3,118)] | | [added: $] | [added: (420)] | | | | | [added: $] | [added: (2,698)] | |

[removed: See "Item] [added: *Item] 7.

[removed: Management's Discussion and Analysis of Financial Condition and Results of Operations" where our non-GAAP financial measures are defined and reconciled.][added: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS]

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

| MTM adjustments and settlements on hedges [removed: | | | $ | 14 | | $] [added: (4)] | [removed: (53)] | | [removed: $] [added: (10)] | [removed: 259] | | [removed: $] [added: (14)] | [removed: 450] | | [removed: $] [added: 4] | [removed: 1,301] | | | | | [added: (0.01)] | | | [added: —] | | | [added: (0.01)] | | |

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

| [removed: Consolidated(1) | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | |] [added: Consolidated (1)] | | | [added: 2020] | | | [added: 2019] | | | [added: 2018] | | |

| Revenue passenger miles (in millions) | | | [removed: 237,680 | | | 225,243 | | | 217,712 | | | 213,098 | | | 209,625 | | | | | |] [added: 73,412] | | | [added: 237,680] | | | [added: 225,243] | | |

| Available seat miles (in millions) | | | [removed: 275,379 | | | 263,365 | | | 254,325 | | | 251,867 | | | 246,764 | | | | | |] [added: 134,339] | | | [added: 275,379] | | | [added: 263,365] | | |

| Passenger mile yield | | | [removed: 17.79 | | ¢ | 17.65 | | ¢ | 16.97] [added: 17.55] | | ¢ | [removed: 16.81] [added: 17.79] | | ¢ | [removed: 16.59] [added: 17.65] | | ¢ | [removed: | | | | | | | | | | | |]

| Passenger revenue per available seat mile | | | [removed: 15.35 | | ¢ | 15.09 | | ¢ | 14.53] [added: 9.59] | | ¢ | [removed: 14.22] [added: 15.35] | | ¢ | [removed: 14.10] [added: 15.09] | | ¢ | [removed: | | | | | | | | | | | |]

| Total revenue per available seat mile | | | [removed: 17.07 | | ¢ | 16.87 | | ¢ | 16.18] [added: 12.73] | | ¢ | [removed: 15.66] [added: 17.07] | | ¢ | [removed: 16.50] [added: 16.87] | | ¢ | [removed: | | | | | | | | | | | |]

| [removed: Operating] [added: Total operating] cost per available seat mile [removed: | | | 14.67 | | ¢ | 14.87] [added: ("CASM")] | | [removed: ¢] | [removed: 13.83] [added: 22.01] | | ¢ | [removed: 12.89] [added: 14.67] | | ¢ | [removed: 13.33] [added: 14.87] | | ¢ | [removed: | | | | | | | | | | | |]

| Fuel gallons consumed (in millions) | | | [removed: 4,214 | | | 4,113 | | | 4,032 | | | 4,016 | | | 3,988 | | | | | |] [added: 1,935] | | | [added: 4,214] | | | [added: 4,113] | | |

| Average price per fuel [removed: gallon(2) | | | $ | 2.02 | | $] [added: gallon (2)] | [removed: 2.20] | | $ | [removed: 1.68] [added: 1.64] | | $ | [removed: 1.49] [added: 2.02] | | $ | [removed: 1.90 | | | | | | | | | | | |] [added: 2.20] | |

| [removed: Full-time] [added: Approximate full-time] equivalent employees, end of period | | | [removed: 91,224 | | | 88,680 | | | 86,564 | | | 83,756 | | | 82,949 | | | | | |] [added: 74,000] | | | [added: 91,000] | | | [added: 89,000] | | |

MD&A*

ITEM 7.

This section of Form 10-K does not address certain items regarding the year ended December 31, 2018.

Discussion and analysis of 2018 and year-to-year comparisons between 2019 and 2018 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, 2019.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited Consolidated Financial Statements and the related notes and other financial information included elsewhere in this Annual Report on Form 10-K.

Impact of the COVID-19 Pandemic

The unprecedented, widespread and persistent impact of COVID-19 and the related travel restrictions and social distancing measures implemented throughout the world have significantly reduced demand for air travel.

After initially impacting our service to China beginning in January 2020, the spread of the virus and the resulting global pandemic have significantly affected our entire network.

Beginning in March 2020, large public events were cancelled, governmental authorities began imposing restrictions on non-essential activities, businesses suspended travel and popular leisure destinations temporarily closed to visitors.

Certain countries that are key markets for our business have imposed bans on international travelers for specified periods or indefinitely.

As a result, demand for travel declined at a rapid pace in the March 2020 quarter and has remained depressed, which has had an unprecedented and materially adverse impact on our results of operations and financial position.

Although demand has improved at a slow pace since that time, it remains significantly below pre-pandemic levels.

The exact timing and pace of the recovery remain uncertain as certain markets have reopened, some of which have since experienced a resurgence of COVID-19 cases, while others, particularly international markets, remain closed or are enforcing extended quarantines for most U.S. residents.

The U.S. and numerous other countries are now also requiring airline passengers to provide negative COVID-19 test results prior to travel into their countries.

Additionally, some states have instituted travel restrictions, advisories or quarantines for travelers from other states within the U.S. We expect the demand environment to remain depressed until effective vaccines become broadly available, vaccination becomes widespread globally and travel restrictions and advisories begin to ease.

Our forecasted expense and liquidity management initiatives may be modified as the demand environment evolves.

In response to these developments, we have implemented enhanced measures focusing on the safety of our customers and employees, while at the same time seeking to mitigate the impact on our financial position and operations and to position our business for recovery.

*Taking Care of our Customers and Employees.* The safety of our customers and employees is our primary focus.

As the COVID-19 pandemic has progressed, we have taken numerous steps to help promote the safety of our customers and employees on the ground and in the air in keeping with current health-expert recommendations, including:

- Adopting new cleaning procedures on all flights, including regular disinfectant electrostatic spraying on aircraft and sanitizing high-touch areas like tray tables, entertainment screens, armrests and seat-back pockets.

- Taking steps to help employees and customers practice social distancing and promote safety, including:

◦Creating a Global Cleanliness Division to ensure a consistently safe and sanitized experience across our facilities and aircraft.

◦Beginning in May 2020, requiring all customers and customer-facing employees to wear masks.

◦Capping load factors throughout our aircraft and blocking middle seats through at least April 30, 2021.

◦Modifying our boarding and deplaning processes, while providing limited food and beverage service that is designed to reduce physical touch points.

◦Encouraging social distancing throughout all aspects of our operation.

◦Implementing significant workforce social distancing and protection measures, including reconfiguring call center spaces to promote social distancing, increasing cleaning and disinfecting of our facilities and encouraging employees to work remotely when possible.

- Giving customers flexibility to plan and re-book travel, including extending expiration on certain tickets and travel credits through December 2022, eliminating change fees for domestic tickets and international tickets originating from North America, with the exception of Basic Economy tickets, and waiving change fees for all tickets purchased before March 30, 2021.

Additionally, we are extending 2020 Medallion Status an additional year, rolling Medallion Qualification Miles into 2021 and extending Delta SkyMiles American Express Card benefits and Delta Sky Club memberships.

*Item 7.

MD&A - Financial Highlights*

- Offering pay protection to employees who have tested positive for COVID-19, who must quarantine due to exposure to COVID-19, who are considered being at high-risk for illness from COVID-19 according to the Centers for Disease Control and Prevention ("CDC") guidelines and do not have the ability to work remotely.

- Offering on-site rapid COVID-19 testing in most locations and making at-home testing available for all U.S.-based employees.

We have also added rapid testing in most U.S. hubs for active flight crews.

*Capacity Reductions.* Beginning in the second half of March 2020, we experienced a precipitous decrease in demand as COVID-19 spread throughout the world.

While we have increased capacity compared to the lowest levels in April 2020, system capacity remains significantly lower than prior to the COVID-19 pandemic.

During 2020, system capacity was reduced approximately 50% compared to 2019, with international capacity reduced by approximately 65% and domestic capacity reduced by approximately 45%.

System capacity for the March 2020 through December 2020 period, excluding the pre-pandemic months of January and February, was reduced by approximately 60%, with international capacity reduced by approximately 75% and domestic capacity reduced by approximately 50%.

For the March 2021 quarter, system capacity is expected to be down approximately 30%-40% compared to the March 2019 quarter.

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, 2019.

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

Results from 2015 have not been recast for the adoption of this standard.

Consolidated Summary of Operations

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

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

| (in millions, except share data) | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | | | | | | | | | | | | |

| Operating revenue | | | $ | 47,007 | | $ | 44,438 | | $ | 41,138 | | $ | 39,450 | | $ | 40,704 | | | | | | | | | | | | | |

| Operating expense | | | 40,389 | | | 39,174 | | | 35,172 | | | 32,454 | | | 32,902 | | | | | | | | | | | | | | |

| Operating income | | | 6,618 | | | 5,264 | | | 5,966 | | | 6,996 | | | 7,802 | | | | | | | | | | | | | | |

| Income before income taxes | | | 6,198 | | | 5,151 | | | 5,500 | | | 6,353 | | | 7,157 | | | | | | | | | | | | | | |

| Income tax provision | | | (1,431) | | | (1,216) | | | (2,295) | | | (2,158) | | | (2,631) | | | | | | | | | | | | | | |

| Net income | | | $ | 4,767 | | $ | 3,935 | | $ | 3,205 | | $ | 4,195 | | $ | 4,526 | | | | | | | | | | | | | |

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

| Basic earnings per share | | | $ | 7.32 | | $ | 5.69 | | $ | 4.45 | | $ | 5.59 | | $ | 5.68 | | | | | | | | | | | | | |

| Diluted earnings per share | | | $ | 7.30 | | $ | 5.67 | | $ | 4.43 | | $ | 5.55 | | $ | 5.63 | | | | | | | | | | | | | |

| Cash dividends declared per share | | | $ | 1.51 | | $ | 1.31 | | $ | 1.02 | | $ | 0.68 | | $ | 0.45 | | | | | | | | | | | | | |

Supplemental Information

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

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

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

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

| (in millions) | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | | | | | | | | | | | | |

| Restructuring and other | | | — | | | — | | | — | | | — | | | (35) | | | | | | | | | | | | | | |

| Equity investment MTM adjustments | | | (14) | | | 29 | | | (8) | | | 115 | | | 26 | | | | | | | | | | | | | | |

| MTM adjustments on investments | | | 13 | | | (14) | | | — | | | — | | | — | | | | | | | | | | | | | | |

| Tax Cuts and Jobs Act | | | — | | | — | | | (394) | | | — | | | — | | | | | | | | | | | | | | |

Consolidated Balance Sheet Data

We adopted Accounting Standards Update No. 2016-02, "Leases (Topic 842)," using the modified retrospective approach in 2018.

Financial statements prior to 2018 were not recast for the adoption of this standard.

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

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

| | | | December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| (in millions) | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | | | | | | | | | | | | |

| Total assets | | | $ | 64,532 | | $ | 60,266 | | $ | 53,671 | | $ | 51,850 | | $ | 53,134 | | | | | | | | | | | | | |

| Debt and finance leases (including current maturities) | | | 11,160 | | | 9,771 | | | 8,834 | | | 7,332 | | | 8,329 | | | | | | | | | | | | | | |

| Stockholders' equity | | | 15,358 | | | 13,687 | | | 12,530 | | | 11,277 | | | 10,850 | | | | | | | | | | | | | | |

Other Financial and Statistical Data (Unaudited)

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

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

| [Report of Independent Registered Public Accounting [removed: Firm](#i_0_148)] [added: Firm](#i9e520fbc9e094b64b139dd151a560bbf_139)] | | | [removed: [50](#i_0_148)] [added: [58](#i9e520fbc9e094b64b139dd151a560bbf_139)] | | |

| [Consolidated Balance Sheets - December 31, [removed: 201](#i_0_151)[9](#i_0_151)] [added: 20](#i9e520fbc9e094b64b139dd151a560bbf_142)[20](#i9e520fbc9e094b64b139dd151a560bbf_142)] [and [removed: 201](#i_0_151)8] [added: 201](#i9e520fbc9e094b64b139dd151a560bbf_142)9] | | | [removed: [53](#i_0_151)] [added: [62](#i9e520fbc9e094b64b139dd151a560bbf_142)] | | |

| [Consolidated Statements of Operations for the years ended December 31, [removed: 201](#i_0_157)[9](#i_0_157)[, 201](#i_0_157)[8](#i_0_157)] [added: 20](#i9e520fbc9e094b64b139dd151a560bbf_148)[20](#i9e520fbc9e094b64b139dd151a560bbf_148)[, 201](#i9e520fbc9e094b64b139dd151a560bbf_148)[9](#i9e520fbc9e094b64b139dd151a560bbf_148)] [and [removed: 201](#i_0_157)7] [added: 201](#i9e520fbc9e094b64b139dd151a560bbf_148)8] | | | [removed: [54](#i_0_157)] [added: [63](#i9e520fbc9e094b64b139dd151a560bbf_148)] | | |

| [Consolidated Statements of [removed: Comprehensive Income] [added: Comprehensive](#i9e520fbc9e094b64b139dd151a560bbf_151) [(](#i9e520fbc9e094b64b139dd151a560bbf_151)[Loss)/](#i9e520fbc9e094b64b139dd151a560bbf_151)[Income] for the years ended December 31, [removed: 201](#i_0_160)[9](#i_0_160)[, 201](#i_0_160)[8](#i_0_160)] [added: 20](#i9e520fbc9e094b64b139dd151a560bbf_151)[20](#i9e520fbc9e094b64b139dd151a560bbf_151)[, 201](#i9e520fbc9e094b64b139dd151a560bbf_151)[9](#i9e520fbc9e094b64b139dd151a560bbf_151)] [and [removed: 201](#i_0_160)7] [added: 201](#i9e520fbc9e094b64b139dd151a560bbf_151)8] | | | [removed: [55](#i_0_160)] [added: [64](#i9e520fbc9e094b64b139dd151a560bbf_151)] | | |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 201](#i_0_163)[9](#i_0_163)[, 201](#i_0_163)[8](#i_0_163)] [added: 20](#i9e520fbc9e094b64b139dd151a560bbf_154)[20](#i9e520fbc9e094b64b139dd151a560bbf_154)[, 201](#i9e520fbc9e094b64b139dd151a560bbf_154)[9](#i9e520fbc9e094b64b139dd151a560bbf_154)] [and [removed: 201](#i_0_163)7] [added: 201](#i9e520fbc9e094b64b139dd151a560bbf_154)8] | | | [removed: [56](#i_0_163)] [added: [65](#i9e520fbc9e094b64b139dd151a560bbf_154)] | | |

| [Consolidated Statements of Stockholders' Equity for the years ended December 31, [removed: 201](#i_0_166)[9](#i_0_166)[, 201](#i_0_166)[8](#i_0_166)] [added: 20](#i9e520fbc9e094b64b139dd151a560bbf_157)[20](#i9e520fbc9e094b64b139dd151a560bbf_157)[, 201](#i9e520fbc9e094b64b139dd151a560bbf_157)[9](#i9e520fbc9e094b64b139dd151a560bbf_157)] [and [removed: 201](#i_0_166)7] [added: 201](#i9e520fbc9e094b64b139dd151a560bbf_157)8] | | | [removed: [57](#i_0_166)] [added: [66](#i9e520fbc9e094b64b139dd151a560bbf_157)] | | |

[removed: | [Notes] [added: *Notes] to the Consolidated Financial [removed: Statements](#i_0_172) | | | [58](#i_0_172) | | |][added: Statements*]

| [Note 1 - Summary of Significant Accounting [removed: Policies](#i_0_175)] [added: Policies](#i9e520fbc9e094b64b139dd151a560bbf_166)] | | | [removed: [58](#i_0_175)] [added: [67](#i9e520fbc9e094b64b139dd151a560bbf_166)] | | |

[removed: | [Note 2 - Revenue Recognition](#i_0_181) | | | [63](#i_0_181) | | |][added: NOTE 3. REVENUE RECOGNITION]

| [removed: [Note 3 -] [added: [Note](#i9e520fbc9e094b64b139dd151a560bbf_178) [4](#i9e520fbc9e094b64b139dd151a560bbf_178) [-] Fair Value [removed: Measurements](#i_0_187)] [added: Measurements](#i9e520fbc9e094b64b139dd151a560bbf_178)] | | | [removed: [66](#i_0_187)] [added: [80](#i9e520fbc9e094b64b139dd151a560bbf_178)] | | |

| [removed: [Note 4 - Investments](#i_0_193)] [added: [Note](#i9e520fbc9e094b64b139dd151a560bbf_184) [5](#i9e520fbc9e094b64b139dd151a560bbf_184) [- Investments](#i9e520fbc9e094b64b139dd151a560bbf_184)] | | | [removed: [68](#i_0_193)] [added: [81](#i9e520fbc9e094b64b139dd151a560bbf_184)] | | |

| [removed: [Note 5 -] [added: [Note](#i9e520fbc9e094b64b139dd151a560bbf_190) [6](#i9e520fbc9e094b64b139dd151a560bbf_190) [-] Derivatives and Risk [removed: Management](#i_0_199)] [added: Management](#i9e520fbc9e094b64b139dd151a560bbf_190)] | | | [removed: [69](#i_0_199)] [added: [85](#i9e520fbc9e094b64b139dd151a560bbf_190)] | | |

| [removed: [Note 8 - Leases](#i_0_217)] [added: [Note](#i9e520fbc9e094b64b139dd151a560bbf_208) [9](#i9e520fbc9e094b64b139dd151a560bbf_208) [- Leases](#i9e520fbc9e094b64b139dd151a560bbf_208)] | | | [removed: [75](#i_0_217)] [added: [93](#i9e520fbc9e094b64b139dd151a560bbf_208)] | | |

| [removed: [Note 9 -] [added: [Note](#i9e520fbc9e094b64b139dd151a560bbf_214) [10](#i9e520fbc9e094b64b139dd151a560bbf_214) [-] Airport [removed: Redevelopment](#i_0_223)] [added: Redevelopment](#i9e520fbc9e094b64b139dd151a560bbf_214)] | | | [removed: [79](#i_0_223)] [added: [96](#i9e520fbc9e094b64b139dd151a560bbf_214)] | | |

| [Note [removed: 10 -] [added: 1](#i9e520fbc9e094b64b139dd151a560bbf_220)[1](#i9e520fbc9e094b64b139dd151a560bbf_220) [-] Employee Benefit [removed: Plans](#i_0_229)] [added: Plans](#i9e520fbc9e094b64b139dd151a560bbf_220)] | | | [removed: [81](#i_0_229)] [added: [98](#i9e520fbc9e094b64b139dd151a560bbf_220)] | | |

| [removed: [Note 11 - Commitments] [added: Commitments] and [removed: Contingencies](#i_0_235)] [added: Contingencies] | | | [removed: [86](#i_0_235)] | | | [added: | | | | | | | | |]

| [Note [removed: 12 -] [added: 1](#i9e520fbc9e094b64b139dd151a560bbf_232)[3](#i9e520fbc9e094b64b139dd151a560bbf_232) [-] Income [removed: Taxes](#i_0_241)] [added: Taxes](#i9e520fbc9e094b64b139dd151a560bbf_232)] | | | [removed: [89](#i_0_241)] [added: [107](#i9e520fbc9e094b64b139dd151a560bbf_232)] | | |

| [Note [removed: 13 -] [added: 1](#i9e520fbc9e094b64b139dd151a560bbf_238)[4](#i9e520fbc9e094b64b139dd151a560bbf_238) [-] Equity and Equity [removed: Compensation](#i_0_247)] [added: Compensation](#i9e520fbc9e094b64b139dd151a560bbf_238)] | | | [removed: [91](#i_0_247)] [added: [109](#i9e520fbc9e094b64b139dd151a560bbf_238)] | | |

| [removed: [Note 14 - Accumulated Other Comprehensive Loss](#i_0_253)] [added: Components of accumulated other comprehensive loss] | | | [removed: [92](#i_0_253)] | | | [added: | | | | | | | | |]

[removed: | [Note 1](#i_0_268)[6](#i_0_268) [- Earnings Per Share](#i_0_268) | | | [95](#i_0_268) | | |][added: (LOSS)/EARNINGS PER SHARE]

We have audited the accompanying consolidated balance sheets of Delta Air Lines, Inc. (the Company) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the related consolidated statements of operations, comprehensive [removed: income,] [added: (loss)/income,] cash flows, and stockholders' equity for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] 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: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] 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: 2019,] [added: 2020,] 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 12, [removed: 2020] [added: 2021] expressed an unqualified opinion thereon.

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and [removed: that:] [added: that] (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments.

[added: |] Loyalty [removed: Program - Mileage Breakage][added: program activity | | | | | | | | | | | |]

| *How We Addressed the Matter in Our Audit* | | | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s accounting for [removed: its loyalty program, including] [added: long-lived asset impairments. For example, we tested] controls over management’s review [removed: of] [added: over determining] the [removed: estimation] [added: relevant measures] of [removed: the mileage breakage and the completeness and accuracy] [added: fair value] of [removed: the data underlying the breakage estimate.] [added: fleet assets.] | | |

| *Description of the Matter* | | | At December 31, [removed: 2019] [added: 2020,] the fair value of the Company’s benefit plan [removed: investments] [added: assets measured at fair value on a recurring basis] totaled [removed: $16.3] [added: $16.6] billion, of which [removed: $9.9] [added: $10.4] billion do not have a readily determinable fair value and are measured at net asset value per share (“NAV assets”) as a practical expedient. Management determines the fair value of NAV assets by applying the methodologies described in Note [removed: 10] [added: 11] to the consolidated financial statements. The Company’s expected long-term rate of return on assets for net periodic benefit for the year ended December 31, [removed: 2019] [added: 2020] was 8.97%. The expected return on plan assets provided net periodic benefit of [removed: $1.2] [added: $1.4] billion for the year ended December 31, [removed: 2019.] [added: 2020.] As disclosed in Note [removed: 10] [added: 11] to the consolidated financial statements, the expected long-term rate of return on plan assets is reviewed annually and is based primarily on plan-specific investment studies using historical market return and volatility data. | | |

| | | | To test the expected long-term rate of return on plan assets, our audit procedures included, among others, evaluating the methodology used, testing the significant assumptions used in the determination of the expected return and testing the underlying data used by the Company. We involved an actuarial specialist to assist in evaluating the appropriateness of the Company’s estimate, including independently calculating a range of expected long-term rates of return based on the Company’s current investment portfolio and strategy, and assessed whether management’s assumption was consistent with a range of returns for a portfolio of comparative investments. Additionally, we tested the completeness and accuracy of the data used by management and [removed: performing] [added: performed] sensitivity analyses to evaluate the changes to the Company’s net periodic benefit that would result from changes in the expected long-term rate of return on plan assets. | | |

| | | | | | | December 31, | | | | | | [removed: | | | | | | | | | | | | | | |]

| (in millions, except [added: per] share data) | | | [removed: | | | 2019 | | | | | | 2018] [added: 2020] | | | | | | [added: 2019] | | | | | | [added: 2018] | | |

| [removed: ASSETS | | | | | | | | | | | |] [added: Current Assets:] | | | | | | | | | | | | | | |

| Current [removed: Assets: | | | | | | | | |] [added: assets:] | | | | | | | | | | | | | | | | | |

| Cash and cash equivalents | | | [removed: | | |] $ | [removed: 2,882] [added: 8,307] | | | | | $ | [removed: 1,565 | | | | | |] [added: 2,882] | | | | | [added: $] | [added: 1,565] | |

| Accounts receivable, net of an allowance for uncollectible accounts of [removed: $13] [added: $89] and [removed: $12 at December 31, 2019] [added: $13 as of 2020] and [removed: 2018,] [added: 2019,] respectively | | | | | | [removed: 2,854 | | | | | | 2,314 | | | | | |] [added: 1,396] | | | | | | [added: 2,854] | | |

| Fuel inventory | | | | | | [removed: 730 | | | | | | 592 | | | | | |] [added: 377] | | | | | | [added: 730] | | |