Delta Air Lines (DAL) 10-K risk factor changes: FY2022 vs FY2021

The baseline for establishing airlines’ [removed: offset] obligations under CORSIA was originally set as an average of 2019 and 2020 emissions.

However, given the COVID-19 pandemic and resulting unprecedented reduction in international travel, [added: in June 2020] ICAO removed 2020 from the baseline calculation for the first [removed: phases] [added: phase] of CORSIA, from 2021 to [removed: 2027.][added: 2023.]

[removed: Individual] [added: The] EU [added: is expected to finalize a SAF mandate on fuel suppliers in 2023 and individual EU] member states have been developing their own requirements, including for example, [removed: a] [added: separate] SAF [removed: mandate] [added: mandates] in France [removed: that will be phased] [added: and Sweden] in [removed: at the beginning of] 2022.

For example, in 2022 the EPA proposed regulations to define certain per- and polyfluoroalkyl substances ("PFAS") as "hazardous substances" under CERCLA.

Numerous states have adopted regulations governing these substances as well.

PFAS are used in a wide variety of consumer and industrial products, including the firefighting foams used to extinguish fuel-based fires at airports and refineries.

EPA's proposed rule, once finalized, could subject airports, airlines, and refineries, among others, to potential liability for cleanup of historical PFAS contamination associated with use of PFAS-containing firefighting foam.

The ultimate impact and associated cost to Delta of this rulemaking cannot be predicted at this time.

In 2022, ICAO established a new, more stringent CORSIA baseline of 85% of 2019, which will apply starting in 2024 through 2035.

In 2022, the EU reached a deal on proposed legislation that would exclude extra-EU flights from the scope of EU ETS until 2027, however that deal has not yet been approved.

Risk Factors Relating to the Airline Industry

Terrorist attacks, geopolitical conflict or security events may adversely affect our business, financial condition and results of operations.

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

Despite significant security measures at airports and airlines, the airline industry remains a high profile target for terrorist groups.

We rely on government provided threat intelligence and utilize private sources to constantly monitor 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.

In addition, the impact on our operations of avoiding areas of the world, including airspace, in which there are geopolitical conflicts and the targeting of commercial aircraft by parties to those conflicts can be significant.

Security events, primarily from external sources but also from potential insider threats, also pose a significant risk to our passenger and cargo operations.

These events could include random acts of violence and could occur in public areas that we cannot control.

Terrorist attacks, geopolitical conflict or security events, or the fear or threat of any of these events, even if not made directly on or involving the airline industry, could have a 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 occurring or could occur, such as flight redirections or cancellations, reputational harm and other costs.

If any or all of these types of events occur, they could have a material adverse effect on our business, financial condition and results of operations.

The global airline industry is highly competitive and, if we cannot successfully compete in the marketplace, our business, financial condition and results of 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), operational reliability, services, products, customer service and loyalty programs.

Consolidation in the airline industry, changes in international alliances, the creation of immunized joint ventures 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 significant 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 Delta.

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

We also face competition in smaller to medium-sized markets from regional jet operations of other carriers.

Our ability to compete in the domestic market effectively depends, in part, on our ability to maintain a competitive cost structure.

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

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

Through alliance and other marketing and codesharing agreements with foreign carriers, U.S. carriers have increased their ability to sell international transportation, such as services to and beyond traditional European and Asian gateway cities.

Similarly, foreign carriers have obtained increased access to interior U.S. passenger traffic beyond traditional U.S. gateway cities through these relationships.

In particular, several joint ventures among U.S. and foreign carriers, including several of our joint ventures as well as those of our competitors, have received grants of antitrust immunity allowing the participating carriers to coordinate schedules, pricing, sales and inventory.

In addition, alliances formed by domestic and foreign carriers, including SkyTeam, the Star Alliance (among United Airlines, Lufthansa German Airlines, Air Canada and others) and the oneworld alliance (among American Airlines, British Airways, Qantas and others) have enhanced competition in international markets.

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

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

*Item 1A.

Risk Factors*

Extended interruptions or disruptions in service at major airports in which we operate or significant problems associated with a type of aircraft or engine we operate could have a material adverse effect on our operations.

The airline industry is heavily dependent on business models that concentrate operations in major airports in the United States and throughout the world.

An extended interruption or disruption at an airport where we have significant operations, whether resulting from a discrete event, such as a hurricane, or the manifestation of a chronic physical risk, such as rising sea levels, could have a material adverse effect on our business, financial condition and results of operations.

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

Any significant problems associated with an aircraft or engine type that we 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 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, which is costly and could materially adversely affect our business.

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

For instance, the FAA from time to time issues directives and other regulations relating to the maintenance and operation of aircraft that necessitate significant expenditures and could carry operational implications.

We expect to continue incurring significant expenses to comply with the FAA’s regulations.

In addition, a directive or other regulation that has a significant operational impact on us could have a material adverse impact on our financial results.

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

The industry is heavily taxed.

| Fuel [removed: expense] [added: expense, adjusted] and [removed: average] [added: Average fuel] price per [removed: gallon] [added: gallon, adjusted reconciliations] | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | |]

| | | | | | | | | | | | | | | | [added: | | |] Average Price Per Gallon | | | | | | | | | [added: | | |]

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

| (in millions, except per gallon data) | | | [added: 2022 | | |] 2021 | | | [removed: 2020] | | | [added: 2019] | | | [removed: 2021] | | | [removed: 2020] [added: 2022] | | | [added: 2021] | | | | | | [added: 2019 | | |]

| Total fuel expense | | | $ | [removed: 5,633] [added: 11,482] | | $ | [removed: 3,176] [added: 5,633] | | [added: | | |] $ | [removed: 2,457] [added: 8,519] | | | | | $ | [removed: 2.02] [added: 3.36] | | $ | [removed: 1.64] [added: 2.02] | | [added: | | |] $ | [removed: 0.38] [added: 2.02] | |

In the [removed: year] [added: years] ended December 31, [added: 2022 and] 2021, we recognized [removed: $19] [added: $124] million [added: and $19 million, respectively,] of adjustments to certain of those restructuring charges, representing changes in our [removed: estimates.][added: estimates or the outcome of contract negotiations.]

[removed: *Profit Sharing.*] To recognize the extraordinary efforts of our employees through the pandemic, we [removed: will make] [added: made] a special profit-sharing payment to eligible employees in February 2022, based on the adjusted pre-tax profit earned during the second half of 2021.

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

| (in millions) | | | [added: 2022 | | |] 2021 | | | [removed: 2020] | | | [added: 2019] | | | | | | [added: | | |]

Based on our [removed: current level] [added: funded status as] of [removed: funding,] [added: December 31, 2021,] we [removed: have modified, and continue to evaluate,] [added: modified] the [added: strategic] asset allocation mix [added: in 2022] to reduce the investment risk of the portfolio.

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

| Third-party refinery sales | | | [removed: 3,229] [added: (4,977)] | | | [removed: 1,150] [added: (3,229)] | | | [removed: 181] | | [removed: %] | [added: (97) | | |]

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

| TRASM, [removed: adjusted(2)] [added: adjusted] | | | [removed: 13.71] [added: 19.55] | | ¢ | [removed: 11.87] [added: 13.71] | | ¢ | [added: | | |] 16.97 | | ¢ | [added: | | |]

| [removed: CASM-Ex(2)] [added: CASM-Ex] | | | [removed: 12.12] [added: 12.87] | | ¢ | [removed: 15.61] [added: 12.12] | | ¢ | [added: | | |] 10.88 | | ¢ | [added: | | |]

[removed: As of December 31, 2021, we had $14.2 billion in cash,] [added: *Liquidity* - Includes our] cash [added: and cash-like assets, including cash] equivalents, short-term investments and aggregate principal amount committed and available to be drawn under our revolving credit facilities.

We had no minimum funding requirements in [removed: 2020] [added: 2021] or [removed: 2021,] [added: 2022,] and have no such requirements in [removed: 2022.][added: 2023.]

Our critical accounting estimates are those estimates made in accordance with [removed: GAAP] [added: generally accepted accounting principles in the U.S. ("GAAP")] that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our consolidated results of operations or financial condition.

A change in assumptions [removed: to] [added: regarding] the redemption activity for miles or the estimated fair value of miles expected to be redeemed could have a material impact on our revenue in the year in which the change occurs and in future years.

At December 31, [removed: 2021,] [added: 2022,] the aggregate deferred revenue balance associated with the SkyMiles program was [removed: $7.6] [added: $7.9] billion.

A hypothetical 10% change in the number of outstanding miles estimated to be redeemed would result in an impact of [removed: approximately $140 million on] [added: less than 1% of] total operating revenue recognized for the year ended December 31, [removed: 2021.][added: 2022.]

A hypothetical 10% increase in our estimate of the ETV of a mile would have decreased total operating revenue by [removed: approximately $60 million] [added: less than 1%] for the year ended December 31, [removed: 2021,] [added: 2022,] as a result of an increase in the amount of revenue deferred associated with the miles earned.

During the years ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] total cash sales from marketing agreements related to our loyalty program were [removed: $4.1] [added: $5.7] billion, [removed: $2.9] [added: $4.1] billion and [removed: $4.2] [added: $2.9] billion, respectively, which are allocated to travel and other performance obligations, as discussed below.

The loyalty program deferred revenue classified as a current liability represents our [removed: current] estimate of revenue expected to be recognized in the next twelve months based on projected redemptions, while the balance classified as a noncurrent liability represents our [removed: current] estimate of revenue expected to be recognized beyond twelve months.

We periodically evaluate the estimated air traffic liability and may record adjustments in our [removed: income statement.][added: Consolidated Statement of Operations ("income statement").]

These adjustments relate primarily to [removed: refunds, exchanges,] ticket breakage, [added: refunds, exchanges,] transactions with other airlines and other items for which final settlement occurs in periods subsequent to the sale of the related tickets at amounts other than the original sales price.

[removed: We have] [added: During the COVID-19 pandemic, we] experienced significant ticket cancellations, particularly in the early months of [removed: the pandemic in] 2020.

Our long-lived lived assets, including flight equipment, which consists of aircraft and associated engines and parts, operating [removed: lease right-of-use ("ROU")] [added: ROU] assets and other long-lived assets, which have a recorded value of approximately [removed: $36.0] [added: $40.1] billion at December 31, [removed: 2021,] [added: 2022,] are recorded in property and equipment, net and operating lease right-of-use assets on our balance sheets.

As a result of the COVID-19 pandemic and our response, we made decisions to remove certain aircraft from active service and to early retire certain [removed: fleets.][added: fleet types.]

We evaluated our fleet [removed: during 2020 and determined] [added: for impairment, determining] that only [removed: the] [added: certain] fleet types [removed: discussed in Note 15 of the Notes to the Consolidated Financial Statements] were impaired, as the future cash flows from the operation of [removed: other] [added: these] fleet types through the respective retirement dates [removed: exceeded] [added: were lower than] the carrying value.

This resulted in impairment and other related charges of $4.4 [removed: billion,] [added: billion during 2020,] recorded in restructuring charges in our income statement.

Due to the recovery in demand that we [removed: have] experienced throughout [removed: 2021,] [added: 2021 and 2022,] we decided not to retire any additional aircraft and returned to service a majority of the aircraft that were temporarily parked in 2020.

We recorded no further impairments during [removed: 2021.][added: 2021 or 2022.]

Following the impairment charges, the aggregate net book value of these aircraft as of December 31, [removed: 2021] [added: 2022] and December 31, [removed: 2020] [added: 2021] was approximately [removed: $340] [added: $220] million and [removed: $500] [added: $340] million, respectively, with the reduction in [removed: 2021] [added: 2022] primarily due to aircraft sales.

Our goodwill balance, which is related to the airline segment, was $9.8 billion at December 31, [removed: 2021.][added: 2022.]

*Identifiable Intangible Assets.* Our identifiable intangible assets, which are related to the airline segment, had a net carrying amount of $6.0 billion at December 31, [removed: 2021,] [added: 2022,] of which $5.9 billion related to indefinite-lived intangible assets.

In [removed: 2021,] [added: 2022,] we performed qualitative assessments of our goodwill and indefinite-lived intangible assets, including applicable factors noted in "Key Assumptions" above, and determined that there was no indication that the assets were impaired.

Our qualitative assessments include analyses and weighting of all relevant [removed: factors,] [added: factors] which impact the fair value of our indefinite-lived intangible assets.

As of December 31, [removed: 2021,] [added: 2022,] the unfunded benefit obligation for these plans recorded on our [removed: Consolidated Balance Sheets ("balance sheets")] [added: balance sheets] was [removed: $1.6 billion.][added: $90 million.]

The most critical assumptions impacting our defined benefit pension plan [removed: obligations] [added: obligations, plan assets] and net periodic benefit cost are the discount rate, the expected long-term rate of return on plan assets and life expectancy of plan participants.

Delta has eliminated change fees for tickets originating in the United States, Canada, Europe and Africa (excluding Basic Economy tickets).

In order to provide our customers more flexibility and time to plan their travel, travel credit holders as of January 2022 and customers who purchased a ticket in 2022 are able to rebook their ticket through December 31, 2023 for travel throughout 2024.

At December 31, 2022, the aggregate air traffic liability balance was $8.3 billion.

A hypothetical 10% change in the amount of travel credits estimated to expire unused would result in an impact of less than 1% of total operating revenue for the year ended December 31, 2022.

In the September 2022 quarter, final regulatory approval was granted for our trans-American joint venture agreement with LATAM.

This agreement combines our highly complementary route networks between North and South America, with the goal of providing customers with a seamless travel experience and industry-leading connectivity.

Approval was granted for a 10-year period with a subsequent reassessment and extension process.

This agreement supports our strategic partnership with LATAM and the value of our $1.2 billion alliance-related indefinite-lived intangible asset.

We believe the LATAM joint venture agreement will generate growth opportunities, building upon Delta's and LATAM's global footprint.

We have classified our LATAM alliance intangible asset as indefinite-lived as we expect to indefinitely receive the economic benefits from the relationship, similar to other joint venture arrangements between U.S. and foreign carriers that have been cleared by competition authorities in relevant foreign jurisdictions and granted antitrust immunity from the U.S. Department of Transportation ("DOT").

Antitrust immunity grants are generally subject to reporting requirements and periodic reassessment processes administered by the DOT.

We have determined that there are currently no material legal, regulatory, contractual, competitive, economic or other factors that limit the useful life of our LATAM alliance-related intangible asset.

During 2022, we returned to profitability, as our business continued to recover from the impact of the pandemic.

We are expecting to generate sufficient taxable income to utilize our federal net operating loss carryforwards before any expire.

*Standards Effective in Future Years*

*Fair Value of Equity Investments.* In June 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2022-03, "Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions." Under this standard, a contractual restriction on the sale of an equity security is not considered in measuring the security's fair value.

The standard also requires certain disclosures for equity securities that are subject to contractual restrictions.

The ASU becomes effective January 1, 2024.

Upon adoption, we do not believe it will have a material impact on the valuation of our equity investments; however, we may be required to include additional disclosures to the extent we have material equity investments subject to contractual sale restrictions.

*Supplier Finance Program Obligations.* In September 2022, the FASB issued ASU No. 2022-04, "Liabilities—Supplier Finance Programs (Subtopic 405-50)." This standard requires disclosure of the key terms of outstanding supplier finance programs and a rollforward of the related obligations.

The new standard does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations.

The ASU becomes effective January 1, 2023, except for the rollforward requirement, which becomes effective January 1, 2024.

Upon adoption, we may be required to include additional disclosures to the extent we have material supplier finance program obligations.

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| Operating income | | | $ | 3,661 | | $ | 1,886 | | | | | $ | 6,618 | | | | | | | |

| Operating income/(loss), adjusted | | | $ | 3,566 | | $ | (2,527) | | | | | $ | 6,636 | | | | | | | |

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- *Financed aircraft acquisitions.* This adjustment reflects aircraft deliveries that are leased as capital expenditures.

The adjustment is based on their original contractual purchase price or an estimate of the aircraft's fair value and provides a more meaningful view of our investing activities.

*Aircraft Fuel and Related Taxes.* Fuel expense increased $2.5 billion compared to 2020 primarily due to a 44% increase in consumption on a 45% increase in capacity, and a 31% increase in the market price of jet fuel.

Additionally, during 2021, we purchased and retired $95 million of carbon offsets, of which $30 million relates to 13 million metric tons of carbon emissions generated by our airline segment from March 1 to December 31, 2020 as well as $65 million which relates to a portion of 2021 carbon emissions generated by our airline segment.

In the table below, these costs are shown in the carbon offset costs line item.

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| Fuel purchase cost (1) | | | $ | 5,527 | | $ | 2,938 | | $ | 2,589 | | | | | $ | 1.99 | | $ | 1.52 | | $ | 0.47 | |

| Carbon offset costs | | | 95 | | | — | | | 95 | | | | | | 0.03 | | | — | | | 0.03 | | |

| Fuel hedge impact | | | 9 | | | 22 | | | (13) | | | | | | — | | | 0.01 | | | (0.01) | | |

| Refinery segment impact | | | 2 | | | 216 | | | (214) | | | | | | — | | | 0.11 | | | (0.11) | | |

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(1)Market price for jet fuel at airport locations, including related taxes and transportation costs.

*Ancillary Businesses and Refinery.* Ancillary businesses and refinery includes expenses associated with refinery sales to third parties, aircraft maintenance services we provide to third parties and our vacation wholesale operations.

Increased expenses were primarily related to refinery sales to third parties, which are at or near cost and increased $2.1 billion compared to 2020.

The increase compared to 2020 was driven by higher pricing during 2021, with lower production and demand for both jet and non-jet fuel products during 2020.

The cost of aircraft maintenance services we provide to third parties increased compared to 2020 due to the increase in flights operated worldwide in 2021.

*Depreciation and Amortization.* Depreciation and amortization decreased compared to 2020 primarily due to the aircraft that were retired or impaired during 2020.

As we acquire new aircraft to provide an improved customer experience, greater fuel efficiency and thus reduced carbon emissions, better operating economics and more premium products, we expect depreciation expense to increase in future years.

*Regional Carrier Expense.* Regional carrier expense increased compared to 2020 due to an increase in utilization as a result of the increased demand discussed above.

Until 2021, we allocated certain costs (such as landing fees and other rents, salaries and related costs and contracted services) to regional carrier expense in our Consolidated Statements of Operations ("income statement") based on relevant statistics (such as passenger counts).

Beginning in 2021 we ceased performing this allocation and have reclassified the costs presented in prior periods to align with this presentation.

This reclassification better reflects the nature of, and how management views, these regional carrier related expenses.

This allocation was approximately $900 million in 2020.

The amounts in regional carrier expense under the current presentation represent the accrual of payments to our regional carriers under capacity purchase agreements, maintenance costs related to our regional fleet and the expenses of our wholly owned regional subsidiary, Endeavor Air, Inc.

*Aircraft Maintenance Materials and Outside Repairs.* Maintenance expense increased compared to 2020 as we returned aircraft to service and to support our operational reliability.

The increase compared to 2020 was particularly pronounced due to the significantly reduced capacity during 2020 and the large number of aircraft we had parked during that time.

*Aircraft Rent.* Most aircraft operating lease expenses are recorded in aircraft rent and are contractually fixed.

Therefore, the increase in aircraft rent was more muted than our other operating expense line items when compared to 2020.

*Restructuring Charges.* During 2020, we recorded restructuring charges of $8.2 billion for items such as fleet impairments and voluntary early retirement and separation programs following strategic business decisions in response to the COVID-19 pandemic.

See Note 15 of the Notes to the Consolidated Financial Statements for additional information about the restructuring charges recorded in 2020.

*Item 7.

MD&A - Results of Operations*

*Government Grant Recognition.* During the year ended December 31, 2021, we received a total of $6.4 billion under the PSP2 and PSP3 agreements with the U.S. Department of the Treasury, which we were required to use exclusively for the payment of employee wages, salaries and benefits.

The support payments included grants totaling $4.5 billion that were recognized as contra-expense in 2021 over the period that the funds were used.

The amount recognized in 2021 exceeded the amount recognized during 2020 due to the increase in grants received during the year.

See Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information on PSP2 and PSP3.

Non-Operating Results

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| Interest expense, net | | | $ | (1,279) | | $ | (929) | | | | | $ | (350) | |

As a result of the reduced capacity from the COVID-19 pandemic, our jet fuel consumption during [removed: 2021] [added: 2022] of [removed: 2.8] [added: 3.4] billion gallons was [removed: significantly less] [added: lower] than our historical and expected future consumption.

At December 31, [removed: 2021,] [added: 2022,] we had [removed: $21.4] [added: $17.9] billion of fixed-rate debt, [removed: $3.9] [added: $3.6] billion of variable-rate debt and [removed: $833] [added: $713] million of variable-rate leases.

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: $1.1 billion] [added: $725 million] at December 31, [removed: 2021] [added: 2022] and would have increased the annual interest expense on our variable-rate debt and variable-rate leases by [removed: $24] [added: $43] million.

In March 2021, the administrator of LIBOR announced that the publication of certain LIBOR settings [removed: will cease] [added: ceased] after December 2021 and publication of the remainder of the LIBOR settings will cease after June 2023.

At December 31, [removed: 2021,] [added: 2022,] we had no exposure to the discontinued LIBOR settings and had approximately [removed: $3.9] [added: $1.4] billion of LIBOR-based debt and finance leases maturing after June 2023, all of which include mechanisms for replacing the applicable reference rate, which we do not expect to be materially different from LIBOR.

At December 31, 2022 we had no open foreign currency options or forward contracts.

At December 31, 2021, we had a U.S. dollar-South Korean won cross currency swap contract totaling a $1 million asset 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 $15 million for the year ending December 31, 2021.

Any growth above the baseline would need to be addressed using either eligible carbon [removed: offset credits] [added: offsets] or a lower carbon fuel.

The baseline for establishing airlines’ [removed: offset] obligations under CORSIA was originally set as an average of 2019 and 2020 emissions.

However, given the COVID-19 pandemic and resulting unprecedented reduction in international travel, [added: in June 2020] ICAO removed 2020 from the baseline calculation for the first [removed: phases] [added: phase] of CORSIA, from 2021 to [removed: 2027.][added: 2023.]

A pilot phase of the CORSIA program runs from 2021 [removed: to] [added: through] 2023, followed by a first phase of the program beginning in 2024 and a second phase beginning in 2027.

Nonetheless, Delta has voluntarily submitted verified emissions reports [removed: for our 2019 and 2020] [added: on its annual] international emissions.

Additionally, the [removed: European Union ("EU")] [added: EU] requires its member states to implement regulations to include aviation in its Emissions Trading Scheme ("ETS").

As a result of the [removed: UK’s] [added: United Kingdom's ("UK")] withdrawal from the EU, UK flights are no longer part of the EU ETS and [removed: will fall] [added: are instead regulated] under a separate UK ETS scheme.

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

On November 15, 2021, the EPA announced that it [removed: plans to] [added: would] defend the current standards while simultaneously calling for ambitious new international CO2 standards at the [removed: upcoming round of] ICAO negotiations.

Individual EU member states have been developing their own requirements, including for example, [removed: a] [added: separate] SAF [removed: mandate] [added: mandates] in France [removed: that will be phased in beginning] [added: and Sweden] in 2022.

In [removed: December 2021,] [added: November 2022,] the EPA issued proposed RFS volume requirements for [removed: 2020, 2021] [added: 2023, 2024] and [removed: 2022,] [added: 2025,] which are expected to be finalized [removed: in the first half of 2022.][added: by June 2023.]

We have agreed to make available under the CRAF Program a portion of our international aircraft during the contract period [removed: ending] [added: that ends on] September 30, [removed: 2022.][added: 2023.]

Bastian, Age [removed: 64:] [added: 65:] Chief Executive Officer of Delta since May 2016; President of Delta (September 2007 - May 2016); President of Delta and Chief Executive Officer Northwest Airlines, Inc. (October 2008 - December 2009); President and Chief Financial Officer of Delta (September 2007 - October 2008); Executive Vice President and Chief Financial Officer of Delta (July 2005 - September 2007); Chief Financial Officer of Acuity Brands (June 2005 - July 2005); Senior Vice President - Finance and Controller of Delta (2000 - April 2005); Vice President and Controller of Delta (1998 - 2000).

Hauenstein, Age [removed: 61:] [added: 62:] President of Delta since May 2016; Executive Vice President - Chief Revenue Officer of Delta (August 2013 - May 2016); Executive Vice President - Network Planning and Revenue Management of Delta (April 2006 - July 2013); Executive Vice President and Chief of Network and Revenue Management of Delta (August 2005 - April 2006); Vice General Director - Chief Commercial Officer and Chief Operating Officer of Alitalia (2003 - 2005); Senior Vice President- Network of Continental Airlines (2003); Senior Vice President - Scheduling of Continental Airlines (2001 - 2003); Vice President Scheduling of Continental Airlines (1998 - 2001).

Ausband, Age [removed: 59:] [added: 60:] Executive Vice President - Chief Customer Experience Officer of Delta since June 2021; Senior Vice President - In-Flight Service of Delta (September 2014 - May 2021); Vice President - Reservation Sales and Customer Care of Delta (January 2010 - September 2014).

Alain Bellemare, Age [removed: 60:] [added: 61:] President - International of Delta since January 2021; Chief Executive Officer of Bombardier (February 2015 - March 2020); President and Chief Executive Officer of United Technologies Corporation Propulsion & Aerospace Systems (June 2011 - February 2015).

Carter, Age [removed: 58:] [added: 59:] Executive Vice President - [added: External Affairs of Delta since October 2022; Executive Vice President -] Chief Legal Officer of Delta [removed: since July 2015;] [added: (July 2015 - October 2022);] Partner of Dorsey & Whitney LLP (1999 - 2015), including co-chair of Securities Litigation and Enforcement practice group, chair of Policy Committee and chair of trial department.

Janki, Age [removed: 53:] [added: 54:] Executive Vice President - Chief Financial Officer of Delta since July 2021; Senior Vice President of General Electric Company (GE) and Chief Executive Officer of GE Power Portfolio (October 2020 - June 2021); Senior Vice President, Business and Portfolio Transformation of GE (2018 - 2020); Senior Vice President, Treasurer and Global Business Operations of GE (2014 - 2017); Senior Vice President, CEO of GE Energy Management (2012 - 2013).

Laughter, Age [removed: 51:] [added: 52:] Executive Vice President - Chief of Operations of Delta since June 2021; Senior Vice President and Chief of Operations of Delta (October 2020 - June 2021); Senior Vice President - Flight Operations of Delta (March 2020 - October 2020); Senior Vice President - Corporate Safety, Security and Compliance of Delta (August 2013 - March 2020); Senior Vice President - Maintenance Operations of Delta (March 2008 - July 2013); Vice President - Maintenance of Delta (December 2005 - March 2008).

Rahul Samant, Age [removed: 55:] [added: 56:] Executive Vice President - Chief Information Officer of Delta since January 2018; Senior Vice President and Chief Information Officer of Delta (February 2016 - December 2017); Senior Vice President and Chief Digital Officer of American International Group, Inc. (January 2015 - February 2016); Senior Vice President and Global Head, Application Development and Management of American International Group, Inc. (September 2012 - December 2014); Managing Director of Bank of America (1999 - September 2012).

Sear, Age [removed: 56:] [added: 57:] Executive Vice President - Global Sales of Delta since February 2016; Senior Vice President - Global Sales of Delta (December 2011 - February 2016); Vice President - Global Sales of Delta (October 2008 - December 2011); Vice President - Sales & Customer Care of Northwest Airlines, Inc. (June 2005 - October 2008).

Smith, Age [removed: 63:] [added: 64:] Executive Vice President and Chief People Officer of Delta since October 2014; Senior Vice President - In-Flight Service of Delta (March 2007 - September 2014); Vice President - Marketing of Delta (November 2005 - February 2007); President of Song (January 2005 - October 2005); Vice President - Marketing and Customer Service of Song (November 2002 - December 2004).

We make available free of charge on our [added: investor relations] website [removed: 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 Commission ("SEC").

Information on our [removed: website] [added: website, including our investor relations website,] is not incorporated into this Form 10-K or our other securities filings and is not a part of those filings.

The [removed: rapid spread of the] COVID-19 [removed: virus in 2020 and variants of the virus in 2021, the persistence of the resulting] pandemic, the measures governments and private parties [removed: have] implemented in order to stem [removed: the spread of this pandemic,] [added: its spread,] and the general concern about the virus among travelers [removed: have had, and are continuing to have,] [added: had] a material adverse effect on the demand for worldwide air travel compared to historical levels, and consequently upon our business.

These [added: pandemic-related] effects [removed: related to the COVID-19 pandemic have] negatively impacted air travel in general, which in turn [removed: has] materially adversely affected our revenues, results of operations and financial [removed: condition.][added: condition for an extended period of time.]

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 [added: a disease outbreak such as] COVID-19, or [added: as a result of a similar public health crisis, or] if they are subject to additional governmental [removed: COVID-19] curfews or [removed: “shelter] [added: "shelter] in [removed: place”] [added: place"] health orders or similar restrictions.

[removed: Collectively,] [added: Any of] the foregoing [removed: circumstances] [added: could] have [removed: had, and are continuing to have,] a material adverse effect on our [removed: business,] [added: financial condition and] results of [removed: operations and financial condition.][added: operations.]

[removed: Future] [added: Similar] disease outbreaks or [removed: similar] public health threats [added: that may arise in the future] could have [removed: similar effects.][added: similarly adverse effects on our business.]

We had approximately [removed: $14.2] [added: $9.4] billion in cash, cash equivalents, short-term investments and aggregate principal amount committed and available to be drawn under our revolving credit facilities ("liquidity") as of December 31, [removed: 2021;] [added: 2022;] however, our future liquidity could be negatively affected by the risk factors discussed in this Form 10-K, and in other filings we may make from time to time with the SEC.

Breaches or lapses in the security of the technology systems we use and rely on [removed: and] [added: could compromise] the data stored within [removed: them, as well as ever-evolving global privacy] [added: them] and [removed: security regulatory obligations,] [added: consequently expose us to liability, disruption to our operations and damage to our reputation, any or all of which] could have a material adverse effect on our business.

The secure operation of [removed: the] [added: our] networks and [removed: systems] [added: systems, and those of our business partners and service providers,] on which this type of information is stored, processed and maintained is critical to our business operations and strategy.

We expect unauthorized parties to continue attempting to gain access to our systems or information, or those of our business partners and service providers, including through fraud or other means of deception, or introduction of malicious code, such as [removed: viruses, worms, Trojan horses] [added: malware] and ransomware.

If successful, these actions could cause harm to our computer systems or compromise data stored on our computer networks or those of our business partners and service [removed: providers.][added: providers, potentially causing us to incur remedial, legal and other costs, which could be material.]

The compromise of our or our business partners’ or service providers’ technology systems resulting in the loss, [added: interruption,] disclosure, misappropriation of, or access to, our information or that of our customers, employees or business partners could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy and security of personal information, disruption to our operations and damage to our reputation, any or all of which could adversely affect our business.

These relationships and investments involve significant challenges and risks, including that [removed: they] [added: joint ventures or cooperation agreements such as our agreement with Aeroméxico] may [added: be subject to ongoing review and renewal requirements and may] not generate the expected financial [removed: results] [added: results,] or that we may not realize a satisfactory return on our [removed: investment.][added: investments.]

The COVID-19 pandemic [removed: has] significantly impacted the operations of our airline partners [removed: and] [added: and, similar public health threats that may arise] could adversely affect the expansion of strategic relationships in the future.

These carriers have incurred significant financial losses as a result of the pandemic, and some [removed: have been or may be] [added: were] forced to seek protection under applicable bankruptcy laws.

[removed: If] [added: In the future if] any airline [removed: partners] [added: partner] that [added: may] seek to restructure or recapitalize [removed: are] [added: is] unable to do so successfully or if our commercial arrangements with [added: any of] these partners are not maintained, any investments or other assets associated with those partners could become impaired, and our business and results of operations could be materially adversely affected.

To the extent that the operations of a [removed: third party] [added: third-party] on which we rely is significantly [removed: disrupted, including as a result of the pandemic,] [added: disrupted] or if these third parties experience significant performance issues (including failing to satisfy any applicable performance standards) or fail to meet any applicable compliance requirements, our revenue may be reduced, our expenses may be increased and our reputation may be harmed, any or all of which could result in a material adverse effect on our business and results of operations.

In 2022, ICAO established a new, more stringent CORSIA baseline of 85% of 2019, which will apply starting in 2024 through 2035.

In late 2022, the EU agreed on legislative language that would extend the narrow scope of EU ETS through 2026.

Extension beyond 2026 would be conditioned on the performance of CORSIA.

The EU is expected to finalize this legislation in early 2023.

For example, in 2023, the EU is expected to finalize a sustainable aviation fuel blending mandate for aviation fuel suppliers beginning in 2025.

For example, in 2022, to reduce noise, the Netherlands announced plans to reduce the maximum number of flights authorized annually at Amsterdam’s Schiphol Airport.

Before implementing the new limitations, the Dutch government must assess alternatives, including noise impact and cost effectiveness.

The outcome cannot be determined at this time.

The EPA's proposed ethanol mandates for 2023, 2024, and 2025 are billions of gallons above the projected ethanol demand for those years, which has resulted in an increase to already high prices for RINs.

Our company website is located at www.delta.com and our investor relations website is located at ir.delta.com.

These networks and systems are subject to an increasing threat of continually evolving cybersecurity risks, which we must manage.

We are also subject to evolving global privacy and security regulatory obligations and an increasing customer focus on privacy issues and data security in the United States and abroad, as well as to geopolitical risks associated with international data transfer.

For example, following the onset of the pandemic, Grupo Aeroméxico and LATAM filed voluntary proceedings to reorganize under Chapter 11 of the United States bankruptcy code ("bankruptcy process"), from which they successfully emerged in the March 2022 quarter and the December 2022 quarter, respectively, and Virgin Atlantic undertook a voluntary recapitalization process in the UK that was completed in September 2020.

During the December 2021 quarter, we announced additional investments in each of these carriers.

As discussed further in Note 4 of the Notes to the Consolidated Financial Statements, due to the effects of the COVID-19 pandemic, the carrying value of our equity investments in these three carriers was reduced to zero prior to our additional investments.

In January 2023, a tentative agreement was ratified by ALPA’s Delta Master Executive Council ("MEC") and is subject to ratification by Delta’s pilots through a vote that is scheduled to close on March 1, 2023.

Our results of operations are impacted by a number of factors including seasonality and changing economic and other conditions beyond our control.

From 2020 to 2022, our average annual fuel price per gallon has increased from $1.64 to $3.36 with significant volatility during that period.

For example, we have established ambitious goals to reduce our greenhouse gas emissions, with the long-term goal to achieve net zero greenhouse gas emissions across our airline operation and its value chain by no later than 2050, subject to validation of this long-term goal by SBTi (for which we cannot predict if and when the validation will occur).

Achieving these ambitious goals will require significant capital investment from manufacturers and other stakeholders, as we are unable to achieve these goals using our existing fleet, current technologies and available fuel sources.

Risk Factors Relating to the Airline Industry

Disease outbreaks, such as the COVID-19 pandemic or similar public health threats that may arise in the future, and measures implemented to combat them have had, and may in the future have, a material adverse effect on our business.

Among other effects of the COVID-19 pandemic that affected air travel and our business, the pandemic led governments both in the United States and abroad to issue travel restriction or advisories, and to implement quarantines and health-related curfews or "shelter in place" orders; led employers to instruct employees to work from home and/or otherwise dissuaded or restricted air travel; caused business conventions, conferences, concerts, sporting events and similar events to be canceled or held with limited or no attendees; and discouraged travelers from air travel to destinations where COVID-19 was particularly virulent or due to possible enhanced COVID-19 related screening measures.

We are unable to predict the extent to which disease outbreaks or other public health threats that may arise in the future may change our customers' behavior or travel patterns, which could have a material impact on our business.

The degree to which any future disease outbreaks or public health threats may impact our revenues, results of operations and financial condition is uncertain and will depend on future developments.

Terrorist attacks, geopolitical conflict or security events may adversely affect our business, financial condition and results of operations.

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

Despite significant security measures at airports and airlines, the airline industry remains a high profile target for terrorist groups.

We rely on government provided threat intelligence and utilize private sources to constantly monitor 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.

In addition, the impact on our operations of avoiding areas of the world, including airspace, in which there are geopolitical conflicts and the targeting of commercial aircraft by parties to those conflicts can be significant.

Security events, primarily from external sources but also from potential insider threats, also pose a significant risk to our passenger and cargo operations.

These events could include random acts of violence and could occur in public areas that we cannot control.

Terrorist attacks, geopolitical conflict or security events, or the fear or threat of any of these events, even if not made directly on or involving the airline industry, could have a 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 occurring or could occur, such as flight redirections or cancellations, reputational harm and other costs.

If any or all of these types of events occur, they could have a material adverse effect on our business, financial condition and results of operations.

*Item 1A.

Risk Factors*

The global airline industry is highly competitive and, if we cannot successfully compete in the marketplace, our business, financial condition and results of 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), operational reliability, services, products, customer service and loyalty programs.

Consolidation in the airline industry, changes in international alliances, the creation of immunized joint ventures 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.

Environmental Regulation

*Environmental Compliance Obligations*.

Our operations are subject to numerous international, federal, state and local laws and regulations governing protection of the environment, including regulation of greenhouse gases and other air emissions, noise reduction, water discharges, aircraft drinking water, storage and use of petroleum and other regulated substances, and the management and disposal of hazardous waste, substances and materials.

We are also subject to certain environmental laws and contractual obligations governing the management and release of regulated substances, which may require the investigation and remediation of affected sites.

Soil and/or ground water impacts have been identified at certain of our current or former leaseholds at several domestic airports.

To address these impacts, we have a program in place to investigate and, if appropriate, remediate these sites.

Although the ultimate outcome of these matters cannot be predicted with certainty, we believe that the resolution of these matters will not have a material adverse effect on our Consolidated Financial Statements.

ICAO has yet to decide how to apply the baseline beyond 2027.

Some countries and other stakeholders, however, have advocated for reestablishing 2020 in the baseline and for using 2020 for the future baseline calculation, which, if adopted, would significantly increase the airline industry’s projected obligations under the program and the cost of compliance.

However, its scope may be expanded in the future.

For example, in 2021 the European Commission proposed legislation that could expand the reach of the EU ETS to include flights into and out of the EEA beginning in 2027 under certain circumstances, increase the stringency of the program, and establish a sustainable aviation fuel blending mandate for aviation fuel suppliers beginning in 2025, among other requirements.

The EPA has not finalized the compliance deadlines to retire our obligations for 2020 and 2021, but we expect those deadlines to be within one year of the effective date of the new RFS volume requirements.

Delta played a central role in transporting 10,000 Afghan refugees that were evacuated from Afghanistan and delivering needed supplies.

The rapid spread of the COVID-19 virus, the continuing spread of its variants, 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.

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

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 discouraged travel and encouraged social distancing efforts and limits on gathering size for an extended period.

In addition, state and local governments issued travel restrictions, quarantines and health-related curfews or “shelter in place” orders which dissuaded or restricted air travel.

- Numerous travel advisories and restrictions were implemented, some of which remain in place or have been reinstated, 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 have required and in some instances continue to require airline passengers to provide negative COVID-19 test results prior to travel into their countries.

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

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

Many popular tourist destinations were closed, or operations curtailed.

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

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

- 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.

Although vaccines have generally proved to be effective and certain of the restrictions above have been 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 vaccines against future variants that may develop is also unknown.

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

In response to the crisis, we took steps to mitigate the effects on our business, which themselves may have negative consequences with respect to our business and operations.

For example, we took cost-saving actions to significantly reduce our capacity in 2020 but were not able to eliminate all costs related to unused capacity.

Ultimately, cost-saving measures that we implemented to date, or may consider in the future, have not made up, and will not in the future make up, for the loss in revenue as a result of decreased ticket sales and cancellations.

In addition, to protect the safety of our employees and customers, we have implemented significant additional cleaning measures on all of our aircraft and at the airports in which we operate which have increased our costs.

We are unable to predict how long conditions related to the pandemic will persist.

The overall situation remains fluid, and it is impossible to predict the timing of future material developments and whether they will occur in the near, medium or long term.

At this time, we are also not able to predict the extent to which the COVID-19 pandemic may result in permanent changes to our customers’ behavior, with such changes including but not limited to a permanent reduction in business travel as a result of increased usage of virtual meetings, and videoconferencing and teleconferencing products and more broadly, a general reluctance to travel, each of which could have a material impact on our business.

Our information systems and those of our service providers are subject to an increasing threat of continually evolving cybersecurity risks, and the increase in work-from-home arrangements since the onset of the COVID-19 pandemic could potentially enhance these risks.

For example, we were notified in 2018 that a third-party vendor of chat services for Delta and other companies determined we 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 were not material to our financial position or results of operations.

For example, following the onset of the pandemic, LATAM and Grupo Aeroméxico filed voluntary proceedings to reorganize under Chapter 11 of the United States bankruptcy code and Virgin Atlantic undertook a voluntary recapitalization process in the United Kingdom ("U.K.") and instituted ancillary proceedings in support of that process in the U.S. As discussed further in Note 4 of the Notes to the Consolidated Financial Statements, due to the effects of the COVID-19 pandemic, along with these actions, the carrying value of our equity investments in these three carriers has been reduced to, and remained, zero as of December 31, 2021.

We believe the claims in these cases are without merit and [added: have] vigorously defended these lawsuits.

For the fiscal year ended December 31, [removed: 2021][added: 2022]

[removed: ][added: ]

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, [removed: 2021] [added: 2022] was approximately [removed: $27.7] [added: $18.6] billion.

On January 31, [removed: 2022,] [added: 2023,] there were outstanding [removed: 639,929,760] [added: 641,238,655] 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 [removed: 2021] [added: 2022] Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission.

| [Forward-Looking [removed: Statements](#i37f8d64a00d24bce88d1b135486c9e43_10)] [added: Statements](#ife9bd3040cbb49f2a063c487f9c9be18_10)] | | | [removed: [1](#i37f8d64a00d24bce88d1b135486c9e43_10)] [added: [1](#ife9bd3040cbb49f2a063c487f9c9be18_10)] | | |

| [ITEM 1. [removed: BUSINESS](#i37f8d64a00d24bce88d1b135486c9e43_16)] [added: BUSINESS](#ife9bd3040cbb49f2a063c487f9c9be18_16)] | | | [removed: [2](#i37f8d64a00d24bce88d1b135486c9e43_16)] [added: [2](#ife9bd3040cbb49f2a063c487f9c9be18_16)] | | |

| [ITEM 1A. RISK [removed: FACTORS](#i37f8d64a00d24bce88d1b135486c9e43_40)] [added: FACTORS](#ife9bd3040cbb49f2a063c487f9c9be18_40)] | | | [removed: [17](#i37f8d64a00d24bce88d1b135486c9e43_40)] [added: [16](#ife9bd3040cbb49f2a063c487f9c9be18_40)] | | |

| [Risk Factors Relating to [removed: Delta](#i37f8d64a00d24bce88d1b135486c9e43_43)] [added: Delta](#ife9bd3040cbb49f2a063c487f9c9be18_43)] | | | [removed: [17](#i37f8d64a00d24bce88d1b135486c9e43_43)] [added: [16](#ife9bd3040cbb49f2a063c487f9c9be18_43)] | | |

| [Risk Factors Relating to the Airline [removed: Industry](#i37f8d64a00d24bce88d1b135486c9e43_46)] [added: Industry](#ife9bd3040cbb49f2a063c487f9c9be18_46)] | | | [removed: [25](#i37f8d64a00d24bce88d1b135486c9e43_46)] [added: [23](#ife9bd3040cbb49f2a063c487f9c9be18_46)] | | |

| [ITEM 1B. UNRESOLVED STAFF [removed: COMMENTS](#i37f8d64a00d24bce88d1b135486c9e43_49)] [added: COMMENTS](#ife9bd3040cbb49f2a063c487f9c9be18_49)] | | | [removed: [28](#i37f8d64a00d24bce88d1b135486c9e43_49)] [added: [27](#ife9bd3040cbb49f2a063c487f9c9be18_49)] | | |

| [ITEM 2. [removed: PROPERTIES](#i37f8d64a00d24bce88d1b135486c9e43_52)] [added: PROPERTIES](#ife9bd3040cbb49f2a063c487f9c9be18_52)] | | | [removed: [29](#i37f8d64a00d24bce88d1b135486c9e43_52)] [added: [28](#ife9bd3040cbb49f2a063c487f9c9be18_52)] | | |

| [Flight [removed: Equipment](#i37f8d64a00d24bce88d1b135486c9e43_55)] [added: Equipment](#ife9bd3040cbb49f2a063c487f9c9be18_55)] | | | [removed: [29](#i37f8d64a00d24bce88d1b135486c9e43_55)] [added: [28](#ife9bd3040cbb49f2a063c487f9c9be18_55)] | | |

| [Ground [removed: Facilities](#i37f8d64a00d24bce88d1b135486c9e43_58)] [added: Facilities](#ife9bd3040cbb49f2a063c487f9c9be18_58)] | | | [removed: [30](#i37f8d64a00d24bce88d1b135486c9e43_58)] [added: [29](#ife9bd3040cbb49f2a063c487f9c9be18_58)] | | |

| [ITEM 3. LEGAL [removed: PROCEEDINGS](#i37f8d64a00d24bce88d1b135486c9e43_61)] [added: PROCEEDINGS](#ife9bd3040cbb49f2a063c487f9c9be18_61)] | | | [removed: [31](#i37f8d64a00d24bce88d1b135486c9e43_61)] [added: [30](#ife9bd3040cbb49f2a063c487f9c9be18_61)] | | |

| [ITEM 4. MINE SAFETY [removed: DISCLOSURES](#i37f8d64a00d24bce88d1b135486c9e43_64)] [added: DISCLOSURES](#ife9bd3040cbb49f2a063c487f9c9be18_64)] | | | [removed: [31](#i37f8d64a00d24bce88d1b135486c9e43_64)] [added: [30](#ife9bd3040cbb49f2a063c487f9c9be18_64)] | | |

| [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED [removed: STOCKHOLDER](#i37f8d64a00d24bce88d1b135486c9e43_70)] [added: STOCKHOLDER](#ife9bd3040cbb49f2a063c487f9c9be18_70)] [MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#i37f8d64a00d24bce88d1b135486c9e43_70)] [added: SECURITIES](#ife9bd3040cbb49f2a063c487f9c9be18_70)] | | | [removed: [32](#i37f8d64a00d24bce88d1b135486c9e43_70)] [added: [31](#ife9bd3040cbb49f2a063c487f9c9be18_70)] | | |

| [ITEM 6. [removed: (RESERVED)](#i37f8d64a00d24bce88d1b135486c9e43_82)] [added: (RESERVED)](#ife9bd3040cbb49f2a063c487f9c9be18_82)] | | | [removed: [33](#i37f8d64a00d24bce88d1b135486c9e43_82)] [added: [32](#ife9bd3040cbb49f2a063c487f9c9be18_82)] | | |

| [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION [removed: AND](#i37f8d64a00d24bce88d1b135486c9e43_85)] [added: AND](#ife9bd3040cbb49f2a063c487f9c9be18_85)] [RESULTS OF [removed: OPERATION](#i37f8d64a00d24bce88d1b135486c9e43_85)S] [added: OPERATION](#ife9bd3040cbb49f2a063c487f9c9be18_85)S] | | | [removed: [34](#i37f8d64a00d24bce88d1b135486c9e43_85)] [added: [33](#ife9bd3040cbb49f2a063c487f9c9be18_85)] | | |

| [Financial [removed: Highlights](#i37f8d64a00d24bce88d1b135486c9e43_88)] [added: Highlights](#ife9bd3040cbb49f2a063c487f9c9be18_88)] | | | [removed: [34](#i37f8d64a00d24bce88d1b135486c9e43_88)] [added: [33](#ife9bd3040cbb49f2a063c487f9c9be18_88)] | | |

| [Results of [removed: Operations](#i37f8d64a00d24bce88d1b135486c9e43_91)] [added: Operations](#ife9bd3040cbb49f2a063c487f9c9be18_91)] | | | [removed: [37](#i37f8d64a00d24bce88d1b135486c9e43_91)] [added: [35](#ife9bd3040cbb49f2a063c487f9c9be18_91)] | | |

| [Non-Operating [removed: Results](#i37f8d64a00d24bce88d1b135486c9e43_109)] [added: Results](#ife9bd3040cbb49f2a063c487f9c9be18_109)] | | | [removed: [42](#i37f8d64a00d24bce88d1b135486c9e43_109)] [added: [40](#ife9bd3040cbb49f2a063c487f9c9be18_109)] | | |

| [Income [removed: Taxes](#i37f8d64a00d24bce88d1b135486c9e43_112)] [added: Taxes](#ife9bd3040cbb49f2a063c487f9c9be18_112)] | | | [removed: [43](#i37f8d64a00d24bce88d1b135486c9e43_112)] [added: [41](#ife9bd3040cbb49f2a063c487f9c9be18_112)] | | |

| [Refinery [removed: Segment](#i37f8d64a00d24bce88d1b135486c9e43_115)] [added: Segment](#ife9bd3040cbb49f2a063c487f9c9be18_115)] | | | [removed: [43](#i37f8d64a00d24bce88d1b135486c9e43_115)] [added: [41](#ife9bd3040cbb49f2a063c487f9c9be18_115)] | | |

| [Financial Condition and [removed: Liquidity](#i37f8d64a00d24bce88d1b135486c9e43_121)] [added: Liquidity](#ife9bd3040cbb49f2a063c487f9c9be18_121)] | | | [removed: [45](#i37f8d64a00d24bce88d1b135486c9e43_121)] [added: [43](#ife9bd3040cbb49f2a063c487f9c9be18_121)] | | |

| [Critical Accounting [removed: Estimates](#i37f8d64a00d24bce88d1b135486c9e43_127)] [added: Estimates](#ife9bd3040cbb49f2a063c487f9c9be18_127)] | | | [removed: [50](#i37f8d64a00d24bce88d1b135486c9e43_127)] [added: [47](#ife9bd3040cbb49f2a063c487f9c9be18_127)] | | |

| [Supplemental [removed: Information](#i37f8d64a00d24bce88d1b135486c9e43_130)] [added: Information](#ife9bd3040cbb49f2a063c487f9c9be18_130)] | | | [removed: [56](#i37f8d64a00d24bce88d1b135486c9e43_130)] [added: [53](#ife9bd3040cbb49f2a063c487f9c9be18_130)] | | |

| [Glossary of Defined [removed: Terms](#i37f8d64a00d24bce88d1b135486c9e43_133)] [added: Terms](#ife9bd3040cbb49f2a063c487f9c9be18_133)] | | | [removed: [60](#i37f8d64a00d24bce88d1b135486c9e43_133)] [added: [56](#ife9bd3040cbb49f2a063c487f9c9be18_133)] | | |

| [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#i37f8d64a00d24bce88d1b135486c9e43_136)] [added: RISK](#ife9bd3040cbb49f2a063c487f9c9be18_136)] | | | [removed: [61](#i37f8d64a00d24bce88d1b135486c9e43_136)] [added: [57](#ife9bd3040cbb49f2a063c487f9c9be18_136)] | | |

| [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#i37f8d64a00d24bce88d1b135486c9e43_139)] [added: DATA](#ife9bd3040cbb49f2a063c487f9c9be18_139)] | | | [removed: [62](#i37f8d64a00d24bce88d1b135486c9e43_139)] [added: [58](#ife9bd3040cbb49f2a063c487f9c9be18_139)] | | |

| [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING [removed: AND](#i37f8d64a00d24bce88d1b135486c9e43_238)] [added: AND](#ife9bd3040cbb49f2a063c487f9c9be18_235)] [FINANCIAL [removed: DISCLOSURE](#i37f8d64a00d24bce88d1b135486c9e43_238)] [added: DISCLOSURE](#ife9bd3040cbb49f2a063c487f9c9be18_235)] | | | [removed: [111](#i37f8d64a00d24bce88d1b135486c9e43_238)] [added: [103](#ife9bd3040cbb49f2a063c487f9c9be18_235)] | | |

| [ITEM 9A. CONTROLS AND [removed: PROCEDURES](#i37f8d64a00d24bce88d1b135486c9e43_241)] [added: PROCEDURES](#ife9bd3040cbb49f2a063c487f9c9be18_238)] | | | [removed: [111](#i37f8d64a00d24bce88d1b135486c9e43_241)] [added: [103](#ife9bd3040cbb49f2a063c487f9c9be18_238)] | | |

| [ITEM 9B. OTHER [removed: INFORMATION](#i37f8d64a00d24bce88d1b135486c9e43_247)] [added: INFORMATION](#ife9bd3040cbb49f2a063c487f9c9be18_244)] | | | [removed: [113](#i37f8d64a00d24bce88d1b135486c9e43_247)] [added: [105](#ife9bd3040cbb49f2a063c487f9c9be18_244)] | | |

| [ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT [removed: INSPECTIONS](#i37f8d64a00d24bce88d1b135486c9e43_1099511630405)] [added: INSPECTIONS](#ife9bd3040cbb49f2a063c487f9c9be18_247)] | | | [removed: [113](#i37f8d64a00d24bce88d1b135486c9e43_1099511630405)] [added: [105](#ife9bd3040cbb49f2a063c487f9c9be18_247)] | | |

| [ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE [removed: GOVERNANCE](#i37f8d64a00d24bce88d1b135486c9e43_253)] [added: GOVERNANCE](#ife9bd3040cbb49f2a063c487f9c9be18_253)] | | | [removed: [113](#i37f8d64a00d24bce88d1b135486c9e43_253)] [added: [105](#ife9bd3040cbb49f2a063c487f9c9be18_253)] | | |

| [ITEM 11. EXECUTIVE [removed: COMPENSATION](#i37f8d64a00d24bce88d1b135486c9e43_256)] [added: COMPENSATION](#ife9bd3040cbb49f2a063c487f9c9be18_256)] | | | [removed: [113](#i37f8d64a00d24bce88d1b135486c9e43_256)] [added: [105](#ife9bd3040cbb49f2a063c487f9c9be18_256)] | | |

| [ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT [removed: AND](#i37f8d64a00d24bce88d1b135486c9e43_259)] [added: AND](#ife9bd3040cbb49f2a063c487f9c9be18_259)] [RELATED STOCKHOLDER [removed: MATTERS](#i37f8d64a00d24bce88d1b135486c9e43_259)] [added: MATTERS](#ife9bd3040cbb49f2a063c487f9c9be18_259)] | | | [removed: [113](#i37f8d64a00d24bce88d1b135486c9e43_259)] [added: [105](#ife9bd3040cbb49f2a063c487f9c9be18_259)] | | |

| [ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND [removed: DIRECTOR](#i37f8d64a00d24bce88d1b135486c9e43_262)] [added: DIRECTOR](#ife9bd3040cbb49f2a063c487f9c9be18_262)] INDEPENDENCE | | | [removed: [113](#i37f8d64a00d24bce88d1b135486c9e43_262)] [added: [105](#ife9bd3040cbb49f2a063c487f9c9be18_262)] | | |

| [ITEM 14. PRINCIPAL ACCOUNTANT FEES AND [removed: SERVICES](#i37f8d64a00d24bce88d1b135486c9e43_265)] [added: SERVICES](#ife9bd3040cbb49f2a063c487f9c9be18_265)] | | | [removed: [113](#i37f8d64a00d24bce88d1b135486c9e43_265)] [added: [105](#ife9bd3040cbb49f2a063c487f9c9be18_265)] | | |

| [ITEM 15. EXHIBITS AND FINANCIAL STATEMENT [removed: SCHEDULES](#i37f8d64a00d24bce88d1b135486c9e43_271)] [added: SCHEDULES](#ife9bd3040cbb49f2a063c487f9c9be18_271)] | | | [removed: [114](#i37f8d64a00d24bce88d1b135486c9e43_271)] [added: [106](#ife9bd3040cbb49f2a063c487f9c9be18_271)] | | |

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements o

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| [SIGNATURES](#ife9bd3040cbb49f2a063c487f9c9be18_277) | | | [111](#ife9bd3040cbb49f2a063c487f9c9be18_277) | | |

As a global airline based in the United States, we connect customers across our expansive global network with a commitment to industry-leading customer service, safety and innovation.

In 2022, demand for air travel accelerated significantly beginning late in the March quarter with continued improvement throughout the remainder of the year.

For the full year, we served approximately 177 million customers.

In 2022, we continued to differentiate Delta from the industry by strengthening our competitive advantages.

Our employees provide world-class travel experiences for our customers and best-in-class service, delivering customer satisfaction and brand preference.

In 2022, we continued investing in our people and hired approximately 25,000 new team members as we continued to rebuild the airline.

As a testament to our people-focused culture, *Forbes* recognized Delta as No. 6 on its list of the World’s Best Employers for 2022, making it the highest-ranked airline on the list.

With our improved profitability, we returned to normal profit sharing and are planning a $563 million planned payout for eligible employees.

Our industry-leading profit sharing program directly aligns our employees’ interests with the company’s long-term success.

The company also maintains a Shared Rewards program to incentivize operational performance, and in 2022 $61 million was earned by employees under this program.

We delivered the best completion factor and on-time arrival and departure rates among our network carrier peers in 2022 based on preliminary data.

Since July 1, 2022, we had a system-wide completion factor of 98.6%, with 71.1% of our domestic flights arriving on time.

In 2022, we were honored with the Cirium Platinum Award for global operational excellence as North America’s most on-time airline, reflecting Delta’s on-time performance.

In January 2023, the *Wall Street Journal* named us the top airline of 2022 among the nine U.S. airlines in its annual airline scorecard for the second consecutive year, leading the industry in on-time arrivals, completion factor and involuntary denied boardings.

At the end of 2022, we offered more than 4,000 daily flights to more than 275 destinations on six continents.

In 2022, we focused on solidifying our positions in our coastal hubs, securing leading positions in Boston and Los Angeles.

We expect to leverage our coastal gateways and strategic relationships with international airline partners to further grow our international service.

We increased local market share in our core hubs and plan to focus growth in 2023 in our core hubs as we complete our rebuild.

In particular, the U.S. Department of Transportation ("DOT") granted final regulatory approval for our joint venture agreement with LATAM in 2022.

In 2022, we took delivery of 69 aircraft, including new A321neos, A220-100s, A220-300s, A330-900s, A350-900s and pre-owned CRJ-900s and Boeing 737-900ERs.

In July 2022, we entered into a purchase agreement with Boeing for 100 Boeing 737-10 aircraft, the largest model in the 737 MAX family, to start delivery in 2025 with the option to purchase an additional thirty 737-10 aircraft.

With operational excellence, best-in-class service and commitment to our customers, we have continued to earn our customers’ trust and preference by delivering the "Delta Difference." We are elevating the customer experience in key markets by deploying our newest aircraft and technology investments and by accelerating generational airport investments, including new facilities that opened at New York-LaGuardia, Los Angeles and Seattle in 2022.

In 2022, various outlets recognized Delta as a trusted consumer brand, including:

- Named the number one airline by corporate travel customers in the annual Business Travel News Airline Survey for the 12th year in a row and the No. 1 U.S. airline by *Condé Nast Traveler* readers.

- Received top honors from The Points Guy’s Readers’ Choice Awards for the Best U.S. Airline Loyalty Program, Best Airport Lounge Network and Best Airline Co-Branded Credit Card with the SkyMiles® Platinum American Express.

- Delta SkyMiles awarded as Americas’ top loyalty program by the Frequent Traveler People’s Awards in four of its five award categories.

We aim to increase the value of our program for customers and to deepen customer engagement with Delta through a growing ecosystem of partnerships with premier brands, extending the value of our SkyMiles currency beyond flight and introducing new technology initiatives.

In 2022, the SkyMiles program membership accelerated with a record 8.5 million new SkyMiles Members.

We believe there is opportunity to continue this trend and expect the increased value we provide customers to deliver high-margin revenue and more resilient cash flows.

In 2022, we made significant progress restoring our financial foundation with strong profitability and positive free cash flow for the year.

Our financial results are discussed in more detail in "Item 7.

Management's Discussion and Analysis," which includes definitions and reconciliations of non-GAAP financial measures, including free cash flow, under the "Supplemental Information" section.

During 2022, we repaid approximately $4.5 billion in debt and finance lease obligations and the company remains committed to regaining investment grade metrics.

The strength of our balance sheet supports our ability to obtain financing and was instrumental in protecting shareholders during the pandemic.

We have diversified our business by growing high-margin revenue streams that leverage our competitive advantages, including:

Our premium yield growth has significantly outpaced main cabin with paid load factors higher in 2022 than in 2019, as demand for premium products continues to grow.

In 2022, we also expanded our Delta Premium Select rollout, which will continue in 2023.

| [SIGNATURES](#i37f8d64a00d24bce88d1b135486c9e43_277) | | | [119](#i37f8d64a00d24bce88d1b135486c9e43_277) | | |

*Item 1.

Business*

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

In 2019, prior to the onset of the COVID-19 pandemic, 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.

We began restoring our network in 2021, as travel restrictions eased and vaccine programs became widespread both domestically and in international markets.

As the year progressed, we saw a full return of domestic consumer travel to 2019 levels while business and international demand continued to lag.

Despite this lag, business and international travel began to increase in the latter part of 2021, spurred in part by the U.S. government’s lifting of restrictions in November 2021 that prevented travelers from entering the United States from a number of specifically-identified countries.

In 2021, we continued to demonstrate agility, operational excellence and discipline.

We believe that we are well positioned to manage the continued challenges brought by the pandemic, even when considering new variants spreading globally, continued uncertainty linked to the full return of business travel and evolving international travel restrictions.

More information about the effect of the COVID-19 pandemic on our business and our recovery can be found in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.

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.

Through the pandemic, we believe that we have strengthened our advantages and our brand.

In 2021, we continued to have the world’s most valuable airline brand.

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

Throughout the pandemic, we were able to avoid involuntary furloughs of U.S. employees by providing voluntary separation and early retirement programs, voluntary unpaid leaves and other initiatives.

We have prioritized the health and safety of our employees by implementing an extensive employee COVID-19 testing program, partnering with Georgia to host the state’s largest COVID-19 vaccination site while steadily increasing the vaccination rate among our employees, providing pay protection programs for employees diagnosed with, exposed to or at high risk from COVID-19 and offering free flu shots for all U.S. employees.

In February 2021, we hired a Chief Health Officer to reimagine our approach to health and well-being to accommodate the physical and mental health needs of our people.

The list is solely based on the input of employees who provide anonymous feedback on their daily jobs, benefits, interview experience and work environment.

Being recognized on this list is a testament to Delta people and our culture.

In 2019, prior to the onset of the COVID-19 pandemic, we offered 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.

At the end of 2021, we offered more than 4,000 daily departures and approximately 5,500 affiliated departures as we began restoring our network.

We are elevating the customer experience in key markets by deploying our newest aircraft and products and by accelerating generational airport investments.

We opened a new facility at Salt Lake City in 2021 and expect to open new facilities at New York-LaGuardia, Los Angeles and Seattle in 2022.

In addition to our domestic mainline operations, we have agreements with domestic regional carriers that operate as Delta Connection® to feed traffic to our domestic hubs.

As we continue our recovery from the impact of the COVID-19 pandemic, we expect to continue to evaluate and adjust our operations to address evolving conditions.

Although our international operations have been substantially curtailed since March 2020 as a result of the COVID-19 pandemic, we have continued to serve Transatlantic, Transpacific and Latin America markets directly on Delta and through joint ventures with global airline partners.

In 2021, we restored approximately 50% of capacity in international markets, but do not expect our international network to be fully restored to 2019 levels until 2023.

We accelerated this fleet simplification strategy by retiring 227 aircraft in 2020, with plans to retire additional aircraft by 2025, though we remain flexible and may decide to fly certain aircraft beyond their planned retirement date, to the extent supported by demand.

In 2021, we had a system-wide completion factor of 99.4%, with 88.0% of our domestic flights arriving on time as reported to the U.S. Department of Transportation, both of which, based on preliminary data, are expected to exceed the performance of our U.S.-based peers.

This reliability was a key component in Delta being named the Top U.S. Airline of 2021 by the Wall Street Journal in its annual airline scorecard rankings, which tracks seven important operations and customer metrics among nine U.S. airlines.

This achievement recognizes the consistent efforts of our people to safely deliver reliable, on-time service while providing exceptional service.

Following the onset of the COVID-19 pandemic, we intensified our focus on ensuring the health and safety of our customers, including the creation of our industry-leading cleanliness standards through the Global Cleanliness organization and the implementation of the Delta CareStandard℠ to ensure a consistently safe and sanitized experience across our facilities and aircraft.

Over the last decade, we significantly improved the quality and reliability of our operations, and our customer satisfaction scores increased meaningfully as a result.

With operational excellence, best-in-class service and a commitment to ensuring the health and safety of our customers, we have continued to earn our customers’ trust and preference by delivering the “Delta Difference.” In 2021, we were recognized as No. 1 in customer satisfaction among airlines in North America by J.D. Power, underscoring the professionalism, care and humanity that our people delivered during one of the most stressful periods for travel in modern history.

We were also ranked No. 1 on Fortune Magazine's Most Admired Airline List for the tenth time in the past 11 years and named one of Fast Company’s most innovative travel companies in 2021.

In 2021, corporate travel professionals also rated us No. 1 in the annual Business Travel News Airline Survey for the 11th year in a row, citing our responsiveness to customers as well as our flexibility-minded approach throughout the pandemic and beyond.

In 2021, customers demonstrated increased loyalty through higher levels of engagement with our SkyMiles program, our co-branded American Express card and use of our FlyDelta app, with remuneration from our co-branded American Express card nearly achieving 2019 levels for the full year and exceeding 2019 levels during the December 2021 quarter.

Our operating aircraft fleet, purchase commitments and options at December 31, [removed: 2021] [added: 2022] are summarized in the following table.

| [removed: Operating] [added: Mainline] aircraft information by fleet type | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| A220-100 | | | [removed: 37] [added: 41] | | | 4 | | | — | | | | | | [removed: 41] [added: 45] | | | [removed: 2.3] [added: 3.0] | | | | | | [removed: 4] [added: —] | | | — | | |

| A220-300 | | | [removed: 10 | | | — | | | — | | | | | | 10] [added: 9] | | | [removed: 1.0] [added: 15] | | | [added: 12] | | | [removed: 40] [added: 24] | | | [removed: 50] [added: 60] | | |

| A319-100 | | | [removed: 55] [added: 57] | | | [removed: 2] [added: —] | | | — | | | | | | 57 | | | [removed: 19.9] [added: 20.9] | | | | | | — | | | — | | |

| A320-200 | | | [removed: 52] [added: 61] | | | [removed: 4] [added: —] | | | — | | | | | | [removed: 56] [added: 61] | | | [removed: 26.0] [added: 27.3] | | | | | | — | | | — | | |

| A321-200 | | | 69 | | | 22 | | | 36 | | | | | | 127 | | | [removed: 3.1] [added: 4.0] | | | | | | — | | | — | | |

| A321-200neo | | | [removed: — | | | — | | | — | | | | | | —] [added: 28] | | | [removed: —] [added: 36] | | | [added: 25] | | | [removed: 155] [added: 45] | | | [removed: 70] [added: 134] | | |

| A330-200 | | | 11 | | | — | | | — | | | | | | 11 | | | [removed: 16.8] [added: 17.8] | | | | | | — | | | — | | |

| A330-300 | | | 28 | | | — | | | 3 | | | | | | 31 | | | [removed: 13.0] [added: 14.0] | | | | | | — | | | — | | |

| A330-900neo | | | [removed: 3] [added: 12] | | | 3 | | | 5 | | | | | | [removed: 11] [added: 20] | | | 1.6 | | | | | | [removed: 26] [added: 18] | | | — | | |

| A350-900 | | | [removed: 13 | | |] — | | | [removed: 11 | | | | | | 24 | | | 3.7] [added: 7] | | | [added: 6] | | | [removed: 20] [added: 3] | | | [removed: —] [added: 16] | | |

| B-717-200 | | | [removed: 9] [added: 10] | | | [removed: 42] [added: 51] | | | [removed: 3] [added: 4] | | | | | | [removed: 54] [added: 65] | | | [removed: 20.6] [added: 21.5] | | | | | | — | | | — | | |

| B-737-800 | | | 73 | | | 4 | | | — | | | | | | 77 | | | [removed: 20.3] [added: 21.3] | | | | | | — | | | — | | |

| B-757-200 | | | [removed: 99] [added: 100] | | | [removed: 1] [added: —] | | | — | | | | | | 100 | | | [removed: 24.4] [added: 25.4] | | | | | | — | | | — | | |

| B-757-300 | | | 16 | | | — | | | — | | | | | | 16 | | | [removed: 18.9] [added: 19.9] | | | | | | — | | | — | | |

| B-767-300ER | | | [removed: 40] [added: 45] | | | — | | | — | | | | | | [removed: 40] [added: 45] | | | [removed: 25.4] [added: 26.8] | | | | | | — | | | — | | |

| B-767-400ER | | | 21 | | | — | | | — | | | | | | 21 | | | [removed: 21.1] [added: 22.0] | | | | | | — | | | — | | |

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

The following table summarizes the aircraft operated by regional carriers on our behalf at December 31, [removed: 2021.][added: 2022.]

| Regional aircraft information by [added: fleet type and] carrier | | | | | | | | | | | | | | | | | | | | |

| | | | Fleet [removed: Type] [added: Type(1)] | | | | | | | | | | | | | | | | | |

| Endeavor Air, Inc. [removed: (1)] [added: (2)] | | | [removed: 46] [added: 26] | | | [removed: 13] [added: 18] | | | [removed: 115] [added: 123] | | | — | | | — | | | [removed: 174] [added: 167] | | |

| SkyWest Airlines, Inc. | | | — | | | 6 | | | [removed: 44] [added: 38] | | | — | | | [removed: 71] [added: 84] | | | [removed: 121] [added: 128] | | |

| Republic [removed: Airline,] [added: Airways,] Inc. | | | — | | | — | | | — | | | [removed: 8] [added: 11] | | | 46 | | | [removed: 54] [added: 57] | | |

[removed: (1)Endeavor] [added: (2)Endeavor] Air, Inc. is a wholly owned subsidiary of Delta.

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

Our [added: contractual] purchase commitments for additional aircraft [removed: at] [added: as of] December 31, [removed: 2021] [added: 2022] are detailed in the following table:

| Aircraft Purchase [removed: Commitments] [added: Commitments(1)] | | | [removed: 2022] [added: 2023] | | | [removed: 2023] [added: 2024] | | | [removed: 2024] [added: 2025] | | | After [removed: 2024] [added: 2025] | | | Total | | |

| A220-300 | | | [removed: 7] [added: 14] | | | [removed: 11] [added: —] | | | [removed: 10] [added: —] | | | [removed: 12] | | | [removed: 40] [added: 14] | | | [added: 1.5 | | | | | | 60 | | | 26 | | |]

| A321-200neo | | | [removed: 27] [added: 21] | | | [removed: 33] [added: —] | | | [removed: 25] [added: —] | | | [removed: 70] | | | [removed: 155] [added: 21] | | | [added: 0.3 | | | | | | 134 | | | 70 | | |]

| A330-900neo | | | [removed: 9] [added: 6] | | | [removed: 8] [added: 9] | | | [removed: 7] [added: 3] | | | [removed: 2] [added: —] | | | [removed: 26] [added: 18] | | |

| A350-900 | | | [removed: 4] [added: 17] | | | — | | | [removed: 6] [added: 11] | | | [removed: 10] | | | [removed: 20] [added: 28] | | | [added: 4.1 | | | | | | 16 | | | — | | |]

| B-737-900ER | | | [removed: 19] [added: 112] | | | [removed: —] [added: 2] | | | [removed: —] [added: 49] | | | [added: | | | 163 | | | 7.0 | | | | | |] — | | | [removed: 19] [added: —] | | |

| B-737-10 | | | — | | | — | | | — | | | | | | — | | | — | | | | | | 100 | | | 30 | | |

| Total | | | 708 | | | 86 | | | 108 | | | | | | 902 | | | 14.4 | | | | | | 328 | | | 126 | | |

(1)Includes both active and temporarily parked aircraft.

| Total | | | 26 | | | 24 | | | 161 | | | 11 | | | 130 | | | 352 | | |

(1)Includes both active and temporarily parked aircraft.

We own 231 and have operating leases for three of these regional aircraft.

The remainder are owned or leased by SkyWest Airlines, Inc. or Republic Airways, Inc.

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

| B-737-10 | | | — | | | — | | | 20 | | | 80 | | | 100 | | |

| Total | | | 43 | | | 67 | | | 66 | | | 152 | | | 328 | | |

(1)The timing of these commitments is based on our contractual agreements with the aircraft manufacturers and may be subject to change based on modifications to those agreements or changes in delivery schedules.

We have been experiencing a recovery in demand from the COVID-19 pandemic, which has led to an increase in our capacity and utilization of our aircraft compared to the year ended December 31, 2020.

Accordingly, as of December 31, 2021, all aircraft in our operating fleet are reflected in the table below compared to approximately 10% that were temporarily parked as of December 31, 2020.

See Note 15 of the Notes to the Consolidated Financial Statements for additional information on the restructuring charges recorded in 2020 related to our fleet retirement plans.

| B-737-900ER | | | 91 | | | — | | | 49 | | | | | | 140 | | | 5.6 | | | | | | 19 | | | — | | |

| Total | | | 627 | | | 82 | | | 107 | | | | | | 816 | | | 14.0 | | | | | | 264 | | | 120 | | |

Includes used aircraft purchases from 2021 that are undergoing modifications and will enter service in the second half of 2022.

| Total | | | 46 | | | 19 | | | 159 | | | 8 | | | 117 | | | 349 | | |

| A220-100 | | | 4 | | | — | | | — | | | — | | | 4 | | |

| Total | | | 70 | | | 52 | | | 48 | | | 94 | | | 264 | | |

As of January 31, [removed: 2022,] [added: 2023,] there were approximately [removed: 2,300] [added: 2,200] holders of record of our common stock.

[removed: In March 2020,] [added: While] we [added: have paid cash dividends to holders of our common stock on a quarterly basis, we] suspended dividends [added: in March 2020] due to the impact of the COVID-19 pandemic.

The [removed: CARES] [added: Coronavirus Aid, Relief, and Economic Security] Act [added: of 2020 (the "CARES Act")] and payroll support program extensions [removed: restrict] [added: restricted] the payment of dividends through September 2022.

[removed: Dividend] [added: Future dividend] payments [removed: 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.

The following graph compares the cumulative total returns during the period from December 31, [removed: 2016] [added: 2017] to December 31, [removed: 2021] [added: 2022] of our common stock to the Standard & Poor's 500 Stock Index and the NYSE ARCA Airline Index.

The comparison assumes $100 was invested on December 31, [removed: 2016] [added: 2017] in each of our common stock and the indices and assumes that all dividends were reinvested.

[removed: ][added: ]

We made cash dividend payments of $980 million during the year ended December 31, 2019 and $260 million in the March 2020 quarter prior to the COVID-19 pandemic.

The following table presents information with respect to purchases of common stock we made during the December [removed: 2021] [added: 2022] quarter.

| Shares purchased / withheld from employee awards during the December [removed: 2021] [added: 2022] quarter | | | | | | | | | | | | | | | | | |

| October 2022 | | | 1,045 | | | $ | 28.62 | | 1,045 | | | $ | — | | | | |

| November 2022 | | | 1,356 | | | $ | 34.54 | | 1,356 | | | $ | — | | | | |

| December 2022 | | | 1,777 | | | $ | 34.74 | | 1,777 | | | $ | — | | | | |

| Total | | | 4,178 | | | | | | 4,178 | | | | | | | | |

| October 2021 | | | 1,098 | | | $ | 45.12 | | 1,098 | | | $ | — | | | | |

| November 2021 | | | 4,488 | | | $ | 40.10 | | 4,488 | | | $ | — | | | | |

| December 2021 | | | 3,005 | | | $ | 37.78 | | 3,005 | | | $ | — | | | | |

| Total | | | 8,591 | | | | | | 8,591 | | | | | | | | |

Given the drastic and unprecedented impact of the pandemic on our operating results in [removed: 2020,] [added: 2020 and 2021,] we believe that [removed: for the financial highlights discussion below,] a comparison of our results in [removed: 2021] [added: 2022] to both [removed: 2020] [added: 2021] and 2019 [added: in this overview section] allows for a better understanding of the full impact of the COVID-19 pandemic and the progress of our recovery.

This section of Form 10-K, however, does not address certain items regarding the year ended December 31, [removed: 2019.][added: 2020.]

Discussion and analysis of [removed: 2019] [added: 2020] and year-to-year comparisons between [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] 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, [removed: 2020.][added: 2021.]

The table below shows certain key financial measures for the years ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and 2019:

| | | | Year Ended December 31, | | | | | | | | | | | | | | | [removed: 2021] [added: 2022] vs [removed: 2020] [added: 2021] % Increase (Decrease) [removed: (1)] | | | [removed: 2021] [added: 2022] vs 2019 % Increase (Decrease) [removed: (1)] | | |

| (in millions) | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | 2019 | | | | | | | | |

| Total operating revenue | | | $ | [removed: 29,899] [added: 50,582] | | | | | $ | [removed: 17,095] [added: 29,899] | | | | | $ | 47,007 | | [removed: 75] [added: 69] | | % | [removed: (36)] [added: 8] | | % |

| Total operating expense | | | [removed: 28,013] [added: 46,921] | | | | | | [removed: 29,564] [added: 28,013] | | | | | | 40,389 | | | [removed: (5)] [added: 67] | | % | [removed: (31)] [added: 16] | | % |

| Total non-operating expense, net | | | [removed: (1,488) | | | | | | (3,118) | | |] [added: $] | [added: (1,747)] | | [removed: (420)] [added: $] | [added: (1,488)] | | [removed: (52)] | | [removed: %] | [removed: NM] [added: $] | [added: (259)] | |

(1)Certain variances are labeled as not meaningful [removed: ("NM") throughout management's discussion and analysis.][added: ("NM").]

Total operating expense, adjusted (a non-GAAP financial measure) [removed: decreased $10.9] [added: increased $2.0] billion, or [removed: 27%] [added: 5%] compared to 2019.

Our total operating cost per available seat mile ("CASM") [removed: decreased 2%] [added: increased 40%] to [removed: 14.40] [added: 20.12] cents compared to [removed: 2019,] [added: 2021,] primarily due to the [removed: cost reductions] [added: higher costs] discussed [removed: above and partially offset by a 29% decrease in capacity.][added: above.]

[removed: *Non-Operating Results.*] Total non-operating expense was [removed: $1.5 billion in 2021, $1.1] [added: $1.3] billion higher than 2019, primarily due to higher [added: mark-to-market losses on certain of our equity investments and higher] interest expense as a result of our increased debt balances due to the financing arrangements entered into during 2020.

[removed: Capital] [added: Our capital] expenditures [added: are] primarily related to the [removed: purchase] [added: purchases] of aircraft, [removed: fleet modifications, our] airport [removed: redevelopment projects] [added: construction projects, fleet modifications] and technology enhancements.

Also, during [removed: 2021] [added: 2022] we had cash outflows of approximately [removed: $5.8] [added: $4.5] billion related to repayments of our debt and finance leases, including approximately [removed: $3.8] [added: $2.3] billion for early repayments and the remainder from scheduled maturities.

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

[removed: These decreases were almost fully offset by] [added: *Operating Expense.* Total operating expense increased $18.9 billion, or 67%, compared to 2021, primarily resulting from] higher [added: fuel costs, due to both an increase in fuel price and increased consumption as capacity was restored, as well as higher salaries and related costs, higher] volume-related expenses associated with the increase in capacity and [removed: demand, mainly fuel and aircraft maintenance and higher salaries and related costs] [added: demand] and an increase in expenses related to refinery sales to third parties, reflected in ancillary business and refinery expense.

[removed: Total operating expense,] [added: Operating income,] adjusted (a non-GAAP financial measure) [removed: increased $5.1 billion, or 21%] [added: decreased $3.1 billion] compared to [removed: 2020.][added: 2019.]

While we do not expect a material adverse effect on our Consolidated Financial Statements in the [removed: near term] [added: near-term] from the use of SAF, we are unable to predict the financial impact of increased use of SAF on our Consolidated Financial Statements over the longer [removed: term,] [added: term] as government policies and incentives for, and sufficient third-party investment in, SAF are necessary to make its use in larger quantities commercially and economically feasible.

| (in millions) (1) | | | [removed: 2021] [added: 2022] | | | [removed: 2020] [added: 2021] | | | | | | | | | | | |

| Loyalty travel awards | | | [removed: 1,786] [added: 2,898] | | | [removed: 935] [added: 1,786] | | | | | | [removed: 851] [added: 1,112] | | | [removed: 91] [added: 62] | | % |

| Travel-related services | | | [removed: 1,394] [added: 1,694] | | | [removed: 978] [added: 1,394] | | | | | | [removed: 416] [added: 300] | | | [removed: 43] [added: 22] | | % |

| Total passenger revenue | | | $ | [removed: 22,519] [added: 40,218] | | $ | [removed: 12,883] [added: 22,519] | | | | | $ | [removed: 9,636] [added: 17,699] | | [removed: 75] [added: 79] | | % |

| Cargo | | | [removed: 1,032] [added: 1,050] | | | [removed: 608] [added: 1,032] | | | | | | [removed: 424] [added: 18] | | | [removed: 70] [added: 2] | | % |

| Total operating revenue | | | $ | [removed: 29,899] [added: 50,582] | | $ | [removed: 17,095] [added: 29,899] | | | | | $ | [removed: 12,804] [added: 20,683] | | [removed: 75] [added: 69] | | % |

| TRASM (cents) | | | [removed: 15.37] [added: 21.69] | | ¢ | [removed: 12.73] [added: 15.37] | | ¢ | | | | [removed: 2.64] [added: 6.32] | | ¢ | [removed: 21] [added: 41] | | % |

| Third-party refinery sales (2) | | | [removed: (1.66)] [added: (2.13)] | | | [removed: (0.86)] [added: (1.66)] | | | | | | [removed: (0.80)] [added: (0.47)] | | | [removed: 93] [added: 28] | | % |

| TRASM, adjusted (cents) | | | [removed: 13.71] [added: 19.55] | | ¢ | [removed: 11.87] [added: 13.71] | | ¢ | | | | [removed: 1.84] [added: 5.84] | | ¢ | [removed: 16] [added: 43] | | % |

Our operating revenue increased [removed: $12.8] [added: $20.7] billion, or [removed: 75%,] [added: 69%,] compared to the year ended December 31, [removed: 2020] [added: 2021] due primarily to increased demand in [removed: 2021] [added: 2022] as a result of the continued recovery from the COVID-19 [removed: pandemic.][added: pandemic and higher third-party refinery sales.]

The increase in operating revenue, on a [removed: 45%] [added: 20%] increase in [added: system] capacity, generated a [removed: 21%] [added: 41%] increase in total revenue per available seat mile ("TRASM") and a [removed: 16%] [added: 43%] increase in TRASM, adjusted (a non-GAAP financial measure) compared to [removed: 2020.][added: 2021.]

| | | | | | | Increase (Decrease) vs. Year Ended December 31, [removed: 2020] [added: 2021] | | | | | | | | | | | | | | | | | | | | |

| (in millions) | | | Year Ended December 31, [removed: 2021] [added: 2022] | | | Passenger Revenue | | | RPMs (Traffic) | | | ASMs (Capacity) | | | Passenger Mile Yield | | | PRASM | | | Load Factor | | | | | |

| Domestic | | | $ | [removed: 18,468] [added: 30,197] | | [removed: 84] [added: 64] | | % | [removed: 98] [added: 27] | | % | [removed: 45] [added: 10] | | % | [removed: (7)] [added: 29] | | % | [removed: 27] [added: 48] | | % | [removed: 20] [added: 11] | | | pts | | |

| Latin America | | | [removed: 1,873] [added: 2,889] | | | [removed: 68] [added: 54] | | % | [removed: 82] [added: 24] | | % | [removed: 79] [added: (5)] | | % | [removed: (8)] [added: 25] | | % | [removed: (6)] [added: 62] | | % | [removed: 1] [added: 19] | | | [removed: pt] [added: pts] | | |

| Total passenger revenue | | | $ | [removed: 22,519] [added: 40,218] | | [removed: 75] [added: 79] | | % | [removed: 83] [added: 45] | | % | [removed: 45] [added: 20] | | % | [removed: (5)] [added: 23] | | % | [removed: 21] [added: 49] | | % | 15 | | | pts | | |

Domestic passenger unit revenue ("PRASM") for the year ended December 31, [removed: 2021] [added: 2022] increased [removed: 27% with capacity up 45%] [added: 48%] compared to the year ended December 31, [removed: 2020] [added: 2021] as a result of [removed: the low] [added: stronger demand and higher] levels of [removed: capacity and demand during 2020] [added: traffic] due to the [removed: COVID-19 pandemic and the] ongoing recovery [added: from the COVID-19 pandemic] throughout [removed: 2021.][added: 2022.]

International passenger revenue for the year ended December 31, [removed: 2021] [added: 2022] increased [removed: 43%] [added: 147%] with capacity up [removed: 45%] [added: 47%] compared to the year ended December 31, [removed: 2020] [added: 2021, with the Atlantic region experiencing the most significant improvement,] as travel to [removed: certain] [added: many European] destinations [removed: has] resumed or increased.

[removed: The] Latin America region [removed: has shown the most recovery of the international regions, with] [added: revenue was also near pre-pandemic levels during 2022, due to] continued [added: strong] demand [removed: improvement] for leisure destinations in [added: Mexico,] the [removed: Caribbean, Mexico] [added: Caribbean] and Central America.

In order to provide our customers more flexibility and time to plan [removed: or rebook] their travel, [removed: we made the following changes] [added: travel credit holders as of January 2022 and customers who purchased a ticket in 2022 are able] to [removed: our] [added: rebook their] ticket [removed: and] [added: through December 31, 2023 for] travel [removed: credit expiration dates.][added: throughout 2024.]

During 2022, our recovery from the impact of the COVID-19 pandemic continued and is continuing into 2023.

| Operating income | | | 3,661 | | | | | | 1,886 | | | | | | 6,618 | | | 94 | | % | (45) | | % |

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

| Available seat miles ("ASM" or "capacity") | | | 233,226 | | | | | | 194,474 | | | | | | 275,379 | | | 20 | | % | (15) | | % |

2022 Financial Overview

Our 2022 operating income was $3.7 billion, an improvement of $1.8 billion compared to 2021, while operating income, adjusted (a non-GAAP financial measure) which excludes restructuring charges and other items was $3.6 billion, an increase of $6.1 billion compared to 2021.

The increases in operating income and operating income, adjusted were primarily due to the continued recovery in the demand for air travel during 2022, which resulted in a 69% increase in operating revenue on a 20% increase in system capacity.

Operating income in 2021 included a benefit of $4.5 billion from the recognition of payroll support program ("PSP") grants, driving the smaller year-over-year increase than operating income, adjusted, which excluded the grants benefit in 2021.

Our 2022 operating income decreased $3.0 billion compared to 2019 primarily due to an increase in operating costs, including a 35% increase in fuel cost, and lower passenger revenue due to system capacity that was 15% lower as we continued to restore our operations from the effects of the COVID-19 pandemic.

*Revenue.* Compared to 2021, our 2022 operating revenue increased $20.7 billion, or 69%, primarily due to continued recovery in travel demand from the COVID-19 pandemic and higher refinery sales to third parties.

Improvement in premium products revenue resulted from both a shift in the mix of seats on our aircraft following the retirement of certain fleets in 2020 and delivery of new aircraft since that time, as well as incremental increase in demand, particularly from leisure customers.

Compared to 2019, our operating revenue increased $3.6 billion, or 8%, due primarily to higher refinery sales to third parties, partially offset by the revenue impact from 15% lower capacity.

We are planning for our 2023 system capacity to fully recover to or exceed 2019 capacity levels.

The increase also resulted from $4.5 billion of PSP grants recognized during 2021, which reduced expenses in that year.

Total operating expense, adjusted (a non-GAAP financial measure) which excludes expenses related to refinery sales to third parties, contra-expense from the recognition of PSP grants in 2021 and other items, increased $12.8 billion, or 44%, compared to 2021.

Non-fuel unit costs ("CASM-Ex", a non-GAAP financial measure), which excludes fuel, expenses related to refinery sales to third parties, contra-expense from the recognition of PSP grants in 2021 and other items, increased 6% to 12.87 cents.

Total operating expense increased $6.5 billion, or 16%, compared to 2019, primarily resulting from higher fuel costs and an increase in expenses related to refinery sales to third parties.

Our CASM increased 37% compared to 2019, primarily due to the higher costs discussed above and a 15% decrease in capacity.

CASM-Ex (a non-GAAP financial measure) increased 18% compared to 2019.

During 2023, we expect non-fuel unit costs to decrease compared to 2022 as we restore our network to pre-pandemic levels, better utilizing our assets.

We expect to reduce our investments in rebuilding the network as we progress through the year while improving our operational efficiency and managing inflationary pressures including labor cost increases.

*Non-Operating Results.* Total non-operating expense was $1.7 billion in 2022, $259 million higher than 2021 primarily due to higher mark-to-market losses on certain of our equity investments, partially offset by reduced losses on our equity method investments, lower interest expense as a result of our debt reduction initiatives and lower losses on extinguishment of debt.

*Cash Flow.* During 2022, operating activities provided cash flows of $6.4 billion, primarily on improving ticket sales, and incurred approximately $6.9 billion of net investing cash outflows, primarily for $6.4 billion of capital expenditures.

After adjusting for strategic investments and certain other activities, these results generated $244 million of free cash flow (a non-GAAP financial measure) in 2022.

Our cash, cash equivalents, short-term investments and aggregate principal amount committed and available to be drawn under our revolving credit facilities ("liquidity") at December 31, 2022 was $9.4 billion.

| Ticket - Main cabin | | | $ | 20,396 | | $ | 11,393 | | | | | $ | 9,003 | | 79 | | % |

| Ticket - Premium products | | | 15,230 | | | 7,946 | | | | | | 7,284 | | | 92 | | % |

| Other | | | 9,314 | | | 6,348 | | | | | | 2,966 | | | 47 | | % |

| Atlantic | | | 6,093 | | | 243 | | % | 194 | | % | 110 | | % | 17 | | % | 63 | | % | 23 | | | pts | | |

| Pacific | | | 1,039 | | | 159 | | % | 211 | | % | 8 | | % | (17) | | % | 139 | | % | 44 | | | pts | | |

Domestic revenue in 2022 was above 2021 levels and near pre-pandemic levels, even though capacity was not fully restored, as consumers continue to return to travel.

We believe spending patterns for services are returning to historical levels compared to spending on goods.

We also experienced higher growth in premium product revenue (including Delta One, First Class, Delta Premium Select and Delta Comfort+) compared to main cabin with the delivery of new aircraft that include more premium seat capacity and an increase in premium product yield compared to main cabin, as we see more consumers choosing these premium offerings.

In 2023, we expect domestic capacity to be restored to pre-pandemic levels through growth in our core hubs in Atlanta, Minneapolis-St. Paul, Detroit and Salt Lake City.

Further, in June 2022, the United States lifted its testing requirement for international travel.

Both of these changes have had a positive impact on international demand.

Most countries in our network have removed or eased travel restrictions, resulting in revenue improvement across all international regions.

The Atlantic region showed strong demand improvement during 2022 as western European countries removed or eased travel restrictions in the first half of 2022.

Revenue in this region was near pre-pandemic levels as travelers continue to show increased desire for transatlantic travel.

This has been led by demand for leisure destinations such as Italy, Spain and Greece and improving business demand.

Our business and operating results continue to be significantly impacted by the COVID-19 pandemic.

However, as described further below, we have seen improvement in our business beginning in March 2021 and progressing through 2021.

| Income/(loss) before income taxes | | | 398 | | | | | | (15,587) | | | | | | 6,198 | | | NM | | | (94) | | % |

Financial Highlights - 2021 Compared to 2019

Our pre-tax income for 2021 was $398 million, which includes recognition of $4.5 billion in grants from the Payroll Support Program Extension ("PSP2") and Payroll Support Program 3 ("PSP3").

This is a $5.8 billion decrease compared to 2019 primarily due to the impact of the COVID-19 pandemic on our business which resulted in a 36% decrease in revenue, partially offset by a reduction in operating expense, including the government grant recognition.

Pre-tax loss, adjusted (a non-GAAP financial measure) which excludes the government grant recognition and other items was $3.4 billion, a decrease of $9.6 billion compared to 2019.

*Revenue.* Compared to 2019, our operating revenue decreased $17.1 billion, or 36% due to reduced demand resulting from the COVID-19 pandemic.

The length and severity of the reduction in travel demand due to the COVID-19 pandemic remains uncertain; however, with continued distribution of effective vaccines and easing of travel advisories and restrictions, we believe customer confidence will continue to grow, leading to increased demand during 2022.

We expect domestic leisure travel to exceed 2019 levels in 2022, while we expect business travel to continue to return as many companies are expected to expand "return to office" plans throughout 2022.

International demand recovery has been uneven as the COVID-19 variants and related travel restrictions impact various countries within our international network, though we believe demand will begin accelerating in the second half of 2022 as travel restrictions are lifted.

We continue to monitor risks to the pace of recovery from COVID-19 variants, the effectiveness of vaccine programs and travel advisories and restrictions.

We are planning for our system capacity to be approximately 15% lower in the March 2022 quarter than the March 2019 quarter and approximately 10% lower for the full year of 2022 compared to 2019.

*Operating Expense.* Total operating expense decreased $12.4 billion, or 31%, compared to 2019, primarily resulting from recognition of the grants from PSP2 and PSP3, lower volume-related expenses (mainly fuel and passenger commissions and other selling expenses), lower salaries and related costs and profit sharing expense, and significant cost reduction measures taken across all aspects of our operation in response to the COVID-19 pandemic.

These decreases were partially offset by an increase in expenses related to refinery sales to third parties, reflected in ancillary business and refinery expense, as well as recovery related and transition costs incurred (e.g., aircraft reactivation, hiring, training, overtime and reservations volume) as we return closer to pre-pandemic levels of demand and capacity.

MD&A - Financial Highlights*

Non-fuel unit costs ("CASM-Ex", a non-GAAP financial measure) increased 11% to 12.12 cents due to the 29% decrease in capacity, despite a decline in adjusted operating expenses.

Minimizing unit cost increases is important to delivering on our overall financial objectives.

During 2022, however, we expect non-fuel unit costs to increase 7%-10% compared to 2019.

This expected unit cost increase is primarily due to 2022 capacity projected to be lower than 2019, costs associated with rebuilding our network, investments to support an elevated customer experience and our premium brand focus, and inflation and labor cost escalation in the underlying business.

We expect non-fuel unit cost increases compared to 2019 to moderate in future years as we return to and exceed pre-pandemic capacity and benefit from cost reduction measures implemented during 2020 that were structural in nature.

We have experienced, and expect to continue experiencing, increased cost inflation as a result of global macroeconomic trends, actions we took in response to the COVID-19 pandemic and labor shortages at our suppliers.

Actions we have taken to mitigate the impact of expected inflation include leveraging scale and efficiency in our underlying business through improved asset utilization and seeking productivity improvements through increased scale efficiencies and technology enhancements.

*Cash Flow.* Our liquidity at December 31, 2021 was $14.2 billion, an $8.2 billion increase compared to December 31, 2019 as a result of proceeds from loans and debt issuances and other liquidity initiatives.

During 2021, operating activities provided $3.3 billion, including $4.5 billion from the payroll support program grants, which was partially offset by the $1.5 billion in contributions we made to our defined benefit pension plans.

During 2021, we incurred approximately $900 million of net investing cash outflows, primarily for $3.2 billion capital expenditures, partially offset by $2.4 billion of net redemptions of short-term investments.

These results generated $1.3 billion of free cash flow (a non-GAAP financial measure) in 2021 compared to $4.2 billion in 2019.

Financial Highlights - 2021 Compared to 2020

Our 2021 pre-tax income improved $16.0 billion compared to 2020.

This was primarily due to the restructuring charges, investment impairments and equity method losses recorded during 2020 and a partial recovery in the demand for air travel during 2021, which resulted in a 75% increase in revenue.

Pre-tax loss, adjusted (a non-GAAP financial measure) was $3.4 billion, an increase of $5.6 billion compared to 2020.

*Revenue.* Compared to 2020, our 2021 operating revenue increased $12.8 billion, or 75%, primarily due to increased travel demand.

*Operating Expense.* Total operating expense decreased $1.6 billion, or 5%, compared to 2020, primarily resulting from the reduction in restructuring charges and recognition of the PSP2 and PSP3 grants.

Our CASM decreased 35% to 14.40 cents compared to 2020, primarily due to a 45% increase in capacity and reduction in operating expense from the reduction in restructuring charges and recognition of the PSP2 and PSP3 grants as noted above.

CASM-Ex (a non-GAAP financial measure) decreased 22% to 12.12 cents.

*Non-Operating Results.* Total non-operating expense was $1.5 billion in 2021, $1.6 billion lower than 2020 primarily due to impairments and our proportionate share of equity method losses related to our investments in LATAM and Grupo Aeroméxico in 2020, which were zero in 2021, and mark-to-market gains on certain of our other equity investments.

These decreases were partially offset by higher interest expense as a result of our increased debt balances due to the financing arrangements entered into during 2020 and losses on debt extinguishment.

*Cash Flow.* The $1.3 billion of free cash flow generated in 2021 compared to $4.3 billion of negative free cash flow in 2020.

Environmental Sustainability

During 2021, we built on our previously announced plan to invest $1.0 billion through the end of 2030 toward airline carbon neutrality by committing to, among other things, set medium- and long-term climate goals that are aligned with applicable SBTi frameworks, as described further in Part I, Item 1, "Business - Environmental Sustainability." We expect our path toward achievement of these ambitious climate goals to depend heavily on increased use of SAF, which is not presently available at scale or at prices competitive to jet fuel, and improved fuel efficiency from fleet renewal and operational initiatives.