Delta Air Lines (DAL) 10-K risk factor changes: FY2023 vs FY2022

The airline industry is subject to many forms of environmental regulation, including but not limited to [added: regulation of hazardous substances,] increased regulation to reduce emissions and other risks associated with climate change.

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

For example, in [removed: 2022] [added: 2022,] the EPA proposed regulations to define certain [removed: per- and polyfluoroalkyl substances ("PFAS")] [added: PFAS] as "hazardous substances" under [removed: CERCLA.][added: CERCLA, and the EPA has proposed to regulate certain PFAS as "hazardous constituents" under RCRA.]

[removed: EPA's] [added: EPA’s] proposed [removed: rule,] [added: rule under CERCLA,] 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 [removed: foam.][added: foam, and some state laws require transition to alternative fire suppression systems.]

The ultimate impact and associated cost to Delta of [removed: this rulemaking] [added: these legislative and regulatory developments related to PFAS, including firefighting foam,] cannot be predicted at this time.

Future regulatory action concerning climate change, aircraft emissions and noise [removed: emissions] could have a significant effect on the airline industry.

In order to address aircraft carbon dioxide emissions, the International Civil Aviation [removed: Organization,] [added: Organization (ICAO),] a United Nations specialized agency, formally adopted a global, market-based emission offset program known as CORSIA.

[removed: In 2022,] ICAO [removed: established] [added: set the baseline for establishing airlines’ obligations under CORSIA for 2021 to 2023 based on 2019 travel, and in 2022 set] a new, more stringent CORSIA baseline of 85% of 2019, which will apply [removed: starting in] [added: from] 2024 through 2035.

[removed: Certain] [added: Because certain] CORSIA program details remain to be developed and could potentially be affected by political developments in participating countries or the results of the [removed: pilot phase] [added: initial phases] of the program, [removed: and thus] the impact of CORSIA cannot be predicted at this time.

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 26][added: 20]

During periods of unfavorable or volatile economic conditions in the economy in the U.S. or abroad, [removed: including as a result of the COVID-19 pandemic and the worldwide response to it,] demand for air travel can be significantly impacted as business and leisure travelers choose not to travel, seek alternative forms of transportation for short trips or conduct business using technological alternatives.

Agreements governing our debt, including our credit facilities and our SkyMiles financing agreements, include financial and other covenants.

Certain of these covenants impose restrictions on our business, and failure to comply with any of the covenants in these agreements could result in events of default.

Our debt agreements contain various affirmative, negative and financial covenants, including our credit facilities and our SkyMiles financing agreements, each of which contains a minimum liquidity covenant.

Certain of our debt agreements and our SkyMiles financing agreements contain minimum coverage ratios.

A decline in these coverage ratios, including due to factors that are beyond our control, could trigger an early amortization event or, if applicable, require us to post additional collateral.

Our SkyMiles financing agreements also restrict our ability to, among other things, change the policies and procedures of the SkyMiles program in a manner that would reasonably be expected to materially impair repayment of our SkyMiles debt.

Complying with certain of the covenants in our debt agreements, and other restrictive covenants that may be contained in any future debt agreements, could limit our ability to operate our business and to take advantage of business opportunities that are in our long-term interest.

While the covenants in our debt agreements are subject to important exceptions and qualifications, if we fail to comply with them and are unable to obtain a waiver or amendment, refinance the indebtedness subject to these covenants or take other mitigating actions, an event of default would result.

These arrangements also contain other events of default customary for such financings.

If an event of default were to occur, the lenders or noteholders could, among other things, declare outstanding amounts due and payable and where applicable and subject to the terms of relevant collateral agreements, repossess collateral, including aircraft or other valuable assets.

In addition, an event of default or acceleration of indebtedness under one agreement could result in an event of default under other of our financing agreements.

The acceleration of significant indebtedness could require us to seek to renegotiate, repay or refinance the obligations under our financing arrangements, and there is no assurance that such renegotiation or refinancing efforts would be successful.

Employee strikes and other labor-related disruptions may have a material adverse effect on our operations.

Our business is labor intensive, utilizing large numbers of pilots, flight attendants, aircraft maintenance technicians, ground support personnel and other personnel.

As of December 31, 2023, 20% of our workforce, primarily pilots, was unionized.

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

The Railway Labor Act generally prohibits strikes or other types of self-help actions both before and after a collective bargaining agreement becomes amendable, unless and until the collective bargaining processes required by the Railway Labor Act have been exhausted.

Separately, the NLRA governs Monroe’s relations with the union representing their employees, which generally allows self help after a collective bargaining agreement expires.

If we or our subsidiaries are unable to reach agreement with any of our unionized work groups in future negotiations regarding the terms of their collective bargaining agreements or if additional segments of our workforce become unionized, we may be subject to work interruptions or stoppages, subject to the requirements of the Railway Labor Act or the NLRA, as the case may be.

Strikes or labor disputes with our unionized employees may have a material adverse effect on our ability to conduct business.

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

Our results can fluctuate due to seasonality and other factors.

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

Demand for air travel is typically higher in the June and September quarters, particularly in our international markets, because there is more vacation travel during these periods than during the remainder of the year.

The seasonal shifting of demand causes our financial results to vary on a quarterly basis.

Changes in the value of our equity investments in other airlines and airline service companies can also be significant and cause fluctuations in our results.

Other factors that may affect our results include severe weather conditions and natural disasters (or other environmental events), which could significantly disrupt service and create air traffic control problems.

In addition, increases in the frequency, severity or duration of thunderstorms, hurricanes, typhoons, floods or other severe weather events, including from changes in the global climate and rising global temperatures, could result in increases in delays and cancellations, turbulence-related injuries and fuel consumption to avoid such weather, any of which could result in loss of revenue and higher costs.

Because of fluctuations in our results from seasonality and other factors, results of operations for a historical period are not necessarily indicative of results of operations for a future period and results of operations for an interim period are not necessarily indicative of results of operations for an entire year.

An environmental or other incident associated with the operation of the Monroe refinery could have a material adverse effect on our consolidated financial results if insurance is unable to cover a significant liability.

In addition, such an incident could damage our reputation.

Monroe's refining operations are subject to various hazards unique to refinery operations, including explosions, fires, toxic emissions and natural catastrophes.

Monroe could incur substantial losses, including cleanup costs, fines and other sanctions and third-party claims, and its operations could be interrupted, as a result of such an incident.

Monroe's insurance coverage does not cover all potential losses, costs or liabilities, and Monroe could suffer losses for uninsurable or uninsured risks or in amounts greater than its insurance coverage.

In addition, Monroe's ability to obtain and maintain adequate insurance may be affected by conditions in the insurance market over which it has no control.

If Monroe were to incur a significant liability for which it is not fully insured or for which insurance companies do not or are unable to provide coverage, this could have a material adverse effect on our consolidated financial results of operations or consolidated financial position.

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

The operation of the refinery by Monroe is subject to significant environmental regulation.

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

Monroe’s operations are subject to extensive environmental, health and safety laws and regulations, including those relating to the discharge of materials into the environment, waste management, pollution prevention measures and greenhouse gas emissions, which are subject to change over time.

Numerous states have adopted regulations governing these substances as well.

The baseline for establishing airlines’ 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, in June 2020 ICAO removed 2020 from the baseline calculation for the first phase of CORSIA, from 2021 to 2023.

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

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.

The EU 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, separate SAF mandates in France and Sweden in 2022.

In the United States various exploratory discussions continue around approaches to address climate change, such as carbon pricing, without a clear legislative path forward.

As more businesses have publicly announced environmental sustainability goals, the cost of carbon offsets has also increased significantly and will likely continue to do so.

This program allows customers to earn [removed: mileage credits ("miles")] [added: miles] by flying on Delta, Delta Connection carriers and other airlines that participate in the loyalty program.

Customers can also earn miles through participating [removed: companies such as credit card companies, hotels, car rental agencies and ridesharing] companies.

Miles are redeemable by customers in future periods for air travel on Delta and other participating airlines, access to [removed: our] [added: Delta] Sky Club and other program awards.

To facilitate transactions with participating companies, we sell miles to non-airline [removed: businesses, customers] [added: businesses] and other airlines.

At December 31, [removed: 2022,] [added: 2023,] the aggregate deferred revenue balance associated with the SkyMiles program was [removed: $7.9] [added: $8.4] billion.

A hypothetical 10% change in the number of outstanding miles estimated to be redeemed would result in an impact of less than 1% of total operating revenue recognized for the year ended December 31, [removed: 2022.][added: 2023.]

A hypothetical 10% increase in our estimate of the ETV of a mile would have decreased total operating revenue by less than 1% for the year ended December 31, [removed: 2022,] [added: 2023,] as a result of an increase in the amount of revenue deferred associated with the miles earned.

*Sale of Miles to Participating Companies.* Customers earn miles based on their spending with participating [removed: companies] [added: companies,] such as credit [removed: card companies, hotels,] [added: card, retail, ridesharing,] car rental [removed: agencies] and [removed: ridesharing companies] [added: hotel companies,] with which we have marketing agreements to sell miles.

Payments are typically due to us monthly based on the volume of miles sold during the period, and the initial terms of our marketing contracts are from [removed: three] [added: one] to [removed: eleven] [added: thirteen] years.

During the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] total cash sales from marketing agreements related to our loyalty program were [removed: $5.7] [added: $6.9] billion, [removed: $4.1] [added: $5.7] billion and [removed: $2.9] [added: $4.1] billion, respectively, which are allocated to travel and other performance obligations, as discussed below.

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 47][added: 37]

Revenue allocated to [removed: access] Delta Sky Club [removed: lounges] [added: lounge access] is recognized as miscellaneous in other revenue as access is provided.

Passenger revenue is recognized when we provide [removed: transportation or when the ticket expires unused ("ticket breakage").][added: transportation.]

The air traffic liability primarily includes sales of passenger tickets with scheduled departure dates in the future and [removed: credits] [added: travel credits,] which can be applied as payment toward the cost of a [removed: ticket ("travel credits").][added: ticket.]

These adjustments relate primarily to [removed: ticket breakage,] [added: tickets that expire unused ("ticket breakage"),] 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.

At December 31, [removed: 2022,] [added: 2023,] the aggregate air traffic liability balance was [removed: $8.3] [added: $7.0] billion.

A hypothetical 10% change in the amount of [removed: travel credits] [added: tickets] estimated to expire unused would result in an impact of less than 1% of total operating revenue for the year ended December 31, [removed: 2022.][added: 2023.]

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 48][added: 38]

See Note [removed: 15] [added: 4] of the Notes to the Consolidated Financial Statements for additional [removed: details regarding these impairments and related charges.][added: details.]

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 49][added: 39]

*Key Assumptions.* The key assumptions in our impairment tests include (1) forecasted revenues, expenses and cash flows, [removed: including the duration and extent of impact to our business and our alliance partners from the COVID-19 pandemic,] (2) current discount rates, (3) observable market transactions and (4) anticipated changes to the regulatory environment (e.g., changes in slot access and/or availability, additional Open Skies agreements or changes to antitrust approvals).

Factors which could cause impairment include, but are not limited to (1) negative trends in our market capitalization, (2) reduced profitability resulting from lower passenger mile yields or higher input costs (primarily related to fuel and employees), (3) lower passenger demand as a result of weakened U.S. and global [removed: economies, global pandemics] [added: economies] or other factors, (4) interruption to our operations due to a prolonged employee strike, terrorist attack or other reasons, (5) changes to the regulatory environment (e.g., changes in slot access and/or availability, additional Open Skies agreements or changes to antitrust approvals), (6) competitive changes by other airlines and (7) strategic changes to our operations leading to diminished utilization of the intangible assets.

Our goodwill balance, which is related to the airline segment, was $9.8 billion at December 31, [removed: 2022.][added: 2023.]

*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: 2022,] [added: 2023,] of which $5.9 billion related to indefinite-lived intangible assets.

In [removed: 2022,] [added: 2023,] we performed [removed: qualitative] [added: quantitative] 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 [removed: impaired.][added: impaired as the fair value of each asset exceeded its carrying value by at least 20%.]

These plans are [added: generally] closed to new entrants and [added: are] frozen for future benefit accruals.

As of December 31, [removed: 2022,] [added: 2023,] the unfunded benefit obligation for these plans recorded on our balance sheets was [removed: $90 million.][added: $145 million, which is the net of our benefit obligation of $15.9 billion and plan assets of $15.8 billion.]

We had no minimum funding requirements in [removed: 2021 or 2022,] [added: 2023,] and have no such requirements in [removed: 2023.][added: 2024.]

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

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 50][added: 40]

[removed: *Weighted Average Discount] [added: *Discount] Rate.* We determine our [removed: weighted average] discount rate on our measurement date primarily by reference to annualized rates earned on high-quality fixed income investments and yield-to-maturity analyses specific to our estimated future benefit [removed: payments.][added: payments for each plan.]

We used a weighted average discount rate to value the obligations of [removed: 5.62%] [added: 5.31%] and [removed: 2.97%] [added: 5.62%] at December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively.

[removed: Based on the portfolio's risk profile, we lowered the weighted average] [added: The] expected long-term rate of return on our defined benefit pension plan assets [removed: for 2022 net periodic benefit cost to] [added: is] 7.00%.

| Change in Assumption | | | | | | Effect on [removed: 2023] [added: 2024] Pension [removed: Benefit Cost] [added: Cost/(Benefit)] | | | | | | Effect on Accrued Pension Liability at December 31, [removed: 2022] [added: 2023] | | |

| 0.50% decrease in weighted average discount rate | | | | | | $ | (5) | million | | | | $ | [removed: 743] [added: 742] | million |

| 0.50% increase in weighted average discount rate | | | | | | $ | [removed: —] [added: 1] | million | | | | $ | (685) | million |

| 1.00% decrease in expected long-term rate of return on assets | | | | | | $ | [removed: 152] [added: 150] | million | | | | $ | — | |

| 1.00% increase in expected long-term rate of return on assets | | | | | | $ | [removed: (152)] [added: (150)] | million | | | | $ | — | |

Changes in life expectancy may significantly impact our benefit obligations and future net periodic [removed: benefit cost.][added: cost/(benefit).]

[removed: We use] [added: Each year we review information published by] the Society of Actuaries [removed: ("SOA") published mortality data] and other publicly available information to develop our best estimate of life [removed: expectancy.][added: expectancy for purposes of measuring pension and other postretirement and postemployment benefit obligations.]

Operating Expense

| | | | Year Ended December 31, | | | | | | Increase (Decrease) | | | % Increase (Decrease)(1) | | | | | |

| Salaries and related costs | | | $ | 14,607 | | $ | 11,902 | | | | | $ | 2,705 | | 23 | | % |

| Aircraft fuel and related taxes | | | 11,069 | | | 11,482 | | | | | | (413) | | | (4) | | % |

| Ancillary businesses and refinery | | | 4,172 | | | 5,756 | | | | | | (1,584) | | | (28) | | % |

| Contracted services | | | 4,041 | | | 3,345 | | | | | | 696 | | | 21 | | % |

| Landing fees and other rents | | | 2,563 | | | 2,181 | | | | | | 382 | | | 18 | | % |

| Aircraft maintenance materials and outside repairs | | | 2,432 | | | 1,982 | | | | | | 450 | | | 23 | | % |

| Depreciation and amortization | | | 2,341 | | | 2,107 | | | | | | 234 | | | 11 | | % |

| Passenger commissions and other selling expenses | | | 2,334 | | | 1,891 | | | | | | 443 | | | 23 | | % |

| Regional carrier expense | | | 2,200 | | | 2,051 | | | | | | 149 | | | 7 | | % |

| Passenger service | | | 1,750 | | | 1,453 | | | | | | 297 | | | 20 | | % |

| Profit sharing | | | 1,383 | | | 563 | | | | | | 820 | | | 146 | | % |

| Pilot agreement and related expenses | | | 864 | | | — | | | | | | 864 | | | NM | | |

| Aircraft rent | | | 532 | | | 508 | | | | | | 24 | | | 5 | | % |

| Other | | | 2,239 | | | 1,700 | | | | | | 539 | | | 32 | | % |

| Total operating expense | | | $ | 52,527 | | $ | 46,921 | | | | | $ | 5,606 | | 12 | | % |

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

*Salaries and Related Costs.* Delta pilots ratified a new four-year Pilot Working Agreement effective January 1, 2023.

The agreement includes numerous work rule changes and pay rate increases during the four-year term, including an initial pay rate increase of 18%.

Additional effects of this agreement are described below under pilot agreement and related expenses.

We also implemented base pay increases for eligible non-pilot employees of 5% effective April 1, 2023.

Further, we have approximately 8,000 more employees as of December 31, 2023 than at December 31, 2022 principally in in-flight service, flight operations and aircraft maintenance, in order to support the growth in our operations.

Each of these actions contributed to the increase in salaries and related costs.

*Aircraft Fuel and Related Taxes.* Fuel expense decreased $413 million compared to 2022 primarily due to an 18% decrease in the market price of jet fuel partially offset by a 15% increase in consumption on a 17% increase in capacity.

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

| Fuel expense and average price per gallon | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | Average Price Per Gallon | | | | | | | | |

| | | | Year Ended December 31, | | | | | | Increase (Decrease) | | | | | | Year Ended December 31, | | | | | | Increase (Decrease) | | |

| Fuel purchase cost (1) | | | $ | 11,506 | | $ | 12,230 | | $ | (724) | | | | | $ | 2.93 | | $ | 3.58 | | $ | (0.65) | |

| Fuel hedge impact | | | (52) | | | 29 | | | (81) | | | | | | (0.01) | | | 0.01 | | | (0.02) | | |

| Refinery segment impact | | | (385) | | | (777) | | | 392 | | | | | | (0.10) | | | (0.23) | | | 0.13 | | |

| Total fuel expense | | | $ | 11,069 | | $ | 11,482 | | $ | (413) | | | | | $ | 2.82 | | $ | 3.36 | | $ | (0.54) | |

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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.

The decline in these expenses was primarily related to lower refinery sales to third parties, which decreased $1.6 billion compared to 2022.

Travel credits are typically issued as a result of ticket cancellations prior to their expiration dates.

During the COVID-19 pandemic, we experienced significant ticket cancellations, particularly in the early months of 2020.

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.

Given the impact of the COVID-19 pandemic on customer behavior and changes made in ticket validity terms, as well as the elimination of change fees for most tickets, our estimates of revenue that will be recognized from the air traffic liability for unused tickets may vary in future periods.

*Long-Lived Assets*

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

This value is based on various factors, including the assets' acquisition costs, estimated useful lives, salvage values, discounted lease payments and lease terms.

We review flight equipment, ROU assets and other long-lived assets used in operations for impairment losses when events and circumstances indicate the assets may be impaired.

Factors which could be indicators of impairment include, but are not limited to (1) a decision to permanently remove flight equipment or other long-lived assets from operations, (2) significant changes in the estimated useful life, (3) significant changes in projected cash flows, (4) permanent and significant declines in fleet fair values and (5) changes to the regulatory environment.

For long-lived assets held for sale, we discontinue depreciation and record impairment losses when the carrying amount of these assets is greater than the fair value less the cost to sell.

To determine whether impairments exist for aircraft used in operations, we group assets at the fleet type level or at the contract level for aircraft operated by third-party regional carriers (i.e., the lowest level for which there are identifiable cash flows) and then estimate future cash flows based on projections of capacity, passenger mile yield, fuel and labor costs and other relevant factors.

If an asset group is impaired, the impairment loss recognized is the amount by which the asset group's carrying amount exceeds its estimated fair value.

We estimate aircraft fair values using published sources, appraisals and bids received from third parties, as available.

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 fleet types.

We evaluated our fleet for impairment, determining that only certain fleet types were impaired, as the future cash flows from the operation of these fleet types through the respective retirement dates were lower than the carrying value.

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

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

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

Due to the recovery in demand that we experienced throughout 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 2021 or 2022.

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

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.

Our qualitative assessments include analyses and weighting of all relevant factors which impact the fair value of our indefinite-lived intangible assets.

However, we voluntarily contributed $1.5 billion to these plans during 2021.

Based on our funded status as of December 31, 2021, we modified the strategic asset allocation mix in 2022 to reduce the investment risk of the portfolio.

The SOA publishes updated mortality tables for U.S. plans and updated improvement scales.

Each year we consider updates by the SOA in setting our mortality assumptions for purposes of measuring pension and other postretirement and postemployment benefit obligations.

*Income Tax Valuation Allowance*

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

We establish valuation allowances if it is more likely than not that we will be unable to realize our deferred income tax assets.

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

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

We have market risk exposure related to fuel prices, interest [removed: rates and] [added: rates,] foreign currency exchange [removed: rates.][added: rates and changes in the market value of equity investments.]

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

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

At December 31, [removed: 2022,] [added: 2023,] we had [removed: $17.9] [added: $16.8] billion of fixed-rate debt, [removed: $3.6] [added: $1.9] billion of variable-rate debt and [removed: $713] [added: $583] million of variable-rate leases.

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

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: $725] [added: $716] million at December 31, [removed: 2022] [added: 2023] and would have increased the annual interest expense on our variable-rate debt and variable-rate leases by [removed: $43] [added: $25] million.

At December 31, [removed: 2022] [added: 2023] we had no open foreign currency options or forward contracts.

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 57][added: 54]

At December 31, 2023 we no longer had LIBOR-based debt or finance leases.

Equity Investment Risk

We own equity investments in a number of airlines and airline service companies, which are subject to equity price risk.

We often hold our equity securities for long periods and short-term price volatility has occurred in the past and will occur in the future, impacting the volatility of our financial results.

During 2023, we recorded a net gain of $1.3 billion related to the valuation of our fair value investments.

As of December 31, 2023, we have long-term investments recorded at fair value of $2.9 billion and, therefore, a 10% change in the fair value of these investments would have an approximately $290 million impact on our financial results.

See Note 3 and Note 4 of the Notes to the Consolidated Financial Statements for further information on our investments.

As a result of the reduced capacity from the COVID-19 pandemic, our jet fuel consumption during 2022 of 3.4 billion gallons was lower than our historical and expected future consumption.

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

At December 31, 2022, we had no exposure to the discontinued LIBOR settings and had approximately $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.

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

In [removed: January] 2021, the EPA finalized GHG emission standards for new aircraft engines designed to implement the ICAO standards on the same timeframe contemplated by [removed: ICAO.][added: ICAO, and these standards have been upheld in response to legal challenges.]

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 13][added: 14]

This statute generally provides that local noise restrictions on Stage 3 aircraft first effective after October 1, [removed: 1990,] [added: 1990] require FAA approval.

In addition, foreign governments may [added: enact or] allow airports to enact similar restrictions, which could adversely impact our international operations or require significant expenditures in order for our aircraft to comply with the restrictions.

For example, in 2022, to reduce noise, the Netherlands announced [removed: plans] [added: a multi-phase plan] to reduce the maximum number of flights authorized annually at Amsterdam’s Schiphol Airport.

Market prices for RINs have been [removed: volatile,] [added: volatile and] marked by periods of sharp increases and decreases primarily in response to speculation about what the EPA and/or the U.S. Congress will do with respect to compliance obligations.

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

We have agreed to make available under the CRAF Program a portion of our international aircraft during the contract period that ends on September 30, [removed: 2023.][added: 2024.]

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 14][added: 15]

Bastian, Age [removed: 65:] [added: 66:] 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: 62:] [added: 63:] 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: 60:] [added: 61:] 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: 61:] [added: 62:] 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: 59:] [added: 60:] Executive Vice President - External Affairs of Delta since October 2022; Executive Vice President - Chief Legal Officer of Delta (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: 54:] [added: 55:] 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: 52:] [added: 53: President - Delta TechOps and Chief of Operations since October 2023;] Executive Vice President - Chief of Operations of Delta [removed: since June 2021;] [added: (June 2021 - October 2023);] 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: 56:] [added: 57:] 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: 57:] [added: 58:] 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: 64:] [added: 65:] 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).

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 15][added: 16]

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 16][added: 17]

An aircraft crash or other serious accident involving our aircraft or those of our airline partners could expose [removed: Delta] [added: us] to significant liability.

The secure operation of our networks and systems, and those of our business partners and [added: third-party] 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 [added: third-party] service providers, including through fraud or other means of deception, or introduction of malicious code, such as 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 [added: third-party] service providers, potentially causing us to incur remedial, legal and other costs, which could be material.

Hardware or software we or our business partners or [added: third-party] service providers develop, acquire or use in connection with our systems may contain defects that could unexpectedly compromise information security.

In addition to continuously assessing risk and reviewing our procedures, processes and technologies, we continue to educate our [removed: people] [added: employees] about these risks and to monitor, review and update the process and control requirements we expect third parties and vendors to leverage and implement for the protection of information regarding our customers, employees or business partners that is in their care.

The compromise of our or our business partners’ or [added: third-party] service providers’ technology systems resulting in the loss, 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.

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 17][added: 18]

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

[removed: While we have in place initiatives to prevent disruptions and disaster recovery plans and continue to invest in improvements to these initiatives and plans, we have previously experienced infrastructure disruptions and these] [added: These] measures may not be adequate to prevent a future business disruption and any material adverse financial and reputational consequences to our business as recent outages of large cloud providers whom we rely on has shown.

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

[removed: In the future if any airline partner that may seek to restructure or recapitalize is unable to do so successfully or if] [added: If] our commercial arrangements with 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.

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 18][added: 19]

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

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

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

[removed: The disruption] [added: Unplanned disruptions] or [removed: interruption] [added: interruptions] of production at the refinery could have a negative impact on our ability to acquire jet fuel needed for our operations.

If the refinery were to experience an [added: unexpected] interruption in operations, disruptions in fuel supplies could have negative effects on our results of operations and financial condition.

For example, in 2023, the EU adopted legislation that will impose a SAF mandate on fuel supplied at EU airports.

The mandate requires that, of the jet fuel supplied in the EU, 2% must be SAF beginning in 2025, and the percentage increases incrementally over time to 70% in 2050.

This mandate is expected to increase the cost of SAF in the EU.

In 2023, airlines and airline associations, including Delta and KLM, challenged the initial phase of the plan.

The legal challenge resulted in a ruling against the industry, but an appeal is currently pending before the Supreme Court of the Netherlands.

The U.S., the European Commission and other governments also raised legal concerns about the plan with the Dutch government.

In November 2023, the Netherlands suspended the initial phase of the plan; however, the government continues to support a second-phase plan to reduce flights at Schiphol.

These volume requirements are below projected production of Transportation Fuels, which has resulted in a decrease in the price of RINs.

Mike Spanos, Age 59: Chief Operating Officer of Delta since June 2023; President and Chief Executive Officer of Six Flags Entertainment Corporation (November 2019 - November 2021); Chief Executive Officer, Asia, Middle East and North Africa of PepsiCo, Inc. (January 2018 - November 2019); previously served in a variety of management roles of increasing responsibility at PepsiCo, Inc. since 1993.

While we have in place initiatives to prevent disruptions and disaster recovery plans and continue to invest in improvements to these initiatives and plans, we have previously experienced infrastructure disruptions.

Fuel costs represented 21%, 24% and 20% of our operating expense in 2023, 2022 and 2021, respectively.

In 2023, our average fuel price per gallon was $2.82, ranging from a monthly low of approximately $2.41 per gallon to a monthly high of approximately $3.18 per gallon.

For example, the DOT's approval of and antitrust immunity grant for our joint cooperation agreement with Aeroméxico is subject to a pending renewal application with the DOT, which was tentatively dismissed pursuant to an Order to Show Cause issued by the DOT on January 26, 2024.

The existing immunity remains in effect pending final adjudication of the renewal application, the timing and outcome of which cannot be predicted at this time.

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

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

*GHG Emissions*.

Aviation industry GHG emissions, particularly carbon emissions, and their impact on climate change have become a focus in the international community and within the U.S. In 2016, the International Civil Aviation Organization ("ICAO") formally adopted a global, market-based emissions offset program known as the Carbon Offsetting and Reduction Scheme for International Aviation ("CORSIA").

This program establishes a goal for the aviation industry to achieve carbon-neutral growth in international aviation beginning in 2021.

Any growth above the baseline would need to be addressed using either eligible carbon offsets or a lower carbon fuel.

The baseline for establishing airlines’ 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, in June 2020 ICAO removed 2020 from the baseline calculation for the first phase of CORSIA, from 2021 to 2023.

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

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

Countries can voluntarily participate in the pilot and first phase, and the United States agreed to participate in these voluntary phases.

Participation in the second phase is mandatory for certain countries, including the United States.

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

Nonetheless, Delta has voluntarily submitted verified emissions reports on its annual international emissions.

Additionally, the EU requires its member states to implement regulations to include aviation in its Emissions Trading Scheme ("ETS").

Under these regulations, any airline with flights originating or landing in the European Economic Area ("EEA") is subject to the ETS and, beginning in 2012, was required to purchase emissions allowances if the airline exceeds the number of free allowances allocated to it under the ETS.

The scope of the ETS has been narrowed so that it currently applies only to flights within the EEA through 2023 to align with the pilot phase of CORSIA.

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.

As a result of the United Kingdom's ("UK") withdrawal from the EU, UK flights are no longer part of the EU ETS and are instead regulated under a separate UK ETS scheme.

UK ETS is applicable to UK domestic flights and flights from the UK to EEA countries.

In 2016, the 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.

The endangerment finding did not establish standards but triggered an obligation for the EPA to regulate GHG emissions from certain aircraft engines.

The final standards have been challenged by several states and environmental groups.

On November 15, 2021, the EPA announced that it would defend the current standards while simultaneously calling for ambitious new international CO2 standards at the ICAO negotiations.

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

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

Individual EU member states have been developing their own requirements, including for example, separate SAF mandates in France and Sweden in 2022.

In the United States, various exploratory discussions continue around approaches to address climate change, such as carbon pricing, without a clear legislative path forward.

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

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

Because Monroe is able to blend only a small amount of renewable fuels, it must purchase the majority of its RINs requirement in the secondary market.

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.

*Item 1A.

Risk Factors*

We have a significant amount of fixed obligations and incurred significant amounts of new debt in a short period in response to the COVID-19 pandemic.

Insufficient liquidity may have a material adverse effect on our financial condition and business.

We have a significant amount of existing fixed obligations, including aircraft lease and debt financings, leases of airport property and other facilities, and other material cash obligations.

In addition, we have substantial commitments for capital expenditures.

We had approximately $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, 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.

If our liquidity is materially diminished, we might not be able to timely pay our leases and debts or comply with certain financial covenants in our financing and credit card processing agreements or with other material provisions of our contractual obligations.

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

In August 2023, the Court denied the defendants' motions for summary judgment that had been pending for over two years.

In Fall 2023, we moved to certify the decision for an interlocutory appeal or for reconsideration, and briefing related to that motion is now complete.

Our summary judgment motion has been fully briefed and pending since May 2021.

For the fiscal year ended December 31, [removed: 2022][added: 2023]

[removed: ][added: ]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such [removed: reports)] [added: reports),] and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting [removed: company] [added: company,] or an emerging growth company.

See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting [removed: company"] [added: company,"] and "emerging growth company" in Rule 12b-2 of the Exchange Act.

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, [removed: 2022] [added: 2023] was approximately [removed: $18.6] [added: $30.4] billion.

On January 31, [removed: 2023,] [added: 2024,] there were outstanding [removed: 641,238,655] [added: 643,323,851] 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: 2022] [added: 2024] Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission.

| [Forward-Looking [removed: Statements](#ife9bd3040cbb49f2a063c487f9c9be18_10)] [added: Statements](#i01f2c2b1323549aeb42f57664a8b19a9_10)] | | | [removed: [1](#ife9bd3040cbb49f2a063c487f9c9be18_10)] [added: [1](#i01f2c2b1323549aeb42f57664a8b19a9_10)] | | |

| [ITEM 1. [removed: BUSINESS](#ife9bd3040cbb49f2a063c487f9c9be18_16)] [added: BUSINESS](#i01f2c2b1323549aeb42f57664a8b19a9_16)] | | | [removed: [2](#ife9bd3040cbb49f2a063c487f9c9be18_16)] [added: [2](#i01f2c2b1323549aeb42f57664a8b19a9_16)] | | |

| [ITEM 1A. RISK [removed: FACTORS](#ife9bd3040cbb49f2a063c487f9c9be18_40)] [added: FACTORS](#i01f2c2b1323549aeb42f57664a8b19a9_40)] | | | [removed: [16](#ife9bd3040cbb49f2a063c487f9c9be18_40)] [added: [17](#i01f2c2b1323549aeb42f57664a8b19a9_40)] | | |

| [Risk Factors Relating to [removed: Delta](#ife9bd3040cbb49f2a063c487f9c9be18_43)] [added: Delta](#i01f2c2b1323549aeb42f57664a8b19a9_43)] | | | [removed: [16](#ife9bd3040cbb49f2a063c487f9c9be18_43)] [added: [17](#i01f2c2b1323549aeb42f57664a8b19a9_43)] | | |

| [Risk Factors Relating to the Airline [removed: Industry](#ife9bd3040cbb49f2a063c487f9c9be18_46)] [added: Industry](#i01f2c2b1323549aeb42f57664a8b19a9_46)] | | | [removed: [23](#ife9bd3040cbb49f2a063c487f9c9be18_46)] [added: [23](#i01f2c2b1323549aeb42f57664a8b19a9_46)] | | |

| [ITEM 1B. UNRESOLVED STAFF [removed: COMMENTS](#ife9bd3040cbb49f2a063c487f9c9be18_49)] [added: COMMENTS](#i01f2c2b1323549aeb42f57664a8b19a9_49)] | | | [removed: [27](#ife9bd3040cbb49f2a063c487f9c9be18_49)] [added: [26](#i01f2c2b1323549aeb42f57664a8b19a9_49)] | | |

| [ITEM 2. [removed: PROPERTIES](#ife9bd3040cbb49f2a063c487f9c9be18_52)] [added: PROPERTIES](#i01f2c2b1323549aeb42f57664a8b19a9_52)] | | | [removed: [28](#ife9bd3040cbb49f2a063c487f9c9be18_52)] [added: [29](#i01f2c2b1323549aeb42f57664a8b19a9_52)] | | |

| [Flight [removed: Equipment](#ife9bd3040cbb49f2a063c487f9c9be18_55)] [added: Equipment](#i01f2c2b1323549aeb42f57664a8b19a9_55)] | | | [removed: [28](#ife9bd3040cbb49f2a063c487f9c9be18_55)] [added: [29](#i01f2c2b1323549aeb42f57664a8b19a9_55)] | | |

| [Ground [removed: Facilities](#ife9bd3040cbb49f2a063c487f9c9be18_58)] [added: Facilities](#i01f2c2b1323549aeb42f57664a8b19a9_58)] | | | [removed: [29](#ife9bd3040cbb49f2a063c487f9c9be18_58)] [added: [30](#i01f2c2b1323549aeb42f57664a8b19a9_58)] | | |

| [ITEM 3. LEGAL [removed: PROCEEDINGS](#ife9bd3040cbb49f2a063c487f9c9be18_61)] [added: PROCEEDINGS](#i01f2c2b1323549aeb42f57664a8b19a9_61)] | | | [removed: [30](#ife9bd3040cbb49f2a063c487f9c9be18_61)] [added: [31](#i01f2c2b1323549aeb42f57664a8b19a9_61)] | | |

| [ITEM 4. MINE SAFETY [removed: DISCLOSURES](#ife9bd3040cbb49f2a063c487f9c9be18_64)] [added: DISCLOSURES](#i01f2c2b1323549aeb42f57664a8b19a9_64)] | | | [removed: [30](#ife9bd3040cbb49f2a063c487f9c9be18_64)] [added: [31](#i01f2c2b1323549aeb42f57664a8b19a9_64)] | | |

| [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED [removed: STOCKHOLDER](#ife9bd3040cbb49f2a063c487f9c9be18_70)] [added: STOCKHOLDER](#i01f2c2b1323549aeb42f57664a8b19a9_70)] [MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#ife9bd3040cbb49f2a063c487f9c9be18_70)] [added: SECURITIES](#i01f2c2b1323549aeb42f57664a8b19a9_70)] | | | [removed: [31](#ife9bd3040cbb49f2a063c487f9c9be18_70)] [added: [32](#i01f2c2b1323549aeb42f57664a8b19a9_70)] | | |

| [ITEM 6. [removed: (RESERVED)](#ife9bd3040cbb49f2a063c487f9c9be18_82)] [added: (RESERVED)](#i01f2c2b1323549aeb42f57664a8b19a9_82)] | | | [removed: [32](#ife9bd3040cbb49f2a063c487f9c9be18_82)] [added: [33](#i01f2c2b1323549aeb42f57664a8b19a9_82)] | | |

| [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION [removed: AND](#ife9bd3040cbb49f2a063c487f9c9be18_85)] [added: AND](#i01f2c2b1323549aeb42f57664a8b19a9_85)] [RESULTS OF [removed: OPERATION](#ife9bd3040cbb49f2a063c487f9c9be18_85)S] [added: OPERATION](#i01f2c2b1323549aeb42f57664a8b19a9_85)S] | | | [removed: [33](#ife9bd3040cbb49f2a063c487f9c9be18_85)] [added: [34](#i01f2c2b1323549aeb42f57664a8b19a9_85)] | | |

| [Financial [removed: Highlights](#ife9bd3040cbb49f2a063c487f9c9be18_88)] [added: Highlights](#i01f2c2b1323549aeb42f57664a8b19a9_88)] | | | [removed: [33](#ife9bd3040cbb49f2a063c487f9c9be18_88)] [added: [34](#i01f2c2b1323549aeb42f57664a8b19a9_88)] | | |

| [Results of [removed: Operations](#ife9bd3040cbb49f2a063c487f9c9be18_91)] [added: Operations](#i01f2c2b1323549aeb42f57664a8b19a9_91)] | | | [removed: [35](#ife9bd3040cbb49f2a063c487f9c9be18_91)] [added: [35](#i01f2c2b1323549aeb42f57664a8b19a9_91)] | | |

| [Non-Operating [removed: Results](#ife9bd3040cbb49f2a063c487f9c9be18_109)] [added: Results](#i01f2c2b1323549aeb42f57664a8b19a9_109)] | | | [removed: [40](#ife9bd3040cbb49f2a063c487f9c9be18_109)] [added: [38](#i01f2c2b1323549aeb42f57664a8b19a9_109)] | | |

| [Income [removed: Taxes](#ife9bd3040cbb49f2a063c487f9c9be18_112)] [added: Taxes](#i01f2c2b1323549aeb42f57664a8b19a9_112)] | | | [removed: [41](#ife9bd3040cbb49f2a063c487f9c9be18_112)] [added: [39](#i01f2c2b1323549aeb42f57664a8b19a9_112)] | | |

| [Refinery [removed: Segment](#ife9bd3040cbb49f2a063c487f9c9be18_115)] [added: Segment](#i01f2c2b1323549aeb42f57664a8b19a9_115)] | | | [removed: [41](#ife9bd3040cbb49f2a063c487f9c9be18_115)] [added: [39](#i01f2c2b1323549aeb42f57664a8b19a9_115)] | | |

| [Financial Condition and [removed: Liquidity](#ife9bd3040cbb49f2a063c487f9c9be18_121)] [added: Liquidity](#i01f2c2b1323549aeb42f57664a8b19a9_121)] | | | [removed: [43](#ife9bd3040cbb49f2a063c487f9c9be18_121)] [added: [41](#i01f2c2b1323549aeb42f57664a8b19a9_121)] | | |

| [Critical Accounting [removed: Estimates](#ife9bd3040cbb49f2a063c487f9c9be18_127)] [added: Estimates](#i01f2c2b1323549aeb42f57664a8b19a9_127)] | | | [removed: [47](#ife9bd3040cbb49f2a063c487f9c9be18_127)] [added: [45](#i01f2c2b1323549aeb42f57664a8b19a9_127)] | | |

| [Supplemental [removed: Information](#ife9bd3040cbb49f2a063c487f9c9be18_130)] [added: Information](#i01f2c2b1323549aeb42f57664a8b19a9_130)] | | | [removed: [53](#ife9bd3040cbb49f2a063c487f9c9be18_130)] [added: [50](#i01f2c2b1323549aeb42f57664a8b19a9_130)] | | |

| [Glossary of Defined [removed: Terms](#ife9bd3040cbb49f2a063c487f9c9be18_133)] [added: Terms](#i01f2c2b1323549aeb42f57664a8b19a9_136)] | | | [removed: [56](#ife9bd3040cbb49f2a063c487f9c9be18_133)] [added: [53](#i01f2c2b1323549aeb42f57664a8b19a9_136)] | | |

| [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#ife9bd3040cbb49f2a063c487f9c9be18_136)] [added: RISK](#i01f2c2b1323549aeb42f57664a8b19a9_139)] | | | [removed: [57](#ife9bd3040cbb49f2a063c487f9c9be18_136)] [added: [54](#i01f2c2b1323549aeb42f57664a8b19a9_139)] | | |

| [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#ife9bd3040cbb49f2a063c487f9c9be18_139)] [added: DATA](#i01f2c2b1323549aeb42f57664a8b19a9_142)] | | | [removed: [58](#ife9bd3040cbb49f2a063c487f9c9be18_139)] [added: [55](#i01f2c2b1323549aeb42f57664a8b19a9_142)] | | |

| [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING [removed: AND](#ife9bd3040cbb49f2a063c487f9c9be18_235)] [added: AND](#i01f2c2b1323549aeb42f57664a8b19a9_241)] [FINANCIAL [removed: DISCLOSURE](#ife9bd3040cbb49f2a063c487f9c9be18_235)] [added: DISCLOSURE](#i01f2c2b1323549aeb42f57664a8b19a9_241)] | | | [removed: [103](#ife9bd3040cbb49f2a063c487f9c9be18_235)] [added: [98](#i01f2c2b1323549aeb42f57664a8b19a9_241)] | | |

| [ITEM 9A. CONTROLS AND [removed: PROCEDURES](#ife9bd3040cbb49f2a063c487f9c9be18_238)] [added: PROCEDURES](#i01f2c2b1323549aeb42f57664a8b19a9_244)] | | | [removed: [103](#ife9bd3040cbb49f2a063c487f9c9be18_238)] [added: [98](#i01f2c2b1323549aeb42f57664a8b19a9_244)] | | |

| [ITEM 9B. OTHER [removed: INFORMATION](#ife9bd3040cbb49f2a063c487f9c9be18_244)] [added: INFORMATION](#i01f2c2b1323549aeb42f57664a8b19a9_250)] | | | [removed: [105](#ife9bd3040cbb49f2a063c487f9c9be18_244)] [added: [100](#i01f2c2b1323549aeb42f57664a8b19a9_250)] | | |

| [ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT [removed: INSPECTIONS](#ife9bd3040cbb49f2a063c487f9c9be18_247)] [added: INSPECTIONS](#i01f2c2b1323549aeb42f57664a8b19a9_253)] | | | [removed: [105](#ife9bd3040cbb49f2a063c487f9c9be18_247)] [added: [100](#i01f2c2b1323549aeb42f57664a8b19a9_253)] | | |

| [ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE [removed: GOVERNANCE](#ife9bd3040cbb49f2a063c487f9c9be18_253)] [added: GOVERNANCE](#i01f2c2b1323549aeb42f57664a8b19a9_259)] | | | [removed: [105](#ife9bd3040cbb49f2a063c487f9c9be18_253)] [added: [100](#i01f2c2b1323549aeb42f57664a8b19a9_259)] | | |

| [ITEM 11. EXECUTIVE [removed: COMPENSATION](#ife9bd3040cbb49f2a063c487f9c9be18_256)] [added: COMPENSATION](#i01f2c2b1323549aeb42f57664a8b19a9_262)] | | | [removed: [105](#ife9bd3040cbb49f2a063c487f9c9be18_256)] [added: [100](#i01f2c2b1323549aeb42f57664a8b19a9_262)] | | |

| [ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT [removed: AND](#ife9bd3040cbb49f2a063c487f9c9be18_259)] [added: AND](#i01f2c2b1323549aeb42f57664a8b19a9_265)] [RELATED STOCKHOLDER [removed: MATTERS](#ife9bd3040cbb49f2a063c487f9c9be18_259)] [added: MATTERS](#i01f2c2b1323549aeb42f57664a8b19a9_265)] | | | [removed: [105](#ife9bd3040cbb49f2a063c487f9c9be18_259)] [added: [100](#i01f2c2b1323549aeb42f57664a8b19a9_265)] | | |

| [ITEM 1C. CYBERSECURITY](#i01f2c2b1323549aeb42f57664a8b19a9_2654) | | | [27](#i01f2c2b1323549aeb42f57664a8b19a9_2654) | | |

| [SIGNATURES](#i01f2c2b1323549aeb42f57664a8b19a9_283) | | | [105](#i01f2c2b1323549aeb42f57664a8b19a9_283) | | |

In 2023, we served over 190 million customers.

We believe that Delta's brand transcends the industry, powered by our people's outstanding work and passion for serving our customers.

Delta is the world's No. 11 Most Admired Company as ranked by *FORTUNE* and is ranked No. 13 in the U.S. on Glassdoor's Best Places to Work list.

In 2023, we focused on restoring our core hubs while solidifying positions in our coastal hubs.

Simultaneously, we continue on our multi-year journey of fleet simplification by replacing retiring aircraft with deliveries of next-generation aircraft.

In January 2024, we entered into a purchase agreement with Airbus for 20 A350-1000 aircraft, with an option to purchase an additional 20 widebody aircraft.

Deliveries of these aircraft are scheduled to begin in 2026.

- Ranked No. 12 in *TIME* magazine's World's Best Companies of 2023 based on revenue growth, employee satisfaction and the company's sustainability profile.

- Earned the No. 1 spot on The Points Guy's list of best U.S. Airlines for the fifth year in a row, and *USA Today* readers selected Delta as the Best Airline of 2023.

- Our other complementary portfolio businesses, such as our cargo business and our travel-adjacent services, which include trip insurance, car and hotel rentals.

In 2023, we grew our mix of premium seats, including the continued expansion of Delta Premium Select.

In 2023, remuneration from American Express totaled $6.8 billion, which we expect to increase by 10% in 2024 and grow to $10 billion over the long-term.

We currently own an approximately 10% equity stake in LATAM.

Each of our joint venture or joint cooperation agreements described above has been approved and granted antitrust immunity from the U.S. Department of Transportation ("DOT").

The grant of antitrust immunity for our joint cooperation agreement with Aeroméxico is subject to a pending renewal application with the DOT, which was tentatively dismissed pursuant to an Order to Show Cause issued by the DOT on January 26, 2024.

The existing immunity remains in effect pending final adjudication of the renewal application, the timing and outcome of which cannot be predicted at this time.

*Other International Carriers*.

These arrangements may include codesharing, reciprocal loyalty program benefits, shared or reciprocal access to passenger lounges, joint promotions, common use of airport gates and ticket counters, office co-location and other activities.

In 2023, cargo revenues decreased year over year, mostly resulting from lower yield due to decreased market demand and increased industry capacity.

Revenue allocated to Delta Vacations excludes flight revenue associated with vacation packages.

In 2023, we outlined our roadmap to a more sustainable future of travel that details our strategy for achieving net-zero greenhouse gas emissions from our airline operations by 2050.

As part of this roadmap, we announced short-, medium- and long-term milestones which will help us measure and report progress towards our ultimate net-zero goal.

In 2023, we made progress toward achievement of our goals across three key areas:

*What We Fly*

- Fleet renewal: We continue to make our existing fleet more efficient as older aircraft are retired.

Additions to our fleet since 2019, including 43 new aircraft delivered in 2023, are on average 28% more fuel efficient per seat mile than aircraft retired since 2019.

We also completed the retirement of the CRJ-200 fleet in 2023, our least fuel-efficient aircraft type, contributing to a fleet-wide fuel efficiency improvement of 5.5% compared to 2019.

- Pursuing future aviation technologies: Our sustainability strategy aims to introduce revolutionary aircraft into our fleet.

In 2023, we joined a coalition alongside Boeing and NASA to support the Sustainable Flight Demonstrator program.

We will serve as an adviser on a new aircraft design with a Transonic Truss-Braced Wing, which will be the first ever experimental aircraft focused on sustainability.

We sold two retired MD-90 aircraft to Boeing which will become the test planes for the program.

This innovative project supplements previously announced partnerships with Airbus on their hydrogen-powered aircraft research as well as our investment in Joby Aviation, which aims to pioneer home-to-airport transportation through electric, vertical takeoff and landing (eVTOL) technology.

- Fleet modification: Following the completed installation of split-scimitar winglets on the Boeing 737-900ER fleet, and outfitting all Boeing 737-800 and 737-900ER aircraft with lighter-weight, radial landing gear tires in 2022, we began installing split-scimitar winglets on the 737-800 fleet in 2023.

When complete, this enhancement is expected to drive approximately three million gallons of fuel savings annually.

Additionally, we completed modifications and certification test flights for a novel drag reduction system on the 737-800 fleet with Aero Design Labs, accelerating the certification of this innovation.

*How We Fly*

- Aircraft operations: Teams across Delta have worked together to make an impact through enhanced landing procedures, optimizations to flight routing and speed, and weight reduction initiatives.

These cross-divisional efforts coordinated through our Carbon Council have saved over 20 million gallons of jet fuel in 2022 and 2023.

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

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 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.

Glassdoor also recognized Delta as one of the Best Places to Work for the sixth year in a row, ranking No. 18 on the 2022 list of 100 large companies.

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

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

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 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.

- 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.

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

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

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

In 2022, the Delta American Express co-branded card grew by 1.2 million new cardholders, with remuneration from American Express surpassing $5.5 billion.

In March 2022, Grupo Aeroméxico emerged from its voluntary proceedings to reorganize under Chapter 11 of the United States bankruptcy code.

Upon completion of LATAM's restructuring process in November 2022, we acquired an approximately 10% equity stake in LATAM.

Virgin Atlantic is expected to join the SkyTeam alliance in early 2023.

In 2022, cargo revenues increased year over year as ongoing supply chain challenges, elevated market yields and increased capacity benefited our cargo operations.

Over the course of 2022, Delta made continued progress on our previously announced plan to invest $1.0 billion through the end of 2030 toward airline carbon neutrality and our climate goals for our airline operations that align with the applicable framework of the Science Based Targets initiative ("SBTi").

These climate goals also are helping inform the evolution of our foundational goals as we pursue a more sustainable airline.

In July 2022, SBTi validated our medium-term goal to reduce well-to-wake (lifecycle) scope 1 and 3 jet fuel greenhouse gas emissions by 45% per revenue tonne kilometer by 2035 from a 2019 base year.

SBTi also determined that our scope 1 and 2 target ambition is in line with the Paris Agreement's goal of limiting global warming to well below two degrees Celsius above pre-industrial levels.

We are awaiting validation of our long-term goal submission, aiming to achieve net zero greenhouse gas emissions across the airline operation and its value chain (scopes 1, 2 and 3) no later than 2050, as outlined by the SBTi Net Zero Standard Criteria.

Our path toward achievement of these targets and our overall environmental sustainability efforts will focus on two main pillars:

*Eliminate our Climate Impact from Flying*

- Fleet: Our fleet renewal efforts have the largest impact on reducing emissions and emissions intensity from our airline operation.

In 2022, Delta took delivery of 69 aircraft that were, on average, 25% more fuel efficient per seat mile than retiring aircraft, contributing to a fleet-wide fuel efficiency improvement of 4.1% compared to 2019.

We also announced a series of new aircraft purchase agreements, which will continue to improve fuel efficiency.

We expect our fleet renewal plans to continue to improve fuel efficiency in future periods.

- Fuel: Sustainable aviation fuel ("SAF") is central to reducing the lifecycle emissions from aviation fuel; however, it is not currently available at the scale or cost necessary to meet the industry’s needs.

We have established a goal of replacing 10% of our jet fuel consumption with SAF by the end of 2030, which we expect will require at least 400 million gallons of SAF annually.

At the end of 2022, Delta had agreements in place with multiple suppliers for an aggregate offtake of 200 million gallons of SAF annually by 2030, subject to third-party investment and timely facility development.

- Aircraft operations: Our Carbon Council is a cross-divisional senior leadership team that is focused on executing and tracking operational initiatives that reduce jet fuel consumption improving our emissions intensity.

This work includes those things we can improve on immediately within flight operations as well as collaborating with outside experts such as MIT to evaluate new technologies.

Our efforts also supplement industry-wide efforts to support the modernization of the air traffic control system, which would allow for more fuel-efficient and less carbon-intensive flying.

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 27][added: 26]

*Item [removed: 2.][added: 1C.]

Cybersecurity*

Properties*

We are committed to safeguarding our information and information systems from unauthorized access, use, disclosure, disruption, modification or destruction.

Our program to protect our information assets and the management of risks to those assets supports the confidentiality, integrity, and availability of the information necessary to our long-term business success.

Risk Management & Strategy

Our processes for assessing, identifying and managing material risks from cybersecurity threats is incorporated into our Enterprise Risk Management ("ERM") framework.

Our information security and ERM teams coordinate to regularly review and assess these risks using a wide range of tools and services.

Our cybersecurity program leverages components from several industry frameworks and generally recognized best practices, including International Organization for Standardization 27001 and National Institute of Standards and Technology ("NIST") standards, such as the NIST Cybersecurity Framework, which emphasizes identification, protection, detection, response and recovery.

We regularly assess our information security program capabilities and tools to improve reliability, enhance capabilities and scan our environment for vulnerabilities and weaknesses.

Our information technology teams are trained to remediate vulnerabilities identified within established timeframes and our information security team reports to management on a weekly basis regarding the security risk posture of our information technology assets.

We have established a dedicated Information Technology Risk team tasked with the goal of ensuring that risk remediation activities are carried out consistently and that risk remediation controls are operating as intended and within established thresholds.

Enterprise-wide training is a vital component to reducing risk and protecting customers, employees and company information.

We expect all Delta employees to adhere to information security and privacy policies as they handle corporate and customer information in their daily jobs.

As a result, we require all employees and contractors with access to Delta’s information to complete annual training, which is updated as new technology, security and privacy issues emerge.

All new employees are required to complete training within 30 days of hire.

We also regularly conduct other training and employee education activities, including through awareness programs and campaigns.

We engage with assessors, consultants, auditors and other third parties, including by regularly having a third party review our overall cybersecurity program to help identify areas for continued focus, improvement and/or compliance.

In connection with certain regulatory requirements, we are required to engage third parties to assess our cybersecurity controls.

Our cybersecurity program is subject to TSA requirements applicable to certain TSA-regulated airport and aircraft operators, including the requirement to develop a TSA-approved implementation plan describing measures we are taking to improve cybersecurity and to assess the effectiveness of those measures on an ongoing basis.

Our processes also address cybersecurity threat risks associated with our use of third-party service providers, including those who have access to our data or our systems.

Third-party risks are included within our risk assessment of vendors, as well as our cybersecurity-specific risk identification program.

In addition, cybersecurity considerations affect the selection and oversight of third-party service providers.

We perform diligence on third parties, particularly those that have access to our systems, data or facilities that house such systems or data, and continually monitor cybersecurity threat risks identified through such diligence.

Additionally, we generally require those third parties that could introduce significant cybersecurity risk to us to agree by contract to manage their cybersecurity risks in specified ways, and to agree to be subject to cybersecurity audits, which we conduct as appropriate.

We regularly test our incident response processes through table-top exercises to ensure they continue to be effective as our business and the cybersecurity threat landscape evolve.

Our incident response processes are designed to guide the actions we take to prepare for, detect, respond to and recover from cybersecurity incidents.

In the last three fiscal years, we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial.

We describe whether and how risks related to cybersecurity threats are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, in Item 1A of this Annual Report on Form 10-K, which disclosures are incorporated by reference in this Item 1C.

Delta Air Lines, Inc. | 2023 Form 10-K 27

*Item 1C.

Cybersecurity*

Governance

Our Board is engaged in the oversight of cybersecurity threat risk management.

As reflected in the Audit Committee’s charter, the Board has specifically delegated responsibility for oversight of cybersecurity matters to the Audit Committee as part of its review of our ERM framework.

The Audit Committee regularly receives updates on cybersecurity risks and the security and operations of our information technology systems from our Chief Information Officer and our Chief Information Security Officer.

In 2023, the Audit Committee received briefings on information security matters at all of its regular meetings.

In addition, our Chief Information Officer, our Chief Information Security Officer, other members of our information technology leadership team and an outside legal expert on cybersecurity matters held a special session with all members of our Board of Directors to provide an overview of the information security environment.

In addition to information provided in these meetings, members of our Board also have access to internal and external education on cybersecurity risks.

The Board also benefits from the expertise of one of our members who has significant experience in management of cybersecurity companies.

Our information security team is led by our Senior Vice President & Chief Information Security Officer, who reports directly to our Executive Vice President - Chief Information Officer.

Leadership of the information security team has extensive dedicated cybersecurity experience.

Additionally, the collective leadership team holds 21 certifications in cybersecurity and related fields, including Certified Information Systems Security Professional, Certified Information Security Manager, and Certified Information Systems Auditor.

Our operating aircraft fleet, purchase commitments and options at December 31, [removed: 2022] [added: 2023] are summarized in the following table.

| A220-100 | | | 41 | | | 4 | | | — | | | | | | 45 | | | [removed: 3.0] [added: 4.0] | | | | | | — | | | — | | |

| A220-300 | | | [removed: 14 | | | — | | | —] [added: 7] | | | [added: 8] | | | 14 | | | [removed: 1.5 | | | | | | 60] [added: 48] | | | [removed: 26] [added: 77] | | |

| A319-100 | | | 57 | | | — | | | — | | | | | | 57 | | | [removed: 20.9] [added: 21.8] | | | | | | — | | | — | | |

| A320-200 | | | [removed: 61] [added: 60] | | | — | | | — | | | | | | [removed: 61] [added: 60] | | | [removed: 27.3] [added: 28.2] | | | | | | — | | | — | | |

| A321-200 | | | [removed: 69] [added: 63] | | | 22 | | | [removed: 36] [added: 42] | | | | | | 127 | | | [removed: 4.0] [added: 5.0] | | | | | | — | | | — | | |

| A321-200neo | | | [removed: 21 | | | — | | | — | | | | | | 21] [added: 25] | | | [removed: 0.3] [added: 22] | | | [added: 24] | | | [removed: 134] [added: 36] | | | [removed: 70] [added: 107] | | |

| A330-200 | | | 11 | | | — | | | — | | | | | | 11 | | | [removed: 17.8] [added: 18.8] | | | | | | — | | | — | | |

| A330-300 | | | 28 | | | — | | | 3 | | | | | | 31 | | | [removed: 14.0] [added: 14.9] | | | | | | — | | | — | | |

| A330-900neo | | | [removed: 12 | | | 3] [added: 7] | | | 5 | | | [removed: | | | 20 | | | 1.6 | | |] [added: —] | | | [removed: 18] [added: —] | | | [removed: —] [added: 12] | | |

| A350-900 | | | [removed: 17 | | | — | | | 11 | | |] [added: 7] | | | [removed: 28] [added: 6] | | | [removed: 4.1] [added: 3] | | | [added: —] | | | 16 | | | [removed: — | | |]

| B-717-200 | | | 10 | | | [removed: 51] [added: 70] | | | [removed: 4] [added: —] | | | | | | [removed: 65] [added: 80] | | | [removed: 21.5] [added: 22.3] | | | | | | — | | | — | | |

| B-737-800 | | | 73 | | | 4 | | | — | | | | | | 77 | | | [removed: 21.3] [added: 22.3] | | | | | | — | | | — | | |

| B-737-900ER | | | [removed: 112] [added: 114] | | | [removed: 2] [added: —] | | | 49 | | | | | | 163 | | | [removed: 7.0] [added: 8.0] | | | | | | — | | | — | | |

| B-757-200 | | | 100 | | | — | | | — | | | | | | 100 | | | [removed: 25.4] [added: 26.4] | | | | | | — | | | — | | |

| B-757-300 | | | 16 | | | — | | | — | | | | | | 16 | | | [removed: 19.9] [added: 20.9] | | | | | | — | | | — | | |

| B-767-300ER | | | [removed: 45] [added: 44] | | | — | | | — | | | | | | [removed: 45] [added: 44] | | | [removed: 26.8] [added: 27.7] | | | | | | — | | | — | | |

| B-767-400ER | | | 21 | | | — | | | — | | | | | | 21 | | | [removed: 22.0] [added: 23.0] | | | | | | — | | | — | | |

[removed: Excludes] [added: (1)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: 2022.][added: 2023.]

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

| | | | Fleet [removed: Type(1) | | |] [added: Type(1)(2)] | | | | | | | | | | | | | | |

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

| Endeavor Air, Inc. [removed: (2) | | | 26] [added: (3)] | | | [removed: 18] [added: 9] | | | [removed: 123] [added: 118] | | | — | | | — | | | [removed: 167] [added: 127] | | |

| SkyWest Airlines, Inc. | | | [removed: — | | | 6] [added: 8] | | | 38 | | | — | | | [removed: 84] [added: 85] | | | [removed: 128] [added: 131] | | |

| Republic Airways, Inc. | | | — | | | — | | | [removed: — | | |] 11 | | | 46 | | | 57 | | |

[removed: We] [added: (1)We] own [removed: 231] [added: 190] and have operating leases for three of these regional aircraft.

[removed: (2)Endeavor] [added: (3)Endeavor] Air, Inc. is a wholly owned subsidiary of Delta.

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 28][added: 29]

Our contractual purchase commitments for additional aircraft as of December 31, [removed: 2022] [added: 2023] are detailed in the following table:

| Aircraft Purchase Commitments(1) | | | [removed: 2023] [added: 2024] | | | [removed: 2024] [added: 2025] | | | [removed: 2025] [added: 2026] | | | After [removed: 2025] [added: 2026] | | | Total | | |

| A220-300 | | | [removed: 9] [added: 23] | | | [removed: 15] [added: —] | | | [removed: 12] [added: —] | | | [removed: 24] | | | [removed: 60] [added: 23] | | | [added: 1.6 | | | | | | 77 | | | — | | |]

| A321-200neo | | | [removed: 28] [added: 48] | | | [removed: 36] [added: —] | | | [removed: 25] [added: —] | | | [removed: 45] | | | [removed: 134] [added: 48] | | | [added: 0.8 | | | | | | 107 | | | 70 | | |]

| A330-900neo | | | [removed: 6] [added: 19] | | | [removed: 9] [added: 3] | | | [removed: 3] [added: 5] | | | [removed: —] | | | [removed: 18] [added: 27] | | | [added: 2.0 | | | | | | 12 | | | — | | |]

| A350-900 | | | [added: 17 | | |] — | | | [removed: 7] [added: 11] | | | [removed: 6] | | | [removed: 3] [added: 28] | | | [added: 5.1 | | | | | |] 16 | | | [added: — | | |]

| B-737-10 | | | — | | | [removed: —] [added: 20] | | | 20 | | | [removed: 80] [added: 60] | | | 100 | | |

(1)The timing of these commitments is based on our contractual agreements with the aircraft manufacturers and [removed: may be subject to change based on modifications] [added: remains uncertain due] to [removed: those agreements or changes in delivery schedules.][added: supply chain, manufacturing and regulatory constraints.]

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 29][added: 30]

| Total | | | 745 | | | 103 | | | 110 | | | | | | 958 | | | 14.8 | | | | | | 312 | | | 100 | | |

In 2023, we retired all remaining CRJ-200 aircraft from service.

| Total | | | 17 | | | 156 | | | 11 | | | 131 | | | 315 | | |

(2)Excluded from the total operating count above are nine CRJ-700 and five CRJ-900 which are owned and temporarily parked as of December 31, 2023.

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

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

| Total | | | 46 | | | 61 | | | 61 | | | 144 | | | 312 | | |

In January 2024, we entered into a purchase agreement with Airbus for 20 A350-1000 aircraft, with an option to purchase an additional 20 widebody aircraft.

Deliveries of these aircraft are scheduled to begin in 2026.

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

(1)Includes both active and temporarily parked aircraft.

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

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

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

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

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 30][added: 31]

As of January 31, [removed: 2023,] [added: 2024,] there were approximately [removed: 2,200] [added: 2,100] holders of record of our common stock.

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

The following graph compares the cumulative total returns during the period from December 31, [removed: 2017] [added: 2018] to December 31, [removed: 2022] [added: 2023] 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: 2017] [added: 2018] in each of our common stock and the indices and assumes that all dividends were reinvested.

[removed: ][added: ]

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 31][added: 32]

After suspending dividends in March 2020, our Board of Directors re-instated a quarterly dividend program in 2023 with $0.10 per share dividend payments in both the September and December quarters.

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

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

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

The following table presents information with respect to purchases of common stock we made during the December [removed: 2022] [added: 2023] quarter.

| Shares purchased / withheld from employee awards during the December [removed: 2022] [added: 2023] quarter | | | | | | | | | | | | | | | | | |

| October 2023 | | | 8,141 | | | $ | 37.56 | | 8,141 | | | $ | — | | | | |

| November 2023 | | | 3,751 | | | $ | 34.89 | | 3,751 | | | $ | — | | | | |

| December 2023 | | | 1,340 | | | $ | 39.94 | | 1,340 | | | $ | — | | | | |

| Total | | | 13,232 | | | | | | 13,232 | | | | | | | | |

| 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 | | | | | | | | |

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 32][added: 33]

This section of Form [removed: 10-K, however,] [added: 10-K] does not address certain items regarding the year ended December 31, [removed: 2020.][added: 2021.]

Discussion and analysis of [removed: 2020] [added: 2021] and year-to-year comparisons between [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] 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: 2021.][added: 2022.]

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

| (in millions) [removed: | | | 2022 | | |] [added: (1)] | | | [removed: 2021] [added: 2023] | | | [added: 2022] | | | [removed: 2019] | | | | | | | | |

| Total operating revenue | | | $ | [removed: 50,582 | | |] [added: 58,048] | | $ | [removed: 29,899] [added: 50,582] | | | | | $ | [removed: 47,007 | | 69 |] [added: 7,466] | [removed: %] | [removed: 8] [added: 15] | | % |

[removed: 2022] [added: 2023] Financial Overview

Our [removed: 2022] [added: 2023] operating income was [removed: $3.7] [added: $5.5] billion, an improvement of [removed: $1.8] [added: $1.9] billion compared to [removed: 2021,] [added: 2022,] while operating income, adjusted (a non-GAAP financial measure) which excludes [removed: restructuring charges] [added: one-time pilot agreement expenses] and other items was [removed: $3.6] [added: $6.3] billion, an increase of [removed: $6.1] [added: $2.8] billion compared to [removed: 2021.][added: 2022.]

[removed: Operating income,] [added: Total operating expense,] adjusted (a non-GAAP financial measure) [removed: decreased $3.1 billion] [added: increased $6.3 billion, or 15%,] compared to [removed: 2019.][added: 2022.]

*Operating Expense.* Total operating expense increased [removed: $18.9] [added: $5.6] billion, or [removed: 67%,] [added: 12%,] compared to [removed: 2021,] [added: 2022,] primarily resulting from higher [removed: fuel costs, due to both an increase in fuel price and] [added: employee related costs from] increased [removed: consumption as capacity was restored, as well as higher salaries] [added: wages] and [added: profit sharing, pilot agreement and] related [removed: costs,] [added: expenses and] higher volume-related expenses associated with the [removed: increase in capacity and demand and an] [added: 17%] increase in [added: capacity, partially offset by lower] expenses related to refinery sales to third parties, reflected in ancillary business and refinery expense.

[removed: Total operating expense, adjusted (a] [added: Non-fuel unit costs ("CASM-Ex", a] non-GAAP financial [removed: measure)] [added: measure),] which excludes [added: fuel,] expenses related to refinery sales to third parties, [removed: contra-expense from the recognition of PSP grants in 2021] and other items, increased [removed: $12.8 billion, or 44%, compared] [added: 2.3%] to [removed: 2021.][added: 13.17 cents.]

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 33][added: 34]

Total [removed: operating expense,] [added: revenue,] adjusted (a non-GAAP financial measure) increased [removed: $2.0] [added: in 2023 by $9.1] billion, or [removed: 5%] [added: 20%,] compared to [removed: 2019.][added: 2022.]

*Non-Operating Results.* Total non-operating [removed: expense] [added: income] was [added: $87 million in 2023 compared to total non-operating expense of] $1.7 billion in [removed: 2022, $259 million higher than 2021] [added: 2022] primarily due to [removed: higher] mark-to-market [removed: losses] [added: gains] on certain of our equity [removed: investments, partially offset by reduced losses on our equity method investments,] [added: investments and] lower interest expense as a result of our debt reduction [removed: initiatives and lower losses on extinguishment of debt.][added: initiatives, partially offset by increased pension related expenses.]

After adjusting for [removed: strategic investments] [added: the pilot agreement payment] and certain other activities, these results generated [removed: $244 million] [added: $2.0 billion] of free cash flow (a non-GAAP financial measure) in [removed: 2022.][added: 2023.]

Also, during [removed: 2022] [added: 2023] we had cash outflows of approximately [removed: $4.5] [added: $4.1] billion related to repayments of our debt and finance leases, including approximately [removed: $2.3] [added: $2.0] billion for early repayments and the remainder from scheduled maturities.

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, [removed: 2022] [added: 2023] was [removed: $9.4] [added: $6.8] billion.

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

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 34][added: 35]

| (in millions) [removed: (1)] | | | [removed: 2022] [added: 2023] | | | [removed: 2021] [added: 2022] | | | | | | | | | | | |

| Ticket - Main cabin | | | $ | [removed: 20,396] [added: 24,477] | | $ | [removed: 11,393] [added: 20,396] | | | | | $ | [removed: 9,003] [added: 4,081] | | [removed: 79] [added: 20] | | % |

| Ticket - Premium products | | | [removed: 15,230] [added: 19,119] | | | [removed: 7,946] [added: 15,230] | | | | | | [removed: 7,284] [added: 3,889] | | | [removed: 92] [added: 26] | | % |

| Loyalty travel awards | | | [removed: 2,898] [added: 3,462] | | | [removed: 1,786] [added: 2,898] | | | | | | [removed: 1,112] [added: 564] | | | [removed: 62] [added: 19] | | % |

| Travel-related services | | | [removed: 1,694] [added: 1,851] | | | [removed: 1,394] [added: 1,694] | | | | | | [removed: 300] [added: 157] | | | [removed: 22] [added: 9] | | % |

| Total passenger revenue | | | $ | [removed: 40,218] [added: 48,909] | | $ | [removed: 22,519] [added: 40,218] | | | | | $ | [removed: 17,699] [added: 8,691] | | [removed: 79] [added: 22] | | % |

| Cargo | | | [removed: 1,050] [added: 723] | | | [removed: 1,032] [added: 1,050] | | | | | | [removed: 18] [added: (327)] | | | [removed: 2] [added: (31)] | | % |

| TRASM (cents) | | | [removed: 21.69] [added: 21.34] | | ¢ | [removed: 15.37] [added: 21.69] | | ¢ | | | | [removed: 6.32] [added: (0.35)] | | ¢ | [removed: 41] [added: (2)] | | % |

| Third-party refinery sales (2) | | | [removed: (2.13)] [added: (1.24)] | | | [removed: (1.66)] [added: (2.13)] | | | | | | [removed: (0.47)] [added: 0.89] | | | [removed: 28] [added: (42)] | | % |

| TRASM, adjusted (cents) | | | [removed: 19.55] [added: 20.10] | | ¢ | [removed: 13.71] [added: 19.55] | | ¢ | | | | [removed: 5.84] [added: 0.55] | | ¢ | [removed: 43] [added: 3] | | % |

| (in millions) | | | Year Ended December 31, [removed: 2022] [added: 2023] | | | Passenger Revenue | | | RPMs (Traffic) | | | ASMs (Capacity) | | | Passenger Mile Yield | | | PRASM | | | Load Factor | | | | | |

| Latin America | | | [removed: 2,889] [added: 3,798] | | | [removed: 54] [added: 31] | | % | [removed: 24] [added: 22] | | % | [removed: (5)] [added: 16] | | % | [removed: 25] [added: 8] | | % | [removed: 62] [added: 13] | | % | [removed: 19] [added: 4] | | | pts | | |

| Total passenger revenue | | | $ | [removed: 40,218] [added: 48,909] | | [removed: 79] [added: 22] | | % | [removed: 45] [added: 19] | | % | [removed: 20] [added: 17] | | % | [removed: 23] [added: 2] | | % | [removed: 49] [added: 4] | | % | [removed: 15] [added: 3] | | | pts | | |

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 [removed: premium product] yield [added: in premium products] compared to main cabin, as we see more consumers choosing these premium offerings.

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 35][added: 36]

[removed: International passenger] [added: Passenger] revenue [removed: for the year ended December 31, 2022] increased [removed: 147% with capacity up 47% compared to the year ended December 31, 2021,] [added: in each geographic region] with the Atlantic region experiencing the [removed: most significant] [added: largest absolute] improvement, as travel to many European destinations [removed: resumed or] increased.

This has been led by demand for [added: travel to] leisure destinations [removed: such as Italy, Spain and Greece] [added: in Europe] and [removed: improving business demand.][added: premium products.]

Latin America region revenue [removed: was also near pre-pandemic levels] [added: increased] during [added: 2023 compared to] 2022, due to [removed: continued] strong demand for leisure destinations in [removed: Mexico,] [added: South America and] the Caribbean [removed: and Central America.][added: on a 16% increase in capacity.]

| Loyalty program | | | [removed: 2,597] [added: 3,093] | | | [removed: 1,770] [added: 2,597] | | | | | | [removed: 827] [added: 496] | | | [removed: 47] [added: 19] | | % |

| Ancillary businesses | | | [removed: 846] [added: 840] | | | [removed: 793] [added: 846] | | | | | | [removed: 53] [added: (6)] | | | [removed: 7] [added: (1)] | | % |

Operating income and operating income, adjusted increased primarily from increases in revenue as described below.

*Revenue.* Compared to 2022, our 2023 operating revenue increased $7.5 billion, or 15%, primarily due to a 17% increase in capacity driven by an increase in demand for international travel and continuing strength in demand for domestic travel and premium products.

Adjustments were primarily to exclude revenue related to refinery sales to third parties.

Adjustments were primarily to exclude expenses related to refinery sales to third parties and the pilot agreement and related expenses.

Our total operating cost per available seat mile ("CASM") decreased 4% compared to 2022 to 19.31 cents, primarily due to a 17% increase in capacity, as well as lower fuel expense and lower expenses related to refinery sales to third parties.

*Cash Flow.* During 2023, operating activities provided cash flows of $6.5 billion, primarily from ticket sales.

Investing activities resulted in net cash outflows of approximately $3.1 billion, primarily for $5.3 billion of capital expenditures, partially offset by $2.2 billion of net redemptions of short-term investments.

| Other | | | 8,416 | | | 9,314 | | | | | | (898) | | | (10) | | % |

Our operating revenue increased $7.5 billion, or 15%, compared to 2022 due primarily to a 17% increase in capacity driven by an increase in demand for international travel and continuing strength in demand for domestic travel, with growth in revenue from premium products outpacing main cabin.

This increase was partially offset by lower third-party refinery sales recorded in other revenue.

Total revenue per available seat mile ("TRASM") decreased 2% in large part as a result of the decline in third-party refinery sales.

| Domestic | | | $ | 33,968 | | 12 | | % | 10 | | % | 10 | | % | 2 | | % | 2 | | % | 1 | | | pt | | |

| Atlantic | | | 9,057 | | | 49 | | % | 34 | | % | 30 | | % | 11 | | % | 15 | | % | 3 | | | pts | | |

| Pacific | | | 2,086 | | | 101 | | % | 104 | | % | 75 | | % | (2) | | % | 15 | | % | 11 | | | pts | | |

Domestic passenger unit revenue ("PRASM") for 2023 increased 2% compared to 2022 due to a 12% increase in revenue on a 10% increase in capacity and a slight increase in load factor.

Domestic revenue in 2023 was above 2022 levels as we experienced strong revenue results across the domestic network, with coastal hub markets such as New York and Boston improving significantly compared to the prior year, domestic business travel revenue improving and a 10% increase in domestic capacity compared to 2022.

In 2024, we expect moderate capacity growth of single digits.

International passenger revenue for 2023 increased 49% with capacity up 31% compared to 2022.

Consumers showed a strong desire for transatlantic travel, driving higher revenue and passenger unit revenue during 2023 on 30% capacity growth compared to 2022.

In addition, during the first year of our joint venture with LATAM, we have streamlined travel between North and South America while expanding connections in each of our key hub airports.

The Pacific region benefited from improved demand for travel to the region, particularly to Japan, on 75% increased capacity following the lifting of pandemic-related travel restrictions and the performance of our joint venture with Korean Air.

| Refinery | | | $ | 3,379 | | $ | 4,977 | | | | | $ | (1,598) | | (32) | | % |

| Miscellaneous | | | 1,104 | | | 894 | | | | | | 210 | | | 23 | | % |

The decrease in third-party refinery sales resulted from lower pricing and a turnaround which was completed between September and November 2023.

The increase in miscellaneous is primarily due to increased revenue from Delta Sky Club access.

*Item 7.

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

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

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

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

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

| Total operating expense | | | 46,921 | | | | | | 28,013 | | | | | | 40,389 | | | 67 | | % | 16 | | % |

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

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

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.

MD&A - Financial Highlights*

Our total operating cost per available seat mile ("CASM") increased 40% to 20.12 cents compared to 2021, primarily due to the higher costs discussed above.

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.

Total non-operating expense was $1.3 billion higher than 2019, primarily due to higher 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.

*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.

MD&A - Results of Operations*

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

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

| | | | Year Ended December 31, | | | | | | Increase (Decrease) | | | % Increase (Decrease) | | | | | |

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

| Total operating revenue | | | $ | 50,582 | | $ | 29,899 | | | | | $ | 20,683 | | 69 | | % |

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

The increase in operating revenue, on a 20% increase in system capacity, generated a 41% increase in total revenue per available seat mile ("TRASM") and a 43% increase in TRASM, adjusted (a non-GAAP financial measure) compared to 2021.

| | | | | | | Increase (Decrease) vs. Year Ended December 31, 2021 | | | | | | | | | | | | | | | | | | | | |

| Domestic | | | $ | 30,197 | | 64 | | % | 27 | | % | 10 | | % | 29 | | % | 48 | | % | 11 | | | pts | | |

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

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

Domestic passenger unit revenue ("PRASM") for the year ended December 31, 2022 increased 48% compared to the year ended December 31, 2021 as a result of stronger demand and higher levels of traffic due to the ongoing recovery from the COVID-19 pandemic throughout 2022.

| [Report of Independent Registered Public Accounting [removed: Firm](#ife9bd3040cbb49f2a063c487f9c9be18_142)] [added: Firm](#i01f2c2b1323549aeb42f57664a8b19a9_145)] (PCAOB ID: 42) | | | [removed: [59](#ife9bd3040cbb49f2a063c487f9c9be18_142)] [added: [56](#i01f2c2b1323549aeb42f57664a8b19a9_145)] | | |

| [Consolidated Balance Sheets - December 31, [removed: 20](#ife9bd3040cbb49f2a063c487f9c9be18_148)[2](#ife9bd3040cbb49f2a063c487f9c9be18_148)[2](#ife9bd3040cbb49f2a063c487f9c9be18_148)] [added: 20](#i01f2c2b1323549aeb42f57664a8b19a9_151)[2](#i01f2c2b1323549aeb42f57664a8b19a9_151)[3](#i01f2c2b1323549aeb42f57664a8b19a9_151)] [and [removed: 20](#ife9bd3040cbb49f2a063c487f9c9be18_148)21] [added: 20](#i01f2c2b1323549aeb42f57664a8b19a9_151)22] | | | [removed: [62](#ife9bd3040cbb49f2a063c487f9c9be18_148)] [added: [58](#i01f2c2b1323549aeb42f57664a8b19a9_151)] | | |

| [Consolidated Statements of Operations for the years ended December 31, [removed: 20](#ife9bd3040cbb49f2a063c487f9c9be18_151)[2](#ife9bd3040cbb49f2a063c487f9c9be18_151)[2](#ife9bd3040cbb49f2a063c487f9c9be18_151)[, 20](#ife9bd3040cbb49f2a063c487f9c9be18_151)[2](#ife9bd3040cbb49f2a063c487f9c9be18_151)[1](#ife9bd3040cbb49f2a063c487f9c9be18_151)] [added: 20](#i01f2c2b1323549aeb42f57664a8b19a9_154)[2](#i01f2c2b1323549aeb42f57664a8b19a9_154)[3](#i01f2c2b1323549aeb42f57664a8b19a9_154)[, 20](#i01f2c2b1323549aeb42f57664a8b19a9_154)[2](#i01f2c2b1323549aeb42f57664a8b19a9_154)[2](#i01f2c2b1323549aeb42f57664a8b19a9_154)] [and [removed: 20](#ife9bd3040cbb49f2a063c487f9c9be18_151)20] [added: 20](#i01f2c2b1323549aeb42f57664a8b19a9_154)21] | | | [removed: [63](#ife9bd3040cbb49f2a063c487f9c9be18_151)] [added: [59](#i01f2c2b1323549aeb42f57664a8b19a9_154)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#ife9bd3040cbb49f2a063c487f9c9be18_154)[/(Loss)](#ife9bd3040cbb49f2a063c487f9c9be18_154)] [added: Income](#i01f2c2b1323549aeb42f57664a8b19a9_157)] [for the years ended December 31, [removed: 20](#ife9bd3040cbb49f2a063c487f9c9be18_154)[2](#ife9bd3040cbb49f2a063c487f9c9be18_154)[2](#ife9bd3040cbb49f2a063c487f9c9be18_154)[, 20](#ife9bd3040cbb49f2a063c487f9c9be18_154)[2](#ife9bd3040cbb49f2a063c487f9c9be18_154)[1](#ife9bd3040cbb49f2a063c487f9c9be18_154)] [added: 20](#i01f2c2b1323549aeb42f57664a8b19a9_157)[2](#i01f2c2b1323549aeb42f57664a8b19a9_157)[3](#i01f2c2b1323549aeb42f57664a8b19a9_157)[, 20](#i01f2c2b1323549aeb42f57664a8b19a9_157)[2](#i01f2c2b1323549aeb42f57664a8b19a9_157)[2](#i01f2c2b1323549aeb42f57664a8b19a9_157)] [and [removed: 20](#ife9bd3040cbb49f2a063c487f9c9be18_154)20] [added: 20](#i01f2c2b1323549aeb42f57664a8b19a9_157)21] | | | [removed: [64](#ife9bd3040cbb49f2a063c487f9c9be18_154)] [added: [60](#i01f2c2b1323549aeb42f57664a8b19a9_157)] | | |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 20](#ife9bd3040cbb49f2a063c487f9c9be18_157)[2](#ife9bd3040cbb49f2a063c487f9c9be18_157)[2](#ife9bd3040cbb49f2a063c487f9c9be18_157)[, 20](#ife9bd3040cbb49f2a063c487f9c9be18_157)[2](#ife9bd3040cbb49f2a063c487f9c9be18_157)[1](#ife9bd3040cbb49f2a063c487f9c9be18_157)] [added: 20](#i01f2c2b1323549aeb42f57664a8b19a9_160)[2](#i01f2c2b1323549aeb42f57664a8b19a9_160)[3](#i01f2c2b1323549aeb42f57664a8b19a9_160)[, 20](#i01f2c2b1323549aeb42f57664a8b19a9_160)[2](#i01f2c2b1323549aeb42f57664a8b19a9_160)[2](#i01f2c2b1323549aeb42f57664a8b19a9_160)] [and [removed: 20](#ife9bd3040cbb49f2a063c487f9c9be18_157)20] [added: 20](#i01f2c2b1323549aeb42f57664a8b19a9_160)21] | | | [removed: [65](#ife9bd3040cbb49f2a063c487f9c9be18_157)] [added: [61](#i01f2c2b1323549aeb42f57664a8b19a9_160)] | | |

| [Consolidated Statements of Stockholders' Equity for the years ended December 31, [removed: 20](#ife9bd3040cbb49f2a063c487f9c9be18_160)[2](#ife9bd3040cbb49f2a063c487f9c9be18_160)[2](#ife9bd3040cbb49f2a063c487f9c9be18_160)[, 20](#ife9bd3040cbb49f2a063c487f9c9be18_160)[2](#ife9bd3040cbb49f2a063c487f9c9be18_160)[1](#ife9bd3040cbb49f2a063c487f9c9be18_160)] [added: 20](#i01f2c2b1323549aeb42f57664a8b19a9_163)[2](#i01f2c2b1323549aeb42f57664a8b19a9_163)[3](#i01f2c2b1323549aeb42f57664a8b19a9_163)[, 20](#i01f2c2b1323549aeb42f57664a8b19a9_163)[2](#i01f2c2b1323549aeb42f57664a8b19a9_163)[2](#i01f2c2b1323549aeb42f57664a8b19a9_163)] [and [removed: 20](#ife9bd3040cbb49f2a063c487f9c9be18_160)20] [added: 20](#i01f2c2b1323549aeb42f57664a8b19a9_163)21] | | | [removed: [66](#ife9bd3040cbb49f2a063c487f9c9be18_160)] [added: [62](#i01f2c2b1323549aeb42f57664a8b19a9_163)] | | |

| [Notes to the Consolidated Financial [removed: Statements](#ife9bd3040cbb49f2a063c487f9c9be18_163)] [added: Statements](#i01f2c2b1323549aeb42f57664a8b19a9_166)] | | | [removed: [67](#ife9bd3040cbb49f2a063c487f9c9be18_163)] [added: [63](#i01f2c2b1323549aeb42f57664a8b19a9_166)] | | |

[removed: | [Note 1 - Summary of Significant Accounting Policies](#ife9bd3040cbb49f2a063c487f9c9be18_166) | | | [67](#ife9bd3040cbb49f2a063c487f9c9be18_166) | | |][added: NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES]

| [removed: [Note](#ife9bd3040cbb49f2a063c487f9c9be18_169) [2](#ife9bd3040cbb49f2a063c487f9c9be18_169)] [added: [Note](#i01f2c2b1323549aeb42f57664a8b19a9_172) [2](#i01f2c2b1323549aeb42f57664a8b19a9_172)] [- Revenue [removed: Recognition](#ife9bd3040cbb49f2a063c487f9c9be18_169)] [added: Recognition](#i01f2c2b1323549aeb42f57664a8b19a9_172)] | | | [removed: [71](#ife9bd3040cbb49f2a063c487f9c9be18_169)] [added: [67](#i01f2c2b1323549aeb42f57664a8b19a9_172)] | | |

| [removed: [Note](#ife9bd3040cbb49f2a063c487f9c9be18_172) [3](#ife9bd3040cbb49f2a063c487f9c9be18_172)] [added: [Note](#i01f2c2b1323549aeb42f57664a8b19a9_175) [3](#i01f2c2b1323549aeb42f57664a8b19a9_175)] [- Fair Value [removed: Measurements](#ife9bd3040cbb49f2a063c487f9c9be18_172)] [added: Measurements](#i01f2c2b1323549aeb42f57664a8b19a9_175)] | | | [removed: [75](#ife9bd3040cbb49f2a063c487f9c9be18_172)] [added: [70](#i01f2c2b1323549aeb42f57664a8b19a9_175)] | | |

| [removed: [Note](#ife9bd3040cbb49f2a063c487f9c9be18_187) [5](#ife9bd3040cbb49f2a063c487f9c9be18_187) [-](#ife9bd3040cbb49f2a063c487f9c9be18_187)] [added: [Note](#i01f2c2b1323549aeb42f57664a8b19a9_190) [5](#i01f2c2b1323549aeb42f57664a8b19a9_190) [-](#i01f2c2b1323549aeb42f57664a8b19a9_190)] [Goodwill [removed: and](#ife9bd3040cbb49f2a063c487f9c9be18_187)] [added: and](#i01f2c2b1323549aeb42f57664a8b19a9_190)] [Intangible [removed: Assets](#ife9bd3040cbb49f2a063c487f9c9be18_187)] [added: Assets](#i01f2c2b1323549aeb42f57664a8b19a9_190)] | | | [removed: [78](#ife9bd3040cbb49f2a063c487f9c9be18_187)] [added: [73](#i01f2c2b1323549aeb42f57664a8b19a9_190)] | | |

| [removed: [Note](#ife9bd3040cbb49f2a063c487f9c9be18_199) [8](#ife9bd3040cbb49f2a063c487f9c9be18_199)] [added: [Note](#i01f2c2b1323549aeb42f57664a8b19a9_202) [8](#i01f2c2b1323549aeb42f57664a8b19a9_202)] [- Airport [removed: Redevelopment](#ife9bd3040cbb49f2a063c487f9c9be18_199)] [added: Redevelopment](#i01f2c2b1323549aeb42f57664a8b19a9_202)] | | | [removed: [84](#ife9bd3040cbb49f2a063c487f9c9be18_199)] [added: [80](#i01f2c2b1323549aeb42f57664a8b19a9_202)] | | |

| [removed: [Note](#ife9bd3040cbb49f2a063c487f9c9be18_202) [9](#ife9bd3040cbb49f2a063c487f9c9be18_202)] [added: [Note](#i01f2c2b1323549aeb42f57664a8b19a9_205) [9](#i01f2c2b1323549aeb42f57664a8b19a9_205)] [- Employee Benefit [removed: Plans](#ife9bd3040cbb49f2a063c487f9c9be18_202)] [added: Plans](#i01f2c2b1323549aeb42f57664a8b19a9_205)] | | | [removed: [86](#ife9bd3040cbb49f2a063c487f9c9be18_202)] [added: [82](#i01f2c2b1323549aeb42f57664a8b19a9_205)] | | |

| [Note [removed: 1](#ife9bd3040cbb49f2a063c487f9c9be18_208)[0](#ife9bd3040cbb49f2a063c487f9c9be18_208)] [added: 1](#i01f2c2b1323549aeb42f57664a8b19a9_211)[0](#i01f2c2b1323549aeb42f57664a8b19a9_211)] [- Commitments and [removed: Contingencies](#ife9bd3040cbb49f2a063c487f9c9be18_208)] [added: Contingencies](#i01f2c2b1323549aeb42f57664a8b19a9_211)] | | | [removed: [91](#ife9bd3040cbb49f2a063c487f9c9be18_208)] [added: [87](#i01f2c2b1323549aeb42f57664a8b19a9_211)] | | |

| [Note [removed: 1](#ife9bd3040cbb49f2a063c487f9c9be18_211)[1](#ife9bd3040cbb49f2a063c487f9c9be18_211)] [added: 1](#i01f2c2b1323549aeb42f57664a8b19a9_214)[1](#i01f2c2b1323549aeb42f57664a8b19a9_214)] [- Income [removed: Taxes](#ife9bd3040cbb49f2a063c487f9c9be18_211)] [added: Taxes](#i01f2c2b1323549aeb42f57664a8b19a9_214)] | | | [removed: [94](#ife9bd3040cbb49f2a063c487f9c9be18_211)] [added: [90](#i01f2c2b1323549aeb42f57664a8b19a9_214)] | | |

| [Note [removed: 1](#ife9bd3040cbb49f2a063c487f9c9be18_214)[2](#ife9bd3040cbb49f2a063c487f9c9be18_214)] [added: 1](#i01f2c2b1323549aeb42f57664a8b19a9_217)[2](#i01f2c2b1323549aeb42f57664a8b19a9_217)] [- Equity and Equity [removed: Compensation](#ife9bd3040cbb49f2a063c487f9c9be18_214)] [added: Compensation](#i01f2c2b1323549aeb42f57664a8b19a9_217)] | | | [removed: [96](#ife9bd3040cbb49f2a063c487f9c9be18_214)] [added: [92](#i01f2c2b1323549aeb42f57664a8b19a9_217)] | | |

| [Note [removed: 1](#ife9bd3040cbb49f2a063c487f9c9be18_220)[3](#ife9bd3040cbb49f2a063c487f9c9be18_220)] [added: 1](#i01f2c2b1323549aeb42f57664a8b19a9_223)[3](#i01f2c2b1323549aeb42f57664a8b19a9_223)] [- Accumulated Other Comprehensive [removed: Loss](#ife9bd3040cbb49f2a063c487f9c9be18_220)] [added: Loss](#i01f2c2b1323549aeb42f57664a8b19a9_223)] | | | [removed: [98](#ife9bd3040cbb49f2a063c487f9c9be18_220)] [added: [94](#i01f2c2b1323549aeb42f57664a8b19a9_223)] | | |

| [Note [removed: 1](#ife9bd3040cbb49f2a063c487f9c9be18_229)[6](#ife9bd3040cbb49f2a063c487f9c9be18_229)] [added: 1](#i01f2c2b1323549aeb42f57664a8b19a9_235)[5](#i01f2c2b1323549aeb42f57664a8b19a9_235)] [- [removed: Earnings](#ife9bd3040cbb49f2a063c487f9c9be18_229)[/(Loss)](#ife9bd3040cbb49f2a063c487f9c9be18_229)] [added: Earnings](#i01f2c2b1323549aeb42f57664a8b19a9_235)] [Per [removed: Share](#ife9bd3040cbb49f2a063c487f9c9be18_229)] [added: Share](#i01f2c2b1323549aeb42f57664a8b19a9_235)] | | | [removed: [102](#ife9bd3040cbb49f2a063c487f9c9be18_229)] [added: [97](#i01f2c2b1323549aeb42f57664a8b19a9_235)] | | |

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 58][added: 55]

To the [added: Stockholders and] Board of Directors [removed: and Stockholders] of [added: Delta Air Lines, Inc.]

Delta Air Lines, Inc. [added: | 2023 Form 10-K 56]

We have audited the accompanying consolidated balance sheets of Delta Air Lines, Inc. (the Company) as of December 31, [removed: 2022 and 2021,] [added: 2023] and [added: 2022,] the related consolidated statements of operations, comprehensive [removed: income/(loss),] [added: income,] cash flows, and stockholders' equity for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February [removed: 10, 2023] [added: 12, 2024] expressed an unqualified opinion thereon.

Our audits included performing procedures to assess the risks of material [removed: misstatements] [added: misstatement] of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 59][added: 57]

Employee Benefit Plans - [removed: NAV] [added: Net] Asset [added: Value Per Share (NAV) Asset] Valuation

| *Description of the Matter* | | | At December 31, [removed: 2022,] [added: 2023,] the fair value of the Company’s benefit plan assets measured at fair value on a recurring basis totaled [removed: $15.6] [added: $16.2] billion, of which [removed: $12.3] [added: $11.4] billion do not have a readily determinable fair value and are measured at [removed: net asset value per share ("NAV assets")] [added: NAV] as a practical expedient. Management determines the fair value of NAV assets by applying the methodologies described in Note 9 to the consolidated financial statements. | | |

| | | | Auditing the Company’s NAV assets required significant judgment in estimating the fair value of the NAV assets, primarily resulting from the lag in the availability of data provided by the investment fund [removed: managers and the use of corroborating data from public markets to estimate fair value.] [added: managers.] | | |

| | | | To test the fair value of plan assets measured at NAV, our audit procedures included, among others, evaluating the valuation methodologies used by the Company and comparing significant inputs and underlying data used in the Company's valuations to information available from third-party sources and market data. Additionally, we performed sensitivity analyses to evaluate the changes to the Company’s net periodic benefit that would result from changes in the fair value measurement, [removed: and] compared the Company’s asset performance results to applicable third-party [removed: benchmarks] [added: benchmarks,] and assessed management’s historical accuracy of estimating fair value by performing retrospective review procedures comparing the Company’s estimates of fair value as of the prior year end to the fair value NAV in the investment’s audited financial statements made available during the current year. | | |

| *Description of the Matter* | | | At December 31, [removed: 2022] [added: 2023] the Company’s aggregate current and noncurrent loyalty program deferred revenue balance was [removed: $7.9] [added: $8.4] billion. For the year ended December 31, [removed: 2022,] [added: 2023,] the Company recognized [removed: $2.9] [added: $3.5] billion of revenue classified as loyalty travel awards within passenger revenue and [removed: $2.6] [added: $3.1] billion of revenue classified as loyalty program revenue within other revenue in the consolidated statement of operations. As disclosed in Note 2 to the consolidated financial statements, the Company defers revenue for mileage credits earned and recognizes loyalty travel awards in passenger revenue as the miles are redeemed and services are provided. In accounting for its loyalty program deferred revenue, the Company estimates the amount of mileage credits outstanding that are not expected to be redeemed [removed: ("mileage breakage").] [added: (mileage breakage).] The Company recognizes mileage breakage proportionally during the period in which the remaining mileage credits are [removed: actually] redeemed. Under the Company’s loyalty program, mileage credits do not expire. Therefore, the Company uses statistical models to estimate mileage breakage based on historical redemption patterns. | | |

| | | | To test the estimate of breakage of mileage credits, our audit procedures included, among others, involving an actuarial specialist to assist in assessing the method used by the Company to develop the mileage breakage estimate and to independently develop a range of mileage breakage estimates and compare to the Company's estimate. Additionally, we tested the completeness and accuracy of the underlying mileage data used [removed: in] [added: to develop] the [removed: Company’s statistical models.] [added: mileage breakage estimate.] | | |

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 60][added: 58]

[removed: Realizability of Deferred Tax Assets][added: | Total deferred tax assets | | | $ | 7,654 | | $ | 8,234 | |]

Delta Air Lines, Inc. | [removed: 2022] [added: 2023 Form] 10-K [removed: 61][added: 59]

| (in millions, except [added: per] share data) | | | [added: 2023] | | | [added: | | |] 2022 | | | | | | 2021 | | |

| Cash and cash equivalents | | | [added: $] | [added: 2,741] | | [added: | | |] $ | 3,266 | | | | | $ | 7,933 | |

| Short-term investments | | | | | | [removed: 3,268] [added: 1,127] | | | | | | [removed: 3,386] [added: 3,268] | | |

| Accounts receivable, net of an allowance for uncollectible accounts of [removed: $23] [added: $17] and [removed: $50] [added: $23] | | | | | | [removed: 3,176] [added: 3,130] | | | | | | [removed: 2,404] [added: 3,176] | | |

| [Note](#i01f2c2b1323549aeb42f57664a8b19a9_181) [4](#i01f2c2b1323549aeb42f57664a8b19a9_181) [- Investments](#i01f2c2b1323549aeb42f57664a8b19a9_181) | | | [72](#i01f2c2b1323549aeb42f57664a8b19a9_181) | | |

| [Note 6 - Debt](#i01f2c2b1323549aeb42f57664a8b19a9_193) | | | [75](#i01f2c2b1323549aeb42f57664a8b19a9_193) | | |

| [Note](#i01f2c2b1323549aeb42f57664a8b19a9_199) [7](#i01f2c2b1323549aeb42f57664a8b19a9_199) [- Leases](#i01f2c2b1323549aeb42f57664a8b19a9_199) | | | [77](#i01f2c2b1323549aeb42f57664a8b19a9_199) | | |

| [Note 1](#i01f2c2b1323549aeb42f57664a8b19a9_226)[4](#i01f2c2b1323549aeb42f57664a8b19a9_226) [- Segments](#i01f2c2b1323549aeb42f57664a8b19a9_226) | | | [95](#i01f2c2b1323549aeb42f57664a8b19a9_226) | | |

| February 12, 2024 | | | | | |

| Pilot agreement and related expenses | | | 864 | | | | | | — | | | | | | — | | |

| Other | | | 2,239 | | | | | | 1,700 | | | | | | 1,386 | | |

| Miscellaneous, net | | | (35) | | | | | | (127) | | | | | | (397) | | |

| Depreciation and amortization | | | 2,341 | | | | | | 2,107 | | | | | | 1,998 | | |

| Net income | | | — | | | — | | | — | | | 4,609 | | | — | | | — | | | — | | | 4,609 | | |

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

| Balance at December 31, 2023 | | | 655 | | | $ | — | | $ | 11,641 | | $ | 5,650 | | $ | (5,845) | | 11 | | | $ | (341) | | $ | 11,105 | |

We are not the primary beneficiary of, nor do we have a controlling financial interest in, any variable interest entity.

Accordingly, we have not consolidated any variable interest entity.

The ASU becomes effective January 1, 2024, however we early adopted this standard as of December 31, 2023.

The new standard does not impact the valuation of our equity investments, but we have included the newly required disclosures related to the contractual sale restrictions associated with our investment in Wheels Up Experience Inc. ("Wheels Up").

See Note 4, "Investments," for additional details.

*Segment Reporting.* In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." This standard requires disclosure of significant segment expenses and other segment items by reportable segment.

This ASU becomes effective for annual periods beginning in 2024 and interim periods in 2025.

We are assessing the impact of this ASU and upon adoption expect that any impact would be limited to additional segment expense disclosures in the footnotes to our Consolidated Financial Statements.

*Income Taxes.* In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." This standard enhances disclosures related to income taxes, including the rate reconciliation and information on income taxes paid.

We are assessing the impact of this ASU and upon adoption may be required to include certain additional disclosures in the footnotes to our Consolidated Financial Statements.

See Note 3, "Fair Value Measurements," for further information regarding our derivative contracts.

(1)Includes aircraft and associated engines and parts.

As of December 31, 2023, all of our air traffic liability was recorded as a current liability.

As of December 31, 2022, our air traffic liability was $8.3 billion, of which $100 million was included in other noncurrent liabilities on our balance sheet due to ticket validity extensions related to certain tickets and travel credits as of the end of 2022.

See Note 10, "Commitments and Contingencies," for additional information regarding contract carrier agreements.

This also includes the redemption of miles for non-travel awards.

| U.S. Government securities | | | 859 | | | 204 | | | 655 | | | — | | | (a) | | |

| Corporate obligations | | | 218 | | | — | | | 218 | | | — | | | (a) | | |

| Other fixed income securities | | | 50 | | | — | | | 50 | | | — | | | (a) | | |

| Long-term investments and related | | | 2,867 | | | 2,614 | | | 134 | | | 119 | | | (a)(b) | | |

These investments are expected to mature in one year or less.

As of December 31, 2023 and December 31, 2022, our equity investment in Wheels Up was classified as Level 1 in the fair value hierarchy.

In the September 2023 quarter, our Wheels Up investment was classified as Level 3 after we determined the quoted price of its publicly-traded shares did not represent fair value due to the short time between closing of Wheels Up's credit facility and our quarterly reporting date.

Given the amount of time that elapsed by December 31, 2023, we returned to valuing our equity investment in Wheels Up using the closing price of its shares at year end as traded on the New York Stock Exchange.

*Equity Method Investments.* We record our share of our equity method investees' financial results in our income statement as described in the table below.

| (in millions) | | | | | | | | | December 31, 2023 | | | December 31, 2022 | | | | | | December 31, 2023 | | | December 31, 2022 | | |

(1)Results are included in miscellaneous, net in our income statement under non-operating expense.

(4)See below for additional information about our ownership interest and voting rights.

| | | | | | |

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

| [Note](#ife9bd3040cbb49f2a063c487f9c9be18_178) [4](#ife9bd3040cbb49f2a063c487f9c9be18_178) [- Investments](#ife9bd3040cbb49f2a063c487f9c9be18_178) | | | [76](#ife9bd3040cbb49f2a063c487f9c9be18_178) | | |

| [Note 6 - Debt](#ife9bd3040cbb49f2a063c487f9c9be18_190) | | | [80](#ife9bd3040cbb49f2a063c487f9c9be18_190) | | |

| [Note](#ife9bd3040cbb49f2a063c487f9c9be18_196) [7](#ife9bd3040cbb49f2a063c487f9c9be18_196) [- Leases](#ife9bd3040cbb49f2a063c487f9c9be18_196) | | | [82](#ife9bd3040cbb49f2a063c487f9c9be18_196) | | |

| [Note 1](#ife9bd3040cbb49f2a063c487f9c9be18_223)[4](#ife9bd3040cbb49f2a063c487f9c9be18_223) [- Segments](#ife9bd3040cbb49f2a063c487f9c9be18_223) | | | [99](#ife9bd3040cbb49f2a063c487f9c9be18_223) | | |

| [Note 15 -](#ife9bd3040cbb49f2a063c487f9c9be18_226) [Government Grants and](#ife9bd3040cbb49f2a063c487f9c9be18_226) [Restructuring](#ife9bd3040cbb49f2a063c487f9c9be18_226) | | | [101](#ife9bd3040cbb49f2a063c487f9c9be18_226) | | |

| *Description of the Matter* | | | At December 31, 2022, the Company had gross deferred tax assets of $8.2 billion with a related valuation allowance of $1.2 billion, and gross deferred tax liabilities of $7.9 billion. As discussed in Notes 1 and 11 to the consolidated financial statements, the Company records a valuation allowance based on the assessment of the realizability of the Company’s deferred tax assets. Deferred tax assets are reduced by a valuation allowance if, based on the weight of all available evidence, in management’s judgment it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. | | |

| | | | Auditing management’s assessment of recoverability of deferred tax assets involved subjective estimation and complex auditor judgment in weighing the positive and negative evidence to determine whether a valuation allowance for deferred tax assets is needed. | | |

| *How We Addressed the Matter in Our Audit* | | | We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls that address the risks of material misstatement relating to the realizability of deferred tax assets. This included controls over management’s scheduling of the future reversal of existing taxable temporary differences, identification and use of available tax planning strategies and estimates of future taxable income. | | |

| | | | To test the realizability of the Company’s deferred tax assets, our audit procedures included, among others, evaluating the assumptions used to develop the scheduling of the future reversal of existing taxable temporary differences, evaluating tax planning strategies and evaluating the assumptions used to develop projections of future taxable income. We compared the projections of future taxable income with the actual results of prior periods and evaluated management’s consideration of current industry and economic trends. We also compared the projections of future taxable income with other forecasted financial information prepared by the Company. In addition, we involved our tax specialists to evaluate the application of tax law in the performance of these procedures. | | |

| February 10, 2023 | | | | | |

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

| Noncurrent air traffic liability | | | | | | 100 | | | | | | 130 | | |

| Restructuring charges | | | (124) | | | | | | (19) | | | | | | 8,219 | | |

| Other | | | 1,824 | | | | | | 1,405 | | | | | | 1,232 | | |

| Impairments and equity method results | | | (20) | | | | | | (337) | | | | | | (2,432) | | |

| Miscellaneous, net | | | (107) | | | | | | (60) | | | | | | 137 | | |

| Restructuring charges | | | (46) | | | | | | 5 | | | | | | 4,111 | | |

| Impairments and equity method results | | | 20 | | | | | | 337 | | | | | | 2,432 | | |

| Proceeds from sale-leaseback transactions | | | — | | | | | | — | | | | | | 465 | | |

| Proceeds from long-term obligations | | | — | | | | | | 1,902 | | | | | | 22,790 | | |

| Proceeds from sale-leaseback transactions | | | — | | | | | | — | | | | | | 2,306 | | |

| Repurchase of common stock | | | — | | | | | | — | | | | | | (344) | | |

| Fuel card obligation | | | — | | | | | | — | | | | | | 364 | | |

| Other, net | | | (60) | | | | | | 80 | | | | | | (202) | | |

| Balance at January 1, 2020 | | | 652 | | | $ | — | | $ | 11,129 | | $ | 12,454 | | $ | (7,989) | | 9 | | | $ | (236) | | $ | 15,358 | |

| Net loss | | | — | | | — | | | — | | | (12,385) | | | — | | | — | | | — | | | (12,385) | | |

| Dividends declared | | | — | | | — | | | — | | | (257) | | | — | | | — | | | — | | | (257) | | |

| Stock purchased and retired | | | (6) | | | — | | | (104) | | | (240) | | | — | | | — | | | — | | | (344) | | |

| Government grant warrant issuance | | | — | | | — | | | 114 | | | — | | | — | | | — | | | — | | | 114 | | |

*Notes to the Consolidated Financial Statements*

We are the primary beneficiary of, and have a controlling financial interest in, certain immaterial entities in which we have voting rights of 50% or less, which we consolidate in our financial results.

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.

We expense the cost of carbon offsets upon retirement within aircraft fuel and related taxes on our income statement as these costs are related to our carbon emissions generated by our airline segment.

The purchase of carbon offsets is included in operating activities on our cash flows statement.

Our management, including our Chief Executive Officer and Chief Financial Officer, concluded that the controls and procedures were effective as of December 31, [removed: 2022] [added: 2023] to ensure that material information was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.