UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2022


Or
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-5424

DELTA AIR LINES, INC.

(Exact name of registrant as specified in its charter)


Delaware						58-0218548
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

Post Office Box 20706
Atlanta, Georgia						30320-6001
(Address of principal executive offices)						(Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

DAL

New York Stock Exchange

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 reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

Number of shares outstanding by each class of common stock, as of ~~June~~September 30, 2022:

Common Stock, $0.0001 par value - ~~641,197,918~~641,188,362 shares outstanding

This document is also available through our website at http://ir.delta.com/.

Forward Looking Statements

Unless otherwise indicated or the context otherwise requires, the terms "Delta," "we," "us" and "our" refer to Delta Air Lines, Inc. and its subsidiaries.

FORWARD-LOOKING STATEMENTS

Statements in this Form 10-Q (or otherwise made by us or on our behalf) that are not historical facts, including statements about our estimates, expectations, beliefs, intentions, projections, goals, aspirations, commitments or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations. Known material risk factors applicable to Delta are described in "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 ("Form 10-K"), other than risks that could apply to any issuer or offering. All forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report except as required by law.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Delta Air Lines, Inc.

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of Delta Air Lines, Inc. (the Company) as of ~~June~~September 30, 2022, the related condensed consolidated statements of operations and comprehensive ~~income/(loss)~~income and consolidated statements of stockholders' equity for the three-month and ~~six-month~~nine-month periods ended ~~June~~September 30, 2022 and 2021, the condensed consolidated statements of cash flows for the ~~six-month~~nine-month periods ended ~~June~~September 30, 2022 and 2021 and the related notes (collectively referred to as the "condensed consolidated interim financial statements"). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2021, the related consolidated statements of operations, comprehensive income/(loss), cash flows, and stockholders' equity for the year then ended, and the related notes (not presented herein); and in our report dated February 11, 2022, we expressed an unqualified audit opinion on those Consolidated Financial Statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the ~~SEC~~Securities and Exchange Commission ("SEC") and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.


			/s/ Ernst & Young LLP
Atlanta, Georgia
~~July~~October 13, 2022

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 2

Financial Statements

DELTA AIR LINES, INC.

Consolidated Balance Sheets

(Unaudited)

(in millions, except share data) June 30,
2022 December 31,
2021
ASSETS
Current Assets:
Cash and cash equivalents $ 9,221 $ 7,933
Short-term investments 1,549 3,386
Accounts receivable, net of allowance for uncollectible accounts of $41 and $50 3,093 2,404
Fuel, expendable parts and supplies inventories, net of allowance for obsolescence of $152 and $176 1,734 1,098
Prepaid expenses and other 1,716 1,119
Total current assets 17,313 15,940
Noncurrent Assets:
Property and equipment, net of accumulated depreciation and amortization of $19,338 and $18,671 30,519 28,749
Operating lease right-of-use assets 7,189 7,237
Goodwill 9,753 9,753
Identifiable intangibles, net of accumulated amortization of $897 and $893 5,997 6,001
Equity investments 1,771 1,712
Deferred income taxes, net 1,219 1,294
Other noncurrent assets 1,044 1,773
Total noncurrent assets 57,492 56,519
Total assets $ 74,805 $ 72,459
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of debt and finance leases $ 1,936 $ 1,782
Current maturities of operating leases 726 703
Air traffic liability 9,664 6,228
Accounts payable 5,353 4,240
Accrued salaries and related benefits 2,565 2,457
Loyalty program deferred revenue 2,994 2,710
Fuel card obligation 1,100 1,100
Other accrued liabilities 1,986 1,746
Total current liabilities 26,324 20,966
Noncurrent Liabilities:
Debt and finance leases 22,903 25,138
Noncurrent air traffic liability 250 130
Pension, postretirement and related benefits 5,654 6,035
Loyalty program deferred revenue 4,763 4,849
Noncurrent operating leases 7,006 7,056
Other noncurrent liabilities 4,094 4,398
Total noncurrent liabilities 44,670 47,606
Commitments and Contingencies 0 0
Stockholders' Equity:
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 651,700,403 and 649,720,387
shares issued
— —
Additional paid-in capital 11,485 11,447
Accumulated deficit (353) (148)
Accumulated other comprehensive loss (7,008) (7,130)
Treasury stock, at cost, 10,502,485 and 9,752,872 shares (313) (282)
Total stockholders' equity 3,811 3,887
Total liabilities and stockholders' equity $ 74,805 $ 72,459
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


(in millions, except share data)	September 30, 2022		December 31, 2021
ASSETS
Current Assets:
Cash and cash equivalents	$	7,023	$	7,933
Short-term investments	1,345		3,386
Accounts receivable, net of allowance for uncollectible accounts of $24 and $50	3,097		2,404
Fuel, expendable parts and supplies inventories, net of allowance for obsolescence of $150 and $176	1,473		1,098
Prepaid expenses and other	1,861		1,119
Total current assets	14,799		15,940
Noncurrent Assets:
Property and equipment, net of accumulated depreciation and amortization of $19,984 and $18,671	31,512		28,749
Operating lease right-of-use assets	6,961		7,237
Goodwill	9,753		9,753
Identifiable intangibles, net of accumulated amortization of $900 and $893	5,994		6,001
Equity investments	1,585		1,712
Deferred income taxes, net	935		1,294
Other noncurrent assets	1,057		1,773
Total noncurrent assets	57,797		56,519
Total assets	$	72,596	$	72,459

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of debt and finance leases	$	2,031	$	1,782
Current maturities of operating leases	738		703
Air traffic liability	8,947		6,228
Accounts payable	4,958		4,240
Accrued salaries and related benefits	2,796		2,457
Loyalty program deferred revenue	3,478		2,710
Fuel card obligation	1,100		1,100
Other accrued liabilities	1,822		1,746
Total current liabilities	25,870		20,966
Noncurrent Liabilities:
Debt and finance leases	21,202		25,138
Noncurrent air traffic liability	150		130
Pension, postretirement and related benefits	5,470		6,035
Loyalty program deferred revenue	4,382		4,849
Noncurrent operating leases	6,865		7,056
Other noncurrent liabilities	4,067		4,398
Total noncurrent liabilities	42,136		47,606

Commitments and Contingencies

Stockholders' Equity:
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 651,719,217 and 649,720,387 shares issued	—		—
Additional paid-in capital	11,507		11,447
Retained earnings/(accumulated deficit)	342		(148)
Accumulated other comprehensive loss	(6,946)		(7,130)
Treasury stock, at cost, 10,530,855 and 9,752,872 shares	(313)		(282)
Total stockholders' equity	4,590		3,887
Total liabilities and stockholders' equity	$	72,596	$	72,459
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 3

Financial Statements

DELTA AIR LINES, INC.

Condensed Consolidated Statements of Operations and Comprehensive ~~Income/(Loss)~~Income

(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except per share data)	(in millions, except per share data)	2022		2021		2022		2021		(in millions, except per share data)	2022		2021		2022		2021
Operating Revenue:	Operating Revenue:									Operating Revenue:
Passenger	Passenger	$	10,958	$	5,339	$	17,865	$	8,087	Passenger	$	11,464	$	7,191	$	29,329	$	15,278
Cargo	Cargo	272		251		561		466		Cargo	240		262		801		728
Other	Other	2,594		1,536		4,747		2,723		Other	2,271		1,701		7,017		4,423
Total operating revenue	Total operating revenue	13,824		7,126		23,173		11,276		Total operating revenue	13,975		9,154		37,147		20,429

Operating Expense:	Operating Expense:									Operating Expense:
Salaries and related costs	Salaries and related costs	2,955		2,328		5,782		4,530		Salaries and related costs	3,050		2,566		8,832		7,096
Aircraft fuel and related taxes	Aircraft fuel and related taxes	3,223		1,487		5,315		2,504		Aircraft fuel and related taxes	3,318		1,552		8,633		4,056
Ancillary businesses and refinery	Ancillary businesses and refinery	1,718		939		3,100		1,645		Ancillary businesses and refinery	1,349		1,079		4,449		2,724
Contracted services	Contracted services	791		570		1,544		1,089		Contracted services	881		634		2,425		1,723
Landing fees and other rents	Landing fees and other rents	546		460		1,050		953		Landing fees and other rents	562		524		1,611		1,477
Depreciation and amortization										Depreciation and amortization	538		501		1,554		1,494
Regional carrier expense	Regional carrier expense	528		403		1,018		804		Regional carrier expense	528		453		1,547		1,258
Depreciation and amortization		510		501		1,016		993
Aircraft maintenance materials and outside repairs	Aircraft maintenance materials and outside repairs	522		287		988		581		Aircraft maintenance materials and outside repairs	487		433		1,474		1,014
Passenger commissions and other selling expenses	Passenger commissions and other selling expenses	526		222		838		332		Passenger commissions and other selling expenses	546		308		1,385		640
Passenger service	Passenger service	369		175		644		294		Passenger service	406		226		1,050		520
Aircraft rent	Aircraft rent	127		104		249		208		Aircraft rent	131		105		380		313
Profit sharing	Profit sharing	54		—		54		—		Profit sharing	237		—		291		—

Government grant recognition	Government grant recognition	—		(1,504)		—		(2,689)		Government grant recognition	—		(1,822)		—		(4,512)
Other	Other	436		338		840		614		Other	486		390		1,325		1,003
Total operating expense	Total operating expense	12,305		6,310		22,438		11,858		Total operating expense	12,519		6,949		34,956		18,806

Operating Income/(Loss)		1,519		816		735		(582)
Operating Income										Operating Income	1,456		2,205		2,191		1,623

Non-Operating Expense:	Non-Operating Expense:									Non-Operating Expense:
Interest expense, net	Interest expense, net	(269)		(338)		(543)		(700)		Interest expense, net	(248)		(314)		(791)		(1,014)
Equity method results	Equity method results	(12)		—		(12)		(54)		Equity method results	4		(49)		(8)		(102)
Gain/(loss) on investments, net	Gain/(loss) on investments, net	(221)		211		(368)		473		Gain/(loss) on investments, net	(245)		(223)		(613)		251
Loss on extinguishment of debt	Loss on extinguishment of debt	(41)		(26)		(66)		(83)		Loss on extinguishment of debt	(34)		(183)		(100)		(266)
Pension and related benefit/(expense)		73		119		145		226
Pension and related benefit										Pension and related benefit	73		111		218		337
Miscellaneous, net	Miscellaneous, net	(16)		(6)		(58)		(19)		Miscellaneous, net	(44)		(15)		(103)		(36)
Total non-operating expense, net	Total non-operating expense, net	(486)		(40)		(902)		(157)		Total non-operating expense, net	(494)		(673)		(1,397)		(830)

Income/(Loss) Before Income Taxes		1,033		776		(167)		(739)
Income Before Income Taxes										Income Before Income Taxes	962		1,532		794		793

Income Tax (Provision)/Benefit		(298)		(124)		(38)		214
Income Tax Provision										Income Tax Provision	(267)		(320)		(305)		(105)

Net Income/(Loss)		$	735	$	652	$	(205)	$	(525)
Net Income										Net Income	$	695	$	1,212	$	489	$	688

Basic Earnings/(Loss) Per Share		$	1.15	$	1.02	$	(0.32)	$	(0.82)
Diluted Earnings/(Loss) Per Share		$	1.15	$	1.02	$	(0.32)	$	(0.82)
Basic Earnings Per Share										Basic Earnings Per Share	$	1.09	$	1.90	$	0.77	$	1.08
Diluted Earnings Per Share										Diluted Earnings Per Share	$	1.08	$	1.89	$	0.76	$	1.07

Comprehensive Income/(Loss)		$	798	$	730	$	(83)	$	(369)
Comprehensive Income										Comprehensive Income	$	757	$	1,294	$	673	$	926

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.	The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.									The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 4

Financial Statements

DELTA AIR LINES, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


		Six Months Ended June 30,					Nine Months Ended September 30,
(in millions)	(in millions)	2022		2021		(in millions)	2022		2021
Net Cash Provided by Operating Activities	Net Cash Provided by Operating Activities	$	4,306	$	2,557	Net Cash Provided by Operating Activities	$	5,175	$	2,708

Cash Flows from Investing Activities:	Cash Flows from Investing Activities:					Cash Flows from Investing Activities:
Property and equipment additions:	Property and equipment additions:					Property and equipment additions:
Flight equipment, including advance payments	Flight equipment, including advance payments	(1,879)		(527)		Flight equipment, including advance payments	(2,852)		(961)
Ground property and equipment, including technology	Ground property and equipment, including technology	(845)		(672)		Ground property and equipment, including technology	(1,314)		(1,068)

Purchase of short-term investments	Purchase of short-term investments	(474)		(5,587)		Purchase of short-term investments	(575)		(10,799)
Redemption of short-term investments	Redemption of short-term investments	2,289		6,494		Redemption of short-term investments	2,584		12,158
Purchase of equity investments	Purchase of equity investments	(100)		—		Purchase of equity investments	(153)		—

Other, net	Other, net	108		258		Other, net	121		252
Net cash used in investing activities	Net cash used in investing activities	(901)		(34)		Net cash used in investing activities	(2,189)		(418)

Cash Flows from Financing Activities:	Cash Flows from Financing Activities:					Cash Flows from Financing Activities:

Proceeds from long-term obligations	Proceeds from long-term obligations	—		1,902		Proceeds from long-term obligations	—		1,902

Payments on debt and finance lease obligations	Payments on debt and finance lease obligations	(2,395)		(3,133)		Payments on debt and finance lease obligations	(4,190)		(4,685)

Other, net	Other, net	(27)		111		Other, net	(40)		98
Net cash used in financing activities	Net cash used in financing activities	(2,422)		(1,120)		Net cash used in financing activities	(4,230)		(2,685)

Net Increase in Cash, Cash Equivalents and Restricted Cash Equivalents		983		1,403
Net Decrease in Cash, Cash Equivalents and Restricted Cash Equivalents						Net Decrease in Cash, Cash Equivalents and Restricted Cash Equivalents	(1,244)		(395)
Cash, cash equivalents and restricted cash equivalents at beginning of period	Cash, cash equivalents and restricted cash equivalents at beginning of period	8,569		10,055		Cash, cash equivalents and restricted cash equivalents at beginning of period	8,569		10,055
Cash, cash equivalents and restricted cash equivalents at end of period	Cash, cash equivalents and restricted cash equivalents at end of period	$	9,552	$	11,458	Cash, cash equivalents and restricted cash equivalents at end of period	$	7,325	$	9,660

Non-Cash Transactions:	Non-Cash Transactions:					Non-Cash Transactions:
Flight and ground equipment acquired under finance leases	Flight and ground equipment acquired under finance leases	$	81	$	752	Flight and ground equipment acquired under finance leases	$	84	$	873
Right-of-use assets acquired under operating leases	Right-of-use assets acquired under operating leases	324		259		Right-of-use assets acquired under operating leases	372		536
Operating leases converted to finance leases	Operating leases converted to finance leases	140		26		Operating leases converted to finance leases	279		31
Equity investments and other financings	Equity investments and other financings	330		240		Equity investments and other financings	330		240
											The following table provides a reconciliation of cash, cash equivalents and restricted cash equivalents reported within the Consolidated Balance Sheets to the total of the same such amounts shown above:
		June 30,					September 30,
(in millions)	(in millions)	2022		2021		(in millions)	2022		2021
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	9,221	$	10,357	Cash and cash equivalents	$	7,023	$	8,785
Restricted cash included in prepaid expenses and other	Restricted cash included in prepaid expenses and other	154		172		Restricted cash included in prepaid expenses and other	149		162
Noncurrent assets:	Noncurrent assets:					Noncurrent assets:
Restricted cash included in other noncurrent assets	Restricted cash included in other noncurrent assets	177		929		Restricted cash included in other noncurrent assets	153		713
Total cash, cash equivalents and restricted cash equivalents	Total cash, cash equivalents and restricted cash equivalents	$	9,552	$	11,458	Total cash, cash equivalents and restricted cash equivalents	$	7,325	$	9,660

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.	The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.					The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 5

Financial Statements

DELTA AIR LINES, INC.

Consolidated Statements of Stockholders' Equity

(Unaudited)


		Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Treasury Stock						Common Stock			Additional Paid-In Capital		Retained Earnings / (Accumulated Deficit)		Accumulated Other Comprehensive Loss		Treasury Stock
(in millions, except per share data)	(in millions, except per share data)	Shares	Amount								Shares	Amount		Total		(in millions, except per share data)	Shares	Amount								Shares	Amount		Total
Balance at December 31, 2021	Balance at December 31, 2021	650	$	—	$	11,447	$	(148)	$	(7,130)	10	$	(282)	$	3,887	Balance at December 31, 2021	650	$	—	$	11,447	$	(148)	$	(7,130)	10	$	(282)	$	3,887
Net loss	Net loss	—	—		—		(940)		—		—	—		(940)		Net loss	—	—		—		(940)		—		—	—		(940)

Other comprehensive income	Other comprehensive income	—	—		—		—		59		—	—		59		Other comprehensive income	—	—		—		—		59		—	—		59
Common stock issued for employee equity awards(1)	Common stock issued for employee equity awards(1)	2	—		15		—		—		1	(30)		(15)		Common stock issued for employee equity awards(1)	2	—		15		—		—		1	(30)		(15)

Balance at March 31, 2022	Balance at March 31, 2022	652	$	—	$	11,462	$	(1,088)	$	(7,071)	11	$	(312)	$	2,991	Balance at March 31, 2022	652	$	—	$	11,462	$	(1,088)	$	(7,071)	11	$	(312)	$	2,991
Net income	Net income	—	—		—		735		—		—	—		735		Net income	—	—		—		735		—		—	—		735

Other comprehensive income	Other comprehensive income	—	—		—		—		63		—	—		63		Other comprehensive income	—	—		—		—		63		—	—		63
Common stock issued for employee equity awards(1)	Common stock issued for employee equity awards(1)	—	—		23		—		—		—	(1)		22		Common stock issued for employee equity awards(1)	—	—		23		—		—		—	(1)		22

Balance at June 30, 2022	Balance at June 30, 2022	652	$	—	$	11,485	$	(353)	$	(7,008)	11	$	(313)	$	3,811	Balance at June 30, 2022	652	$	—	$	11,485	$	(353)	$	(7,008)	11	$	(313)	$	3,811
Net income																Net income	—	—		—		695		—		—	—		695

Other comprehensive income																Other comprehensive income	—	—		—		—		62		—	—		62
Common stock issued for employee equity awards(1)																Common stock issued for employee equity awards(1)	—	—		22		—		—		—	—		22

Balance at September 30, 2022																Balance at September 30, 2022	652	$	—	$	11,507	$	342	$	(6,946)	11	$	(313)	$	4,590

(1)Treasury shares were withheld for payment of taxes, at a weighted average price per share of $41.00, $38.11 and ~~$38.11~~$30.66 in the March 2022 quarter, June 2022 quarter and ~~June~~September 2022 quarter, respectively.


		Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Treasury Stock						Common Stock			Additional Paid-In Capital		Retained Earnings / (Accumulated Deficit)		Accumulated Other Comprehensive Loss		Treasury Stock
(in millions, except per share data)	(in millions, except per share data)	Shares	Amount								Shares	Amount		Total		(in millions, except per share data)	Shares	Amount								Shares	Amount		Total
Balance at December 31, 2020	Balance at December 31, 2020	647	$	—	$	11,259	$	(428)	$	(9,038)	9	$	(259)	$	1,534	Balance at December 31, 2020	647	$	—	$	11,259	$	(428)	$	(9,038)	9	$	(259)	$	1,534
Net loss	Net loss	—	—		—		(1,177)		—		—	—		(1,177)		Net loss	—	—		—		(1,177)		—		—	—		(1,177)

Other comprehensive income	Other comprehensive income	—	—		—		—		78		—	—		78		Other comprehensive income	—	—		—		—		78		—	—		78
Common stock issued for employee equity awards(1)	Common stock issued for employee equity awards(1)	2	—		23		—		—		1	(20)		3		Common stock issued for employee equity awards(1)	2	—		23		—		—		1	(20)		3
Government grant warrant issuance	Government grant warrant issuance	—	—		44		—		—		—	—		44		Government grant warrant issuance	—	—		44		—		—		—	—		44
Balance at March 31, 2021	Balance at March 31, 2021	649	$	—	$	11,326	$	(1,605)	$	(8,960)	10	$	(279)	$	482	Balance at March 31, 2021	649	$	—	$	11,326	$	(1,605)	$	(8,960)	10	$	(279)	$	482
Net income	Net income	—	—		—		652		—		—	—		652		Net income	—	—		—		652		—		—	—		652

Other comprehensive income	Other comprehensive income	—	—		—		—		78		—	—		78		Other comprehensive income	—	—		—		—		78		—	—		78
Common stock issued for employee equity awards(1)	Common stock issued for employee equity awards(1)	1	—		28		—		—		—	(1)		27		Common stock issued for employee equity awards(1)	1	—		28		—		—		—	(1)		27

Government grant warrant issuance	Government grant warrant issuance	—	—		42		—		—		—	—		42		Government grant warrant issuance	—	—		42		—		—		—	—		42
Balance at June 30, 2021	Balance at June 30, 2021	650	$	—	$	11,396	$	(953)	$	(8,882)	10	$	(280)	$	1,281	Balance at June 30, 2021	650	$	—	$	11,396	$	(953)	$	(8,882)	10	$	(280)	$	1,281
Net income																Net income	—	—		—		1,212		—		—	—		1,212

Other comprehensive income																Other comprehensive income	—	—		—		—		82		—	—		82
Common stock issued for employee equity awards(1)																Common stock issued for employee equity awards(1)	—	—		32		—		—		—	(1)		31

Balance at September 30, 2021																Balance at September 30, 2021	650	$	—	$	11,428	$	259	$	(8,800)	10	$	(281)	$	2,606

(1)Treasury shares were withheld for payment of taxes, at a weighted average price per share of $38.35, $46.21 and ~~$46.21~~$43.48 in the March 2021 quarter, June 2021 quarter and ~~June~~September 2021 quarter, respectively.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 6

Notes to the Consolidated Financial Statements

DELTA AIR LINES, INC.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Delta Air Lines, Inc. and our consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Form 10-K for the year ended December 31, 2021.

Management believes the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including normal recurring items, considered necessary for a fair statement of results for the interim periods presented.

Due to impacts from the COVID-19 pandemic and the ongoing recovery, seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the three and ~~six~~nine months ended ~~June~~September 30, 2022 are not necessarily indicative of operating results for the entire year.

We reclassified certain prior period amounts to conform to the current period presentation. Unless otherwise noted, all amounts disclosed are stated before consideration of income taxes.

Recent Accounting Standards

Standards Effective in Future Years

Fair Value of Equity Investments. In June 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2022-03, "Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions." Under this standard, a contractual restriction on the sale of an equity security is not considered in measuring the security's fair value. The standard also requires certain disclosures for equity securities that are subject to contractual restrictions. The ASU becomes effective January 1, ~~2024,~~2024. Upon adoption, we do not believe it will have a material impact on the valuation of our equity investments; however, we may be required to include additional disclosures to the extent we have material equity investments subject to contractual sale restrictions.

Supplier Finance Program Obligations. In September 2022, the FASB issued ASU No. 2022-04, "Liabilities—Supplier Finance Programs (Subtopic 405-50)." This standard requires disclosure of the key terms of outstanding supplier finance programs and a rollforward of the related obligations. The new standard does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. The ASU becomes effective January 1, 2023, except for the rollforward requirement, which becomes effective January 1, 2024. Upon adoption, we ~~are evaluating~~may be required to include additional disclosures to the ~~potential impact of this standard on our investments.~~extent we have material supplier finance program obligations.

NOTE 2. REVENUE RECOGNITION

Passenger Revenue


		Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	(in millions)	2022		2021		2022		2021			(in millions)	2022		2021			2022		2021
Ticket	Ticket	$	9,773	$	4,553	$	15,759	$	6,830		Ticket	$	10,247	$	6,237		$	26,005	$	13,067
Loyalty travel awards	Loyalty travel awards	744		428		1,287		669			Loyalty travel awards	786		544			2,073		1,213
Travel-related services	Travel-related services	441		358		819		588			Travel-related services	431		410			1,251		998
Total passenger revenue	Total passenger revenue	$	10,958	$	5,339	$	17,865	$	8,087		Total passenger revenue	$	11,464	$	7,191		$	29,329	$	15,278

Delta Air Lines, Inc. September 2022 Form 10-Q 7

Notes to the Consolidated Financial Statements

Ticket

We recognized approximately~~$3.3~~ $3.9 billionand ~~$1.4~~$1.8 billion in passenger revenue during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively, that had been recorded in our air traffic liability balance at the beginning of those periods.

~~Delta Air Lines, Inc. June 2022 Form 10-Q 7~~

~~Notes to the Consolidated Financial Statements~~

In order to provide our customers more flexibility and time to plan or rebook their travel, we announced in January 2022 that all existing travel credit holders will have until December 31, 2023 to rebook their ticket for travel throughout 2024. Additionally, all Delta customers with upcoming 2022 travel or who purchase a ticket in 2022 will also have the flexibility to rebook their ticket through December 31, 2023, and travel throughout 2024. The air traffic liability classified as current as of ~~June~~September 30, 2022 represents our estimate of tickets and travel credits to be used within one year. We will continue to monitor our customers' travel behavior and may adjust our estimates in the future.

We estimate the value of tickets that will expire unused (“ticket breakage”) and recognize the related revenue at the scheduled flight date. Our ticket breakage estimates are primarily based on historical experience, ticket contract terms and customers’ travel behavior. 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.

Loyalty Travel Awards

Our SkyMiles loyalty program allows customers to earn mileage credits ("miles") by flying on Delta, Delta Connection and other airlines that participate in the loyalty program. Customers can also earn miles through participating companies, such as credit card companies, hotels, car rental agencies and ridesharing companies, who purchase miles from us. Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. During the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, total cash sales from marketing agreements related to our loyalty program were ~~$2.6~~$4.1 billion and ~~$1.8~~$2.9 billion, respectively, which are allocated to travel and other performance obligations. Loyalty travel awards revenue is related to the redemption of miles for air travel.

Current Activity of the Loyalty Program. Miles are combined in one homogeneous pool and are not separately identifiable. Therefore, revenue is comprised of miles that were part of the loyalty program deferred revenue balance at the beginning of the period as well as miles that were issued during the period. The timing of mile redemptions can vary widely; however, the majority of miles have historically been redeemed within two years of being earned.

The table below presents the activity of the current and noncurrent loyalty program deferred revenue and includes miles earned through travel and miles sold to participating companies, which are primarily through marketing agreements.


Loyalty program activity	Loyalty program activity					Loyalty program activity
(in millions)	(in millions)	2022		2021		(in millions)	2022		2021
Balance at January 1	Balance at January 1	$	7,559	$	7,182	Balance at January 1	$	7,559	$	7,182
Miles earned	Miles earned	1,558		915		Miles earned	2,496		1,541
Miles redeemed for air travel	Miles redeemed for air travel	(1,287)		(669)		Miles redeemed for air travel	(2,073)		(1,213)
Miles redeemed for non-air travel and other	Miles redeemed for non-air travel and other	(73)		(27)		Miles redeemed for non-air travel and other	(122)		(54)
Balance at June 30		$	7,757	$	7,401
Balance at September 30						Balance at September 30	$	7,860	$	7,456

Travel-Related Services

Travel-related services are primarily composed of services performed in conjunction with a passenger’s flight and include baggage fees, on-board sales and administrative fees.

~~Other Revenue~~
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2022 2021 2022 2021
Refinery $ 1,514 $ 777 $ 2,700 $ 1,317
Loyalty program 650 439 1,221 807
Ancillary businesses 206 185 416 371
Miscellaneous 224 135 410 228
Total other revenue $ 2,594 $ 1,536 $ 4,747 $ 2,723

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 8

Notes to the Consolidated Financial Statements

Other Revenue



	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022		2021		2022		2021
Refinery	$	1,134	$	872	$	3,835	$	2,189
Loyalty program	655		453		1,877		1,260
Ancillary businesses	249		215		665		586
Miscellaneous	233		161		640		388
Total other revenue	$	2,271	$	1,701	$	7,017	$	4,423

Refinery. This represents refinery sales to third parties, which are at or near cost; accordingly, the recorded margin on these sales is de minimis.

Loyalty Program. This relates to brand usage by third parties and other performance obligations embedded in miles sold, including redemption of miles for non-air travel and other awards. These revenues are mainly ~~included within~~derived from the total cash sales from marketing agreements, discussed above.

Ancillary Businesses. This represents revenues from aircraft maintenance services we provide to third parties and our vacation wholesale operations.

Miscellaneous. This is primarily composed of revenues related to lounge access, including access provided to certain American Express cardholders, and codeshare agreements.

Revenue by Geographic Region

Operating revenue for the airline segment is recognized in a specific geographic region based on the origin, flight path and destination of each flight segment. A significant portion of the refinery segment's revenues typically consists of fuel sales to support the airline, which is eliminated in the Condensed Consolidated Financial Statements. The remaining operating revenue for the refinery segment is included in the domestic region. Our passenger and operating revenue by geographic region is summarized in the following tables:


Passenger revenue by geographic region	Passenger revenue by geographic region									Passenger revenue by geographic region
		Passenger Revenue											Passenger Revenue
		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	(in millions)	2022		2021		2022		2021				(in millions)	2022		2021			2022		2021
Domestic	Domestic	$	8,318	$	4,478	$	13,881	$	6,758			Domestic	$	8,154	$	5,759		$	22,035	$	12,517
Atlantic	Atlantic	1,701		288		2,240		430				Atlantic	2,313		730			4,553		1,160
Latin America	Latin America	745		485		1,425		749				Latin America	659		564			2,084		1,313
Pacific	Pacific	194		88		319		150				Pacific	338		138			657		288
Total	Total	$	10,958	$	5,339	$	17,865	$	8,087			Total	$	11,464	$	7,191		$	29,329	$	15,278


Operating revenue by geographic region	Operating revenue by geographic region									Operating revenue by geographic region
		Operating Revenue											Operating Revenue
		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	(in millions)	2022		2021		2022		2021				(in millions)	2022		2021			2022		2021
Domestic	Domestic	$	10,655	$	5,894	$	18,204	$	9,262			Domestic	$	10,118	$	7,311		$	28,322	$	16,572
Atlantic	Atlantic	2,057		467		2,833		734				Atlantic	2,705		954			5,538		1,688
Latin America	Latin America	854		586		1,665		967				Latin America	752		653			2,417		1,620
Pacific	Pacific	258		179		471		313				Pacific	400		236			870		549
Total	Total	$	13,824	$	7,126	$	23,173	$	11,276			Total	$	13,975	$	9,154		$	37,147	$	20,429

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 9

Notes to the Consolidated Financial Statements

NOTE 3. FAIR VALUE MEASUREMENTS

Assets/(Liabilities) Measured at Fair Value on a Recurring Basis


(in millions)	(in millions)	June 30, 2022		Level 1		Level 2		Level 3		(in millions)	September 30, 2022		Level 1		Level 2		Level 3
Cash equivalents	Cash equivalents	$	6,873	$	6,873	$	—	$	—	Cash equivalents	$	4,443	$	4,443	$	—	$	—
Restricted cash equivalents	Restricted cash equivalents	331		331		—		—		Restricted cash equivalents	302		302		—		—
Short-term investments	Short-term investments	1,549		75		1,474		—		Short-term investments	1,345		75		1,270		—
Long-term investments	Long-term investments	1,089		958		34		97		Long-term investments	899		767		35		97
Fuel hedge contracts	Fuel hedge contracts	59		—		59		—		Fuel hedge contracts	23		—		23		—


(in millions)	December 31, 2021		Level 1		Level 2		Level 3
Cash equivalents	$	5,450	$	5,450	$	—	$	—
Restricted cash equivalents	635		635		—		—
Short-term investments	3,386		1,376		2,010		—
Long-term investments	1,459		1,326		36		97
Fuel hedge contracts	(18)		—		(18)		—

Cash Equivalents and Restricted Cash Equivalents. Cash equivalents generally consist of money market funds. Restricted cash equivalents generally consist of money market funds, time deposits, commercial paper and negotiable certificates of deposit, which primarily relate to certain self-insurance obligations and airport commitments as well as proceeds from debt issued to finance, among other things, a portion of the construction costs for our new terminal facilities at New York's LaGuardia Airport. Restricted cash equivalents are recorded in prepaid expenses and other and other noncurrent assets on our Consolidated Balance Sheet ("balance sheet"). The fair value of these cash equivalents is based on a market approach using prices generated by market transactions involving identical or comparable assets.

Short-Term Investments. Short-term investments consist of U.S. government and agency securities. The fair values of these investments are based on a market approach using industry standard valuation techniques that incorporate observable inputs such as quoted market prices, interest rates, benchmark curves, credit ratings of the security and other observable information.

As of ~~June~~September 30, 2022, the estimated fair value of our short-term investments was $~~1.5~~1.3 billion. Of these investments, ~~$821~~$711 million are expected to mature in one year or less, with the remainder maturing by the first half of 2024. Investments with maturities beyond one year when purchased are classified as short-term investments if they are expected to be available to support our short-term liquidity needs.

Long-Term Investments. Our long-term investments measured at fair value primarily consist of equity investments, which are valued based on market prices or other observable transactions and inputs, and are recorded in equity investments on our balance sheet. Our equity investments in private companies are classified as Level 3 in the fair value hierarchy as their equity is not traded on a public exchange and our valuations incorporate certain unobservable inputs, including non-public equity issuances and forecasts provided by our investees. Fair value measurement using unobservable inputs is inherently uncertain, and a change in significant inputs could result in different fair values. See Note 4, "Investments," for further information on our equity investments.

Fuel Hedge Contracts. Our derivative contracts to hedge the financial risk from changing fuel prices are primarily related to inventory at our wholly-owned subsidiary, Monroe Energy, LLC ("Monroe"). Our fuel hedge portfolio may consist of a combination of options, swaps or futures contracts, most of which have a duration of less than three months. Option and swap contracts are valued under income approaches using option pricing models and discounted cash flow models, respectively, based on data either readily observable in public markets, derived from public markets or provided by counterparties who regularly trade in public markets. Futures contracts and options on futures contracts are traded on a public exchange and valued based on quoted market prices. We recognized gains of $139 million and losses of ~~$239 million and $478~~$339 million on our fuel hedge contracts in aircraft fuel and related taxes on our Condensed Consolidated Statements of Operations and Comprehensive ~~Loss~~Income ("income statement") for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively, compared to losses of ~~$63~~$22 million and ~~$120~~$143 million for the three and ~~six~~nine months ended ~~June~~September 30, 2021, respectively. The losses recognized during the nine months ended September 30, 2022 ~~are~~were composed of ~~$555~~$380 million of settlements on contracts, ~~and $77~~partially offset by $41 million of mark-to-market adjustments. Expense from the settlement of closed contracts is offset by higher operating profits at Monroe from higher pricing. See Note 9, "Segments," for further information on our Monroe refinery segment.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 10

Notes to the Consolidated Financial Statements

NOTE 4. INVESTMENTS

We have developed strategic relationships with a number of airlines and airline services companies through joint ventures and other forms of cooperation and support, including equity investments. Our equity investments reinforce our commitment to these relationships and generally enhance our ability to offer input to the investee on strategic issues and direction, in some cases through representation on the board of directors.

Fair Value Investments. Changes in the valuation of investments accounted for at fair value are recorded in gain/(loss) on investments, net in our income statement within non-operating expense and are driven by changes in stock prices, foreign currency fluctuations and other valuation techniques for investments in companies without publicly-traded shares.

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


Equity investments ownership interest and carrying value	Equity investments ownership interest and carrying value										Equity investments ownership interest and carrying value
		Accounting Treatment	Ownership Interest				Carrying Value					Accounting Treatment	Ownership Interest				Carrying Value
(in millions)	(in millions)		June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021		(in millions)		September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Air France-KLM	Air France-KLM	Fair Value	3	%	6	%	$	86	$	165	Air France-KLM	Fair Value	3	%	6	%	$	94	$	165
China Eastern	China Eastern	Fair Value	2	%	2	%	179		177		China Eastern	Fair Value	2	%	2	%	158		177
CLEAR	CLEAR	Fair Value	6	%	6	%	166		260		CLEAR	Fair Value	6	%	6	%	189		260
Grupo Aeroméxico	Grupo Aeroméxico	Equity Method(1)	20	%	51	%	420		—		Grupo Aeroméxico	Equity Method(1)	20	%	51	%	424		—
Hanjin-KAL		Fair Value	13	%	13	%	419		455
Hanjin KAL											Hanjin KAL	Fair Value(2)	15	%	13	%	259		455
Unifi Aviation	Unifi Aviation	Equity Method(2)	49	%	49	%	163		159		Unifi Aviation	Equity Method(3)	49	%	49	%	161		159
Wheels Up	Wheels Up	Fair Value(3)	21	%	21	%	101		241		Wheels Up	Fair Value(4)	21	%	21	%	60		241
Other investments	Other investments	Various					237		255		Other investments	Various					240		255
Equity investments	Equity investments						$	1,771	$	1,712	Equity investments						$	1,585	$	1,712

(1)Results are included in equity method results in our income statement under non-operating expense.

(2)At September 30, 2022, we held 14.8% of the outstanding shares (including common and preferred), and 14.9% of the common shares, of Hanjin KAL.

(3)Results are included in contracted services in our income statement as this entity is integral to the operations of our business by providing services at many of our airport locations.

~~(3)~~(4)We elected to account for our investment under the fair value option.

Air France-KLM. During the June 2022 quarter, Air France-KLM ("AFKL") executed a €2.3 billion rights issue, through the issuance of 1.9 billion new AFKL shares. We participated in the rights issue on a cash neutral basis by subscribing to approximately 36 million new AFKL shares using the proceeds from the sale of part of our rights to a third party. The net impact of these transactions reduced our ownership interest to approximately 3% and the change in the fair value of our investment in AFKL is recorded in gain/(loss) on investments, net in our income statement within non-operating expense.

Grupo Aeroméxico. In the March 2022 quarter, Grupo Aeroméxico ("Aeroméxico") emerged from its voluntary proceedings to reorganize under Chapter 11 of the United States bankruptcy code ("bankruptcy process"). At the conclusion of the bankruptcy process, Aeroméxico's previously outstanding capital stock was consolidated and exchanged for less than 0.01% of new capital stock, which effectively eliminated our historical 51% ownership stake. Upon emergence, Delta received a 20% equity stake in the newly restructured Aeroméxico in exchange for (1) our receivables under Aeroméxico's debtor-in-possession financing, (2) $100 million (recorded as an investing outflow on our Condensed Consolidated Statements of Cash Flows), and (3) our agreement to provide expanded commercial services to Aeroméxico in future periods. We account for our investment in Aeroméxico under the equity method of accounting and record our share of Aeroméxico's financial results in equity method results in our income statement.

Delta Air Lines, Inc. September 2022 Form 10-Q 11

Notes to the Consolidated Financial Statements

Other ~~Investments.~~ Investments

This category includes various investments that are accounted for at fair value or under the equity method, depending on our ownership interest and the level of influence conveyed by our investment.

Virgin Atlantic. Virgin Atlantic has completed an out-of-court restructuring, during which we provided ~~and continue to provide~~ strategic and operational ~~assistance.~~assistance and which we continue to provide. The carrying value of our investment in Virgin Atlantic remains zero as of ~~June~~September 30, 2022. We maintained our 49% equity interest and continue to track our share of Virgin Atlantic's losses under the equity method of accounting, which are only recorded to the extent we make additional investments in Virgin Atlantic.

~~Delta Air Lines, Inc. June 2022 Form 10-Q 11~~

~~Notes to the Consolidated Financial Statements~~

LATAM. LATAM Airlines Group S.A. ("LATAM") is undergoing voluntary proceedings to reorganize under Chapter 11 of the United States bankruptcy code, and the carrying value of our investment in LATAM remains zero as of ~~June~~September 30, 2022. In order to support our relationship with LATAM, we are providing strategic and operational assistance through the bankruptcy process. After LATAM's refinancing in ~~April~~the June 2022 quarter, we have a $71 million noncurrent receivable outstanding associated with LATAM's debtor-in-possession financing. LATAM's plan of reorganization has been confirmed by the Bankruptcy Court and is expected to take effect before the end of 2022. As our pre-bankruptcy equity ownership of approximately 20% will be substantially diluted to a de minimis level, we expect to participate in certain of the offerings contemplated under the reorganization plan at an additional investment level commensurate with an equity stake ~~not to exceed~~of approximately 10% in the reorganized LATAM.

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

We have classified our 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.

Delta Air Lines, Inc. September 2022 Form 10-Q 12

Notes to the Consolidated Financial Statements

NOTE 5. DEBT


Summary of outstanding debt by category	Summary of outstanding debt by category											Summary of outstanding debt by category
		Maturity			Interest Rate(s) Per Annum at			June 30,		December 31,			Maturity			Interest Rate(s) Per Annum at			September 30,		December 31,
(in millions)	(in millions)	Dates			June 30, 2022			2022		2021		(in millions)	Dates			September 30, 2022			2022		2021
Unsecured Payroll Support Program Loans	Unsecured Payroll Support Program Loans	2030	to	2031	1.00%			$	3,496	$	3,496	Unsecured Payroll Support Program Loans	2030	to	2031	1.00%			$	3,496	$	3,496
Unsecured notes	Unsecured notes	2023	to	2029	2.90%	to	7.38%	3,146		4,354		Unsecured notes	2023	to	2029	2.90%	to	7.38%	2,997		4,354
Financing arrangements secured by SkyMiles assets:	Financing arrangements secured by SkyMiles assets:											Financing arrangements secured by SkyMiles assets:
SkyMiles Notes(1)	SkyMiles Notes(1)	2023	to	2028	4.50%	and	4.75%	6,000		6,000		SkyMiles Notes(1)	2023	to	2028	4.50%	and	4.75%	5,144		6,000
SkyMiles Term Loan(1)(2)	SkyMiles Term Loan(1)(2)	2023	to	2027	4.81%			2,820		2,820		SkyMiles Term Loan(1)(2)	2023	to	2027	6.46%			2,820		2,820
Financing arrangements secured by aircraft:	Financing arrangements secured by aircraft:											Financing arrangements secured by aircraft:
Certificates(1)	Certificates(1)	2022	to	2028	2.00%	to	8.00%	1,867		1,932		Certificates(1)	2022	to	2028	2.00%	to	8.00%	1,855		1,932
Notes(1)(2)	Notes(1)(2)	2022	to	2033	1.99%	to	5.75%	987		1,139		Notes(1)(2)	2022	to	2033	1.99%	to	5.75%	915		1,139
NYTDC Special Facilities Revenue Bonds(1)	NYTDC Special Facilities Revenue Bonds(1)	2023	to	2045	4.00%	to	5.00%	2,838		2,894		NYTDC Special Facilities Revenue Bonds(1)	2023	to	2045	4.00%	to	5.00%	2,838		2,894
Financing arrangements secured by slots, gates and/or routes:	Financing arrangements secured by slots, gates and/or routes:											Financing arrangements secured by slots, gates and/or routes:
2020 Senior Secured Notes	2020 Senior Secured Notes	2025			7.00%			2,019		2,589		2020 Senior Secured Notes	2025			7.00%			1,542		2,589
2018 Revolving Credit Facility(2)	2018 Revolving Credit Facility(2)	2023	to	2024	Undrawn			—		—		2018 Revolving Credit Facility(2)	2023	to	2024	Undrawn			—		—
Other financings(1)(2)	Other financings(1)(2)	2022	to	2030	2.51%	to	5.00%	68		68		Other financings(1)(2)	2022	to	2030	2.51%	to	5.00%	67		68
Other revolving credit facilities(2)	Other revolving credit facilities(2)	2023	to	2024	Undrawn			—		—		Other revolving credit facilities(2)	2023	to	2024	Undrawn			—		—
Total secured and unsecured debt	Total secured and unsecured debt							23,241		25,292		Total secured and unsecured debt							$	21,674	$	25,292
Unamortized (discount)/premium and debt issue cost, net and other	Unamortized (discount)/premium and debt issue cost, net and other							(176)		(208)		Unamortized (discount)/premium and debt issue cost, net and other							(151)		(208)
Total debt	Total debt							23,065		25,084		Total debt							$	21,523	$	25,084
Less: current maturities	Less: current maturities							(1,621)		(1,502)		Less: current maturities							(1,723)		(1,502)
Total long-term debt	Total long-term debt							$	21,444	$	23,582	Total long-term debt							$	19,800	$	23,582

(1)Due in installments during the years shown above.

(2)Certain financings are comprised of variable rate debt. All variable rates are equal to LIBOR (generally subject to a floor) or another index rate plus a specified margin.

Availability Under Revolving Credit Facilities

As of ~~June~~September 30, 2022, we had approximately $2.8 billion undrawn and available under our revolving credit facilities. In addition, we had approximately $300 million outstanding letters of credit as of ~~June~~September 30, 2022 ~~including approximately $100 million that reduced the availability under our revolving credit facilities and approximately $300 million~~ that did not affect the availability of our revolving credit facilities.

Early Settlement of Outstanding Notes

In August 2022, we completed a cash tender offer for an aggregate purchase price of $1.5 billion, excluding accrued and unpaid interest, of certain of our outstanding debt securities. As a result of the tender offer, we repurchased the following notes:


Notes Repurchased in Tender Offer
(in millions)	Location in debt table	Principal Repurchased		Amount Paid
4.500% Senior Secured Notes due 2025	SkyMiles Notes	$	856	$	850
7.000% Senior Secured Notes due 2025	2020 Senior Secured Notes	478		498
7.375% Notes due 2026	Unsecured Notes	84		87
3.800% Notes due 2023	Unsecured Notes	65		65
Total Notes Repurchased		$	1,483	$	1,500

In addition to the early settlement of the principal amount of the purchased notes, we recorded a loss of $34 million on extinguishment of debt in non-operating expense in our income statement.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 1213

Notes to the Consolidated Financial Statements

Fair Value of Debt

Market risk associated with our fixed- and variable-rate debt relates to the potential reduction in fair value and negative impact to future earnings, respectively, from an increase in interest rates. The fair value of debt shown below is principally based on reported market values, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral. Debt is primarily classified as Level 2 within the fair value hierarchy.


Fair value of outstanding debt	Fair value of outstanding debt					Fair value of outstanding debt
(in millions)	(in millions)	June 30, 2022		December 31, 2021		(in millions)	September 30, 2022		December 31, 2021
Net carrying amount	Net carrying amount	$	23,065	$	25,084	Net carrying amount	$	21,523	$	25,084
Fair value	Fair value	$	22,200	$	26,900	Fair value	$	20,500	$	26,900

Covenants

Our debt agreements contain various affirmative, negative and financial covenants. We were in compliance with the covenants in our debt agreements at ~~June~~September 30, 2022.

NOTE 6. EMPLOYEE BENEFIT PLANS


Employee benefit plans net periodic (benefit) cost	Employee benefit plans net periodic (benefit) cost									Employee benefit plans net periodic (benefit) cost
		Pension Benefits				Other Postretirement and Postemployment Benefits					Pension Benefits				Other Postretirement and Postemployment Benefits
(in millions)	(in millions)	2022		2021		2022		2021		(in millions)	2022		2021		2022		2021
Three Months Ended June 30,
Three Months Ended September 30,										Three Months Ended September 30,
Service cost	Service cost	$	—	$	—	$	18	$	21	Service cost	$	—	$	—	$	18	$	21
Interest cost	Interest cost	153		146		32		29		Interest cost	153		146		32		29
Expected return on plan assets	Expected return on plan assets	(330)		(381)		(4)		(9)		Expected return on plan assets	(330)		(381)		(4)		(9)
Amortization of prior service credit	Amortization of prior service credit	—		—		(1)		(2)		Amortization of prior service credit	—		—		(1)		(2)
Recognized net actuarial loss	Recognized net actuarial loss	64		88		13		15		Recognized net actuarial loss	64		88		13		15

Settlements										Settlements	—		1		—		—
Net periodic (benefit) cost	Net periodic (benefit) cost	$	(113)	$	(147)	$	58	$	54	Net periodic (benefit) cost	$	(113)	$	(146)	$	58	$	54

Six Months Ended June 30,
Nine Months Ended September 30,										Nine Months Ended September 30,
Service cost	Service cost	$	—	$	—	$	35	$	43	Service cost	$	—	$	—	$	53	$	64
Interest cost	Interest cost	306		291		64		59		Interest cost	459		437		96		88
Expected return on plan assets	Expected return on plan assets	(660)		(761)		(8)		(17)		Expected return on plan assets	(990)		(1,142)		(12)		(26)
Amortization of prior service credit	Amortization of prior service credit	—		—		(3)		(3)		Amortization of prior service credit	—		—		(4)		(5)
Recognized net actuarial loss	Recognized net actuarial loss	127		177		28		27		Recognized net actuarial loss	191		266		41		42

Settlements										Settlements	—		1		—		—
Net periodic (benefit) cost	Net periodic (benefit) cost	$	(227)	$	(293)	$	116	$	109	Net periodic (benefit) cost	$	(340)	$	(438)	$	174	$	163

Service cost is recorded in salaries and related costs in our income statement, while all other components are recorded within pension and related ~~benefit/(expense)~~benefit under non-operating expense.

Expected Long-Term Rate of Return. Based on our funded status as of December 31, 2021, we have modified the strategic asset allocation mix to reduce the investment risk of the portfolio. As a result of the lower risk profile of the portfolio, the weighted average expected long-term rate of return on our defined benefit pension plan assets for 2022 net periodic benefit cost is 7.0%.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 1314

Notes to the Consolidated Financial Statements

NOTE 7. COMMITMENTS AND CONTINGENCIES

Aircraft Purchase Commitments

Our future aircraft purchase commitments totaled approximately ~~$15.1~~$19.9 billion at ~~June~~September 30, 2022.


Aircraft purchase commitments	Aircraft purchase commitments			Aircraft purchase commitments
(in millions)	(in millions)	Total		(in millions)	Total
Six months ending December 31, 2022		$	2,320
Three months ending December 31, 2022				Three months ending December 31, 2022	$	1,380
2023	2023	3,170		2023	3,440
2024	2024	3,480		2024	3,640
2025	2025	2,890		2025	4,230
2026	2026	2,240		2026	3,700
Thereafter	Thereafter	960		Thereafter	3,500
Total	Total	$	15,060	Total	$	19,890

Our future aircraft purchase commitments included the following aircraft at ~~June~~September 30, 2022:


Aircraft purchase commitments by fleet type
Aircraft Type			Purchase Commitments
A220-300			3950
A321-200neo			~~152~~147
A330-900neo			2320
A350-900			18
B-737-900ER			43
~~CRJ-900~~B-737-10			1100
Total			~~237~~338

Aircraft Orders

During the June 2022 quarter, we agreed to acquire 4four B-737-900ER and 1one A330-900 aircraft. Deliveries of the pre-owned B-737-900ER aircraft are expected to occur by the end of 2022 and delivery of the new A330-900 aircraft is expected to occur in 2024.

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 of aircraft, to start delivery in 2025 with the option to purchase an additional thirty 737-10 aircraft. Also in July 2022, we exercised purchase rights for 12 A220-300 aircraft with Airbus.

Legal Contingencies

We are involved in various legal proceedings related to employment practices, environmental issues, antitrust matters and other matters concerning our business. We record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount of loss can be reasonably estimated. Although the outcome of the legal proceedings in which we are involved cannot be predicted with certainty, we believe that the resolution of current matters will not have a material adverse effect on our Condensed Consolidated Financial Statements.

Delta Air Lines, Inc. September 2022 Form 10-Q 15

Notes to the Consolidated Financial Statements

Other Contingencies

General Indemnifications

We are the lessee under many commercial real estate leases. It is common in these transactions for us, as the lessee, to agree to indemnify the lessor and the lessor's related parties for tort, environmental and other liabilities that arise out of or relate to our use or occupancy of the leased premises. This type of indemnity would typically make us responsible to indemnified parties for liabilities arising out of the conduct of, among others, contractors, licensees and invitees at, or in connection with, the use or occupancy of the leased premises. This indemnity often extends to related liabilities arising from the negligence of the indemnified parties but usually excludes any liabilities caused by either their sole or gross negligence or their willful misconduct.

~~Delta Air Lines, Inc. June 2022 Form 10-Q 14~~

~~Notes to the Consolidated Financial Statements~~

Our aircraft and other equipment lease and financing agreements typically contain provisions requiring us, as the lessee or obligor, to indemnify the other parties to those agreements, including certain of those parties' related persons, against virtually any liabilities that might arise from the use or operation of the aircraft or other equipment.

We believe that our insurance would cover most of our exposure to liabilities and related indemnities associated with the commercial real estate leases and aircraft and other equipment lease and financing agreements described above. While our insurance does not typically cover environmental liabilities, we have insurance policies in place as required by applicable environmental laws.

Some of our aircraft and other financing transactions include provisions that require us to make payments to preserve an expected economic return to the lenders if that economic return is diminished due to specified changes in laws or regulations. In some of these financing transactions, we also bear the risk of changes in tax laws that would subject payments to non-U.S. lenders to withholding taxes.

We cannot reasonably estimate our potential future payments under the indemnities and related provisions described above because we cannot predict (1) when and under what circumstances these provisions may be triggered and (2) the amount that would be payable if the provisions were triggered because the amounts would be based on facts and circumstances existing at such time.

Other

We have certain contracts for goods and services that require us to pay a penalty, acquire inventory specific to us or purchase contract-specific equipment, as defined by each respective contract, if we terminate the contract without cause prior to its expiration date. Because these obligations are contingent on our termination of the contract without cause prior to its expiration date, no obligation would exist unless such a termination occurs.

NOTE 8. ACCUMULATED OTHER COMPREHENSIVE LOSS


Components of accumulated other comprehensive loss	Components of accumulated other comprehensive loss							Components of accumulated other comprehensive loss
(in millions)	(in millions)	Pension and Other Benefit Liabilities		Other		Total		(in millions)	Pension and Other Benefit Liabilities		Other		Total
Balance at January 1, 2022 (net of tax effect of $1,184)	Balance at January 1, 2022 (net of tax effect of $1,184)	$	(7,170)	$	40	$	(7,130)	Balance at January 1, 2022 (net of tax effect of $1,184)	$	(7,170)	$	40	$	(7,130)

Reclassifications into earnings (net of tax effect of $37)(1)		122		—		122
Balance at June 30, 2022 (net of tax effect of $1,147)		$	(7,048)	$	40	$	(7,008)
Reclassifications into earnings (net of tax effect of $56)(1)								Reclassifications into earnings (net of tax effect of $56)(1)	184		—		184
Balance at September 30, 2022 (net of tax effect of $1,128)								Balance at September 30, 2022 (net of tax effect of $1,128)	$	(6,986)	$	40	$	(6,946)

Balance at January 1, 2021 (net of tax effect of $1,764) $ (9,078) $ 40 $ (9,038)
Reclassifications into earnings (net of tax effect of $47)(1)
156 — 156
Balance at June 30, 2021 (net of tax effect of $1,717) $ (8,922) $ 40 $ (8,882)


Balance at January 1, 2021 (net of tax effect of $1,764)	$	(9,078)	$	40	$	(9,038)
Changes in value (net of tax effect of $1)	3		—		3
Reclassifications into earnings (net of tax effect of $71)(1)	235		—		235
Balance at September 30, 2021 (net of tax effect of $1,692)	$	(8,840)	$	40	$	(8,800)

(1)Amounts reclassified from accumulated other comprehensive loss for pension and other benefit liabilities are recorded in pension and related ~~benefit/(expense)~~benefit in non-operating expense in our income statement.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 1516

Notes to the Consolidated Financial Statements

NOTE 9. SEGMENTS

Refinery Operations

Our refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and through jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel, as well as non-jet fuel products. We use several counterparties to exchange the non-jet fuel products produced by the refinery for jet fuel consumed in our airline operations. The gross fair value of the products exchanged under these agreements during the three and ~~six~~nine months ended ~~June~~September 30, 2022 was ~~$1.0 billion~~$834 million and ~~$1.8~~$2.6 billion, respectively, compared to ~~$536~~$629 million and ~~$1.0~~$1.7 billion for the three and ~~six~~nine months ended ~~June~~September 30, 2021, respectively.

Segment Reporting

Segment results are prepared based on our internal accounting methods described below, with reconciliations to consolidated amounts in accordance with GAAP. Our segments are not designed to measure operating income or loss directly related to the products and services included in each segment on a stand-alone basis.


Financial information by segment	Financial information by segment										Financial information by segment
(in millions)	(in millions)	Airline		Refinery		Intersegment Sales/Other			Consolidated		(in millions)	Airline		Refinery		Intersegment Sales/Other			Consolidated
Three Months Ended June 30, 2022
Three Months Ended September 30, 2022											Three Months Ended September 30, 2022
Operating revenue:	Operating revenue:	$	12,310	$	3,353				$	13,824	Operating revenue:	$	12,841	$	2,599				$	13,975
Sales to airline segment	Sales to airline segment					$	(761)	(1)			Sales to airline segment					$	(504)	(1)
Exchanged products	Exchanged products					(982)		(2)			Exchanged products					(834)		(2)
Sales of refined products	Sales of refined products					(96)		(3)			Sales of refined products					(127)		(3)
Operating income	Operating income	1,250		269		—			1,519		Operating income	1,264		192		—			1,456
Interest expense, net	Interest expense, net	269		2		(2)			269		Interest expense, net	248		3		(3)			248
Depreciation and amortization	Depreciation and amortization	510		23		(23)		(4)	510		Depreciation and amortization	538		23		(23)		(4)	538

Total assets, end of period	Total assets, end of period	71,766		3,065		(26)			74,805		Total assets, end of period	69,680		2,977		(61)			72,596
Net fair value obligations, end of period	Net fair value obligations, end of period	—		(556)		—			(556)		Net fair value obligations, end of period	—		(291)		—			(291)
Capital expenditures	Capital expenditures	928		30		—			958		Capital expenditures	1,393		49		—			1,442

Three Months Ended June 30, 2021
Three Months Ended September 30, 2021											Three Months Ended September 30, 2021
Operating revenue:	Operating revenue:	$	6,349	$	1,434				$	7,126	Operating revenue:	$	8,282	$	1,696				$	9,154
Sales to airline segment	Sales to airline segment					$	(108)	(1)			Sales to airline segment					$	(183)	(1)
Exchanged products	Exchanged products					(536)		(2)			Exchanged products					(629)		(2)
Sales of refined products	Sales of refined products					(13)		(3)			Sales of refined products					(12)		(3)
Operating income/(loss)		973		(157)		—			816
Operating income											Operating income	2,108		97		—			2,205
Interest expense, net	Interest expense, net	338		1		(1)			338		Interest expense, net	314		2		(2)			314
Depreciation and amortization	Depreciation and amortization	501		24		(24)		(4)	501		Depreciation and amortization	501		24		(24)		(4)	501

Total assets, end of period	Total assets, end of period	73,491		1,825		(7)			75,309		Total assets, end of period	70,783		2,012		(12)			72,783
Net fair value obligations, end of period	Net fair value obligations, end of period	—		(507)		—			(507)		Net fair value obligations, end of period	—		(547)		—			(547)
Capital expenditures	Capital expenditures	752		9		—			761		Capital expenditures	818		12		—			830

(1)Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price for jet fuel from the refinery by reference to the market index for the primary delivery location, which is New York Harbor.

(2)Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.

(3)These sales were at or near cost; accordingly, the margin on these sales is de minimis.

(4)Refinery segment operating results, including depreciation and amortization, are included within aircraft fuel and related taxes in our income statement.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 1617

Notes to the Consolidated Financial Statements


Financial information by segment	Financial information by segment										Financial information by segment
(in millions)	(in millions)	Airline		Refinery		Intersegment Sales/Other			Consolidated		(in millions)	Airline		Refinery		Intersegment Sales/Other			Consolidated
Six Months Ended June 30, 2022
Nine Months Ended September 30, 2022											Nine Months Ended September 30, 2022
Operating revenue:	Operating revenue:	$	20,473	$	5,666				$	23,173	Operating revenue:	$	33,312	$	8,265				$	37,147
Sales to airline segment	Sales to airline segment					$	(1,053)	(1)			Sales to airline segment					$	(1,557)	(1)
Exchanged products	Exchanged products					(1,791)		(2)			Exchanged products					(2,623)		(2)
Sales of refined products	Sales of refined products					(122)		(3)			Sales of refined products					(250)		(3)
Operating income	Operating income	412		323		—			735		Operating income	1,676		515		—			2,191
Interest expense, net	Interest expense, net	543		4		(4)			543		Interest expense, net	791		7		(7)			791
Depreciation and amortization	Depreciation and amortization	1,016		47		(47)		(4)	1,016		Depreciation and amortization	1,554		70		(70)		(4)	1,554
Capital expenditures	Capital expenditures	2,676		48		—			2,724		Capital expenditures	4,069		97		—			4,166

Six Months Ended June 30, 2021
Nine Months Ended September 30, 2021											Nine Months Ended September 30, 2021
Operating revenue:	Operating revenue:	$	9,959	$	2,481				$	11,276	Operating revenue:	$	18,240	$	4,177				$	20,429
Sales to airline segment	Sales to airline segment					$	(108)	(1)			Sales to airline segment					$	(292)	(1)
Exchanged products	Exchanged products					(1,039)		(2)			Exchanged products					(1,667)		(2)
Sales of refined products	Sales of refined products					(17)		(3)			Sales of refined products					(29)		(3)
Operating loss		(299)		(283)		—			(582)
Operating income (loss)											Operating income (loss)	1,809		(186)		—			1,623
Interest expense, net	Interest expense, net	700		3		(3)			700		Interest expense, net	1,014		5		(5)			1,014
Depreciation and amortization	Depreciation and amortization	993		48		(48)		(4)	993		Depreciation and amortization	1,494		72		(72)		(4)	1,494
Capital expenditures	Capital expenditures	1,177		22		—			1,199		Capital expenditures	1,994		35		—			2,029

(2)Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.

(3)These sales were at or near cost; accordingly, the margin on these sales is de minimis.

(4)Refinery segment operating results, including depreciation and amortization, are included within aircraft fuel and related taxes in our income statement.

Fair Value Obligations

The net fair value obligations presented in the financial information by segment for the three month periods table above are related to renewable fuel compliance costs, are presented net of any related assets or fixed price purchase agreements and are based on quoted market prices and other observable information and are therefore classified as Level 2 in the fair value hierarchy. Our obligation as of ~~June~~September 30, 2022 was calculated using the U.S. Environmental Protection Agency's ("EPA") Renewable Fuel Standard ("RFS") volume requirements, which were finalized in the June ~~2022.~~2022 quarter. The compliance deadlines to retire our obligations for 2020 and 2021 are in the fourth quarter of 2022 and first quarter of 2023, respectively.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 1718

Notes to the Consolidated Financial Statements

NOTE 10. ~~EARNINGS/(LOSS)~~EARNINGS PER SHARE

We calculate basic ~~earnings/(loss)~~earnings ~~per share and diluted loss~~ per share by dividing net ~~income/(loss)~~income by the weighted average number of common shares outstanding, excluding restricted shares. We calculate diluted earnings per share by dividing net income by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based instruments, including stock options, restricted stock awards and warrants. Antidilutive common stock equivalents excluded from the diluted earnings per share calculation are not material. The following table shows the computation of basic and diluted ~~earnings/(loss)~~earnings per share:


Basic and diluted earnings/(loss) per share
Basic and diluted earnings per share										Basic and diluted earnings per share
		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except per share data)	(in millions, except per share data)	2022		2021		2022		2021		(in millions, except per share data)	2022		2021		2022		2021
Net income/(loss)		$	735	$	652	$	(205)	$	(525)
Net income										Net income	$	695	$	1,212	$	489	$	688

Basic weighted average shares outstanding	Basic weighted average shares outstanding	638		637		638		636		Basic weighted average shares outstanding	638		637		638		636
Dilutive effect of share-based instruments	Dilutive effect of share-based instruments	3		5		—		—		Dilutive effect of share-based instruments	3		4		3		5
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding	641		642		638		636		Diluted weighted average shares outstanding	641		641		641		641

Basic earnings/(loss) per share		$	1.15	$	1.02	$	(0.32)	$	(0.82)
Diluted earnings/(loss) per share		$	1.15	$	1.02	$	(0.32)	$	(0.82)
Basic earnings per share										Basic earnings per share	$	1.09	$	1.90	$	0.77	$	1.08
Diluted earnings per share										Diluted earnings per share	$	1.08	$	1.89	$	0.76	$	1.07

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 1819

Item 2. MD&A

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and related notes included in our 2021 Form 10-K.

~~June~~September 2022 Quarter Financial Overview

~~Although~~During the September 2022 quarter, we have experienced continued improvement in our ~~business remained affected by~~recovery from the impact of the COVID-19 pandemic, which improvement we expect will continue in the ~~first two months of the year, we have seen continued improvement during the June~~December 2022 quarter ~~which we expect to continue throughout 2022.~~and beyond. Given the drastic and unprecedented impact of the COVID-19 pandemic on our operating results in 2021 and 2020, we believe that a comparison of our results in the ~~June~~September 2022 quarter to both the ~~June~~September 2021 and ~~June~~September 2019 quarters 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 selected key financial and statistical measures for the three months ended ~~June~~September 30, 2022, 2021 and 2019.


		Three Months Ended June 30,						2022 vs. 2021 % Increase (Decrease) (1)		2022 vs. 2019 % Increase (Decrease) (1)			Three Months Ended September 30,						2022 vs. 2021 % Increase (Decrease)		2022 vs. 2019 % Increase (Decrease)
(in millions)	(in millions)	2022		2021		2019						(in millions)	2022		2021		2019
Total operating revenue	Total operating revenue	$	13,824	$	7,126	$	12,536	94	%	10	%	Total operating revenue	$	13,975	$	9,154	$	12,560	53	%	11	%
Total operating expense	Total operating expense	12,305		6,310		10,408		95	%	18	%	Total operating expense	12,519		6,949		10,489		80	%	19	%
Operating income	Operating income	1,519		816		2,128		86	%	(29)	%	Operating income	1,456		2,205		2,071		(34)	%	(30)	%

Available seat miles ("ASM")	Available seat miles ("ASM")	58,903		48,529		71,754		21	%	(18)	%	Available seat miles ("ASM")	63,007		54,083		75,742		17	%	(17)	%

~~Our~~The increase in operating ~~income for~~revenue during the ~~June~~September 2022 quarter ~~was $1.5 billion, an improvement of $703 million~~ compared to the ~~June~~September 2021 ~~quarter. This improvement was~~quarter primarily ~~due to~~resulted from a ~~$5.6~~$4.3 billion, or ~~105%~~59%, increase in passenger revenue ~~as a result of~~on increased demand and ~~capacity, partially offset by~~capacity. Offsetting the increase in operating revenue, the decrease in operating income resulted from a ~~$1.7~~$1.8 billion increase in fuel expense and increases in other volume-related expenses as we ~~continue~~continued to restore our ~~operation. Operating income in~~operation during the ~~June 2021~~September 2022 quarter, ~~also benefited from~~as well as the recognition of ~~$1.5~~a $1.8 billion ofbenefit from the Payroll Support Programs ("PSP") grant ~~proceeds.~~proceeds in the September 2021 quarter, which reduced expenses in that quarter.

Compared to operating income of $2.1 billion in the ~~June~~September 2019 quarter, our operating income in the ~~June~~September 2022 quarter was lower primarily from a ~~41%~~48% increase in fuel expense and ~~a 4% decrease in~~flat passenger revenue on ~~18%~~17% lower system capacity, as we continue to ~~rebuild~~restore our operations following the COVID-19 pandemic.

Revenue. Compared to the ~~June~~September 2021 quarter, our operating revenue increased ~~$6.7~~$4.8 billion, or ~~94%~~53%, due primarily to increased travel ~~demand and higher refinery third party sales.~~demand.

Compared to the ~~June~~September 2019 quarter, our operating revenue was ~~$1.3~~$1.4 billion, ~~higher,~~ or ~~10%~~11%, higher due primarily to higher refinery third party sales and improved yield. We expect system capacity to be ~~83%~~91% to ~~85%~~92% recovered in the ~~September~~December 2022 quarter compared to the ~~September~~December 2019 quarter.

Consumer demand continued to improve through the ~~June~~September 2022 quarter with a strong ~~beginning to~~summer season driving domestic passenger revenue 2% higher than the ~~summer season. The sale of tickets to domestic business customers (i.e., both corporate and contracted small- and medium-sized enterprises), including tickets for travel during and beyond the~~September 2019 quarter, ~~(“advance sales”), continued to improve during the June 2022 quarter.~~despite 11% lower capacity.

International revenue has lagged the recovery in domestic travel, but improved in the ~~June~~September 2022 quarter to approximately ~~80%~~97% recovered compared to the ~~June~~September 2019 quarter as travel restrictions eased and many countries have now ended testing requirements, including the U.S. The sale of tickets to international business customers (i.e., both corporate and contracted small- and medium-sized enterprises), including advance sales, also significantly improved during the June 2022 quarter, led by the Atlantic region. Despite the recent policy changes, ~~and improved advance sales,~~ we still expect the recovery of international revenue to continue to trail domestic revenue ~~through 2022.~~during the December 2022 quarter.

We remain optimistic about the ultimate recovery of business travel, which is comprised of both corporate managed travel and small- and medium-sized businesses, and expect demand for business travel to increase during the December 2022 quarter.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 1920

Item 2. MD&A

Operating Expense. Total operating expense in the ~~June~~September 2022 quarter increased ~~$6.0~~$5.6 billion, or ~~95%~~80%, compared to the ~~June~~September 2021 quarter, primarily resulting from increased fuel costs, due to both an increase in fuel price and increased capacity, as well as higher salaries and related costs ~~including premium pay and overtime as we continue to rebuild the operation,~~ and an increase in expenses related to refinery sales to third parties, reflected in ancillary businesses and refinery expense. The increase also resulted from ~~$1.5~~$1.8 billion of PSP grant proceeds recognized during the ~~June~~September 2021 quarter, which reduced expenses in that quarter. Total operating expense, adjusted (a non-GAAP financial measure) for the ~~June~~September 2022 quarter increased ~~$3.9~~$3.5 billion, or ~~55%~~45%, compared to the ~~June~~September 2021 quarter. Adjustments were primarily to exclude expenses related to PSP grant proceeds in the ~~June~~September 2021 quarter and refinery sales to third parties.

Total operating expense in the ~~June~~September 2022 quarter increased ~~$1.9~~$2.0 billion, or ~~18%~~19%, compared to the ~~June~~September 2019 quarter, primarily resulting from increased fuel costs and ~~increased~~ expenses related to refinery sales to third parties, reflected in ancillary businesses and refinery expense. Total operating expense, adjusted for the ~~June~~September 2022 quarter increased ~~$558~~$888 million, or 5%8%, compared to the ~~June~~September 2019 quarter. Adjustments were primarily to exclude mark to market adjustments and expenses related to refinery sales to third parties.

Our total operating cost per available seat mile ("CASM") increased ~~44%~~43% to ~~20.89~~19.87 cents compared to the ~~June~~September 2019 quarter, primarily due to the higher costs discussed above and ~~an 18%~~a 17% decrease in capacity. Non-fuel unit costs ("CASM-Ex", a non-GAAP financial measure) increased ~~22%~~22.5% to ~~12.76~~12.43 cents primarily due to the ~~18%~~17% decrease in capacity.

We now expect non-fuel costs for the full year 2022 to be approximately ~~17%~~18% higher than 2019, ~~which is eight points above the mid-point of our initial expectations from the beginning of 2022 of 7% to 10% higher. The increased unit costs are~~ primarily due to ~~lower~~ capacity ~~and additional costs associated with rebuilding our network and restoring~~reductions during the ~~operational reliability and integrity that we believe is one~~second half of our competitive advantages. We now expect capacity for the full year 2022 to be approximately 85% restored to 2019, which is five percentage points lower than our initial expectations from the beginning of 2022 of 90% restored to 2019.2022.

Cash Flow. Our cash, cash equivalents, short-term investments and aggregate principal amount committed and available to be drawn under our revolving credit facilities ("liquidity") as of ~~June~~September 30, 2022 was ~~$13.6~~$11.2 billion. During the ~~June~~September 2022 quarter, operating activities generated ~~$2.5 billion.~~$869 million.

During the June 2022 quarter, the air traffic liability increased $805 million. We sell tickets for air travel in advance of the customer's travel date and the cash received on these advance sales is recorded as deferred revenue in our air traffic liability. Passenger revenue is recognized and the air traffic liability is reduced when we provide transportation services. The increase in the air traffic liability exceeds our historical seasonal increase, reflecting the continued restoration of our business and a robust demand environment.

As discussed above, consumer demand for travel accelerated through the quarter. Domestic corporate advance sales for the June 2022 quarter were nearly 80% recovered compared to the June 2019 quarter which was approximately 25 percentage points higher compared to the domestic advance sales recovery in the March 2022 quarter. The international corporate advance sales recovery for the June 2022 quarter was approximately 65% compared to the June 2019 quarter which was approximately 30 percentage points higher as compared to the March 2022 quarter, primarily driven by improvement in the Atlantic region.

Additionally, total cash sales to American Express were $1.4 billion in the ~~June~~September 2022 quarter, upan increase of approximately 35% compared to the ~~June~~September 2019 quarter.

Also during the quarter, investing activities used a net of ~~$152 million,~~$1.3 billion, primarily for capital expenditures, partially offset by net redemptions of short-term investments. During the ~~June~~September 2022 quarter we had cash outflows of approximately ~~$952 million~~$1.8 billion related to repayments of our debt and finance leases.

The non-GAAP financial measure referenced above for operating expense, adjusted isand CASM-Ex are defined and reconciled in "Supplemental Information" below.

Environmental Sustainability. During 2022, we are continuing to develop our climate transition plan and to ~~have~~pursue our short-, medium-, and long-term climate ~~goals, including~~goals. In July 2022, Science Based Targets Initiative (SBTi) validated our medium-term goal ~~of achieving net zero~~to reduce well-to-wake (lifecycle) scope 1 and 3 jet fuel greenhouse gas emissions ~~no later than 2050, validated~~ by ~~the Science Based Targets initiative, as described in our 2021 Form 10-K.~~45% per revenue tonne kilometer by 2035 from a 2019 base year. We expect our path toward achievement of these goals to depend heavily on improved fuel efficiency from fleet renewal, increased use of sustainable aviation fuel ~~("SAF")~~(SAF) which is not presently available at scale or at prices competitive to jet fuel, operational initiatives and technological innovation. In the ~~six~~nine months ended ~~June~~September 30, 2022, we incurred ~~$72~~$98 million of expense related to carbon offset credits, which relates to a portion of our airline segment's 2021 and March 2022 quarter carbon emissions. As we continue to work on accelerating our long-term, net-zero greenhouse gas emissions goal, our vision of the path forward will require multiple initiatives, centered on a long-term strategy of decarbonization; we therefore expect substantially all of our investment going forward will be focused on solutions other than carbon offsets.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 2021

Item 2. MD&A - Results of Operations

Results of Operations - Three Months Ended ~~June~~September 30, 2022 and 2021

Operating Revenue


		Three Months Ended June 30,						Increase (Decrease)	% Increase (Decrease)						Three Months Ended September 30,					Increase (Decrease)			% Increase (Decrease)
(in millions)(1)	(in millions)(1)	2022			2021									(in millions)(1)	2022		2021
Ticket - Main cabin	Ticket - Main cabin	$	5,664		$	2,752			$	2,912		106	%			Ticket - Main cabin	$	5,893		$	3,705			$	2,188		59	%
Ticket - Premium products	Ticket - Premium products	4,109			1,801				2,308			128	%			Ticket - Premium products	4,354			2,532				1,822			72	%
Loyalty travel awards	Loyalty travel awards	744			428				316			74	%			Loyalty travel awards	786			544				242			44	%
Travel-related services	Travel-related services	441			358				83			23	%			Travel-related services	431			410				21			5	%
Total passenger revenue	Total passenger revenue	$	10,958		$	5,339			$	5,619		105	%			Total passenger revenue	$	11,464		$	7,191			$	4,273		59	%
Cargo	Cargo	272			251				21			8	%			Cargo	240			262				(22)			(8)	%
Other	Other	2,594			1,536				1,058			69	%			Other	2,271			1,701				570			34	%
Total operating revenue	Total operating revenue	$	13,824		$	7,126			$	6,698		94	%			Total operating revenue	$	13,975		$	9,154			$	4,821		53	%

TRASM (cents)	TRASM (cents)	23.47		¢	14.68		¢		8.79		¢	60	%			TRASM (cents)	22.18		¢	16.93		¢		5.25		¢	31	%
Third-party refinery sales	Third-party refinery sales	(2.57)			(1.60)				(0.97)			61	%			Third-party refinery sales	(1.80)			(1.61)				(0.19)			12	%

TRASM, adjusted(2)	TRASM, adjusted(2)	20.90		¢	13.08		¢		7.82		¢	60	%			TRASM, adjusted(2)	20.38		¢	15.31		¢		5.07		¢	33	%

(1)Total amounts in the table above may not calculate exactly due to rounding.

(2)TRASM, adjusted is a non-GAAP financial measure. For additional information on adjustments to TRASM, see "Supplemental Information" below.

Compared to the ~~June~~September 2021 quarter, our operating revenue increased ~~$6.7~~$4.8 billion, or ~~94%~~53%, due to the continued recovery in demand from the COVID-19 ~~pandemic and higher refinery third party sales.~~pandemic. The increase in operating revenue, on a ~~21%~~17% increase in capacity, resulted in a ~~60%~~31% increase in total revenue per available seat mile ("TRASM") and a 33% increase in TRASM, adjusted compared to the ~~June~~September 2021 quarter. The growth in passenger revenue was due to increased demand in both main cabin and ~~premiums~~premium products, with ~~paid load factor and~~ yield growth in premium products outpacing main cabin.

See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales recorded in other revenue.

We have historically generated cargo revenues in domestic and international markets through the use of cargo space on regularly scheduled passenger aircraft. In 2020 and 2021, following the onset of the COVID-19 pandemic, reduced industry cargo capacity drove a significant increase in our cargo yield. The increase in revenue compared to the June 2021 quarter was primarily driven by additional cargo volume as yield stabilized. We expect capacity growth in the industry to pressure yields in the September 2022 quarter as the industry rebuilds international networks to pre-pandemic levels.

Passenger Revenue by Geographic Region


				Increase (Decrease) vs. Three Months Ended June 30, 2021															Increase (Decrease) vs. Three Months Ended September 30, 2021
(in millions)	(in millions)	Three Months Ended June 30, 2022		Passenger Revenue		RPMs (Traffic)		ASMs (Capacity)		Passenger Mile Yield		PRASM		Load Factor		(in millions)	Three Months Ended September 30, 2022		Passenger Revenue		RPMs (Traffic)		ASMs (Capacity)		Passenger Mile Yield		PRASM		Load Factor
Domestic	Domestic	$	8,318	86	%	31	%	9	%	41	%	70	%	15	pts	Domestic	$	8,154	42	%	8	%	5	%	32	%	35	%	2	pts
Atlantic	Atlantic	1,701		491	%	402	%	158	%	18	%	129	%	41	pts	Atlantic	2,313		217	%	153	%	103	%	25	%	56	%	17	pts
Latin America	Latin America	745		53	%	19	%	(4)	%	29	%	59	%	16	pts	Latin America	659		17	%	(4)	%	(13)	%	22	%	34	%	8	pts
Pacific	Pacific	194		121	%	174	%	(21)	%	(19)	%	181	%	46	pts	Pacific	338		145	%	218	%	(3)	%	(23)	%	153	%	60	pts
Total	Total	$	10,958	105	%	55	%	21	%	33	%	69	%	18	pts	Total	$	11,464	59	%	27	%	17	%	25	%	37	%	7	pts

Domestic

Domestic passenger unit revenue ("PRASM") increased in the ~~June~~September 2022 quarter compared to the ~~June~~September 2021 quarter as a result of demand increasing faster than capacity, as well as higher yields, during the ~~June~~September 2022 quarter.

The ~~June~~September 2022 quarter domestic consumer revenue was above ~~June~~September 2021 quarter ~~levels. Domestic consumer revenue also now exceeds~~levels and continues to exceed pre-pandemic levels, even though capacity has not been fully restored, as consumers continue to return to travel and we believe spending patterns for services are ~~shifting post-pandemic~~returning to ~~experiences instead of~~historical levels compared to spending on goods.

~~Delta Air Lines, Inc. June 2022 Form 10-Q 21~~

~~Item 2. MD&A - Results of Operations~~

We also remain optimistic about the ultimate recovery of business travel, which is comprised of both corporate managed travel and small- and medium-sized businesses, and expect the recovery of both of these components to continue to increase throughout 2022. Business travel demand in the June 2022 quarter was the highest since the onset of the COVID-19 pandemic.

International

International passenger revenue for the ~~June~~September 2022 quarter increased compared to the ~~June~~September 2021 quarter in each geographic region, with the Atlantic region experiencing the most significant improvement.

Delta Air Lines, Inc. September 2022 Form 10-Q 22

Item 2. MD&A - Results of Operations

In November 2021, travel restrictions for fully vaccinated foreign visitors to the United States were lifted. This action made travel to the U.S. by many foreign nationals possible for the first time in 18 months. Further, in June 2022, the United States lifted its testing requirement for international travel. ~~Since the removal~~Both of ~~U.S. pre-departure test requirements, we~~these changes have ~~seen~~had a ~~modest improvement in~~positive impact on international demand.

While ~~some~~many countries have removed or eased travel restrictions, others still maintain international testing requirements and travel restrictions (primarily in the Pacific region), which continue to restrain demand in some ~~markets~~markets.

The Atlantic region has shown the greatest recovery of the international regions, despite the ongoing conflict in Ukraine, as western European countries removed or eased travel ~~restrictions.~~restrictions earlier in 2022. Revenue in this region ~~has nearly restored to~~surpassed pre-pandemic levels in the ~~June~~September 2022 quarter as consumers continue to show increased desire for trans-Atlantic travel. This has been led by demand for ~~premium leisure products and demand for~~ leisure destinations ~~in Europe.~~such as Italy, Spain and Greece and improving business demand.

Latin America region revenue was near pre-pandemic levels during the ~~June~~September 2022 quarter, due to continued strong demand for leisure destinations in Mexico, the Caribbean ~~Mexico~~ and Central America. We expect this trend to continue ~~throughout~~during the December 2022 quarter as demand for leisure destinations remains strong and travel to South America continues to recover. Also, in the September 2022 quarter, final regulatory approval was granted for our trans-American joint venture agreement with LATAM. This agreement will combine 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.

The Pacific region continues to be the most impacted by travel restrictions, although we ~~began to experience some~~experienced demand improvement in the ~~June~~September 2022 quarter asfollowing South Korea and Australia ~~re-opened~~re-opening to international tourists earlier in the year and the gradual easing of travel restrictions to ~~Japan are easing.~~Japan.

Overall, we still expect a lower international revenue environment ~~through~~during the December of 2022 quarter compared to 2019, with the recovery of international revenue continuing to trail domestic revenue.

Ticket Validity Flexibility

We estimate the value of ticket breakage and recognize the related revenue at the scheduled flight date. Our ticket breakage estimates are primarily based on historical experience, ticket contract terms and customers’ travel behavior. 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.

~~Delta Air Lines, Inc. June 2022 Form 10-Q 22~~

~~Item 2. MD&A - Results of Operations~~

Other Revenue


		Three Months Ended June 30,				Increase (Decrease)	% Increase (Decrease)					Three Months Ended September 30,				Increase (Decrease)		% Increase (Decrease)
(in millions)	(in millions)	2022		2021							(in millions)	2022		2021
Refinery	Refinery	$	1,514	$	777		$	737	95	%			Refinery	$	1,134	$	872		$	262	30	%
Loyalty program	Loyalty program	650		439			211		48	%			Loyalty program	655		453			202		45	%
Ancillary businesses	Ancillary businesses	206		185			21		11	%			Ancillary businesses	249		215			34		16	%
Miscellaneous	Miscellaneous	224		135			89		66	%			Miscellaneous	233		161			72		45	%
Total other revenue	Total other revenue	$	2,594	$	1,536		$	1,058	69	%			Total other revenue	$	2,271	$	1,701		$	570	34	%

Refinery. This represents refinery sales to third parties. These sales increased ~~$737~~$262 million compared to the ~~June~~September 2021 quarter. The increase in third-party refinery sales resulted from higher pricing and production during the ~~June~~September 2022 quarter compared to the ~~June~~September 2021 quarter. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales recorded in other revenue.

Delta Air Lines, Inc. September 2022 Form 10-Q 23

Item 2. MD&A - Results of Operations

Loyalty Program. This relates to brand usage by third parties and other performance obligations embedded in miles sold, including redemption of miles for non-travel awards. These revenues are mainly driven by customer spend on American Express cards and new cardholder acquisitions. AsOn continued strength in co-brand card spend and card acquisitions, ~~continue to be strong,~~ revenues from our relationship with American Express increased in the ~~June~~September 2022 quarter compared to the ~~June~~September 2021 quarter.

Ancillary Businesses. This represents revenues from aircraft maintenance services we provide to third parties and our vacation wholesale operations.

Miscellaneous. This is primarily composed of revenues related to lounge access, including access provided to certain American Express cardholders, and codeshare agreements. The volume of these transactions has increased compared to the ~~June~~September 2021 quarter due to the ongoing recovery of our business. Our network of Delta Sky Club lounges was fully reopened by the end of July 2021 after some lounges temporarily closed at the onset of the pandemic in 2020.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 2324

Item 2. MD&A - Results of Operations

Operating Expense


		Three Months Ended June 30,				Increase (Decrease)	% Increase (Decrease)(1)					Three Months Ended September 30,				Increase (Decrease)		% Increase (Decrease)(1)
(in millions)	(in millions)	2022		2021							(in millions)	2022		2021
Salaries and related costs	Salaries and related costs	$	2,955	$	2,328		$	627	27	%			Salaries and related costs	$	3,050	$	2,566		$	484	19	%
Aircraft fuel and related taxes	Aircraft fuel and related taxes	3,223		1,487			1,736		117	%			Aircraft fuel and related taxes	3,318		1,552			1,766		114	%
Ancillary businesses and refinery	Ancillary businesses and refinery	1,718		939			779		83	%			Ancillary businesses and refinery	1,349		1,079			270		25	%
Contracted services	Contracted services	791		570			221		39	%			Contracted services	881		634			247		39	%
Landing fees and other rents	Landing fees and other rents	546		460			86		19	%			Landing fees and other rents	562		524			38		7	%
Depreciation and amortization													Depreciation and amortization	538		501			37		7	%
Regional carrier expense	Regional carrier expense	528		403			125		31	%			Regional carrier expense	528		453			75		17	%
Depreciation and amortization		510		501			9		2	%
Aircraft maintenance materials and outside repairs	Aircraft maintenance materials and outside repairs	522		287			235		82	%			Aircraft maintenance materials and outside repairs	487		433			54		12	%
Passenger commissions and other selling expenses	Passenger commissions and other selling expenses	526		222			304		137	%			Passenger commissions and other selling expenses	546		308			238		77	%
Passenger service	Passenger service	369		175			194		111	%			Passenger service	406		226			180		80	%
Aircraft rent	Aircraft rent	127		104			23		22	%			Aircraft rent	131		105			26		25	%
Profit sharing	Profit sharing	54		—			54		NM				Profit sharing	237		—			237		NM

Government grant recognition	Government grant recognition	—		(1,504)			1,504		NM				Government grant recognition	—		(1,822)			1,822		NM
Other	Other	436		338			98		29	%			Other	486		390			96		25	%
Total operating expense	Total operating expense	$	12,305	$	6,310		$	5,995	95	%			Total operating expense	$	12,519	$	6,949		$	5,570	80	%

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

Salaries and Related Costs. During 2021, we continued to offer voluntary unpaid leaves of absence in response to the COVID-19 pandemic for periods ranging from 30 days up to 12 months and approximately 8,000 of our employees elected to take a leave of absence during the June 2021 quarter. In the June 2022 quarter, we no longer offered these leaves of absence as the program terminated by the end of the September 2021 quarter. Additionally, weWe have hired approximately ~~18,000~~19,000 employees since the ~~June~~September 2021 quarter, in certain areas, including flight operations, in-flight service, reservations and customer care and airport customer service, in order to support our operations as demand and capacity ~~returns.~~return. These hiring actions and a 4% base pay increase effective May 1, 2022 for eligible employees ~~and additional premium pay and overtime~~ resulted in the ~~increases~~increase in salaries and related costs during the ~~June~~September 2022 quarter compared to the ~~June~~September 2021 quarter.

Aircraft Fuel and Related Taxes. Fuel expense increased ~~$1.7~~$1.8 billion compared to the ~~June~~September 2021 quarter primarily due to ~~a 119%~~an 83% increase in the market price of jet fuel and ~~a 25%~~an 18% increase in ~~consumption.~~consumption on a 17% increase in capacity. We expect elevated jet fuel prices in comparison to historical levels to continue ~~throughout~~during the December 2022 quarter due to current market conditions, further exacerbated by geopolitical events.

Additionally, during the ~~June~~September 2022 quarter, we purchased and retired $25 million of carbon offset credits, which relate to a portion of our airline segment's ~~2021~~March 2022 quarter carbon emissions. During the ~~June~~September 2021 quarter, we purchased and retired ~~$20~~$29 million of carbon offset credits, which related to a portion of our airline segment's ~~2020 and~~ 2021 carbon emissions. In the table below, these costs are shown in the carbon offset costs line item.

See "Refinery Segment" below for additional details on the refinery's operations.


Fuel expense and average price per gallon	Fuel expense and average price per gallon												Fuel expense and average price per gallon
									Average Price Per Gallon														Average Price Per Gallon
		Three Months Ended June 30,				Increase (Decrease)	Three Months Ended June 30,				Increase (Decrease)			Three Months Ended September 30,				Increase (Decrease)		Three Months Ended September 30,			Increase (Decrease)
(in millions, except per gallon data)	(in millions, except per gallon data)	2022		2021					2022				2021				(in millions, except per gallon data)			2021		Increase (Decrease)			2022		Increase (Decrease)		2021
Fuel purchase cost(1)	Fuel purchase cost(1)	$	3,540	$	1,286		$	2,254	$	4.10	$	1.87			$	2.23	Fuel purchase cost(1)	$	3,449	$	1,601		$	1,848	$	3.71				$	1.68
Carbon offset costs	Carbon offset costs	25		20			5		0.03		0.03				—		Carbon offset costs	25		29			(4)		0.03		0.04			(0.01)
Fuel hedge impact	Fuel hedge impact	(73)		24			(97)		(0.08)		0.03				(0.11)		Fuel hedge impact	36		19			17		0.04		0.02			0.02
Refinery segment impact	Refinery segment impact	(269)		157			(426)		(0.31)		0.23				(0.54)		Refinery segment impact	(192)		(97)			(95)		(0.21)		(0.12)			(0.09)
Total fuel expense	Total fuel expense	$	3,223	$	1,487		$	1,736	$	3.74	$	2.16			$	1.58	Total fuel expense	$	3,318	$	1,552		$	1,766	$	3.57	$	1.97		$	1.60

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

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 2425

Item 2. MD&A - Results of Operations

Ancillary Businesses and Refinery. Ancillary businesses and refinery includes expenses associated with refinery sales to third parties, aircraft maintenance services we provide to third parties and our vacation wholesale operations. Increased expenses were primarily related to refinery sales to third parties. The refinery cost of sales increased ~~$737~~$262 million compared to the ~~June~~September 2021 quarter. The increase in third-party refinery sales resulted from higher pricing and production during the ~~June~~September 2022 quarter compared to the ~~June~~September 2021 quarter.

Contracted Services. During the ~~June~~September 2022 quarter, demand and capacity increased compared to the ~~June~~September 2021 quarter due to the ongoing recovery from the COVID-19 pandemic. The continued restoration of our operations and associated higher volume-related expenses ~~was~~and inflationary pressures were the primary ~~driver~~drivers for the increase in contracted services.

Regional Carrier Expense. Regional carrier expense increased compared to the ~~June~~September 2021 quarter due to an increase in utilization and volume-related expenses as a result of increased demand.

Aircraft Maintenance Materials and Outside Repairs. Maintenance expense increased compared to the ~~June~~September 2021 quarter as we ~~returned~~continued to return aircraft to service and to support our operational reliability.

Passenger Commissions and Other Selling Expenses. Compared to the ~~June~~September 2021 quarter, passenger revenue increased ~~105%~~59% in the ~~June~~September 2022 quarter, leading to higher volume-related expenses, which was the primary reason for the increase in passenger commissions and other selling expenses.

Passenger Service. Passenger service expenses increased compared to the ~~June~~September 2021 quarter due to higher volume-related expenses associated with increased ~~demand.~~demand and inflationary pressures.

Aircraft Rent. Aircraft rent increased compared to the September 2021 quarter due to a shift in the mix of leased aircraft from older, narrowbody aircraft to newer, widebody aircraft.

Profit Sharing. Our profit sharing program pays 10% to all eligible employees for the first $2.5 billion of annual pre-tax profit and 20% of annual pre-tax profit above $2.5 billion, as defined by the terms of the program.

Government Grant Recognition. During the ~~June~~September 2021 quarter, we recognized ~~$1.5~~$1.8 billion of government PSP grant proceeds as contra-expense that were used exclusively for the payment of employee wages, salaries and benefits.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 2526

Item 2. MD&A - Results of Operations

Results of Operations - ~~Six~~Nine Months Ended ~~June~~September 30, 2022 and 2021

Operating Revenue


		Six Months Ended June 30,						Increase (Decrease)	% Increase (Decrease)						Nine Months Ended September 30,					Increase (Decrease)			% Increase (Decrease)
(in millions)(1)	(in millions)(1)	2022			2021									(in millions)(1)	2022		2021
Ticket - Main cabin	Ticket - Main cabin	$	9,111		$	4,105			$	5,006		122	%			Ticket - Main cabin	$	15,000		$	7,810			$	7,190		92	%
Ticket - Premium products	Ticket - Premium products	6,648			2,725				3,923			144	%			Ticket - Premium products	11,005			5,257				5,748			109	%
Loyalty travel awards	Loyalty travel awards	1,287			669				618			92	%			Loyalty travel awards	2,073			1,213				860			71	%
Travel-related services	Travel-related services	819			588				231			39	%			Travel-related services	1,251			998				253			25	%
Total passenger revenue	Total passenger revenue	$	17,865		$	8,087			$	9,778		121	%			Total passenger revenue	$	29,329		$	15,278			$	14,051		92	%
Cargo	Cargo	561			466				95			20	%			Cargo	801			728				73			10	%
Other	Other	4,747			2,723				2,024			74	%			Other	7,017			4,423				2,594			59	%
Total operating revenue	Total operating revenue	$	23,173		$	11,276			$	11,897		106	%			Total operating revenue	$	37,147		$	20,429			$	16,718		82	%

TRASM (cents)	TRASM (cents)	20.93		¢	12.72		¢		8.21		¢	65	%			TRASM (cents)	21.38		¢	14.31		¢		7.07		¢	49	%
Third-party refinery sales(2)	Third-party refinery sales(2)	(2.44)			(1.49)				(0.95)			64	%			Third-party refinery sales(2)	(2.20)			(1.53)				(0.67)			44	%

TRASM, adjusted	TRASM, adjusted	18.49		¢	11.23		¢		7.26		¢	65	%			TRASM, adjusted	19.18		¢	12.78		¢		6.40		¢	50	%

(1)Total amounts in the table above may not calculate exactly due to rounding.

(2)TRASM, adjusted inis a non-GAAP financial measure. For additional information on adjustments to TRASM, see "Supplemental Information" below.

Unless otherwise discussed below, the changes in operating revenue line items, as well as the underlying reasons for these changes, compared to the ~~six~~nine months ended ~~June~~September 30, 2021 are consistent with the discussion above under Results of Operations - Three Months Ended ~~June~~September 30, 2022 and 2021.

Compared to the ~~six~~nine months ended ~~June~~September 30, 2021, our operating revenue increased ~~$11.9~~$16.7 billion, or ~~106%~~82%, due to the continued recovery in demand from the COVID-19 pandemic and higher refinery third party sales. The increase in operating revenue, on a ~~25%~~22% increase in capacity, resulted in a ~~65%~~49% increase in TRASM and a 50% increase in TRASM, adjusted compared to the ~~six~~nine months ended ~~June~~September 30, 2021. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales recorded in other revenue.

Passenger Revenue by Geographic Region


				Increase (Decrease) vs. Six Months Ended June 30, 2021															Increase (Decrease) vs. Nine Months Ended September 30, 2021
(in millions)	(in millions)	Six Months Ended June 30, 2022		Passenger Revenue		RPMs (Traffic)		ASMs (Capacity)		Passenger Mile Yield		PRASM		Load Factor		(in millions)	Nine Months Ended September 30, 2022		Passenger Revenue		RPMs (Traffic)		ASMs (Capacity)		Passenger Mile Yield		PRASM		Load Factor
Domestic	Domestic	$	13,881	105	%	57	%	18	%	31	%	74	%	21	pts	Domestic	$	22,035	76	%	35	%	13	%	30	%	56	%	14	pts
Atlantic	Atlantic	2,240		421	%	375	%	139	%	10	%	118	%	39	pts	Atlantic	4,553		293	%	234	%	121	%	17	%	77	%	28	pts
Latin America	Latin America	1,425		90	%	48	%	(2)	%	28	%	95	%	28	pts	Latin America	2,084		59	%	28	%	(5)	%	24	%	68	%	22	pts
Pacific	Pacific	319		112	%	144	%	(10)	%	(13)	%	137	%	31	pts	Pacific	657		128	%	178	%	(8)	%	(18)	%	147	%	42	pts
Total	Total	$	17,865	121	%	76	%	25	%	25	%	77	%	23	pts	Total	$	29,329	92	%	54	%	22	%	25	%	58	%	17	pts

Domestic passenger unit revenue for the ~~six~~nine months ended ~~June~~September 30, 2022 increased compared to the ~~six~~nine months ended ~~June~~September 30, 2021 as a result of the higher levels of capacity and demand during the ~~six~~nine months ended ~~June~~September 30, 2022 due to the ongoing recovery in the period. International passenger revenue for the ~~six~~nine months ended ~~June~~September 30, 2022 increased ~~200%~~164% on ~~44%~~46% higher capacity compared to the ~~six~~nine months ended ~~June~~September 30, 2021.

Other Revenue


		Six Months Ended June 30,				Increase (Decrease)	% Increase (Decrease)					Nine Months Ended September 30,				Increase (Decrease)		% Increase (Decrease)
(in millions)	(in millions)	2022		2021							(in millions)	2022		2021
Refinery	Refinery	$	2,700	$	1,317		$	1,383	105	%			Refinery	$	3,835	$	2,189		$	1,646	75	%
Loyalty program	Loyalty program	1,221		807			414		51	%			Loyalty program	1,877		1,260			617		49	%
Ancillary businesses	Ancillary businesses	416		371			45		12	%			Ancillary businesses	665		586			79		13	%
Miscellaneous	Miscellaneous	410		228			182		80	%			Miscellaneous	640		388			252		65	%
Total other revenue	Total other revenue	$	4,747	$	2,723		$	2,024	74	%			Total other revenue	$	7,017	$	4,423		$	2,594	59	%

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 2627

Item 2. MD&A - Results of Operations

Operating Expense


		Six Months Ended June 30,				Increase (Decrease)	% Increase (Decrease)					Nine Months Ended September 30,				Increase (Decrease)		% Increase (Decrease)
(in millions)	(in millions)	2022		2021							(in millions)	2022		2021
Salaries and related costs	Salaries and related costs	$	5,782	$	4,530		$	1,252	28	%			Salaries and related costs	$	8,832	$	7,096		$	1,736	24	%
Aircraft fuel and related taxes	Aircraft fuel and related taxes	5,315		2,504			2,811		112	%			Aircraft fuel and related taxes	8,633		4,056			4,577		113	%
Ancillary businesses and refinery	Ancillary businesses and refinery	3,100		1,645			1,455		88	%			Ancillary businesses and refinery	4,449		2,724			1,725		63	%
Contracted services	Contracted services	1,544		1,089			455		42	%			Contracted services	2,425		1,723			702		41	%
Landing fees and other rents	Landing fees and other rents	1,050		953			97		10	%			Landing fees and other rents	1,611		1,477			134		9	%
Depreciation and amortization													Depreciation and amortization	1,554		1,494			60		4	%
Regional carrier expense	Regional carrier expense	1,018		804			214		27	%			Regional carrier expense	1,547		1,258			289		23	%
Depreciation and amortization		1,016		993			23		2	%
Aircraft maintenance materials and outside repairs	Aircraft maintenance materials and outside repairs	988		581			407		70	%			Aircraft maintenance materials and outside repairs	1,474		1,014			460		45	%
Passenger commissions and other selling expenses	Passenger commissions and other selling expenses	838		332			506		152	%			Passenger commissions and other selling expenses	1,385		640			745		116	%
Passenger service	Passenger service	644		294			350		119	%			Passenger service	1,050		520			530		102	%
Aircraft rent	Aircraft rent	249		208			41		20	%			Aircraft rent	380		313			67		21	%
Profit sharing	Profit sharing	54		—			54		NM				Profit sharing	291		—			291		NM

Government grant recognition	Government grant recognition	—		(2,689)			2,689		NM				Government grant recognition	—		(4,512)			4,512		NM
Other	Other	840		614			226		37	%			Other	1,325		1,003			322		32	%
Total operating expense	Total operating expense	$	22,438	$	11,858		$	10,580	89	%			Total operating expense	$	34,956	$	18,806		$	16,150	86	%

Unless otherwise discussed below, the changes in operating expense line items, as well as the underlying reasons for these changes, compared to the ~~six~~nine months ended ~~June~~September 30, 2021 are consistent with the discussion above under Results of Operations - Three Months Ended ~~June~~September 30, 2022 and 2021.

Salaries and Related Costs. Salaries and related costs increased compared to the nine months ended September 30, 2021 due to the hiring actions and pay increase discussed above. The increase also relates to the voluntary unpaid leave of absence program we offered in response to the COVID-19 pandemic during 2021. During 2022, we no longer offered these leaves of absence as the program terminated by the end of the September 2021 quarter.

Aircraft Fuel and Related Taxes. Fuel expense increased ~~$2.8~~$4.6 billion compared to the ~~six~~nine months ended ~~June~~September 30, 2021 due to a ~~31% increase in consumption and a 98%~~91% increase in the market price per gallon of jet ~~fuel.~~fuel and a 26% increase in consumption on a 22% increase in capacity.

Additionally, during the ~~six~~nine months ended ~~June~~September 30, 2022, we purchased and retired ~~$72~~$98 million of carbon offset credits, which relate to a portion of our airline segment's 2021 and March 2022 quarter carbon emissions. During the ~~six~~nine months ended ~~June~~September 30, 2021, we purchased and retired ~~$40~~$69 million of carbon offset credits, which related to a portion of our airline segment's 2020 and 2021 carbon emissions. In the table below, these costs are shown in the carbon offset costs line item.

See "Refinery Segment" below for additional details on the refinery's operations.


Fuel expense and average price per gallon	Fuel expense and average price per gallon												Fuel expense and average price per gallon
									Average Price Per Gallon														Average Price Per Gallon
		Six Months Ended June 30,				Increase (Decrease)	Six Months Ended June 30,				Increase (Decrease)			Nine Months Ended September 30,				Increase (Decrease)		Nine Months Ended September 30,			Increase (Decrease)
(in millions, except per gallon data)	(in millions, except per gallon data)	2022		2021					2022				2021				(in millions, except per gallon data)			2021		Increase (Decrease)			2022		Increase (Decrease)		2021
Fuel purchase cost(1)	Fuel purchase cost(1)	$	5,643	$	2,180		$	3,463	$	3.50	$	1.77			$	1.73	Fuel purchase cost(1)	$	9,091	$	3,781		$	5,310	$	3.57				$	1.70
Carbon offset costs	Carbon offset costs	72		40			32		0.04		0.03				0.01		Carbon offset costs	98		69			29		0.04		0.03			0.01
Fuel hedge impact	Fuel hedge impact	(77)		1			(78)		(0.05)		—				(0.05)		Fuel hedge impact	(41)		20			(61)		(0.02)		0.01			(0.03)
Refinery segment impact	Refinery segment impact	(323)		283			(606)		(0.20)		0.23				(0.43)		Refinery segment impact	(515)		186			(701)		(0.20)		0.09			(0.29)
Total fuel expense	Total fuel expense	$	5,315	$	2,504		$	2,811	$	3.29	$	2.03			$	1.26	Total fuel expense	$	8,633	$	4,056		$	4,577	$	3.39	$	2.00		$	1.39

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

Delta Air Lines, Inc. September 2022 Form 10-Q 28

Item 2. MD&A - Results of Operations

Ancillary Businesses and Refinery. The changes in ancillary businesses and refinery expenses were primarily related to refinery sales to third parties, which increased by ~~$1.4~~$1.6 billion compared to the ~~six~~nine months ended ~~June~~September 30, 2021.

Government Grant Recognition. During the ~~six~~nine months ended ~~June~~September 30, 2021, we recognized ~~$2.7~~$4.5 billion of government PSP grant proceeds as contra-expense that were used exclusively for the payment of employee wages, salaries and benefits.

~~Delta Air Lines, Inc. June 2022 Form 10-Q 27~~

~~Item 2. MD&A - Non-Operating Results~~

Non-Operating Results


		Three Months Ended June 30,				Favorable (Unfavorable)				Six Months Ended June 30,					Favorable (Unfavorable)				Three Months Ended September 30,								Favorable (Unfavorable)			Nine Months Ended September 30,				Favorable (Unfavorable)
(in millions)	(in millions)	2022		2021				2022		2021		(in millions)		2022				2021							2022				2021
Interest expense, net	Interest expense, net	$	(269)	$	(338)			$	69			$	(543)				$	(700)	$	157	Interest expense, net		$	(248)		$		(314)		$	66			$	(791)	$	(1,014)	$	223
Equity method results	Equity method results	(12)		—		(12)				(12)		(54)			42			Equity method results	4		(49)						53			(8)		(102)		94
Gain/(loss) on investments, net	Gain/(loss) on investments, net	(221)		211		(432)				(368)		473			(841)			Gain/(loss) on investments, net	(245)		(223)						(22)			(613)		251		(864)
Loss on extinguishment of debt	Loss on extinguishment of debt	(41)		(26)		(15)				(66)		(83)			17			Loss on extinguishment of debt	(34)		(183)						149			(100)		(266)		166
Pension and related benefit/(expense)		73		119		(46)				145		226			(81)
Pension and related benefit																		Pension and related benefit	73		111						(38)			218		337		(119)
Miscellaneous, net	Miscellaneous, net	(16)		(6)		(10)				(58)		(19)			(39)			Miscellaneous, net	(44)		(15)						(29)			(103)		(36)		(67)
Total non-operating expense, net	Total non-operating expense, net	$	(486)	$	(40)	$	(446)			$	(902)	$	(157)		$	(745)		Total non-operating expense, net	$	(494)	$	(673)					$	179		$	(1,397)	$	(830)	$	(567)

Interest expense, net. Interest expense, net includes interest expense and interest income. This decreased compared to the prior year periods as a result of our debt reduction initiatives since the December 2020 quarter. During 2021, we made payments of approximately $5.8 billion related to our debt and finance leases, which included approximately $3.8 billion for early repayments. We have continued to pay down our debt during the ~~six~~nine months ended ~~June~~September 30, 2022 with ~~$2.4~~$4.2 billion of payments on debt and finance lease obligations, including $1.5 billion of certain notes through a cash tender offer in the September 2022 quarter and $839 million for the early repurchase of various secured and unsecured notes through repurchases on the open market. We continue to seek opportunities to pre-pay our debt, in addition to periodic amortization and scheduled maturities, during the ~~remainder of~~December 2022 quarter and beyond.

Equity method results. Equity method results in 2022 consist of our share of Aeroméxico's net ~~losses~~results and in 2021 reflected our share of Virgin Atlantic's net losses. See Note 4 of the Notes to the Condensed Consolidated Financial Statements for additional information on our equity method investments.

Gain/(loss) on investments, net. Changes in the valuation of investments accounted for at fair value are recorded in gain/(loss) on investments, net and are driven by changes in stock prices, foreign currency fluctuations and other valuation techniques for investments in companies without publicly-traded shares. See Note 4 of the Notes to the Condensed Consolidated Financial Statements for additional information on our equity investments measured at fair value on a recurring basis.

Loss on extinguishment of debt. Loss on extinguishment of debt reflects the losses incurred in the early repayment of the notes mentioned above.

Pension and related ~~benefit/(expense).~~benefit. Pension and related ~~benefit/(expense)~~benefit reflects the net periodic benefit/(cost) of our pension and other postretirement and postemployment benefit plans. Based on our funded status as of December 31, 2021, we have modified the strategic asset allocation mix to reduce the investment risk of the portfolio. As a result of the lower risk profile of the portfolio, the weighted average expected long-term rate of return on our defined benefit pension plan assets for 2022 net periodic benefit cost is 7.0%.

Miscellaneous, net. Miscellaneous, net primarily includes foreign exchange gains/(losses) and charitable contributions.

Delta Air Lines, Inc. September 2022 Form 10-Q 29

Item 2. MD&A - Income Taxes

Income Taxes

We project that our annual effective tax rate for 2022 will be ~~approximately 25%~~between 28% and 30%. In certain interim periods, we may have adjustments to our net deferred tax assets as a result of changes in prior year estimates and tax laws enacted during the period, which will impact the effective tax rate for that interim period.

The Inflation Reduction Act ("IRA") was enacted into law on August 16, 2022. Included in the IRA was a provision to implement a 15% corporate alternative minimum tax on corporations whose average annual adjusted financial statement income during the most recently-completed three-year period exceeds $1.0 billion. This provision is effective for tax years beginning after December 31, 2022. We are in the process of evaluating the provisions of the IRA, but we do not currently believe the IRA will have a material impact on our reported results, cash flows or financial position when it becomes effective.

~~Delta Air Lines, Inc. June 2022 Form 10-Q 28~~

~~Item 2. MD&A - Refinery Segment~~

Refinery Segment

The refinery operated by Monroe primarily produces gasoline, diesel and jet fuel. Monroe exchanges the non-jet fuel products the refinery produces with third parties for jet fuel consumed in our airline operations. Historically, the jet fuel produced and procured through exchanging gasoline and diesel fuel produced by the refinery provided approximately 200,000 barrels per day, or approximately 75% of our pre-COVID-19 pandemic consumption, for use in our airline operations.

During the three and ~~six~~nine months ended ~~June~~September 30, 2022, the refinery operated at near pre-pandemic production levels and a summary of the refinery results is shown below.


Refinery segment financial information	Refinery segment financial information											Refinery segment financial information
		Three Months Ended June 30,				Increase (Decrease)		Six Months Ended June 30,				Increase (Decrease)			Three Months Ended September 30,				Increase (Decrease)		Nine Months Ended September 30,				Increase (Decrease)
(in millions, except per gallon data)	(in millions, except per gallon data)	2022		2021				2022		2021				(in millions, except per gallon data)	2022		2021				2022		2021
Exchange products	Exchange products	$	982	$	536	$	446	$	1,791	$	1,039	$	752	Exchange products	$	834	$	629	$	205	$	2,623	$	1,667	$	956
Sales of refined products	Sales of refined products	96		13		83		122		17		105		Sales of refined products	127		12		115		250		29		221
Sales to airline segment	Sales to airline segment	761		108		653		1,053		108		945		Sales to airline segment	504		183		321		1,557		292		1,265
Third party refinery sales	Third party refinery sales	1,514		777		737		2,700		1,317		1,383		Third party refinery sales	1,134		872		262		3,835		2,189		1,646
Operating revenue	Operating revenue	$	3,353	$	1,434	$	1,919	$	5,666	$	2,481	$	3,185	Operating revenue	$	2,599	$	1,696	$	903	$	8,265	$	4,177	$	4,088

Operating income/(loss)	Operating income/(loss)	$	269	$	(157)	$	426	$	323	$	(283)	$	606	Operating income/(loss)	$	192	$	97	$	95	$	515	$	(186)	$	701
Refinery segment impact on airline average price per fuel gallon	Refinery segment impact on airline average price per fuel gallon	$	(0.31)	$	0.23	$	(0.54)	$	(0.20)	$	0.23	$	(0.43)	Refinery segment impact on airline average price per fuel gallon	$	(0.21)	$	(0.12)	$	(0.09)	$	(0.20)	$	0.09	$	(0.29)

Refinery revenues increased compared to the three and ~~six~~nine months ended ~~June~~September 30, 2021 due primarily to higher pricing and production. The refinery generated higher operating income in the three and ~~six~~nine months ended ~~June~~September 30, 2022 compared to ~~an operating loss in~~ the three and ~~six~~nine months ended ~~June~~September 30, 2021, which was driven by the revenue and production increases described in the Results of Operations section above, and partially offset by higher crude oil acquisition costs and increased expense associated with the higher levels of production.

A refinery is subject to annual U.S. Environmental Protection Agency ("EPA") requirements to blend renewable fuels into the gasoline and on-road diesel fuel it produces. Alternatively, a refinery may purchase Renewable Identification Numbers ("RINs") from third parties in the secondary market. The Monroe refinery purchases the majority of its RINs in the secondary market. Observable RINs prices increased during much of 2022 and Monroe incurred ~~$223~~$140 million and ~~$308~~$448 million in RINs compliance costs during the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively, compared to ~~$252~~$44 million and ~~$410~~$453 million in the three and ~~six~~nine months ended ~~June~~September 30, 2021, respectively. The higher expense in the ~~2021 periods~~three months ended September 30, 2022 resulted from a larger increase in observable RINs prices during that period compared to the increase in the ~~2022 periods.~~2021 period.

At ~~June~~September 30, 2022, we had a net fair value obligation of ~~$556~~$291 million related to RINs compliance costs. Our obligation as of ~~June~~September 30, 2022 was calculated using the Renewable Fuel Standard ("RFS") volume requirements, which were finalized in the June ~~2022.~~2022 quarter. The compliance deadlines to retire our obligations for 2020 and 2021 are in the fourth quarter of 2022 and first quarter of 2023, respectively.

For more information regarding the refinery's results, see Note 9 of the Notes to the Condensed Consolidated Financial Statements.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 2930

Item 2. MD&A - Operating Statistics

Operating Statistics


		Three Months Ended June 30,									2022 vs. 2021 Increase (Decrease)		2022 vs. 2019 Increase (Decrease)			Three Months Ended September 30,						2022 vs. 2021 Increase (Decrease)						2022 vs. 2019 Increase (Decrease)
Consolidated(1)	Consolidated(1)	2022			2021			2019							Consolidated(1)	2022	2021		2019
Revenue passenger miles (in millions) ("RPM")	Revenue passenger miles (in millions) ("RPM")	51,519			33,285			63,173			55	%	(18)	%				Revenue passenger miles (in millions) ("RPM")	54,786			43,057			66,862			27	%	(18)	%
Available seat miles (in millions) ("ASM")	Available seat miles (in millions) ("ASM")	58,903			48,529			71,754			21	%	(18)	%				Available seat miles (in millions) ("ASM")	63,007			54,083			75,742			17	%	(17)	%
Passenger mile yield	Passenger mile yield	21.27		¢	16.04		¢	18.00		¢	33	%	18	%				Passenger mile yield	20.93		¢	16.70		¢	17.07		¢	25	%	23	%
Passenger revenue per available seat mile ("PRASM")	Passenger revenue per available seat mile ("PRASM")	18.60		¢	11.00		¢	15.84		¢	69	%	17	%				Passenger revenue per available seat mile ("PRASM")	18.19		¢	13.30		¢	15.06		¢	37	%	21	%
Total revenue per available seat mile ("TRASM")	Total revenue per available seat mile ("TRASM")	23.47		¢	14.68		¢	17.47		¢	60	%	34	%				Total revenue per available seat mile ("TRASM")	22.18		¢	16.93		¢	16.58		¢	31	%	34	%
TRASM, adjusted(2)	TRASM, adjusted(2)	20.90		¢	13.08		¢	17.35		¢	60	%	20	%				TRASM, adjusted(2)	20.38		¢	15.31		¢	16.51		¢	33	%	23	%
Cost per available seat mile ("CASM")	Cost per available seat mile ("CASM")	20.89		¢	13.00		¢	14.51		¢	61	%	44	%				Cost per available seat mile ("CASM")	19.87		¢	12.85		¢	13.85		¢	55	%	43	%
CASM-Ex(2)	CASM-Ex(2)	12.76		¢	11.42		¢	10.47		¢	12	%	22	%				CASM-Ex(2)	12.43		¢	11.67		¢	10.15		¢	7	%	22.5	%

Passenger load factor	Passenger load factor	87		%	69		%	88		%	18	pts	(1)	pt				Passenger load factor	87		%	80		%	88		%	7	pts	(1)	pt
Fuel gallons consumed (in millions)	Fuel gallons consumed (in millions)	863			690			1,099			25	%	(22)	%				Fuel gallons consumed (in millions)	930			789			1,154			18	%	(19)	%
Average price per fuel gallon(3)	Average price per fuel gallon(3)	$	3.74		$	2.16		$	2.08		73	%	80	%				Average price per fuel gallon(3)	$	3.57		$	1.97		$	1.94		81	%	84	%
Average price per fuel gallon, adjusted(2)(3)	Average price per fuel gallon, adjusted(2)(3)	$	3.82		$	2.12		$	2.07		80	%	85	%				Average price per fuel gallon, adjusted(2)(3)	$	3.53		$	1.94		$	1.96		82	%	80	%


		Six Months Ended June 30,			2022 vs. 2021 Increase (Decrease)				2022 vs. 2019 Increase (Decrease)										Nine Months Ended September 30,				2022 vs. 2021 Increase (Decrease)	2022 vs. 2019 Increase (Decrease)
Consolidated(1)	Consolidated(1)	2022	2021	2019											Consolidated(1)				2022		2021	2019
Revenue passenger miles (in millions) ("RPM")	Revenue passenger miles (in millions) ("RPM")					90,218			51,233			114,790			76	%	(21)	%		Revenue passenger miles (in millions) ("RPM")					145,004			94,290			181,652			54	%	(20)	%
Available seat miles (in millions) ("ASM")	Available seat miles (in millions) ("ASM")					110,713			88,647			134,169			25	%	(17)	%		Available seat miles (in millions) ("ASM")					173,720			142,730			209,911			22	%	(17)	%
Passenger mile yield	Passenger mile yield					19.80		¢	15.79		¢	17.96		¢	25	%	10	%		Passenger mile yield					20.23		¢	16.20		¢	17.63		¢	25	%	15	%
Passenger revenue per available seat mile ("PRASM")	Passenger revenue per available seat mile ("PRASM")					16.14		¢	9.12		¢	15.37		¢	77	%	5	%		Passenger revenue per available seat mile ("PRASM")					16.88		¢	10.70		¢	15.26		¢	58	%	11	%
Total revenue per available seat mile ("TRASM")	Total revenue per available seat mile ("TRASM")					20.93		¢	12.72		¢	17.15		¢	65	%	22	%		Total revenue per available seat mile ("TRASM")					21.38		¢	14.31		¢	16.94		¢	49	%	26	%
TRASM, adjusted(2)	TRASM, adjusted(2)					18.49		¢	11.23		¢	17.01		¢	65	%	9	%		TRASM, adjusted(2)					19.18		¢	12.78		¢	16.83		¢	50	%	14	%
Cost per available seat mile ("CASM")	Cost per available seat mile ("CASM")					20.27		¢	13.38		¢	14.80		¢	51	%	37	%		Cost per available seat mile ("CASM")					20.12		¢	13.18		¢	14.46		¢	53	%	39	%
CASM-Ex(2)	CASM-Ex(2)					12.98		¢	12.14		¢	10.95		¢	7	%	19	%		CASM-Ex(2)					12.78		¢	11.96		¢	10.66		¢	7	%	20	%

Passenger load factor	Passenger load factor					81		%	58		%	86		%	23	pts	(5)	pts		Passenger load factor					83		%	66		%	87		%	17	pts	(4)	pts
Fuel gallons consumed (in millions)	Fuel gallons consumed (in millions)					1,613			1,235			2,061			31	%	(22)	%		Fuel gallons consumed (in millions)					2,543			2,023			3,215			26	%	(21)	%
Average price per fuel gallon(3)	Average price per fuel gallon(3)					$	3.29		$	2.03		$	2.07		62	%	59	%		Average price per fuel gallon(3)					$	3.39		$	2.00		$	2.03		70	%	67	%
Average price per fuel gallon, adjusted(2)(3)	Average price per fuel gallon, adjusted(2)(3)					$	3.34		$	2.03		$	2.06		65	%	62	%		Average price per fuel gallon, adjusted(2)(3)					$	3.41		$	1.99		$	2.02		71	%	69	%

(1)Includes the operations of our regional carriers under capacity purchase agreements.

(2)Non-GAAP financial measures defined and reconciled to TRASM, CASM and average fuel price per gallon, respectively, in "Supplemental Information" below.

(3)Includes the impact of fuel hedge activity, refinery segment results and carbon offset costs.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 3031

Item 2. MD&A - Fleet Information

Fleet Information

Our operating aircraft fleet, purchase commitments and options at ~~June~~September 30, 2022 are summarized in the following table.


Mainline aircraft information by fleet type	Mainline aircraft information by fleet type								Mainline aircraft information by fleet type
		Current Fleet(1)					Commitments(1)			Current Fleet(1)					Commitments(1)
Fleet Type	Fleet Type	Owned	Finance Lease	Operating Lease	Total	Average Age (Years)	Purchase	Options	Fleet Type	Owned	Finance Lease	Operating Lease	Total	Average Age (Years)	Purchase	Options
A220-100	A220-100	41	4	—	45	2.5			A220-100	41	4	—	45	2.8
A220-300	A220-300	11	—	—	11	1.3	39	50	A220-300	12	—	—	12	1.5	50	38
A319-100	A319-100	57	—	—	57	20.3			A319-100	57	—	—	57	20.6
A320-200	A320-200	60	—	—	60	26.7			A320-200	61	—	—	61	27.1
A321-200	A321-200	69	22	36	127	3.5			A321-200	69	22	36	127	3.8
A321-200neo	A321-200neo	3	—	—	3	0.2	152	70	A321-200neo	8	—	—	8	0.3	147	70
A330-200	A330-200	11	—	—	11	17.2			A330-200	11	—	—	11	17.5
A330-300	A330-300	28	—	3	31	13.4			A330-300	28	—	3	31	13.7
A330-900neo	A330-900neo	7	3	5	15	1.6	23		A330-900neo	10	3	5	18	1.6	20
A350-900	A350-900	15	—	11	26	3.9	18		A350-900	15	—	11	26	4.2	18
B-717-200	B-717-200	10	50	4	64	21.0			B-717-200	10	50	4	64	21.3
B-737-800	B-737-800	73	4	—	77	20.8			B-737-800	73	4	—	77	21.1
B-737-900ER	B-737-900ER	108	2	49	159	6.4	4		B-737-900ER	109	2	49	160	6.7	3
B-737-10									B-737-10	—	—	—	—	—	100	30
B-757-200	B-757-200	100	—	—	100	24.9			B-757-200	100	—	—	100	25.2
B-757-300	B-757-300	16	—	—	16	19.4			B-757-300	16	—	—	16	19.6
B-767-300ER	B-767-300ER	42	—	—	42	25.9			B-767-300ER	45	—	—	45	26.6
B-767-400ER	B-767-400ER	21	—	—	21	21.5			B-767-400ER	21	—	—	21	21.8
Total	Total	672	85	108	865	14.3	236	120	Total	686	85	108	879	14.5	338	138

(1)Includes both active and temporarily parked aircraft. Excludes certain aircraft we own or lease or that are operated by regional carriers on our behalf shown in the table below. ~~We have also committed to purchase one CRJ-900 aircraft for Endeavor Air, Inc.~~

The table below summarizes the aircraft operated by regional carriers on our behalf at ~~June~~September 30, 2022.


Regional aircraft information by fleet type and carrier	Regional aircraft information by fleet type and carrier							Regional aircraft information by fleet type and carrier
		Fleet Type(1)							Fleet Type(1)
Carrier	Carrier	CRJ-200	CRJ-700	CRJ-900	Embraer 170	Embraer 175	Total	Carrier	CRJ-200	CRJ-700	CRJ-900	Embraer 170	Embraer 175	Total
Endeavor Air, Inc.(2)	Endeavor Air, Inc.(2)	51	18	126	—	—	195	Endeavor Air, Inc.(2)	30	18	123	—	—	171
SkyWest Airlines, Inc.	SkyWest Airlines, Inc.	9	6	44	—	71	130	SkyWest Airlines, Inc.	9	6	44	—	76	135
Republic Airways, Inc.	Republic Airways, Inc.	—	—	—	11	46	57	Republic Airways, Inc.	—	—	—	11	46	57
Total	Total	60	24	170	11	117	382	Total	39	24	167	11	122	363

(1)Includes both active and temporarily parked aircraft.

(2)Endeavor Air, Inc. is a wholly owned subsidiary of Delta.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 3132

Item 2. MD&A - Financial Condition and Liquidity

Financial Condition and Liquidity

As of ~~June~~September 30, 2022, we had ~~$13.6~~$11.2 billion in cash, cash equivalents, short-term investments and aggregate principal amount committed and available to be drawn under our revolving credit facilities ("liquidity"). We expect to meet our liquidity needs for the next twelve months with cash and cash equivalents, short-term investments, restricted cash equivalents and cash flows from operations. We expect to meet our long-term liquidity needs with cash flows from operations and financing arrangements. We are continuing to evaluate the appropriate level of liquidity to maintain following the COVID-19 pandemic although, at least in the near term, we expect this level to be higher than the liquidity maintained prior to the pandemic. By 2024, we expect liquidity to be between $5 billion and $6 billion as we work to reduce our financial obligations and reinvest in the business.

Sources and Uses of Liquidity

Operating Activities

We generated cash flows from operations of ~~$4.3~~$5.2 billion and ~~$2.6~~$2.7 billion in the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. We expect to continue generating positive cash flows from operations during the ~~remainder of 2022.~~December 2022 quarter.

Our operating cash flow is impacted by the following factors:

Seasonality of Advance Ticket Sales. We sell tickets for air travel in advance of the customer's travel date. When we receive a cash payment at the time of sale, we record the cash received on advance sales as deferred revenue in air traffic liability. The air traffic liability typically increases during the winter and spring months as advance ticket sales grow prior to the summer peak travel season and decreases during the summer and fall months.

From the onset of the COVID-19 pandemic in the March 2020 quarter through 2021, reduced demand for air travel resulted in a lower level of advance bookings and the associated cash received than we had historically experienced, which had been impacting the typical seasonal trend of air traffic liability. However, demand has improved during 2022 as consumers have regained confidence to travel and increased ticket purchases for travel further in advance. Air traffic liability ~~increased approximately $805 million~~decreased during the ~~June~~September 2022 quarter, ~~which exceeds~~as is typical with our ~~historical~~usual seasonal ~~change, reflecting the continued restoration of our business and robust demand environment.~~trend. Our air traffic liability remains above historical levels with no material change to the travel credit balance compared to December 31, 2021.

Fuel. Fuel expense represented approximately ~~24%~~25% and ~~21%~~22% of our total operating expense for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. The market price for jet fuel is volatile, which can impact the comparability of our periodic cash flows from operations. The average fuel price per gallon increased substantially during the ~~six~~nine months ended ~~June~~September 30, 2022. We expect elevated jet fuel prices in comparison to historical levels to continue ~~throughout~~during the December 2022 quarter due to current market conditions, further exacerbated by geopolitical events. Fuel consumption was also higher during the ~~six~~nine months ended ~~June~~September 30, 2022 compared to the prior year period due to the increase in capacity. We expect that fuel consumption will continue to increase ~~throughout~~during the December 2022 quarter, compared to 2021, as we ~~expect to~~ return closer to pre-pandemic levels of capacity, ~~and demand for air travel,~~ partially offset by increases in fuel efficiency of our fleet.

New York-JFK Airport Expansion. During 2021, the Port Authority of New York and New Jersey ("Port Authority") approved modified project plans to renovate and expand Terminal 4 in order to facilitate Delta's relocation from Terminal 2 and consolidation of its operations into the single facility. The project will add 10 new gates and other complementary facilities, including an additional Delta Sky Club and a new Delta One lounge. The project is estimated to cost approximately $1.5 billion and will be funded primarily with bonds issued in April 2022 by the New York Transportation Development Corporation ("NYTDC") for which our landlord, JFK International Air Terminal LLC, is the obligor. In April 2022, we amended our sublease to provide for the expansion project, including the adjustment of our subleased space and rentals. Based on our assessment of the project, we concluded that we do not control the underlying assets being constructed, and therefore, we do not have the project asset or related obligation recorded on our balance sheet. The majority of project costs are being used to expand or modify Delta's leased premises, and thus will increase Delta's lease liability which we will pay via rent through 2043. Construction started in late 2021, with Delta's portion of the project estimated to be complete by the end of 2023.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 3233

Item 2. MD&A - Financial Condition and Liquidity

Investing Activities

Short-Term Investments. During the ~~six~~nine months ended ~~June~~September 30, 2022, we redeemed a net of ~~$1.8~~$2.0 billion in short-term investments. See Note 3 of the Notes to the Condensed Consolidated Financial Statements for further information on these investments.

Capital Expenditures. Our capital expenditures were ~~$2.7~~$4.2 billion and ~~$1.2~~$2.0 billion for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. Our capital expenditures are primarily related to the purchases of aircraft, airport construction projects, fleet modifications and technology enhancements.

We have committed to future aircraft purchases and have obtained, but are under no obligation to use, long-term financing commitments for a substantial portion of the purchase price of the aircraft. Excluding the New York-LaGuardia airport project discussed below, our expected 2022 capital ~~expenditures~~spend of approximately ~~$6.0~~$5.7 billion will be primarily for aircraft, including deliveries and advance deposit payments, as well as fleet modifications and technology enhancements and may vary depending on financing decisions.

New York-LaGuardia Redevelopment. As part of the terminal redevelopment project at LaGuardia Airport, we are partnering with the Port Authority to replace Terminals C and D with a new state-of-the-art terminal facility. Completion is expected by 2025. In June 2022, we achieved a significant milestone by opening the 455,000 square foot headhouse, the terminal roadways and Concourse E - the second of four new concourses to be built.Additionally, in early October, we opened four of 12 planned new gates on Concourse F.Construction is approximately 75% complete and will continue to be phased to support airline operations while minimizing customer inconvenience.

We currently expect our net project costs to be approximately $3.5 billion and we bear the risks of project construction, including any potential cost over-runs. Using funding primarily provided by existing financing arrangements, we expect to spend approximately ~~$725~~$670 million on this project during 2022, of which ~~$402~~$534 million was incurred in the ~~six~~nine months ended ~~June~~September 30, 2022.

Los Angeles International Airport ("LAX"). The City of Los Angeles ~~("the City"~~(the "City") owns and operates LAX and we have an ongoing terminal redevelopment project at LAX to modernize, update and provide post-security connection to Terminals 2 and 3. In April 2022, we reached the next major phasing milestone of the project with the opening of a new consolidated headhouse for both terminals, which includes ticketing, security, baggage claim and a new Delta Sky Club ~~lounge, and in~~lounge. In May, we opened the Terminal 3 concourse with the initial three of 14 planned new gates. Additionally, in early October, we opened the Terminal 3 satellite with eight planned new gates for a total of 11 of 14 planned new gates now open in Terminal 3. Construction is expected to be completed in 2023 ~~and the project is expected to~~with a cost of approximately $2.3 billion. A substantial majority of the project costs are being funded through the Regional Airports Improvement Corporation ("RAIC"), a California public benefit corporation, using a revolving credit facility provided by a group of lenders. The credit facility was executed in 2017 and we have guaranteed the obligations of the RAIC under the credit facility. The revolving credit facility agreement was amended in January 2022, increasing the revolver capacity from $800 million to $1.1 billion. In September 2022, the revolving credit facility agreement capacity was reduced to $800 million. Loans made under the credit facility are being repaid with the proceeds from the City's purchase of completed project assets.

Financing Activities

Debt and Finance Leases. In the ~~six~~nine months ended ~~June~~September 30, 2022, we had cash outflows of ~~approximately $2.4~~$4.2 billion related to repayments of our debt and finance lease obligations, including $1.5 billion of certain notes through a cash tender offer in the September 2022 quarter and $839 million for the early repurchase of various secured and unsecured ~~notes.~~notes through repurchases on the open market. We continue to seek opportunities to pre-pay our debt, in addition to periodic amortization and scheduled maturities, during the ~~remainder of~~December 2022 quarter and beyond.

The principal amount of our debt and finance leases was ~~$25.0~~$23.4 billion at ~~June~~September 30, 2022.

Undrawn Lines of Credit

Delta Air Lines, Inc. September 2022 Form 10-Q 34

Item 2. MD&A - Financial Condition and Liquidity

Covenants

We were in compliance with the covenants in our debt agreements at ~~June~~September 30, 2022.

~~Delta Air Lines, Inc. June 2022 Form 10-Q 33~~

~~Item 2. MD&A - Critical Accounting Estimates~~

Critical Accounting Estimates

Except as set forth below, for information regarding our Critical Accounting Estimates, see the "Critical Accounting Estimates" section of "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K.

Goodwill and Indefinite-Lived Intangible Assets

Identifiable Intangible Assets. In the September 2022 quarter, final regulatory approval was granted for our trans-American joint venture agreement with LATAM. This agreement will combine 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 and joint ventures.

Defined Benefit Pension Plans

Recent Accounting Standards

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 3435

Item 2. MD&A - Supplemental Information

Supplemental Information

We sometimes use information (non-GAAP financial measures) that is derived from the Condensed Consolidated Financial Statements, but that is not presented in accordance with GAAP. Under the U.S. Securities and Exchange Commission rules, non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results.

Included below are reconciliations of non-GAAP measures used within this Form 10-Q to the most directly comparable GAAP financial measures. Reconciliations below may not calculate exactly due to rounding. These reconciliations include certain adjustments to GAAP measures that are directly related to the impact of COVID-19 and our response. These adjustments are made to provide comparability between the reported periods, if applicable, as indicated below:

•Restructuring charges. During 2020, we recorded restructuring charges for items such as fleet impairments and voluntary early retirement and separation programs following strategic business decisions in response to the COVID-19 pandemic. In the ~~June~~September 2022 quarter, we recognized $1 million of net adjustments to certain of those restructuring charges, representing changes in our estimates, compared to $8$33 million of net adjustments in the ~~June~~September 2021 quarter.

•Government grant recognition. We recognized ~~$1.5~~$1.8 billion and ~~$2.7~~$4.5 billion of the grant proceeds from the payroll support program extensions as contra-expense during the ~~June~~September 2021 quarter and ~~six~~nine months ended ~~June~~September 2021, respectively. We recognized the grant proceeds as contra-expense based on the periods that the funds were intended to compensate and have fully used all proceeds from the payroll support program extensions.

We also regularly adjust certain GAAP measures for the following items, if applicable, for the reasons indicated below:

•MTM adjustments and settlements on hedges. Mark-to-market ("MTM") adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period, and therefore we remove this impact to allow investors to better understand and analyze our core performance. Settlements represent cash received or paid on hedge contracts settled during the applicable period.

•Third-party refinery sales. Refinery sales to third parties, and related expenses, are not related to our airline segment. Excluding these sales therefore provides a more meaningful comparison of our airline operations to the rest of the airline industry.

•Delta Private Jets adjustment. Because we combined Delta Private Jets with Wheels Up in January 2020, we have excluded the impact of Delta Private Jets from 2019 results for comparability.

•Aircraft fuel and related taxes. The volatility in fuel prices impacts the comparability of year-over-year financial performance. The adjustment for aircraft fuel and related taxes allows investors to better understand and analyze our non-fuel costs and year-over-year financial performance.

•Profit sharing. We adjust for profit sharing because this adjustment allows investors to better understand and analyze our recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry.

•~~Delta Private Jets adjustment.~~ ~~Because we combined Delta Private Jets with Wheels Up in January 2020, we have excluded the impact of Delta Private Jets from 2019 results for comparability.~~


Operating expense, adjusted reconciliation	Operating expense, adjusted reconciliation					Operating expense, adjusted reconciliation
		Three Months Ended June 30,							Three Months Ended September 30,
(in millions)	(in millions)	2022		2021		2019		(in millions)		2022		2021		2019
Operating expense	Operating expense	$	12,305	$	6,310	$	10,408	Operating expense		$	12,519	$	6,949	$	10,489
Adjusted for:	Adjusted for:							Adjusted for:
Restructuring charges	Restructuring charges	1		(8)		—		Restructuring charges		(1)		(33)		—
Government grant recognition	Government grant recognition	—		1,504		—		Government grant recognition		—		1,822		—
MTM adjustments and settlements on hedges	MTM adjustments and settlements on hedges	73		(24)		(10)		MTM adjustments and settlements on hedges		(36)		(19)		25
Third-party refinery sales	Third-party refinery sales	(1,514)		(777)		(40)		Third-party refinery sales		(1,134)		(872)		(6)
Delta Private Jets adjustment	Delta Private Jets adjustment	—		—		(50)		Delta Private Jets adjustment		—		—		(49)
Operating expense, adjusted	Operating expense, adjusted	$	10,866	$	7,005	$	10,308	Operating expense, adjusted		$	11,348	$	7,846	$	10,460

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 3536

Item 2. MD&A - Supplemental Information


Fuel expense, adjusted reconciliation	Fuel expense, adjusted reconciliation													Fuel expense, adjusted reconciliation
								Average Price Per Gallon													Average Price Per Gallon
		Three Months Ended June 30,						Three Months Ended June 30,							Three Months Ended September 30,						Three Months Ended September 30,
(in millions, except per gallon data)	(in millions, except per gallon data)	2022		2021		2019		2022		2021		2019		(in millions, except per gallon data)	2022		2021		2019		2022		2021		2019
Total fuel expense	Total fuel expense	$	3,223	$	1,487	$	2,291	$	3.74	$	2.16	$	2.08	Total fuel expense	$	3,318	$	1,552	$	2,239	$	3.57	$	1.97	$	1.94
Adjusted for:	Adjusted for:													Adjusted for:
MTM adjustments and settlements on hedges	MTM adjustments and settlements on hedges	73		(24)		(10)		0.08		(0.03)		(0.01)		MTM adjustments and settlements on hedges	(36)		(19)		25		(0.04)		(0.02)		0.02
Delta Private Jets adjustment	Delta Private Jets adjustment	—		—		(8)		—		—		(0.01)		Delta Private Jets adjustment	—		—		(7)		—		—		(0.01)
Total fuel expense, adjusted	Total fuel expense, adjusted	$	3,296	$	1,463	$	2,274	$	3.82	$	2.12	$	2.07	Total fuel expense, adjusted	$	3,282	$	1,533	$	2,257	$	3.53	$	1.94	$	1.96

								Average Price Per Gallon													Average Price Per Gallon
		Six Months Ended June 30,						Six Months Ended June 30,							Nine Months Ended September 30,						Nine Months Ended September 30,
(in millions, except per gallon data)	(in millions, except per gallon data)	2022		2021		2019		2022		2021		2019		(in millions, except per gallon data)	2022		2021		2019		2022		2021		2019
Total fuel expense	Total fuel expense	$	5,315	$	2,504	$	4,269	$	3.29	$	2.03	$	2.07	Total fuel expense	$	8,633	$	4,056	$	6,508	$	3.39	$	2.00	$	2.03
Adjusted for:	Adjusted for:													Adjusted for:
MTM adjustments and settlements on hedges	MTM adjustments and settlements on hedges	77		(1)		(17)		0.05		—		(0.01)		MTM adjustments and settlements on hedges	41		(20)		8		0.02		(0.01)		—
Delta Private Jets adjustment	Delta Private Jets adjustment	—		—		(15)		—		—		(0.01)		Delta Private Jets adjustment	—		—		(22)		—		—		(0.01)
Total fuel expense, adjusted	Total fuel expense, adjusted	$	5,392	$	2,504	$	4,237	$	3.34	$	2.03	$	2.06	Total fuel expense, adjusted	$	8,674	$	4,037	$	6,494	$	3.41	$	1.99	$	2.02


TRASM, adjusted reconciliation
	Three Months Ended September 30,						Nine Months Ended September 30,
	2022		2021		2019		2022		2021		2019
TRASM (cents)	22.18	¢	16.93	¢	16.58	¢	21.38	¢	14.31	¢	16.94	¢
Adjusted for:
Third-party refinery sales	(1.80)		(1.61)		(0.01)		(2.20)		(1.53)		(0.05)
Delta Private Jets adjustment	—		—		(0.06)		—		—		(0.07)
TRASM, adjusted	20.38	¢	15.31	¢	16.51	¢	19.18	¢	12.78	¢	16.83	¢

TRASM, adjusted reconciliation
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2019 2022 2021 2019
TRASM (cents) 23.47 ¢ 14.68 ¢ 17.47 ¢ 20.93 ¢ 12.72 ¢ 17.15 ¢
Adjusted for:
Third-party refinery sales (2.57) (1.60) (0.06) (2.44) (1.49) (0.07)
Delta Private Jets adjustment — — (0.07) — — (0.07)
TRASM, adjusted 20.90 ¢ 13.08 ¢ 17.35 ¢ 18.49 ¢ 11.23 ¢ 17.01 ¢


CASM-Ex reconciliation	CASM-Ex reconciliation													CASM-Ex reconciliation
		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022		2021		2019		2022		2021		2019			2022		2021		2019		2022		2021		2019
CASM (cents)	CASM (cents)	20.89	¢	13.00	¢	14.51	¢	20.27	¢	13.38	¢	14.80	¢	CASM (cents)	19.87	¢	12.85	¢	13.85	¢	20.12	¢	13.18	¢	14.46	¢
Adjusted for:	Adjusted for:													Adjusted for:
Restructuring charges	Restructuring charges	—		(0.02)		—		0.01		0.04		—		Restructuring charges	—		(0.06)		—		—		—		—
Government grant recognition	Government grant recognition	—		3.10		—		—		3.03		—		Government grant recognition	—		3.37		—		—		3.16		—
Aircraft fuel and related taxes	Aircraft fuel and related taxes	(5.47)		(3.06)		(3.19)		(4.80)		(2.82)		(3.18)		Aircraft fuel and related taxes	(5.26)		(2.87)		(2.96)		(4.97)		(2.84)		(3.10)
Third-party refinery sales	Third-party refinery sales	(2.57)		(1.60)		(0.06)		(2.44)		(1.49)		(0.07)		Third-party refinery sales	(1.80)		(1.61)		(0.01)		(2.20)		(1.53)		(0.05)
Profit sharing	Profit sharing	(0.09)		—		(0.72)		(0.05)		—		(0.55)		Profit sharing	(0.38)		—		(0.68)		(0.17)		—		(0.60)
Delta Private Jets adjustment	Delta Private Jets adjustment	—		—		(0.06)		—		—		(0.06)		Delta Private Jets adjustment	—		—		(0.05)		—		—		(0.06)
CASM-Ex	CASM-Ex	12.76	¢	11.42	¢	10.47	¢	12.98	¢	12.14	¢	10.95	¢	CASM-Ex	12.43	¢	11.67	¢	10.15	¢	12.78	¢	11.96	¢	10.66	¢

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 3637

Item 3. Market Risk

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in market risk from the information provided in "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in our Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Our management, including our Chief Executive Officer and Chief Financial Officer, performed an evaluation of our disclosure controls and procedures, which have been designed to permit us to effectively identify and timely disclose important information. Our management, including our Chief Executive Officer and Chief Financial Officer, concluded that the controls and procedures were effective as of ~~June~~September 30, 2022 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.

During the three months ended ~~June~~September 30, 2022, we did not make any changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

"Item 3. Legal Proceedings" of our Form 10-K includes a discussion of our legal proceedings. There have been no material changes from the legal proceedings described in our Form 10-K.

ITEM 1A. RISK FACTORS

“Item 1A. Risk Factors” of our Form 10-K includes a discussion of our known material risk factors, other than risks that could apply to any issuer or offering. There have been no material changes from the risk factors described in our Form 10-K.

~~Delta Air Lines, Inc. June 2022 Form 10-Q 37~~

~~Item 2. Unregistered Sales of Equity Securities~~

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents information with respect to purchases of common stock we made during the ~~June~~September 2022 quarter. The table reflects shares withheld from employees to satisfy certain tax obligations due in connection with grants of stock under the Delta Air Lines, Inc. Performance Compensation Plan (the "Plan"). The Plan provides for the withholding of shares to satisfy tax obligations. It does not specify a maximum number of shares that can be withheld for this purpose. The shares of common stock withheld to satisfy tax withholding obligations may be deemed to be "issuer purchases" of shares that are required to be disclosed pursuant to this Item.

Shares purchased / withheld from employee awards during the June 2022 quarter
Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans Approximate Dollar Value (in millions) of Shares That May
Yet be Purchased Under the
Plan
April 2022 4,066 $ 40.24 4,066 $ —
May 2022 1,430 $ 40.08 1,430 $ —
June 2022 11,174 $ 37.08 11,174 $ —
Total 16,670 16,670


Shares purchased / withheld from employee awards during the September 2022 quarter
Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans	Approximate Dollar Value (in millions) of Shares That May Yet be Purchased Under the Plan
July 2022	20,165	$	30.92	20,165	$	—
August 2022	1,564	$	33.28	1,564	$	—
September 2022	6,641	$	29.27	6,641	$	—
Total	28,370			28,370

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 38

ITEM 6. EXHIBITS

(a) Exhibits

3.1(a) Delta's Amended and Restated Certificate of Incorporation (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on April 30, 2007).*

3.1 (b) Amendment to Amended and Restated Certificate of Incorporation (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on June 27, 2014).*

3.2 Delta's Bylaws (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on February 8, 2019).*

4.1 Description of Registrant's Securities (Filed as Exhibit 4.1 to Delta's Annual Report on Form 10-K for the year ended December 31, 2020).*

10.1 ~~Sixth Supplement to~~ Purchase Agreement Number PA-04 A ~~nchor~~ ~~Tenant Agreement~~696, dated ~~as of April 8,~~July 18, 2022, between ~~JFK International Air Termi~~The Bo ~~nal LLC~~eing Comp any and Delta Air Lines, ~~Inc~~Inc. relating to Boeing Model 737-10 Aircraft .

~~10.2~~ ~~Terms of 2022 Restricted Stock Awards for Non-Employee~~ ~~Directors~~**

15 Letter from Ernst & Young LLP regarding unaudited interim financial information

31.1 Certification by Delta's Chief Executive Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended ~~June~~ September 30 , 2022

31.2 Certification by Delta's Chief Financial Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended ~~June~~Sep tember 30,, 2022

32 Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code by Delta's Chief Executive Officer and Chief Financial Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended ~~June~~September 30,, 2022

101.INS Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

104 The cover page from this Quarterly Report on Form 10-Q for the quarter ended ~~June~~September 30, 2022, formatted in Inline XBRL (included in Exhibit 101)

_______________

* Incorporated by reference.

** Portions of this exhibit have been omitted as confidential information.

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 39

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			Delta Air Lines, Inc.
			(Registrant)

			/s/ William C. Carroll
			William C. Carroll
			Senior Vice President - Controller
			(Principal Accounting Officer)
~~July~~October 13, 2022

Delta Air Lines, Inc. ~~June~~September 2022 Form 10-Q 40


Table of Contents

			Page
Forward Looking Statements			1
Report of Independent Registered Public Accounting Firm			2

Part I. Financial Information
Item 1. Financial Statements			3
Consolidated Balance Sheets			3
Condensed Consolidated Statements of Operations and Comprehensive ~~Loss~~ Income			4
Condensed Consolidated Statements of Cash Flows			5
Consolidated Statements of Stockholders' Equity			6
Notes to the Condensed Consolidated Financial Statements			7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			1920
Item 3. Quantitative and Qualitative Disclosures About Market Risk			3738
Item 4. Controls and Procedures			3738

Part II. Other Information
Item 1. Legal Proceedings			3738
Item 1A. Risk Factors			3738
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			38
Item 6. Exhibits			39

Signature			40