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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Or
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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58-0218548
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Post Office Box 20706
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Atlanta, Georgia
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30320-6001
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code: (404) 715-2600
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.0001 per share
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New York Stock Exchange
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Large accelerated filer
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þ
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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o
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Emerging growth company
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o
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Table of Contents
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Page
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PART I
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PART II
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Page
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PART III
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PART IV
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•
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A joint venture with Virgin Atlantic with respect to operations on non-stop routes between the United Kingdom and North America. In addition to the joint venture, we own a non-controlling 49% equity stake in Virgin Atlantic Limited, the parent company of Virgin Atlantic Airways.
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•
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A transatlantic joint venture with Air France and KLM, both of which are subsidiaries of the same holding company, and Alitalia. In addition to the joint venture, we own a non-controlling 9% ownership stake in the parent company of Air France and KLM.
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•
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A joint venture with Aeroméxico with respect to trans-border operations on flights between the U.S. and Mexico. In addition to the joint venture, we own a non-controlling 51% equity stake in Grupo Aeroméxico, S.A.B. de C.V., the parent company of Aeroméxico. In addition, we and Aeroméxico have established a joint venture relating to an airframe maintenance, repair and overhaul operation located in Queretaro, Mexico.
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•
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A joint venture with Virgin Australia and its affiliated carriers with respect to operations on transpacific routes between North America and Australia/New Zealand.
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•
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In 2018, we launched a joint venture with Korean Air Lines with respect to operations on transpacific routes between the United States and certain countries in Asia.
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•
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Compass Airlines, LLC ("Compass") and GoJet Airlines, LLC, both subsidiaries of Trans States Holdings, Inc. ("Trans States");
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•
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Endeavor Air, Inc., a wholly owned subsidiary of ours;
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•
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Republic Airline, Inc. ("Republic"), a subsidiary of Republic Airways Holdings, Inc.; and
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•
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SkyWest Airlines, Inc., a subsidiary of SkyWest, Inc.
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Year
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Gallons Consumed(1)
(in millions)
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Cost(1)(2) (in millions)
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Average Price Per Gallon(1)(2)
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Percentage of Total Operating Expense(1)(2)
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||||||
2018
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4,113
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$
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9,020
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$
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2.20
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23.0
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%
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2017
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4,032
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$
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6,756
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$
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1.68
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19.2
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%
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2016
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4,016
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$
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5,985
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$
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1.49
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18.3
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%
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(1)
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Includes the operations of our regional carriers operating under capacity purchase agreements.
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(2)
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Includes the impact of fuel hedge activity and refinery segment results.
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•
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In addition to providing maintenance and engineering support for our fleet of over 1,000 aircraft, our aircraft maintenance, repair and overhaul ("MRO") operation, known as Delta TechOps, serves aviation and airline customers from around the world.
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•
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Our vacation wholesale business, Delta Vacations, provides vacation packages to third-party consumers.
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•
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Our private jet operations, Delta Private Jets, provides aircraft charters, aircraft management and programs allowing members to purchase flight time by the hour.
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Employee Group
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Approximate Number of Active Employees Represented
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Union
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Date on which Collective Bargaining Agreement Becomes Amendable
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Delta Pilots
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13,203
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ALPA
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December 31, 2019
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Delta Flight Superintendents (Dispatchers)(1)
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432
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PAFCA
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March 31, 2018
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Endeavor Air Pilots
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1,976
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ALPA
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January 1, 2024
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Endeavor Air Flight Attendants(1)
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1,307
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AFA
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December 31, 2018
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Endeavor Air Dispatchers(1)
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60
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PAFCA
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December 31, 2018
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(1)
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We are in discussions with representatives of these employee groups regarding terms of amendable collective bargaining agreements.
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Current Fleet(1)
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Commitments
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||||
Aircraft Type
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Owned
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Finance Lease
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Operating Lease
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Total
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Average Age
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Purchase
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Options
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B-717-200
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3
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16
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72
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91
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17.3
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—
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—
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B-737-700
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10
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—
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—
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10
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9.9
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—
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—
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B-737-800
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73
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4
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—
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77
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17.3
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—
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—
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B-737-900ER
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73
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—
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39
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112
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2.7
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18
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—
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B-757-200
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89
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9
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2
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100
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21.4
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—
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—
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B-757-300
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16
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—
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—
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16
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15.9
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—
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—
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B-767-300
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2
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—
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—
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2
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25.5
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—
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—
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B-767-300ER
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55
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1
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—
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56
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22.6
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—
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—
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B-767-400ER
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21
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—
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—
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21
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18.0
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—
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—
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B-777-200ER
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8
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—
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—
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8
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19.1
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—
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—
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B-777-200LR
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10
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—
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—
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10
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9.8
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—
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—
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A220-100
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4
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—
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—
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4
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0.1
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36
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50
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A220-300
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—
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—
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—
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—
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—
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50
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—
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A319-100
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55
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—
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2
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57
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16.8
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—
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—
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A320-200
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55
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3
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4
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62
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23.4
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—
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—
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A321-200
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37
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—
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28
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65
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1.2
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62
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—
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A321-200neo
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—
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—
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—
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—
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—
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100
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100
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A330-200
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11
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—
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—
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11
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13.8
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—
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—
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A330-300
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28
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—
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3
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31
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9.9
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—
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—
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A330-900neo
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—
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—
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—
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—
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—
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35
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—
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A350-900
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11
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—
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—
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11
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1.0
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14
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—
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MD-88
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71
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13
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—
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84
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28.1
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—
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—
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MD-90
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43
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—
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—
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43
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21.8
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—
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—
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Total
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675
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46
|
150
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871
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16.0
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315
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150
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(1)
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Excludes certain aircraft we own, lease or have committed to purchase that are operated by regional carriers on our behalf shown in the table below.
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Fleet Type
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||||
Carrier
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CRJ-200
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CRJ-700
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CRJ-900
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Embraer 170
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Embraer 175
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Total
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Endeavor Air, Inc.(1)
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42
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3
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109
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—
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—
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154
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SkyWest Airlines, Inc.
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77
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22
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41
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—
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49
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189
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Compass Airlines, LLC
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—
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—
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—
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—
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36
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36
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Republic Airline, Inc.
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—
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—
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—
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21
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16
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37
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GoJet Airlines, LLC
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—
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22
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7
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—
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—
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29
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Total
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119
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47
|
157
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21
|
101
|
445
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(1)
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Endeavor Air, Inc. is a wholly owned subsidiary of Delta.
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Delivery in Calendar Years Ending
|
||||
Aircraft Purchase Commitments
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2019
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2020
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2021
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After 2021
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Total
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A220-100
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24
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12
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—
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—
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36
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A220-300
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—
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6
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12
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32
|
50
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A321-200
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32
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27
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3
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—
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62
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A321-200neo
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—
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16
|
36
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48
|
100
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A330-900neo
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4
|
4
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9
|
18
|
35
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A350-900
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2
|
2
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—
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10
|
14
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B-737-900ER
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18
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—
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—
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—
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18
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CRJ-900
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7
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8
|
—
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—
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15
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Total
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87
|
75
|
60
|
108
|
330
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Period
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Total Number of Shares Purchased
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Average Price Paid Per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
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Approximate Dollar Value (in millions) of Shares That May Yet Be Purchased Under the Plan or Programs
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|||||||
October 2018
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1,538,432
|
|
$
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53.25
|
|
1,538,432
|
|
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$
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3,350
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|
November 2018
|
2,188,178
|
|
$
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56.38
|
|
2,188,178
|
|
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$
|
3,225
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December 2018
|
2,221,305
|
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$
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54.22
|
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2,221,305
|
|
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$
|
3,100
|
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Total
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5,947,915
|
|
|
5,947,915
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||
(in millions, except share data)
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
Operating revenue
|
$
|
44,438
|
|
$
|
41,138
|
|
$
|
39,450
|
|
$
|
40,704
|
|
$
|
40,362
|
|
Operating expense
|
39,174
|
|
35,172
|
|
32,454
|
|
32,902
|
|
38,156
|
|
|||||
Operating income
|
5,264
|
|
5,966
|
|
6,996
|
|
7,802
|
|
2,206
|
|
|||||
Non-operating expense, net
|
(113
|
)
|
(466
|
)
|
(643
|
)
|
(645
|
)
|
(1,134
|
)
|
|||||
Income before income taxes
|
5,151
|
|
5,500
|
|
6,353
|
|
7,157
|
|
1,072
|
|
|||||
Income tax (provision) benefit
|
(1,216
|
)
|
(2,295
|
)
|
(2,158
|
)
|
(2,631
|
)
|
(413
|
)
|
|||||
Net income
|
$
|
3,935
|
|
$
|
3,205
|
|
$
|
4,195
|
|
$
|
4,526
|
|
$
|
659
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per share
|
$
|
5.69
|
|
$
|
4.45
|
|
$
|
5.59
|
|
$
|
5.68
|
|
$
|
0.79
|
|
Diluted earnings per share
|
$
|
5.67
|
|
$
|
4.43
|
|
$
|
5.55
|
|
$
|
5.63
|
|
$
|
0.78
|
|
Cash dividends declared per share
|
$
|
1.31
|
|
$
|
1.02
|
|
$
|
0.68
|
|
$
|
0.45
|
|
$
|
0.30
|
|
|
Year Ended December 31,
|
||||||||||||||
(in millions)
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
MTM adjustments and settlements
|
$
|
(53
|
)
|
$
|
259
|
|
$
|
450
|
|
$
|
1,301
|
|
$
|
(2,346
|
)
|
Restructuring and other
|
—
|
|
—
|
|
—
|
|
(35
|
)
|
(716
|
)
|
|||||
Loss on extinguishment of debt
|
—
|
|
—
|
|
—
|
|
—
|
|
(268
|
)
|
|||||
Equity investment MTM adjustments
|
29
|
|
(8
|
)
|
115
|
|
26
|
|
(134
|
)
|
|||||
Unrealized (gain)/loss on investments
|
(14
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Tax Cuts and Jobs Act
|
—
|
|
(394
|
)
|
—
|
|
—
|
|
—
|
|
|
December 31,
|
||||||||||||||
(in millions)
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
Total assets
|
$
|
60,266
|
|
$
|
53,671
|
|
$
|
51,850
|
|
$
|
53,134
|
|
$
|
54,005
|
|
Long-term debt and finance leases (including current maturities)
|
9,771
|
|
8,834
|
|
7,332
|
|
8,329
|
|
9,661
|
|
|||||
Stockholders' equity
|
13,687
|
|
12,530
|
|
11,277
|
|
10,850
|
|
8,813
|
|
|
Year Ended December 31,
|
||||||||||||||
Consolidated(1)
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
Revenue passenger miles (in millions)
|
225,243
|
|
217,712
|
|
213,098
|
|
209,625
|
|
202,925
|
|
|||||
Available seat miles (in millions)
|
263,365
|
|
254,325
|
|
251,867
|
|
246,764
|
|
239,676
|
|
|||||
Passenger mile yield
|
|
17.65
|
¢
|
|
16.97
|
¢
|
|
16.81
|
¢
|
|
16.59
|
¢
|
|
17.22
|
¢
|
Passenger revenue per available seat mile
|
|
15.09
|
¢
|
|
14.53
|
¢
|
|
14.22
|
¢
|
|
14.10
|
¢
|
|
14.58
|
¢
|
Total revenue per available seat mile
|
|
16.87
|
¢
|
|
16.18
|
¢
|
|
15.66
|
¢
|
|
16.50
|
¢
|
|
16.84
|
¢
|
Operating cost per available seat mile
|
|
14.87
|
¢
|
|
13.83
|
¢
|
|
12.89
|
¢
|
|
13.33
|
¢
|
|
15.92
|
¢
|
Passenger load factor
|
85.5
|
%
|
85.6
|
%
|
84.6
|
%
|
84.9
|
%
|
84.7
|
%
|
|||||
Fuel gallons consumed (in millions)
|
4,113
|
|
4,032
|
|
4,016
|
|
3,988
|
|
3,893
|
|
|||||
Average price per fuel gallon(2)
|
$
|
2.20
|
|
$
|
1.68
|
|
$
|
1.49
|
|
$
|
1.90
|
|
$
|
3.47
|
|
Full-time equivalent employees, end of period
|
88,680
|
|
86,564
|
|
83,756
|
|
82,949
|
|
79,655
|
|
(1)
|
Includes the operations of our regional carriers under capacity purchase agreements. Full-time equivalent employees exclude employees of regional carriers that we do not own.
|
(2)
|
Includes the impact of fuel hedge activity and refinery segment results.
|
|
Year Ended December 31,
|
Increase
|
% Increase
|
||||||||
(in millions)
|
2018
|
2017
|
|||||||||
Ticket - Main cabin
|
$
|
21,196
|
|
$
|
20,380
|
|
$
|
816
|
|
4.0
|
%
|
Ticket - Business cabin and premium products
|
13,754
|
|
12,087
|
|
1,667
|
|
13.8
|
%
|
|||
Loyalty travel awards
|
2,651
|
|
2,403
|
|
248
|
|
10.3
|
%
|
|||
Travel-related services
|
2,154
|
|
2,077
|
|
77
|
|
3.7
|
%
|
|||
Total passenger revenue
|
$
|
39,755
|
|
$
|
36,947
|
|
$
|
2,808
|
|
7.6
|
%
|
Cargo
|
865
|
|
744
|
|
121
|
|
16.3
|
%
|
|||
Other
|
3,818
|
|
3,447
|
|
371
|
|
10.8
|
%
|
|||
Total operating revenue
|
$
|
44,438
|
|
$
|
41,138
|
|
$
|
3,300
|
|
8.0
|
%
|
|
|
|
|
|
|||||||
TRASM (cents)
|
|
16.87
|
¢
|
|
16.18
|
¢
|
|
0.69
|
¢
|
4.3
|
%
|
Third-party refinery sales(1)
|
(0.21
|
)
|
(0.20
|
)
|
(0.01
|
)
|
NM
|
|
|||
TRASM, adjusted (cents)
|
|
16.66
|
¢
|
|
15.98
|
¢
|
|
0.68
|
¢
|
4.3
|
%
|
(1)
|
For additional information on adjusting for third-party refinery sales, see "Supplemental Information" below.
|
|
|
Increase (Decrease)
vs. Year Ended December 31, 2017
|
||||||||||||||
(in millions)
|
Year Ended December 31, 2018
|
Passenger Revenue
|
RPMs (Traffic)
|
ASMs (Capacity)
|
Passenger Mile Yield
|
PRASM
|
Load Factor
|
|||||||||
Domestic
|
$
|
28,159
|
|
8.0
|
%
|
4.9
|
%
|
5.2
|
%
|
2.9
|
%
|
2.6
|
%
|
(0.2
|
)
|
pts
|
Atlantic
|
6,165
|
|
11.4
|
%
|
3.9
|
%
|
2.7
|
%
|
7.2
|
%
|
8.4
|
%
|
1.0
|
|
pt
|
|
Latin America
|
2,888
|
|
0.9
|
%
|
(1.7
|
)%
|
(0.5
|
)%
|
2.6
|
%
|
1.4
|
%
|
(1.0
|
)
|
pt
|
|
Pacific
|
2,543
|
|
3.0
|
%
|
(1.8
|
)%
|
(1.4
|
)%
|
4.9
|
%
|
4.5
|
%
|
(0.3
|
)
|
pts
|
|
Total passenger revenue
|
$
|
39,755
|
|
7.6
|
%
|
3.5
|
%
|
3.6
|
%
|
4.0
|
%
|
3.9
|
%
|
(0.1
|
)
|
pts
|
|
Year Ended December 31,
|
Increase
(Decrease)
|
% Increase
(Decrease)
|
||||||||
(in millions)
|
2018
|
2017
|
|||||||||
Ancillary businesses and refinery
|
$
|
1,801
|
|
$
|
1,591
|
|
$
|
210
|
|
13.2
|
%
|
Loyalty program
|
1,459
|
|
1,269
|
|
190
|
|
15.0
|
%
|
|||
Miscellaneous
|
558
|
|
587
|
|
(29
|
)
|
(4.9
|
)%
|
|||
Total other revenue
|
$
|
3,818
|
|
$
|
3,447
|
|
$
|
371
|
|
10.8
|
%
|
|
Year Ended December 31,
|
Increase
(Decrease)
|
% Increase
(Decrease)
|
||||||||
(in millions)
|
2018
|
2017
|
|||||||||
Salaries and related costs
|
$
|
10,743
|
|
$
|
10,058
|
|
$
|
685
|
|
6.8
|
%
|
Aircraft fuel and related taxes
|
9,020
|
|
6,756
|
|
2,264
|
|
33.5
|
%
|
|||
Regional carriers expense, excluding fuel
|
3,438
|
|
3,466
|
|
(28
|
)
|
(0.8
|
)%
|
|||
Depreciation and amortization
|
2,329
|
|
2,222
|
|
107
|
|
4.8
|
%
|
|||
Contracted services
|
2,175
|
|
2,108
|
|
67
|
|
3.2
|
%
|
|||
Passenger commissions and other selling expenses
|
1,941
|
|
1,827
|
|
114
|
|
6.2
|
%
|
|||
Ancillary businesses and refinery
|
1,695
|
|
1,495
|
|
200
|
|
13.4
|
%
|
|||
Landing fees and other rents
|
1,662
|
|
1,501
|
|
161
|
|
10.7
|
%
|
|||
Aircraft maintenance materials and outside repairs
|
1,575
|
|
1,591
|
|
(16
|
)
|
(1.0
|
)%
|
|||
Profit sharing
|
1,301
|
|
1,065
|
|
236
|
|
22.2
|
%
|
|||
Passenger service
|
1,178
|
|
1,123
|
|
55
|
|
4.9
|
%
|
|||
Aircraft rent
|
394
|
|
351
|
|
43
|
|
12.3
|
%
|
|||
Other
|
1,723
|
|
1,609
|
|
114
|
|
7.1
|
%
|
|||
Total operating expense
|
$
|
39,174
|
|
$
|
35,172
|
|
$
|
4,002
|
|
11.4
|
%
|
|
|
|
Average Price Per Gallon
|
||||||||||||||||
|
Year Ended December 31,
|
Increase
(Decrease)
|
|
Year Ended December 31,
|
Increase (Decrease)
|
||||||||||||||
(in millions, except per gallon data)
|
2018
|
2017
|
|
2018
|
2017
|
||||||||||||||
Fuel purchase cost(1)
|
$
|
9,131
|
|
$
|
6,833
|
|
$
|
2,298
|
|
|
$
|
2.22
|
|
$
|
1.70
|
|
$
|
0.52
|
|
Fuel hedge impact
|
(53
|
)
|
33
|
|
(86
|
)
|
|
(0.01
|
)
|
0.01
|
|
(0.02
|
)
|
||||||
Refinery segment impact
|
(58
|
)
|
(110
|
)
|
52
|
|
|
(0.01
|
)
|
(0.03
|
)
|
0.02
|
|
||||||
Total fuel expense
|
$
|
9,020
|
|
$
|
6,756
|
|
$
|
2,264
|
|
|
$
|
2.20
|
|
$
|
1.68
|
|
$
|
0.52
|
|
MTM adjustments and settlements(2)
|
53
|
|
259
|
|
(206
|
)
|
|
0.01
|
|
0.06
|
|
(0.05
|
)
|
||||||
Total fuel expense, adjusted
|
$
|
9,073
|
|
$
|
7,015
|
|
$
|
2,058
|
|
|
$
|
2.21
|
|
$
|
1.74
|
|
$
|
0.47
|
|
(1)
|
Market price for jet fuel at airport locations, including related taxes and transportation costs.
|
(2)
|
MTM adjustments and settlements include the effects of the derivative transactions disclosed in Note 5 of the Notes to the Condensed Consolidated Financial Statements. For additional information and the reason for adjusting fuel expense, see "Supplemental Information" below.
|
|
Year Ended December 31,
|
Increase (Decrease)
|
% Increase (Decrease)
|
||||||||
(in millions)
|
2017
|
2016
|
|||||||||
Ticket - Main cabin
|
$
|
20,380
|
|
$
|
20,489
|
|
$
|
(109
|
)
|
(0.5
|
)%
|
Ticket - Business cabin and premium products
|
12,087
|
|
11,045
|
|
1,042
|
|
9.4
|
%
|
|||
Loyalty travel awards
|
2,403
|
|
2,234
|
|
169
|
|
7.6
|
%
|
|||
Travel-related services
|
2,077
|
|
2,046
|
|
31
|
|
1.5
|
%
|
|||
Total passenger revenue
|
$
|
36,947
|
|
$
|
35,814
|
|
$
|
1,133
|
|
3.2
|
%
|
Cargo
|
744
|
|
684
|
|
60
|
|
8.8
|
%
|
|||
Other
|
3,447
|
|
2,952
|
|
495
|
|
16.8
|
%
|
|||
Total operating revenue
|
$
|
41,138
|
|
$
|
39,450
|
|
$
|
1,688
|
|
4.3
|
%
|
|
|
|
|
|
|||||||
TRASM (cents)
|
|
16.18
|
¢
|
|
15.66
|
¢
|
|
0.52
|
¢
|
3.3
|
%
|
Third-party refinery sales(1)
|
(0.20
|
)
|
(0.09
|
)
|
(0.11
|
)
|
NM
|
|
|||
TRASM, adjusted (cents)
|
|
15.98
|
¢
|
|
15.57
|
¢
|
|
0.41
|
¢
|
2.6
|
%
|
(1)
|
For additional information on adjusting for third-party refinery sales, see "Supplemental Information" below.
|
|
|
Increase (Decrease)
vs. Year Ended December 31, 2016
|
||||||||||||||
(in millions)
|
Year Ended December 31, 2017
|
Passenger Revenue
|
RPMs (Traffic)
|
ASMs (Capacity)
|
Passenger Mile Yield
|
PRASM
|
Load Factor
|
|||||||||
Domestic
|
$
|
26,079
|
|
4.3
|
%
|
3.2
|
%
|
2.7
|
%
|
1.1
|
%
|
1.6
|
%
|
0.4
|
|
pts
|
Atlantic
|
5,537
|
|
2.2
|
%
|
4.8
|
%
|
0.3
|
%
|
(2.5
|
)%
|
1.8
|
%
|
3.6
|
|
pts
|
|
Latin America
|
2,862
|
|
6.6
|
%
|
3.1
|
%
|
1.0
|
%
|
3.3
|
%
|
5.5
|
%
|
1.8
|
|
pts
|
|
Pacific
|
2,469
|
|
(8.8
|
)%
|
(9.0
|
)%
|
(7.7
|
)%
|
0.2
|
%
|
(1.2
|
)%
|
(1.2
|
)
|
pts
|
|
Total passenger revenue
|
$
|
36,947
|
|
3.2
|
%
|
2.2
|
%
|
1.0
|
%
|
1.0
|
%
|
2.2
|
%
|
1.0
|
|
pt
|
|
Year Ended December 31,
|
Increase
|
% Increase
|
||||||||
(in millions)
|
2017
|
2016
|
|||||||||
Ancillary businesses and refinery
|
$
|
1,591
|
|
$
|
1,293
|
|
$
|
298
|
|
23.0
|
%
|
Loyalty program
|
1,269
|
|
1,110
|
|
159
|
|
14.3
|
%
|
|||
Miscellaneous
|
587
|
|
549
|
|
38
|
|
6.9
|
%
|
|||
Total other revenue
|
$
|
3,447
|
|
$
|
2,952
|
|
$
|
495
|
|
16.8
|
%
|
|
Year Ended December 31,
|
Increase
(Decrease)
|
% Increase
(Decrease)
|
||||||||
(in millions)
|
2017
|
2016
|
|||||||||
Salaries and related costs
|
$
|
10,058
|
|
$
|
9,394
|
|
$
|
664
|
|
7.1
|
%
|
Aircraft fuel and related taxes
|
6,756
|
|
5,985
|
|
771
|
|
12.9
|
%
|
|||
Regional carriers expense, excluding fuel
|
3,466
|
|
3,447
|
|
19
|
|
0.6
|
%
|
|||
Depreciation and amortization
|
2,222
|
|
1,886
|
|
336
|
|
17.8
|
%
|
|||
Contracted services
|
2,108
|
|
1,918
|
|
190
|
|
9.9
|
%
|
|||
Passenger commissions and other selling expenses
|
1,827
|
|
1,751
|
|
76
|
|
4.3
|
%
|
|||
Aircraft maintenance materials and outside repairs
|
1,591
|
|
1,434
|
|
157
|
|
10.9
|
%
|
|||
Landing fees and other rents
|
1,501
|
|
1,472
|
|
29
|
|
2.0
|
%
|
|||
Ancillary businesses and refinery
|
1,495
|
|
1,182
|
|
313
|
|
26.5
|
%
|
|||
Passenger service
|
1,123
|
|
964
|
|
159
|
|
16.5
|
%
|
|||
Profit sharing
|
1,065
|
|
1,115
|
|
(50
|
)
|
(4.5
|
)%
|
|||
Aircraft rent
|
351
|
|
285
|
|
66
|
|
23.2
|
%
|
|||
Other
|
1,609
|
|
1,621
|
|
(12
|
)
|
(0.7
|
)%
|
|||
Total operating expense
|
$
|
35,172
|
|
$
|
32,454
|
|
$
|
2,718
|
|
8.4
|
%
|
|
|
|
Average Price Per Gallon
|
||||||||||||||||
|
Year Ended December 31,
|
Increase
(Decrease)
|
|
Year Ended December 31,
|
Increase
(Decrease)
|
||||||||||||||
(in millions, except per gallon data)
|
2017
|
2016
|
|
2017
|
2016
|
||||||||||||||
Fuel purchase cost(1)
|
$
|
6,833
|
|
$
|
5,579
|
|
$
|
1,254
|
|
|
$
|
1.70
|
|
$
|
1.39
|
|
$
|
0.31
|
|
Fuel hedge impact(2)
|
33
|
|
281
|
|
(248
|
)
|
|
0.01
|
|
0.07
|
|
(0.06
|
)
|
||||||
Refinery segment impact(2)
|
(110
|
)
|
125
|
|
(235
|
)
|
|
(0.03
|
)
|
0.03
|
|
(0.06
|
)
|
||||||
Total fuel expense
|
$
|
6,756
|
|
$
|
5,985
|
|
$
|
771
|
|
|
$
|
1.68
|
|
$
|
1.49
|
|
$
|
0.19
|
|
MTM adjustments and settlements(3)
|
259
|
|
450
|
|
(191
|
)
|
|
0.06
|
|
0.11
|
|
(0.05
|
)
|
||||||
Total fuel expense, adjusted
|
$
|
7,015
|
|
$
|
6,435
|
|
$
|
580
|
|
|
$
|
1.74
|
|
$
|
1.60
|
|
$
|
0.14
|
|
(1)
|
Market price for jet fuel at airport locations, including related taxes and transportation costs.
|
(2)
|
Includes the impact of pricing arrangements between the airline and refinery segments with respect to the refinery's inventory price risk. For additional information regarding the refinery segment, see "Refinery Segment" below.
|
(3)
|
MTM adjustments and settlements include the effects of the derivative transactions discussed in Note 5 of the Notes to the Consolidated Financial Statements. For additional information and the reason for adjusting fuel expense, see "Supplemental Information" below.
|
|
Year Ended December 31,
|
|
Favorable (Unfavorable)
|
|||||||||||||
(in millions)
|
2018
|
2017
|
2016
|
|
2018 vs. 2017
|
2017 vs. 2016
|
||||||||||
Interest expense, net
|
$
|
(311
|
)
|
$
|
(396
|
)
|
$
|
(388
|
)
|
|
$
|
85
|
|
$
|
(8
|
)
|
Unrealized gain/(loss) on investments, net
|
14
|
|
—
|
|
—
|
|
|
14
|
|
—
|
|
|||||
Miscellaneous, net
|
184
|
|
(70
|
)
|
(255
|
)
|
|
254
|
|
185
|
|
|||||
Total non-operating expense, net
|
$
|
(113
|
)
|
$
|
(466
|
)
|
$
|
(643
|
)
|
|
$
|
353
|
|
$
|
177
|
|
•
|
Pension Benefit. The pension benefit increased $243 million in the current year compared to the prior year as plan assets increased $4.4 billion from the prior year end. In recent years, we have contributed significantly more to the pension plans than the minimum funding requirements, including $500 million in 2018 and $3.5 billion in 2017.
|
•
|
DGS Transaction. In the sale of our DGS entity to a subsidiary of Argenbright Holdings, LLC, we received a non-controlling 49% equity stake in a new entity and $40 million cash, which resulted in a gain of $91 million. See Note 4 of the Notes to the Consolidated Financial Statements for more information.
|
•
|
CLEAR Share Sale. We sold a portion of our equity interest in Alclear Holdings LLC, and recognized a gain of $18 million.
|
Rating Agency
|
Current Rating
|
Outlook
|
Fitch
|
BBB-
|
Stable
|
Moody's
|
Baa3
|
Stable
|
Standard & Poor's
|
BBB-
|
Stable
|
|
Contractual Obligations by Year(1)
|
||||||||||||||||||||
(in millions)
|
2019
|
2020
|
2021
|
2022
|
2023
|
Thereafter
|
Total
|
||||||||||||||
Long-term debt (see Note 7)
|
|
|
|
|
|
|
|
||||||||||||||
Principal amount
|
$
|
1,441
|
|
$
|
2,048
|
|
$
|
1,019
|
|
$
|
1,676
|
|
$
|
929
|
|
$
|
2,195
|
|
$
|
9,308
|
|
Interest payments
|
387
|
|
300
|
|
248
|
|
195
|
|
128
|
|
643
|
|
1,901
|
|
|||||||
Finance lease obligations (see Note 8)
|
|
|
|
|
|
|
|
||||||||||||||
Principal amount
|
109
|
|
77
|
|
68
|
|
28
|
|
23
|
|
98
|
|
403
|
|
|||||||
Interest payments
|
17
|
|
12
|
|
8
|
|
5
|
|
4
|
|
13
|
|
59
|
|
|||||||
Operating lease obligations (see Note 8)
|
1,185
|
|
1,022
|
|
845
|
|
712
|
|
673
|
|
4,289
|
|
8,726
|
|
|||||||
Aircraft purchase commitments (see Note 11)
|
3,290
|
|
3,130
|
|
3,190
|
|
2,760
|
|
1,850
|
|
1,940
|
|
16,160
|
|
|||||||
Contract carrier obligations (see Note 11)
|
1,505
|
|
1,344
|
|
951
|
|
872
|
|
769
|
|
2,862
|
|
8,303
|
|
|||||||
Employee benefit obligations (see Note 10)
|
146
|
|
144
|
|
125
|
|
119
|
|
111
|
|
6,027
|
|
6,672
|
|
|||||||
Other obligations
|
874
|
|
709
|
|
470
|
|
732
|
|
566
|
|
765
|
|
4,116
|
|
|||||||
Total
|
$
|
8,954
|
|
$
|
8,786
|
|
$
|
6,924
|
|
$
|
7,099
|
|
$
|
5,053
|
|
$
|
18,832
|
|
$
|
55,648
|
|
(1)
|
For additional information, see the Notes to the Consolidated Financial Statements referenced in the table above.
|
Change in Assumption
|
Effect on 2019
Pension Expense
|
Effect on Accrued
Pension Liability at
December 31, 2018
|
||||||
0.50% decrease in weighted average discount rate
|
|
$
|
(5
|
) million
|
|
$
|
1.2
|
billion
|
0.50% increase in weighted average discount rate
|
|
$
|
3
|
million
|
|
$
|
(1.1
|
) billion
|
0.50% decrease in expected long-term rate of return on assets
|
|
$
|
65
|
million
|
|
$
|
—
|
|
0.50% increase in expected long-term rate of return on assets
|
|
$
|
(65
|
) million
|
|
$
|
—
|
|
|
Year Ended December 31,
|
|||||
(in millions)
|
2018
|
2017
|
||||
Pre-tax income
|
$
|
5,151
|
|
$
|
5,500
|
|
Adjusted for:
|
|
|
||||
MTM adjustments and settlements
|
(53
|
)
|
(259
|
)
|
||
Equity investment MTM adjustments
|
29
|
|
8
|
|
||
Unrealized gain/loss on investments
|
(14
|
)
|
—
|
|
||
Pre-tax income, adjusted
|
$
|
5,113
|
|
$
|
5,250
|
|
•
|
Third-party Refinery Sales. We adjust TRASM for refinery sales to third parties to determine TRASM, adjusted because these revenues are not related to our airline segment. TRASM, adjusted therefore provides a more meaningful comparison of revenue from our airline operations to the rest of the airline industry.
|
|
Year Ended December 31,
|
|||||
|
2018
|
2017
|
||||
TRASM
|
|
16.87
|
¢
|
|
16.18
|
¢
|
Adjusted for:
|
|
|
||||
Third-party refinery sales
|
(0.21
|
)
|
(0.20
|
)
|
||
TRASM, adjusted
|
|
16.66
|
¢
|
|
15.98
|
¢
|
•
|
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.
|
•
|
Ancillary Businesses and Refinery. These expenses include aircraft maintenance we provide to third parties, our vacation wholesale operations and refinery cost of sales to third parties. Results also include staffing services performed by DGS. Because these businesses are not related to the generation of a seat mile, we adjust for the costs related to these areas to provide a more meaningful comparison of the costs of our airline operations to the rest of the airline industry.
|
•
|
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.
|
|
Year Ended December 31,
|
|||||
|
2018
|
2017
|
||||
CASM (cents)
|
|
14.87
|
¢
|
|
13.83
|
¢
|
Adjusted for:
|
|
|
||||
Aircraft fuel and related taxes
|
(3.43
|
)
|
(2.66
|
)
|
||
Ancillary businesses and refinery
|
(0.64
|
)
|
(0.58
|
)
|
||
Profit sharing
|
(0.49
|
)
|
(0.42
|
)
|
||
CASM-Ex
|
|
10.31
|
¢
|
|
10.17
|
¢
|
|
Page
|
|
/s/ Ernst & Young LLP
|
We have served as the Company's auditor since 2006.
|
|
|
|
Atlanta, Georgia
|
|
February 15, 2019
|
|
|
|
December 31,
|
||||||
(in millions, except share data)
|
|
2018
|
|
2017
|
||||
ASSETS
|
||||||||
Current Assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,565
|
|
|
$
|
1,814
|
|
Short-term investments
|
|
203
|
|
|
825
|
|
||
Accounts receivable, net of an allowance for uncollectible accounts of $12 at December 31, 2018 and 2017
|
|
2,314
|
|
|
2,377
|
|
||
Fuel inventory
|
|
592
|
|
|
916
|
|
||
Expendable parts and supplies inventories, net of an allowance for obsolescence of $102 and $113 at December 31, 2018 and 2017, respectively
|
|
463
|
|
|
413
|
|
||
Prepaid expenses and other
|
|
1,203
|
|
|
1,459
|
|
||
Total current assets
|
|
6,340
|
|
|
7,804
|
|
||
|
|
|
|
|
||||
Noncurrent Assets:
|
|
|
|
|
||||
Property and equipment, net of accumulated depreciation and amortization of $15,823 and $14,097 at December 31, 2018 and 2017, respectively
|
|
28,335
|
|
|
26,563
|
|
||
Operating lease right-of-use assets
|
|
5,994
|
|
|
—
|
|
||
Goodwill
|
|
9,781
|
|
|
9,794
|
|
||
Identifiable intangibles, net of accumulated amortization of $862 and $845 at December 31, 2018 and 2017, respectively
|
|
4,830
|
|
|
4,847
|
|
||
Cash restricted for airport construction
|
|
1,136
|
|
|
—
|
|
||
Deferred income taxes, net
|
|
242
|
|
|
1,354
|
|
||
Other noncurrent assets
|
|
3,608
|
|
|
3,309
|
|
||
Total noncurrent assets
|
|
53,926
|
|
|
45,867
|
|
||
Total assets
|
|
$
|
60,266
|
|
|
$
|
53,671
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current Liabilities:
|
|
|
|
|
||||
Current maturities of long-term debt and finance leases
|
|
$
|
1,518
|
|
|
$
|
2,242
|
|
Current maturities of operating leases
|
|
955
|
|
|
—
|
|
||
Air traffic liability
|
|
4,661
|
|
|
4,364
|
|
||
Accounts payable
|
|
2,976
|
|
|
3,634
|
|
||
Accrued salaries and related benefits
|
|
3,287
|
|
|
3,022
|
|
||
Loyalty program deferred revenue
|
|
2,989
|
|
|
2,762
|
|
||
Fuel card obligation
|
|
1,075
|
|
|
1,067
|
|
||
Other accrued liabilities
|
|
1,117
|
|
|
1,868
|
|
||
Total current liabilities
|
|
18,578
|
|
|
18,959
|
|
||
|
|
|
|
|
||||
Noncurrent Liabilities:
|
|
|
|
|
||||
Long-term debt and finance leases
|
|
8,253
|
|
|
6,592
|
|
||
Pension, postretirement and related benefits
|
|
9,163
|
|
|
9,810
|
|
||
Loyalty program deferred revenue
|
|
3,652
|
|
|
3,559
|
|
||
Noncurrent operating leases
|
|
5,801
|
|
|
—
|
|
||
Other noncurrent liabilities
|
|
1,132
|
|
|
2,221
|
|
||
Total noncurrent liabilities
|
|
28,001
|
|
|
22,182
|
|
||
|
|
|
|
|
||||
Commitments and Contingencies
|
|
|
|
|
||||
|
|
|
|
|
||||
Stockholders' Equity:
|
|
|
|
|
||||
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 688,136,306 and 714,674,160 shares issued at December 31, 2018 and 2017, respectively
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
11,671
|
|
|
12,053
|
|
||
Retained earnings
|
|
10,039
|
|
|
8,256
|
|
||
Accumulated other comprehensive loss
|
|
(7,825
|
)
|
|
(7,621
|
)
|
||
Treasury stock, at cost, 8,191,831 and 7,476,181 shares at December 31, 2018 and 2017, respectively
|
|
(198
|
)
|
|
(158
|
)
|
||
Total stockholders' equity
|
|
13,687
|
|
|
12,530
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
60,266
|
|
|
$
|
53,671
|
|
|
|
|
|
|
||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
|
|
Year Ended December 31,
|
||||||||||
(in millions, except per share data)
|
2018
|
|
2017
|
|
2016
|
||||||
Operating Revenue:
|
|
|
|
|
|
||||||
Passenger
|
$
|
39,755
|
|
|
$
|
36,947
|
|
|
$
|
35,814
|
|
Cargo
|
865
|
|
|
744
|
|
|
684
|
|
|||
Other
|
3,818
|
|
|
3,447
|
|
|
2,952
|
|
|||
Total operating revenue
|
44,438
|
|
|
41,138
|
|
|
39,450
|
|
|||
|
|
|
|
|
|
||||||
Operating Expense:
|
|
|
|
|
|
||||||
Salaries and related costs
|
10,743
|
|
|
10,058
|
|
|
9,394
|
|
|||
Aircraft fuel and related taxes
|
9,020
|
|
|
6,756
|
|
|
5,985
|
|
|||
Regional carriers expense, excluding fuel
|
3,438
|
|
|
3,466
|
|
|
3,447
|
|
|||
Depreciation and amortization
|
2,329
|
|
|
2,222
|
|
|
1,886
|
|
|||
Contracted services
|
2,175
|
|
|
2,108
|
|
|
1,918
|
|
|||
Passenger commissions and other selling expenses
|
1,941
|
|
|
1,827
|
|
|
1,751
|
|
|||
Ancillary businesses and refinery
|
1,695
|
|
|
1,495
|
|
|
1,182
|
|
|||
Landing fees and other rents
|
1,662
|
|
|
1,501
|
|
|
1,472
|
|
|||
Aircraft maintenance materials and outside repairs
|
1,575
|
|
|
1,591
|
|
|
1,434
|
|
|||
Profit sharing
|
1,301
|
|
|
1,065
|
|
|
1,115
|
|
|||
Passenger service
|
1,178
|
|
|
1,123
|
|
|
964
|
|
|||
Aircraft rent
|
394
|
|
|
351
|
|
|
285
|
|
|||
Other
|
1,723
|
|
|
1,609
|
|
|
1,621
|
|
|||
Total operating expense
|
39,174
|
|
|
35,172
|
|
|
32,454
|
|
|||
|
|
|
|
|
|
||||||
Operating Income
|
5,264
|
|
|
5,966
|
|
|
6,996
|
|
|||
|
|
|
|
|
|
||||||
Non-Operating Expense:
|
|
|
|
|
|
||||||
Interest expense, net
|
(311
|
)
|
|
(396
|
)
|
|
(388
|
)
|
|||
Unrealized gain/(loss) on investments, net
|
14
|
|
|
—
|
|
|
—
|
|
|||
Miscellaneous, net
|
184
|
|
|
(70
|
)
|
|
(255
|
)
|
|||
Total non-operating expense, net
|
(113
|
)
|
|
(466
|
)
|
|
(643
|
)
|
|||
|
|
|
|
|
|
||||||
Income Before Income Taxes
|
5,151
|
|
|
5,500
|
|
|
6,353
|
|
|||
|
|
|
|
|
|
||||||
Income Tax Provision
|
(1,216
|
)
|
|
(2,295
|
)
|
|
(2,158
|
)
|
|||
|
|
|
|
|
|
||||||
Net Income
|
$
|
3,935
|
|
|
$
|
3,205
|
|
|
$
|
4,195
|
|
|
|
|
|
|
|
||||||
Basic Earnings Per Share
|
$
|
5.69
|
|
|
$
|
4.45
|
|
|
$
|
5.59
|
|
Diluted Earnings Per Share
|
$
|
5.67
|
|
|
$
|
4.43
|
|
|
$
|
5.55
|
|
Cash Dividends Declared Per Share
|
$
|
1.31
|
|
|
$
|
1.02
|
|
|
$
|
0.68
|
|
|
|
|
|
|
|
||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Net Income
|
$
|
3,935
|
|
|
$
|
3,205
|
|
|
$
|
4,195
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Net change in derivative contracts
|
15
|
|
|
(29
|
)
|
|
(37
|
)
|
|||
Net change in pension and other benefits
|
(113
|
)
|
|
(98
|
)
|
|
(360
|
)
|
|||
Net change in investments
|
—
|
|
|
142
|
|
|
36
|
|
|||
Total Other Comprehensive (Loss) Income
|
(98
|
)
|
|
15
|
|
|
(361
|
)
|
|||
Comprehensive Income
|
$
|
3,837
|
|
|
$
|
3,220
|
|
|
$
|
3,834
|
|
|
Common Stock
|
Additional
Paid-In Capital |
Retained
Earnings |
Accumulated
Other Comprehensive Loss |
Treasury Stock
|
|
||||||||||||||||
(in millions, except per share data)
|
Shares
|
Amount
|
Shares
|
Amount
|
Total
|
|||||||||||||||||
Balance at January 1, 2016
|
800
|
|
$
|
—
|
|
$
|
12,936
|
|
$
|
5,562
|
|
$
|
(7,275
|
)
|
21
|
|
$
|
(373
|
)
|
$
|
10,850
|
|
Net income
|
—
|
|
—
|
|
—
|
|
4,195
|
|
—
|
|
—
|
|
—
|
|
4,195
|
|
||||||
Change in accounting principle
|
—
|
|
—
|
|
—
|
|
(735
|
)
|
—
|
|
—
|
|
—
|
|
(735
|
)
|
||||||
Dividends declared
|
—
|
|
—
|
|
—
|
|
(509
|
)
|
—
|
|
—
|
|
—
|
|
(509
|
)
|
||||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(361
|
)
|
—
|
|
—
|
|
(361
|
)
|
||||||
Shares of common stock issued and compensation expense associated with equity awards (Treasury shares withheld for payment of taxes, $44.27(1) per share)
|
2
|
|
—
|
|
105
|
|
—
|
|
—
|
|
1
|
|
(40
|
)
|
65
|
|
||||||
Stock options exercised
|
3
|
|
—
|
|
32
|
|
—
|
|
—
|
|
—
|
|
—
|
|
32
|
|
||||||
Treasury stock, net, contributed to our qualified defined benefit pension plans
|
—
|
|
—
|
|
204
|
|
—
|
|
—
|
|
(8
|
)
|
139
|
|
343
|
|
||||||
Stock purchased and retired
|
(60
|
)
|
—
|
|
(983
|
)
|
(1,618
|
)
|
—
|
|
—
|
|
—
|
|
(2,601
|
)
|
||||||
Balance at December 31, 2016
|
745
|
|
—
|
|
12,294
|
|
6,895
|
|
(7,636
|
)
|
14
|
|
(274
|
)
|
11,279
|
|
||||||
Net income
|
—
|
|
—
|
|
—
|
|
3,205
|
|
—
|
|
—
|
|
—
|
|
3,205
|
|
||||||
Dividends declared
|
—
|
|
—
|
|
—
|
|
(731
|
)
|
—
|
|
—
|
|
—
|
|
(731
|
)
|
||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
15
|
|
—
|
|
—
|
|
15
|
|
||||||
Shares of common stock issued and compensation expense associated with equity awards (Treasury shares withheld for payment of taxes, $48.31(1) per share)
|
1
|
|
—
|
|
107
|
|
—
|
|
—
|
|
1
|
|
(39
|
)
|
68
|
|
||||||
Stock options exercised
|
2
|
|
—
|
|
28
|
|
—
|
|
—
|
|
—
|
|
—
|
|
28
|
|
||||||
Treasury stock, net, contributed to our qualified defined benefit pension plans
|
—
|
|
—
|
|
188
|
|
—
|
|
—
|
|
(8
|
)
|
155
|
|
343
|
|
||||||
Stock purchased and retired
|
(33
|
)
|
—
|
|
(564
|
)
|
(1,113
|
)
|
—
|
|
—
|
|
—
|
|
(1,677
|
)
|
||||||
Balance at December 31, 2017
|
715
|
|
—
|
|
12,053
|
|
8,256
|
|
(7,621
|
)
|
7
|
|
(158
|
)
|
12,530
|
|
||||||
Net income
|
—
|
|
—
|
|
—
|
|
3,935
|
|
—
|
|
—
|
|
—
|
|
3,935
|
|
||||||
Change in accounting principle and other
|
—
|
|
—
|
|
—
|
|
(154
|
)
|
(106
|
)
|
—
|
|
—
|
|
(260
|
)
|
||||||
Dividends declared
|
—
|
|
—
|
|
—
|
|
(909
|
)
|
—
|
|
—
|
|
—
|
|
(909
|
)
|
||||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(98
|
)
|
—
|
|
—
|
|
(98
|
)
|
||||||
Shares of common stock issued and compensation expense associated with equity awards (Treasury shares withheld for payment of taxes, $54.90(1) per share)
|
1
|
|
—
|
|
91
|
|
—
|
|
—
|
|
1
|
|
(40
|
)
|
51
|
|
||||||
Stock options exercised
|
1
|
|
—
|
|
13
|
|
—
|
|
—
|
|
—
|
|
—
|
|
13
|
|
||||||
Stock purchased and retired
|
(29
|
)
|
—
|
|
(486
|
)
|
(1,089
|
)
|
—
|
|
—
|
|
—
|
|
(1,575
|
)
|
||||||
Balance at December 31, 2018
|
688
|
|
$
|
—
|
|
$
|
11,671
|
|
$
|
10,039
|
|
$
|
(7,825
|
)
|
8
|
|
$
|
(198
|
)
|
$
|
13,687
|
|
(1)
|
Weighted average price per share.
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||||||||||||
(in millions, except per share data)
|
As Previously Reported
|
Adjustments
|
Current Presentation
|
|
As Previously Reported
|
Adjustments
|
Current Presentation
|
||||||||||||
Income statement:
|
|
|
|
|
|
|
|
||||||||||||
Passenger revenue
|
$
|
34,819
|
|
$
|
2,128
|
|
$
|
36,947
|
|
|
$
|
33,777
|
|
$
|
2,037
|
|
$
|
35,814
|
|
Cargo revenue
|
729
|
|
15
|
|
744
|
|
|
668
|
|
16
|
|
684
|
|
||||||
Other revenue
|
5,696
|
|
(2,249
|
)
|
3,447
|
|
|
5,194
|
|
(2,242
|
)
|
2,952
|
|
||||||
Total operating revenue
|
41,244
|
|
(106
|
)
|
41,138
|
|
|
39,639
|
|
(189
|
)
|
39,450
|
|
||||||
Operating expense
|
35,130
|
|
42
|
|
35,172
|
|
|
32,687
|
|
(233
|
)
|
32,454
|
|
||||||
Non-operating expense
|
(413
|
)
|
(53
|
)
|
(466
|
)
|
|
(316
|
)
|
(327
|
)
|
(643
|
)
|
||||||
Income tax provision
|
(2,124
|
)
|
(171
|
)
|
(2,295
|
)
|
|
(2,263
|
)
|
105
|
|
(2,158
|
)
|
||||||
Net income
|
$
|
3,577
|
|
$
|
(372
|
)
|
$
|
3,205
|
|
|
$
|
4,373
|
|
$
|
(178
|
)
|
$
|
4,195
|
|
Diluted earnings per share
|
$
|
4.95
|
|
$
|
(0.52
|
)
|
$
|
4.43
|
|
|
$
|
5.79
|
|
$
|
(0.24
|
)
|
$
|
5.55
|
|
|
December 31, 2017
|
||||||||
(in millions)
|
As Previously Reported
|
Adjustments
|
Current Presentation
|
||||||
Balance sheet:
|
|
|
|
||||||
Deferred income taxes, net
|
$
|
935
|
|
$
|
419
|
|
$
|
1,354
|
|
Air traffic liability
|
4,888
|
|
(524
|
)
|
4,364
|
|
|||
Loyalty program deferred revenue (current and noncurrent)
|
4,118
|
|
2,203
|
|
6,321
|
|
|||
Other accrued and other noncurrent liabilities
|
3,969
|
|
120
|
|
4,089
|
|
|||
Retained earnings
|
9,636
|
|
(1,380
|
)
|
8,256
|
|
Derivative Type
|
Hedged Risk
|
Classification of Gains and Losses
|
Fuel hedge contracts
|
Fluctuations in fuel prices
|
Aircraft fuel and related taxes
|
Interest rate contracts
|
Increases in interest rates
|
Interest expense, net
|
Foreign currency exchange contracts
|
Fluctuations in foreign currency exchange rates
|
Passenger revenue or non-operating expense (See Note 5)
|
|
Impact of Unrealized Gains and Losses
|
|
Accounting Designation
|
Effective Portion
|
Ineffective Portion
|
Not designated as hedges
|
Change in fair value(1) of hedge is recorded in earnings
|
|
Designated as cash flow hedges
|
Market adjustments are recorded in AOCI
|
Excess, if any, over effective portion of hedge is recorded in non-operating expense
|
Designated as fair value hedges
|
Market adjustments are recorded in long-term debt and finance leases
|
Excess, if any, over effective portion of hedge is recorded in non-operating expense
|
(1)
|
Including settled gains and losses as well as mark-to-market adjustments ("MTM adjustments").
|
|
|
December 31,
|
|||||
(in millions, except for estimated useful life)
|
Estimated Useful Life
|
2018
|
2017
|
||||
Flight equipment
|
20-34 years
|
$
|
33,898
|
|
$
|
30,688
|
|
Ground property and equipment
|
3-40 years
|
8,028
|
|
7,665
|
|
||
Flight and ground equipment under finance leases
|
Shorter of lease term or estimated useful life
|
1,055
|
|
1,147
|
|
||
Advance payments for equipment
|
|
1,177
|
|
1,160
|
|
||
Less: accumulated depreciation and amortization(1)
|
|
(15,823
|
)
|
(14,097
|
)
|
||
Total property and equipment, net
|
|
$
|
28,335
|
|
$
|
26,563
|
|
(1)
|
Includes accumulated amortization for flight and ground equipment under finance leases in the amount of $566 million and $668 million at December 31, 2018 and 2017, respectively.
|
|
Year Ended December 31,
|
||||||||
(in millions)
|
2018
|
2017
|
2016
|
||||||
Ticket
|
$
|
34,950
|
|
$
|
32,467
|
|
$
|
31,534
|
|
Loyalty travel awards
|
2,651
|
|
2,403
|
|
2,234
|
|
|||
Travel-related services
|
2,154
|
|
2,077
|
|
2,046
|
|
|||
Total passenger revenue
|
$
|
39,755
|
|
$
|
36,947
|
|
$
|
35,814
|
|
(in millions)
|
2018
|
2017
|
||||
Balance at January 1
|
$
|
6,321
|
|
$
|
5,922
|
|
Mileage credits earned
|
3,142
|
|
2,948
|
|
||
Travel mileage credits redeemed
|
(2,651
|
)
|
(2,403
|
)
|
||
Non-travel mileage credits redeemed
|
(171
|
)
|
(146
|
)
|
||
Balance at December 31
|
$
|
6,641
|
|
$
|
6,321
|
|
|
Passenger Revenue
|
|
Operating Revenue
|
||||||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||||||
(in millions)
|
2018
|
2017
|
2016
|
|
2018
|
2017
|
2016
|
||||||||||||
Domestic
|
$
|
28,159
|
|
$
|
26,079
|
|
$
|
25,002
|
|
|
$
|
31,233
|
|
$
|
28,850
|
|
$
|
27,309
|
|
Atlantic
|
6,165
|
|
5,537
|
|
5,419
|
|
|
7,042
|
|
6,297
|
|
6,115
|
|
||||||
Latin America
|
2,888
|
|
2,862
|
|
2,686
|
|
|
3,181
|
|
3,133
|
|
2,939
|
|
||||||
Pacific
|
2,543
|
|
2,469
|
|
2,707
|
|
|
2,982
|
|
2,858
|
|
3,087
|
|
||||||
Total
|
$
|
39,755
|
|
$
|
36,947
|
|
$
|
35,814
|
|
|
$
|
44,438
|
|
$
|
41,138
|
|
$
|
39,450
|
|
|
Year Ended December 31,
|
||||||||
(in millions)
|
2018
|
2017
|
2016
|
||||||
Ancillary businesses and refinery
|
$
|
1,801
|
|
$
|
1,591
|
|
$
|
1,293
|
|
Loyalty program
|
1,459
|
|
1,269
|
|
1,110
|
|
|||
Miscellaneous
|
558
|
|
587
|
|
549
|
|
|||
Total other revenue
|
$
|
3,818
|
|
$
|
3,447
|
|
$
|
2,952
|
|
•
|
Level 1. Observable inputs such as quoted prices in active markets;
|
•
|
Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
|
•
|
Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
(a)
|
Market Approach. Prices and other relevant information generated by observable transactions involving identical or comparable assets or liabilities; and
|
(b)
|
Income Approach. Techniques to convert future amounts to a single present value amount based on market expectations (including present value techniques and option-pricing models).
|
|
December 31, 2018
|
Valuation
Technique
|
||||||||
(in millions)
|
Total
|
Level 1
|
Level 2
|
|||||||
Cash equivalents
|
$
|
1,222
|
|
$
|
1,222
|
|
$
|
—
|
|
(a)
|
Restricted cash equivalents
|
1,183
|
|
1,183
|
|
—
|
|
(a)
|
|||
Short-term investments
|
|
|
|
|
||||||
U.S. government and agency securities
|
50
|
|
45
|
|
5
|
|
(a)
|
|||
Asset- and mortgage-backed securities
|
36
|
|
—
|
|
36
|
|
(a)
|
|||
Corporate obligations
|
90
|
|
—
|
|
90
|
|
(a)
|
|||
Other fixed income securities
|
27
|
|
—
|
|
27
|
|
(a)
|
|||
Long-term investments
|
1,084
|
|
880
|
|
204
|
|
(a)
|
|||
Hedge derivatives, net
|
|
|
|
|
||||||
Fuel hedge contracts
|
15
|
|
20
|
|
(5
|
)
|
(a)(b)
|
|||
Interest rate contracts
|
1
|
|
—
|
|
1
|
|
(a)
|
|||
Foreign currency exchange contracts
|
(3
|
)
|
—
|
|
(3
|
)
|
(a)
|
|
December 31, 2017
|
Valuation
Technique
|
||||||||
(in millions)
|
Total
|
Level 1
|
Level 2
|
|||||||
Cash equivalents
|
$
|
1,357
|
|
$
|
1,357
|
|
$
|
—
|
|
(a)
|
Restricted cash equivalents
|
38
|
|
38
|
|
—
|
|
(a)
|
|||
Short-term investments
|
|
|
|
|
|
|
||||
U.S. government securities
|
93
|
|
84
|
|
9
|
|
(a)
|
|||
Asset- and mortgage-backed securities
|
173
|
|
—
|
|
173
|
|
(a)
|
|||
Corporate obligations
|
467
|
|
—
|
|
467
|
|
(a)
|
|||
Other fixed income securities
|
92
|
|
—
|
|
92
|
|
(a)
|
|||
Long-term investments
|
513
|
|
485
|
|
28
|
|
(a)
|
|||
Hedge derivatives, net
|
|
|
|
|
||||||
Fuel hedge contracts
|
(66
|
)
|
(43
|
)
|
(23
|
)
|
(a)(b)
|
|||
Foreign currency exchange contracts
|
(17
|
)
|
—
|
|
(17
|
)
|
(a)
|
(1)
|
See Note 10, "Employee Benefit Plans," for fair value of benefit plan assets.
|
•
|
Fuel Contracts. Our fuel hedge portfolio consists of options, swaps and futures. 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.
|
•
|
Interest Rate Contracts. Our interest rate derivatives are swap contracts, which are valued based on data readily observable in public markets.
|
•
|
Foreign Currency Exchange Contracts. Our foreign currency derivatives consist of Japanese yen and Euro forward contracts and are valued based on data readily observable in public markets.
|
(in millions)
|
|
||||
Due in one year or less
|
$
|
93
|
|
||
Due after one year through three years
|
96
|
|
|||
Due after three years through five years
|
1
|
|
|||
Due after five years
|
13
|
|
|||
Total
|
$
|
203
|
|
•
|
Aeroméxico. We have a 51% equity stake in Grupo Aeroméxico, the parent company of Aeroméxico, which is recorded at $897 million as of December 31, 2018. Our investment is non-controlling and accounted for under the equity method as Mexican law and Grupo Aeroméxico's corporate bylaws limit our voting interest to 49%.
|
•
|
Virgin Atlantic. We have a non-controlling 49% equity stake in Virgin Atlantic Limited, the parent company of Virgin Atlantic Airways, which is recorded at $383 million as of December 31, 2018.
|
•
|
DGS. In December 2018, we sold DGS, which provides aviation-related, ground support equipment maintenance and professional security services, to a new subsidiary of Argenbright Holdings, LLC. The new company will continue to service our customers and third parties, and is expected to continue operating at the same airport locations it currently serves.
|
•
|
Air France-KLM. We own 9% of the outstanding shares of Air France-KLM, which are recorded at $408 million as of December 31, 2018. In addition, we have a joint venture with Air France-KLM and entered into an agreement with Air France-KLM and Virgin Atlantic to combine our separate transatlantic joint ventures into a single three-party transatlantic joint venture. The three-party agreement remains subject to required regulatory approvals.
|
•
|
GOL. We own 9% of the outstanding capital stock of GOL Linhas Aéreas Inteligentes, the parent company of VRG Linhas Aéreas (operating as GOL), through ownership of its preferred shares. Our ownership stake is recorded at $213 million as of December 31, 2018.
|
•
|
China Eastern. We own a 3% equity interest in China Eastern, which is recorded at $259 million as of December 31, 2018.
|
•
|
Alclear Holdings, LLC ("CLEAR"). We own a 7% equity interest in CLEAR. During the year ended December 31, 2018, we sold a portion of our equity interest and recognized a gain of $18 million in miscellaneous, net in our income statement under non-operating expense.
|
•
|
Republic Airways. We own a 17% equity interest in Republic Airways Holdings Inc. ("Republic"). This ownership interest is currently recorded at our original cost, as Republic's shares are not actively traded on a public exchange and we do not have the ability to exercise significant influence over Republic.
|
(in millions)
|
Volume
|
|
Final Maturity Date
|
Prepaid Expenses and Other
|
Other Noncurrent Assets
|
Other Accrued Liabilities
|
Other Noncurrent Liabilities
|
Hedge Derivatives, net
|
|||||||||||
Designated as hedges
|
|
|
|
|
|
|
|
|
|||||||||||
Interest rate contracts (fair value hedges)
|
1,893
|
|
U.S. dollars
|
April 2028
|
$
|
—
|
|
$
|
8
|
|
$
|
(7
|
)
|
$
|
—
|
|
$
|
1
|
|
Foreign currency exchange contracts
|
6,934
|
|
Japanese yen
|
November 2019
|
1
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|||||
Not designated as hedges
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency exchange contract
|
397
|
|
Euros
|
December 2020
|
13
|
|
—
|
|
—
|
|
(17
|
)
|
(4
|
)
|
|||||
Fuel hedge contracts
|
219
|
|
gallons - crude oil and refined products
|
December 2019
|
30
|
|
—
|
|
(15
|
)
|
—
|
|
15
|
|
|||||
Total derivative contracts
|
|
|
$
|
44
|
|
$
|
8
|
|
$
|
(22
|
)
|
$
|
(17
|
)
|
$
|
13
|
|
(in millions)
|
Volume
|
|
Final Maturity Date
|
Prepaid Expenses and Other
|
Other Noncurrent Assets
|
Other Accrued Liabilities
|
Other Noncurrent Liabilities
|
Hedge Derivatives, net
|
|||||||||||
Designated as hedges
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency exchange contracts
|
23,512
|
|
Japanese yen
|
November 2019
|
$
|
1
|
|
$
|
1
|
|
$
|
(13
|
)
|
$
|
(6
|
)
|
$
|
(17
|
)
|
490
|
|
Canadian dollars
|
May 2020
|
||||||||||||||||
Not designated as hedges
|
|
|
|
|
|
|
|
||||||||||||
Fuel hedge contracts
|
249
|
|
gallons - crude oil and refined products
|
May 2019
|
638
|
|
8
|
|
(694
|
)
|
(18
|
)
|
(66
|
)
|
|||||
Total derivative contracts
|
|
|
$
|
639
|
|
$
|
9
|
|
$
|
(707
|
)
|
$
|
(24
|
)
|
$
|
(83
|
)
|
(in millions)
|
Prepaid Expenses and Other
|
Other Noncurrent Assets
|
Other Accrued Liabilities
|
Other Noncurrent Liabilities
|
Hedge Derivatives, Net
|
||||||||||
December 31, 2018
|
|
|
|
|
|
||||||||||
Net derivative contracts
|
$
|
35
|
|
$
|
—
|
|
$
|
(13
|
)
|
$
|
(9
|
)
|
$
|
13
|
|
December 31, 2017
|
|
|
|
|
|
||||||||||
Net derivative contracts
|
$
|
—
|
|
$
|
1
|
|
$
|
(68
|
)
|
$
|
(16
|
)
|
$
|
(83
|
)
|
|
Effective Portion Reclassified from AOCI to Earnings
|
|
Effective Portion Recognized in Other Comprehensive (Loss) Income
|
||||||||||||||||
(in millions)
|
2018
|
2017
|
2016
|
|
2018
|
2017
|
2016
|
||||||||||||
Foreign currency exchange contracts
|
$
|
(3
|
)
|
$
|
10
|
|
$
|
37
|
|
|
$
|
1
|
|
$
|
(43
|
)
|
$
|
(68
|
)
|
|
Carrying Value at December 31,
|
|||||
(in millions)
|
2018
|
2017
|
||||
International routes and slots
|
$
|
2,583
|
|
$
|
2,583
|
|
Delta tradename
|
850
|
|
850
|
|
||
SkyTeam-related assets
|
661
|
|
661
|
|
||
Domestic slots
|
622
|
|
622
|
|
||
Total
|
$
|
4,716
|
|
$
|
4,716
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||
(in millions)
|
Gross
Carrying
Value
|
Accumulated
Amortization
|
|
Gross
Carrying
Value
|
Accumulated
Amortization
|
||||||||
Marketing agreements
|
$
|
730
|
|
$
|
(687
|
)
|
|
$
|
730
|
|
$
|
(677
|
)
|
Contracts
|
193
|
|
(122
|
)
|
|
193
|
|
(115
|
)
|
||||
Other
|
53
|
|
(53
|
)
|
|
53
|
|
(53
|
)
|
||||
Total
|
$
|
976
|
|
$
|
(862
|
)
|
|
$
|
976
|
|
$
|
(845
|
)
|
|
Maturity
|
Interest Rate(s)(4)
Per Annum at
|
December 31,
|
|||||||||
(in millions)
|
Dates
|
December 31, 2018
|
2018
|
2017
|
||||||||
Pacific Facilities:
|
|
|
|
|
|
|
|
|
||||
Pacific Term Loan B-1
|
n/a
|
n/a
|
|
n/a
|
$
|
—
|
|
$
|
1,048
|
|
||
Pacific Revolving Credit Facility
|
n/a
|
n/a
|
|
n/a
|
—
|
|
—
|
|
||||
2015 Credit Facilities:
|
|
|
|
|
|
|
|
|
||||
Term Loan Facility
|
n/a
|
n/a
|
|
n/a
|
—
|
|
490
|
|
||||
Revolving Credit Facility
|
n/a
|
n/a
|
|
n/a
|
—
|
|
—
|
|
||||
Financing arrangements secured by aircraft:
|
|
|
|
|
|
|
|
|
||||
Certificates(1)
|
2019
|
to
|
2027
|
3.63%
|
to
|
8.02%
|
1,837
|
|
2,380
|
|
||
Notes(1)
|
2019
|
to
|
2025
|
2.91%
|
to
|
6.54%
|
1,787
|
|
1,961
|
|
||
2018 Unsecured notes
|
2021
|
to
|
2028
|
3.40%
|
to
|
4.38%
|
1,600
|
|
—
|
|
||
2018 Unsecured Revolving Credit Facility
|
2021
|
to
|
2023
|
undrawn
|
variable(3)
|
—
|
|
—
|
|
|||
NYTDC Special Facilities Revenue Bonds, Series 2018(1)
|
2022
|
to
|
2036
|
4.00%
|
to
|
5.00%
|
1,383
|
|
—
|
|
||
Other unsecured notes
|
2020
|
to
|
2022
|
2.60%
|
to
|
3.63%
|
2,450
|
|
2,450
|
|
||
Other financings(1)(2)
|
2019
|
to
|
2030
|
1.81%
|
to
|
8.75%
|
251
|
|
210
|
|
||
Other revolving credit facilities
|
2019
|
to
|
2021
|
undrawn
|
variable(3)
|
—
|
|
—
|
|
|||
Total secured and unsecured debt
|
|
|
|
|
|
|
9,308
|
|
8,539
|
|
||
Unamortized premium (discount) and debt issue cost, net
|
|
|
|
|
|
|
60
|
|
(99
|
)
|
||
Total debt
|
|
|
|
|
|
|
9,368
|
|
8,440
|
|
||
Less: current maturities
|
|
|
|
|
|
|
(1,409
|
)
|
(2,145
|
)
|
||
Total long-term debt
|
|
|
|
|
|
|
$
|
7,959
|
|
$
|
6,295
|
|
(1)
|
Due in installments.
|
(2)
|
Primarily includes unsecured bonds and debt secured by certain accounts receivable and real estate.
|
(3)
|
Interest rate equal to LIBOR (generally subject to a floor) or another index rate, in each case plus a specified margin.
|
(4)
|
Certain aircraft and other financings are comprised of variable rate debt.
|
(in millions)
|
|
||
Unsecured Revolving Credit Facility
|
$
|
2,650
|
|
Other revolving credit facilities
|
380
|
|
|
Total availability under revolving credit facilities
|
$
|
3,030
|
|
(in millions)
|
Total Debt
|
|
Amortization of
Debt (Discount) Premium and Debt Issuance Cost, net
|
|
|
||||||
2019
|
$
|
1,441
|
|
|
$
|
(22
|
)
|
|
|
||
2020
|
2,048
|
|
|
2
|
|
|
|
||||
2021
|
1,019
|
|
|
7
|
|
|
|
||||
2022
|
1,676
|
|
|
11
|
|
|
|
||||
2023
|
929
|
|
|
9
|
|
|
|
||||
Thereafter
|
2,195
|
|
|
53
|
|
|
|
||||
Total
|
$
|
9,308
|
|
|
$
|
60
|
|
|
$
|
9,368
|
|
|
December 31,
|
|||||
(in millions)
|
2018
|
2017
|
||||
Total debt at par value
|
$
|
9,308
|
|
$
|
8,539
|
|
Unamortized premium (discount) and debt issuance cost, net
|
60
|
|
(99
|
)
|
||
Net carrying amount
|
$
|
9,368
|
|
$
|
8,440
|
|
Fair value
|
$
|
9,400
|
|
$
|
8,700
|
|
(in millions)
|
Classification on the Balance Sheet
|
December 31, 2018
|
||
Assets
|
|
|
||
Operating lease assets
|
Operating lease right-of-use assets
|
$
|
5,994
|
|
Finance lease assets
|
Property and equipment, net
|
490
|
|
|
Total lease assets
|
|
$
|
6,484
|
|
|
|
|
||
Liabilities
|
|
|
||
Current
|
|
|
||
Operating
|
Current maturities of operating leases
|
$
|
955
|
|
Finance
|
Current maturities of long-term debt and finance leases
|
109
|
|
|
Noncurrent
|
|
|
||
Operating
|
Noncurrent operating leases
|
5,801
|
|
|
Finance
|
Long-term debt and finance leases
|
294
|
|
|
Total lease liabilities
|
|
$
|
7,159
|
|
|
|
|
||
Weighted-average remaining lease term
|
|
|
||
Operating leases
|
|
12 years
|
|
|
Finance leases
|
|
7 years
|
|
|
Weighted-average discount rate
|
|
|
||
Operating leases(1)
|
|
3.69
|
%
|
|
Finance leases
|
|
5.23
|
%
|
(1)
|
Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2018.
|
|
Year Ended
|
||
(in millions)
|
December 31, 2018
|
||
Finance lease cost
|
|
||
Amortization of leased assets
|
$
|
100
|
|
Interest of lease liabilities
|
22
|
|
|
Operating lease cost(1)
|
994
|
|
|
Short-term lease cost(1)
|
458
|
|
|
Variable lease cost(1)
|
1,427
|
|
|
Total lease cost
|
$
|
3,001
|
|
(1)
|
Expenses are classified within aircraft rent, landing fees and other rents and regional carriers expense, excluding fuel on the income statement.
|
|
Year Ended
|
||
(in millions)
|
December 31, 2018
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
||
Operating cash flows for operating leases
|
$
|
1,271
|
|
Operating cash flows for finance leases
|
22
|
|
|
Financing cash flows for finance leases
|
108
|
|
(in millions)
|
Operating Leases
|
Finance Leases
|
||||
2019
|
$
|
1,172
|
|
$
|
127
|
|
2020
|
1,000
|
|
89
|
|
||
2021
|
819
|
|
75
|
|
||
2022
|
692
|
|
33
|
|
||
2023
|
654
|
|
27
|
|
||
Thereafter
|
4,200
|
|
111
|
|
||
Total minimum lease payments
|
8,537
|
|
462
|
|
||
Less: amount of lease payments representing interest
|
(1,781
|
)
|
(59
|
)
|
||
Present value of future minimum lease payments
|
6,756
|
|
403
|
|
||
Less: current obligations under leases
|
(955
|
)
|
(109
|
)
|
||
Long-term lease obligations
|
$
|
5,801
|
|
$
|
294
|
|
|
Pension Benefits
|
|
Other Postretirement and Postemployment Benefits
|
||||||||||
|
December 31,
|
|
December 31,
|
||||||||||
(in millions)
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Benefit obligation at beginning of period
|
$
|
21,696
|
|
$
|
20,859
|
|
|
$
|
3,504
|
|
$
|
3,379
|
|
Service cost
|
—
|
|
—
|
|
|
85
|
|
87
|
|
||||
Interest cost
|
781
|
|
853
|
|
|
126
|
|
138
|
|
||||
Actuarial (gain) loss
|
(1,560
|
)
|
1,068
|
|
|
(142
|
)
|
183
|
|
||||
Benefits paid, including lump sums and annuities
|
(1,093
|
)
|
(1,075
|
)
|
|
(306
|
)
|
(311
|
)
|
||||
Participant contributions
|
—
|
|
—
|
|
|
26
|
|
28
|
|
||||
Curtailment
|
—
|
|
—
|
|
|
(68
|
)
|
—
|
|
||||
Settlements
|
(15
|
)
|
(9
|
)
|
|
—
|
|
—
|
|
||||
Benefit obligation at end of period(1)
|
$
|
19,809
|
|
$
|
21,696
|
|
|
$
|
3,225
|
|
$
|
3,504
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of period
|
$
|
14,744
|
|
$
|
10,301
|
|
|
$
|
866
|
|
$
|
784
|
|
Actual (loss) gain on plan assets
|
(700
|
)
|
1,966
|
|
|
(72
|
)
|
138
|
|
||||
Employer contributions
|
523
|
|
3,561
|
|
|
152
|
|
254
|
|
||||
Participant contributions
|
—
|
|
—
|
|
|
26
|
|
28
|
|
||||
Benefits paid, including lump sums and annuities
|
(1,093
|
)
|
(1,075
|
)
|
|
(335
|
)
|
(338
|
)
|
||||
Settlements
|
(15
|
)
|
(9
|
)
|
|
—
|
|
—
|
|
||||
Fair value of plan assets at end of period
|
$
|
13,459
|
|
$
|
14,744
|
|
|
$
|
637
|
|
$
|
866
|
|
|
|
|
|
|
|
||||||||
Funded status at end of period
|
$
|
(6,350
|
)
|
$
|
(6,952
|
)
|
|
$
|
(2,588
|
)
|
$
|
(2,638
|
)
|
(1)
|
At the end of each year presented, our accumulated benefit obligations for our pension plans are equal to the benefit obligations shown above.
|
|
Pension Benefits
|
|
Other Postretirement and Postemployment Benefits
|
||||||||||
|
December 31,
|
|
December 31,
|
||||||||||
(in millions)
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Current liabilities
|
$
|
(27
|
)
|
$
|
(32
|
)
|
|
$
|
(123
|
)
|
$
|
(121
|
)
|
Noncurrent liabilities
|
(6,323
|
)
|
(6,920
|
)
|
|
(2,465
|
)
|
(2,517
|
)
|
||||
Total liabilities
|
$
|
(6,350
|
)
|
$
|
(6,952
|
)
|
|
$
|
(2,588
|
)
|
$
|
(2,638
|
)
|
|
|
|
|
|
|
||||||||
Net actuarial loss
|
$
|
(8,682
|
)
|
$
|
(8,495
|
)
|
|
$
|
(613
|
)
|
$
|
(651
|
)
|
Prior service credit
|
—
|
|
—
|
|
|
47
|
|
56
|
|
||||
Total accumulated other comprehensive loss, pre-tax
|
$
|
(8,682
|
)
|
$
|
(8,495
|
)
|
|
$
|
(566
|
)
|
$
|
(595
|
)
|
|
Pension Benefits
|
|
Other Postretirement and Postemployment Benefits
|
||||||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||||||
(in millions)
|
2018
|
2017
|
2016
|
|
2018
|
2017
|
2016
|
||||||||||||
Service cost
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
85
|
|
$
|
87
|
|
$
|
68
|
|
Interest cost
|
781
|
|
853
|
|
917
|
|
|
126
|
|
138
|
|
147
|
|
||||||
Expected return on plan assets
|
(1,318
|
)
|
(1,143
|
)
|
(902
|
)
|
|
(67
|
)
|
(69
|
)
|
(74
|
)
|
||||||
Amortization of prior service credit
|
—
|
|
—
|
|
—
|
|
|
(24
|
)
|
(26
|
)
|
(26
|
)
|
||||||
Recognized net actuarial loss
|
267
|
|
262
|
|
233
|
|
|
36
|
|
32
|
|
24
|
|
||||||
Settlements
|
4
|
|
3
|
|
3
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Curtailment
|
—
|
|
—
|
|
—
|
|
|
(53
|
)
|
—
|
|
—
|
|
||||||
Net periodic (benefit) cost(1)
|
$
|
(266
|
)
|
$
|
(25
|
)
|
$
|
251
|
|
|
$
|
103
|
|
$
|
162
|
|
$
|
139
|
|
(1)
|
See Note 1, "Summary of Significant Accounting Policies," for discussion on ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715)."
|
|
December 31,
|
|||
Benefit Obligations(1)
|
2018
|
2017
|
||
Weighted average discount rate
|
4.33
|
%
|
3.69
|
%
|
|
Year Ended December 31,
|
|||||
Net Periodic Cost(1)
|
2018
|
2017
|
2016
|
|||
Weighted average discount rate - pension benefit
|
3.69
|
%
|
4.14
|
%
|
4.57
|
%
|
Weighted average discount rate - other postretirement benefit
|
3.69
|
%
|
4.19
|
%
|
4.53
|
%
|
Weighted average discount rate - other postemployment benefit
|
3.65
|
%
|
4.14
|
%
|
4.50
|
%
|
Weighted average expected long-term rate of return on plan assets
|
8.97
|
%
|
8.96
|
%
|
8.94
|
%
|
Assumed healthcare cost trend rate for the next year(2)
|
6.75
|
%
|
7.00
|
%
|
6.50
|
%
|
(1)
|
Future employee compensation levels do not impact our frozen defined benefit pension plans or other postretirement plans and impact only a small portion of our other postemployment obligation.
|
(2)
|
Healthcare cost trend rate is assumed to decline gradually to 5.00% by 2026 and remain unchanged thereafter.
|
(in millions)
|
1% Increase
|
1% (Decrease)
|
||||
Increase (decrease) in total service and interest cost
|
$
|
1
|
|
$
|
(2
|
)
|
Increase (decrease) in the accumulated plan benefit obligation
|
9
|
|
(29
|
)
|
(in millions)
|
Pension Benefits
|
Other Postretirement and Postemployment Benefits
|
||||
2019
|
$
|
1,187
|
|
$
|
295
|
|
2020
|
1,197
|
|
302
|
|
||
2021
|
1,218
|
|
303
|
|
||
2022
|
1,238
|
|
301
|
|
||
2023
|
1,252
|
|
298
|
|
||
2024-2028
|
6,380
|
|
1,418
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|
Valuation Technique
|
||||||||||||||||
(in millions)
|
Level 1
|
Level 2
|
Total
|
|
Level 1
|
Level 2
|
Total
|
|
|||||||||||||
Equities and equity-related instruments
|
$
|
400
|
|
$
|
100
|
|
$
|
500
|
|
|
$
|
2,033
|
|
$
|
13
|
|
$
|
2,046
|
|
|
(a)
|
Delta common stock
|
675
|
|
—
|
|
675
|
|
|
801
|
|
—
|
|
801
|
|
|
(a)
|
||||||
Cash equivalents
|
312
|
|
708
|
|
1,020
|
|
|
735
|
|
697
|
|
1,432
|
|
|
(a)
|
||||||
Fixed income and fixed income-related instruments
|
233
|
|
2,157
|
|
2,390
|
|
|
17
|
|
3,648
|
|
3,665
|
|
|
(a)(b)
|
||||||
Benefit plan assets
|
$
|
1,620
|
|
$
|
2,965
|
|
$
|
4,585
|
|
|
$
|
3,586
|
|
$
|
4,358
|
|
$
|
7,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investments measured at net asset value ("NAV")(1)
|
|
|
9,136
|
|
|
|
|
7,378
|
|
|
|
||||||||||
Total benefit plan assets
|
|
|
$
|
13,721
|
|
|
|
|
$
|
15,322
|
|
|
|
(1)
|
Investments that were measured at NAV per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy.
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||
(in millions)
|
Fair Value
|
Redemption Frequency
|
Redemption Notice Period
|
|
Fair Value
|
Redemption Frequency
|
Redemption Notice Period
|
||||
Hedge funds and hedge fund-related strategies
|
$
|
5,264
|
|
(4)
|
2-180 Days
|
|
$
|
4,768
|
|
(4)
|
2-120 Days
|
Commingled funds, private equity and private equity-related instruments(5)
|
1,591
|
|
(4)
|
2-30 Days
|
|
1,375
|
|
(1) (3)
|
10-30 Days
|
||
Fixed income and fixed income-related instruments(5)
|
769
|
|
(2)
|
15-90 Days
|
|
311
|
|
(2)
|
3-15 Days
|
||
Real assets(5)
|
807
|
|
(3)
|
N/A
|
|
924
|
|
(3)
|
N/A
|
||
Other
|
705
|
|
(1) (2)
|
2-90 Days
|
|
—
|
|
(1)
|
30 Days
|
||
Total investments measured at NAV
|
$
|
9,136
|
|
|
|
|
$
|
7,378
|
|
|
|
(1)
|
Monthly
|
(2)
|
Semi-monthly
|
(3)
|
Semi-annually and annually
|
(4)
|
Various. Includes funds with weekly, monthly, semi-monthly, quarterly and custom redemption frequencies as well as funds with a redemption window following the anniversary of the initial investment.
|
(5)
|
Unfunded commitments were $490 million for commingled funds, private equity and private equity-related instruments, $256 million for fixed income and fixed income-related instruments, and $227 million for real assets at December 31, 2018.
|
(in millions)
|
Total
|
||
2019
|
$
|
3,290
|
|
2020
|
3,130
|
|
|
2021
|
3,190
|
|
|
2022
|
2,760
|
|
|
2023
|
1,850
|
|
|
Thereafter
|
1,940
|
|
|
Total
|
$
|
16,160
|
|
Aircraft Type
|
Purchase Commitments
|
|
A220-100
|
36
|
|
A220-300
|
50
|
|
A321-200
|
62
|
|
A321-200neo
|
100
|
|
A330-900neo
|
35
|
|
A350-900
|
14
|
|
B-737-900ER
|
18
|
|
CRJ-900
|
15
|
|
Total
|
330
|
|
•
|
In June 2018, we signed an agreement with Bombardier Commercial Aircraft to purchase 20 CRJ-900 aircraft. These aircraft will be operated by SkyWest Airlines, Inc., and will replace older dual-class aircraft that they own or lease. The new aircraft will be delivered through 2020.
|
•
|
In November 2018, we expanded our purchase commitment for A330-900neo aircraft from 25 to 35 and deferred the delivery of the final ten A350-900 purchase commitments.
|
•
|
In December 2018, we increased our A220 purchase commitment by 15 to a total of 90 aircraft, composed of 40 A220-100s and 50 A220-300s. The first four A220-100 deliveries were received during the December 2018 quarter and deliveries will continue through 2020. The A220-300 deliveries will begin during 2020.
|
(1)
|
These amounts exclude contract carrier payments accounted for as operating leases of aircraft, which are described in Note 8, "Leases."
|
Employee Group
|
Approximate Number of Active Employees Represented
|
|
Union
|
Date on which Collective Bargaining Agreement Becomes Amendable
|
|
Delta Pilots
|
13,203
|
|
|
ALPA
|
December 31, 2019
|
Delta Flight Superintendents (Dispatchers)(1)
|
432
|
|
|
PAFCA
|
March 31, 2018
|
Endeavor Air Pilots
|
1,976
|
|
|
ALPA
|
January 1, 2024
|
Endeavor Air Flight Attendants(1)
|
1,307
|
|
|
AFA
|
December 31, 2018
|
Endeavor Air Dispatchers(1)
|
60
|
|
|
PAFCA
|
December 31, 2018
|
(1)
|
We are in discussions with representatives of these employee groups regarding terms of amendable collective bargaining agreements.
|
|
Year Ended December 31,
|
||||||||
(in millions)
|
2018
|
2017
|
2016
|
||||||
Current tax (provision) benefit:
|
|
|
|
|
|
|
|||
Federal
|
$
|
187
|
|
$
|
(4
|
)
|
$
|
—
|
|
State and local
|
(26
|
)
|
5
|
|
(28
|
)
|
|||
International
|
(13
|
)
|
(54
|
)
|
(12
|
)
|
|||
Deferred tax provision:
|
|
|
|
|
|
|
|||
Federal
|
(1,226
|
)
|
(2,093
|
)
|
(1,990
|
)
|
|||
State and local
|
(138
|
)
|
(149
|
)
|
(128
|
)
|
|||
Income tax provision
|
$
|
(1,216
|
)
|
$
|
(2,295
|
)
|
$
|
(2,158
|
)
|
|
Year Ended December 31,
|
|||||
|
2018
|
2017
|
2016
|
|||
U.S. federal statutory income tax rate
|
21.0
|
%
|
35.0
|
%
|
35.0
|
%
|
State taxes, net of federal benefit
|
2.5
|
|
1.8
|
|
1.8
|
|
Foreign tax rate differential
|
0.1
|
|
(2.2
|
)
|
(2.1
|
)
|
Tax Cuts and Jobs Act adjustment
|
(0.5
|
)
|
7.2
|
|
—
|
|
Other
|
0.5
|
|
—
|
|
(0.7
|
)
|
Effective income tax rate
|
23.6
|
%
|
41.8
|
%
|
34.0
|
%
|
|
December 31,
|
|||||
(in millions)
|
2018
|
2017
|
||||
Deferred tax assets:
|
|
|
||||
Net operating loss carryforwards
|
$
|
674
|
|
$
|
1,297
|
|
Pension, postretirement and other benefits
|
2,435
|
|
2,544
|
|
||
Alternative minimum tax credit carryforward
|
189
|
|
379
|
|
||
Deferred revenue
|
1,620
|
|
1,416
|
|
||
Operating lease liabilities
|
1,579
|
|
—
|
|
||
Other
|
357
|
|
728
|
|
||
Valuation allowance
|
(13
|
)
|
(15
|
)
|
||
Total deferred tax assets
|
$
|
6,841
|
|
$
|
6,349
|
|
Deferred tax liabilities:
|
|
|
||||
Depreciation
|
$
|
4,185
|
|
$
|
3,847
|
|
Operating lease right-of-use assets
|
1,388
|
|
—
|
|
||
Intangible assets
|
1,052
|
|
1,043
|
|
||
Other
|
137
|
|
105
|
|
||
Total deferred tax liabilities
|
$
|
6,762
|
|
$
|
4,995
|
|
|
|
|
||||
Net deferred tax assets(1)
|
$
|
79
|
|
$
|
1,354
|
|
(1)
|
At December 31, 2018, the net deferred tax assets of $79 million included $242 million of net state deferred tax assets, which are recorded in deferred income taxes, net, and $163 million of net federal deferred tax liabilities, which are recorded in other noncurrent liabilities.
|
(in millions)
|
Pension and Other Benefits Liabilities(3)
|
Derivative Contracts and Other
|
Available-for-Sale Investments
|
Total
|
||||||||
Balance at January 1, 2016 (net of tax effect of $1,222)
|
$
|
(7,354
|
)
|
$
|
151
|
|
$
|
(72
|
)
|
$
|
(7,275
|
)
|
Changes in value (net of tax effect of $293)
|
(482
|
)
|
(13
|
)
|
36
|
|
(459
|
)
|
||||
Reclassifications into earnings (net of tax effect of $57)(1)
|
122
|
|
(24
|
)
|
—
|
|
98
|
|
||||
Balance at December 31, 2016 (net of tax effect of $1,458)
|
(7,714
|
)
|
114
|
|
(36
|
)
|
(7,636
|
)
|
||||
Changes in value (net of tax effect of $32)
|
(264
|
)
|
(23
|
)
|
150
|
|
(137
|
)
|
||||
Reclassifications into earnings (net of tax effect of $90)(1)
|
166
|
|
(6
|
)
|
(8
|
)
|
152
|
|
||||
Balance at December 31, 2017 (net of tax effect of $1,400)
|
(7,812
|
)
|
85
|
|
106
|
|
(7,621
|
)
|
||||
Changes in value (net of tax effect of $88)
|
(294
|
)
|
7
|
|
—
|
|
(287
|
)
|
||||
Reclassifications into retained earnings (net of tax effect of $61)(2)
|
—
|
|
—
|
|
(106
|
)
|
(106
|
)
|
||||
Reclassifications into earnings (net of tax effect of $57)(1)
|
181
|
|
8
|
|
—
|
|
189
|
|
||||
Balance at December 31, 2018 (net of tax effect of $1,492)
|
$
|
(7,925
|
)
|
$
|
100
|
|
$
|
—
|
|
$
|
(7,825
|
)
|
(1)
|
Amounts reclassified from AOCI for pension and other benefits liabilities and for derivative contracts designated as foreign currency cash flow hedges are recorded in miscellaneous and in passenger revenue, respectively, in the income statement. The 2017 reclassification into earnings for available-for-sale investments relates to our investment in Grupo Aeroméxico and the related conversion to accounting under the equity method. The reclassification of the unrealized gain was recorded to non-operating expense in our income statement.
|
(2)
|
The reclassification into retained earnings relates to our investments in GOL, China Eastern and other previously designated available-for-sale investments, and the related conversion to accounting for changes in fair value of these investments from AOCI to the income statement. See Note 1, "Summary of Significant Accounting Policies," for more information.
|
(3)
|
Includes $688 million of deferred income tax expense primarily related to pension and other benefit obligations that will not be recognized in net income until these obligations are fully extinguished. We consider all income sources, including other comprehensive income, in determining the amount of tax benefit allocated to continuing operations.
|
(in millions)
|
Airline
|
Refinery
|
|
Intersegment Sales/Other
|
|
Consolidated
|
||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
||||||||
Operating revenue:
|
$
|
43,890
|
|
$
|
5,458
|
|
|
|
|
$
|
44,438
|
|
||
Sales to airline segment
|
|
|
|
$
|
(962
|
)
|
(1)
|
|
||||||
Exchanged products
|
|
|
|
(3,596
|
)
|
(2)
|
|
|||||||
Sales of refined products
|
|
|
|
(352
|
)
|
(3)
|
|
|||||||
Operating income
|
5,206
|
|
58
|
|
|
|
|
5,264
|
|
|||||
Interest expense (income), net
|
334
|
|
(23
|
)
|
|
|
|
311
|
|
|||||
Depreciation and amortization
|
2,262
|
|
67
|
|
|
|
|
2,329
|
|
|||||
Total assets, end of period
|
58,561
|
|
1,705
|
|
|
|
|
60,266
|
|
|||||
Capital expenditures
|
5,005
|
|
163
|
|
|
|
|
5,168
|
|
|||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
||||||||
Operating revenue:
|
$
|
40,636
|
|
$
|
5,039
|
|
|
|
|
$
|
41,138
|
|
||
Sales to airline segment
|
|
|
|
$
|
(886
|
)
|
(1)
|
|
||||||
Exchanged products
|
|
|
|
(3,240
|
)
|
(2)
|
|
|||||||
Sales of refined products
|
|
|
|
(411
|
)
|
(3)
|
|
|||||||
Operating income
|
5,856
|
|
110
|
|
|
|
|
5,966
|
|
|||||
Interest expense (income), net
|
403
|
|
(7
|
)
|
|
|
|
396
|
|
|||||
Depreciation and amortization
|
2,175
|
|
47
|
|
|
|
|
2,222
|
|
|||||
Total assets, end of period
|
51,544
|
|
2,127
|
|
|
|
|
53,671
|
|
|||||
Capital expenditures
|
3,743
|
|
148
|
|
|
|
|
3,891
|
|
|||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
||||||||
Operating revenue:
|
$
|
39,217
|
|
$
|
3,843
|
|
|
|
|
$
|
39,450
|
|
||
Sales to airline segment
|
|
|
|
$
|
(695
|
)
|
(1)
|
|
||||||
Exchanged products
|
|
|
|
(2,658
|
)
|
(2)
|
|
|||||||
Sales of refined products
|
|
|
|
(257
|
)
|
(3)
|
|
|||||||
Operating income (loss)(4)
|
7,121
|
|
(125
|
)
|
|
|
|
6,996
|
|
|||||
Interest expense, net
|
386
|
|
2
|
|
|
|
|
388
|
|
|||||
Depreciation and amortization
|
1,846
|
|
40
|
|
|
|
|
1,886
|
|
|||||
Total assets, end of period
|
50,519
|
|
1,331
|
|
|
|
|
51,850
|
|
|||||
Capital expenditures
|
3,270
|
|
121
|
|
|
|
|
3,391
|
|
(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 by reference to the market index for the primary delivery location, which is New York Harbor, for jet fuel from the refinery.
|
(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)
|
Includes the impact of pricing arrangements between the airline and refinery segments with respect to the refinery's inventory price risk.
|
(in millions)
|
2018
|
2017
|
2016
|
||||||
Liability at beginning of period
|
$
|
237
|
|
$
|
333
|
|
$
|
467
|
|
Reclassified to lease liability
|
(195
|
)
|
—
|
|
—
|
|
|||
Payments
|
(5
|
)
|
(103
|
)
|
(144
|
)
|
|||
Additional expenses and other
|
1
|
|
7
|
|
10
|
|
|||
Liability at end of period
|
$
|
38
|
|
$
|
237
|
|
$
|
333
|
|
|
Year Ended December 31,
|
||||||||
(in millions, except per share data)
|
2018
|
2017
|
2016
|
||||||
Net income
|
$
|
3,935
|
|
$
|
3,205
|
|
$
|
4,195
|
|
|
|
|
|
||||||
Basic weighted average shares outstanding
|
691
|
|
720
|
|
751
|
|
|||
Dilutive effect of share-based awards
|
3
|
|
3
|
|
4
|
|
|||
Diluted weighted average shares outstanding
|
694
|
|
723
|
|
755
|
|
|||
|
|
|
|
||||||
Basic earnings per share
|
$
|
5.69
|
|
$
|
4.45
|
|
$
|
5.59
|
|
Diluted earnings per share
|
$
|
5.67
|
|
$
|
4.43
|
|
$
|
5.55
|
|
As recast for lease accounting standard
|
Three Months Ended,
|
|||||||||||
(in millions, except per share data)
|
March 31
|
June 30
|
September 30
|
December 31
|
||||||||
2018
|
|
|
|
|
||||||||
Operating revenue
|
$
|
9,968
|
|
$
|
11,775
|
|
$
|
11,953
|
|
$
|
10,742
|
|
Operating income
|
844
|
|
1,684
|
|
1,645
|
|
1,090
|
|
||||
Net income
|
557
|
|
1,036
|
|
1,322
|
|
1,019
|
|
||||
Basic earnings per share
|
$
|
0.79
|
|
$
|
1.49
|
|
$
|
1.93
|
|
$
|
1.50
|
|
Diluted earnings per share
|
$
|
0.79
|
|
$
|
1.49
|
|
$
|
1.92
|
|
$
|
1.49
|
|
As previously reported
|
Three Months Ended,
|
|
||||||||
(in millions, except per share data)
|
March 31
|
June 30
|
September 30
|
|
||||||
2018
|
|
|
|
|
||||||
Operating revenue
|
$
|
9,968
|
|
$
|
11,775
|
|
$
|
11,953
|
|
|
Operating income
|
840
|
|
1,680
|
|
1,642
|
|
|
|||
Net income
|
547
|
|
1,025
|
|
1,312
|
|
|
|||
Basic earnings per share
|
$
|
0.78
|
|
$
|
1.47
|
|
$
|
1.91
|
|
|
Diluted earnings per share
|
$
|
0.77
|
|
$
|
1.47
|
|
$
|
1.91
|
|
|
|
Three Months Ended,
|
|||||||||||
(in millions, except per share data)
|
March 31
|
June 30
|
September 30
|
December 31
|
||||||||
2017
|
|
|
|
|
||||||||
Operating revenue
|
$
|
9,101
|
|
$
|
10,747
|
|
$
|
11,061
|
|
$
|
10,229
|
|
Operating income
|
999
|
|
1,982
|
|
1,823
|
|
1,162
|
|
||||
Net income
|
561
|
|
1,186
|
|
1,159
|
|
299
|
|
||||
Basic earnings per share
|
$
|
0.77
|
|
$
|
1.63
|
|
$
|
1.62
|
|
$
|
0.42
|
|
Diluted earnings per share
|
$
|
0.77
|
|
$
|
1.62
|
|
$
|
1.61
|
|
$
|
0.42
|
|
Atlanta, Georgia
|
/s/ Ernst & Young LLP
|
February 15, 2019
|
|
Plan Category
|
(a) No. of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1)
|
(b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(2)
|
(c) No. of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(3)
|
||||
Equity compensation plans approved by securities holders
|
4,085,690
|
|
$
|
29.45
|
|
27,412,528
|
|
Equity compensation plans not approved by securities holders
|
—
|
|
—
|
|
—
|
|
|
Total
|
4,085,690
|
|
$
|
29.45
|
|
27,412,528
|
|
(1)
|
Includes a maximum of 1,630,020 shares of common stock that may be issued upon the achievement of certain performance conditions under outstanding performance share awards as of December 31, 2018.
|
(2)
|
Includes performance share awards, which do not have exercise prices. The weighted average exercise price of options is $48.99.
|
(3)
|
Reflects shares remaining available for issuance under Delta's Performance Compensation Plan. If any shares of our common stock are covered by an award under the Plan that expires, is canceled, forfeited or otherwise terminates without delivery of shares (including shares surrendered or withheld for payment of taxes related to an award), then such shares will again be available for issuance under the Plan except for (i) any shares tendered in payment of an option, (ii) shares withheld to satisfy any tax withholding obligation with respect to the exercise of an option or stock appreciation right ("SAR") or (iii) shares covered by a stock-settled SAR or other awards that were not issued upon the settlement of the award. Because 2,399,369 shares of restricted stock remain unvested and subject to forfeiture, these shares could again be available for issuance.
|
3.1(a)
|
3.1 (b)
|
3.2
|
10.1
|
10.2
|
10.3
|
10.4(a)
|
10.4(b)
|
10.4(c)
|
10.4(d)
|
10.5(a)
|
10.5(b)
|
10.6(a)
|
10.6(b)
|
10.6(c)
|
10.7(a)
|
10.7(b)
|
10.7(c)
|
10.7(d)
|
10.7(e)
|
10.8(a)
|
10.8(b)
|
10.8(c)
|
10.9
|
10.10
|
10.11
|
10.12
|
10.14(a)
|
10.14(b)
|
10.14(d)
|
10.15(a)
|
10.15(b)
|
10.16
|
10.17
|
10.18
|
10.19
|
10.20
|
10.21
|
10.22
|
21.1
|
23.1
|
31.1
|
31.2
|
32
|
101.INS
|
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
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Incorporated by reference.
|
**
|
Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to requests for confidential treatment.
|
|
DELTA AIR LINES, INC.
|
|
|
|
|
|
|
|
By:
|
/s/ Edward H. Bastian
|
|
|
|
Edward H. Bastian
|
|
|
|
Chief Executive Officer
|
|
Signature
|
|
Title
|
|
|
|
/s/ Edward H. Bastian
|
|
Chief Executive Officer and Director
(Principal Executive Officer)
|
Edward H. Bastian
|
|
|
|
|
|
/s/ Paul A. Jacobson
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
Paul A. Jacobson
|
|
|
|
|
|
/s/ Craig M. Meynard
|
|
Vice President and Chief Accounting Officer (Principal Accounting Officer)
|
Craig M. Meynard
|
|
|
|
|
|
/s/ Francis S. Blake
|
|
Chairman of the Board
|
Francis S. Blake
|
|
|
|
|
|
/s/ Daniel A. Carp
|
|
Director
|
Daniel A. Carp
|
|
|
|
|
|
/s/ Ashton B. Carter
|
|
Director
|
Ashton B. Carter
|
|
|
|
|
|
/s/ David G. DeWalt
|
|
Director
|
David G. DeWalt
|
|
|
|
|
|
/s/ William H. Easter III
|
|
Director
|
William H. Easter III
|
|
|
|
|
|
/s/ Michael P. Huerta
|
|
Director
|
Michael P. Huerta
|
|
|
|
|
|
/s/ Jeanne P. Jackson
|
|
Director
|
Jeanne P. Jackson
|
|
|
|
|
|
/s/ George N. Mattson
|
|
Director
|
George N. Mattson
|
|
|
|
|
|
/s/ Douglas R. Ralph
|
|
Director
|
Douglas R. Ralph
|
|
|
|
|
|
/s/ Sergio A.L. Rial
|
|
Director
|
Sergio A.L. Rial
|
|
|
|
|
|
/s/ Kathy N. Waller
|
|
Director
|
Kathy N. Waller
|
|
1.
|
DEFINITIONS
|
1.1
|
Clause 0 of the Agreement is hereby amended to add the following terms:
|
1.2
|
Clause 0 of the Agreement is hereby amended to delete the definition of A330-300 Standard Specification,A330neo Standard Specification Freeze, New Engine Option Changes, and Sharklets.
|
1.3
|
Clause 0 of the Agreement is hereby amended such that the definitions of A330-900 Aircraft and A330-900 Standard Specification are amended and restated in their entirety as follows to read:
|
2.
|
SALE AND PURCHASE
|
3.
|
SPECIFICATION
|
2.1.1
|
Aircraft Specification
|
4.
|
PRICE
|
(i)
|
The base price of the A330-900 Aircraft corresponding to the A330-900 Standard Specification, including the A330-900 Propulsion Systems (excluding Buyer Furnished Equipment), which is:
|
(ii)
|
The base price of the preliminary Specification Change Notices, as listed in Exhibit A-3, which for budgetary purposes can be estimated at:
|
5.
|
DELIVERY SCHEDULE
|
5.1
|
The Parties agree to add ten 2018 A330-900 Aircraft to the Agreement. [***]
|
5.2
|
A350-900 Rescheduling
|
5.2.1
|
The Parties agree to amend the Scheduled Delivery Periods of the Rescheduled A350-900 Aircraft [***]:
|
(i)
|
[***], and
|
(ii)
|
[***], and
|
(iii)
|
[***], and
|
(iv)
|
[***], and
|
(v)
|
[***], and
|
(vi)
|
[***], and
|
(vii)
|
[***].
|
5.2.2
|
Predelivery Payments paid by the Buyer and held by the Seller in respect of Rescheduled A350-900 Aircraft [***].
|
5.3
|
Subject to the conditions of Clause 5.5 hereunder, the Parties agree to amend the Scheduled Delivery Periods of the two (2) A330-900 Aircraft [***]. The Aircraft referred to in the immediately preceding sentence shall be referred to as the “[***]”.
|
5.4
|
As a result of the changes set out Clauses 5.1, 5.2 and 5.3 above, Clause 9.1.1 of the Agreement is deleted in its entirety and is replaced with the following:
|
Rank
|
CAC ID
|
Aircraft type
|
Scheduled Delivery Period
|
Rank
|
CAC ID
|
Aircraft type
|
Scheduled Delivery Period
|
1
|
[***]
|
[***]
|
[***]
|
41
|
[***]
|
[***]
|
[***]
|
2
|
[***]
|
[***]
|
[***]
|
42
|
[***]
|
[***]
|
[***]
|
3
|
[***]
|
[***]
|
[***]
|
43
|
[***]
|
[***]
|
[***]
|
4
|
[***]
|
[***]
|
[***]
|
44
|
[***]
|
[***]
|
[***]
|
5
|
[***]
|
[***]
|
[***]
|
45
|
[***]
|
[***]
|
[***]
|
6
|
[***]
|
[***]
|
[***]
|
46
|
[***]
|
[***]
|
[***]
|
7
|
[***]
|
[***]
|
[***]
|
47
|
[***]
|
[***]
|
[***]
|
8
|
[***]
|
[***]
|
[***]
|
48
|
[***]
|
[***]
|
[***]
|
9
|
[***]
|
[***]
|
[***]
|
49
|
[***]
|
[***]
|
[***]
|
10
|
[***]
|
[***]
|
[***]
|
50
|
[***]
|
[***]
|
[***]
|
11
|
[***]
|
[***]
|
[***]
|
51
|
[***]
|
[***]
|
[***]
|
16
|
[***]
|
[***]
|
[***]
|
52
|
[***]
|
[***]
|
[***]
|
17
|
[***]
|
[***]
|
[***]
|
53
|
[***]
|
[***]
|
[***]
|
18
|
[***]
|
[***]
|
[***]
|
54
|
[***]
|
[***]
|
[***]
|
19
|
[***]
|
[***]
|
[***]
|
55
|
[***]
|
[***]
|
[***]
|
21
|
[***]
|
[***]
|
[***]
|
56
|
[***]
|
[***]
|
[***]
|
23
|
[***]
|
[***]
|
[***]
|
57
|
[***]
|
[***]
|
[***]
|
26
|
[***]
|
[***]
|
[***]
|
58
|
[***]
|
[***]
|
[***]
|
27
|
[***]
|
[***]
|
[***]
|
59
|
[***]
|
[***]
|
[***]
|
14
|
[***]
|
[***]
|
[***]
|
60
|
[***]
|
[***]
|
[***]
|
15
|
[***]
|
[***]
|
[***]
|
20
|
[***]
|
[***]
|
[***]
|
29
|
[***]
|
[***]
|
[***]
|
12
|
[***]
|
[***]
|
[***]
|
30
|
[***]
|
[***]
|
[***]
|
13
|
[***]
|
[***]
|
[***]
|
34
|
[***]
|
[***]
|
[***]
|
22
|
[***]
|
[***]
|
[***]
|
35
|
[***]
|
[***]
|
[***]
|
24
|
[***]
|
[***]
|
[***]
|
36
|
[***]
|
[***]
|
[***]
|
25
|
[***]
|
[***]
|
[***]
|
37
|
[***]
|
[***]
|
[***]
|
28
|
[***]
|
[***]
|
[***]
|
38
|
[***]
|
[***]
|
[***]
|
31
|
[***]
|
[***]
|
[***]
|
39
|
[***]
|
[***]
|
[***]
|
32
|
[***]
|
[***]
|
[***]
|
40
|
[***]
|
[***]
|
[***]
|
33
|
[***]
|
[***]
|
[***]
|
5.5.1
|
[***]
|
(i)
|
[***] and
|
(ii)
|
[***],
|
(i)
|
[***] or
|
(ii)
|
[***]
|
5.5.4
|
[***]
|
6.
|
SUPPORT
|
6.1
|
Clause 15.1.1 of the Agreement is amended and restated to read in its entirety as follows
|
15.1.1
|
In addition to the services of Seller customer support representative(s) (each a “Seller Representative”), provided by the Seller in prior agreement between the Seller and the Buyer, the Seller shall provide [***] to the Buyer [***] of exclusive services of a Seller Representative(s) at the Buyer’s main base or such other locations as the parties may agree at Delivery of the first Aircraft.
|
6.2
|
Annex A to Clause 16 of the Agreement is amended and restated to read in its entirety as set out in Annex 1.
|
7.
|
EXHIBITS AND LETTER AGREEMENTS
|
7.1
|
Exhibits
|
(i)
|
Exhibit A-1 to the Agreement is amended and restated to read in its entirety as set out in Annex 2.
|
(ii)
|
Exhibit A-3 to the Agreement is amended and restated to read in its entirety as set out in Annex 3.
|
(i)
|
Letter Agreement No. 1 to the Agreement is deleted in its entirety and is replaced with Amended and Restated Letter Agreement No. 1 dated as of the date hereof.
|
(ii)
|
Letter Agreement No. 2 to the Agreement is deleted in its entirety and is replaced with Amended and Restated Letter Agreement No. 2 dated as of the date hereof.
|
(iii)
|
Amended and Restated Letter Agreement No. 4 to the Agreement is deleted in its entirety and is replaced with Amended and Restated Letter Agreement No. 4 dated as of the date hereof.
|
(iv)
|
Amended and Restated Letter Agreement No. 5 to the Agreement is deleted in its entirety and is replaced with Amended and Restated Letter Agreement No. 5 dated as of the date hereof.
|
(v)
|
Amended and Restated Letter Agreement No. 8 to the Agreement is deleted in its entirety and is replaced with Amended and Restated Letter Agreement No. 8 dated as of the date hereof.
|
(vi)
|
Letter Agreement No. 10 to the Agreement is deleted in its entirety and is replaced with Amended and Restated Letter Agreement No. 10 dated as of the date hereof.
|
(vii)
|
[***] in its entirety and is replaced with the [***], dated as of the date hereof.
|
8.
|
EFFECT OF THE AMENDMENT
|
(a)
|
the Agreement will be deemed amended to the extent herein provided, and, will continue in full force and effect,
|
(b)
|
this Amendment will supersede any previous understandings, commitments, or representations whatsoever, whether oral or written, related to the subject matter of this Amendment, and
|
(c)
|
the Parties agree that this Amendment will constitute an integral, nonseverable part of the Agreement and be governed by its provisions, except that if the Agreement and this Amendment have specific provisions that are inconsistent, the specific provisions contained in this Amendment will govern.
|
9.
|
CONFIDENTIALITY
|
10.
|
GOVERNING LAW
|
10.1
|
THIS AMENDMENT AND THE AGREEMENTS CONTEMPLATED HEREIN WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF CLAUSE 22.6 OF THE AGREEMENT.
|
11.
|
ASSIGNMENT
|
12.
|
COUNTERPARTS
|
1.
|
FLIGHT OPERATIONS TRAINING
|
1.1
|
Flight Crew Training (standard transition course)
|
1.2
|
Flight Crew Line Initial Operating Experience
|
1.3
|
Type Specific Cabin Crew Training Course
|
1.4
|
Airbus Training Credits
|
1.5
|
Airbus Simulator and APT Trainer Availability
|
2.
|
PERFORMANCE / OPERATIONS COURSE(S)
|
3.
|
MAINTENANCE TRAINING
|
3.1
|
The Seller shall provide to the Buyer [***] of maintenance training [***] for the Buyer’s personnel which may be used for any maintenance course in the Seller’s Customer Services Catalogue.
|
3.2
|
The Seller shall provide to the Buyer [***].
|
4.
|
TRAINEE DAYS ACCOUNTING
|
4.1
|
For instruction at the Seller’s Training Centers: [***]. The number of trainees originally registered at the beginning of the course shall be counted as the number of trainees to have taken the course.
|
4.2
|
For instruction outside of the Seller’s Training Centers: [***] Seller Instructor equals the actual number of trainees attending the course or [***].
|
4.3
|
For structure maintenance training courses outside the Seller’s Training Center(s), [***].
|
4.4
|
For practical training, whether on training devices or on aircraft, [***] trainee days.
|
1
|
[***]
|
1.1
|
A330-900 Aircraft
|
1.1.1
|
In respect of each A330-900 Aircraft that is sold by the Seller and purchased by the Buyer, the Seller shall provide to the Buyer the following [***]:
|
(i)
|
[***],
|
(ii)
|
[***],
|
(iii)
|
[***],
|
(iv)
|
[***],
|
(v)
|
[***],
|
(vi)
|
[***],
|
(vii)
|
[***], and
|
(viii)
|
[***].
|
(ix)
|
[***]
|
1.1.2
|
The A330-900 Aircraft [***].
|
1.1.3
|
The A330-900 Aircraft [***].
|
1.1.4
|
[***]
|
(ii)
|
[***].
|
(i)
|
[***],
|
(ii)
|
[***],
|
(iii)
|
[***],
|
1.1.12
|
[***].
|
1.1.13
|
[***]
|
1.1.14
|
[***]
|
1.1.15
|
[***]
|
1.2
|
A350-900 Aircraft
|
1.2.1
|
In respect of each A350-900 Aircraft that is sold by the Seller and purchased by the Buyer, the Seller shall provide to the Buyer [***]:
|
(i)
|
[***],
|
(ii)
|
[***],
|
(iii)
|
[***],
|
(iv)
|
[***],
|
(v)
|
[***],
|
(vi)
|
[***],
|
(vii)
|
[***], and
|
(viii)
|
[***].
|
1.2.2
|
[***]
|
1.2.3
|
[***]
|
1.2.4
|
[***]
|
(i)
|
[***]
|
(ii)
|
[***]
|
1.2.5
|
[***]
|
1.2.6
|
[***]
|
1.2.7
|
[***]
|
1.2.8
|
[***]
|
1.2.9
|
[***]
|
(i)
|
[***], and
|
(ii)
|
[***].
|
1.3
|
[***]
|
1.3.1
|
[***]
|
(i)
|
[***], and
|
(ii)
|
[***], and
|
(b)
|
[***].
|
1.3.2
|
[***]
|
(a)
|
[***]:
|
(i)
|
[***], and
|
(ii)
|
[***], and
|
(b)
|
[***].
|
1.4
|
[***]
|
1.5
|
[***]
|
2
|
[***]
|
2.1
|
[***]:
|
(i)
|
[***],
|
(ii)
|
[***], and
|
(iii)
|
[***].
|
2.2
|
[***]:
|
(i)
|
[***],
|
(ii)
|
[***], and
|
(iii)
|
[***].
|
3
|
ASSIGNMENT
|
4
|
CONFIDENTIALITY
|
5
|
COUNTERPARTS
|
6
|
[***]
|
(i)
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
(ii)
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
(iii)
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
(iv)
|
[***]
|
(a)
|
[***]:
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
(v)
|
[***]
|
(a)
|
[***]:
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
(b)
|
[***].
|
(vi)
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
5.2.3.1.3
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
5.2.3.2
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
5.2.3.3
|
[***]
|
7
|
ASSIGNMENT
|
8
|
CONFIDENTIALITY
|
9
|
COUNTERPARTS
|
1.
|
[***]
|
1.1
|
A330-900 Flexibility
|
1.1.1
|
[***]
|
1.1.1.1
|
The Seller grants the Buyer the right to [***] certain firmly ordered A330-900 [***] subject to the following:
|
(i)
|
[***]
|
(ii)
|
[***]
|
(iii)
|
[***]:
|
(a)
|
[***], and
|
(b)
|
[***].
|
(iv)
|
[***]
|
1.1.1.2
|
[***]
|
(i)
|
[***]
|
(ii)
|
[***]
|
(iii)
|
[***]
|
(iv)
|
[***]
|
1.1.1.3
|
[***]
|
(i)
|
[***], and
|
(ii)
|
[***].
|
1.1.1.4
|
[***]
|
1.1.1.4.1
|
[***]:
|
(i)
|
[***], and,
|
(ii)
|
[***]
|
a)
|
[***]:
|
i.
|
[***], and
|
ii.
|
[***].
|
b)
|
[***]
|
c)
|
[***]
|
1.1.1.4.2
|
[***]
|
1.1.1.4.3
|
[***]
|
1.1.1.4.4
|
[***]
|
1.1.1.4.5
|
[***]
|
1.1.2
|
[***]Aircraft [***]
|
1.1.2.1
|
The Seller grants the Buyer the right to [***]:
|
(v)
|
[***]
|
1.1.2.2
|
[***]
|
(i)
|
[***]
|
(ii)
|
[***]
|
(iii)
|
[***]
|
(iv)
|
The Seller’s obligation to comply with an [***] shall be subject to the provisions of Paragraph 1.3.
|
1.1.2.3
|
[***]
|
(i)
|
[***], and
|
(ii)
|
[***].
|
1.2
|
A350-900 Flexibility
|
1.2.1
|
[***]
|
1.2.1.1
|
[***]:
|
(i)
|
[***]
|
(ii)
|
[***]
|
(iii)
|
[***]
|
1.2.1.2
|
[***]
|
1.2.1.3
|
[***]
|
(i)
|
[***], and
|
(ii)
|
[***].
|
1.2.2
|
[***]
|
1.2.3
|
[***]
|
1.2.3.1
|
[***]
|
1.2.3.2
|
[***]
|
(i)
|
[***]:
|
(a)
|
[***], and
|
(b)
|
[***].
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
(a)
|
[***],
|
(b)
|
[***].
|
(iv)
|
[***]
|
1.3
|
General provisions applicable to Flexibility Rights
|
1.3.1
|
[***]
|
1.3.2
|
[***]
|
1.3.3
|
[***]
|
1.3.4
|
[***]
|
2.
|
[***]
|
2.1
|
[***]:
|
(i)
|
[***], and
|
(ii)
|
[***].
|
2.2
|
[***]:
|
(i)
|
[***],
|
(ii)
|
[***], and
|
(iii)
|
[***].
|
2.3
|
[***]:
|
3.
|
ASSIGNMENT
|
4.
|
CONFIDENTIALITY
|
5.
|
COUNTERPARTS
|
1
|
[***]
|
1.1
|
[***]
|
1.1.1
|
[***]
|
1.1.3
|
[***]
|
1.2
|
[***]
|
1.2.1
|
[***]
|
1.2.2
|
[***]
|
2
|
[***]
|
2.1
|
[***]
|
2.1.1
|
Clause 2.2.3.1 of the Agreement is deleted in its entirety and is replaced with the following:
|
2.1.2
|
Subclause 2.2.4 of the Agreement is deleted in its entirety and is replaced with the following:
|
•
|
[***]; and
|
•
|
[***]; and
|
2.1.3
|
Clause 18.1.1.2 of the Agreement is deleted in its entirety and replaced by the following:
|
2.2
|
[***]
|
2.3
|
[***]
|
2.4
|
[***]
|
2.5
|
[***]
|
2.5.1
|
[***]
|
3
|
CLAUSE 2 – SPECIFICATION
|
4
|
ASSIGNMENT
|
5
|
CONFIDENTIALITY
|
6
|
COUNTERPARTS
|
2.3.2.1
|
[***]
|
2.3.2.2
|
[***]
|
2.3.3.2
|
In the event of the Seller revising the Specification to incorporate Development Changes which have no adverse effect on the performance, weight, Base Price, Delivery Date of the Aircraft affected thereby or the interchangeability or replaceability requirements under the Specification, such revision shall be performed by the Seller without the Buyer’s consent. In such cases, the Buyer shall have access to the details of such changes through the relevant application in AirbusWorld.
|
1
|
WARRANTIES
|
1.1
|
Warranties and Service Life Policy
|
1.1.1
|
Standard Warranty
|
(i)
|
design and furnish to the Buyer a correction for such Item subject to a Failure and provide any parts required for such correction (including Seller designed standard parts but excluding industry standard parts unless a part of an Item), or
|
(ii)
|
replace such Item.
|
1.1.3
|
[***]
|
1.1.4
|
[***]
|
1.1.5
|
[***]
|
2
|
TECHNICAL PUBLICATIONS
|
2.1
|
Clause 14.6 of the Agreement is deleted in its entirety and replaced with the following:
|
3
|
[***]
|
3.1
|
[***]
|
3.1.1
|
[***]
|
3.1.1.1
|
[***]
|
3.1.1.2
|
[***]
|
(a)
|
[***]:
|
(i)
|
[***], and
|
(ii)
|
[***] and,
|
(b)
|
[***].
|
3.1.2
|
[***]
|
(A)
|
[***],
|
(B)
|
or by:
|
(i)
|
[***], and
|
(ii)
|
[***].
|
3.1.3
|
[***]
|
(i)
|
[***], and
|
(ii)
|
[***].
|
3.2
|
[***]
|
3.2.1
|
[***]
|
3.2.1.1
|
[***]
|
3.2.1.2
|
[***]
|
(a)
|
[***]:
|
(i)
|
[***], and
|
(ii)
|
[***], and
|
(b)
|
[***].
|
3.2.2
|
[***]
|
3.2.3
|
[***]
|
(i)
|
[***], and
|
(ii)
|
[***].
|
4
|
[***]
|
5
|
[***]
|
6
|
[***]
|
6.1
|
[***]
|
6.1.1
|
[***]:
|
a.
|
[***], and
|
b.
|
[***], and
|
c.
|
[***]
|
6.1.2
|
[***]
|
6.2
|
[***]
|
6.2.1
|
[***]
|
6.2.2
|
[***]
|
6.2.3
|
[***]
|
i.
|
[***], and
|
ii.
|
[***], and
|
iii.
|
[***].
|
6.2.4
|
[***]
|
(i)
|
[***], and
|
(ii)
|
[***], and
|
(iii)
|
[***].
|
7
|
ASSIGNMENT
|
8
|
CONFIDENTIALITY
|
9
|
COUNTERPARTS
|
1
|
[***]
|
2
|
CLAUSE 0 – DEFINITIONS
|
2.1
|
Clause 0 of the Agreement is amended to delete the following defined term and replace it as follows:
|
2.2
|
Clause 0 of the Agreement is amended to add the following defined terms:
|
3
|
CLAUSE 3 – PRICE
|
4
|
CLAUSE 5 – PAYMENT TERMS
|
4.1
|
Subclause 5.3 of the Agreement is deleted in its entirety and replaced as follows:
|
(i)
|
[***], and
|
(ii)
|
[***]
|
a.
|
[***], or
|
b.
|
[***].
|
a.
|
[***], and
|
4.2
|
Subclause 5.4 of the Agreement is deleted in its entirety and replaced as follows:
|
“5.4
|
Payment of Other Amounts
|
5.4.1
|
[***]
|
4.3
|
Subclause 5.5 of the Agreement is deleted in its entirety and replaced as follows:
|
“5.5
|
Overdue Payments
|
4.4
|
Subclause 5.10 of the Agreement is deleted in its entirety.
|
5
|
CLAUSE 7 – CERTIFICATION
|
5.1
|
Subclauses 7.3 and 7.4 of the Agreement are deleted in their entirety and replaced with the following:
|
“7.3
|
Specification Changes before Aircraft Ready for Delivery
|
7.3.1
|
[***]
|
7.3.2
|
The Seller shall as far as practicable, [***], take into account the information available to it concerning any proposed law, rule or regulation or interpretation that could become a Change in Law, in order to minimize the costs of changes to the Specification as a result of such proposed law, regulation or interpretation becoming effective before the Aircraft is Ready for Delivery.
|
7.3.3
|
[***]:
|
(i)
|
[***];
|
(ii)
|
[***];
|
(iii)
|
[***].
|
7.3.4
|
[***]
|
7.4
|
Specification Changes after Certificate of Acceptance
|
5.2
|
A new Subclause 7.5 is added to the Agreement as follows:
|
6
|
CLAUSE 8 – THE BUYER’S ACCEPTANCE
|
6.1
|
Subclause 8.1.2 of the Agreement is deleted in its entirety and replaced with the following:
|
6.2
|
Subclause 8.2 of the Agreement is deleted in its entirety and replaced with the following:
|
(i)
|
[***],
|
(ii)
|
[***], and
|
(iii)
|
[***].
|
7
|
CLAUSE 9 - DELIVERY
|
8
|
CLAUSE 10 – EXCUSABLE DELAY
|
9
|
CLAUSE 11 – INEXCUSABLE DELAY
|
10
|
CLAUSE 20 – INDEMNIFICATION AND INSURANCE
|
11
|
CLAUSE 21 – TERMINATION FOR CERTAIN EVENTS
|
12
|
ASSIGNMENT
|
13
|
CONFIDENTIALITY
|
14
|
COUNTERPARTS
|
3.3.1
|
The Seller shall bear and pay the amount of [***].
|
3.3.2
|
The Buyer shall bear and pay the amount of [***].
|
3.3.3
|
The Seller shall [***].
|
3.3.4
|
It is expressly understood and agreed that [***].
|
3.3.5
|
It is expressly understood and agreed that [***].
|
3.3.6
|
[***]
|
3.3.7
|
[***]
|
3.3.8
|
[***]
|
3.3.9
|
[***]
|
3.3.10
|
[***]
|
3.3.11
|
Taxes and Disputes
|
10.6
|
[***]
|
(i)
|
[***], and
|
(ii)
|
[***].
|
11
|
INEXCUSABLE DELAY
|
11.1
|
[***]
|
11.1.1
|
[***]
|
11.1.2
|
[***]
|
11.2
|
[***]
|
11.2.1
|
[***]
|
11.2.2
|
[***]
|
11.2.3
|
[***]
|
11.2.4
|
[***]
|
11.4
|
[***]
|
11.4.1
|
[***]
|
11.4.2
|
[***]
|
11.4.3
|
[***]
|
11.7
|
[***]
|
11.8
|
[***]
|
20.1
|
[***]
|
20.2
|
[***]:
|
(A)
|
[***], and
|
(B)
|
[***].
|
20.3
|
[***]:
|
(A)
|
[***], and
|
(B)
|
[***].
|
20.4
|
[***] Upon receipt of such notice, the Indemnitor (unless otherwise agreed by the Indemnified Party and the Indemnitor) shall assume and conduct the defense, or settlement, of such claim or suit. [***] Notice of the claim or suit shall be accompanied by all information pertinent to the matter as is reasonably available to the Indemnified Party and shall be followed by such cooperation by the Indemnified Party as the Indemnitor or its counsel may reasonably request, at the expense of the Indemnitor.
|
(A)
|
[***], and
|
(B)
|
[***].
|
1
|
|
21.1
|
Any of the following shall be considered a material breach of, [***]:
|
(1)
|
[***], the Buyer or any [***] shall commence any case, proceeding or other action with respect to [***] or the Buyer in any jurisdiction relating to bankruptcy, insolvency, reorganization or relief from debtors or seeking a reorganization, arrangement, winding-up, liquidation, dissolution or other relief with respect to its debts and such case, proceeding or action is not dismissed [***].
|
(2)
|
An action is commenced seeking the appointment of a receiver, trustee, custodian or other similar official for [***] or the Buyer for all or substantially all of its assets and such action is not stayed or dismissed [***], or the Seller or the Buyer makes a general assignment for the benefit of its creditors.
|
(3)
|
An action is commenced against [***].
|
(4)
|
[***]
|
(5)
|
[***]
|
(6)
|
The Buyer fails to make any [***] Payment required to be made pursuant to the Agreement when such payment comes due or fails to make payment [***] required to be made pursuant to Subclause 5.3 of the Agreement.
|
(7)
|
[***]
|
(8)
|
[***]
|
(9)
|
[***]
|
(10)
|
[***]
|
(11)
|
[***]
|
21.2
|
[***]
|
(1)
|
The “Conversion Formula” will apply to convert from cash to Shares the payout, if any, of a Performance Award to a person who is an Executive Officer Participant at the time of such payout. First, the cash amount of the payout is calculated in the same manner as if the payout is being made in cash. Next, the cash amount is converted into a number of Shares based on the following formula: (A÷B), where:
|
(2)
|
“GAAP” means accounting principles generally accepted in the United States of America.
|
(3)
|
“Industry Group” means Alaska Air Group, Inc., American Airlines Group, Inc., JetBlue Airways Corporation, Southwest Airlines Co., and United Continental Holdings, Inc.
|
(4)
|
“Performance Period” means the period beginning on January 1, 2019 and ending on and including December 31, 2021.
|
(1)
|
“TRASM Performance” shall be measured based on the result of the following formula: (A÷B), expressed as a percentage, where:
|
(2)
|
“TRASM” for Delta shall be calculated by using Delta’s Available Seat Miles and Total Operating Revenue for the applicable periods and the following formula: (A÷B), where
|
(3)
|
The “Industry Group Average TRASM” shall be calculated by using the aggregate Available Seat Miles and aggregate Total Operating Revenue for the applicable periods and the following formula: (A÷B), where
|
(4)
|
“Available Seat Miles” means, for the subject company, the consolidated scheduled and non-scheduled total number of seats available for transporting passengers during a reporting period multiplied by the total number of miles flown during that period.
|
(5)
|
“Total Operating Revenue” means, subject to Section 4(b)(v)(B), the subject company’s total operating revenue for the applicable periods based on its regularly prepared and publicly available statements of operations
|
(1)
|
The “Customer Service Performance” for Delta shall be measured based on the percentage point improvement in Delta’s average monthly Net Promoter Score (“NPS”) from the 2018 calendar year to the average monthly NPS over the Performance Period, with (A) Delta’s NPS performance attributable to domestic travel accounting for 50% of the measure and (ii) Delta’s NPS performance attributable to international travel accounting for 50% of the measure. The criteria and methodology used to determine Delta’s NPS is described in a document titled, “‘Net Promoter’: Measuring Customer Satisfaction at Delta,” which was previously reviewed by the Committee. Company management will periodically report to the Company’s Board of Directors regarding Delta’s NPS.
|
(1)
|
The “Return on Invested Capital” for Delta shall be calculated by using Delta’s Average Adjusted Total Net Operating Income and Average Invested Capital for the applicable periods and the following formula (A÷B), where:
|
(2)
|
“Average Adjusted Total Net Operating Income” means, subject to Section 4(b)(v)(B), (i) Delta’s average consolidated pre-tax income for the applicable periods based on its regularly prepared and publicly available statements of operations prepared in accordance with GAAP, but excluding (A) net interest expense; (B) items present in the line item “restructuring and other items” or such similar line item; (C) mark-to-market adjustments; (D) other special, unusual or nonrecurring items which are disclosed in publicly available filings with the U.S. Securities and Exchange Commission (the “SEC”); and (E) implied interest in aircraft rent expense and amortized pension expense related to gains/losses that impact accumulated other comprehensive income (“AOCI”) multiplied by (ii) one minus Delta’s Effective Tax Rate for the applicable periods.
|
(3)
|
“Effective Tax Rate” means Delta’s effective income tax rate for the applicable periods as disclosed in publicly available filings with the SEC.
|
(4)
|
“Average Invested Capital” means, subject to Section 4(b)(v)(B), Delta’s total invested capital determined based on the average of thirteen calendar quarters measured from the last calendar quarter preceding the Performance
|
(5)
|
“Adjusted Book Value of Equity” for Delta shall be calculated quarterly based on its regularly prepared internal financial statements (i) with an initial starting value for the quarter ending December 31, 2018 (the “Initial Value”) equal to the book value of equity determined in accordance with GAAP as of December 31, 2018, but excluding the impact of gains or losses as of December 31, 2018 associated with (1) the cumulative pension and other post-employment retirement benefits net balance recorded in AOCI; (2) the derivative contracts and associated items net balance recorded in AOCI; and (3) the deferred tax asset valuation allowance balance and (ii) using the following formula for each subsequent quarter thereafter, (A+B+C), where:
|
(6)
|
“Adjusted Gross Debt” for Delta shall be calculated quarterly based on its regularly prepared internal financial statements using the following formula (A+B), subject to Section 4(b)(v)(B), where:
|
(1)
|
“Relative TSR Performance” shall be calculated based on Delta’s TSR Percentile Ranking for the Performance Period.
|
(2)
|
“TSR Percentile Ranking” means the percentage of the S&P 500 Companies with Total Shareholder Return for the Performance Period that is less than or equal to Delta’s Total Shareholder Return. If the Company’s Total Shareholder Return is the same as another company’s Total Shareholder Return, the Company shall be treated as having the higher Total Shareholder Return. The percentile ranking shall be carried out to two decimal places.
|
(3)
|
“S&P 500 Companies” means all of the companies constituting the Standard & Poor’s 500 Index as of the first and last day of the Performance Period (excluding the Company) and which continue to be actively traded under the same ticker symbol on an established securities market through the end of the Performance Period.
|
(4)
|
“Total Shareholder Return” or “TSR” means, for Delta and each of the S&P 500 Companies, (i) the change in the average closing market price of its common stock (as quoted in the principal market on which it is traded over the 20 trading days immediately preceding the first and last day of the Performance Period), plus dividends and other distributions paid, divided by (ii) the average closing market price over the 20 trading days immediately preceding the first day of the Performance Period, all of which are adjusted for any changes in equity structure, including, without limitation, stock splits and stock dividends, and assuming that all cash dividends and cash distributions are immediately reinvested in common stock of the subject company using the closing market price on the ex-dividend date.
|
(1)
|
If there is a payout under the Company’s broad-based employee profit sharing program for ground and flight attendant employees (the “Profit Sharing Program”) for 2019, the Option shall vest and become exercisable with respect to one-third of the Shares on each of the following dates: (I) February 1, 2020 (the “First Option Installment”), (II) February 1, 2021
|
(2)
|
If there is no payout under the Profit Sharing Program for 2019, but there is a payout under the Profit Sharing Program for 2020, the Option shall vest and become exercisable with respect to (I) the First and Second Option Installments on February 1, 2021 and (II) the Third Option Installment on February 1, 2022; and
|
Performance Measures and Weightings
|
|||||
Employment
Level
|
% of Target MIP Award allocated to
Absolute Financial
Performance
|
% of Target
MIP Award allocated to
Relative Financial
Performance
|
% of Target
MIP Award allocated to Operational Performance |
% of Target MIP Award allocated to
Leadership Effectiveness
Performance
|
% of Target MIP Award allocated to
Individual
Performance
|
CEO
|
50%
|
25%
|
25%
|
0%
|
0%
|
President/SEVP
|
50%
|
25%
|
25%
|
0%
|
0%
|
EVP
|
50%
|
25%
|
25%
|
0%
|
0%
|
SVP –Fleet & Technical Procurement
|
50%
|
25%
|
25%
|
0%
|
0%
|
SVP
|
50%
|
15%
|
25%
|
10%
|
0%
|
VP
|
50%
|
15%
|
25%
|
10%
|
0%
|
Managing Director
(Grade 13) |
35%
|
10%
|
15%
|
0%
|
40%
|
Director
(Grade 12) |
35%
|
10%
|
15%
|
0%
|
40%
|
General Manager (Grade 11)
|
25%
|
10%
|
15%
|
0%
|
50%
|
Grade 10
|
0%
|
0%
|
0%
|
0%
|
100%
|
Grade 8
|
0%
|
0%
|
0%
|
0%
|
100%
|
|
Threshold
|
Target
|
Maximum
|
% of Target Absolute Financial Performance Measure Paid
|
50%
|
100%
|
200%
|
Required 2019 Pre-Tax Income
|
$6,521 Million
|
$7,683 Million
|
$8,423 Million
|
|
Threshold
|
Target
|
Maximum
|
% of Target Relative Financial Performance Measure Paid
|
50%
|
100%
|
200%
|
Delta’s 2019 Annual Pre-Tax Income Margin relative to Composite Performance of Industry Composite Group for the same period
|
Composite Performance
|
+3.0 points above Composite Performance
|
+4.0 points above Composite Performance
|
|
Threshold
|
Target
|
Maximum
|
Shared Rewards Program
|
|
|
|
% of Target Payout for this Performance Measure (75% Weighting)
|
37.50%
|
75%
|
150%
|
Number of monthly Shared Rewards Program goals actually met during 2019
|
21
|
28
|
35 or more
|
Delta Connection Goals
|
|
|
|
% of Target Payout for this Performance Measure (25% Weighting)
|
12.50%
|
25%
|
50%
|
Number of Delta Connection Goals actually met during 2019
|
9
|
14
|
19 or more
|
|
|
|
|
|
|
Completion Factor
2019 Goal |
On-Time Arrival Performance
2019 Goal |
||
Month in 2019
|
Relative CF
|
Absolute CF
|
Relative A0
|
Absolute A0
|
January
|
1st
|
96.8%
|
1st
|
65.7%
|
February
|
1st
|
96.7%
|
1st
|
65.3%
|
March
|
1st
|
99.0%
|
1st
|
67.2%
|
April
|
1st
|
99.4%
|
1st
|
72.1%
|
May
|
1st
|
99.8%
|
1st
|
71.6%
|
June
|
1st
|
98.7%
|
1st
|
68.0%
|
July
|
1st
|
98.2%
|
1st
|
68.2%
|
August
|
1st
|
98.3%
|
1st
|
70.1%
|
September
|
1st
|
99.3%
|
1st
|
74.5%
|
October
|
1st
|
99.3%
|
1st
|
76.0%
|
November
|
1st
|
99.4%
|
1st
|
74.1%
|
December
|
1st
|
97.9%
|
1st
|
66.4%
|
Overall
|
1st
|
98.6%
|
1st
|
70.0%
|
A.
|
The primary source of reported metrics used to calculate performance will be each Delta Connection carrier’s data which flows into Delta’s data warehouse.
|
B.
|
All domestic and international Delta Connection carrier system operations subject to capacity purchase agreements and/or revenue proration agreements will be included in the performance measures, including the operations of, Compass, GoJet, Endeavor Air, Republic Airlines and SkyWest, but excluding any revenue proration operations with respect to which passenger reservations are not reflected on Delta’s reservations system (the “Delta Connection Program”). In the event that a carrier enters or leaves the Delta Connection Program, that carrier’s operations will be included or excluded from the performance measures as applicable.
|
C.
|
The monthly calculation for completion factor will be as follows:
|
1.
|
Add all Delta Connection scheduled system operations for the month.
|
2.
|
Add all Delta Connection system completed flights for the month (including flights canceled by one carrier and covered by another via an extra section, which also includes flights changed to Delta aircraft).
|
3.
|
Divide the result of C.2 by the result of C.1 for a combined Delta Connection system completion factor.
|
D.
|
The monthly calculation for on-time performance will be as follows:
|
1.
|
Add all Delta Connection completed system operations for the month.
|
2.
|
Add all Delta Connection system on time operations for the month. On time operations are defined as the number of flights that arrive at the scheduled destination at the scheduled arrival time.
|
3.
|
Divide the result of D.2 by the result of D.1 for a combined Delta Connection system on-time performance measure.
|
E.
|
All calculations will be performed and validated by Delta Connection Operations.
|
F.
|
The comparator group for the relative measure shall include the regional portfolios for Alaska Air Group, Inc., United Continental Holdings, Inc. and American Airlines Group, Inc. and the data is compiled by a third party selected by the Company.
|
|
|
|
NAME OF SUBSIDIARY
|
JURISDICTION OF INCORPORATION OR
ORGANIZATION
|
|
Aero Assurance Ltd.
|
Vermont
|
|
Delta Flight Products, LLC
|
Delaware
|
|
Delta Material Services, LLC
|
Delaware
|
|
Delta Private Jets, Inc.
|
Kentucky
|
|
Delta Professional Services, LLC
|
Delaware
|
|
Delta Vacations, LLC
|
Minnesota
|
|
Endeavor Air, Inc.
|
Georgia
|
|
Epsilon Trading, LLC
|
Delaware
|
|
MIPC, LLC
|
Delaware
|
|
Monroe Energy, LLC
|
Delaware
|
|
New Sky, Ltd.
|
Bermuda
|
(1)
|
Registration Statement No. 333-142424 on Form S-8 pertaining to the Delta Air Lines, Inc. 2007 Performance Compensation Plan,
|
(2)
|
Registration Statement No. 333-149308 on Form S-8 pertaining to the Delta Air Lines, Inc. 2007 Performance Compensation Plan,
|
(3)
|
Registration Statement No. 333-154818 on Form S-8 pertaining to the Delta Air Lines, Inc. 2007 Performance Compensation Plan,
|
(4)
|
Registration Statement No. 333-151060 on Form S-8 pertaining to the Northwest Airlines Corporation 2007 Stock Incentive Plan,
|
(5)
|
Registration Statement No. 333-212525 on Form S-8 pertaining to the Delta Air Lines, Inc. Performance Compensation Plan,
|
(6)
|
Registration Statement No. 333-209571 on Form S-3 pertaining to Common Stock, and
|
(7)
|
Registration Statement No. 333-216463 on Form S-3 pertaining to debt securities;
|
|
/s/ Ernst & Young LLP
|
Atlanta, Georgia
|
|
February 15, 2019
|
|
1.
|
I have reviewed this annual report on Form 10-K of Delta Air Lines, Inc. ("Delta") for the annual period ended December 31, 2018;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Delta as of, and for, the periods presented in this report;
|
4.
|
Delta's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Delta and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Delta, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of Delta's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in Delta's internal control over financial reporting that occurred during Delta's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Delta's internal control over financial reporting; and
|
5.
|
Delta's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Delta's auditors and the Audit Committee of Delta's Board of Directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Delta's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in Delta's internal control over financial reporting.
|
February 15, 2019
|
/s/ Edward H. Bastian
|
|
Edward H. Bastian
|
|
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Delta Air Lines, Inc. ("Delta") for the annual period ended December 31, 2018;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Delta as of, and for, the periods presented in this report;
|
4.
|
Delta's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Delta and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Delta, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of Delta's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in Delta's internal control over financial reporting that occurred during Delta's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Delta's internal control over financial reporting; and
|
5.
|
Delta's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Delta's auditors and the Audit Committee of Delta's Board of Directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Delta's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in Delta's internal control over financial reporting.
|
February 15, 2019
|
/s/ Paul A. Jacobson
|
|
Paul A. Jacobson
|
|
Executive Vice President and Chief Financial Officer
|
1.
|
such Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Delta.
|
|
/s/ Edward H. Bastian
|
|
Edward H. Bastian
|
|
Chief Executive Officer
|
|
|
|
/s/ Paul A. Jacobson
|
|
Paul A. Jacobson
|
|
Executive Vice President and Chief Financial Officer
|
|
|