What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-11 compared with 2024-02-12 · 271 added, 339 removed, 1218 unchanged (33% of the section changed)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Delta Air Lines, Inc.

To the Stockholders and the Board of Directors of Delta Air Lines, Inc.

Opinion on the Financial Statements

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Management determines the fair value of NAV assets by applying the methodologies described in Note 9 to the consolidated financial statements.

Auditing the Company’s NAV assets required significant judgment in estimating the fair value of the NAV assets, primarily resulting from the lag in the availability of data provided by the investment fund managers.

Auditing the Company’s estimates of the fair value of its NAV assets required significant judgment, primarily resulting from the lag in the availability of data provided by the investment fund managers.

Delta Air Lines, Inc.

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How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s accounting for the fair value measurement of its NAV assets, including controls over management’s assessment of the significant inputs and estimates affecting the fair value measurement.

To test the fair value of plan assets measured at NAV, our audit procedures included, among others, evaluating the valuation methodologies used by the Company and comparing significant inputs and underlying data used in the Company's valuations to information available from third-party sources and market data.

Additionally, we performed sensitivity analyses to evaluate the changes to the Company’s net periodic benefit that would result from changes in the fair value measurement, compared the Company’s asset performance results to applicable third-party benchmarks, and assessed management’s historical accuracy of estimating fair value by performing retrospective review procedures comparing the Company’s estimates of fair value as of the prior year end to the fair value NAV in the investment’s audited financial statements made available during the current year.

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Therefore, the Company uses statistical models to estimate mileage breakage based on historical redemption patterns.

Auditing the Company’s accounting for its loyalty program required significant estimation in determining the mileage breakage estimate for mileage credits.

Auditing the mileage breakage estimate for the loyalty program required significant judgment.

In particular, there is complexity and subjectivity in estimating mileage breakage based on expectations of future redemption patterns due to the absence of historical expirations as the Company’s mileage credits do not expire.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s accounting for its loyalty program, including controls over management’s review of the estimation of the mileage breakage and the completeness and accuracy of the data underlying the mileage breakage estimate.

To test the estimate of breakage of mileage credits, our audit procedures included, among others, involving an actuarial specialist to assist in assessing the method used by the Company to develop the mileage breakage estimate and to independently develop a range of mileage breakage estimates and compare to the Company's estimate.

To test the mileage breakage estimate, our audit procedures included, among others, involving an actuarial specialist to assist in assessing the method and assumptions used by the Company to develop the mileage breakage estimate and to independently develop a range of mileage breakage estimates and compare to the Company's estimate.

Additionally, we tested the completeness and accuracy of the underlying mileage data used to develop the mileage breakage estimate.

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Profit sharing 1,389 1,383 563

Pilot agreement and related expenses 864 — —

Aircraft rent 548 532 508

Government grant recognition — — ( 4,512 )

Pilot agreement and related expenses — 864 —

Other 2,460 2,239 1,700

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Operating Income 5,995 5,521 3,661

Non-Operating Income/(Expense):

Non-Operating (Expense)/Income:

Interest expense, net ( 747 ) ( 834 ) ( 1,029 )

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Loss on extinguishment of debt ( 39 ) ( 63 ) ( 100 )

Pension and related (expense)/benefit ( 244 ) 292 451

Miscellaneous, net ( 232 ) ( 279 ) 165

Total non-operating income/(expense), net 87 ( 1,747 ) ( 1,488 )

Total non-operating (expense)/income, net ( 1,337 ) 87 ( 1,747 )

Income Before Income Taxes 4,658 5,608 1,914

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Net change in pension and other benefits 864 ( 44 ) 1,329

Total Other Comprehensive (Loss)/Income ( 44 ) 1,329 1,908

Net change in other 2 — —

Total Other Comprehensive Income/(Loss) 866 ( 44 ) 1,329

Comprehensive Income $ 4,323 $ 4,565 $ 2,647

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Receivables ( 126 ) ( 7 ) ( 728 )

Fuel inventory 121 ( 158 ) ( 318 )

Prepaids and other current assets ( 241 ) 137 ( 1,026 )

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Other payables, deferred revenue and accrued liabilities 614 ( 285 ) 1,226

Noncurrent liabilities ( 18 ) ( 348 ) ( 399 )

Other, net 163 ( 50 ) ( 227 )

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Net cash used in financing activities ( 4,260 ) ( 3,394 ) ( 4,535 )

Net Decrease in Cash, Cash Equivalents and Restricted Cash ( 78 ) ( 5,096 ) ( 1,486 )

Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash 26 ( 78 ) ( 5,096 )

Cash, cash equivalents and restricted cash at beginning of period 3,395 3,473 8,569

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Non-Cash Transactions:

Right-of-use assets acquired under operating leases $ 661 $ 531 $ 2,113

Flight and ground equipment acquired under finance leases 31 91 1,049

Right-of-use assets acquired or modified under operating leases $ 327 $ 661 $ 531

Flight and ground equipment acquired or modified under finance leases ( 17 ) 31 91

Operating leases converted to finance leases 25 84 342

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Consolidated Statements of Stockholders' Equity

Common Stock Additional

Paid-In Capital Retained

Earnings / (Accumulated Deficit) Accumulated

Other Comprehensive Loss Treasury Stock

Common Stock Additional Paid-In Capital Retained Earnings / (Accumulated Deficit) Accumulated Other Comprehensive Loss Treasury Stock

(in millions, except per share data) Shares Amount Shares Amount Total

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2 — 79 — — 1 ( 31 ) 48

Government grant warrant issuance — — 86 — — — — 86

Balance at December 31, 2022 652 — 11,526 1,170 ( 5,801 ) 11 ( 313 ) 6,582

— — — 4,609 — — — 4,609

Other comprehensive income

Dividends declared ($ 0.2 0 per share)

— — — ( 129 ) — — — ( 129 )

Other comprehensive loss

— — — — ( 44 ) — — ( 44 )

Common stock issued for employee equity awards (1)

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— — — ( 324 ) — — — ( 324 )

Other comprehensive loss

Other comprehensive income

— — — — 866 — — 866

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( 1 ) — 31 — — ( 3 ) 90 121

Stock options exercised 1 — 68 — — — — 68

Balance at December 31, 2024 655 $ — $ 11,740 $ 8,783 $ ( 4,979 ) 8 $ ( 251 ) $ 15,293

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Some of our marketing arrangements provide for the sharing of revenues and expenses.

Revenues and expenses associated with collaborative arrangements are presented on a gross basis in the applicable line items on our Consolidated Statements of Operations ("income statement").

Revenues and expenses associated with the flights we operate under collaborative arrangements are presented on a gross basis in the applicable line items on our Consolidated Statements of Operations ("income statement").

We have reclassified certain prior period amounts to conform to the current period presentation.

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Recent Accounting Standards

Standards Effective in Future Years

Fair Value of Equity Investments.

In June 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2022-03, "Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions." Under this standard, a contractual restriction on the sale of an equity security is not considered in measuring the security's fair value.

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

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

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

("Wheels Up").

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

Segment Reporting.

In November 2023, the FASB issued ASU No.

Recently Adopted Standards

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures." This standard requires disclosure of significant segment expenses and other segment items by reportable segment.

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

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

We adopted this standard effective January 1, 2024.

See Note 14, "Segments," for further information regarding our segment reporting.

Standards Effective in Future Years

Income Taxes.

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Improvements to Income Tax Disclosures." This standard enhances disclosures related to income taxes, including the rate reconciliation and information on income taxes paid.

This ASU becomes effective January 1, 2025.

This ASU is effective beginning January 1, 2025.

Upon adoption of this ASU we expect to include certain additional disclosures in the effective income tax rate reconciliation in the footnotes to our Consolidated Financial Statements.

Disaggregation of Income Statement Expenses.

In November 2024, the FASB issued ASU No.

2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)." This standard requires disclosure of specific information about costs and expenses and becomes effective January 1, 2027.

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

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Short-term, highly liquid investments with maturities of three months or less when purchased are classified as cash and cash equivalents.

Investments with maturities of greater than three months, but not in excess of one year, when purchased are classified as short-term investments and are stated at fair value.

Investments with maturities of greater than three months, but not in excess of one year, when purchased were classified as short-term investments and stated at fair value.

Investments with maturities beyond one year when purchased may be classified as short-term investments if they are expected to be available to support our short-term liquidity needs.

Our short-term investments in debt securities purchased prior to October 1, 2022 are classified as fair value investments under the fair value option and unrealized gains and losses are recorded in non-operating expense.

Our short-term investments in debt securities purchased on or after October 1, 2022 are classified as available-for-sale investments and are stated at fair value with unrealized gains and losses recorded in accumulated other comprehensive income/(loss) ("AOCI").

Realized gains and losses on these investments are recorded in non-operating expense.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets ("balance sheets") that sum to the total of the same such amounts shown within the Consolidated Statements of Cash Flows ("cash flows statement").

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As part of our strategy to mitigate the cost of the refining margin reflected in the price of jet fuel, our wholly owned subsidiary, Monroe Energy, LLC ("Monroe"), operates the Trainer oil refinery.

Refined products (finished goods) and feedstock and blendstock inventories (work-in-process) are both carried at the lower of cost and net realizable value.

We use jet fuel in our airline operations that is produced by the refinery and procured through the exchanges with third parties of gasoline, diesel and other refined products ("non-jet fuel products") the refinery produces.

Refined products (finished goods) and feedstock and blendstock inventories (work-in-process) are carried at the lower of cost and net realizable value.

We use jet fuel in our airline operations that is produced by the refinery, procured through the exchanges with third parties of gasoline, diesel and other refined products ("non-jet fuel products") the refinery produces and purchased directly from third parties.

Cost is determined using the first-in, first-out method.

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We have recorded these nonmonetary exchanges at the carrying amount of the non-jet fuel products transferred within aircraft fuel and related taxes on the income statement.

Delta Air Lines, Inc.

| 2023 Form 10-K 64

Notes to the Consolidated Financial Statements

Changes in fuel prices, interest rates and foreign currency exchange rates impact our results of operations.

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

Delta Air Lines, Inc.

| 2024 Form 10-K

Notes to the Consolidated Financial Statements

Long-Lived Assets

Our long-lived lived assets include property and equipment, net and operating lease right-of-use ("ROU") assets on our balance sheets.

Our tangible assets consist primarily of flight equipment, which is mobile across geographic markets.

Accordingly, assets are not allocated to specific geographic regions.

See Note 7, "Leases," for further information regarding our leases.

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Information technology-related assets 3 - 15 years

Flight and ground equipment under finance leases Shorter of lease term or estimated useful life 1,862 1,950

Flight and ground equipment under finance leases Lease term or estimated useful life 1,196 1,862

Advance payments for equipment 1,075 1,062

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The net book value of these assets, which are included in information technology-related assets above, totaled $ 933 million and $ 932 million at December 31, 2024 and 2023, respectively.

Our tangible assets consist primarily of flight equipment, which is mobile across geographic markets.

Accordingly, assets are not allocated to specific geographic regions.

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

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

Delta Air Lines, Inc.

| 2023 Form 10-K 65

Notes to the Consolidated Financial Statements

We account for deferred income taxes under the liability method.

We recognize deferred tax assets and liabilities based on the tax effects of temporary differences between the financial statement and tax basis of assets and liabilities, as measured by current enacted tax rates.

Deferred tax assets and liabilities are net by jurisdiction and are recorded as noncurrent on the balance sheets.

We have elected to recognize global intangible low tax income in the period it arises and do not recognize deferred taxes for basis differences that may reverse in future years.

A valuation allowance is recorded to reduce deferred tax assets when necessary.

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

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

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

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

See Note 11, "Income Taxes," for further information on our deferred income taxes.

Fuel Card Obligation

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At both December 31, 2024 and 2023, we had $ 1.1 billion outstanding on this purchasing card and the activity was classified as a financing activity in our cash flows statement.

Delta Air Lines, Inc.

| 2024 Form 10-K

Notes to the Consolidated Financial Statements

Manufacturers' Credits

We periodically receive credits in connection with the acquisition of aircraft and engines.

We periodically receive credits in connection with the acquisition of aircraft and engines or in connection with delivery delays or manufacturing defects.

These credits are deferred until the aircraft and engines are delivered, and then applied as a reduction to the cost of the related equipment.

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Passenger sales commissions and merchant fees are recognized in passenger commissions and other selling expenses when the related revenue is recognized.

Delta Air Lines, Inc.

| 2023 Form 10-K 66

Notes to the Consolidated Financial Statements

REVENUE RECOGNITION

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We periodically evaluate the estimated air traffic liability and may record adjustments in our income statement.

These adjustments relate primarily to tickets that expire unused ("ticket breakage"), refunds, exchanges, transactions with other airlines and other items for which final settlement occurs in periods subsequent to the sale of the related tickets at amounts other than the original sales price.

These adjustments relate primarily to tickets that expire unused ("ticket breakage") and items for which final settlement occurs in periods subsequent to the sale of the related tickets such as refunds, exchanges and transactions with other airlines.

We recognized approximately $ 6.5 billion, $ 7.4 billion and $ 4.2 billion in passenger revenue during the years ended December 31, 2024, 2023 and 2022, respectively, that had been recorded in our air traffic liability balance at the beginning of those periods.

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

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

Delta Air Lines, Inc.

| 2024 Form 10-K

Notes to the Consolidated Financial Statements

Ticket Breakage.

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We recognize revenue for these services when the related transportation service is provided.

Delta Air Lines, Inc.

| 2023 Form 10-K 67

Notes to the Consolidated Financial Statements

Loyalty Program

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Customers can also earn miles through participating companies.

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

Miles are redeemable by customers for air travel on Delta and other participating airlines, access to Delta Sky Club and other program awards.

To facilitate transactions with participating companies, we sell miles to non-airline businesses and other airlines.

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Sale of Miles to Participating Companies.

Customers earn miles based on their spending with participating companies, such as credit card, retail, ridesharing, car rental and hotel companies, with which we have marketing agreements to sell miles.

Customers earn miles based on their spending with participating companies, such as credit card, ridesharing, retail, car rental and hotel companies, with which we have marketing agreements to sell miles.

Our contracts to sell miles under these marketing agreements have multiple performance obligations.

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During the years ended December 31, 2024, 2023 and 2022, total cash sales from marketing agreements related to our loyalty program were $ 7.4 billion, $ 6.9 billion and $ 5.7 billion, respectively, which are allocated to travel and other performance obligations, as discussed below.

Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express.

Delta Air Lines, Inc.

| 2024 Form 10-K

Notes to the Consolidated Financial Statements

Our most significant arrangement to sell miles relates to our co-brand credit card relationship with American Express.

Our agreements with American Express provide for joint marketing, grant certain benefits to Delta-American Express co-branded credit card holders ("cardholders") and American Express Membership Rewards program participants, and allow American Express to market its services or products using our customer database.

Cardholders earn miles for making purchases using co-branded cards, and certain cardholders may also check their first bag for free, are granted discounted access to Delta Sky Club lounges and receive priority boarding and other benefits while traveling on Delta.

Cardholders earn miles for making purchases using co-branded cards, and certain cardholders may also receive baggage fee waivers, lounge access, priority boarding and other benefits while traveling on Delta.

Additionally, participants in the American Express Membership Rewards program may exchange their points for miles under the loyalty program.

We sell miles at agreed-upon rates to American Express which are then provided to their customers under the co-brand credit card program and the Membership Rewards program.

We sell miles to American Express which are then provided to their customers under the co-brand credit card program and the Membership Rewards program.

We account for marketing agreements, including those with American Express, by allocating the consideration to the individual products and services delivered.

We allocate the value based on the relative selling prices of those products and services, which generally consist of award travel, priority boarding, baggage fee waivers, lounge access and the use of our brand.

We determine our best estimate of the selling prices by using a discounted cash flow analysis using multiple inputs and assumptions, including (1) the expected number of miles awarded and number of miles redeemed, (2) ETV for the award travel obligation adjusted for mileage breakage, (3) published rates on our website for baggage fees, discounted access to Delta Sky Club lounges and other benefits while traveling on Delta, (4) brand value (using estimated royalties generated from the use of our brand) and (5) volume discounts provided to certain partners.

We allocate the value based on the relative selling prices of those products and services, which generally consist of award travel, baggage fee waivers, lounge access, priority boarding and the use of our brand.

We determine our best estimate of the selling prices by using a discounted cash flow analysis using multiple inputs and assumptions, including (1) the expected number of miles awarded and number of miles redeemed, (2) ETV for the award travel obligation adjusted for mileage breakage, (3) published rates on our website for baggage fees, Delta Sky Club lounge access and other benefits while traveling on Delta, (4) brand value (using estimated royalties generated from the use of our brand) and (5) volume discounts provided to certain partners.

We defer the amount allocated to award travel as part of loyalty program deferred revenue and recognize loyalty travel awards in passenger revenue as the miles are redeemed and transportation is provided.

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Revenue allocated to the remaining performance obligations, primarily brand value, is recorded as loyalty program in other revenue as miles are delivered.

Delta Air Lines, Inc.

| 2023 Form 10-K 68

Notes to the Consolidated Financial Statements

Current Activity of the Loyalty Program.

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Cargo revenue is recognized when we provide the transportation.

Delta Air Lines, Inc.

| 2024 Form 10-K

Notes to the Consolidated Financial Statements

Other Revenue

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Ancillary Businesses.

This includes aircraft maintenance services we provide to third parties and our vacation wholesale operations.

This includes revenues from aircraft maintenance services we provide to third parties and our vacation package operations.

Miscellaneous.

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

Delta Air Lines, Inc.

| 2023 Form 10-K 69

Notes to the Consolidated Financial Statements

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

Revenue by Geographic Region

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We record a liability when the amounts are collected and reduce the liability when payments are made to the applicable government agency or operating carrier (i.e., for codeshare-related fees).

Delta Air Lines, Inc.

| 2024 Form 10-K

Notes to the Consolidated Financial Statements

FAIR VALUE MEASUREMENTS

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Techniques to convert future amounts to a single present value amount based on market expectations (including present value techniques and option-pricing models).

Delta Air Lines, Inc.

| 2023 Form 10-K 70

Notes to the Consolidated Financial Statements

Assets (Liabilities) Measured at Fair Value on a Recurring Basis (1)

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Restricted cash equivalents 351 351 — — (a)

Short-term investments

Government securities 859 204 655 — (a)

Corporate obligations 218 — 218 — (a)

Other fixed income securities 50 — 50 — (a)

Long-term investments and related 2,372 2,085 160 127 (a)(b)

Hedge derivatives, net

Fuel hedge contracts ( 17 ) — ( 17 ) — (a)(b)

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Other fixed income securities 50 — 50 — (a)

Long-term investments 1,450 1,305 38 107 (a)(b)

Hedge derivatives, net

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

Fuel hedge contracts 5 — 5 — (a)(b)

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Cash equivalents generally consist of money market funds.

Restricted cash equivalents are recorded in prepaid expenses and other and other noncurrent assets on our balance sheets and generally consist of money market funds, time deposits, commercial paper and negotiable certificates of deposit, which primarily relate to proceeds from debt issued to finance, among other things, a portion of the construction costs for our new terminal facilities at New York's LaGuardia Airport as well as certain self-insurance obligations and airport commitments.

Restricted cash equivalents are recorded in other noncurrent assets and prepaid expenses and other on our balance sheets and generally consist of money market funds, time deposits, commercial paper and negotiable certificates of deposit, which primarily relate to proceeds from debt issued to finance, among other things, a portion of the construction costs for our new terminal facilities at New York's LaGuardia Airport as well as certain self-insurance obligations and airport commitments.

The fair value of these cash equivalents is based on a market approach using prices generated by market transactions involving identical or comparable assets.

Short-Term Investments.

The fair values of our short-term investments are based on a market approach using industry standard valuation techniques that incorporate observable inputs such as quoted market prices, interest rates, benchmark curves, credit ratings of the security and other observable information.

As of December 31, 2023, the estimated fair value of our short-term investments was $ 1.1 billion.

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

The fair values of our short-term investments were based on a market approach using industry standard valuation techniques that incorporate observable inputs such as quoted market prices, interest rates, benchmark curves, credit ratings of the security and other observable information.

Delta Air Lines, Inc.

| 2024 Form 10-K

Notes to the Consolidated Financial Statements

Long-Term Investments and Related.

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Our equity investments in private companies are classified as Level 3 in the fair value hierarchy as their equity is not traded on a public exchange and our valuations incorporate certain unobservable inputs, including non-public equity issuances.

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

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

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

Fair value measurement using unobservable inputs is inherently uncertain, and a change in significant inputs could result in different fair values.

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See Note 4, "Investments," for further information on our long-term investments.

Delta Air Lines, Inc.

| 2023 Form 10-K 71

Notes to the Consolidated Financial Statements

Hedge Derivatives.

Fuel Hedge Contracts.

A portion of our derivative contracts may be negotiated over-the-counter with counterparties without going through a public exchange.

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These contracts would be classified within Level 1 of the fair value hierarchy.

• Fuel Hedge Contracts.

Our derivative contracts to hedge the financial risk from changing fuel prices are related to Monroe’s inventory.

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We recognized losses of $ 31 million, $ 6 million and $ 394 million on our fuel hedge contracts in aircraft fuel and related taxes on our income statement for the years ended December 31, 2024, 2023 and 2022, respectively.

The losses recognized during 2023 were composed of $ 58 million of settlements on contracts and $ 52 million of mark-to-market adjustments.

Expense from the settlement of closed contracts is offset by higher operating profits at Monroe from higher pricing.

See Note 14, "Segments," for further information on our Monroe refinery segment.

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China Eastern Fair Value 2 % 2 % 155 134

CLEAR Fair Value 6 % 5 % 171 227

Grupo Aeroméxico Equity Method (1)

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

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

(4) Our voting rights with respect to Wheels Up are capped at 29.9 %.

We elected to account for our investment under the fair value option.

Delta Air Lines, Inc.

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Notes to the Consolidated Financial Statements

During 2023, we announced an expanded strategic partnership with Wheels Up, which included an agreement for a new credit facility to Wheels Up.

This new credit facility is comprised of a $ 390 million term loan, of which we contributed $ 150 million and several other lenders contributed the remaining $ 240 million, and a $ 100 million liquidity facility that we made available to Wheels Up in the event the company's liquidity falls below $ 100 million.

In connection with the credit facility, the term loan investors received newly issued shares of Wheels Up's common stock representing 95 % of Wheels Up's outstanding equity on a fully diluted basis as of the closing of the initial extension of credit.

Our $ 150 million cash contribution was reflected as an investing outflow in our cash flows statement and allocated on a relative fair value basis to a loan receivable within other noncurrent assets and an equity investment on our balance sheet.

Combined with our previous ownership stake, this new investment provides us with a 38 % equity interest in Wheels Up.

Delta's voting rights with respect to its Wheels Up equity interest are capped at 29.9 %.

As a result of the transaction, we concluded that Wheels Up is a variable interest entity ("VIE").

We concluded that Wheels Up is a variable interest entity ("VIE").

A VIE requires consolidation by the entity’s primary beneficiary.

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Based on this assessment, Wheels Up is not consolidated in our financial statements.

We continue to account for our Wheels Up equity interest under the fair value option, as originally elected as part of our initial acquisition of Wheels Up shares in 2020.

During 2023, we recorded a $ 786 million mark-to-market gain on our investment in Wheels Up based on the closing price of its shares as traded on the New York Stock Exchange.

As of December 31, 2023, Wheels Up's public float was under 5 % of the total outstanding shares which contributed to significant volatility in the value of our Wheels Up equity investment since the announcement of Wheels Up's credit facility in September 2023.

The Wheels Up shares issued to Delta and the other term loan lenders were unregistered as of December 31, 2023 and are subject to a contractual transfer restriction until the first anniversary of the credit facility (September 2024).

Following the expiration of this restriction, our equity investment in Wheels Up will be subject to certain, more limited transfer restrictions.

We also account for our loan receivable at fair value, as the fair value option is applied to all of an investor's financial interests in the same entity.

None of the $ 100 million liquidity facility has been drawn as of December 31, 2023.

Our investment is subject to contractual transfer restrictions until September 2025 and thereafter will remain subject to certain, more limited transfer restrictions.

During the December 2024 quarter, Wheels Up entered into a five year Note Purchase Agreement with third parties which provides for the issuance of Revolving Equipment Notes in an aggregate principal amount not to exceed $ 332 million under a Revolving Equipment Notes Facility.

We have provided credit support for the Revolving Equipment Notes Facility which effectively guarantees the Wheels Up payment obligations.

As a result, and consistent with our fair value option election, we recorded the immaterial fair value of the guarantee in other noncurrent liabilities on our balance sheet.

Other Investments

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

Among others, this category includes our equity method investments in Virgin Atlantic and JFK IAT Member LLC.

Among others, this category includes our equity method investments in Virgin Atlantic and JFK IAT Member LLC and our fair value investment in CLEAR.

Virgin Atlantic.

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As of December 31, 2024, we have approximately $ 480 million of unrecognized equity method losses related to our 49 % interest in Virgin Atlantic.

JFK IAT Member LLC is discussed further in Note 8, "Airport Redevelopment."

In 2024, we sold in multiple transactions our equity ownership in Clear Secure, Inc.

This sale is recorded in gain/(loss) on investments, net on our income statement and cash proceeds are recorded in other, net within investing activities on our cash flows statement.

JFK IAT Member LLC.

We have an equity method investment in JFK IAT Member LLC, which owns JFK International Air Terminal LLC ("IAT"), our landlord at the New York-JFK Airport.

We have a long-term agreement with IAT to sublease space in Terminal 4 through 2043 ("Sublease") which requires us to pay certain fixed management fees.

We determined that the investment is a VIE and assessed whether we have a controlling financial interest in IAT.

Our rights under the Sublease, with respect to management of Terminal 4, are consistent with rights granted to an anchor tenant under a standard airport lease.

Accordingly, we do not consolidate this entity in our Consolidated Financial Statements.

GOODWILL AND INTANGIBLE ASSETS

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Changes in certain events and circumstances could result in impairment or a change from indefinite-lived to definite-lived.

Factors which could cause impairment include, but are not limited to (1) negative trends in our market capitalization, (2) reduced profitability resulting from lower passenger mile yields or higher input costs (primarily related to fuel and employees), (3) lower passenger demand as a result of weakened U.S.

and global economies or other factors, (4) interruption to our operations due to a prolonged employee strike, terrorist attack or other reasons, (5) changes to the regulatory environment (e.g., changes in slot access and/or availability, additional Open Skies agreements or changes to antitrust approvals), (6) competitive changes by other airlines and (7) strategic changes to our operations leading to diminished utilization of the intangible assets.

Factors which could cause impairment include, but are not limited to (1) negative trends in our market capitalization, (2) reduced profitability resulting from lower passenger mile yields or higher input costs, (3) lower passenger demand as a result of weakened U.S.

and global economies or other factors, (4) prolonged interruption to our operations, (5) changes to the regulatory environment, (6) operational or performance changes by other airlines and (7) strategic changes to our operations leading to diminished utilization of the intangible assets.

Identifiable Intangible Assets.

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Costs incurred to renew or extend the term of an intangible asset are expensed as incurred.

During the December 2023 quarter, we performed a quantitative valuation of our goodwill and indefinite-lived intangible assets as the most recent quantitative analysis was several years ago.

These quantitative impairment tests of goodwill and intangibles concluded that there was no indication of impairment as the fair values exceeded our carrying values.

During the December 2024 quarter, we performed qualitative assessments of goodwill and indefinite-lived intangible assets, including applicable factors noted above, and determined that there was no indication that the assets were impaired.

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

We previously performed quantitative assessments in the December 2023 quarter, noting no impairment of goodwill or indefinite-lived intangible assets.

Goodwill and indefinite-lived intangible assets by category

Carrying Value at Excess Fair Value at 2023 Testing Date

Carrying Value at

(in millions) December 31, 2024 December 31, 2023

Goodwill $ 9,753 $ 9,753

International routes and slots 2,583 2,583 20 % to > 100 %

Airline alliances 1,863 1,863 30 % to > 100 %

International routes and slots 2,583 2,583

Airline alliances 1,863 1,863

Delta tradename 850 850

Domestic slots 622 622 60 % to > 100 %

Domestic slots 622 622

Total $ 15,671 $ 15,671

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December 31, 2024 December 31, 2023

(in millions) Gross Carrying Value

Accumulated Amortization Gross Carrying Value Accumulated Amortization

(in millions) Gross Carrying Value Accumulated Amortization Gross Carrying Value Accumulated Amortization

Marketing agreements $ 730 $ ( 712 ) $ 730 $ ( 708 )

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Total $ 976 $ ( 919 ) $ 976 $ ( 911 )

Amortization expense was $ 9 million, $ 9 million and $ 10 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Amortization expense was $ 9 million for the years ended December 31, 2024, 2023 and 2022.

Based on our definite-lived intangible assets at December 31, 2024, we estimate that we will incur approximately $ 7 million of amortization expense annually from 2025 through 2029.

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(in millions) 2024 2023

Unsecured Payroll Support Program Loans 2030 to 2031 1.00 % $ 3,496 $ 3,496

Unsecured Payroll Support Program Loans (1)

2030 to 2031 1.00 % $ 3,496 $ 3,496

Unsecured notes 2026 to 2029 3.75 % to 7.38 % 1,575 2,590

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Senior Secured Notes 2025 7.00 % 812 838

2018 Revolving Credit Facility (2)

2026 to 2028 Undrawn — —

Other financings (2)

2025 to 2030 2.51 % to 5.00 % 66 67

Corporate Revolving Credit Facility 2026 to 2028 Undrawn — —

Other revolving credit facilities (3)

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Total long-term debt $ 13,546 $ 15,985

(1) Interest rates on the Payroll Support Program loans are 1.00 % for the first five years and the applicable SOFR plus 2.00 % in the final five years .

The applicable interest rates will begin to adjust for each loan in April 2025, January 2026 and April 2026.

(2) Due in installments.

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All variable rates are equal to SOFR (generally subject to a floor) or another index rate plus a specified margin.

Early Settlement of Outstanding Notes

During 2023, we repurchased a principal amount of $ 1.4 billion of various secured and unsecured notes and a portion of the SkyMiles Term Loan on the open market and made early principal repayments of $ 585 million on various notes secured by aircraft.

Early Settlement of Outstanding Loans and Notes

During 2024, through early principal repayments and open market repurchases, we extinguished an aggregate principal amount of $ 844 million related to a portion of the SkyMiles Term Loan and various secured and unsecured notes.

Collectively, these payments resulted in a $ 39 million loss on extinguishment of debt, which is recorded in non-operating expense in our income statement.

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As of December 31, 2024, we had approximately $ 3.1 billion undrawn and available under our revolving credit facilities.

In addition, we had $ 450 million of outstanding letters of credit as of December 31, 2023 that did not affect the availability under our revolvers.

New York Transportation Development Corporation ("NYTDC") Special Facilities Revenue Bonds, Series 2023

In the December 2023 quarter, the NYTDC issued Special Facilities Revenue Bonds ("Series 2023 Bonds") in the aggregate principal amount of $ 878 million.

We entered into loan agreements with the NYTDC to use the proceeds from the Series 2023 Bonds to finance a portion of the costs of the construction project that is currently in process at LaGuardia Airport.

The proceeds from the Series 2023 Bonds are recorded in other noncurrent assets on our balance sheets.

See Note 8, "Airport Redevelopment," for further information on our LaGuardia Airport project.

We are required to pay debt service on the Series 2023 Bonds through payments under loan agreements with NYTDC, and we have guaranteed the Series 2023 Bonds.

2018 Revolving Credit Facility

In the December 2023 quarter, we entered into an amended and restated credit agreement (the "A&R Credit Facility") which amends and restates the previous 2018 revolving credit facility.

The A&R Credit Facility was undrawn at the time we entered into it and at December 31, 2023.

The A&R Credit Facility contains a $ 1.325 billion three-year revolving facility, a $ 1.325 billion five-year revolving facility and a $ 360 million three-year standby letter of credit facility.

Up to $ 250 million of each of the three-year and the five-year facilities can also be used for the issuance of letters of credit.

The A&R Credit Facility contains an accordion feature under which the aggregate commitments can be increased up to $ 3.65 billion subject to certain conditions.

The A&R Credit Facility is secured by a first lien on collateral consistent with the existing credit agreement, which includes our Pacific route authorities and certain related assets.

We also have the option of pledging additional collateral.

The A&R Credit Facility provides for the release of the lien on the collateral if we receive and maintain an investment grade rating with stable outlook from at least two of the three rating agencies (such date on which the collateral release conditions are met, the "Collateral Release Date").

Corporate Revolving Credit Facility

During the September 2024 quarter, Delta received a second investment grade credit rating, which satisfied the collateral release conditions under the Corporate Revolving Credit Facility.

As a result, the liens on collateral, including our Pacific route authorities and certain related other assets, were released during 2024.

Additionally, the minimum collateral coverage ratio and minimum liquidity covenants were replaced by minimum fixed charge coverage ratio and minimum asset coverage ratio covenants.

Fair Value of Debt

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The fair value of debt, shown below, is principally based on reported market values, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral.

Debt is primarily classified as Level 2 within the fair value hierarchy.

Debt is primarily classified as Level 1 or Level 2 within the fair value hierarchy.

Fair value of outstanding debt

(in millions) December 31,

2023 December 31,

(in millions) December 31, 2024 December 31, 2023

Net carrying amount $ 15,347 $ 18,610

Fair value $ 15,300 $ 18,400

Delta Air Lines, Inc.

| 2023 Form 10-K 76

Notes to the Consolidated Financial Statements

Our debt agreements contain various affirmative, negative and financial covenants.

For example, our credit facilities and our SkyMiles financing agreements, contain, among other things, a minimum liquidity covenant.

For example, certain credit facilities, including our SkyMiles financing agreements, contain, among other things, a minimum liquidity covenant.

The minimum liquidity covenant requires us to maintain at least $ 2.0 billion of liquidity (defined as cash, cash equivalents, short-term investments and aggregate principal amount committed and available to be drawn under our revolving credit facilities).

Certain of our debt agreements also include collateral coverage ratios and limit our ability to (1) incur liens under certain circumstances, (2) dispose of collateral and (3) engage in mergers and consolidations or transfer all or substantially all of our assets.

On or after the Collateral Release Date, collateral and liquidity covenants in the A&R Credit Facility will be replaced to include, among other things, (1) restrictions on our ability to place liens on, or to sell or otherwise dispose of, a designated pool of assets and (2) minimum fixed charge coverage ratio and minimum asset coverage ratio covenants.

Our SkyMiles financing agreements include a debt service coverage ratio and also restrict our ability to, among other things, (1) modify the terms of the SkyMiles program, or otherwise change the policies and procedures of the SkyMiles program, in a manner that would reasonably be expected to materially impair repayment of the SkyMiles Debt, (2) sell pre-paid miles in excess of $ 550 million in the aggregate and (3) terminate or materially modify the intercompany arrangements governing the relationship between Delta and SkyMiles IP Ltd.

with respect to the SkyMiles program.

Each of these restrictions, however, is subject to certain exceptions and qualifications that are set forth in these debt agreements.

Certain of our debt agreements limit our ability to (1) incur liens under certain circumstances, (2) dispose of collateral and (3) engage in mergers and consolidations or transfer all or substantially all of our assets.

The notes secured by our non-Pacific slots, gates and routes are also subject to a collateral coverage ratio.

Each of these restrictions is subject to certain exceptions and qualifications that are set forth in these debt agreements.

We were in compliance with the covenants in our debt agreements at December 31, 2024.

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Future debt maturities

(in millions) Total Debt Amortization of

Debt (Discount)/Premium and Debt Issuance Cost, net and other

2024 $ 2,633 $ ( 49 )

(in millions) Total Debt Amortization of Debt (Discount)/Premium and Debt Issuance Cost, net and other

2025 $ 1,798 $ ( 29 )

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Total $ 15,373 $ ( 26 ) $ 15,347

Delta Air Lines, Inc.

| 2024 Form 10-K

Notes to the Consolidated Financial Statements

We lease property and equipment under finance and operating leases.

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These guarantees represent an immaterial portion of our lease liability.

Delta Air Lines, Inc.

| 2023 Form 10-K 77

Notes to the Consolidated Financial Statements

As of December 31, 2024, including aircraft operated by our regional carriers, we leased 170 aircraft, of which 55 were under finance leases and 115 were operating leases.

Our aircraft leases had remaining lease terms of five months to 12 years.

Our aircraft leases had remaining lease terms of three months to 11 years.

In addition, we have regional aircraft leases that are embedded within our capacity purchase agreements and included in the ROU asset and lease liability.

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airports, the lease rates depend on airport operating costs or use of the facilities and are reset at least annually.

Because of the variable nature of the rates, these leases are not recorded on our balance sheets as a ROU asset and lease liability.

Some airport facilities have fixed payment schedules, the most significant of which are New York-LaGuardia and New York-JFK.

For those airport leases, we have recorded a ROU asset and lease liability representing the fixed component of the lease payments.

Because of the variable nature of the rates, these leases are not recorded on our balance sheets.

Some airport facilities have fixed payment schedules, the most significant of which is New York-JFK which comprises the majority of our ground and other operating right of use asset and lease liability.

For those airport leases with fixed payment schedules, we have recorded a ROU asset and lease liability representing the fixed component of the lease payments.

See Note 8, "Airport Redevelopment," for more information on our significant airport redevelopment projects.

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We lease certain IT assets (including servers, mainframes, etc.), ground support equipment (including tugs, tractors, fuel trucks and de-icers) and various other equipment.

The remaining lease terms range from one month to six years .

The remaining lease terms range from one month to five years .

Certain leased assets are embedded within various ground and IT service agreements.

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Lease asset and liability balance sheet position by category

(in millions) Classification on the Balance Sheet 2023 2022

Operating lease assets Operating lease right-of-use assets $ 7,004 $ 7,036

(in millions) Classification on the Balance Sheets 2024 2023

Operating lease assets - Fleet (1)

Operating lease right-of-use assets $ 2,910 $ 3,420

Operating lease assets - Ground and other Operating lease right-of-use assets 3,734 3,584

Finance lease assets Property and equipment, net 825 1,338

Total lease assets $ 7,469 $ 8,342

Operating Current maturities of operating leases $ 759 $ 714

Operating - Fleet (1)

Current maturities of operating leases $ 551 $ 552

Operating - Ground and other Current maturities of operating leases 212 207

Finance Current maturities of debt and finance leases 374 358

Operating Noncurrent operating leases 6,468 6,866

Operating - Fleet (1)

Noncurrent operating leases 2,627 3,226

Operating - Ground and other Noncurrent operating leases 3,187 3,242

Finance Debt and finance leases 473 1,086

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Finance leases 3.53 % 3.12 %

(1) Includes mainline and regional aircraft leases, regional aircraft leases embedded within our capacity purchase arrangements and engine leases.

The interest portion of straight-line rent expense related to fleet operating leases was $ 165 million and $ 189 million during the years ended December 31, 2024 and 2023, respectively.

The table below presents certain information related to the lease costs for finance and operating leases.

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Long-term lease obligations $ 5,814 $ 473

As of December 31, 2023, we had additional leases that had not yet commenced of $ 151 million.

These leases will commence in 2024 with lease terms of 4 to 19 years.

AIRPORT REDEVELOPMENT

New York-JFK Airport

We are enhancing and expanding our facilities at Terminal 4 of JFK to strengthen our competitive position and offer a premium travel experience for customers in New York City.

Terminal 4 is operated by JFK International Air Terminal LLC ("IAT"), a private party, under its lease with the Port Authority of New York and New Jersey ("Port Authority").

We have a long-term agreement with IAT to sublease space in Terminal 4 through 2043 ("Sublease").

In 2021, the Port Authority approved plans to renovate and expand Terminal 4 in order to facilitate Delta's relocation from Terminal 2 and consolidation of its operations into Terminal 4.

The project is adding 10 new gates and other complementary facilities, including an additional Delta Sky Club and a new Delta premium lounge.

The project is estimated to cost approximately $ 1.6 billion and will be funded primarily with bonds issued in 2022 by the NYTDC for which our landlord, IAT, is the obligor.

The majority of project costs are being used to expand or modify Delta's leased premises.

Construction started in late 2021 and in 2023 we substantially completed a majority of Delta's portion of the project and consolidated all operations to Terminal 4.

Delta Air Lines, Inc.

| 2023 Form 10-K 80

Notes to the Consolidated Financial Statements

Equity Investment.

We have an equity method investment in JFK IAT Member LLC, which owns IAT.

The Sublease requires us to pay certain fixed management fees.

We determined the investment is a variable interest entity and assessed whether we have a controlling financial interest in IAT.

Our rights under the Sublease, with respect to management of Terminal 4, are consistent with rights granted to an anchor tenant under a standard airport lease.

Accordingly, we do not consolidate this entity in our Consolidated Financial Statements.

See Note 4, "Investments" for additional information on our equity investments.

Los Angeles International Airport ("LAX")

As part of the terminal redevelopment project at LAX, we are modernizing, upgrading, and providing post-security connection to Terminals 2 and 3.

We announced this project and executed a modified lease agreement during 2016 with the City of Los Angeles (the "City"), which owns and operates LAX.

This project includes a new centralized ticketing and arrival hall, a new security checkpoint, core infrastructure to support the City's planned airport people mover, ramp improvements and a post-security connector to the north side of the Tom Bradley International Terminal.

The project is expected to cost approximately $ 2.4 billion.

A substantial majority of the project costs are being funded through the Regional Airports Improvement Corporation ("RAIC"), a California public benefit corporation, using a revolving credit facility provided by a group of lenders.

In 2023, we substantially completed all construction for the LAX upgrade and modernization project that consolidates Terminals 2 and 3, as well as connects these terminals to the Tom Bradley International Terminal.

The project cost approximately $ 2.5 billion.

A substantial majority of the project costs were funded through the Regional Airports Improvement Corporation ("RAIC"), a California public benefit corporation, using a revolving credit facility provided by a group of lenders.

The credit facility was executed in 2017 and we have guaranteed the obligations of the RAIC under the credit facility.

During 2023, the revolving credit facility agreement was amended and the revolver capacity was reduced to $ 626 million.

Loans made under the credit facility are being repaid with the proceeds from the City’s purchase of completed project assets.

Under the lease agreement and subsequent project component approvals by the City's Board of Airport Commissioners, the City has appropriated to date approximately $ 1.8 billion to purchase completed project assets, representing the maximum allowable reimbursement by the City.

Costs incurred in excess of the $ 1.8 billion maximum will not be reimbursed by the City.

We currently expect our net project costs to be approximately $ 600 million, of which approximately $ 350 million has been reflected as investing activities and approximately $ 200 million as operating activities in our cash flows statement since the project started in 2017.

In 2020, we enhanced the project’s scope to include a more customer-friendly design of Terminal 3, an expanded Delta Sky Club and baggage system upgrades designed to increase the terminals’ operational efficiency going forward.

In 2023, we substantially completed all construction for this project.

Loans made under the credit facility are being repaid with the proceeds from the City of Los Angeles' (the "City") purchase of completed project assets.

Under the lease agreement and subsequent project component approvals by the City's Board of Airport Commissioners, the City appropriated approximately $ 1.8 billion to purchase completed project assets, representing the maximum allowable reimbursement by the City.

Costs incurred in excess of the $ 1.8 billion maximum were not reimbursed by the City.

Our net project costs were approximately $ 700 million, of which approximately $ 350 million has been reflected as investing activities and approximately $ 350 million as operating activities in our cash flows statement since the project started in 2017.

Based on our assessment of the project, we concluded that we do not control the underlying assets being constructed, and therefore, we do not have the project asset or related obligation recorded on our balance sheets, except for certain assets recorded as leasehold improvements within property and equipment, net on our balance sheets.

We have recorded approximately $ 200 million as a ROU asset on our balance sheets related to certain costs incurred in excess of RAIC funding, though we have not recognized a ROU asset and lease liability on our balance sheets for the variable lease payments in our agreement with the City.

See Note 7, "Leases" for more information on our ROU assets and lease liabilities.

New York-LaGuardia Airport

As part of the terminal redevelopment project at LaGuardia Airport, we are partnering with the Port Authority to replace Terminals C and D with a new state-of-the-art terminal facility consisting of 37 gates across four concourses connected to a central headhouse.

The completed terminal redevelopment features a new, larger Delta Sky Club, wider concourses, more gate seating and nearly double the amount of concessions space than the prior terminals.

The completed facility also offers direct access between the parking garage and terminal and improved roadways and drop-off/pick-up areas.

Construction is underway and is being phased to limit passenger inconvenience.

We have opened Concourse E, Concourse G, the headhouse (including the Delta Sky Club), the terminal roadways and portions of Concourse D and Concourse F.

Due to an acceleration effort that commenced in 2020, substantial completion is expected by the end of 2024.

Delta Air Lines, Inc.

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Notes to the Consolidated Financial Statements

In connection with the redevelopment, during 2017, we entered into an amended and restated terminal lease with the Port Authority with a term through 2050.

Pursuant to the lease agreement, as amended to date, we (1) are funding (through debt issuance and existing cash) and undertaking the design, management and construction of the terminal and certain off-premises supporting facilities, (2) are receiving a Port Authority contribution of approximately $ 500 million to facilitate construction of the terminal and other supporting infrastructure, (3) will be responsible for all operations and maintenance during the term of the lease and (4) will have preferential rights to all gates in the terminal subject to Port Authority requirements with respect to accommodation of designated carriers.

The project is expected to cost $ 4.3 billion and the total amount spent to date is approximately $ 3.7 billion.

We currently expect our net project cost to be approximately $ 3.8 billion and we bear the risks of project construction, including any potential cost over-runs.

We have recorded approximately $ 350 million as a ROU asset on our balance sheets related to certain costs incurred in excess of RAIC funding, though we have not recognized a ROU asset and lease liability on our balance sheets for the variable lease payments in our agreement with the City.

See Note 7, "Leases" for more information on our ROU assets and lease liabilities.

New York-LaGuardia Airport

In 2024, we substantially completed all construction for the replacement of Terminals C and D of the New York-LaGuardia Airport with a new state-of-the-art terminal facility.

The project cost approximately $ 4.2 billion and was funded through debt issuance, existing cash and a Port Authority contribution of approximately $ 500 million.

We entered into loan agreements to fund a portion of the construction, which are recorded on our balance sheets as debt with the proceeds reflected as restricted cash.

Using funding primarily provided by these arrangements, we spent approximately $ 300 million, $ 500 million and $ 650 million during 2024, 2023 and 2022, respectively.

Based on our assessment of the project, we concluded that we do not control the underlying assets being constructed.

Based on our assessment of the project, we concluded that we did not control the underlying assets being constructed.

Costs incurred by Delta are accounted for as leasehold improvements recorded in property and equipment, net on our balance sheets.

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These plans are generally closed to new entrants and frozen for future benefit accruals.

Our funding obligations for qualified defined benefit plans are governed by the Employee Retirement Income Security Act and any applicable legislation.

Under the Pension Protection Act of 2006, we elected alternative funding rules so that the unfunded liability for a frozen defined benefit plan may be amortized over a fixed 17-year period and is calculated using an 8.85 % discount rate until the 17-year period expires for all frozen defined benefit plans by the end of 2024.

Upon expiration, under legislation passed in 2021, any required funding would be amortized over a rolling 15-year period and calculated using a discount rate of no less than 4.75% through 2030.

We have no minimum funding requirements for these plans in 2024 and do no t plan to make voluntary contributions during 2024.

During 2023, we established a market based cash balance defined benefit pension plan for eligible pilots that is funded by company contributions in excess of IRS limits in the 401(k) plan.

Prior to 2023, these contributions were reflected in our cost associated with the defined contribution pension plans shown below.

The company funds the plan with cash contributions as benefits are earned and invests those assets.

Our funding obligations for qualified defined benefit plans are governed by the Employee Retirement Income Security Act and any additional applicable legislation.

Under current legislation, any required funding would be amortized over a rolling 15-year period and calculated using a discount rate of no less than 4.75% through 2030.

We estimate that there will be approximately $ 80 million of minimum funding requirements under these plans in 2025.

We also sponsor a market based cash balance defined benefit pension plan for eligible pilots that is funded by company contributions in excess of IRS limits in the 401(k) plan.

We fund this plan with cash contributions as benefits are earned and invest those assets.

The participants’ benefit is the sum of the contributions made on their behalf plus any positive return on the invested contributions.

In estimating the related benefit obligation and net benefit cost, the expected long-term rate of return on plan assets is used in determining the interest crediting rate.

Defined Contribution Pension Plans.

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These plans generally cover different employee groups and employer contributions vary by plan.

The costs associated with our defined contribution pension plans were approximately $ 1.2 billion, $ 1.0 billion and $ 875 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The costs associated with our defined contribution pension plans were approximately $ 1.3 billion, $ 1.2 billion and $ 1.0 billion for the years ended December 31, 2024, 2023 and 2022, respectively.

Postretirement Healthcare Plans.

We sponsor healthcare plans that provide benefits to eligible retirees and their dependents who are under age 65 .

We have generally eliminated company-paid post age 65 healthcare coverage, except for (1) subsidies available to a limited group of retirees and their dependents, (2) a group of retirees who retired prior to 1987 and (3) retiree medical accounts which provide a fixed dollar amount to eligible employees who retired under the 2012 voluntary workforce reduction programs or under the 2020 voluntary early retirement and separation programs ("voluntary programs").

We have generally eliminated company-paid post age 65 healthcare coverage, except for (1) subsidies available to a limited group of retirees and their dependents, (2) a group of retirees who retired prior to 1987 and (3) retiree medical accounts which provide a fixed dollar amount to eligible employees who retired under the 2012 voluntary workforce reduction programs or the 2020 voluntary early retirement and separation programs ("voluntary programs").

Postemployment Plans.

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Benefit Obligations, Fair Value of Plan Assets and Funded Status

Pension Benefits Other Postretirement and Postemployment Benefits

December 31, December 31,

Pension Benefits

Other Postretirement and Postemployment Benefits

(in millions) 2024 2023 2024 2023

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Interest cost 820 855 182 200

Actuarial loss/(gain) 351 ( 4,599 ) 24 ( 710 )

Actuarial (gain)/loss ( 738 ) 351 ( 50 ) 24

Benefits paid, including lump sums and annuities ( 1,259 ) ( 1,201 ) ( 497 ) ( 485 )

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Participant contributions — — 30 18

Special termination benefits — — 5 —

Benefit obligation at end of period (2)

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Fair value of plan assets at beginning of period $ 15,766 $ 15,721 $ 33 $ 71

Actual gain/(loss) on plan assets 1,142 ( 2,517 ) 3 ( 73 )

Actual gain on plan assets 1,142 1,142 ( 7 ) 3

Employer contributions 256 104 468 426

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Funded status at end of period $ 938 $ ( 145 ) $ ( 3,238 ) $ ( 3,470 )

(1) Service cost shown above relates to the market based cash balance plan.

There is no service cost associated with traditional frozen defined benefit plans.

(2) At the end of each year presented, our accumulated benefit obligations for our pension plans are equal to the benefit obligations shown above.

During 2023, net actuarial losses increased our benefit obligation primarily due to the decrease in discount rates while net actuarial gains decreased our benefit obligation primarily due to the increase in discount rates during 2022.

During 2024, net actuarial gains decreased our benefit obligation primarily due to the increase in discount rates while net actuarial losses increased our benefit obligation primarily due to the decrease in discount rates during 2023.

These gains and losses are recorded in AOCI and reflected in the table below.

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Balance Sheet Position

Pension Benefits Other Postretirement and Postemployment Benefits

December 31, December 31,

Pension Benefits

Other Postretirement and Postemployment Benefits

(in millions) 2024 2023 2024 2023

Prepaid pension assets $ 22 $ 27 $ — $ —

Other noncurrent assets $ 1,005 $ 22 $ — $ —

Current liabilities ( 9 ) ( 9 ) ( 430 ) ( 404 )

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Funded status at end of period $ 938 $ ( 145 ) $ ( 3,238 ) $ ( 3,470 )

Net actuarial (loss)/gain $ ( 6,474 ) $ ( 6,444 ) $ ( 162 ) $ ( 155 )

Net actuarial loss $ ( 5,407 ) $ ( 6,474 ) $ ( 103 ) $ ( 162 )

Prior service credit — — ( 3 ) 1

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Certain pension plans have benefit obligations in excess of plan assets.

These plans have aggregate projected benefit obligations of $ 8.6 billion and aggregate fair value of plan assets of $ 8.4 billion at December 31, 2023.

These plans have aggregate projected benefit obligations of $ 67 million and are unfunded at December 31, 2024.

Delta Air Lines, Inc.

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Net Periodic Cost/(Benefit)

Pension Benefits Other Postretirement and Postemployment Benefits

Year Ended December 31, Year Ended December 31,

Pension Benefits

Year Ended December 31,

Other Postretirement and Postemployment Benefits

Year Ended December 31,

(in millions) 2024 2023 2022 2024 2023 2022

Service cost (1)

$ 233 $ 95 $ — $ 92 $ 71 $ 70

Interest cost 820 855 611 182 200 128

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Recognized net actuarial loss 248 240 255 18 14 56

Settlements — — 2 — — —

Special termination benefits — — — 5 — —

Net periodic cost/(benefit)

$ 239 $ 130 $ ( 453 ) $ 291 $ 279 $ 232

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

Service cost listed under Pension Benefits relates solely to the new market based cash balance defined benefit pension plan discussed above.

(1) Service cost shown above relates to the market based cash balance plan.

There is no service cost associated with traditional frozen defined benefit plans.

Service cost is recorded in salaries and related costs in the income statement, while all other components are recorded within miscellaneous, net under non-operating expense.

We used the following actuarial assumptions to determine our benefit obligations and our net periodic cost/(benefit) for the periods presented:

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Active management strategies are utilized where feasible in an effort to realize investment returns in excess of market indices.

Derivatives in the plans are primarily used to manage risk and gain asset class exposure while still maintaining liquidity.

Derivatives in the plans are primarily used to manage risk and gain asset class exposure while preserving liquidity.

As part of these strategies, the plans are required to hold cash collateral associated with certain derivatives.

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979 (2) N/A 893 (2) N/A

Balanced allocation 349 (5) 0 Days

100 (5) 0 Days

Other 813 (3) 2 - 10 Days

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(4) Unfunded commitments were $ 1.3 billion for commingled funds, private equity and private equity-related instruments, $ 287 million for fixed income and fixed income-related instruments and $ 618 million for real assets at December 31, 2024.

(5) Includes funds with daily redemptions.

On an annual basis we assess the potential for adjustments to the fair value of all investments.

This primarily applies to private equity, private equity-related strategies and real assets.

Due to a lag in the availability of data for certain of these investments, we solicit valuation updates from the investment fund managers and use their information and corroborating data from public markets to determine any needed fair value adjustments.

Due to a lag in the availability of data for certain of these investments (this primarily applies to private equity, private equity-related strategies and real assets), we solicit valuation updates from the investment fund managers and use their information and corroborating data from public markets to determine any needed fair value adjustments.

Hedge Funds and Hedge Fund-Related Strategies.

These investments are primarily made through shares of limited partnerships or similar structures for which a liquid secondary market does not exist.

Delta Air Lines, Inc.

| 2024 Form 10-K

Notes to the Consolidated Financial Statements

Commingled Funds, Private Equity and Private Equity-Related Instruments.

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Private equity and private equity-related instruments are typically valued quarterly by the fund managers using valuation models where one or more of the significant inputs into the model cannot be observed and which require the development of assumptions.

Delta Air Lines, Inc.

| 2023 Form 10-K 86

Notes to the Consolidated Financial Statements

Fixed Income and Fixed Income-Related Instruments.

These investments include private fixed income instruments that are typically valued monthly or quarterly by the fund managers or third-party valuation agents using valuation models where one or more of significant inputs into the model cannot be observed and which require the development of assumptions.

These investments include real estate, energy transition, timberland, agriculture and infrastructure.

These investments include real estate, energy, timberland, agriculture and infrastructure.

The valuation of real assets requires significant judgment due to the absence of quoted market prices as well as the inherent lack of liquidity and the long-term nature of these assets.

Real assets are typically valued quarterly by the fund managers using valuation models where one or more of the significant inputs into the model cannot be observed and which require the development of assumptions .

Balanced Allocation.

The investments include commingled funds invested in common stock and fixed income instruments.

Commingled funds are valued based on quoted market prices of the underlying assets owned by the fund.

Primarily includes globally-diversified, risk-managed commingled funds consisting mainly of equity, fixed income and commodity exposures.

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In determining the amount of profit sharing, the program defines profit as pre-tax profit adjusted for profit sharing and certain other items.

For the years ended December 31, 2023 and 2022, we recorded profit sharing expense of $ 1.4 billion and $ 563 million under the program, respectively.

For the year ended December 31, 2021, we recorded a special profit sharing expense of $ 108 million, based on the adjusted pre-tax profit earned during the second half of the year, to recognize the extraordinary efforts of our employees through the pandemic.

For both the years ended December 31, 2024 and 2023, we recorded profit sharing expense of $ 1.4 billion under the program.

COMMITMENTS AND CONTINGENCIES

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Aircraft Orders

During 2023, we agreed to acquire one A330-900 with delivery expected to occur in 2025 and exercised purchase rights for 26 A220-300 aircraft with delivery expected to start in 2027.

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

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

Deliveries of these aircraft are scheduled to begin in 2026.

Also during 2024 we amended our purchase agreement with Boeing and received an updated delivery schedule for our Boeing 737-10 orders.

Contract Carrier Agreements

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Capacity Purchase Agreements.

Our regional carriers primarily operate for us under capacity purchase agreements.

Under these agreements, the regional carriers operate some or all of their aircraft using our flight designator codes, and we control the scheduling, pricing, reservations, ticketing and seat inventories of those aircraft and retain the revenues associated with those flights.

Our contractual agreements with regional carriers are primarily capacity purchase arrangements, under which we control the scheduling, pricing, reservations, ticketing and seat inventories for the regional carriers' flights operating under our "DL" designator code.

We are entitled to all ticket, cargo, mail, in-flight and ancillary revenues associated with the flights under these capacity purchase arrangements.

We pay those airlines an amount, as defined in the applicable agreement, which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates for those services.

The following table shows our minimum obligations under our existing capacity purchase agreements with third-party regional carriers, excluding contract carrier payments accounted for as leases of aircraft, which are described in Note 7, "Leases." The obligations set forth in the table contemplate minimum levels of flying by the regional carriers under the respective agreements and also reflect assumptions regarding certain costs associated with the minimum levels of flying such as the cost of fuel, labor, maintenance, insurance, catering, property tax and landing fees.

The following table shows our minimum obligations at December 31, 2024 under our existing capacity purchase agreements with third-party regional carriers, excluding contract carrier payments accounted for as leases of aircraft, which are described in Note 7, "Leases." The obligations set forth in the table contemplate minimum levels of flying by the regional carriers under the respective agreements and also reflect assumptions regarding certain costs associated with the minimum levels of flying such as the cost of fuel, labor, maintenance, insurance, catering, property tax and landing fees.

Accordingly, our actual payments under these agreements could differ materially from the minimum fixed obligations set forth in the table below.

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Total $ 7,670

Revenue Proration Agreement.

As of December 31, 2023, a portion of our contract carrier arrangement with SkyWest Airlines, Inc.

was structured as a revenue proration agreement.

This revenue proration agreement establishes a fixed dollar or percentage division of revenues for tickets sold to passengers traveling on connecting flight itineraries.

Delta Air Lines, Inc.

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Domestic airline employees represented by collective bargaining agreements by group

Employee Group Approximate Number of

Employees Represented Union Date on which Collective

Bargaining Agreement

Becomes Amendable

Employee Group Approximate Number of Employees Represented Union Date on which Collective Bargaining Agreement Becomes Amendable

Delta Pilots 17,380 ALPA December 31, 2026

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1,700 AFA March 31, 2027

Delta pilots ratified a new four -year Pilot Working Agreement effective January 1, 2023.

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

The agreement also includes a provision for a one-time payment made upon ratification in the March 2023 quarter of $ 735 million.

Additionally, we recorded adjustments to other benefit-related items of approximately $ 130 million.

These items are recorded within pilot agreement and related expenses in our income statement.

(1) We are in discussions with representatives of PAFCA regarding terms of the collective bargaining agreement that became amendable on November 1, 2024.

In addition to the domestic airline employee groups discussed above, approximately 200 refinery employees of our wholly owned subsidiary Monroe are represented by the United Steel Workers under an agreement that expires on February 28, 2026.

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Deferred Taxes

We account for deferred income taxes under the asset and liability method.

Deferred tax assets and liabilities are net by jurisdiction and are recorded as noncurrent on the balance sheets.

We have elected to recognize global intangible low tax income in the period it arises and do not recognize deferred taxes for basis differences that may reverse in future years.

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes.

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Deferred income taxes, net 2,176 908

Net deferred tax (liabilities) assets

Net deferred tax liabilities

$ 2,081 $ 665

Delta Air Lines, Inc.

| 2024 Form 10-K

Notes to the Consolidated Financial Statements

Valuation Allowance

A valuation allowance is recorded to reduce deferred tax assets when necessary.

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

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Delta Air Lines, Inc.

| 2023 Form 10-K 91

Notes to the Consolidated Financial Statements

At December 31, 2023 our net deferred tax liability balance was $ 665 million, including an $ 877 million valuation allowance primarily related to certain net realized and unrealized capital losses and certain state net operating losses.

At December 31, 2024 our net deferred tax liability balance was $ 2.1 billion, including a $ 951 million valuation allowance primarily related to certain net realized and unrealized capital losses and certain state net operating losses.

As of December 31, 2024, we had approximately $ 2.7 billion of U.S.

federal pre-tax net operating loss carryforwards which we are expecting to utilize by the end of 2025.

Approximately $ 800 million of these net operating loss carryforwards were generated prior to 2018 and will not begin to expire until 2029, while the remaining net operating loss carryforwards do not expire.

federal pre-tax net operating loss carryforwards which we are expecting to utilize during 2025.

These net operating loss carryforwards were primarily generated in 2020 and do not expire.

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

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Tax provision 74 ( 299 )

Equity investment activity — 188

Balance at December 31 $ 951 $ 877

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Treasury Stock.

We generally withhold shares of Delta common stock to cover employees' portion of required tax withholdings when employee equity awards are issued or vest.

These shares are valued at cost, which equals the market price of the common stock on the date of issuance or vesting.

We generally withhold shares of Delta common stock to cover employees' portion of required tax withholdings when employee equity awards vest.

These shares are valued at cost, which equals the market price of the common stock on the date of vesting.

The weighted average cost per share held in treasury was $ 31.06 and $ 30.37 as of December 31, 2024 and 2023, respectively.

During 2020 and 2021, in connection with the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the "CARES Act") payroll support program ("PSP") and extensions, we issued warrants to the U.S Department of the Treasury to acquire more than 11.1 million shares of Delta common stock.

The number of warrants outstanding slightly increased and the exercise price of the warrants slightly decreased since December 31, 2022 due to dividend payments during 2023.

Delta Air Lines, Inc.

| 2024 Form 10-K

Notes to the Consolidated Financial Statements

The number of warrants outstanding slightly increased and the exercise price of the warrants slightly decreased since December 31, 2023 due to adjustments resulting from dividend payments during 2024.

Key terms under each program as of December 31, 2024 are as follows:

Summary of payroll support program warrants

(in millions) Number of Warrants Exercise Price Expiration Year

(in millions, except exercise price) Number of Warrants Exercise Price Expiration Year

Payroll Support Program (PSP1) 6.9 $ 23.99 2025

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Payroll Support Program 3 (PSP3) 1.9 47.05 2026

Delta Air Lines, Inc.

| 2023 Form 10-K 92

Notes to the Consolidated Financial Statements

Government Grant Recognition.

Under the initial payroll support program under the CARES Act and PSP extensions we received support payments of grants, which included $ 4.5 billion of grants during the year ended December 31, 2021.

The grants received from PSP2 and PSP3 were recognized in government grant recognition in our income statement during 2021 over the period that the funds were intended to compensate.

Equity Compensation

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The Plan authorizes the issuance of up to 163 million shares of common stock.

As of December 31, 2023, there were 13 million shares available for future grants.

As of December 31, 2024, there were nine million shares available for future grants.

We make long-term incentive awards annually to eligible employees under the Plan.

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2024 2023 2022

Stock Awards Weighted-Average

Grant Price Restricted

Stock Awards Weighted-Average

Grant Price Restricted

Stock Awards Weighted-Average

Restricted Stock Awards Weighted-Average

Grant Price Restricted Stock Awards Weighted-Average

(in millions, except weighted avg grant price)

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We determine the fair value of stock options at the grant date using an option pricing model.

As of December 31, 2023, there were 6.2 million outstanding stock option awards with a weighted average exercise price of $ 50.42 of which 5.9 million were exercisable.

As of December 31, 2024, there were 4.8 million outstanding exercisable stock option awards with a weighted average exercise price of $ 50.41 .

Stock option activity under the Plan for the years ended December 31, 2024, 2023 and 2022 is as follows:

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Outstanding at December 31 4.8 $ 50.41 6.2 $ 50.42 6.2 $ 50.40

(1) 2023 exercise and forfeiture and 2022 forfeiture activity in the table above rounds to zero.

(1) Forfeitures in 2024, 2023 and 2022 and exercises in 2023 occurred, but round to zero in the table above.

Performance Awards.

Performance awards are dollar-denominated long-term incentive opportunities which, for grants prior to 2021, were payable in Delta stock to executive officers on the payment date and in cash to all other participants.

Beginning with the 2021 grants, performance awards are payable in cash to all participants.

Performance awards are dollar-denominated long-term incentive opportunities which are payable in cash to all participants.

Potential performance award payments range from 0 %- 200 % of a target level and are contingent upon our achieving certain financial and operational goals over a three-year performance period.

As of December 31, 2023, there were no performance awards payable in Delta stock to executive officers.

Based on the closing stock price at each respective year end and contingent on achieving the specified performance conditions, the maximum shares that could be issued were 0.7 million and 1.5 million for the years ended December 31, 2022 and 2021, respectively.

Performance-Based Restricted Stock Units.

Performance-based restricted stock units are long-term incentive opportunities that provide executive officers with the right to receive shares of Delta stock based on our achievement of certain performance conditions at the end of a three-year period.

Potential payouts range from 0 %- 300 % of a target level.

Based on the closing stock price at year end and contingent on achieving the specified performance conditions, the maximum shares that could be issued were 3.3 million and 1.3 million for the years ended December 31, 2023 and 2022, respectively.

There were no outstanding performance-based restricted stock units for the year ended December 31, 2021.

Performance Restricted Stock Units (PRSU).

Performance restricted stock units are long-term incentive opportunities that provide executive officers with the right to receive shares of Delta stock based on our achievement of certain performance conditions at the end of a three-year period.

PRSUs were first granted to executive officers in 2022.

Potential payouts range from 0 %- 300 % of a target level for the grants in 2022 and 2023 and range from 0 %- 200 % of a target level for the grants in 2024.

Based on the closing stock price at year end and contingent on achieving the specified performance conditions, the maximum shares that could be issued were 6.0 million, 3.3 million and 1.3 million for the years ended December 31, 2024, 2023 and 2022 respectively.

ACCUMULATED OTHER COMPREHENSIVE LOSS

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$ ( 5,557 ) $ 42 $ 536 $ ( 4,979 )

(1) Amounts reclassified from AOCI for pension and other benefits liabilities are recorded in pension and related (expense)/benefit in non-operating expense in the income statement.

(1) Amounts reclassified from AOCI for pension and other benefits liabilities are recorded in miscellaneous, net in non-operating expense in our income statement.

(2) Includes approximately $ 750 million of deferred income tax expense as a result of tax law changes and prior valuation allowance releases through continuing operations, that will not be recognized in net income until pension and other benefit obligations are fully extinguished.

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Notes to the Consolidated Financial Statements

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker and is used in resource allocation and performance assessments.

Our chief operating decision maker is considered to be our executive leadership team.

Our executive leadership team regularly reviews discrete information for our two operating segments, which are determined by the products and services provided:

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker ("CODM") and is used in resource allocation and performance assessments.

Our executive leadership team, the Delta Leadership Committee (“DLC”), is our CODM.

The DLC regularly reviews information for our two operating segments:

our airline segment and our refinery segment.

The DLC uses operating income to evaluate segment performance.

The DLC is involved in determining and reviewing projected operating income as part of the annual plan process.

Throughout the year, the DLC considers forecast to actual results and variances on a monthly and quarterly basis to allocate resources for the airline segment's fleet and network and to optimize the refinery segment's operations.

The DLC also considers this information in strategic decisions related to capital allocations, including investments in fleet, ground, information technology and refinery assets, route and network development and human capital.

Airline Segment

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Our flight equipment forms one fleet, which is deployed through a single route scheduling system.

When making resource allocation decisions, our chief operating decision maker evaluates flight profitability data, which considers fleet type and route economics, but gives no weight to the financial impact of the resource allocation decision on a geographic region or mainline/regional carrier basis.

When making resource allocation decisions, our CODM evaluates aggregated flight profitability data, which considers fleet type and route economics, but gives no weight to the financial impact of the resource allocation decision on a geographic region or mainline/regional carrier basis.

Our objective in making resource allocation decisions is to optimize our consolidated financial results.

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The refinery's production consists of jet fuel, as well as non-jet fuel products.

We use several counterparties to exchange the non-jet fuel products produced by the refinery for jet fuel consumed in our airline operations.

We exchange the non-jet fuel products produced by the refinery with counterparties for jet fuel consumed in our airline operations.

The gross fair value of the products exchanged under these agreements during the years ended December 31, 2024, 2023 and 2022 was $ 1.5 billion, $ 2.4 billion and $ 3.5 billion, respectively.

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Purchased RINs are carried at the lower of cost and net realizable value and are recorded in prepaid expenses and other.

During 2023, we acquired RINs assets to satisfy substantially all of our 2023 RINs obligation.

The RINs asset and obligation are retired when used to satisfy EPA requirements.

During 2023, we retired approximately $ 700 million of our 2021 and 2022 RINs assets to settle our 2021 and 2022 obligations prior to the compliance deadlines.

Delta Air Lines, Inc.

| 2023 Form 10-K 95

Notes to the Consolidated Financial Statements

Segment Reporting

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Our segments are not designed to measure operating income or loss directly related to the products and services included in each segment on a stand-alone basis.

Our income tax provision is determined on a consolidated basis and is not calculated at the segment level.

Delta Air Lines, Inc.

| 2024 Form 10-K

Notes to the Consolidated Financial Statements

Financial information by segment

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Operating revenue $ 57,001 $ 7,767 $ ( 3,125 ) (1)

Airline salaries and related costs 16,161

Aircraft fuel and related costs 10,566

Refinery cost of goods sold (2)

Depreciation and amortization 2,513 113

Other segment items (3)

Operating income (4)

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Interest expense, net 747 3 ( 3 ) 747

Other non-operating expense 590 590

Income before income taxes 4,620 35 3 4,658

Total assets, end of period 72,979 2,418 ( 25 ) 75,372

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Operating revenue $ 54,669 $ 7,572 $ ( 4,193 ) (1)

Airline salaries and related costs 14,607

Aircraft fuel and related costs 11,069

Refinery cost of goods sold (2)

Depreciation and amortization 2,341 94

Other segment items (3)

Operating income (4)

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Interest expense, net 834 17 ( 17 ) 834

Other non-operating income 921 921

Income before income taxes 5,223 368 17 5,608

Total assets, end of period 71,529 2,174 ( 59 ) 73,644

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Operating revenue $ 45,605 $ 10,706 $ ( 5,729 ) (1)

Airline salaries and related costs 11,902

Aircraft fuel and related costs 11,482

Refinery cost of goods sold (2)

Depreciation and amortization 2,107 93

Operating income/(loss) (2)

Other segment items (3)

Operating income (4)

2,884 777 3,661

Interest expense, net 1,029 12 ( 12 ) 1,029

Other non-operating expense 718 718

Income before income taxes 1,137 765 12 1,914

Total assets, end of period 69,355 3,039 ( 106 ) 72,288

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(1) See table below for detail of the intersegment operating revenue amounts.

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

(2) Refinery cost of goods sold are included within aircraft fuel and related taxes and ancillary businesses and refinery in our income statement.

(3) The nature of other segment items for the airline segment are shown on the income statement and for the refinery segment include salaries and related costs, maintenance, utilities and other expenses.

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

Delta Air Lines, Inc.

| 2024 Form 10-K

Notes to the Consolidated Financial Statements

Operating revenue intersegment sales/other

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

Delta Air Lines, Inc.

| 2023 Form 10-K 96

Notes to the Consolidated Financial Statements

EARNINGS PER SHARE

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data