Defined Benefit Pension Plans. We sponsor defined benefit pension plans for eligible employees and retirees. These plans are closed to new entrants and frozen for future benefit accruals. The Pension Protection Act of 2006 allows commercial airlines to elect alternative funding rules ("Alternative Funding Rules") for defined benefit plans that are frozen. We elected the Alternative Funding Rules under which 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. We have no minimum funding requirements in 2019, but we plan to voluntarily contribute approximately $500 million to these plans.

Defined Contribution Pension Plans. We sponsor several defined contribution plans. These plans generally cover different employee groups and employer contributions vary by plan. The costs associated with our defined contribution pension plans were $926 million, $875 million and $733 million for the years ended December 31, 2018, 2017 and 2016, 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 and (2) a group of retirees who retired prior to 1987. Benefits under these plans are funded from current assets and employee contributions. During 2018, we remeasured our postretirement obligation to reflect a curtailment of our postretirement healthcare plans.

Postemployment Plans. We provide certain other welfare benefits to eligible former or inactive employees after employment but before retirement, primarily as part of the disability and survivorship plans. Substantially all employees are eligible for benefits under these plans in the event of death and/or disability.



	Pension Benefits						Other Postretirement and Postemployment Benefits
	December 31,						December 31,
(in millions)	2018			2017			2018			2017
Benefit obligation at beginning of period	$	21,696		$	20,859		$	3,504		$	3,379
Service cost	—			—			85			87
Interest cost	781			853			126			138
Actuarial (gain) loss	(1,560		)	1,068			(142		)	183
Benefits paid, including lump sums and annuities	(1,093		)	(1,075		)	(306		)	(311		)
Participant contributions	—			—			26			28
Curtailment	—			—			(68		)	—
Settlements	(15		)	(9		)	—			—
Benefit obligation at end of period⁽¹⁾	$	19,809		$	21,696		$	3,225		$	3,504

Fair value of plan assets at beginning of period	$	14,744		$	10,301		$	866		$	784
Actual (loss) gain on plan assets	(700		)	1,966			(72		)	138
Employer contributions	523			3,561			152			254
Participant contributions	—			—			26			28
Benefits paid, including lump sums and annuities	(1,093		)	(1,075		)	(335		)	(338		)
Settlements	(15		)	(9		)	—			—
Fair value of plan assets at end of period	$	13,459		$	14,744		$	637		$	866

Funded status at end of period	$	(6,350	)	$	(6,952	)	$	(2,588	)	$	(2,638	)

During 2018, net actuarial gains decreased our benefit obligation due to the increase in discount rates, while in 2017 our obligations increased due to the actuarial losses from a decrease in discount rates. These gains and losses are recorded in AOCI and reflected in the table below.



	Pension Benefits						Other Postretirement and Postemployment Benefits
	December 31,						December 31,
(in millions)	2018			2017			2018			2017
Current liabilities	$	(27	)	$	(32	)	$	(123	)	$	(121	)
Noncurrent liabilities	(6,323		)	(6,920		)	(2,465		)	(2,517		)
Total liabilities	$	(6,350	)	$	(6,952	)	$	(2,588	)	$	(2,638	)

Net actuarial loss	$	(8,682	)	$	(8,495	)	$	(613	)	$	(651	)
Prior service credit	—			—			47			56
Total accumulated other comprehensive loss, pre-tax	$	(8,682	)	$	(8,495	)	$	(566	)	$	(595	)

Net Periodic (Benefit) Cost



	Pension Benefits									Other Postretirement and Postemployment Benefits
	Year Ended December 31,									Year Ended December 31,
(in millions)	2018			2017			2016			2018			2017			2016
Service cost	$	—		$	—		$	—		$	85		$	87		$	68
Interest cost	781			853			917			126			138			147
Expected return on plan assets	(1,318		)	(1,143		)	(902		)	(67		)	(69		)	(74		)
Amortization of prior service credit	—			—			—			(24		)	(26		)	(26		)
Recognized net actuarial loss	267			262			233			36			32			24
Settlements	4			3			3			—			—			—
Curtailment	—			—			—			(53		)	—			—
Net periodic (benefit) cost⁽¹⁾	$	(266	)	$	(25	)	$	251		$	103		$	162		$	139



	Year Ended December 31,
Net Periodic Cost⁽¹⁾	2018		2017		2016
Weighted average discount rate - pension benefit	3.69	%	4.14	%	4.57	%
Weighted average discount rate - other postretirement benefit	3.69	%	4.19	%	4.53	%
Weighted average discount rate - other postemployment benefit	3.65	%	4.14	%	4.50	%
Weighted average expected long-term rate of return on plan assets	8.97	%	8.96	%	8.94	%
Assumed healthcare cost trend rate for the next year⁽²⁾	6.75	%	7.00	%	6.50	%

Expected Long-Term Rate of Return. Our expected long-term rate of return on plan assets is based primarily on plan-specific investment studies using historical market return and volatility data. Modest excess return expectations versus some public market indices are incorporated into the return projections based on the actively managed structure of the investment programs and their records of achieving such returns historically. We also expect to receive a premium for investing in less liquid private markets. We review our rate of return on plan assets assumptions annually. Our annual investment performance for one particular year does not, by itself, significantly influence our evaluation. The investment strategy for our defined benefit pension plan assets is to earn a long-term return that meets or exceeds our annualized return target while taking an acceptable level of risk and maintaining sufficient liquidity to pay current benefits and other cash obligations of the plan. This is achieved by investing in a globally diversified mix of public and private equity, fixed income, real assets, hedge funds and other assets and instruments. Our expected long-term rate of return on assets for net periodic pension benefit cost for the year ended December 31, 2018 was 8.97%.

Healthcare Cost Trend Rate. Assumed healthcare cost trend rates have an effect on the amounts reported for the other postretirement benefit plans. A 1% change in the healthcare cost trend rate used in measuring the plan benefit obligation for these plans would have the following effects:

Life Expectancy. Changes in life expectancy may significantly change our benefit obligations and future expense. We use the Society of Actuaries ("SOA") published mortality data, other publicly available information and our own perspective of future longevity to develop our best estimate of life expectancy. The SOA publishes updated mortality tables for U.S. plans and updated improvement scales. Each year we consider updates by the SOA in setting our mortality assumptions for purposes of measuring pension and other postretirement and postemployment benefit obligations.

Benefit payments in the table below are based on the same assumptions used to measure the related benefit obligations. Actual benefit payments may vary significantly from these estimates. Benefits earned under our pension plans and certain postemployment benefit plans are expected to be paid from funded benefit plan trusts, while our other postretirement benefits are funded from current assets.

We have adopted and implemented investment policies for our defined benefit pension plans that incorporate strategic asset allocation mixes intended to best meet the plans' long-term obligations, while maintaining an appropriate level of risk and liquidity. These asset portfolios employ a diversified mix of investments, which are reviewed periodically. 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. As part of these strategies, the plans are required to hold cash collateral associated with certain derivatives. Our investment strategies target a mix of 30-50% growth-seeking assets, 25-35% income-generating assets and 30-40% risk-diversifying assets. Risk diversifying assets include hedged mandates implementing long-short, market neutral and relative value strategies that invest primarily in publicly-traded equity, fixed income, foreign currency and commodity securities and are used to improve the impact of active management on the plans.

Benefit Plan Assets. Benefit plan assets relate to our defined benefit pension plans and certain of our postemployment benefit plans. These investments are presented net of the related benefit obligation in pension, postretirement and related benefits on the balance sheets. See Note 3, "Fair Value," for a description of the levels within the fair value hierarchy and associated valuation techniques used to measure fair value. The following table shows our benefit plan assets by asset class.



	December 31, 2018						December 31, 2017						Valuation Technique
(in millions)	Level 1		Level 2		Total		Level 1		Level 2		Total		Valuation Technique
Equities and equity-related instruments	$	400	$	100	$	500	$	2,033	$	13	$	2,046	(a)
Delta common stock	675		—		675		801		—		801		(a)
Cash equivalents	312		708		1,020		735		697		1,432		(a)
Fixed income and fixed income-related instruments	233		2,157		2,390		17		3,648		3,665		(a)(b)
Benefit plan assets	$	1,620	$	2,965	$	4,585	$	3,586	$	4,358	$	7,944

Investments measured at net asset value ("NAV")⁽¹⁾					9,136						7,378
Total benefit plan assets					$	13,721					$	15,322

Equities and Equity-Related Instruments. These investments include common stock and equity-related instruments. Common stock is valued at the closing price reported on the active market on which the individual securities are traded. Equity-related instruments include investments in securities traded on exchanges, including listed futures and options, which are valued at the last reported sale prices on the last business day of the year or, if not available, the last reported bid prices. Over-the-counter securities are valued at the bid prices or the average of the bid and ask prices on the last business day of the year from published sources or, if not available, from other sources considered reliable, generally broker quotes.

Delta Common Stock. In both 2017 and 2016, we contributed $350 million of Delta common stock as a portion of the employer contribution to certain of our defined benefit pension plans. The Delta common stock investment is managed by an independent fiduciary.

Cash Equivalents. These investments primarily consist of high-quality, short-term obligations that are a part of institutional money market mutual funds that are valued using current market quotations or an appropriate substitute that reflects current market conditions.

Fixed Income and Fixed Income-Related Instruments. These investments include corporate bonds, government bonds, collateralized mortgage obligations and other asset-backed securities, and are generally valued at the bid price or the average of the bid and ask price. Prices are based on pricing models, quoted prices of securities with similar characteristics, or broker quotes. Fixed income-related instruments include investments in securities traded on exchanges, including listed futures and options, which are valued at the last reported sale prices on the last business day of the year, or if not available, the last reported bid prices. Over-the-counter securities are valued at the bid prices or the average of the bid and ask prices on the last business day of the year from published sources or, if not available, from other sources considered reliable, generally broker quotes.



	December 31, 2018				December 31, 2017
(in millions)	Fair Value		Redemption Frequency	Redemption Notice Period	Fair Value		Redemption Frequency	Redemption Notice Period
Hedge funds and hedge fund-related strategies	$	5,264	(4)	2-180 Days	$	4,768	(4)	2-120 Days
Commingled funds, private equity and private equity-related instruments⁽⁵⁾	1,591		(4)	2-30 Days	1,375		(1) (3)	10-30 Days
Fixed income and fixed income-related instruments⁽⁵⁾	769		(2)	15-90 Days	311		(2)	3-15 Days
Real assets⁽⁵⁾	807		(3)	N/A	924		(3)	N/A
Other	705		(1) (2)	2-90 Days	—		(1)	30 Days
Total investments measured at NAV	$	9,136			$	7,378

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. Investments in these strategies are typically valued monthly by third-party administrators or valuation agents with an annual audit performed by an independent third party.

Commingled Funds, Private Equity and Private Equity-Related Instruments. These investments include commingled funds invested in common stock, as well as private equity and private equity-related instruments. Commingled funds are valued based on quoted market prices of the underlying assets owned by the fund. Private equity and private equity-related strategies 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. There is an annual audit performed by an independent third party.

Fixed Income and Fixed Income-Related Instruments. These investments include commingled funds invested in debt obligations. Commingled funds are valued based on quoted market prices of the underlying assets owned by the fund. Private fixed income strategies 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. There is an annual audit performed by an independent third party.

Real Assets. 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. There is an annual audit performed by an independent third party.

Other. Primarily includes globally-diversified, risk-managed commingled funds consisting mainly of equity, fixed income and commodity exposures. Investments in these strategies are typically valued monthly by third-party administrators or valuation agents with an annual audit performed by an independent third party.

On an annual basis we assess the potential for adjustments to the fair value of all investments. Certain of our investments valued using NAV as a practical expedient have a lag in the availability of data. 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.

Our broad-based employee profit sharing program provides that, for each year in which we have an annual pre-tax profit, as defined by the terms of the program, we will pay a specified portion of that profit to employees. 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, 2018, 2017 and 2016, we recorded expenses of $1.3 billion, $1.1 billion and $1.1 billion under the profit sharing program, respectively.