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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
Or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-5424
deltacra01a01a01a02a58.jpg
DELTA AIR LINES, INC.
(Exact name of registrant as specified in its charter)
Delaware58-0218548
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
Post Office Box 20706
Atlanta, Georgia
30320-6001
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (404) 715-2600

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.0001 per shareDALNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer Non-accelerated filer 
Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No
Number of shares outstanding by each class of common stock, as of March 31, 2024
Common Stock, $0.0001 par value - 645,312,283 shares outstanding
This document is also available through our website at http://ir.delta.com/.




Table of Contents
Page



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

FORWARD-LOOKING STATEMENTS

Statements in this Form 10-Q (or otherwise made by us or on our behalf) that are not historical facts, including statements about our estimates, expectations, beliefs, intentions, projections, goals, aspirations, commitments or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations. Known material risk factors applicable to Delta are described in "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 ("Form 10-K"), other than risks that could apply to any issuer or offering. All forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report except as required by law.

Delta Air Lines, Inc. | March 2024 Form 10-Q                                 1


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of Delta Air Lines, Inc. (the Company) as of March 31, 2024, the related condensed consolidated statements of operations and comprehensive income/(loss), condensed consolidated statements of cash flows, and consolidated statements of stockholders' equity for the three-month periods ended March 31, 2024 and 2023, and the related notes (collectively referred to as the "condensed consolidated interim financial statements"). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2023, the related consolidated statements of operations, comprehensive income, cash flows, and stockholders' equity for the year then ended, and the related notes (not presented herein); and in our report dated February 12, 2024, we expressed an unqualified audit opinion on those Consolidated Financial Statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2023, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

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


/s/ Ernst & Young LLP
Atlanta, Georgia
April 10, 2024

Delta Air Lines, Inc. | March 2024 Form 10-Q                                 2

Financial Statements

DELTA AIR LINES, INC.
Consolidated Balance Sheets
(Unaudited)
(in millions, except share data)March 31,
2024
December 31,
2023
ASSETS
Current Assets:
Cash and cash equivalents$3,877 $2,741 
Short-term investments589 1,127 
Accounts receivable, net of allowance for uncollectible accounts of $16 and $17
3,748 3,130 
Fuel, expendable parts and supplies inventories, net of allowance for obsolescence of $124 and $123
1,452 1,314 
Prepaid expenses and other1,913 1,957 
Total current assets11,579 10,269 
Noncurrent Assets:
Property and equipment, net of accumulated depreciation and amortization of $22,156 and $21,707
35,915 35,486 
Operating lease right-of-use assets6,785 7,004 
Goodwill9,753 9,753 
Identifiable intangibles, net of accumulated amortization of $913 and $911
5,981 5,983 
Equity investments3,247 3,457 
Other noncurrent assets1,709 1,692 
Total noncurrent assets63,390 63,375 
Total assets$74,969 $73,644 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of debt and finance leases$2,809 $2,983 
Current maturities of operating leases742 759 
Air traffic liability10,193 7,044 
Accounts payable4,541 4,446 
Accrued salaries and related benefits3,037 4,561 
Loyalty program deferred revenue4,018 3,908 
Fuel card obligation1,100 1,100 
Other accrued liabilities2,038 1,617 
Total current liabilities28,478 26,418 
Noncurrent Liabilities:
Debt and finance leases16,555 17,071 
Pension, postretirement and related benefits3,524 3,601 
Loyalty program deferred revenue4,523 4,512 
Noncurrent operating leases6,203 6,468 
Deferred income taxes, net994 908 
Other noncurrent liabilities3,541 3,561 
Total noncurrent liabilities35,340 36,121 
Commitments and Contingencies
Stockholders' Equity:
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 657,166,677 and 654,671,194
shares issued
  
Additional paid-in capital11,688 11,641 
Retained earnings5,622 5,650 
Accumulated other comprehensive loss(5,793)(5,845)
Treasury stock, at cost, 11,854,394 and 11,224,246 shares
(366)(341)
Total stockholders' equity11,151 11,105 
Total liabilities and stockholders' equity$74,969 $73,644 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
Delta Air Lines, Inc. | March 2024 Form 10-Q                                 3

Financial Statements
DELTA AIR LINES, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss)
(Unaudited)
Three Months Ended March 31,
(in millions, except per share data)20242023
Operating Revenue:
Passenger$11,131 $10,411 
Cargo178 209 
Other2,439 2,139 
Total operating revenue13,748 12,759 
Operating Expense:
Salaries and related costs3,791 3,386 
Aircraft fuel and related taxes2,598 2,676 
Ancillary businesses and refinery1,370 1,125 
Contracted services1,024 1,010 
Landing fees and other rents748 584 
Aircraft maintenance materials and outside repairs679 585 
Depreciation and amortization615 564 
Regional carrier expense550 559 
Passenger commissions and other selling expenses550 500 
Passenger service413 416 
Aircraft rent136 132 
Profit sharing125 72 
Pilot agreement and related expenses 864 
Other535 563 
Total operating expense13,134 13,036 
Operating Income/(Loss)614 (277)
Non-Operating Expense:
Interest expense, net(205)(227)
Gain/(loss) on investments, net(227)122 
Loss on extinguishment of debt(4)(22)
Miscellaneous, net(56)(102)
Total non-operating expense, net(492)(229)
Income/(Loss) Before Income Taxes122 (506)
Income Tax (Provision)/Benefit(85)143 
Net Income/(Loss)$37 $(363)
Basic Earnings/(Loss) Per Share$0.06 $(0.57)
Diluted Earnings/(Loss) Per Share$0.06 $(0.57)
Comprehensive Income/(Loss)$89 $(316)
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Delta Air Lines, Inc. | March 2024 Form 10-Q                                 4

Financial Statements
DELTA AIR LINES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 31,
(in millions)20242023
Net Cash Provided by Operating Activities$2,408 $2,235 
Cash Flows from Investing Activities:
Property and equipment additions:
Flight equipment, including advance payments(883)(630)
Ground property and equipment, including technology(310)(370)
Purchase of short-term investments (999)
Redemption of short-term investments546 897 
Other, net10 2 
Net cash used in investing activities(637)(1,100)
Cash Flows from Financing Activities:
Payments on debt and finance lease obligations(712)(1,166)
Cash dividends(64) 
Other, net(11)(13)
Net cash used in financing activities(787)(1,179)
Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash Equivalents984 (44)
Cash, cash equivalents and restricted cash equivalents at beginning of period3,395 3,473 
Cash, cash equivalents and restricted cash equivalents at end of period$4,379 $3,429 
Non-Cash Transactions:
Right-of-use assets acquired or modified under operating leases$(34)$208 
Flight and ground equipment acquired or modified under finance leases6 25 
Operating leases converted to finance leases 30 
The following table provides a reconciliation of cash, cash equivalents and restricted cash equivalents reported within the Consolidated Balance Sheets to the total of the same such amounts shown above:
March 31,
(in millions)20242023
Current assets:
Cash and cash equivalents$3,877 $3,215 
Restricted cash included in prepaid expenses and other126 160 
Noncurrent assets:
Restricted cash included in other noncurrent assets376 54 
Total cash, cash equivalents and restricted cash equivalents$4,379 $3,429 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


Delta Air Lines, Inc. | March 2024 Form 10-Q                                 5

Financial Statements
DELTA AIR LINES, INC.
Consolidated Statements of Stockholders' Equity
(Unaudited)
Common StockAdditional
Paid-In Capital
Retained EarningsAccumulated Other Comprehensive LossTreasury Stock
(in millions, except per share data)SharesAmountSharesAmountTotal
Balance at December 31, 2023
655 $ $11,641 $5,650 $(5,845)11 $(341)$11,105 
Net income— — — 37 — — — 37 
Dividends declared ($0.10 per share)
— — — (65)— — — (65)
Other comprehensive income— — — — 52 — — 52 
Common stock issued for employee equity awards(1)
2 — 47 — — 1 (25)22 
Balance at March 31, 2024
657 $ $11,688 $5,622 $(5,793)12 $(366)$11,151 
(1)Treasury shares were withheld for payment of taxes, at a weighted average price per share of $39.83 in the March 2024 quarter.


Common StockAdditional
Paid-In Capital
Retained EarningsAccumulated Other Comprehensive LossTreasury Stock
(in millions, except per share data)SharesAmountSharesAmountTotal
Balance at December 31, 2022
652 $ $11,526 $1,170 $(5,801)11 $(313)$6,582 
Net loss— — — (363)— — — (363)
Other comprehensive income— — — — 47 — — 47 
Common stock issued for employee equity awards(1)
2 — 18 — — — (24)(6)
Balance at March 31, 2023
654 $ $11,544 $807 $(5,754)11 $(337)$6,260 
(1)Treasury shares were withheld for payment of taxes, at a weighted average price per share of $39.73 in the March 2023 quarter.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
Delta Air Lines, Inc. | March 2024 Form 10-Q                                 6

Notes to the Condensed Consolidated Financial Statements
DELTA AIR LINES, INC.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Delta Air Lines, Inc. and our consolidated subsidiaries, and have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Form 10-K for the year ended December 31, 2023.

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

Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the three months ended March 31, 2024 are not necessarily indicative of operating results for the entire year.

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


NOTE 2. REVENUE RECOGNITION

Passenger Revenue
Three Months Ended March 31,
(in millions)20242023
Ticket$9,833 $9,239 
Loyalty travel awards844 743 
Travel-related services454 429 
Passenger revenue$11,131 $10,411 

Ticket

We recognized approximately $3.9 billion in passenger revenue during both the three months ended March 31, 2024 and 2023 that had been recorded in our air traffic liability balance at the beginning of those periods.

Loyalty Travel Awards

Loyalty travel awards revenue is related to the redemption of mileage credits ("miles") for air travel. Our SkyMiles loyalty program allows customers to earn miles by flying on Delta, Delta Connection and other airlines that participate in the loyalty program. Customers can also earn miles through participating companies, such as credit card, retail, ridesharing, car rental and hotel companies, who purchase miles from us. Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. During the three months ended March 31, 2024 and 2023, total cash sales from marketing agreements related to our loyalty program were $1.8 billion and $1.7 billion, respectively, which are allocated to travel and other performance obligations.

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

Delta Air Lines, Inc. | March 2024 Form 10-Q                                 7

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

Loyalty program activity
(in millions)20242023
Balance at January 1$8,420 $7,882 
Miles earned1,021 999 
Miles redeemed for air travel(844)(743)
Miles redeemed for non-air travel and other(56)(40)
Balance at March 31
$8,541 $8,098 

Travel-Related Services

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

Other Revenue
Three Months Ended March 31,
(in millions)20242023
Refinery$1,185 $916 
Loyalty program795 726 
Ancillary businesses180 231 
Miscellaneous279 266 
Other revenue$2,439 $2,139 

Refinery. This represents refinery sales to third parties. See Note 9, "Segments," for more information on revenue recognition within our refinery segment.

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

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

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

Delta Air Lines, Inc. | March 2024 Form 10-Q                                 8

Notes to the Condensed Consolidated Financial Statements
Revenue by Geographic Region

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

Passenger revenue by geographic region
Three Months Ended March 31,
(in millions)20242023
Domestic$7,983 $7,594 
Atlantic1,305 1,244 
Latin America1,265 1,132 
Pacific578 441 
Total$11,131 $10,411 

Operating revenue by geographic region
Three Months Ended March 31,
(in millions)20242023
Domestic$10,031 $9,396 
Atlantic1,581 1,548 
Latin America1,442 1,280 
Pacific694 535 
Total$13,748 $12,759 


NOTE 3. FAIR VALUE MEASUREMENTS

Assets/(Liabilities) Measured at Fair Value on a Recurring Basis
(in millions)March 31,
2024
Level 1Level 2Level 3
Cash equivalents$2,495 $2,495 $ $ 
Restricted cash equivalents501 501   
Short-term investments
U.S. Government securities473 101 372  
Corporate obligations86  86  
Other fixed income securities30  30  
Long-term investments and related2,641 2,387 139 115 
Fuel hedge contracts(22) (22) 

(in millions)December 31,
2023
Level 1Level 2Level 3
Cash equivalents$1,545 $1,545 $ $ 
Restricted cash equivalents653 653   
Short-term investments
U.S. Government securities859 204 655  
Corporate obligations218  218  
Other fixed income securities50  50  
Long-term investments and related2,867 2,614 134 119 
Fuel hedge contracts5  5  
Delta Air Lines, Inc. | March 2024 Form 10-Q                                 9

Notes to the Condensed Consolidated Financial Statements
Cash Equivalents and Restricted Cash Equivalents. Cash equivalents generally consist of money market funds. Restricted cash equivalents generally consist of money market funds, time deposits, commercial paper and negotiable certificates of deposit. Restricted cash equivalents 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 prepaid expenses and other on our Consolidated Balance Sheet ("balance sheet"). The fair value of these cash equivalents is based on a market approach using prices generated by market transactions involving identical or comparable assets.

Short-Term Investments. 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. These investments are expected to mature in one year or less.

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

Fuel Hedge Contracts. Our derivative contracts to hedge the financial risk from changing fuel prices are related to inventory at our wholly-owned subsidiary, Monroe Energy, LLC ("Monroe"). We recognized losses of $96 million and gains of $31 million on our fuel hedge contracts in aircraft fuel and related taxes on our Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) ("income statement") for the three months ended March 31, 2024 and 2023, respectively. The losses recognized during the first three months of 2024 were composed of $27 million of mark-to-market losses and $69 million of settlement losses on contracts. Gains and losses on settled contracts are reflected within Monroe's operating results. See Note 9, "Segments," for further information on our Monroe refinery segment.


NOTE 4. INVESTMENTS

Equity investments ownership interest and carrying value
Accounting TreatmentOwnership InterestCarrying Value
(in millions)March 31, 2024December 31, 2023March 31, 2024December 31, 2023
Air France-KLMFair Value3 %3 %$82 $110 
China EasternFair Value2 %2 %116 134 
Grupo AeroméxicoEquity Method20 %20 %441 421 
Hanjin KAL
Fair Value(1)
15 %15 %439 561 
LATAMFair Value10 %10 %756 658 
Unifi AviationEquity Method49 %49 %161 162 
Wheels Up
Fair Value(2)
38 %38 %756 903 
Other investmentsVarious496 508 
Equity investments$3,247 $3,457 
(1)At March 31, 2024, we held 14.8% of the outstanding shares (including common and preferred), and 14.9% of the common shares, of Hanjin KAL.
(2)Our voting rights with respect to Wheels Up are capped at 29.9%.
Delta Air Lines, Inc. | March 2024 Form 10-Q                                 10

Notes to the Condensed Consolidated Financial Statements
NOTE 5. DEBT

Summary of outstanding debt by category
MaturityInterest Rate(s) Per Annum atMarch 31,December 31,
(in millions)DatesMarch 31, 202420242023
Unsecured Payroll Support Program Loans2030to20311.00%$3,496 $3,496 
Unsecured notes2024to20292.90%to7.38%2,575 2,590 
Financing arrangements secured by SkyMiles assets:
SkyMiles Notes(1)
2024to20284.50%and4.75%4,381 4,518 
SkyMiles Term Loan(1)(2)
2024to20279.07%1,598 1,772 
NYTDC Special Facilities Revenue Bonds(1)
2025to20454.00%to6.00%3,591 3,656 
Financing arrangements secured by aircraft:
Certificates(1)
2024to20282.00%to8.00%1,582 1,591 
Notes(1)(2)
2024to20334.00%to7.59%94 165 
Financing arrangements secured by slots, gates and/or routes:
2020 Senior Secured Notes20257.00%812 838 
2018 Revolving Credit Facility(2)
2026to2028Undrawn  
Other financings(1)(2)
2024to20302.51%to5.00%67 67 
Other revolving credit facilities(2)
2024to2026Undrawn  
Total secured and unsecured debt$18,196 $18,693 
Unamortized (discount)/premium and debt issue cost, net and other(69)(83)
Total debt$18,127 $18,610 
Less: current maturities(2,551)(2,625)
Total long-term debt$15,576 $15,985 
(1)Due in installments during the years shown above.
(2)Certain financings are comprised of variable rate debt. All variable rates are equal to SOFR (generally subject to a floor) or another index rate, plus a specified margin.

Availability Under Revolving Credit Facilities

As of March 31, 2024, we had approximately $2.9 billion undrawn and available under our revolving credit facilities.

Fair Value of Debt

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

Fair value of outstanding debt
(in millions)March 31,
2024
December 31,
2023
Net carrying amount$18,127 $18,610 
Fair value$18,000 $18,400 

Covenants

Our debt agreements contain various affirmative, negative and financial covenants. We were in compliance with the covenants in our debt agreements at March 31, 2024.


Delta Air Lines, Inc. | March 2024 Form 10-Q                                 11

Notes to the Condensed Consolidated Financial Statements
NOTE 6. EMPLOYEE BENEFIT PLANS

Employee benefit plans net periodic cost
Pension BenefitsOther Postretirement and Postemployment Benefits
(in millions)2024202320242023
Three Months Ended March 31,
Service cost$3 $ $23 $18 
Interest cost201 213 45 50 
Expected return on plan assets(263)(264)(1) 
Amortization of prior service credit  (1)(1)
Recognized net actuarial loss62 60 5 3 
Net periodic cost$3 $9 $71 $70 

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


NOTE 7. COMMITMENTS AND CONTINGENCIES

Aircraft Purchase Commitments

Our future aircraft purchase commitments totaled approximately $20.7 billion at March 31, 2024.

Aircraft purchase commitments(1)
(in millions)Total
Nine months ending December 31, 2024$2,990 
20253,970 
20264,990 
20275,020 
20282,980 
Thereafter770 
Total$20,720 
(1)The timing of these commitments is based on our contractual agreements with the aircraft manufacturers and remains uncertain due to supply chain, manufacturing and regulatory constraints.

Our future aircraft purchase commitments included the following aircraft at March 31, 2024:

Aircraft purchase commitments by fleet type
Aircraft TypePurchase Commitments
A220-30076 
A321-200neo101 
A330-900neo12 
A350-90016 
A350-100020 
B-737-10100 
Total325 

Aircraft Orders

In January 2024, we entered into a purchase agreement with Airbus for 20 A350-1000 aircraft, with an option to purchase an additional 20 widebody aircraft. Deliveries of these aircraft are scheduled to begin in 2026.
Delta Air Lines, Inc. | March 2024 Form 10-Q                                 12

Notes to the Condensed Consolidated Financial Statements
Legal Contingencies

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


NOTE 8. ACCUMULATED OTHER COMPREHENSIVE LOSS

Components of accumulated other comprehensive loss
(in millions)Pension and Other Benefit LiabilitiesOtherTax EffectTotal
Balance at January 1, 2024
$(6,681)$40 $796 $(5,845)
Reclassifications into earnings(1)
66  (14)52 
Balance at March 31, 2024
$(6,615)$40 $782 $(5,793)

Balance at January 1, 2023
$(6,624)$41 $782 $(5,801)
Reclassifications into earnings(1)
62  (15)47 
Balance at March 31, 2023
$(6,562)$41 $767 $(5,754)
(1)Amounts reclassified from accumulated other comprehensive loss for pension and other benefit liabilities are recorded in miscellaneous, net in non-operating expense in our income statement.


Delta Air Lines, Inc. | March 2024 Form 10-Q                                 13

Notes to the Condensed Consolidated Financial Statements
NOTE 9. SEGMENTS

Refinery Operations

Our refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and from jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel, as well as non-jet fuel products. We use several counterparties to exchange non-jet fuel products produced by the refinery for jet fuel consumed in our airline operations.

Segment Reporting

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

Financial information by segment
(in millions)AirlineRefineryIntersegment Sales/OtherConsolidated
Three Months Ended March 31, 2024
Operating revenue$12,563 $2,049 $(864)
(1)
$13,748 
Depreciation and amortization615 27 (27)
(2)
615 
Operating income(2)
565 49  614 
Interest expense, net205 5 (5)205 
Total assets, end of period72,875 2,123 (29)74,969 
Capital expenditures1,178 15  1,193 
Three Months Ended March 31, 2023
Operating revenue$11,843 $2,352 $(1,436)
(1)
$12,759 
Depreciation and amortization564 23 (23)
(2)
564 
Operating (loss)/income(2)
(499)222  (277)
Interest expense, net227 4 (4)227 
Total assets, end of period70,183 3,005 (54)73,134 
Capital expenditures971 29  1,000 
(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.

Operating Revenue Intersegment Sales/Other
Three Months Ended March 31,
(in millions)20242023
Sales to airline segment(1)
$(386)$(596)
Exchanged products(2)
(439)(714)
Sales of refined products
(39)(126)
Total Operating Revenue Intersegment Sales/Other$(864)$(1,436)
(1)Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price for jet fuel from the refinery by reference to the market index for the primary delivery location, which is New York Harbor.
(2)Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.


Delta Air Lines, Inc. | March 2024 Form 10-Q                                 14

Notes to the Condensed Consolidated Financial Statements
NOTE 10. EARNINGS/(LOSS) PER SHARE

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

Basic and diluted earnings/(loss) per share
Three Months Ended March 31,
(in millions, except per share data)20242023
Net income/(loss)$37 $(363)
Basic weighted average shares outstanding640 639 
Dilutive effect of share-based instruments5  
Diluted weighted average shares outstanding645 639 
Basic earnings/(loss) per share$0.06 $(0.57)
Diluted earnings/(loss) per share$0.06 $(0.57)
Delta Air Lines, Inc. | March 2024 Form 10-Q                                 15

Item 2. MD&A
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and related notes included in our 2023 Form 10-K.

March 2024 Quarter Financial Highlights

Our operating income for the March 2024 quarter improved $891 million compared to the March 2023 quarter to $614 million for the reasons discussed below.

Revenue. Compared to the March 2023 quarter, our total revenue increased $989 million, or 8%, due primarily to a 7% increase in capacity and continued strength in travel demand across all geographic regions, particularly for our premium products. Total revenue, adjusted (a non-GAAP financial measure, which excludes revenue related to refinery sales to third parties) increased in the March 2024 quarter by $721 million, or 6%, compared to the March 2023 quarter.

Operating Expense. Total operating expense in the March 2024 quarter increased $98 million, or 1%, compared to the March 2023 quarter, primarily due to higher employee costs from increased wages and profit sharing and increased costs associated with higher capacity, partially offset by the one time pilot agreement-related expenses in 2023. Total operating expense, adjusted (a non-GAAP financial measure) in the March 2024 quarter increased $627 million, or 6%, compared to the March 2023 quarter. Adjustments were primarily to exclude expenses related to refinery sales to third parties and the one time pilot agreement-related expenses in 2023.

Our total operating cost per available seat mile ("CASM") decreased 6% compared to the March 2023 quarter, primarily due to a 7% increase in capacity, as well as the one time pilot agreement-related expenses in 2023. Non-fuel unit cost ("CASM-Ex", a non-GAAP financial measure) increased 1.5%, primarily due to higher employee costs from increased wages and profit sharing.

Cash Flow. Our cash, cash equivalents, short-term investments and aggregate undrawn principal amount available under our revolving credit facilities ("liquidity") as of March 31, 2024 was $7.4 billion.

During the March 2024 quarter, operating activities generated $2.4 billion. Cash flows from operating activities benefited from the sale of tickets to managed corporate customers, including tickets for travel during and beyond the quarter, which grew 14% during the March 2024 quarter compared to the March 2023 quarter, led by large accounts, particularly in the technology, consumer services and financial services sectors. In addition, total cash sales to American Express were $1.7 billion in the March 2024 quarter, an increase of approximately 5% compared to the March 2023 quarter.

Cash flows used in investing activities during the quarter totaled $637 million as capital expenditures were partially offset by redemptions of short-term investments. These operating and investing activities yielded free cash flow (a non-GAAP financial measure) of $1.4 billion in the March 2024 quarter. Additionally, we had cash outflows of $712 million related to repayments of our debt and finance leases.

The non-GAAP financial measures referenced above for total revenue, adjusted, operating expense, adjusted, CASM-Ex and free cash flow are defined and reconciled in "Supplemental Information" below.


Delta Air Lines, Inc. | March 2024 Form 10-Q                                 16

Item 2. MD&A - Results of Operations
Results of Operations - Three Months Ended March 31, 2024 and 2023

Total Operating Revenue
Three Months Ended March 31,
Increase (Decrease)% Increase (Decrease)
(in millions)(1)
20242023
Ticket - Main cabin$5,425 $5,223 $202 %
Ticket - Premium products4,408 4,016 392 10 %
Loyalty travel awards844 743 101 14 %
Travel-related services454 429 25 %
Passenger revenue$11,131 $10,411 $720 %
Cargo178 209 (31)(15)%
Other2,439 2,139 300 14 %
Total operating revenue$13,748 $12,759 $989 %
TRASM (cents)20.98 ¢20.80 ¢0.18 ¢%
Third-party refinery sales
(1.81)(1.49)(0.32)21 %
TRASM, adjusted(2)
19.17 ¢19.30 ¢(0.13)¢(0.7)%
(1)Total amounts in the table above may not calculate exactly due to rounding.
(2)Total Revenue per available seat mile ("TRASM"), adjusted is a non-GAAP financial measure. For additional information on adjustments to TRASM, see "Supplemental Information" below.

Compared to the March 2023 quarter, total revenue increased $989 million, or 8%, due primarily to a 7% increase in capacity and continued strength in travel demand across all geographic regions, particularly for our premium products.

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

Passenger Revenue by Geographic Region
Increase (Decrease)
vs. Three Months Ended March 31, 2023
(in millions)
Three Months Ended March 31, 2024
Passenger Revenue
RPMs (Traffic)
ASMs (Capacity)
Passenger Mile YieldPRASMLoad Factor
Domestic$7,983 %%%— %%pts
Atlantic1,305 %%%(1)%%pts
Latin America1,265 12 %26 %27 %(12)%(12)%— pts
Pacific578 31 %34 %36 %(2)%(4)%(1)pt
Total$11,131 %%%(2)%— %pts

Domestic

Domestic passenger revenue increased 5% in the March 2024 quarter compared to the March 2023 quarter on a 2% increase in capacity and two point increase in load factor. We experienced strong revenue results across the domestic network, with coastal hub markets such as New York and Boston improving significantly compared to the prior year period.

International

International passenger revenue for the March 2024 quarter increased compared to the March 2023 quarter in each geographic region. Passenger unit revenue declined 3% as we continued to invest in rebuilding our Latin and Pacific networks. Strong demand for international travel, particularly to leisure destinations, enabled a one point increase in load factor on a 16% increase in capacity compared to the March 2023 quarter.

Delta Air Lines, Inc. | March 2024 Form 10-Q                                 17

Item 2. MD&A - Results of Operations
Other Revenue
Three Months Ended March 31,
Increase (Decrease)% Increase (Decrease)
(in millions)20242023
Refinery$1,185 $916 $269 29 %
Loyalty program795 726 69 10 %
Ancillary businesses180 231 (51)(22)%
Miscellaneous279 266 13 %
Other revenue$2,439 $2,139 $300 14 %

Refinery. Refinery sales to third parties increased $269 million compared to the March 2023 quarter due to higher sales volume. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales.

Loyalty Program. This relates to revenues from brand usage by third parties and other performance obligations embedded in miles sold, as well as redemption of miles for non-air travel and other awards. These revenues are mainly driven by customer spend on American Express cards and new cardholder acquisitions. Revenues from our relationship with American Express increased compared to the March 2023 quarter due to increased co-brand card spend.


Delta Air Lines, Inc. | March 2024 Form 10-Q                                 18

Item 2. MD&A - Results of Operations
Operating Expense
Three Months Ended March 31,
Increase (Decrease)% Increase (Decrease)
(in millions)20242023
Salaries and related costs$3,791 $3,386 $405 12 %
Aircraft fuel and related taxes2,598 2,676 (78)(3)%
Ancillary businesses and refinery1,370 1,125 245 22 %
Contracted services1,024 1,010 14 %
Landing fees and other rents748 584 164 28 %
Aircraft maintenance materials and outside repairs679 585 94 16 %
Depreciation and amortization615 564 51 %
Regional carrier expense550 559 (9)(2)%
Passenger commissions and other selling expenses550 500 50 10 %
Passenger service413 416 (3)(1)%
Aircraft rent136 132 %
Profit sharing125 72 53 74 %
Pilot agreement and related expenses— 864 (864)NM
Other535 563 (28)(5)%
Total operating expense$13,134 $13,036 $98 %

Salaries and Related Costs. We implemented a base pay increase for eligible employees of 5% effective April 1, 2023 and on January 1, 2024, Delta pilots received a 5% pay increase. Additionally, we had approximately 5,000 more employees as of March 31, 2024 than at March 31, 2023, principally in in-flight service, flight operations and aircraft maintenance, in order to support our operations. Each of these items contributed to the increase in salaries and related costs during the March 2024 quarter compared to the March 2023 quarter.

Aircraft Fuel and Related Taxes. Aircraft fuel and related taxes decreased $78 million compared to the March 2023 quarter primarily due to a 15% decrease in the market price of jet fuel partially offset by a 5% increase in consumption on a 7% increase in capacity. The refinery also provided a benefit of five cents per gallon compared to a benefit of 25 cents per gallon in the March 2023 quarter. We expect jet fuel prices to remain volatile.

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

Fuel expense and average price per gallon
Average Price Per Gallon
Three Months Ended March 31,
Increase (Decrease)
Three Months Ended March 31,
Increase (Decrease)
(in millions, except per gallon data)
2024202320242023
Fuel purchase cost(1)
$2,620 $2,939 $(319)$2.81 $3.31 $(0.50)
Fuel hedge impact27 (41)68 0.03 (0.05)0.08 
Refinery segment impact(49)(222)173 (0.05)(0.25)0.20 
Total fuel expense$2,598 $2,676 $(78)$2.79 $3.01 $(0.22)
(1)Market price for jet fuel at airport locations, including related taxes and transportation costs.

Ancillary Businesses and Refinery. Ancillary businesses and refinery includes expenses associated with refinery sales to third parties, aircraft maintenance services we provide to third parties and our vacation wholesale operations. Refinery sales to third parties increased $269 million compared to the March 2023 quarter due to higher sales volume. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales.

Landing Fees and Other Rents. The increase in landing fees and other rents primarily resulted from higher rates charged by airports following extensive redevelopment projects at numerous facilities and more flights compared to the March 2023 quarter that contributed to our increased capacity.



Delta Air Lines, Inc. | March 2024 Form 10-Q                                 19

Item 2. MD&A - Results of Operations
Pilot agreement and related expenses. In the March 2023 quarter, 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.


Non-Operating Results
Three Months Ended March 31,
Favorable (Unfavorable)
(in millions)20242023
Interest expense, net$(205)$(227)$22 
Gain/(loss) on investments, net(227)122 (349)
Loss on extinguishment of debt(4)(22)18 
Miscellaneous, net(56)(102)46 
Total non-operating expense, net$(492)$(229)$(263)

Interest expense, net. Interest expense, net includes interest expense and interest income. This decreased compared to the prior year primarily due to reduced interest expense resulting from our debt reduction initiatives. During 2023, we made payments of approximately $4.1 billion related to our debt and finance lease obligations and we have continued to pay down our debt during the three months ended March 31, 2024 with $712 million of payments on debt and finance lease obligations. We continue to seek opportunities to pre-pay our debt, in addition to periodic amortization and scheduled maturities.

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

Loss on extinguishment of debt. Loss on extinguishment of debt reflects the losses incurred in the early repayment of certain loans and notes.

Miscellaneous, net. Miscellaneous, net primarily includes employee benefit plans net periodic cost, our share of our equity method investments' results, charitable contributions and foreign exchange gains/(losses).


Income Taxes

We project our annual effective tax rate for 2024 will be between 23% and 25%. In certain periods, we may have adjustments to our net deferred tax liabilities as a result of changes in prior year estimates, mark-to-market adjustments on our equity investments and tax laws enacted during the period, which will impact the effective tax rate for that period.


Delta Air Lines, Inc. | March 2024 Form 10-Q                                 20

Item 2. MD&A - Refinery Segment
Refinery Segment

The refinery operated by Monroe primarily produces gasoline, diesel and jet fuel. Monroe exchanges non-jet fuel products the refinery produces with third parties for jet fuel consumed in our airline operations. The jet fuel produced and procured through exchanging gasoline and diesel fuel produced by the refinery typically provides approximately 200,000 barrels per day, or approximately 75% of our consumption, for use in our airline operations. The refinery generated lower operating income in the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily as a result of lower pricing.

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

Refinery segment financial information
Three Months Ended March 31,
Increase (Decrease)
(in millions, except per gallon data)20242023
Exchanged products $439 $714 $(275)
Sales of refined products 39 126 (87)
Sales to airline segment386 596 (210)
Third party refinery sales1,185 916 269 
Operating revenue $2,049 $2,352 $(303)
Operating income$49 $222 $(173)
Refinery segment impact on airline average price per fuel gallon $(0.05)$(0.25)$0.20 


Operating Statistics
Three Months Ended March 31,
% Increase (Decrease)
Consolidated(1)
20242023
Revenue passenger miles (in millions) ("RPM")54,207 49,687 %
Available seat miles (in millions) ("ASM")65,542 61,351 %
Passenger mile yield20.53 ¢20.95 ¢(2)%
Passenger revenue per available seat mile ("PRASM")16.98 ¢16.97 ¢— %
Total revenue per available seat mile ("TRASM")20.98 ¢20.80 ¢%
TRASM, adjusted(2)
19.17 ¢19.30 ¢(0.7)%
Cost per available seat mile ("CASM")20.04 ¢21.25 ¢(6)%
CASM-Ex(2)
14.08 ¢13.86 ¢1.5 %
Passenger load factor83  %81  %pts
Fuel gallons consumed (in millions)931 888 %
Average price per fuel gallon(3)
$2.79 $3.01 (7)%
Average price per fuel gallon, adjusted(2)(3)
$2.76 $3.06 (10)%
(1)Includes the operations of our regional carriers under capacity purchase agreements.
(2)Non-GAAP financial measures defined and reconciled to TRASM, CASM and average fuel price per gallon, respectively, in "Supplemental Information" below.
(3)Includes the impact of fuel hedge activity and refinery segment results.

Delta Air Lines, Inc. | March 2024 Form 10-Q                                 21

Item 2. MD&A - Fleet Information
Fleet Information

Our operating aircraft fleet, purchase commitments and options at March 31, 2024 are summarized in the following table.

Mainline aircraft information by fleet type
Current Fleet(1)
Commitments
Fleet TypeOwnedFinance LeaseOperating LeaseTotalAverage Age (Years)PurchaseOptions
A220-10045 — — 45 4.3
A220-30024 — — 24 1.876 
A319-10057 — — 57 22.1
A320-20060 — — 60 28.5
A321-20070 15 42 127 5.3
A321-200neo54 — — 54 1.0101 70 
A330-20011 — — 11 19.0
A330-30028 — 31 15.2
A330-900neo20 27 2.312 10 
A350-90017 — 11 28 5.316 10 
A350-1000— — — — 20 
B-717-20010 70 — 80 22.5
B-737-80073 — 77 22.5
B-737-900ER114 — 49 163 8.2
B-737-10— — — — 100 30 
B-757-20098 — — 98 26.5
B-757-30016 — — 16 21.1
B-767-300ER44 — — 44 28.0
B-767-400ER21 — — 21 23.2
Total762 91 110 963 14.9325 120 
(1)Excludes certain aircraft we own or lease that are operated by regional carriers on our behalf shown in the table below.

The table below summarizes the aircraft operated by regional carriers on our behalf at March 31, 2024.

Regional aircraft information by fleet type and carrier
Fleet Type(1)(2)
CarrierCRJ-700CRJ-900Embraer 170Embraer 175Total
Endeavor Air, Inc.(3)
120 — — 129 
SkyWest Airlines, Inc.37 — 85 130 
Republic Airways, Inc.— — 11 46 57 
Total17 157 11 131 316 
(1)We own 192 and have operating leases for three of these regional aircraft. The remainder are owned or leased by SkyWest Airlines, Inc. or Republic Airways, Inc.
(2)Excluded from the total operating count above are nine CRJ-700 and three CRJ-900 aircraft which are owned and temporarily parked as of March 31, 2024.
(3)Endeavor Air, Inc. is a wholly owned subsidiary of Delta.
Delta Air Lines, Inc. | March 2024 Form 10-Q                                 22

Item 2. MD&A - Financial Condition and Liquidity
Financial Condition and Liquidity

As of March 31, 2024, we had $7.4 billion in cash, cash equivalents, short-term investments and aggregate undrawn principal amount available under our revolving credit facilities. We expect to meet our liquidity needs for the next twelve months with cash and cash equivalents, short-term investments and cash flows from operations. We expect to meet our long-term liquidity needs with cash flows from operations and financing arrangements.

Undrawn Lines of Credit. As of March 31, 2024, we had approximately $2.9 billion undrawn and available under our revolving credit facilities.

Sources and Uses of Liquidity

Operating Activities

We generated cash flows from operations of $2.4 billion and $2.2 billion in the three months ended March 31, 2024 and 2023, respectively. We expect to continue generating positive cash flows from operations during the remainder of 2024.

Our operating cash flow is impacted by the following factors:

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

Fuel. Fuel expense represented approximately 20% and 21% of our total operating expense for the three months ended March 31, 2024 and 2023, respectively. The market price for jet fuel is volatile, which can impact the comparability of our periodic cash flows from operations. The market price for jet fuel was lower in the March quarter 2024 compared to the March quarter 2023. Fuel consumption was higher during the three months ended March 31, 2024 compared to the prior year period due to the increase in capacity. We continue to expect that fuel consumption for the full year 2024 will increase compared to 2023 aligned with capacity, partially offset by increases in the fuel efficiency of our fleet.

Profit Sharing. We paid $1.4 billion in profit sharing payments in February 2024 related to our 2023 pre-tax profit in recognition of our employees' contributions toward achieving the year's financial results. This is an increase compared to our profit sharing payment made in February 2023, where we paid $563 million in profit sharing related to our 2022 pre-tax profit.

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 eligible employees. In determining the amount of profit sharing, the program defines profit as pre-tax profit adjusted for profit sharing and certain other items. During the three months ended March 31, 2024, we accrued $125 million in profit sharing expense based on the year-to-date performance and current expectations for 2024 profit.

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. Payments are typically due to us monthly based on the volume of miles sold during the period. Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. Total cash sales to American Express were $1.7 billion in the three months ended March 31, 2024, an increase of 5% compared to the prior year period. See Note 2 of the Notes to the Condensed Consolidated Financial Statements for further information regarding the cash sales from marketing agreements.


Delta Air Lines, Inc. | March 2024 Form 10-Q                                 23

Item 2. MD&A - Financial Condition and Liquidity
Investing Activities

Short-Term Investments. During the three months ended March 31, 2024, we redeemed a net of $546 million in short-term investments. See Note 3 of the Notes to the Condensed Consolidated Financial Statements for further information on these investments.

Capital Expenditures. Our capital expenditures were $1.2 billion and $1.0 billion for the three months ended March 31, 2024 and 2023, respectively. We have committed to future aircraft purchases and have obtained, but are under no obligation to use, long-term financing commitments for a substantial portion of the purchase price of the aircraft. Our expected 2024 capital spend of approximately $5.0 billion, excluding the New York-LaGuardia airport project discussed below, will be primarily for aircraft, including deliveries and advance deposit payments, as well as fleet modifications and technology enhancements and may vary depending on financing decisions.

New York-LaGuardia Redevelopment. As part of the terminal redevelopment project at LaGuardia Airport, we are partnering with the Port Authority of New York and New Jersey to replace Terminals C and D with a new state-of-the-art terminal facility. Construction is ongoing with completion expected by the end of 2024.

Using funding primarily provided by existing financing arrangements and other sources of funding, we expect to spend approximately $400 million on this project during 2024, of which $93 million was incurred in the three months ended March 31, 2024.

Financing Activities

Debt and Finance Leases. In the three months ended March 31, 2024, we had cash outflows of $712 million related to repayments of our debt and finance lease obligations. We continue to seek opportunities to pre-pay our debt, in addition to periodic amortization and scheduled maturities.

In February 2024, Moody's credit rating agency affirmed our credit rating and upgraded its outlook for Delta to positive.

Capital Return to Shareholders. In the March 2024 quarter, the Board of Directors approved a quarterly dividend of $0.10 per share, which we paid on March 18, 2024 for total cash dividends of $64 million.

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


Critical Accounting Estimates

There have been no material changes in our Critical Accounting Estimates from the information provided in the "Critical Accounting Estimates" section of "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K.
Delta Air Lines, Inc. | March 2024 Form 10-Q                                 24

Item 2. MD&A - Supplemental Information
Supplemental Information

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

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

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

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

One-time pilot agreement expenses. In the March 2023 quarter, 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. Adjusting for these expenses allows investors to better understand and analyze our core cost performance.

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

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

Total revenue, adjusted reconciliation
Three Months Ended March 31,
(in millions)20242023
Total revenue$13,748 $12,759 
Adjusted for:
Third-party refinery sales(1,185)(916)
Total revenue, adjusted$12,563 $11,842 

Operating expense, adjusted reconciliation
Three Months Ended March 31,
(in millions)20242023
Operating expense$13,134 $13,036 
Adjusted for:
MTM adjustments and settlements on hedges(27)41 
Third-party refinery sales(1,185)(916)
One-time pilot agreement expenses— (864)
Operating expense, adjusted$11,923 $11,296 

Delta Air Lines, Inc. | March 2024 Form 10-Q                                 25

Item 2. MD&A - Supplemental Information
Fuel expense, adjusted reconciliation
Average Price Per Gallon
Three Months Ended March 31,
Three Months Ended March 31,
(in millions, except per gallon data) 2024202320242023
Total fuel expense $2,598 $2,676 $2.79 $3.01 
Adjusted for:
MTM adjustments and settlements on hedges(27)41 (0.03)0.05 
Total fuel expense, adjusted$2,571 $2,718 $2.76 $3.06 

TRASM, adjusted reconciliation
Three Months Ended March 31,
20242023
TRASM (cents)20.98 ¢20.80 ¢
Adjusted for:
Third-party refinery sales(1.81)(1.49)
TRASM, adjusted19.17 ¢19.30 ¢

CASM-Ex reconciliation
Three Months Ended March 31,
20242023
CASM (cents)20.04 ¢21.25 ¢
Adjusted for:
Aircraft fuel and related taxes(3.96)(4.36)
Third-party refinery sales(1.81)(1.49)
Profit sharing(0.19)(0.12)
One-time pilot agreement expenses— (1.41)
CASM-Ex14.08 ¢13.86 ¢

Delta Air Lines, Inc. | March 2024 Form 10-Q                                 26

Item 2. MD&A - Supplemental Information
Free Cash Flow

The following table shows a reconciliation of net cash provided by operating and used in investing activities (GAAP measures) to free cash flow (a non-GAAP financial measure). We present free cash flow because management believes this metric is helpful to investors to evaluate the company's ability to generate cash that is available for use for debt service or general corporate initiatives. Adjustments include:

Net redemptions of short-term investments. Net redemptions of short-term investments represent the net purchase and sale activity of investments and marketable securities in the period, including gains and losses. We adjust for this activity to provide investors a better understanding of the company's free cash flow generated by our operations.

Net cash flows related to certain airport construction projects and other. Cash flows related to certain airport construction projects are included in our GAAP operating activities and capital expenditures. We have adjusted for these items because management believes investors should be informed that a portion of these capital expenditures from airport construction projects are either reimbursed by a third party or funded with restricted cash specific to these projects.

Free cash flow reconciliation
Three Months Ended March 31,
(in millions)2024
Net cash provided by operating activities$2,408 
Net cash used in investing activities(637)
Adjusted for:
Net redemptions of short-term investments(546)
Net cash flows related to certain airport construction projects and other154 
Free cash flow$1,378 
Delta Air Lines, Inc. | March 2024 Form 10-Q                                 27

Item 3. Market Risk
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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


ITEM 4. CONTROLS AND PROCEDURES

Our management, including our Chief Executive Officer and Chief Financial Officer, performed an evaluation of our disclosure controls and procedures, which have been designed to permit us to effectively identify and timely disclose important information. Our management, including our Chief Executive Officer and Chief Financial Officer, concluded that the controls and procedures were effective as of March 31, 2024 to ensure that material information was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

During the three months ended March 31, 2024, we did not make any changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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


ITEM 1A. RISK FACTORS

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


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

The following table presents information with respect to purchases of common stock we made during the March 2024 quarter. The table reflects shares withheld from employees to satisfy certain tax obligations due in connection with grants of stock under the Delta Air Lines, Inc. Performance Compensation Plan (the "Plan"). The Plan provides for the withholding of shares to satisfy tax obligations. It does not specify a maximum number of shares that can be withheld for this purpose. The shares of common stock withheld to satisfy tax withholding obligations may be deemed to be "issuer purchases" of shares that are required to be disclosed pursuant to this Item.

Shares purchased / withheld from employee awards during the March 2024 quarter
PeriodTotal Number of Shares PurchasedAverage Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced PlansApproximate Dollar Value (in millions) of Shares That May
Yet be Purchased Under the
Plan
January 202456,545 $40.22 56,545 $— 
February 2024570,332 $39.77 570,332 $— 
March 20243,271 $43.73 3,271 $— 
Total630,148 630,148 


Delta Air Lines, Inc. | March 2024 Form 10-Q                                 28


ITEM 6. EXHIBITS
(a) Exhibits    
3.1(a)    Delta's Amended and Restated Certificate of Incorporation (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on April 30, 2007).*
3.1 (b)    Amendment to Amended and Restated Certificate of Incorporation (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on June 27, 2014).*
3.2    Delta's Bylaws (Filed as Exhibit 3.1 to Delta's Current Report on Form 8-K as filed on December 9, 2022).*
4.1    Description of Registrant's Securities (Filed as Exhibit 4.1 to Delta's Annual Report on Form 10-K for the year ended December 31, 2020).*
10.1    Model Award Agreement for the Delta Air Lines, Inc. 2024 Long-Term Incentive Program.
10.2(a)    Amendment No. 18, dated as of January 11, 2024, to Airbus A330-900 Aircraft and A350-900 Aircraft Purchase Agreement, dated as of November 24, 2014, between Airbus S.A.S. and Delta Air Lines, Inc.**
10.2(b)    Letter Agreements, dated as of January 11, 2024, relating to Amendment No. 18.**
15    Letter from Ernst & Young LLP regarding unaudited interim financial information.
31.1    Certification by Delta's Chief Executive Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024.
31.2    Certification by Delta's Chief Financial Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024.
32    Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code by Delta's Chief Executive Officer and Chief Financial Officer with respect to Delta's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024.
101.INS    Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCH    Inline XBRL Taxonomy Extension Schema Document
101.CAL    Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF    Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB    Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE    Inline XBRL Taxonomy Extension Presentation Linkbase Document
104    The cover page from this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL (included in Exhibit 101)
_______________
*    Incorporated by reference.
**    Portions of this exhibit have been omitted as confidential information.
Delta Air Lines, Inc. | March 2024 Form 10-Q                                 29


SIGNATURE

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

Delta Air Lines, Inc.
(Registrant)
/s/ William C. Carroll
William C. Carroll
Senior Vice President - Controller
(Principal Accounting Officer)
April 10, 2024

Delta Air Lines, Inc. | March 2024 Form 10-Q                                 30