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UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549
FORM10-K
þANNUALREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934
ForthefiscalyearendedDecember31,2015
Or
oTRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934
CommissionFileNumber001-5424
DELTAAIRLINES,INC.
(Exactnameofregistrantasspecifiedinitscharter)
Delaware 58-0218548
(Stateorotherjurisdictionofincorporationororganization) (I.R.S.EmployerIdentificationNo.)
PostOfficeBox20706
Atlanta,Georgia 30320-6001
(Addressofprincipalexecutiveoffices) (ZipCode)
Registrant'stelephonenumber,includingareacode:(404)715-2600
SecuritiesregisteredpursuanttoSection12(b)oftheAct:
Titleofeachclass
Nameofeachexchangeonwhichregistered
CommonStock,parvalue$0.0001pershare
NewYorkStockExchange
SecuritiesregisteredpursuanttoSection12(g)oftheAct:None
Indicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.YesþNoo
IndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheExchangeAct.YesoNoþ
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þNo
o
IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,everyInteractiveDataFilerequiredtobesubmitted
andposted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andpostsuchfiles).YesþNoo
IndicatebycheckmarkifdisclosureofdelinquentfilerspursuanttoItem405ofRegulationS-Kisnotcontainedherein,andwillnotbecontained,tothebestofregistrant's
knowledge,indefinitiveproxyorinformationstatementsincorporatedbyreferenceinPartIIIofthisForm10-KoranyamendmenttothisForm10-K.þ
Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,orasmallerreportingcompany.Seethedefinitionsof
“largeacceleratedfiler,”“acceleratedfiler”and“smallerreportingcompany”inRule12b-2oftheExchangeAct.(Checkone):
Largeacceleratedfiler þAcceleratedfiler oNon-acceleratedfiler oSmallerreportingcompany o
(Donotcheckifasmallerreportingcompany)
Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheExchangeAct).YesoNoþ
Theaggregatemarketvalueofthevotingandnon-votingcommonequityheldbynon-affiliatesoftheregistrantasofJune30,2015wasapproximately$32.7billion.
OnJanuary31,2016,therewereoutstanding778,508,621sharesoftheregistrant'scommonstock.
Thisdocumentisalsoavailableonourwebsiteathttp://ir.delta.com/.
DocumentsIncorporatedByReference
PartIIIofthisForm10-Kincorporatesbyreferencecertaininformationfromtheregistrant'sdefinitiveProxyStatementforitsAnnualMeetingofStockholderstobefiled
withtheSecuritiesandExchangeCommission.

Table of contents

  • Page 1
    ... of each class Name of each exchange on which registered Common Stock, par value $0.0001 per share New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of...

  • Page 2
    ... Statements PART I ITEM 1. BUSINESS General Fuel Frequent Flyer Program Other Businesses Distribution and Expanded Product Offerings Competition Regulatory Matters Employee Matters Executive Officers of the Registrant Additional Information ITEM 1A. RISK FACTORS Risk Factors Relating to Delta...

  • Page 3

  • Page 4
    ITEM 9B. OTHER INFORMATION PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE OF THE REGISTRANT ITEM 11. EXECUTIVE COMPENSATION ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS ITEM 13. CERTAIN RELATIONSHIPS AND...

  • Page 5
    ... Factors Relating to Delta" and "Risk Factors Relating to the Airline Industry" in "Item 1A. Risk Factors" of this 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...

  • Page 6
    ...global route network gives us a presence in every major domestic and international market. Our route network is centered around a system of hub, international gateway and key airports that we operate in Amsterdam, Atlanta, Boston, Detroit, London-Heathrow, Los Angeles, Minneapolis-St. Paul, New York...

  • Page 7
    ...more effectively on routes between the U.S. and China, provide more travel options for customers in both countries and make joint investments in the customer experience. SkyTeam . In addition to our marketing alliance agreements with individual foreign airlines, we are a member of the SkyTeam global...

  • Page 8
    ... and terminal assets that allow the refinery to supply jet fuel to our airline operations throughout the Northeastern U.S., including our New York hubs at LaGuardia and JFK. These companies are distinct from us, operating under their own management teams and with their own boards of managers. We own...

  • Page 9
    ... miles flown on Delta were from award travel. Other Businesses Cargo Through our global network, our cargo operations are able to connect all of the world's major freight gateways. We generate cargo revenues in domestic and international markets through the use of cargo space on regularly scheduled...

  • Page 10
    ... either directly at those airports or at the hubs of other airlines that are located in close proximity to our hubs and gateways. We also face competition in smaller to medium-sized markets from regional jet operations of other carriers. International Our international operations are subject to...

  • Page 11
    ... route authorities or otherwise affect our international operations. Bilateral agreements between the U.S. and various foreign countries served by us are subject to renegotiation from time to time. The U.S. government has negotiated "Open Skies" agreements with many countries, which allow...

  • Page 12
    ... in 2012, was required to purchase emissions allowances if the airline exceeds the number of free allowances allocated to it under the ETS. The ETS has been amended to apply only to flights within the European Economic Area from 2013 through 2016. As a result, we operate a limited number of flights...

  • Page 13
    ... We have reduced the fuel needs of our aircraft fleet through the retirement of older, less fuel efficient aircraft and replacement with newer, more fuel efficient aircraft. In addition, we have implemented fuel saving procedures in our flight and ground support operations that further reduce carbon...

  • Page 14
    ... our domestic airline employee groups that are represented by unions. Employee Group Approximate Number of Active Employees Represented Union Date on which Collective Bargaining Agreement Becomes Amendable Delta Pilots Delta Flight Superintendents (Dispatchers) Endeavor Air Pilots Endeavor Air...

  • Page 15
    ...Operations of Delta (February 2012 February 2014); Senior Vice President - Airport Customer Service of Delta (March 2008 - January 2012); President and Chief Executive Officer of Laidlaw Transit Services (2006 - 2007). Additional Information We make available free of charge on our website our Annual...

  • Page 16
    ... manage our fuel price risk through a hedging program intended to reduce the financial impact from changes in the price of jet fuel. We utilize different contract and commodity types in this program and frequently test their economic effectiveness against our financial targets. We closely monitor...

  • Page 17
    .... The margin funding requirements may require us to post margin to counterparties or may cause counterparties to post margin to us as market prices in the underlying hedged items change. If fuel prices decrease significantly from the levels existing at the time we enter into fuel hedge contracts, we...

  • Page 18
    ...under the credit facilities or other financing arrangements. Employee strikes and other labor-related disruptions may adversely affect our operations. Our business is labor intensive, utilizing large numbers of pilots, flight attendants, aircraft maintenance technicians, ground support personnel and...

  • Page 19
    ... customer service, reduce costs and increase operational effectiveness in order to compete in the current business environment. For example, we have made and continue to make significant investments in delta.com, mobile device applications, check-in kiosks and related initiatives, including security...

  • Page 20
    .... We utilize the services of third parties in a number of areas in support of our operations that are integral to our business, including third-party carriers in the Delta Connection program. While we have agreements with these providers that define expected service performance, we do not have...

  • Page 21
    ... with respect to routes, fares, schedules (both timing and frequency), services, products, customer service and frequent flyer programs. Consolidation in the airline industry, the rise of well-funded government sponsored international carriers, changes in international alliances and the creation...

  • Page 22
    ... could lead to increased delays and inefficiencies in flight operations as demand for U.S. air travel increases, having a material adverse effect on our operations. Failure to update the air traffic control system in a timely manner, and the substantial funding requirements of an updated system that...

  • Page 23
    ... of Contents ITEM 2. PROPERTIES Flight Equipment Our operating aircraft fleet, commitments and options at December 31, 2015 are summarized in the following table: Aircraft Type Owned Current Fleet (1) Capital Lease Operating Lease Total Average Age Commitments Purchase (2) Lease B-717-200...

  • Page 24
    ...debt service on special facility bonds issued to finance their construction. We also lease marketing, ticketing and reservations offices in certain locations for varying terms. Refinery Operations Our wholly-owned subsidiaries, Monroe and MIPC, own and operate the Trainer refinery and related assets...

  • Page 25
    ... Litigation In July 2015, a number of purported class action antitrust lawsuits were filed alleging that Delta, American, United and Southwest had conspired to restrain capacity. The lawsuits were filed in the wake of media reports that the U.S. Department of Justice had served civil investigative...

  • Page 26
    ... II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the New York Stock Exchange ("NYSE"). The following table sets forth for the periods indicated the highest and lowest sales price...

  • Page 27
    ... of Rule 10b5-1 under the Securities Exchange Act of 1934. In addition, the table includes shares withheld from employees to satisfy certain tax obligations due in connection with grants of stock under the Delta Air Lines, Inc. 2007 Performance Compensation Plan (the "2007 Plan"). The 2007 Plan...

  • Page 28
    ...45 $ Year Ended December 31, 2015 2014 2013 2012 2011 MTM adjustments and settlements Restructuring and other Loss on extinguishment of debt Virgin Atlantic MTM adjustments Release of tax valuation allowance and intraperiod income tax allocation Total income (loss) Consolidated Balance Sheet Data...

  • Page 29
    ...(1) 2015 2014 Year Ended December 31, 2013 2012 2011 Revenue passenger miles (in millions) Available seat miles (in millions) Passenger mile yield Passenger revenue per available seat mile Operating cost per available seat mile Passenger load factor Fuel gallons consumed (in millions) Average price...

  • Page 30
    ... priced in local currency. Operating Expense. Total operating expense decreased $5.3 billion from 2014 driven by lower fuel prices, partially offset by fuel hedge losses, higher salaries and related costs and profit sharing. During 2015, Brent crude oil averaged $52 per barrel and closed the year...

  • Page 31
    ... free cash flow is used to further strengthen the balance sheet by reducing debt levels, make incremental pension contributions and return capital to shareholders through dividends and share repurchases. Strengthened Balance Sheet A key tenet of our strategy is to operate the company with investment...

  • Page 32
    ...debt levels and investing in the business, we have been increasing our capital returns to shareholders, returning a total of $2.6 billion in 2015 through dividends and share repurchases. Since first implementing our quarterly dividend in 2013, we have increased the dividend per share by 50% annually...

  • Page 33
    ...New York, Seattle and Los Angeles. Regional carriers passenger revenue decreased 6.1% on a 4.0% reduction in capacity. During 2015, we removed thirty 50-seat regional aircraft as part of our strategy to restructure our domestic fleet. Revenues related to our international regions decreased 6.0% year...

  • Page 34
    ... Increase (Decrease) Salaries and related costs Aircraft fuel and related taxes Regional carriers expense Aircraft maintenance materials and outside repairs Contracted services Depreciation and amortization Passenger commissions and other selling expenses Landing fees and other rents Profit sharing...

  • Page 35
    ... in the price per gallon of fuel, lower capacity and reduced maintenance expenses. During 2015, we removed t hirty 50-seat regional aircraft as part of our strategy to restructure our domestic fleet. Contracted Services. The increase in contracted services expense predominantly related to costs...

  • Page 36
    ... leading year-over-year unit revenue improvement. Unit revenues of the domestic region rose 5.2% led by strong performances from our hubs in Atlanta, New York-LaGuardia and Seattle. Revenues related to our international regions increased 3.0% year-over-year primarily due to 17.7% capacity growth in...

  • Page 37
    ... Increase (Decrease) Salaries and related costs Aircraft fuel and related taxes Regional carriers expense Aircraft maintenance materials and outside repairs Contracted services Depreciation and amortization Passenger commissions and other selling expenses Landing fees and other rents Profit sharing...

  • Page 38
    ... other selling expenses increased on higher passenger revenue. Profit Sharing. The increase in profit sharing is driven by an increase in full year pre-tax income, excluding profit sharing and certain other items, compared to the prior year. Aircraft Rent. Aircraft rent increased year-over-year due...

  • Page 39
    ... increase is our proportionate share of earnings from our equity investment in Virgin Atlantic. The gain from Virgin Atlantic primarily results from year-over-year profit and improvements in MTM adjustments on fuel hedges. Income Taxes Our effective tax rate for 2015 was 36.8% . We expect our annual...

  • Page 40
    ... contracts. Our hedge contracts were in a net loss position at December 31, 2015 and 2014, resulting in $119 million and $925 million, respectively, of margin postings to counterparties. Timing of SkyMiles Sales. In December 2011, we amended our American Express agreements and agreed to sell...

  • Page 41
    ... results, the program will pay 20% of the year-over-year increase in pre-tax profit to eligible employees. The profit sharing program for pilots remains unchanged and will continue in 2016 under its terms. Investing Activities Capital Expenditures. Our capital expenditures were $2.9 billion in 2015...

  • Page 42
    ...2013, our Board of Directors has implemented three programs to return capital to shareholders through quarterly dividends and share repurchases. Since first implementing our quarterly dividend in 2013, we have increased the dividend per share by 50% annually, and paid $712 million in total dividends...

  • Page 43
    ... Interest payments Capital lease obligations (see Note 7) Principal amount Interest payments Operating lease payments (see Note 7) Aircraft purchase commitments (see Note 10) Contract carrier obligations (see Note 10) Employee benefit obligations (see Note 9) Other obligations Total $ 148...

  • Page 44
    ... agencies. We sell mileage credits to non-airline businesses, customers and other airlines. Effective January 1, 2015, the SkyMiles program was modified from a model in which customers earn redeemable mileage credits based on distance traveled to a model based on ticket price. This award change...

  • Page 45
    ... revenue balance associated with the SkyMiles Program was $3.9 billion . A hypothetical 1% change in the number of outstanding miles estimated to be redeemed would result in a $29 million impact on our deferred revenue liability at December 31, 2015 . Goodwill and Indefinite-Lived Intangible Assets...

  • Page 46
    ... to sell. To determine whether impairments exist for aircraft used in operations, we group assets at the fleet-type level (the lowest level for which there are identifiable cash flows) and then estimate future cash flows based on projections of capacity, passenger mile yield, fuel costs, labor costs...

  • Page 47
    ... three years has varied from the rate selected on our measurement date, ranging from 4.10% to 4.99% between 2013 and 2015. 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...

  • Page 48
    ... standard effective January 1, 2016. We are currently assessing how the adoption of this standard will impact our Consolidated Financial Statements as our pension plan has a significant number of investments measured at net asset value. Balance Sheet Classification of Deferred Taxes In November 2015...

  • Page 49
    ... in accumulated other comprehensive income/(loss) ("AOCI") related to equity investments would be reclassified to non-operating expense/income. As of December 31, 2015, a net unrealized loss of $66 million related to these investments was recorded in AOCI on our Consolidated Balance Sheet. 45

  • Page 50
    ... . We record our proportionate share of earnings from our equity investment in Virgin Atlantic in other expense. We adjust for Virgin Atlantic's MTM adjustments to allow investors to better understand and analyze our core financial performance in the periods shown. Year Ended December 31, 2015 2014...

  • Page 51
    ... of a seat mile, we adjust for the costs related to these sales to provide a more meaningful comparison of the costs of our airline operations to the rest of the airline industry. Year Ended December 31, 2015 2014 • • • CASM Adjusted for: Aircraft fuel and related taxes Profit sharing...

  • Page 52
    ... 31, 2009 Debt and capital lease obligations Plus: unamortized discount, net and debt issuance costs Adjusted debt and capital lease obligations Plus: 7x last twelve months' aircraft rent Adjusted total debt Less: cash, cash equivalents and short-term investments Less: hedge margin (receivable...

  • Page 53
    ... total number of miles flown during that period. CASM - (Operating) Cost per Available Seat Mile. The amount of operating cost incurred per ASM during a reporting period. CASM-Ex - The amount of operating cost incurred per ASM during a reporting period, adjusted for aircraft fuel and related taxes...

  • Page 54
    ... ABOUT MARKET RISK We have market risk exposure related to aircraft fuel prices, interest rates and foreign currency exchange rates. Market risk is the potential negative impact of adverse changes in these prices or rates on our Consolidated Financial Statements. In an effort to manage our...

  • Page 55
    ... and Canadian dollar. To manage exchange rate risk, we execute both our international revenue and expense transactions in the same foreign currency to the extent practicable. From time to time, we may also enter into foreign currency option and forward contracts. At December 31, 2015 , we had open...

  • Page 56
    ...of Significant Accounting Policies Note 2 - Fair Value Measurements Note 3 - Investments Note 4 - Derivatives and Risk Management Note 5 - Intangible Assets Note 6 - Long-Term Debt Note 7 - Lease Obligations Note 8 - American Express Relationship Note 9 - Employee Benefit Plans Note 10 - Commitments...

  • Page 57
    ... the Board of Directors and Stockholders of Delta Air Lines, Inc. We have audited the accompanying consolidated balance sheets of Delta Air Lines, Inc. (the Company) as of December 31, 2015 and 2014 , and the related consolidated statements of operations, comprehensive income (loss), cash flows, and...

  • Page 58
    ...DELTA AIR LINES, INC. Consolidated Balance Sheets (in millions, except share data) ASSETS 2015 December 31, 1,972 $ 1,465 2,020 119 379 318 1,987 796 9,056 2014 Current Assets: Cash and cash equivalents Short-term investments Accounts receivable, net of an allowance...

  • Page 59
    Total liabilities and stockholders' equity $ The accompanying notes are an integral part of these Consolidated Financial Statements. 53,134 $ 54,005 54

  • Page 60
    ...: Salaries and related costs Aircraft fuel and related taxes Regional carriers expense Aircraft maintenance materials and outside repairs Contracted services Depreciation and amortization Passenger commissions and other selling expenses Landing fees and other rents Profit sharing Passenger service...

  • Page 61
    ... Income (Loss) (in millions) 2015 Year Ended December 31, $ 2014 659 $ 2013 Net Income Other comprehensive income (loss): Net (loss) gain on foreign currency and interest rate derivatives Net change in pension and other benefits Net (loss) gain on investments Total Other...

  • Page 62
    ...payments greater than expense Restructuring and other Extinguishment of debt Equity investment (earnings) loss SkyMiles used pursuant to advance purchase under American Express Agreements Changes in certain assets and liabilities: Receivables Restricted cash and cash equivalents Fuel inventory Hedge...

  • Page 63
    Flight equipment under capital leases Build-to-suit leased facilities American Express advance purchase of restricted SkyMiles $ 111 $ 5 - 28 $ 7 - 67 114 285 The accompanying notes are an integral part of these Consolidated Financial Statements. 57

  • Page 64
    ... payment of taxes, $14.97 (1) per share) Stock options exercised Stock purchased and retired Balance at December 31, 2013 Net income Dividends declared Other comprehensive loss Shares of common stock issued and compensation expense associated with equity awards (Treasury shares withheld for payment...

  • Page 65
    ..., common use of airport gates and ticket counters, ticket office co-location and other marketing agreements. We have received antitrust immunity for certain marketing arrangements, which enables us to offer a more integrated route network and develop common sales, marketing and discount programs for...

  • Page 66
    ... from credit card companies from the sale of passenger airline tickets, customers of our aircraft maintenance and cargo transportation services and other companies for the purchase of mileage credits under our frequent flyer program (the "SkyMiles Program"). We provide an allowance for uncollectible...

  • Page 67
    ...Risk Classification of Gains and Losses Fuel hedge contracts Interest rate contracts Foreign currency exchange contracts Increases in jet fuel prices Increases in interest rates Fluctuations in foreign currency exchange rates Aircraft fuel and related taxes Interest expense, net Passenger revenue...

  • Page 68
    .... 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. Frequent Flyer Program Our SkyMiles Program offers incentives to travel on Delta. This program allows customers to earn mileage credits by...

  • Page 69
    ... Program participants and allow American Express to market using our customer database. Cardholders earn mileage credits for making purchases using co-branded cards, may check their first bag for free, are granted discounted access to Delta Sky Club lounges and receive other benefits while traveling...

  • Page 70
    ... of (1) the non-travel components of the sale of mileage credits discussed above, (2) baggage fee revenue, (3) other miscellaneous service revenue, including ticket change fees, (4) revenue from ancillary businesses, such as the aircraft maintenance and repair and staffing services we provide to...

  • Page 71
    ... whether impairments exist for aircraft used in operations, we group assets at the fleet-type level (the lowest level for which there are identifiable cash flows) and then estimate future cash flows based on projections of capacity, passenger mile yield, fuel costs, labor costs and other relevant...

  • Page 72
    ... pay per flight hour to the service provider in exchange for maintenance and repairs under a predefined maintenance program. Modifications that enhance the operating performance or extend the useful lives of airframes or engines are capitalized and amortized over the remaining estimated useful life...

  • Page 73
    ... investments U.S. government and agency securities Asset- and mortgage-backed securities Corporate obligations Other fixed income securities Restricted cash equivalents and investments Long-term investments Hedge derivatives, net Fuel hedge contracts Interest rate contract Foreign currency exchange...

  • Page 74
    ... maturity dates, underlying commodities and strike prices of the option contracts. Swap contracts are valued under an income approach using a discounted cash flow model based on data either readily observable or provided by counterparties who regularly trade in public markets. Discount rates used in...

  • Page 75
    ... investment for Delta, which operates as an extension of our global network. We have the intent and ability to hold our investment in China Eastern for a period of time sufficient to allow for the recovery of its market value. Equity Method Investment Virgin Atlantic . In June 2013, we purchased...

  • Page 76
    ... the investment in Virgin Atlantic to (1) our portion of their equity, (2) adjustments in the fair market value of assets and liabilities and (3) implied goodwill. NOTE 4 . DERIVATIVES AND RISK MANAGEMENT Changes in aircraft fuel prices, interest rates and foreign currency exchange rates impact...

  • Page 77
    ... rate risk, we execute both our international revenue and expense transactions in the same foreign currency to the extent practicable. From time to time, we may also enter into foreign currency option and forward contracts. These foreign currency exchange contracts are designated as cash flow hedges...

  • Page 78
    ...December 31, 2015 , we have recorded $75 million of net gains on cash flow hedge contracts in AOCI, which are scheduled to settle and be reclassified into earnings within the next 12 months. Credit Risk To manage credit risk associated with our aircraft fuel price, interest rate and foreign currency...

  • Page 79
    .... During the December 2015 quarter, we acquired six London-Heathrow slot pairs for $276 million we previously leased from Air France-KLM. Domestic Slots. Our domestic slots relate to our slots at New York-LaGuardia and Washington-Reagan National airports. Changes to our operations could result in an...

  • Page 80
    ... of the outstanding loans under our existing Senior Secured Credit Facilities ("2011 Credit Facilities"), in the September 2015 quarter, we issued new debt consisting of the new Senior Secured Credit Facilities ("2015 Credit Facilities"), described below, and the 2015-1 pass through certificates...

  • Page 81
    ... under the 2015 Credit Facilities are secured by liens on certain of our and the Guarantors' assets, including accounts receivable, aircraft, spare engines, non-Pacific international routes, domestic slots and certain investment property. These assets also secure $187 million of certain fuel hedging...

  • Page 82
    ... lease aircraft, airport terminals, maintenance facilities, ticket offices and other property and equipment from third parties. Rental expense for operating leases, which is recorded on a straight-line basis over the life of the lease term, totaled $1.2 billion for the years ended December 31, 2015...

  • Page 83
    ..., in 2010, the Port Authority issued approximately $800 million principal amount of special project bonds to fund the majority of the project. We managed the project and bore the construction risk, including cost overruns. We recorded an asset for project costs (e.g., design, permitting, labor and...

  • Page 84
    ... Program participants and allow American Express to market using our customer database. Cardholders earn mileage credits for making purchases using co-branded cards, may check their first bag for free, are granted access to Delta Sky Club lounges and receive other benefits while traveling on Delta...

  • Page 85
    ... of plan participants. Balance Sheet Position (in millions) 2015 Pension Benefits December 31, 2014 (28 Other Postretirement and Postemployment Benefits December 31, 2015 2014 Current liabilities Noncurrent liabilities Total liabilities Net actuarial loss Prior service credit Total...

  • Page 86
    ...844 $ $ $ 2015 Other Postretirement and Postemployment Benefits Year Ended December 31, 2014 2013 Service cost Interest cost Expected return on plan assets Amortization of prior service credit Recognized net actuarial loss Settlements Net periodic cost Defined contribution plan costs Total cost...

  • Page 87
    .... 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...

  • Page 88
    ...of shares outstanding, which is based on quoted market prices of the underlying assets owned by the fund. 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...

  • Page 89
    ... 2015 quarter, we announced certain changes to employee compensation. Beginning with 2016 pre-tax profit (to be paid out in 2017), the profit sharing formula will be adjusted to pay 10% of annual pre-tax profit (as defined by the terms of the program) and, if we exceed our prior-year results...

  • Page 90
    ... the scheduling, pricing, reservations, ticketing and seat inventories of those aircraft and retain the revenues associated with those flights. 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...

  • Page 91
    ... adverse effect on our Consolidated Financial Statements. Credit Card Processing Agreements Our VISA/MasterCard and American Express credit card processing agreements provide that no cash reserve ("Reserve") is required, and no withholding of payment related to receivables collected will occur...

  • Page 92
    ... following table shows our domestic airline employee groups that are represented by unions. Approximate Number of Active Employees Represented Date on which Collective Bargaining Agreement Becomes Amendable Employee Group Union Delta Pilots Delta Flight Superintendents (Dispatchers) Endeavor Air...

  • Page 93
    ... $ Net operating loss carryforwards Pension, postretirement and other benefits Fuel derivatives MTM adjustments AMT credit carryforward Deferred revenue Other Valuation allowance Total deferred tax assets Deferred tax liabilities: 12,456 $ Depreciation Intangible assets Other Total deferred tax...

  • Page 94
    ... valuation allowances related to net operating losses and capital loss carryovers in each of those years. As a result, at December 31, 2014 and 2015, we retained valuation allowances of $46 million and $56 million , respectively, primarily related to state net operating losses, state credits and...

  • Page 95
    ...equal to the closing price of Delta common stock on the grant date and generally have a 10-year term. We determine the fair value of stock options at the grant date using an option pricing model. As of December 31, 2015 , there were 5.3 million outstanding stock option awards with a weighted average...

  • Page 96
    ...is managed as a single business unit that provides scheduled air transportation for passengers and cargo throughout the U.S. and around the world and other ancillary airline services. This allows us to benefit from an integrated revenue pricing and route network. Our flight equipment forms one fleet...

  • Page 97
    ...Operating revenue: Sales to airline segment Exchanged products Sales of refined products to third parties Operating income (loss) (4) Interest expense, net Depreciation and amortization Total assets, end of period Capital expenditures (1) Represents transfers, valued on a market price...

  • Page 98
    ... of our 50-seat regional fleet with more efficient and customer preferred CRJ-900 and B-717-200 aircraft and replacing older, less cost effective B-757-200 aircraft with B-737-900ER aircraft. The restructuring charges recorded during 2015 include remaining lease payments and lease return costs for...

  • Page 99
    ...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 awards, including stock options and restricted stock awards...

  • Page 100
    ... revenue Operating income (loss) Net income (loss) Basic earnings (loss) per share Diluted earnings (loss) per share Special Items (in millions) 0.25 $ 0.25 $ Three Months Ended, March 31 June 30 September 30 December 31 2015 $ (10) 13 $ $ 589 $ (25) 31 720 $ - (13) (99) $ 91...

  • Page 101
    ... us to record, process, summarize and report, within time periods specified by the SEC's rules and forms, information required to be disclosed. Our management, including our Chief Executive Officer and Chief Financial Officer, concluded that the controls and procedures were effective as of December...

  • Page 102
    ...standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Delta Air Lines, Inc. as of December 31, 2015 and 2014 , and the related consolidated statements of operations, comprehensive income (loss), cash flows and stockholders...

  • Page 103
    ... 31, 2015 . (2) Includes performance share awards, which do not have exercise prices. The weighted average exercise price of options is $15.05. (3) Reflects shares remaining available for issuance under Delta's 2007 Performance Compensation Plan. If any shares of our common stock are covered...

  • Page 104
    ... item that are included in this Form 10-K: Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets- December 31, 2015 and 2014 Consolidated Statements of Operations for the years ended December 31, 2015 , 2014 and 2013 Consolidated Statements of Comprehensive Income (Loss...

  • Page 105
    ...15(d) 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, on the 5th day of February 2016 DELTA AIR LINES, INC. By: 99 /s/ Richard H. Anderson Richard H. Anderson Chief Executive Officer

  • Page 106
    ...) Executive Vice President and Chief Financial Officer (Principal Financial Officer) Vice President and Chief Accounting Officer (Principal Accounting Officer) President and Director Director Director Director Chairman of the Board Director Director Director Director Director Director...

  • Page 107
    ...Annual Report on Form 10-K for the year ended December 31, 2012).* Transaction Framework Agreement among Delta, Delta Master Executive Council, Northwest Master Executive Council and Air Line Pilots Association, International dated as of June 26, 2008 (Filed as Exhibit 10 to Delta's Quarterly Report...

  • Page 108
    ...31, 2015).* 10.10(d) Form of Delta 2007 Performance Compensation Plan Award Agreement for Officers (Filed as Exhibit 10.1 to Delta's Current Report on Form 8-K filed on April 30, 2007).* 10.11(a) Delta Air Lines, Inc. Officer and Director Severance Plan, as amended and restated as of January 2, 2009...

  • Page 109
    ... Agreement, dated February 2, 2012 between Delta Air Lines, Inc. and Richard B. Hirst (Filed as Exhibit 10.26 to Delta's Annual Report on Form 10-K for the year ended December 31, 2011).* Terms of 2014 Restricted Stock Awards for Non-Employee Directors (Filed as Exhibit 10.1 to Delta's Quarterly...

  • Page 110
    ....DEF 101.LAB Statement regarding computation of ratio of earnings to fixed charges for each fiscal year in the five-year period ended December 31, 2015. Subsidiaries of the Registrant. Consent of Ernst & Young LLP. Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. Rule 13a-14(a)/15d...

  • Page 111
    .... Confidential portions of this document have been redacted and have been separately filed with the Commission. SUPPLEMENTAL AGREEMENT NO. 17 to PURCHASE AGREEMENT NUMBER 2022 between THE BOEING COMPANY and DELTA AIR LINES, INC. Relating to Boeing Model 737NG Aircraft P.A. 2022 SA-17 Page 1

  • Page 112
    ... as of December 16, 2015 amends Purchase Agreement No. 2022 dated as of October 21, 1997 ( Purchase Agreement ) between The Boeing Company ( Boeing ) and Delta Air Lines, Inc. ( Customer ) relating to the purchase and sale of Model 737NG aircraft. The Purchase Agreement incorporates the terms and...

  • Page 113
    ... the configuration of the Incremental Aircraft. As a matter of record, Letter Agreement 6-1162-RLL-2234R8 entitled " Special Matters " was revised and superseded by Letter Agreement 6-1162-RLL-2234R9 independently of a Purchase Agreement Supplemental Agreement. Letter Agreement 6-1162-RLL-2234R9 is...

  • Page 114
    ... such information; and (iii) to the extent such information is publicly available other than as a result of the disclosure by or on behalf of such party. Except as amended as set forth above, the Purchase Agreement remains in full force and effect. DELTA AIR LINES, INC. THE BOEING COMPANY By...

  • Page 115
    ... Furnished Equipment Variables Buyer Furnished Equipment Variables Buyer Furnished Equipment Variables for 737NG Customer Support Variables Customer Support Variables for 737â€'700 Aircraft Customer Support Variables for 737â€'900ER Aircraft Engine Escalation [***] Service Life Policy Components...

  • Page 116
    ...SA NUMBER Airframe Maintenance Cost Protection Program Multiple Aircraft Operating Weights Delivery Price Adjustment Aircraft Performance Guarantees for 737â€'632, 732 and 832 Aircraft Special Matters [***] Promotion Support SAâ€'17 SAâ€'13, Article 7 1997 and 1998 Escalation Sharing...

  • Page 117
    ...-LA-1501328 SA NUMBER [***] [***] for 737â€'932ER Aircraft [***] Guarantee Open Configuration Matters for 737â€'932ER Aircraft [***] Guarantees for 737â€'932ER Aircraft Agreement for [***] [***] [***] Option Aircraft [***] [***] [***] Promotional Support [***] Put Option Aircraft [***] SAâ€'17...

  • Page 118
    ...Base Year/Escalation Formula: Airframe Price: Optional Features: Engine Price (Per Aircraft): Sub-Total of Airframe and Features: Aircraft Basic Price (Excluding BFE/SPE): Buyer Furnished Equipment (BFE) Estimate: Seller Purchased Equipment (SPE) Estimate Delivery Date Number of Aircraft...

  • Page 119
    ...1Q[***] To Purchase Agreement No. PA-02022 Aircraft Delivery, Description, Price and Advance Payments Delivery Date Number of Aircraft Escalation Factor (Airframe Escalation Estimate Adv Payment Base Price Per A/P Amts. Due/Mos. Prior to Delivery [***] Confidential portion omitted and filed...

  • Page 120
    ... Price: Optional Features: Engine Price (Per Aircraft): Engine Price Base Year/Escalation Formula Sub-Total of Airframe and Features: Aircraft Basic Price (Excluding BFE/SPE): Buyer Furnished Equipment (BFE) Estimate: Seller Purchased Equipment (SPE) Estimate Delivery Date Number of Aircraft...

  • Page 121
    ...1Q[***] To Purchase Agreement No. PA-02022 Aircraft Delivery, Description, Price and Advance Payments Delivery Date Number of Aircraft Escalation Factor (Airframe Escalation Estimate Adv Payment Base Price Per A/P Amts. Due/Mos. Prior to Delivery [***] Confidential portion omitted and filed...

  • Page 122
    ... Price Base Year/Escalation Formula Airframe Price: Optional Features: Engine Price (Per Aircraft): Sub-Total of Airframe and Features: Aircraft Basic Price (Excluding BFE/SPE): Buyer Furnished Equipment (BFE) Estimate: Seller Purchased Equipment (SPE) Estimate Delivery Date Number of Aircraft...

  • Page 123
    ...To Purchase Agreement No. PA-02022 Aircraft Delivery, Description, Price and Advance Payments Delivery Date Number of Aircraft Escalation Factor (Airframe Escalation Estimate [***] (Amts. Due/Mos. Prior to Delivery): Adv Payment Base Price Per A/P [***] Confidential portion omitted and filed...

  • Page 124
    Exhibit A6 Aircraft Configuration for 737-932ER Incremental Aircraft [***] Confidential portion omitted and filed separately with the Commission Pursuant to a Request for Confidential Treatment. P.A. 2022 SA-17

  • Page 125
    BOEING PROPRIETARY Exhibit A6 Page 1

  • Page 126
    .... 6â€'1162â€'RLLâ€'2234R10 Delta Air Lines, Inc. Hartsfield Atlanta International Airport Atlanta, Georgia 30320 Subject: Special Matters Purchase Agreement Nos. 2022 and 2026 (the Purchase Agreement) between The Boeing Company (Boeing) and Delta Air Lines, Inc. (Customer) relating to 737â€'632...

  • Page 127
    7 8 9 10 11 12 13 14. [***] 15. [***] 16 6-1162-RLL-2234R10 Special Matters SA-17 LA Page 2 BOEING PROPRIETARY [***] Confidential portion omitted and filed separately with the Commission Pursuant to a Request for Confidential Treatment.

  • Page 128
    [***] [***] 17 18. [***] [***] E. Model 777â€'232IGW Aircraft (P. A. 2026) [***] 1 2 3 4 6-1162-RLL-2234R10 Special Matters SA-17 LA Page 3 BOEING PROPRIETARY [***] Confidential portion omitted and filed separately with the Commission Pursuant to a Request for Confidential Treatment.

  • Page 129
    5 6 7 8 F. Model 777â€'232LR Aircraft (P. A. 2026) 1 2 3 4 5 Confidential Treatment . The information contained herein represents confidential business information and has value precisely because it is not available generally or to other 6-1162-RLL-2234R10 Special Matters SA-17 LA Page 4 ...

  • Page 130
    ...; and (iii) to the extent such information is publicly available other than as a result of the disclosure by or on behalf of such party. Very truly yours, THE BOEING COMPANY By: /s/ Will Witherspoon Its: Attorney in Fact ACCEPTED AND AGREED TO: Date: December 16, 2015 DELTA AIR LINES, INC. By...

  • Page 131
    ... Company ( Boeing ) and Delta Air Lines, Inc. ( Customer ) relating to Model 737-900ER aircraft with Winglets ( Aircraft ) This letter agreement ( Letter Agreement ) revises and supersedes DAL-PA-02022-LA-1104482 and amends and supplements the Purchase Agreement. All terms used but not defined...

  • Page 132
    ... confidential business information and has value precisely because it is not available generally or to other parties. Each party will limit the disclosure of its contents to its employees with a need to know the contents for purposes of helping it perform its obligations under the Purchase Agreement...

  • Page 133
    ... ACCEPTED AND AGREED TO this Date: December 16, 2015 Delta Air Lines, Inc. By Its /s/ Gregory A. May SVP - Supply Chain Management DAL-PA-2022-LA-1104482R1 [***] SA-17 LA Page 3 BOEING PROPRIETARY [***] Confidential portion omitted and filed separately with the Commission Pursuant...

  • Page 134
    Attachment A Delivery Schedule for Covered Aircraft [***] DAL-PA-2022-LA-1104482R1 [***] SA-17 LA Page 4 BOEING PROPRIETARY [***] Confidential portion omitted and filed separately with the Commission Pursuant to a Request for Confidential Treatment.

  • Page 135
    Attachment B [***] DAL-PA-2022-LA-1104482R1 [***] SA-17 LA Page 5 BOEING PROPRIETARY [***] Confidential portion omitted and filed separately with the Commission Pursuant to a Request for Confidential Treatment.

  • Page 136
    ... The Boeing Company ( Boeing ) and Delta Air Lines, Inc. ( Customer ) relating to Model 737-732/-832/-932 aircraft. This letter agreement ( Letter Agreement ) revises and supersedes DAL-PA-02022-LA-1105848 and amends and supplements the Purchase Agreement. All terms used but not defined in this...

  • Page 137
    ... confidential business information and has value precisely because it is not available generally or to other parties. Each party will limit the disclosure of its contents to its employees with a need to know the contents for purposes of helping it perform its obligations under the Purchase Agreement...

  • Page 138
    ... of our agreement with respect to the matters treated above, please indicate your acceptance and approval below. Very truly yours, THE BOEING COMPANY By Its /s/Will Witherspoon Attorney-In-Fact Will Witherspoon ACCEPTED AND AGREED TO this Date: December 16, 2015 DELTA AIR...

  • Page 139
    ... No. PA-02022 ( Purchase Agreement ) between The Boeing Company ( Boeing ) and Delta Air Lines, Inc. ( Customer ) relating to Model 737-900ER aircraft ( Aircraft ) This letter agreement ( Letter Agreement ) amends and supplements the Purchase Agreement. All terms used but not defined in this Letter...

  • Page 140
    ... such information is publicly available other than as a result of the disclosure by or on behalf of such party. Very truly yours, THE BOEING COMPANY By Its /s/ Will Witherspoon Attorney-In-Fact Will Witherspoon ACCEPTED AND AGREED TO this Date: December 16, 2015 DELTA AIR...

  • Page 141
    ... General Terms Agreement Number AGTA-DAL between Boeing and Customer dated as of October 21, 1997 (AGTA-DAL) related to options and rolling options for 737-600, -700, -800, and -900ER model aircraft provided thereunder are deleted and of no further force or effect. Concurrently with the execution of...

  • Page 142
    ...extent such information is publicly available other than as a result of the disclosure by or on behalf of such party. Very truly yours, THE BOEING COMPANY By Its /s/ Will Witherspoon Attorney-In-Fact Will Witherspoon ACCEPTED AND AGREED TO this Date: December 16, 2015 Delta Air...

  • Page 143
    ..., Inc. ( Customer ) relating to Model 737-732/-832/-932ER aircraft ( Aircraft ) This letter agreement ( Letter Agreement ) amends and supplements the Purchase Agreement and supersedes and replaces, in its entirety, letter agreement DAL-PA-02022-LA-1105850R1, dated August 2, 2012. All terms used but...

  • Page 144
    ... to the extent such information is publicly available other than as a result of the disclosure by or on behalf of such party. Very truly yours, THE BOEING COMPANY By Its /s/ Will Witherspoon Attorney-In-Fact ACCEPTED AND AGREED TO this Date: December 16, 2015 DELTA AIR LINES, INC...

  • Page 145
    ATTACHMENT A [***] [***] Page 3 [***] Confidential portion omitted and filed separately with the Commission Pursuant to a Request for Confidential Treatment.

  • Page 146
    ... No. PA-02022 ( Purchase Agreement ) between The Boeing Company ( Boeing ) and Delta Air Lines, Inc. ( Customer ) relating to Model 737-900ER aircraft ( Aircraft ) This letter agreement ( Letter Agreement ) amends and supplements the Purchase Agreement. All terms used but not defined in this Letter...

  • Page 147
    ...to the extent such information is publicly available other than as a result of the disclosure by or on behalf of such party. Very truly yours, THE BOEING COMPANY By /s/ Will Witherspoon Its Attorney-In-Fact ACCEPTED AND AGREED TO this Date: December 16, 2015 Delta Air Lines, Inc. By...

  • Page 148
    Attachment A [***] DAL-PA-2022-LA-1105843R3 [***] SA-17 LA Page 3 BOEING PROPRIETARY [***] Confidential portion omitted and filed separately with the Commission Pursuant to a Request for Confidential Treatment.

  • Page 149
    Attachment B [***] DAL-PA-2022-LA-1105843R3 [***] SA-17 LA Page 4 BOEING PROPRIETARY [***] Confidential portion omitted and filed separately with the Commission Pursuant to a Request for Confidential Treatment.

  • Page 150
    ...Table 1Q to the Purchase Agreement as of the date of execution of this Letter Agreement, Boeing may sell and Customer agrees to purchase up to ten (10) additional Model 737-900ER aircraft as Put Option Aircraft. Delivery . The Put Option Aircraft may be delivered in any month as listed in Attachment...

  • Page 151
    ... confidential business information and has value precisely because it is not available generally or to other parties. Each party will limit the disclosure of its contents to its employees with a need to know the contents for purposes of helping it perform its obligations under the Purchase Agreement...

  • Page 152
    ...ACCEPTED AND AGREED TO this Date: December 16, 2015 DELTA AIR LINES, INC. By Its /s/ Gregory A. May SVP - Supply Chain Management DAL-PA-2022-LA-1501328 Put Option Aircraft SA-17 LA Page 3 BOEING PROPRIETARY [***] Confidential portion omitted and filed separately with the Commission...

  • Page 153
    ... Engine Price Base Year/Escalation Formula Airframe Price: Optional Features:** Engine Price (Per Aircraft): Sub-Total of Airframe and Features: Aircraft Basic Price (Excluding BFE/SPE): Buyer Furnished Equipment (BFE) Estimate: Seller Purchased Equipment (SPE) Estimate Delivery Date Number of...

  • Page 154
    ... Engine Price Base Year/Escalation Formula Airframe Price: Optional Features:** Engine Price (Per Aircraft): Sub-Total of Airframe and Features: Aircraft Basic Price (Excluding BFE/SPE): Buyer Furnished Equipment (BFE) Estimate: Seller Purchased Equipment (SPE) Estimate Delivery Date Number of...

  • Page 155
    ... Year/Escalation Formula: Airframe Price: Optional Features:** Sub-Total of Airframe and Features: Engine Price (Per Aircraft): Aircraft Basic Price (Excluding BFE/SPE): Buyer Furnished Equipment (BFE) Estimate: Seller Purchased Equipment (SPE) Estimate Delivery Date Number of Aircraft...

  • Page 156
    ... used but not defined in this Letter Agreement shall have the same meaning as in the applicable Purchase Agreement. The 737-900ER aircraft did not exist at the time the AGTA-DAL was signed. Customer has ordered 737-932ER aircraft and Customer and Boeing now agree to incorporate the 737-900ER model...

  • Page 157
    ... "Option Aircraft is defined as those Option Aircraft listed in Table 2 to the applicable Purchase Agreement and in Letter Agreement DAL-PA-02022-LA-1105858. For historical records the Option Aircraft were initially (a) 60 model 737-632/-732/-832 Aircraft; (b) 20 model 757-232 Aircraft; (c) 10 model...

  • Page 158
    ... confidential business information and has value precisely because it is not available generally or to other parties. Each party will limit the disclosure of its contents to its employees with a need to know the contents for purposes of helping it perform its obligations under the Purchase Agreement...

  • Page 159
    ... ACCEPTED AND AGREED TO this Date: December 16, 2015 DELTA AIR LINES, INC. By: Its: /s/ Gregory A. May SVP - Supply Chain Management Gregory A. May DAL-PA-02022-LA-1104472R1 BOEING PROPRIETARY [***] Confidential portion omitted and filed separately with the Commission Pursuant...

  • Page 160
    ... under the Delta Air Lines, Inc. 2007 Performance Compensation Plan (" 2007 Performance Plan "). It is subject to the terms of the 2007 Performance Plan and an individual's 2016 LTIP Award Agreement (" Award Agreement "). Capitalized terms that are used but not defined in the 2016 LTIP shall...

  • Page 161
    ...iv) Lapse of Restrictions-Continued Employment . Subject to the terms of the 2007 Performance Plan and the 2016 LTIP, the Restrictions shall lapse and be of no further force or effect with respect to one-third of the Shares of Restricted Stock on each of the following dates: (A) February 1, 2017...

  • Page 162
    ...Annual Operating Income Margin during the Performance Period of the Company relative to the Composite Performance of the members of the Industry Composite Group; (B) Customer Service Performance during the Performance Period of the Company; and (C) Return on Invested Capital during the Performance...

  • Page 163
    ... Annual Operating Income Margin " for Delta and each member of the Industry Composite Group shall be calculated by using the subject company's Operating Income and Total Operating Revenue for the applicable periods and the following formula: (A ÷ B ), where: A = Operating Income for 2016, 2017...

  • Page 164
    ... items" or such similar line item; (ii) mark-to-market adjustments for fuel hedges recorded in periods other than the settlement period; and (iii) other special, unusual, or nonrecurring items which are disclosed in publicly available filings with the SEC. " Total Operating Revenue...

  • Page 165
    ... post-employment benefit losses in AOCI that have occurred during the Performance Period; and C = in the event that the Company pays a dividend or issues or repurchases additional Common Stock for cash during the Performance Period (but excluding the exercise of any employee stock option for cash or...

  • Page 166
    ... Margin, Customer Service Performance and/or Return on Invested Capital, as applicable and as described below. For purposes of Average Annual Operating Income Margin, the Company's performance is compared against the Composite Performance of the Industry Composite Group...

  • Page 167
    ...% of Target) 1.5% points above Composite Performance +3.7% points or higher Average Annual Operating Income Margin Customer Service Performance-Domestic Customer Service Performance- International Return on Invested Capital Threshold (50% of Target) Composite Performance 50% +0% points 15...

  • Page 168
    ... of such Change in Control, subject to the Participant's execution of a waiver and release of claims in a form and manner satisfactory to the Company, the Participant's outstanding Performance Award shall immediately become vested at the target level and such amount will be paid in cash to the...

  • Page 169
    ... Grant Date of the RSUs will be determined in accordance with the Company's Equity Award Grant Policy, as in effect from time to time, and set forth in the Participant's Award Agreement. (iii) Risk of Forfeiture . Until an RSU becomes vested, a Participant will not be permitted to sell, exchange...

  • Page 170
    ... she is employed by an Affiliate at the time the Company sells or otherwise divests itself of such Affiliate) on or after a Change in Control, but prior to the second anniversary of such Change in Control, subject to the Participant's execution of a waiver and release of claims in a form and manner...

  • Page 171
    ... time, and set forth in a Participant's Award Agreement. (iii) Exercise Price . The exercise price of the Option is the closing price of a Share on the New York Stock Exchange on the Grant Date. (iv) Exercise Period/Performance Measures . Subject to the terms of the 2007 Performance Plan...

  • Page 172
    ... such Termination of Employment or (ii) the applicable Option Installment Vesting Date or (y) the Expiration Date. Upon a Participant's Termination of Employment by the Company without Cause or by the Participant for Good Reason, any portion of the Option that is not exercisable at the time of such...

  • Page 173
    ... 2007 Performance Plan; (ii) any other equity-based awards or other incentive compensation awards made to a Participant by Delta (or any Affiliate or former Affiliate); and (iii) any retention payment or special travel benefits provided to a Participant as a result of his or her initial employment...

  • Page 174
    ...a Participant under the 2016 LTIP constitutes non excepted deferred compensation under Section 409A and the Participant is at the time of his termination of employment considered to be a "specified employee" pursuant to the Company's policy for determining such employees, the payment of any such non...

  • Page 175
    ...'s Target MIP Award, as defined below; (ii) the level of achievement within each applicable performance measure; and (iii) the occurrence of a payout for 2016 under the Company's broad-based employee profit sharing program for ground and flight attendant employees (the " Profit Sharing Program...

  • Page 176
    ... Operational, Revenue, Leadership Effectiveness and Individual Performance, are based on the achievement of the target performance level with respect to each applicable performance measure (except that Financial Performance also requires a payout under the Profit Sharing Program for 2016...

  • Page 177
    ... and as reported in the Company's public securities filings, but excluding: (a) all asset write downs related to long term assets; (b) gains or losses with respect to special, unusual, or nonrecurring items; and (c) expense accrued with respect to any employee profit sharing plan, program or similar...

  • Page 178
    ... Seat Miles of all members of the Industry Group. " Total Operating Revenue " means, for Delta and each member of the Industry Group, the applicable company's total operating revenue for a calendar year based on its regularly prepared and publicly available statements of operations...

  • Page 179
    ...(i) Payment in Restricted Stock. If there is no payout under the Profit Sharing Program for 2016, any payout under the MIP to an Executive Officer Participant will be made in shares of Restricted Stock rather than in cash, with the number of shares of Restricted Stock being...

  • Page 180
    ... Affiliate at the time the Company sells or otherwise divests itself of such Affiliate) or (2) Retirement, the Restrictions shall lapse and be of no further force or effect on the date there is a payout under the Profit Sharing Program as if such Executive Officer Participant...

  • Page 181
    ... Individual Performance measure, if any, applicable to the Participant. The Participant's Annual Base Salary will be the result of the following formula: X Ã- Y/12, where: X = the Participant's annual base salary as in effect as of the date of Termination of Employment; and Y = the number of...

  • Page 182
    ... during 2016 will have their Target MIP Award calculated based on their annual base salary at each MIP-eligible job level (measured as of the date immediately prior to the date the promotion is considered effective for purposes of the MIP, if applicable, as...

  • Page 183
    ... made to an Executive Officer Participant in MIP Restricted Stock will be considered as earnings only for purposes of the Company's restoration payment program, as in effect from time to time. If such payments are included, unless otherwise provided in such plan or program, participants will be...

  • Page 184
    ... on time operations for the month. On time operations are defined as the number of flights that arrive at the scheduled destination within 15 minutes of the scheduled arrival time. 3. Divide the result of D.2 by the result of D.1 for a combined Delta Connection system on-time performance measure.

  • Page 185
    E. All calculations will be performed and validated by Delta Connection Operations. F. The comparator group for the relative measure shall include the regional portfolios for Alaska Air Group, Inc., United Continental Holdings, Inc. and American Airlines Group, Inc. and the data is compiled by a ...

  • Page 186
    ...$ 7,705 $ 534 $ 50 584 $ 13.19 1,122 80 1,202 1.63 Year Ended December 31, 2015 2014 2013 2012 2011 MTM adjustments and settlements Restructuring and other Loss on extinguishment of debt Virgin Atlantic MTM adjustments Total income (loss) $ 1,301 $ (35) - 26 (2,346) $ (716) (268) (134...

  • Page 187
    ... 31, 2015 NAME OF SUBSIDIARY JURISDICTION OF INCORPORATION OR ORGANIZATION Aero Assurance Ltd. DAL Global Services, LLC Delta Material Services, LLC Delta Private Jets, Inc. Endeavor Air, Inc. Epsilon Trading, LLC MIPC, LLC MLT Vacations, Inc. Monroe Energy, LLC New Sky, Ltd...

  • Page 188
    ... pertaining to Delta Air Lines, Inc. 2007 Performance Compensation Plan, and Registration Statement No. 333-151060 on Form S-8 pertaining to Northwest Airlines Corporation 2007 Stock Incentive Plan; (2) (3) (4) of our reports dated February 5, 2016 , with respect...

  • Page 189
    ... of operations and cash flows of Delta as of, and for, the periods presented in this report; Delta's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control...

  • Page 190
    ... of operations and cash flows of Delta as of, and for, the periods presented in this report; 4. Delta's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control...

  • Page 191
    ... the filing on the date hereof with the Securities and Exchange Commission of the annual report on Form 10-K of Delta Air Lines, Inc. ("Delta") for the fiscal year ended December 31, 2015 (the "Report"). Each of the undersigned, the Chief Executive Officer and the Executive Vice President and...