DELTA AIR LINES, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)


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 2021 Form
10-K.

March 2022 Financial overview for the quarter

Our business and operating results continued to be impacted by the COVID-19
pandemic in the March 2022 quarter. We have seen continued improvement in our
business during the March 2022 quarter, which we expect to continue throughout
2022. Given the drastic and unprecedented impact of the COVID-19 pandemic on our
operating results in 2021 and 2020, we believe that a comparison of our results
in the March 2022 quarter to both the March 2021 and March 2019 quarters in this
overview section allows for a better understanding of the full impact of the
COVID-19 pandemic and the progress of our recovery.

The table below shows certain key financial measures and statistics for the three months ended. March 31, 20222021 and 2019.

                                                                 Three Months Ended March 31,               2022 vs. 2021 %    2022 vs. 2019 %
                                                                                                                Increase           Increase
(in millions)                                               2022                 2021             2019       (Decrease) (1)     (Decrease) (1)
Total operating revenue                              $    9,348               $ 4,150          $ 10,472                125  %             (11) %
Total operating expense                                  10,131                 5,548             9,452                 83  %               7  %
Operating (loss)/income                                    (783)               (1,398)            1,020                (44) %                 NM

Available seat miles ("ASM")                             51,810                40,118            62,416                 29  %             (17) %

(1)Certain deviations are labeled as Not Material (“NM”) throughout Management’s Discussion and Analysis.

Our operating loss for the March 2022 quarter was $783 million, an improvement
of $615 million compared to the March 2021 quarter. This improvement was
primarily due to a $4.2 billion, or 151%, increase in passenger revenue as a
result of increased demand and capacity, partially offset by a $1.1 billion
increase in fuel expense, $1.2 billion of Payroll Support Programs ("PSP") grant
proceeds recognized during the March 2021 quarter and increases in other volume
related expenses as we continue to restore our operation.

Compared to the operating result of $1.0 billion in the March 2019 quarter, our operating loss was primarily the result of the continued impact of the COVID-19 pandemic on our business, which resulted in a 25% decline in passenger revenue.

Revenue. Compared to the March 2021 quarter, our revenue increased
$5.2 billionor 125%, primarily due to increased travel demand and higher refinery sales to third parties.

Compared to the March 2019 quarter, our operating revenue was $1.1 billion
lower, or 11%, on 17% lower system capacity, due primarily to the continued
impact of the COVID-19 pandemic on travel demand, partially offset by higher
refinery third party sales. We expect system capacity to be approximately 85%
recovered in the June 2022 quarter compared to the June 2019 quarter. We have
the ability to return to 2019 capacity levels by the end of 2022, if demand
warrants.

Beginning in the latter half of the March 2021 quarter, we began to see
bookings, primarily among domestic consumers, improve from the low levels of
2020. Throughout 2021, demand continued to improve, with some variability in
periods of rising COVID-19 cases attributable to variants of the virus. Consumer
demand accelerated through the March 2022 quarter, highlighted by strong spring
break performance. As the omicron variant faded, offices reopened and travel
restrictions were lifted, leading to improved demand for business travel and a
strengthened fare environment. The sale of tickets to domestic business
customers (i.e., both corporate and contracted small- and medium-sized
enterprises), including tickets for travel during and beyond the quarter
("domestic corporate advance sales"), significantly improved during the March
2022 quarter. We remain optimistic about the ultimate recovery of business
travel; however, we are unable to fully predict the pace of that recovery.
Delta Air Lines, Inc. March 2022 Form 10-Q                 18
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Item 2. MD&A
International revenue continues to lag the recovery in domestic travel due to
certain international testing requirements and travel restrictions, but improved
in the March 2022 quarter to approximately 55% recovered compared to the March
2019 quarter. During the March 2022 quarter, many European countries removed
entry testing requirements for vaccinated travelers. The sale of tickets to
international business customers (i.e., both corporate and contracted small- and
medium-sized enterprises), including tickets for travel during and beyond the
quarter ("international corporate advance sales"), significantly improved during
the March 2022 quarter. Despite the recent policy changes and improved advance
sales, we expect the lower international revenue environment to continue through
at least the second quarter of 2022, with the recovery of international revenue
continuing to trail domestic revenue.

Operating Expense. Total operating expense in the March 2022 quarter increased
$4.6 billion, or 83%, compared to the March 2021 quarter, primarily resulting
from increased fuel costs due to both an increase in fuel price and increased
capacity and higher volume-related expenses associated with the increase in
capacity and demand, mainly aircraft maintenance and higher salaries and related
costs. The increase also resulted from $1.2 billion of PSP grant proceeds
recognized during the March 2021 quarter, which reduced expenses and an increase
in expenses related to refinery sales to third parties, reflected in ancillary
business and refinery expense. Total operating expense, adjusted (a non-GAAP
financial measure) for the March 2022 quarter increased $2.7 billion, or 43%,
compared to the March 2021 quarter. Adjustments were primarily to exclude
expenses related to refinery sales to third parties and PSP grant proceeds in
the March 2021 quarter.

Total operating expense in the March 2022 quarter increased $679 million, or 7%,
compared to the March 2019 quarter, primarily resulting from increased expenses
related to refinery sales to third parties, reflected in ancillary business and
refinery expense. Total operating expense, adjusted (a non-GAAP financial
measure) for the March 2022 quarter decreased $400 million, or 4%, compared to
the March 2019 quarter. Adjustments were primarily to exclude expenses related
to refinery sales to third parties.

Cash flow. Our cash, cash equivalents, short-term investments and aggregate principal amount committed and available to be drawn under our revolving credit facilities (“cash”) at March 31, 2022 been $12.8 billion. During the
March 2022 quarter, operating activities generated $1.8 billion.

During the March 2022 quarter, the air traffic liability increased approximately
$2.8 billion. We sell tickets for air travel in advance of the customer's travel
date and the cash received on these advance sales is recorded as deferred
revenue in our air traffic liability. Passenger revenue is recognized and the
air traffic liability is reduced when we provide transportation services. The
increase in the air traffic liability exceeds our historical seasonal increase,
reflecting the continued restoration of our business.

As discussed above, consumer demand for travel accelerated through the quarter.
Domestic corporate advance sales for the March 2022 quarter were approximately
50% recovered compared to the March 2019 quarter and the month of March was
approximately 70% recovered versus 2019. The domestic corporate advance sales
recovery was also nearly 40 percentage points higher in the March 2022 quarter
compared to the March 2021 quarter. International corporate advance sales for
the March 2022 quarter were approximately 35% recovered compared to the March
2019 quarter, with the month of March improving to approximately 50% compared to
March 2019. Internationally, Transatlantic improved the most as European
countries reopened. The international corporate advance sales recovery was also
nearly 30 percentage points higher in the March 2022 quarter compared to the
March 2021 quarter.

In addition, total cash sales to American Express were $1.2 billion in the
March 2022 quarter up 25% compared to the March 2019 trimester.

Also during the quarter, investing activities used a net of $749 million,
primarily for capital expenditures, partially offset by net redemptions of
short-term investments. These activities resulted in $197 million of free cash
flow (a non-GAAP financial measure) in the March 2022 quarter. Also, during the
March 2022 quarter we had cash outflows of approximately $1.4 billion related to
repayments of our debt and finance leases.

The non-GAAP financial measures referenced above for operating expenses, adjusted and free cash flow are defined and reconciled in “Supplementary Information” below.

Delta Air Lines, Inc. March 2022 Form 10-Q                 19
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Item 2. MD&A
Environmental Sustainability. During 2022, we are continuing to develop our
climate transition plan and to have our medium- and long-term climate goals,
including our goal of achieving net zero greenhouse gas emissions no later than
2050, validated by the Science Based Targets initiative, as described in our
2021 Form 10-K. We expect our path toward achievement of these goals to depend
heavily on increased use of sustainable aviation fuel ("SAF") which is not
presently available at scale or at prices competitive to jet fuel, and improved
fuel efficiency from fleet renewal and operational initiatives. In the three
months ended March 31, 2022, we also incurred $47 million of expense related to
carbon offset credits, which relates to a portion of our airline segment's 2021
carbon emissions.
Delta Air Lines, Inc. March 2022 Form 10-Q                 20
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Item 2. MD&A - Results of Operations
Results of Operations - Three Months Ended March 31, 2022 and 2021

Operating revenue

                                                          Three Months Ended March 31,                               % Increase
(in millions)(1)                                             2022              2021         Increase (Decrease)      (Decrease)
Ticket - Main cabin                                    $       3,448     $       1,353                            $     2,095            155  %
Ticket - Premium products                                      2,538               924                                  1,614            175  %
Loyalty travel awards                                            543               241                                    302            125  %
Travel-related services                                          378               230                                    148             64  %
Total passenger revenue                                $       6,907     $       2,748                            $     4,159            151  %
Cargo                                                            289               215                                     74             34  %
Other                                                          2,152             1,187                                    965             81  %
Total operating revenue                                $       9,348     $       4,150                            $     5,198            125  %

TRASM (cents)                                                  18.04   ¢         10.34  ¢                                7.70    ¢        74  %
Third-party refinery sales                                     (2.29)            (1.35)                                 (0.94)            70  %

TRASM, adjusted(2)                                             15.75   ¢          9.00  ¢                                6.75    ¢        75  %


(1)Total amounts in the table above may not calculate exactly due to rounding.
(2)TRASM, adjusted is a non-GAAP financial measure. For additional information
on adjustments to TRASM, see "Supplemental Information" below.

Operating revenue

Compared to the March 2021 quarter, our operating revenue increased $5.2
billion, or 125%, due to the continued recovery in demand from the COVID-19
pandemic and higher refinery third party sales. The increase in operating
revenue, on a 29% increase in capacity, resulted in a 74% increase in total
revenue per available seat mile ("TRASM") and a 75% increase in TRASM, adjusted
compared to the March 2021 quarter. The growth in passenger revenue was due to
increased demand in both main cabin and premiums products, with premium products
experiencing a quicker recovery than main cabin.

See “Refinery Segment” below for details of refinery operations, including refinery sales to third parties recognized in other income.

We have historically generated cargo revenues in domestic and international
markets through the use of cargo space on regularly scheduled passenger
aircraft. In 2020 and 2021, following the onset of the COVID-19 pandemic,
reduced industry cargo capacity drove a significant increase in our cargo yield,
and we also generated cargo revenue through the operation of cargo-only charter
flights (i.e., using aircraft in our fleet not being utilized for passenger
travel to fly cargo internationally). The higher cargo yield trend has continued
into the March 2022 quarter driving the increase in revenue compared to the
March 2021 quarter. We expect capacity constraints and elevated market yields to
continue through 2022 while the industry rebuilds international networks to
pre-pandemic levels.

Passenger revenue per Geographic region

                                                                                                 Increase (Decrease)
                                                                                        vs. Three Months Ended March 31, 2021
                            Three Months Ended                                                                       Passenger Mile
(in millions)                 March 31, 2022   Passenger Revenue      RPMs (Traffic)          ASMs (Capacity)            Yield            PRASM         Load Factor
Domestic                    $         5,563                144  %                  105  %                    29  %              19  %          90  %    29     pts
Atlantic                                539                281  %                  320  %                   108  %              (9) %          83  %    33     pts
Latin America                           680                158  %                   93  %                    (1) %              33  %         160  %    38     pts
Pacific                                 125                100  %                  106  %                     3  %              (3) %          95  %    17     pts
Total                       $         6,907                151  %                  116  %                    29  %              17  %          95  %    30     pts



Domestic

Domestic passenger unit revenue ("PRASM") increased in the March 2022 quarter
compared to the March 2021 quarter as a result of the higher levels of capacity
and demand during the March 2022 quarter due to the ongoing recovery in the
period.
Delta Air Lines, Inc. March 2022 Form 10-Q                 21
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Item 2. MD&A - Results of Operations
The March 2022 quarter domestic consumer revenue was above March 2021 quarter
levels. After starting with somewhat muted demand recovery due to rising
COVID-19 cases attributable to variants of the virus, revenue recovery
accelerated during the quarter as consumers continued to show increased
confidence in travel.

We also remain optimistic about the ultimate recovery of business travel, which
is comprised of both corporate managed travel and small- and medium-sized
businesses, and expect the recovery of both of these components to continue to
increase throughout 2022. Business travel demand in the March 2022 quarter was
the highest since the onset of the COVID-19 pandemic.

International

International passenger revenue for the March 2022 quarter increased compared to
the March 2021 quarter as travel to certain destinations has resumed or
increased. While some countries have removed or eased travel restrictions, many
countries still maintain international testing requirements and travel
restrictions, which have restrained demand in the short-term.

In November 2021, travel restrictions for fully vaccinated foreign visitors to
the United States were lifted. This action made travel to the U.S. by many
foreign nationals possible for the first time in 18 months. Despite this policy
change, we expect the lower international revenue environment to continue
through at least the second quarter of 2022, with the recovery of international
revenue continuing to trail domestic revenue. We will continue to be nimble in
the restoration of our international network based on changes in government
restrictions and consumer demand.

The Atlantic region continues to improve, despite the conflict in Ukraine, as
western European countries remove or ease travel restrictions. In February 2022,
we suspended our codeshare services operated in conjunction with Russian
national airline, Aeroflot, which is not expected to have a material impact on
our Atlantic region revenues as Russia and Ukraine represent less than one
percent of our Atlantic region traffic.

the Latin America The region showed the strongest recovery of international regions, with continued improvement in demand for leisure destinations in the
Caribbean, Mexico and central America. We expect this trend to continue through 2022 with the recovery in Latin America lead the Atlantic and the Pacific regions.

The Pacific region continues to be the most impacted by the restrictions
described above. Travel in the Pacific region remains largely limited to
essential travel, and we expect only small demand improvements until government
restrictions ease, such as South Korea's recent announcement that vaccinated
travelers would be able to enter the country without quarantine beginning on
April 1, 2022.

Ticket Validity Flexibility

In order to provide our customers more flexibility and time to plan or rebook
their travel, in January 2022, we announced that all existing travel credit
holders will have until December 31, 2023 to rebook their ticket for travel
throughout 2024. Additionally, all Delta customers with upcoming 2022 travel or
who purchase a ticket in 2022 will also have the flexibility to rebook their
ticket through December 31, 2023, and travel throughout 2024.

We estimate the value of ticket breakage and recognize the related revenue at
the scheduled flight date. Our ticket breakage estimates are primarily based on
historical experience, ticket contract terms and customers' travel behavior.
Given the impact of the COVID-19 pandemic on customer behavior and changes made
in ticket validity terms, as well as the elimination of change fees for most
tickets, our estimates of revenue that will be recognized from the air traffic
liability for unused tickets may vary in future periods.


Delta Air Lines, Inc. March 2022 Form 10-Q                 22
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Item 2. MD&A - Results of Operations
Other Revenue
                                                 Three Months Ended March 31,                             % Increase
(in millions)                                          2022           2021       Increase (Decrease)      (Decrease)
Refinery                                         $        1,187    $    540                            $         647          120  %
Loyalty program                                             571         368                                      203           55  %
Ancillary businesses                                        209         186                                       23           12  %
Miscellaneous                                               185          93                                       92           99  %
Total other revenue                              $        2,152    $  1,187                            $         965           81  %



Refinery. This represents refinery sales to third parties. These sales, which
are at or near cost, increased $647 million compared to the March 2021 quarter.
The increase in third-party refinery sales resulted from higher pricing and
production during the March 2022 quarter compared to the March 2021 quarter. See
"Refinery Segment" below for additional details on the refinery's operations,
including third party refinery sales recorded in other revenue.

Loyalty Program. Loyalty program revenues relate to brand usage by third parties
and other performance obligations embedded in miles sold, including redemption
of miles for non-travel awards. These revenues are mainly driven by customer
spend on American Express cards and new cardholder acquisitions. As co-brand
card spend and card acquisitions continue to be strong, revenues from our
relationship with American Express increased in the March 2022 quarter compared
to 2021.

Related companies. Ancillary business revenue includes aircraft maintenance services we provide to third parties and our vacation wholesale business.

Miscellaneous. Miscellaneous revenue is primarily composed of lounge access,
including access provided to certain American Express cardholders, and codeshare
revenues. The volume of these transactions has increased compared to the March
2021 quarter due to the ongoing recovery of our business that continued to
materialize in the March 2022 quarter. Our network of Delta Sky Club lounges was
fully reopened by the end of July 2021 after some lounges temporarily closed at
the onset of the pandemic in 2020.

Delta Air Lines, Inc. March 2022 Form 10-Q                 23
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Item 2. MD&A - Results of Operations
Operating Expense
                                               Three Months Ended March
                                                         31,                                      % Increase
(in millions)                                      2022        2021       Increase (Decrease)     (Decrease)
Salaries and related costs                     $   2,826    $  2,202                            $        624            28  %
Aircraft fuel and related taxes                    2,092       1,017                                   1,075           106  %
Ancillary businesses and refinery                  1,382         706                                     676            96  %
Contracted services                                  753         519                                     234            45  %
Depreciation and amortization                        506         492                                      14             3  %
Landing fees and other rents                         504         493                                      11             2  %
Regional carrier expense                             491         401                                      90            22  %
Aircraft maintenance materials and outside
repairs                                              465         294                                     171            58  %
Passenger commissions and other selling
expenses                                             312         110                                     202           184  %
Passenger service                                    275         118                                     157           133  %
Aircraft rent                                        122         104                                      18            17  %
Restructuring charges                                 (5)        (44)                                     39           (89) %
Government grant recognition                           -      (1,186)                                  1,186          (100) %

Other                                                408         322                                      86            27  %
Total operating expense                        $  10,131    $  5,548                            $      4,583            83  %



Salaries and Related Costs. During 2021, we continued to offer voluntary unpaid
leaves of absence in response to the COVID-19 pandemic for periods ranging from
30 days up to 12 months and approximately 13,000 of our employees elected to
take a leave of absence during the March 2021 quarter. In the March 2022 quarter
we no longer offered these leaves of absence as the program terminated by the
end of the September 2021 quarter. Additionally, we hired approximately 15,000
employees since the March 2021 quarter, of which approximately 4,000 were in the
March 2022 quarter, in certain areas, including flight operations, reservations
and customer care and airport customer service, in order to support our
operations as demand and capacity returns. These actions resulted in higher
salaries and related costs during the March 2022 quarter compared to the March
2021 quarter.

In March 2022we announced that eligible employees will receive a 4% base salary increase, effective May 1, 2022.

Aircraft Fuel and Related Taxes. Fuel expense increased $1.1 billion compared to
the March 2021 quarter primarily due to a 71% increase in the market price of
jet fuel and a 38% increase in consumption on a comparable increase in capacity.
We expect this elevated jet fuel cost to continue throughout 2022 due to recent
market disruptions, further exacerbated by geopolitical events.

Moreover, during the March 2022 quarter, we bought and withdrew $47 million carbon offset credits linked to a portion of the carbon emissions of our air segment in 2021. In the table below, these costs are presented under the carbon offset costs line item.

Fuel expenses and average price per gallon

                                                                                        Average Price Per Gallon
                                Three Months Ended
                                    March 31,                                Three Months Ended March 31,
(in millions, except per                                                                                       Increase
gallon data)                     2022        2021      Increase (Decrease)                        2022        (Decrease)     2021
Fuel purchase cost(1)         $  2,102    $   895                            $        1,207    $   2.81    $        1.64           $ 1.17
Carbon offset costs                 47         20                                        27        0.06             0.04             0.02
Fuel hedge impact                   (4)       (23)                                       19       (0.01)           (0.04)            0.03
Refinery segment impact            (53)       125                                      (178)      (0.07)            0.23            (0.30)
Total fuel expense            $  2,092    $ 1,017                            $        1,075    $   2.79    $        1.87           $ 0.92

(1) Market price of jet fuel at airport locations, including related taxes and transportation costs.

Delta Air Lines, Inc. March 2022 Form 10-Q                 24
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Item 2. MD&A - Results of Operations
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.
Increased expenses were primarily related to refinery sales to third parties,
which are at or near cost. The refinery cost of sales increased $647 million
compared to the March 2021 quarter. The increase in third-party refinery sales
resulted from higher pricing and production during the March 2022 quarter
compared to the March 2021 quarter.

Contractual Services. During the March 2022 quarter, demand and capacity increased compared to the March 2021 quarter due to the ongoing recovery from the COVID-19 pandemic, as noted above. The continued restoration of our operations was the main driver for the increase in contractual services.

Regional Carrier Expenses. Spending by regional carriers increased from
March 2021 quarter due to an increase in utilization resulting from the increase in demand mentioned above.

Aircraft maintenance equipment and exterior repairs. Maintenance expenses have increased compared to March 2021 quarter as we return our aircraft to service and to support our operational reliability.

Passenger commissions and other selling expenses. Compared to the March 2021
quarter, passenger revenue increased 151% in the March 2022 quarter, which was
the primary reason for the increase in passenger commissions and other selling
expenses.

Passenger service. Passenger service increased from March 2021
quarter due to the increase in traffic mentioned above.

Restructuring Charges. During 2020, we recorded restructuring charges for items
such as fleet impairments and voluntary early retirement and separation programs
following strategic business decisions in response to the COVID-19 pandemic. In
the March 2022 quarter, we recognized $5 million of net adjustments to certain
of those restructuring charges, representing changes in our estimates, compared
to $44 million of net adjustments in the March 2021 quarter.

Recognition of government grants. During the March 2021 quarter, we recognized $1.2 billion PSP government grant proceeds for expenses that were used exclusively for the payment of salaries, wages and employee benefits.

Non-Operating Results
                                                                 Three Months Ended March 31,
                                                                                                       Favorable
(in millions)                                                          2022            2021          (Unfavorable)
Interest expense, net                                           $          (274)   $    (361)      $            87
Equity method results                                                         -          (54)                   54
Gain/(loss) on investments, net                                            (147)         262                  (409)
Loss on extinguishment of debt                                              (25)         (56)                   31
Pension and related benefit/(expense)                                        73          107                   (34)
Miscellaneous, net                                                          (44)         (15)                  (29)
Total non-operating expense, net                                $          

(417) $ (117) $(300)



Interest expense, net. Interest expense, net includes interest expense and
interest income. This decreased compared to the March 2021 quarter as a result
of our debt reduction initiatives since the December 2020 quarter. During 2021,
we made payments of approximately $5.8 billion related to our debt and finance
leases, which included approximately $3.8 billion for early repayments. We have
continued to pay down our debt in the March 2022 quarter with $1.4 billion of
payments on debt and finance lease obligations, including $199 million for the
early repurchase of various secured notes and unsecured notes through
repurchases on the open market. We continue to seek opportunities to pre-pay our
debt, in addition to periodic amortization and scheduled maturities, during the
remainder of 2022 and beyond.

Results according to the equity method. The results of the equity method in 2021 reflected our share of
from Virgin Atlantic losses under the equity method. See note 4 of the notes to the condensed consolidated financial statements for more information on our equity investments.

Delta Air Lines, Inc. March 2022 Form 10-Q                 25
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Item 2. MD&A - Non-Operating Results
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 companies 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. The loss on extinguishment of debt reflects the losses incurred on the early redemption of the notes mentioned above.

Pension and related benefit/(expense). Pension and related benefit/(expense)
reflects the net periodic benefit/(cost) of our pension and other postretirement
and postemployment benefit plans. Based on our level of funding at year-end, we
have modified the strategic asset allocation mix to reduce the investment risk
of the portfolio. As a result of the lower risk profile of the portfolio, the
weighted average expected long-term rate of return on our defined benefit
pension plan assets for 2022 net periodic benefit cost is 7.0%.

Miscellaneous, neat. Miscellaneous, net primarily includes foreign exchange gains/(losses) and charitable contributions.

Income taxes

We project that our annual effective tax rate for 2022 will be approximately
25%. In certain interim periods, we may have adjustments to our net deferred tax
assets as a result of changes in prior year estimates and tax laws enacted
during the period, which will impact the effective tax rate for that interim
period.


Refinery Segment

The refinery operated by Monroe primarily produces gasoline, diesel and jet fuel. Monroe trades jet fuel products that the refinery produces with third parties for jet fuel consumed in our flight operations. Historically, jet fuel produced and purchased through the exchange of gasoline and diesel fuel produced by the refinery has supplied approximately 200,000 barrels per day, or approximately 75% of our pre-pandemic COVID-19 consumption, for use in our air operations.

In the three months ended March 31, 2022the refinery was operating at near pre-pandemic production levels and a summary of the refinery’s results is shown below.

Financial information of the refinery sector

                                                   Three Months Ended March 

31,

                                                                                       Increase          % Increase
(in millions, except per gallon data)                   2022            2021          (Decrease)         (Decrease)
Exchange products                                 $          809    $     503       $        306                   61  %
Sales of refined products                                     26            4                 22                      NM
Sales to airline segment                                     291            -                291                      NM
Third party refinery sales                                 1,187          540                647                  120  %
Operating revenue                                 $        2,313    $   1,047       $      1,266                  121  %

Operating income/(loss)                           $           53    $    (125)      $        178                      NM
Refinery segment impact on airline average price
per fuel gallon                                   $        (0.07)   $    0.23       $      (0.30)                     NM



Refinery revenues increased compared to the three months ended March 31, 2021
due primarily to higher pricing and production during the March 2022 quarter
compared to the March 2021 quarter. The refinery generated operating income of
$53 million in the March 2022 quarter compared to an operating loss of $125
million in the March 2021 quarter which was driven by the revenue increase
described above, and partially offset by increased expense associated with the
higher levels of production.

Delta Air Lines, Inc. March 2022 Form 10-Q                 26
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Item 2. MD&A - Refinery Segment
A refinery is subject to annual U.S. Environmental Protection Agency ("EPA")
requirements to blend renewable fuels into the gasoline and on-road diesel fuel
it produces. Alternatively, a refinery may purchase Renewable Identification
Numbers ("RINs") from third parties in the secondary market. The Monroe refinery
purchases the majority of its RINs in the secondary market. Observable RINs
prices increased slightly during the March 2022 quarter and Monroe incurred $85
million in RINs compliance costs during the three months ended March 31, 2022
compared to $158 million in the three months ended March 31, 2021. The higher
expense in the March 2021 quarter resulted from a larger increase in observable
RINs prices during that period compared to the slight increase in the March 2022
quarter.

At March 31, 2022, we had a net fair value obligation of $430 million related to
RINs compliance costs. Our obligation as of March 31, 2022 was calculated using
the proposed Renewable Fuel Standard ("RFS") volume requirements, which were
issued in December 2021. The EPA has not finalized the compliance deadlines to
retire our obligations for 2020 and 2021, but we expect those deadlines to be
within one year of the effective date of the new RFS volume requirements.

For more information on the refinery’s results, see note 9 to the condensed consolidated financial statements.

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