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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
Or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-5424
dal-20210930_g1.jpg
DELTA AIR LINES, INC.
(Exact name of registrant as specified in its charter)
Delaware58-0218548
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
Post Office Box 20706
Atlanta, Georgia
30320-6001
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (404) 715-2600

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.0001 per shareDALNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer Non-accelerated filer 
Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No
Number of shares outstanding by each class of common stock, as of September 30, 2021:
Common Stock, $0.0001 par value - 640,013,818 shares outstanding
This document is also available through our website at http://ir.delta.com/.







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

FORWARD-LOOKING STATEMENTS

Statements in this Form 10-Q (or otherwise made by us or on our behalf) that are not historical facts, including statements about our estimates, expectations, beliefs, intentions, projections, goals, aspirations, commitments or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations. Known material risk factors applicable to Delta are described in "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 ("Form 10-K"), other than risks that could apply to any issuer or offering. All forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report except as required by law.

Delta Air Lines, Inc. September 2021 Form 10-Q                                 1


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of Delta Air Lines, Inc. (the Company) as of September 30, 2021, the related condensed consolidated statements of operations and comprehensive income/(loss) and consolidated statements of stockholders' equity for the three-month and nine-month periods ended September 30, 2021 and 2020, the condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2021 and 2020 and the related notes (collectively referred to as the "condensed consolidated interim financial statements"). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2020, the related consolidated statements of operations, comprehensive loss, cash flows, and stockholders' equity for the year then ended, and the related notes (not presented herein); and in our report dated February 12, 2021, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2020, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

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


/s/ Ernst & Young LLP
Atlanta, Georgia
October 13, 2021

Delta Air Lines, Inc. September 2021 Form 10-Q                                 2

Financial Statements

DELTA AIR LINES, INC.
Consolidated Balance Sheets
(Unaudited)
(in millions, except share data)September 30,
2021
December 31,
2020
ASSETS
Current Assets:
Cash and cash equivalents$8,785 $8,307 
Short-term investments4,417 5,789 
Accounts receivable, net of an allowance for uncollectible accounts of $78 and $89
2,183 1,396 
Fuel inventory641 377 
Expendable parts and supplies inventories, net of an allowance for obsolescence of $174 and $188
371 355 
Prepaid expenses and other1,074 1,180 
Total current assets17,471 17,404 
Noncurrent Assets:
Property and equipment, net of accumulated depreciation and amortization of $18,693 and $17,511
27,816 26,529 
Operating lease right-of-use assets5,827 5,733 
Goodwill9,753 9,753 
Identifiable intangibles, net of accumulated amortization of $890 and $883
6,004 6,011 
Cash restricted for airport construction713 1,556 
Equity investments1,919 1,665 
Deferred income taxes, net1,813 1,988 
Other noncurrent assets1,467 1,357 
Total noncurrent assets55,312 54,592 
Total assets$72,783 $71,996 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of debt and finance leases$2,296 $1,732 
Current maturities of operating leases636 678 
Air traffic liability6,246 4,044 
Accounts payable4,017 2,840 
Accrued salaries and related benefits2,198 2,086 
Loyalty program deferred revenue2,619 1,777 
Fuel card obligation1,100 1,100 
Other accrued liabilities1,812 1,670 
Total current liabilities20,924 15,927 
Noncurrent Liabilities:
Debt and finance leases25,523 27,425 
Noncurrent air traffic liability130 500 
Pension, postretirement and related benefits8,408 10,630 
Loyalty program deferred revenue4,837 5,405 
Noncurrent operating leases5,742 5,713 
Other noncurrent liabilities4,613 4,862 
Total noncurrent liabilities49,253 54,535 
Commitments and Contingencies
Stockholders' Equity:
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 649,758,099 and 647,352,203
shares issued
  
Additional paid-in capital11,428 11,259 
Retained earnings/(accumulated deficit)259 (428)
Accumulated other comprehensive loss(8,800)(9,038)
Treasury stock, at cost, 9,744,281 and 9,169,683 shares
(281)(259)
Total stockholders' equity2,606 1,534 
Total liabilities and stockholders' equity$72,783 $71,996 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Delta Air Lines, Inc. September 2021 Form 10-Q                                 3

Financial Statements
DELTA AIR LINES, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss)
(Unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
(in millions, except per share data)2021202020212020
Operating Revenue:
Passenger$7,191 $1,938 $15,278 $10,185 
Cargo262 142 728 403 
Other1,701 982 4,423 2,534 
  Total operating revenue9,154 3,062 20,429 13,122 
Operating Expense:
Salaries and related costs2,566 2,012 7,096 7,000 
Aircraft fuel and related taxes1,552 486 4,056 2,453 
Ancillary businesses and refinery1,079 561 2,724 1,181 
Contracted services634 419 1,723 1,536 
Depreciation and amortization501 545 1,494 1,813 
Landing fees and other rents524 458 1,477 1,430 
Regional carrier expense453 290 1,258 1,204 
Aircraft maintenance materials and outside repairs433 106 1,014 618 
Passenger commissions and other selling expenses308 100 640 548 
Passenger service226 92 520 456 
Aircraft rent105 99 313 295 
Restructuring charges33 5,345 (3)7,798 
Government grant recognition(1,822)(1,315)(4,512)(2,595)
Other357 250 1,006 996 
Total operating expense6,949 9,448 18,806 24,733 
Operating Income/(Loss)2,205 (6,386)1,623 (11,611)
Non-Operating Expense:
Interest expense, net(314)(291)(1,014)(564)
Impairments and equity method losses(49)(114)(102)(2,432)
Gain/(loss) on investments, net(223)(95)251 (199)
Loss on extinguishment of debt(183) (266) 
Miscellaneous, net96 27 301 327 
Total non-operating expense, net(673)(473)(830)(2,868)
Income/(Loss) Before Income Taxes1,532 (6,859)793 (14,479)
Income Tax (Provision)/Benefit(320)1,480 (105)2,849 
Net Income/(Loss)$1,212 $(5,379)$688 $(11,630)
Basic Earnings/(Loss) Per Share$1.90 $(8.47)$1.08 $(18.30)
Diluted Earnings/(Loss) Per Share$1.89 $(8.47)$1.07 $(18.30)
Cash Dividends Declared Per Share$ $ $ $0.40 
Comprehensive Income/(Loss)$1,294 $(5,381)$926 $(11,580)
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Delta Air Lines, Inc. September 2021 Form 10-Q                                 4

Financial Statements
DELTA AIR LINES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended September 30,
(in millions)20212020
Net Cash Provided by/(Used in) Operating Activities$2,708 $(2,507)
Cash Flows from Investing Activities:
Property and equipment additions:
Flight equipment, including advance payments(961)(594)
Ground property and equipment, including technology(1,068)(757)
Proceeds from sale-leaseback transactions 465 
Purchase of short-term investments(10,799)(8,700)
Redemption of short-term investments12,158 3,654 
Purchase of equity investments (2,099)
Other, net252 (159)
Net cash used in investing activities(418)(8,190)
Cash Flows from Financing Activities:
Proceeds from short-term obligations 3,261 
Proceeds from long-term obligations1,902 22,481 
Proceeds from sale-leaseback transactions 2,306 
Payments on debt and finance lease obligations(4,685)(2,318)
Repurchase of common stock (344)
Cash dividends (260)
Fuel card obligation 364 
Other, net98 (177)
Net cash (used in)/provided by financing activities(2,685)25,313 
Net (Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash Equivalents(395)14,616 
Cash, cash equivalents and restricted cash equivalents at beginning of period10,055 3,730 
Cash, cash equivalents and restricted cash equivalents at end of period$9,660 $18,346 
Non-Cash Transactions:
Flight and ground equipment acquired under finance leases$904 $347 
Right-of-use assets acquired under operating leases536 1,062 
Other financings240 115 
The following table provides a reconciliation of cash, cash equivalents and restricted cash equivalents reported within the Consolidated Balance Sheets to the total of the same such amounts shown above:
September 30,
(in millions)20212020
Current assets:
Cash and cash equivalents$8,785 $16,477 
Restricted cash included in prepaid expenses and other162 189 
Noncurrent assets:
Cash restricted for airport construction713 1,680 
Total cash, cash equivalents and restricted cash equivalents$9,660 $18,346 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
Delta Air Lines, Inc. September 2021 Form 10-Q                                 5

Financial Statements
DELTA AIR LINES, INC.
Consolidated Statements of Stockholders' Equity
(Unaudited)
Common StockAdditional
Paid-In Capital
Retained Earnings / (Accumulated Deficit)Accumulated
Other
Comprehensive Loss
Treasury Stock
(in millions, except per share data)SharesAmountSharesAmountTotal
Balance at December 31, 2020
647 $ $11,259 $(428)$(9,038)9 $(259)$1,534 
Net loss— — — (1,177)— — — (1,177)
Other comprehensive income— — — — 78 — — 78 
Common stock issued for employee equity awards(1)
2 — 23 — — 1 (20)3 
Government grant warrant issuance— — 44 — — — — 44 
Balance at March 31, 2021
649 $ $11,326 $(1,605)$(8,960)10 $(279)$482 
Net income— — — 652 — — — 652 
Other comprehensive income— — — — 78 — — 78 
Common stock issued for employee equity awards(1)
1 — 28 — —  (1)27 
Government grant warrant issuance— — 42 — — — — 42 
Balance at June 30, 2021
650 $ $11,396 $(953)$(8,882)10 $(280)$1,281 
Net income— — — 1,212 — — — 1,212 
Other comprehensive income— — — — 82 — — 82 
Common stock issued for employee equity awards(1)
 — 32 — —  (1)31 
Balance at September 30, 2021
650 $ $11,428 $259 $(8,800)10 $(281)$2,606 

(1)Treasury shares were withheld for payment of taxes, at a weighted average price per share of $38.35, $46.21 and $43.48 in the March 2021 quarter, June 2021 quarter and September 2021 quarter, respectively.


Common StockAdditional
Paid-In Capital
 Retained
Earnings
Accumulated
Other
Comprehensive Loss
Treasury Stock
(in millions, except per share data)SharesAmountSharesAmountTotal
Balance at December 31, 2019
652 $ $11,129 $12,454 $(7,989)9 $(236)$15,358 
Net loss— — — (534)— — — (534)
Dividends declared— — — (257)— — — (257)
Other comprehensive income— — — — 91 — — 91 
Common stock issued for employee equity awards(1)
1 — 29 — — 1 (34)(5)
Stock purchased and retired(6)— (104)(240)— — — (344)
Balance at March 31, 2020
647 $ $11,054 $11,423 $(7,898)10 $(270)$14,309 
Net loss— — — (5,717)— — — (5,717)
Other comprehensive loss— — — — (39)— — (39)
Common stock issued for employee equity awards(1)
 — 38 — —  (1)37 
Government grant warrant issuance— — 100 — — — — 100 
Balance at June 30, 2020
647 $ $11,192 $5,706 $(7,937)10 $(271)$8,690 
Net loss— — — (5,379)— — — (5,379)
Other comprehensive loss— — — — (2)— — (2)
Common stock issued for employee equity awards(1)
 — 35 — —  (1)34 
Government grant warrant issuance— — 14 — — — — 14 
Balance at September 30, 2020
647 $ $11,241 $327 $(7,939)10 $(272)$3,357 

(1)Treasury shares were withheld for payment of taxes, at a weighted average price per share of $56.48, $25.56 and $28.29 in the March 2020 quarter, June 2020 quarter and September 2020 quarter, respectively.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
Delta Air Lines, Inc. September 2021 Form 10-Q                                 6

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

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Delta Air Lines, Inc. and our consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Form 10-K for the year ended December 31, 2020.

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

Due to impacts from the COVID-19 pandemic and the uncertain pace of recovery, seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of operating results for the entire year.

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

Regional Carrier Expense

We previously allocated certain costs (such as landing fees and other rents, salaries and related costs and contracted services) to regional carrier expense in our Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) ("income statement") based on relevant statistics (such as passenger counts). Beginning in the March 2021 quarter we ceased performing this allocation and have reclassified the costs presented in prior periods to align with this presentation. This reclassification better reflects the nature of, and how management views, these regional carrier related expenses. This allocation was approximately $900 million in 2020, including approximately $200 million in the September 2020 quarter, and $1.4 billion in 2019, including approximately $360 million in the September 2019 quarter. The remaining amounts in regional carrier expense represent the accrual of payments to our regional carriers under capacity purchase agreements and the expenses of our wholly owned regional subsidiary, Endeavor Air, Inc.


Delta Air Lines, Inc. September 2021 Form 10-Q                                 7

Notes to the Consolidated Financial Statements
NOTE 2. REVENUE RECOGNITION

Passenger Revenue
Three Months Ended September 30,
Nine Months Ended September 30,
(in millions)2021202020212020
Ticket$6,237 $1,634 $13,067 $8,712 
Loyalty travel awards544 143 1,213 731 
Travel-related services410 161 998 742 
Total passenger revenue$7,191 $1,938 $15,278 $10,185 

We recognized approximately $1.8 billion and $3.0 billion in passenger revenue during the nine months ended September 30, 2021 and 2020, respectively, that had been recorded in our air traffic liability balance at the beginning of those periods.

In the March 2021 quarter, we announced the extension of the validity of all passenger tickets and travel credits purchased or expiring in 2021 to December 31, 2022. Additionally, with the exception of Basic Economy tickets, we eliminated change fees for tickets originating in North America and waived change fees for those originating outside of North America. We also implemented a waiver that allows Basic Economy tickets purchased for travel in 2021, which are normally non-changeable, to be changed without paying a fee regardless of origin or destination.

We estimate the value of tickets that will expire unused (“breakage”) and recognize revenue at the scheduled flight date. Our breakage estimates are primarily based on historical experience, ticket contract terms and customers’ travel behavior. Given the change in ticket validity terms made in 2021 and the uncertainty caused by the COVID-19 pandemic, our estimates of revenue that will be recognized from the air traffic liability for unused tickets may vary in future periods.

Other Revenue
Three Months Ended September 30,
Nine Months Ended September 30,
(in millions)2021202020212020
Refinery$872 $417 $2,189 $709 
Loyalty program453 343 1,260 1,086 
Ancillary businesses215 155 586 476 
Miscellaneous161 67 388 263 
Total other revenue$1,701 $982 $4,423 $2,534 

Refinery. This represents refinery sales to third parties, which are at or near cost; accordingly, the margin on these sales is de minimis.

Loyalty Program. Our SkyMiles loyalty program allows customers to earn mileage credits ("miles") by flying on Delta, Delta Connection and other airlines that participate in the loyalty program. Customers can also earn miles through participating companies, such as credit card companies, hotels, car rental agencies and ridesharing companies, who purchase miles from us. Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. During the nine months ended September 30, 2021 and 2020, total cash sales from marketing agreements related to our loyalty program were $2.9 billion and $2.2 billion, respectively, which are allocated to travel and other performance obligations.

Ancillary Businesses. Ancillary businesses includes aircraft maintenance services we provide to third parties and our vacation wholesale operations.
Delta Air Lines, Inc. September 2021 Form 10-Q                                 8

Notes to the Consolidated Financial Statements
Current Activity of the Loyalty Program. Miles are combined in one homogeneous pool and are not separately identifiable. Therefore, revenue is comprised of miles that were part of the loyalty program deferred revenue balance at the beginning of the period as well as miles that were issued during the period.

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

Loyalty program activity
(in millions)20212020
Balance at January 1$7,182 $6,728 
Miles earned1,541 1,132 
Miles redeemed for air travel(1,213)(731)
Miles redeemed for non-air travel and other(54)(40)
Balance at September 30
$7,456 $7,089 

The timing of mile redemptions can vary widely; however, the majority of miles have historically been redeemed within two years of being earned.

Revenue by Geographic Region

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

Passenger revenue by geographic region
Passenger Revenue
Three Months Ended September 30,
Nine Months Ended September 30,
(in millions)2021202020212020
Domestic$5,759 $1,647 $12,517 $7,812 
Atlantic730 132 1,160 1,014 
Latin America564 97 1,313 879 
Pacific138 62 288 480 
Total$7,191 $1,938 $15,278 $10,185 

Operating revenue by geographic region
Operating Revenue
Three Months Ended September 30,
Nine Months Ended September 30,
(in millions)2021202020212020
Domestic$7,311 $2,585 $16,572 $10,116 
Atlantic954 240 1,688 1,353 
Latin America653 126 1,620 1,015 
Pacific236 111 549 638 
Total$9,154 $3,062 $20,429 $13,122 



Delta Air Lines, Inc. September 2021 Form 10-Q                                 9

Notes to the Consolidated Financial Statements
NOTE 3. FAIR VALUE MEASUREMENTS

Assets Measured at Fair Value on a Recurring Basis
(in millions)September 30,
2021
Level 1Level 2Level 3
Cash equivalents$6,098 $6,098 $ $ 
Restricted cash equivalents874 874   
Short-term investments4,417 2,291 2,126  
Long-term investments1,659 1,525 37 97 
(in millions)December 31,
2020
Level 1Level 2Level 3
Cash equivalents$5,755 $5,755 $ $ 
Restricted cash equivalents1,747 1,747   
Short-term investments5,789 3,919 1,870  
Long-term investments1,417 948 38 431 

Cash Equivalents and Restricted Cash Equivalents. Cash equivalents generally consist of money market funds. Restricted cash equivalents are recorded in prepaid expenses and other and cash restricted for airport construction on our Consolidated Balance Sheet ("balance sheet"). Restricted cash equivalents generally consist of money market funds, time deposits, commercial paper and negotiable certificates of deposit, which primarily relate to proceeds from debt issued to finance, among other things, a portion of the construction costs for our new terminal facilities at New York's LaGuardia Airport. The fair value of these cash equivalents is based on a market approach using prices generated by market transactions involving identical or comparable assets.

Short-Term Investments. Short-term investments consist of U.S. government and agency securities. The fair values of these investments are based on a market approach using industry standard valuation techniques that incorporate observable inputs such as quoted market prices, interest rates, benchmark curves, credit ratings of the security and other observable information.

As of September 30, 2021, the estimated fair value of our short-term investments was $4.4 billion. Of these investments, $3.7 billion are expected to mature in one year or less, with the remainder maturing by the first half of 2023. Investments with maturities beyond one year when purchased are classified as short-term investments if they are expected to be available to support our short-term liquidity needs.

Long-Term Investments. Our long-term investments measured at fair value primarily consist of equity investments, which are valued based on market prices or other observable transactions and inputs, and are recorded in equity investments on our balance sheet. In the September 2021 quarter, Wheels Up Experience Inc. ("Wheels Up") became publicly traded and, as of September 30, 2021, our investment in Wheels Up is classified as Level 1. In the June 2021 quarter, Clear Secure, Inc. ("CLEAR") became publicly traded and our investment is classified as Level 1. In addition, our equity investments in private companies are classified as Level 3 in the fair value hierarchy as their equity is not traded on a public exchange and our valuations incorporate certain unobservable inputs, including non-public equity issuances and forecasts provided by our investees. Fair value measurement using unobservable inputs is inherently uncertain, and a change in significant inputs could result in different fair values. See Note 4, "Investments," for further information on our equity investments.


NOTE 4. INVESTMENTS

We have developed strategic relationships with a number of airlines and airline services companies through joint ventures and other forms of cooperation and support, including equity investments. Our equity investments reinforce our commitment to these relationships and generally enhance our ability to offer input to the investee on strategic issues and direction, in some cases through representation on the board of directors.

Changes in the valuation of investments accounted for at fair value are recorded in gain/(loss) on investments, net in our income statement within non-operating expense and are driven by changes in stock prices, other valuation techniques for investments in companies without publicly-traded shares and foreign currency fluctuations.

Delta Air Lines, Inc. September 2021 Form 10-Q                                 10

Notes to the Consolidated Financial Statements
Our share of Unifi Aviation's financial results is recorded in contracted services in our income statement as this entity is integral to the operations of our business by providing services at our airport locations, while our share of other equity method investees' financial results is recorded in impairments and equity method losses in our income statement under non-operating expense. If an investment accounted for under the equity method experiences a loss in value that is determined to be other than temporary, we will reduce our carrying value of the investment to fair value and record the loss in impairments and equity method losses in our income statement.

Equity investments ownership interest and carrying value
Accounting TreatmentOwnership InterestCarrying Value
(in millions)September 30, 2021December 31, 2020September 30, 2021December 31, 2020
Wheels UpFair Value21 %24 %$343 $210 
Hanjin-KALFair Value13 %13 %456 512 
Air France-KLMFair Value6 %9 %184 235 
China EasternFair Value3 %3 %179 201 
CLEARFair Value6 %6 %340 120 
Unifi AviationEquity Method49 %49 %167 154 
Other investmentsVarious250 233 
Equity investments$1,919 $1,665 

Wheels Up. In July 2021, Wheels Up became a publicly-traded company through a merger with Aspirational Consumer Lifestyle Corp ("Aspirational"). Aspirational subsequently changed its name to Wheels Up Experience Inc. and its common stock trades on the New York Stock Exchange under the symbol UP. We account for our investment under the fair value option and are using the stock price to recognize fair value adjustments beginning in the September 2021 quarter.

CLEAR. In the June 2021 quarter, CLEAR completed an initial public offering of Class A common stock, which trades on the New York Stock Exchange under the symbol YOU. We own shares of Alclear Holdings, LLC, which are convertible on a one-to-one basis for the Class A common stock of CLEAR. Our 6% ownership interest is determined on a fully exchanged and converted basis. We account for our investment under the fair value method and are using the stock price to recognize fair value adjustments.

Other Investments. This category includes various investments that are accounted for at fair value or under the equity method, depending on our ownership interest and the level of influence conveyed by our investment. Included therein are our investments in Grupo Aeroméxico, LATAM Airlines Group S.A. ("LATAM") and Virgin Atlantic, all of which are undergoing in-court or out-of-court restructurings, and the carrying values of these investments have been reduced to and remain zero as of September 30, 2021. In order to support our relationships with these carriers, we have provided them with strategic and operational assistance through their restructurings. As of September 30, 2021, we had notes payable of approximately $