Delta Air Lines DAL · USD

SEGMENTSOperating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker ("CODM") and is used in resource allocation and performance assessments. Our executive leadership team, the Delta Leadership Committee (“DLC”), is our CODM. The DLC regularly reviews information for our two operating segments: our airline segment and our refinery segment.The DLC uses operating income to evaluate segment performance. The DLC is involved in determining and reviewing projected operating income as part of the annual plan process. Throughout the year, the DLC considers forecast to actual results and variances on a monthly and quarterly basis to allocate resources for the airline segment's fleet and network and to optimize the refinery segment's operations. The DLC also considers this information in strategic decisions related to capital allocations, including investments in fleet, ground, information technology and refinery assets, route and network development, and human capital.Airline SegmentOur airline segment 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 includes our loyalty program, as well as other ancillary businesses. This allows us to benefit from an integrated revenue pricing and route network. Our flight equipment forms one fleet, which is deployed through a single route scheduling system. When making resource allocation decisions, our CODM evaluates aggregated flight profitability data, which considers fleet type and route economics, but gives no weight to the financial impact of the resource allocation decision on a geographic region or mainline/regional carrier basis. Our objective in making resource allocation decisions is to optimize our consolidated financial results.Refinery SegmentOur Monroe subsidiary operates the Trainer oil refinery and related assets located near Philadelphia, Pennsylvania, as part of our strategy to mitigate the cost of the refining margin reflected in the price of jet fuel. Monroe's operations include pipelines 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.

REVENUE RECOGNITIONPassenger RevenuePassenger revenue is composed of passenger ticket sales, loyalty travel awards and travel-related services performed in conjunction with a passenger’s flight.Passenger revenue by categoryYear Ended December 31,(in millions)202520242023Ticket$45,488 $45,096 $43,596 Loyalty travel awards4,237 3,841 3,462 Travel-related services2,043 1,957 1,851 Total passenger revenue$51,768 $50,894 $48,909 TicketPassenger Tickets. We defer sales of passenger tickets to be flown by us or that we sell on behalf of other airlines in our air traffic liability. Passenger revenue is recognized when we provide transportation. For tickets that we sell on behalf of other airlines, we reduce the air traffic liability when consideration is remitted to those airlines. The air traffic liability primarily includes sales of passenger tickets with scheduled departure dates in the future and travel credits, which can be applied as payment toward the cost of a ticket. We periodically evaluate the estimated air traffic liability and may record adjustments in our income statement. These adjustments relate primarily to tickets that expire unused ("ticket breakage") and items for which final settlement occurs in periods subsequent to the sale of the related tickets such as refunds, exchanges and transactions with other airlines.We recognized approximately $6.4 billion, $6.5 billion and $7.4 billion in passenger revenue during the years ended December 31, 2025, 2024 and 2023, respectively, that had been recorded in our air traffic liability balance at the beginning of those periods.Ticket Breakage. We estimate the value of ticket breakage and recognize revenue at the scheduled flight date. Our ticket breakage estimates are primarily based on historical experience, ticket contract terms and customers’ travel behavior.Regional Carriers. Our regional carriers include both third-party regional carriers with which we have contract carrier agreements ("contract carriers") and Endeavor Air, Inc., our wholly owned subsidiary. Our contract carrier agreements are primarily structured as capacity purchase agreements where we purchase all or a portion of the contract carrier's capacity and are responsible for selling the seat inventory we purchase. We record revenue related to our capacity purchase agreements in passenger revenue and the related expenses in regional carrier expense.

COMMITMENTS AND CONTINGENCIESAircraft Purchase CommitmentsOur future aircraft purchase commitments totaled approximately $15.4 billion at December 31, 2025:Aircraft purchase commitments(1)(in millions)Total2026$3,650 20275,860 20284,150 20291,290 2030480 Thereafter— Total$15,430 (1)The timing of these commitments is based on our contractual agreements with the aircraft manufacturers and remains uncertain due to supply chain, manufacturing and regulatory constraints.Our future aircraft purchase commitments included the following aircraft at December 31, 2025:Aircraft purchase commitments by fleet typeFleet TypePurchase CommitmentsA220-30064 A321-200neo68 A350-9004 A350-100020 B-737-10100 Total256 In addition to the aircraft purchase commitments above, on January 12, 2026, we entered into a definitive agreement with The Boeing Company to acquire 30 Boeing 787-10 aircraft, with an option to purchase up to an additional 30 of the same aircraft. The B-787-10 aircraft will include GEnx engines manufactured by General Electric. Deliveries of the B-787-10 aircraft will begin in 2031.On January 27, 2026, we entered into a definitive agreement with Airbus S.A.S. to purchase 16 Airbus A330-900 aircraft and 15 Airbus A350-900 aircraft, with an option to purchase up to an additional 20 widebody aircraft. The A330-900 aircraft will be powered by the Trent 7000 engine and the A350-900 aircraft will utilize the Trent XWB-84 EP engine, both manufactured by Rolls-Royce. Deliveries of the aircraft will begin in 2029.Contract Carrier AgreementsWe have contract carrier agreements with regional carriers expiring through 2035. These agreements are structured as either capacity purchase or revenue proration agreements.Capacity Purchase Agreements. Our contractual agreements with regional carriers are primarily capacity purchase arrangements, under which we control the scheduling, pricing, reservations, ticketing and seat inventories for the regional carriers' flights operating under our "DL" designator code. We are entitled to all ticket, cargo, mail, in-flight and ancillary revenues associated with the flights under these capacity purchase arrangements. 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 other factors intended to approximate market rates for those services.

DEBTThe following table summarizes our debt as of the dates indicated below:Summary of outstanding debt by categoryMaturity DatesInterest Rate(s) Per Annum at December 31, 2025December 31,(in millions)20252024Unsecured notes2028to20303.75%to5.30%$2,884 $1,575 Unsecured Payroll Support Program Loans(1)20311.00%1,848 3,496 Financing arrangements secured by SkyMiles assets:SkyMiles Notes(2)2026to20284.75%3,422 3,970 SkyMiles Term Loan(2)(3)2026to20285.38%588 784 NYTDC Special Facilities Revenue Bonds(2)2026to20454.00%to6.00%3,522 3,591 Financing arrangements secured by aircraft:Certificates(2)2026to20282.00%to8.00%894 992 Notes(2)(3)2026to20335.96%to7.18%78 87 Financing arrangements secured by slots, gates and/or routes:Senior Secured Notes2025—%— 812 Other financings(2)20305.00%66 66 Corporate Revolving Credit Facility2026to2028Undrawn— — Other revolving credit facilities(3)2026Undrawn— — Total secured and unsecured debt13,302 15,373 Unamortized (discount)/premium and debt issuance cost, net and other6 (26)Total debt13,308 15,347 Less: current maturities(1,372)(1,801)Total long-term debt$11,936 $13,546 (1)Interest rates on the Payroll Support Program ("PSP") loans are 1.00% for the first five years and the applicable SOFR plus 2.00% in the final five years. The applicable interest rates will begin to adjust for each loan in January 2026 and April 2026.(2)Due in installments during the years shown above.(3)Certain financings are comprised of variable rate debt. All variable rates are equal to SOFR (generally subject to a floor) or another index rate plus a specified margin.2025 Unsecured NotesIn June 2025, we issued $2.0 billion in aggregate principal amounts of unsecured notes, consisting of $1.0 billion of 4.95% Notes due 2028 and $1.0 billion of 5.25% Notes due 2030 (collectively, the "Notes"). The Notes are included in Unsecured notes in the table above. The net proceeds from the offering of the Notes were used to repay the Payroll Support Program ("PSP") loan due 2030 included in Unsecured Payroll Support Program Loans in the table above and for general corporate purposes.SkyMiles Credit FacilityIn September 2025, we and our indirect wholly-owned subsidiary SkyMiles IP Ltd. entered into an amendment to the SkyMiles Term Loan credit and guaranty agreement (the "SkyMiles Credit Facility").

INCOME TAXESIncome Tax ProvisionComponents of income tax provisionYear Ended December 31,(in millions)202520242023Current tax provision:Federal$(10)$— $— State and local(17)(35)(8)International(44)(11)(11)Deferred tax provision:Federal(970)(1,038)(896)State and local(139)(117)(84)Income tax provision$(1,180)$(1,201)$(999)The following table presents the principal reasons for the difference between the effective tax rate and the U.S. federal statutory income tax rate:Reconciliation of statutory federal income tax rate to the effective income tax rateYear Ended December 31,202520242023(in millions, except for percentages)AmountPercentAmountPercentAmountPercentU.S. federal statutory income tax rate$1,299 21.0 %$978 21.0 %$1,178 21.0 %State and local income tax, net of federal income tax effect(1)123 2.0 115 2.5 112 2.0 Nontaxable or nondeductible items41 0.7 59 1.3 46 0.8 Changes in valuation allowances(272)(4.4)89 1.9 (274)(4.9)Other(11)(0.2)(40)(0.9)(63)(1.1)Effective income tax rate$1,180 19.1 %$1,201 25.8 %$999 17.8 %(1)New York City, New York, Georgia and California make up the majority (greater than 50%) of the tax effect in this category in 2024 and 2025. Georgia, New York City, New York and New Jersey make up the majority (greater than 50%) of the tax effect in this category in 2023.Taxes paid across all jurisdictions were immaterial for all periods presented.Deferred TaxesWe account for deferred income taxes under the asset and liability method. We recognize deferred tax assets and liabilities based on the tax effects of temporary differences between the financial statement and tax basis of assets and liabilities, as measured by current enacted tax rates. Deferred tax assets and liabilities are net by jurisdiction and are recorded as noncurrent on the balance sheets.We have elected to recognize Global Intangible Low-Taxed Income ("GILTI") in the period it arises and do not recognize deferred taxes for basis differences that may reverse in future years.Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes.

LEASESWe lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of the fixed minimum lease payments over the term. Many of our leases include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when appropriate. We do not separate lease and nonlease components of contracts, except for regional aircraft and information technology ("IT") assets as discussed below.We use the rate implicit in the lease to discount lease payments to present value, when readily determinable. When the rate implicit in the lease is not readily determinable, we use our incremental borrowing rate, which is based on the estimated interest rate for collateralized borrowing over a similar term of the lease at commencement date.Some of our aircraft lease agreements include provisions for residual value guarantees. These guarantees represent an immaterial portion of our lease liability.AircraftAs of December 31, 2025, including aircraft operated by our regional carriers, we leased 122 aircraft, of which 20 were under finance leases and 102 were operating leases. Our aircraft leases had remaining lease terms of two months to 10 years.In addition, we have regional aircraft leases that are embedded within our capacity purchase agreements and included in the ROU asset and lease liability. We allocated the consideration in each capacity purchase agreement to the lease and nonlease components based on their relative standalone fair values. Lease components of these agreements consist of 119 aircraft as of December 31, 2025 and nonlease components primarily consist of flight operations, in-flight and maintenance services. We determined our best estimate of the standalone fair value of the individual components by considering observable information including rates paid by our wholly owned subsidiary, Endeavor Air, Inc., and rates published by independent valuation firms. See Note 9, "Commitments and Contingencies," for additional information about our capacity purchase agreements.Airport FacilitiesOur facility leases are primarily for space at approximately 300 airports around the world that we serve. These leases reflect our use of airport terminals, office space, cargo warehouses and maintenance facilities.

Our processes for assessing, identifying and managing material risks from cybersecurity threats is incorporated into our Enterprise Risk Management ("ERM") framework. Our information security and ERM teams coordinate to regularly review and assess these risks using a wide range of tools and services. Our cybersecurity program leverages components from several industry frameworks and generally recognized best practices, including International Organization for Standardization 27001 and National Institute of Standards and Technology ("NIST") standards, such as the NIST Cybersecurity Framework, which emphasizes identification, protection, detection, response and recovery. We regularly assess our information security program capabilities and tools to improve reliability, enhance capabilities and scan our environment for vulnerabilities and weaknesses.Our information technology teams are trained to remediate vulnerabilities identified within established timeframes and our information security team reports to management on a weekly basis regarding the security risk posture of our information technology assets. We have established a dedicated Information Technology Risk team tasked with the goal of ensuring that risk remediation activities are carried out consistently and that risk remediation controls are operating as intended.Enterprise-wide training is a vital component to reducing risk and protecting customers, employees and company information. We expect all Delta employees and third-party contractors to adhere to information security and privacy policies as they handle corporate and customer information in their daily jobs. As a result, we require all employees and contractors with access to Delta’s information to complete annual training, which is updated as new technology, security and privacy issues emerge. All new employees are required to complete training within 30 days of hire. We also conduct, at least annually, other training and employee education activities, including through awareness programs and campaigns.We engage assessors, consultants, auditors and other third parties to perform assessments of our cybersecurity program with the intent to identify areas for continued improvement, as well as to ensure ongoing compliance with regulatory requirements to which we are subject. In connection with certain regulatory requirements, we are required to engage third parties to assess our cybersecurity controls.

INVESTMENTSWe 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 of the investee.Fair Value Investments. 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, foreign currency fluctuations and other valuation techniques for investments in companies without publicly-traded shares. We elect to measure certain equity securities without readily determinable fair values under the "measurement alternative" (i.e., at their cost less impairment, adjusted for observable price changes).Equity Method Investments. We record our share of our equity method investees' financial results in our income statement as described in the table below.Equity investments ownership interest and carrying valueAccounting TreatmentOwnership Interest(4)Carrying Value(in millions)December 31, 2025December 31, 2024December 31, 2025December 31, 2024Air France-KLMFair Value3 %3 %$100 $62 China EasternFair Value2 %2 %319 155 Grupo AeroméxicoEquity Method(1)19 %20 %377 354 Hanjin-KALFair Value(2)15 %15 %861 507 LATAMFair Value11 %10 %1,644 837 Republic AirwaysFair Value14 %17 %124 84 Unifi AviationEquity Method20 %49 %51 146 WestJetFair Value13 %— %248 — Wheels UpFair Value(3)36 %38 %173 435 Other investmentsVarious325 266 Equity investments$4,222 $2,846 (1)Results are included in miscellaneous, net in our income statement under non-operating expense.(2)At December 31, 2025, we held 14.8% of the outstanding shares (including common and preferred), and 14.9% of the common shares, of Hanjin KAL.(3)Our voting rights with respect to Wheels Up are capped at 29.9%. We elected to account for our equity method investment under the fair value option.(4)Unless otherwise indicated below, movements in our ownership interest result from changes in our equity investees' outstanding shares.Grupo Aeroméxico. In November 2025, Grupo Aeroméxico issued shares through an initial public offering which reduced our ownership interest to 19%.