DELTA AIR LINES, INC.

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, 2025.

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

Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the three and six months ended June 30, 2026 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.

Recent Accounting Standards

Standards Effective in Future Years

Environmental Credits. In May 2026, the Financial Accounting Standards Board issued Accounting Standards Update No. 2026-02 "Environmental Credits and Environmental Credit Obligations (Topic 818)." This standard provides specific guidelines for the recognition, measurement, presentation and disclosure of tradable environmental assets and regulatory compliance liabilities. This standard becomes effective January 1, 2028 and we are assessing the potential impact on our Consolidated Financial Statements.

NOTE 2. REVENUE RECOGNITION

Passenger Revenue

Ticket

We recognized approximately $5.8 billion and $5.7 billion in passenger revenue during the six months ended June 30, 2026 and 2025, respectively, that had been recorded in our air traffic liability balance at the beginning of those periods.

Loyalty Travel Awards

Loyalty travel awards revenue is related to the redemption of mileage credits ("miles") for air travel. Our SkyMiles loyalty program allows customers to earn miles by flying on Delta, Delta Connection carriers and other airlines that participate in the loyalty program. Customers can also earn miles through participating companies, such as credit card, retail, ridesharing, car rental and hotel companies, who purchase miles from us under their respective marketing agreements. Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. During the six months ended June 30, 2026 and 2025, total cash sales from marketing agreements related to our loyalty program were $4.5 billion and $4.0 billion, respectively, which are allocated to travel and other performance obligations.

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

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 within marketing agreements with those companies.

Travel-Related Services

Travel-related services are primarily composed of services performed in conjunction with a passenger’s flight and include baggage fees, administrative fees and on-board sales. We recognize revenue for these services when the related transportation service is provided.

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

Loyalty and Related. This primarily relates to revenue from brand usage by third parties embedded in miles sold, which is included within the total cash sales from marketing agreements, discussed above. Loyalty and related also includes the redemption of miles for non-travel awards and revenue from our vacation package operations, lounge access (including access provided to certain American Express cardholders) and travel products (e.g., commissions from car rentals or hotels booked with our commercial partners).

MRO. This represents revenue from our Delta TechOps third-party maintenance, repair and overhaul ("MRO") business.

Miscellaneous. This is primarily composed of revenues related to codeshare agreements and international commercial joint venture contractual settlements.

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 portion of the refinery segment's revenues consists of fuel sales to 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:

NOTE 3. FAIR VALUE MEASUREMENTS

Assets/(Liabilities) Measured at Fair Value on a Recurring Basis

Cash Equivalents and Restricted Cash Equivalents. Cash equivalents generally consist of money market funds. Restricted cash equivalents generally consist of money market funds, time deposits, commercial paper and negotiable certificates of deposit. Restricted cash equivalents primarily relate to certain self-insurance obligations, debt related reserves and airport commitments. Restricted cash equivalents are recorded in prepaid expenses and other noncurrent assets on our Consolidated Balance Sheet ("balance sheet"). The fair value of these cash equivalents is based on a market approach using prices generated by market transactions involving identical or comparable assets.

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

Fuel Hedge Contracts. Our derivative contracts to hedge the financial risk from changing fuel prices are related to inventory at our wholly-owned subsidiary, Monroe Energy, LLC ("Monroe"). We recognized a gain of $166 million and a loss of $303 million on our fuel hedge contracts in aircraft fuel and related taxes on our Condensed Consolidated Statements of Operations and Comprehensive Income ("income statement") for the three and six months ended June 30, 2026, compared to gains of $53 million and $33 million for the three and six months ended June 30, 2025, respectively. The loss recognized during the first six months of 2026 was composed of $28 million of mark-to-market gains and $331 million of settlement losses on contracts. Gains and losses on settled contracts are reflected within Monroe's operating results. See Note 9, "Segments," for further information on our refinery segment.

NOTE 4. INVESTMENTS

(1)At June 30, 2026, we held 14.8% of the outstanding shares (including common and preferred), and 14.9% of the common shares, of Hanjin KAL.

(2)Our voting rights with respect to Wheels Up are capped at 29.9%. We account for our financial interests in Wheels Up under the fair value option.

Wheels Up. During the six months ended June 30, 2026, Wheels Up drew under the terms of the revolving working capital credit facility that was entered into in 2023, and $36 million was outstanding as of June 30, 2026. This facility is required to be repaid by September 20, 2028.

In May 2026, Wheels Up entered into a new $100 million term loan credit agreement, of which we contributed $57 million with other shareholders making up the remainder. The scheduled maturity date of the term loan is May 29, 2029. The term loan also has capacity to be increased by up to an additional $100 million. We also agreed to extend the contractual transfer restrictions on our investment in Wheels Up until May 2027 and thereafter will remain subject to certain, more limited transfer restrictions.

Both loans are reflected as an investing outflow in our cash flows statement and loan receivable on our balance sheet.

Following these transactions, we continue to conclude that Wheels Up is a variable interest entity ("VIE") and that we are not the primary beneficiary. Based on this assessment, Wheels Up is not consolidated in our financial statements.

NOTE 5. DEBT

(1)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.

(2)Due in installments during the years shown above.

2026 Term Loan

In January 2026, we entered into a $1.25 billion term loan issued by a group of lenders due December 2026. The proceeds of the term loan were used to repay $957 million of Payroll Support Program loans due 2031 (included in Unsecured Payroll Support Program Loans in the table above) and for general corporate purposes.

SkyMiles Credit Facility

In April 2026, 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") with Barclays Bank PLC as lender and administrative agent. This amendment refinanced the existing term loans with the proceeds of replacement term loans bearing interest at a variable rate equal to an adjusted term SOFR, plus a margin of 1.25% per annum, and added a prepayment premium of 1.00% payable in connection with a Repricing Event (as defined in the amended SkyMiles Credit Facility) occurring within six months following April 23, 2026.

2026 Corporate Revolving Credit Facility

In June 2026, we entered into a new $2.650 billion revolving credit facility with JPMorgan Chase Bank, N.A. as administrative agent and the lenders party thereto to refinance and replace the existing Corporate Revolving Credit Facility (the "2026 Corporate Revolving Credit Facility"). The 2026 Corporate Revolving Credit Facility effectively extends the maturity of the $1.325 billion three-year tranche to 2029 and the $1.325 billion five-year tranche to 2031. Borrowings under the three-year and five-year tranches bear interest at a variable rate equal to an adjusted term SOFR, or another index rate, in each case plus a specified margin.

Availability Under Revolving Credit Facilities

As of June 30, 2026, we had approximately $3.1 billion undrawn and available under our revolving credit facilities.

Fair Value of Debt

Market risk associated with our fixed- and variable-rate debt relates to the potential reduction in fair value and negative impact to future earnings, respectively, from an increase in interest rates. The fair value of debt shown below is principally based on reported market values, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral. Debt is primarily classified as Level 1 or 2 within the fair value hierarchy.

Covenants

Our debt agreements contain various affirmative, negative and financial covenants. We were in compliance with the covenants in our debt agreements at June 30, 2026.

NOTE 6. EMPLOYEE BENEFIT PLANS

We sponsor defined benefit and defined contribution pension plans, healthcare plans, and disability and survivorship plans for eligible employees and retirees and their eligible family members.

(1)Service cost relates to the market based cash balance plan. Our traditional benefit plans are frozen and there is no service cost.

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

We also sponsor defined benefit pension plans for eligible employees in certain foreign countries which have immaterial obligations. These plans are not included in the net periodic cost table above.

NOTE 7. COMMITMENTS AND CONTINGENCIES

Aircraft Purchase Commitments

Our future aircraft purchase commitments totaled approximately $27.6 billion at June 30, 2026.

(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 June 30, 2026:

Aircraft Orders

In the March 2026 quarter, 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. Deliveries of the B-787-10 aircraft are scheduled to begin in 2031.

In the March 2026 quarter, 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. Deliveries of the aircraft are scheduled to begin in 2029.

In the March 2026 quarter, we exercised options for 34 Airbus A321neo aircraft. Deliveries from this order are scheduled to begin in 2029. In addition to this order, we maintain options to purchase 36 Airbus A321neo aircraft.

Legal Contingencies

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

NOTE 8. ACCUMULATED OTHER COMPREHENSIVE LOSS

(1)Amounts reclassified from accumulated other comprehensive loss for pension and other benefit liabilities are recorded in miscellaneous, net in non-operating expense in our income statement.

NOTE 9. SEGMENTS

Refinery Operations

The refinery operated by Monroe typically produces approximately 200,000 barrels of refined products (primarily, gasoline, diesel and jet fuel) per day and operates for the benefit of the airline segment by providing jet fuel to the airline. Non-jet fuel production is sold to or exchanged with third parties, which enables us to procure additional jet fuel for consumption in our airline operations. The exchange agreements for non-jet fuel products ended during the second half of 2025.

Segment Reporting

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

(1)Represents sales to the airline segment and products delivered under our exchange agreements as discussed above. During the three months ended June 30, 2026 and 2025, sales to the airline segment were $520 million and $332 million, respectively. Sales to the airline segment represent transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price for jet fuel from the refinery by reference to the market index for the primary delivery location, which is New York Harbor.

(2)Refinery cost of goods sold is included within aircraft fuel and related taxes and refinery expense in our income statement.

(3)The nature of other segment items for the airline segment is shown on our income statement, and the refinery segment includes salaries and related costs, maintenance, utilities and other expenses.

(4)Refinery segment operating results are included within aircraft fuel and related taxes in our income statement.

(1)Represents sales to the airline segment and products delivered under our exchange agreements as discussed above. During the six months ended June 30, 2026 and 2025, sales to the airline segment were $904 million and $592 million, respectively. Sales to the airline segment represent transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price for jet fuel from the refinery by reference to the market index for the primary delivery location, which is New York Harbor.

(2)Refinery cost of goods sold is included within aircraft fuel and related taxes and refinery expense in our income statement.

(3)The nature of other segment items for the airline segment is shown on our income statement, and the refinery segment includes salaries and related costs, maintenance, utilities and other expenses.

(4)Refinery segment operating results are included within aircraft fuel and related taxes in our income statement.

NOTE 10. EARNINGS PER SHARE

We calculate basic earnings per shareby dividing net income by the weighted average number of common shares outstanding, excluding restricted shares. We calculate diluted earnings per share by dividing net income by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based instruments, including stock options, restricted stock awards and warrants. Antidilutive common stock equivalents excluded from the diluted earnings per share calculation are not material.

During the March 2026 quarter, the remaining 1.9 million warrants related to the Payroll Support Program were exercised and settled in a net share settlement. No warrants are outstanding as of June 30, 2026.

The following table shows the computation of basic and diluted earnings per share: