DAL 10-K & 10-Q changes, risk factors and insider trading

In addition, any accident involving an aircraft or aircraft type that we operate or an aircraft that is operated by ananother airlineairline, that is one ofincluding our regional carriers or codeshare, alliance or joint venture partnerspartners, could create a negative public perception about safety and reliability for aviation authorities and the public, which could harm our reputation, resulting in air travelers being reluctant to fly on our aircraft and therefore harm our business.

Breaches or lapses in the security of the technology systems we use and rely on could compromise the data stored within them and consequently disrupt our operations, damage our reputation and expose us to liability, disruption to our operations and damage to our reputation, any or all of which could have a material adverse effect on our business.

As a regular part of our ordinary business operations, we process a high volume of information, including personal information about individuals we have a relationship with and other sensitive business information. The secure operation of our networks and systems, and those of our business partners and third-party service providers, on which this type of information is processed is critical to our business operations and strategy. These networks and systems are subject to anhigh increasinglevels of threat of continually evolving cybersecurity risks, which we must manage.

The methods used to obtain unauthorized access, disable or degrade service or sabotage systems are constantly evolving and may be difficult to anticipate or to detect for long periods of time. Threat actors are also increasingly leveraging advanced technologies, including the use of AI and automated tools, to enhance the scale, speed and effectiveness of cyberattacks. As a result of these types of risks and regular attacks on our systems, we review and update procedures and processes to prevent and protect against unauthorized access to our systems and information and inadvertent misuse of data. In addition to assessing risk and reviewing our procedures, processes and technologies, we continue to educate our employees and contractors about these risks and to monitor, review and update the process and control requirements we expect third parties and vendors to leverage and implement for the protection of Delta information in their care. However, the constantly changing nature of the threats means that we may not be able to prevent all information security breaches or misuse of data. In addition, as cybercriminals become more sophisticated, including through the use of AI-enabled technologies, the cost of proactive defensive measures continues to increase.

We are also subject to evolving global privacy and security regulatory obligations and an increasing customer focus on privacy issues and data security in the United States and abroad, as well as to geopolitical risks associated with international data transfer. The compromise of our or our business partners’ or third-party service providers’ technology systems could result in disruption to our operations, damage to our reputation and legal claims or proceedings, liability, fines or other regulatory enforcement actions, disruption to our operations and damage to our reputation, any or all of which could adversely affect our business. The costs to remediate these incidents could be material.

Disruptions in our information technology capability could result from a technology error or failure impacting our internal systems, whether hosted internally at our data centers or externally at third-party locations, or large-scale external interruption in technology infrastructure support on which we depend, such as power, telecommunications or the internet. The operation of our technology systems and the use of related data may also be vulnerable to a variety of other sources of interruption, including natural disasters, terrorist attacks, computer viruses, hackers and other security issues. A significant individual, sustained or repeated failure of our information technology infrastructure, including third-party networks, software-as-a-service applications, cloud services, or technology that we utilize and on which we depend, could impact our operations and our customer service, result in loss of revenue,revenue and increased costscosts, and damage our reputation. While we have initiatives and disaster recovery plans in place to prevent or mitigate disruptions, we have experienced a significant disruption in the past, such as the global outage caused by a faulty update by cybersecurity vendor CrowdStrike in July 2024 that resulted in global information technology outages of Windows-based systems.systems The faulty software updateand significantly affected our information technology systems, disrupting our operations. The operational disruption resulted in flight delays and approximately 7,000 cancellations of Delta flights over five days, impacting 1.4 million customers. The CrowdStrike-caused outage and resulting operational disruption adversely impacted our results of operations as discussed in more detail in “Item 7. Management's Discussion and Analysis.” While we continue to invest in improvements to our preventative initiatives and disaster recovery plans, the measures we have in place may not be adequate to prevent future business disruptions and any material adverse financial and reputational consequences to our business.

We are dependent on technology initiatives and capabilities to provide customer service and operational effectiveness in order to compete in the current business environment. For example, substantially all of our tickets are issued to our customers as electronic tickets, and a significant number of our customers check in for flights using our website, airport kiosks and ourthe FlyDeltaDelta mobile application.app. We have made and continue to make significant investments in customer facing technology such as delta.com, the FlyDeltaDelta mobile application,app, in-flight wireless internet, check-in kiosks, customer service applications, application of biometric technology, airport information displaysdisplays, new AI-based tools and services, and related initiatives, including security for these initiatives. We have also invested in significant upgrades to technology infrastructure and other supporting systems and have largely completed a transition to cloud-based technologies. The performance, reliability and security of the technology we use are critical to our ability to serve customers. IfNew thisand technologyemerging doestechnologies, including AI‑based tools and services, may not perform effectively,as intended, may be difficult to implement, integrate or scale, or may require ongoing training, monitoring and refinement. If our technology initiatives and capabilities do not perform effectively or accurately, including as a result of the implementation or integration of new or upgraded technologies or systems, our business and operations can be negatively affected, which could be material. In addition, if we are unable to develop or deploy new technologies, including AI‑enabled capabilities, as quickly or effectively as our competitors, or if our investments do not deliver expected benefits, our ability to compete and meet customer expectations could be adversely affected. As discussed above, the faulty CrowdStrike software update significantly affected our information technology systems, disrupting our operations. Additional failures of the technology we use or depend on could expose us to liability, disrupt our business and damage our reputation in the future.

Our results of operations are significantly impacted by changes in the price of aircraft fuel. Fuel costs represented 19%,17%, 21%19% and 24%21% of our operating expense in 2024,2025, 20232024 and 2022,2023, respectively. Fuel prices are highly volatile and at times have adjustedincreased substantially in relatively short periods of time. Between 20222023 and 2024,2025, our average fuel price per gallon has ranged from a monthly high of $4.25$3.22 in JuneOctober 20222023 to a monthly low of $2.29$2.20 in NovemberAugust 2024.2025.

We acquire a significant amount of jet fuel from Monroe and through strategic agreements associated with the refinery that Monroe has with third parties.Monroe. The cost of the jet fuel we purchase under these arrangements remains subject to volatility, including from the cost of crude oil. In addition, we have historically purchased a significant amount of aircraft fuel in addition to what we obtain from Monroe. Our aircraft fuel purchase contracts alone do not provide material protection against price increases as these contracts typically establish the price based on industry standard market price indices.

Because passengers often purchase tickets well in advance of their travel, a significant rapid increase in fuel price maycould result in the fare charged not covering that increase. At times in the past, we often were not able to increase our fares to offset fully the effect of increases in fuel costs, and we may not be able to do so in the future.

Unplanned disruptions or interruptions of production at theMonroe's refinery could have a negative impact on our ability to acquire jet fuel needed for our operations. Disruptions or interruptions of production at the refinery could result from various sources including a major accident or mechanical failure, interruption of supply or delivery of crude oil, work stoppages relating to organized labor issues, or damage from severe weather or other natural or man-made disasters, including acts of terrorism. If the refinery were to experience an unexpected interruption in operations, disruptions in fuel supplies could have negative effects on our results of operations and financial condition. In addition, the financial benefits from the operation of the refinery could be materially adversely affected (to the extent not recoverable through insurance) because of lost production and repair costs.

An important part of our strategy to expand our global network has been to develop and expand strategic relationships with a number of airlines through joint ventures and other forms of cooperation and support, including equity investments. These relationships and investments involve significant challenges and risks, including that joint ventures or cooperation agreements may be subject to ongoing review and renewal requirements and may not generate the expected financial results, or that we may not realize a satisfactory return on our investments. ForOn example,September 15, 2025, the DOT'sDOT approvalissued ofa andfinal order terminating the antitrust immunity grant for our joint cooperation agreement with Aeroméxico isand subjectdirected us and Aeroméxico to awind pendingdown renewalcertain applicationjoint withoperations thethat DOT,were which was tentatively dismissed pursuant to an Order to Show Cause issuedcovered by the DOTimmunity onby January 26,1, 2024.2026. TheWe existingand immunityAeroméxico remainssubsequently filed a petition in effectthe pendingUnited finalStates adjudicationCourt of Appeals for the Eleventh Circuit for judicial review of the renewalDOT application,final order. On November 12, 2025, the Court granted a stay of the final order pending the resolution of the case, the timing and outcome of which cannot be predicted at this time. In the meantime, we and Aeroméxico continue to operate under the joint cooperation agreement.

We rely on the operations and performance of third parties in a number of areas that are important to our business, including third-party regional carriers, international alliance partnerspartners, technology service providers and ground operation providers at some airports. While we have agreements with certain of these third parties that define expected service performance, we do not have direct control over their operations. To the extent that the operations of a third-party on which we rely isare significantly disrupted or if these third parties experience significant performance issues (including failing to satisfy any applicable performance standards) or fail to meet any applicable compliance requirements, our revenue may be reduced, our expenses may be increased and our reputation may be harmed, any or all of which could result in a material adverse effect on our business and results of operations.

Agreements governing our debt, including our credit facilities and our SkyMiles financing agreements, include financial and other covenants. Certain of these covenants could impose restrictions on our business, and failure to comply with any of the covenants in these agreements could result in events of default.

Our business is labor intensive, utilizing large numbers of pilots, flight attendants, aircraft maintenance technicians, ground support personnel and other personnel. As of December 31, 2024,2025, approximately 20% of our workforce, primarily pilots, was unionized. Relations between air carriers and labor unions in the United States are governed by the Railway Labor Act, which provides that a collective bargaining agreement between an airline and a labor union does not expire, but instead becomes amendable as of a stated date. The Railway Labor Act generally prohibits strikes or other types of self-help actions both before and after a collective bargaining agreement becomes amendable, unless and until the collective bargaining processes required by the Railway Labor Act have been exhausted. Separately, the NLRA governs Monroe’s relations with the union representing their employees, which generally allows self-help after a collective bargaining agreement expires.

Our results of operations are impacted by a number of factors including seasonality and changing economic and other conditions beyond our control. Demand for air travel ishas typicallyhistorically been higher in the June and September quarters, particularly in our international markets, because there is more vacation travel during these periods than during the remainder of the year. The seasonalSeasonal shifting of demand causes our financial results to vary on a quarterly basis. Changes in the value of our equity investments in other airlines and airline service companies can also be significant and cause fluctuations in our results. Other factors that may affect our results include severe weather conditions and natural disasters (or other environmental events), which could significantly disrupt service and create air traffic control problems. In addition, increases in the frequency, severity or duration of thunderstorms, hurricanes, typhoons, floods or other severe weather events, including from changes in the global climate and rising global temperatures, could result in increases in delays and cancellations, turbulence-related injuries and fuel consumption to avoid such weather, any of which could result in loss of revenue and higher costs. Because of fluctuations in our results from seasonality and other factors, results of operations for a historical period are not necessarily indicative of results of operations for a future period and results of operations for an interim period are not necessarily indicative of results of operations for an entire year.

Maintaining our reputation and global brand is critical to our business. We operate in a highly visible and public environment with significant real-time exposure to traditional and social media. Adverse publicity, whether justified or not, can rapidly spread, including through social or digital media. In particular, passengers can use social media to portray interactions with Delta, without context, in a manner that can be quickly and broadly disseminated. AI‑enabled tools may also be used to generate, manipulate or amplify inaccurate, misleading or fabricated content, including social media posts, images or videos, which may be difficult to promptly identify or correct. To the extent we are unable to respond in a timely and appropriate manner to adverse publicity, including content that is false or misleading, our brand and reputation may be damaged.

Our reputation and brand could also be adversely impacted by, among other things, failure to make progress toward and achieve our environmental sustainability goals, as well as public pressure from investors or policy groups to change our policies or negative public perception of the environmental impact of air travel. ForOur example,climate westrategy and transition plan is continuing to develop and evolve. We have established ambitious goals to reduce our greenhouse gas emissions.emissions, Achieving these ambitious goals will require significant capital investment from manufacturers and other stakeholders, aswhich we are unable to achieve these goals using our existing fleet, current technologies and available fuel sources. We are continuing to develop our climate strategy and transition plan; however, ourOur ability to execute on such a plan and achieve our goals is subject to substantial risks and uncertainties, as it is dependent on the actions of governments and third parties and will require, among other things, significant capital investment, including from third parties, research and development from manufacturers and other stakeholders, along with government policies and incentives to reduce the cost, and incent production, of SAF and other technologies that are not presently in existence or available at scale. Significant damage to our reputation and brand could have a material adverse effect on our business and financial results, including as a result of litigation related to any of these matters.

The measures governments and private parties implementedimplement in order to stem the spread of a disease outbreak or other public threat, such as the COVID-19 pandemic, and the general concern among travelers about such a disease outbreak or public threat have had, and may in the virusfuture among travelers, hadhave, a material adverse effect on the demand for worldwide air travel compared to historical levels, and consequently upon our business for an extended period. Similar disease outbreaks or public health threats that may arise in the future could have similarly adverse effects on our business.

Our operations were, and could in the future be,be negatively affected further if our employees are quarantined or sickened as a result of exposure to a disease outbreak, or as a result of a similar public health crisis, or if they are subject to additional governmental curfews or "shelter in place" health orders or similar restrictions. Measures restricting the ability of our airport or in-flight employees to come to work negatively impact our service or operations, all of which could negatively affect our business.

Terrorist attacks, geopolitical conflict or security events, or the fear or threat of any of these events, could have a significant adverse effect on our business. Despite significant security measures implemented at airports and airlines, the airline industry remains a high profile target for terrorist groups.groups and cyber threat actors. We rely on government providedgovernment-provided threat intelligence and utilize private sources to constantly monitor for threats from terrorist groups and individuals, including from violent extremists both internationally and domestically, with respect to direct threats against our operations and in ways not directly related to the airline industry. In addition, the impact on our operations of avoiding areas of the world, including airspace, in which there are geopolitical conflicts and the targeting of commercial aircraft by parties to those conflicts can be significant. Security events, primarily from external sources but also from potential insider threats, also pose a significant risk to our passenger and cargo operations. These events could include random acts of violence and could occur in public areas that we cannot control.

Terrorist attacks, geopolitical conflict or security events, or the fear or threat of any of these events, even if not made directly on or involving the airline industry, could have a significant negative impact on us by discouraging or preventing passengers from flying, leading to decreased ticket sales and increased refunds. In addition, potential costs from these types of events include increased security costs, impacts from avoiding flight paths over areas in which conflict is occurring or could occur, such as flight redirections or cancellations, reputational harm and other costs. If any or all of these types of events occur, they could have a material adverse effect on our business, financial condition and results of operations.

The airline industry is highly competitive, marked by significant competition with respect to routes, fares, schedules (both timing and frequency), operational reliability, services, products, customer service and loyalty programs. Consolidation inOver the airlinelast industry,20 changesyears, inthe industry has evolved significantly both domestically and internationally. Consolidation, international alliances, the creation of immunized joint ventures and the rise of subsidized government-sponsored international carriers have altered and will continue to altershaped the competitive landscape in the industry, resulting in the formation of airlines and alliances with increasedsignificant financial resources, more extensive global networks and competitive cost structures.

Our domestic operations are subject to significant competition from traditional network carriers, including American Airlines and United Airlines, national point-to-point carriers, including Alaska Airlines, JetBlue Airways and Southwest Airlines, and other discount or ultra-low-cost carriers, including Allegiant Air, Avelo Airlines, Breeze Airways, Frontier Airlines and Spirit Airlines. Some of these carriers have business models primarily focused on maintaining low costs, with the intention of providing service at lower fares to destinations served by Delta. In particular, we face significant competition at our domestic hubs and key airports either directly at those airports or at the hubs of other airlines that are located in close proximity. We also face competition in small- to medium-sized markets from regional jet operations of other carriers. Our ability to compete in the domestic market effectively depends, in part, on our ability to maintain a competitive cost structure. If we cannot maintain our costs at a competitive level, then our business, financial condition and results of operations could be materially adversely affected.

TheTo a lesser extent, the airline industry also faces competition from surface transportation and technological alternatives such as virtual meetings, teleconferencing or videoconferencing. Increased competition from these sectors in both the domestic and international markets may have a material adverse effect on our business, financial condition and results of operations.

The airline industry is heavily dependent on business models that concentrate operations in major airports in the United States and throughout the world. An interruption or disruption at an airport or facility where we have significant operations, whether resulting from air traffic control delays, interruptions in other government services or staffing shortages (including as a result of prolonged government shutdowns), failure of computer systems or technology infrastructure, weather events or natural disasters, or performance issues from third-party service providers, if sustained for an extended period of time, could have a material adverse effect on our business, financial condition and results of operations.

TheAirlines are subject to extensive regulatory and legal compliance requirements that result in significant costs and may have material adverse effects on our business. For instance, the FAA from time to time issues directives and other regulations relating to the maintenance and operation of aircraft that necessitate significant expenditures and could carry operational implications. We expect to continue incurring significant expenses to comply with the FAA’s regulations. In addition, a directive or other regulation that has a significant operational impact on us–including, for example, a temporary reduction in flights at high-traffic airports to address air traffic control staffing challenges–could have a material adverse impact on our financial results.

Inefficiencies in the U.S. air traffic control system, which is regulated by the FAA, canincluding resultoutdated technology and inadequate staffing levels have resulted, and may in the future result, in delays and disruptions of air traffic, especially during peak travel periods in certain congested markets. Failure to implement measures to improve the air traffic control system could lead to capacity constraints as well as increased delays and inefficiencies in flight operations as demand for U.S. air travel increases, having a material adverse effect on our operations. Failure to update the air traffic control system in a timely manner, and the substantial funding requirements of an updated system that may be imposed on air carriers, may have an adverse impact on our financial condition and results of operations.

Airport slot access is subject to government regulation and changes in slot regulations or allocations could impose a significant cost on the airlines operating in airports subject to such regulations or allocations or otherwise adversely affect an airline’s business. Certain of our hubs are among the most congested airports in the United States and have been, and could in the future be, the subject of regulatory action that might limit the number of flights and/or increase costs of operations at certain times or throughout the day. Air traffic control inefficiencies or inadequate staffing levels can also enhanceexacerbate these pressures.

As an international carrier, we are subject to a wide variety of U.S. and foreign laws that affect trade, including tariff and trade policies, export and import requirements, taxes, monetary policies and other restrictions and charges. In particular, the imposition of significant new tariffs or increases in existing tariffs with respect to aircraft or related parts that we are not able to mitigate could substantially increase our costs, which in turn could have a material adverse effect on our financial results.

We and other U.S. carriers are subject to U.S. and foreign data privacy and security laws, as well as emerging laws and regulations governing the use of AI, that are not consistent in all countries in which we operate and which are continuously evolving, requiring ongoing monitoring and updates to our privacy andprivacy, information security and AI governance programs. Although we dedicate significant resources to manage compliance with global privacy andprivacy, information security and AI-related obligations, this challenging regulatory environment may pose material risks to our business, including increased operational burdens and costs, regulatory enforcement, and legal claims or proceedings.

For example, in 2024, the EPA finalized regulations defining certain per- and polyfluoroalkyl substances ("PFAS") as "hazardous substances" under the Comprehensive Environmental Response Compensation and Liability Act ("CERCLA"),CERCLA, and the EPA also finalized regulations establishing drinking water standards for regulating certain PFAS under the Safe Drinking Water Act. PFAS are man-made chemicals that have been used in a wide variety of consumer and industrial products, including the firefighting foams used to extinguish fuel-based fires at airports and refineries. Numerous states have also adopted regulations governing PFAS as well.PFAS. The EPA’s final rule under CERCLA, and analogous state laws, could subject airports, airlines, and refineries, among others, to potential liability for cleanup of historical PFAS contamination associated with use of PFAS-containing firefighting foam. In addition, some states have adopted legislation prohibiting the manufacture, sale, distribution and/or use of firefighting foam containing intentionally added PFAS, which may require the transition to alternative fire suppression systems. Delta has developed and is implementing plans to transition the fire suppression systems in affected aircraft maintenance hangars to systems that do not contain intentionally added PFAS. The ultimate impact and associated cost to Delta of these legislative and regulatory developments related to PFAS, including firefighting foam, cannot be predicted at this time.

Future regulatory action concerning climate change, aircraft emissions and noise could have a significant effect on the airline industry. In order to address aircraft carbon dioxide emissions, the International Civil Aviation Organization ("ICAO"), a United Nations specialized agency, formally adopted a global, market-based emissionemissions offset program known as CORSIA. This program establishesestablished a goal for the aviation industry to achieve carbon-neutral growth in international aviation beginning in 20212021. throughAny growth above the usebaseline ofwould need to be addressed using eligible carbon offsets and/or lower carbon aviation fuel. ICAO set the baseline for establishing airlines’ obligations under CORSIA for 2021 to 2023 based on 2019 travel, and in 2022 set a new, more stringent CORSIA baseline of 85% of 2019, which will apply from 2024 through 2035. Because certain CORSIA programhas detailsnot remainyet tobeen beimplemented developedin the United States and could potentially be affected by political developments in participating countries or the results of the initial phases of the program, the impact of CORSIA cannot be predicted at this time. However, compliance with CORSIA is expected to increase operating costs for airlines subject to the program that operate internationally.

In addition to CORSIA, we may face a patchwork of regulation of aircraft emissions in the U.S. and abroad and could become subject to further taxes, charges or additional requirements to obtain permits or purchase allowances or emission credits for greenhouse gas emissions in various jurisdictions. For example, in 2023, the EU adopted updated legislation on the EU Emissions Trading System (“ETS”). That legislation continues in effect the so-called “stop-the-clock” provision whereby EU ETS does not apply to flights to or from locations outside the EEA, Switzerland or the UK until 2027. The legislation also provides for a review of the effectiveness of CORSIA in 2026 that could, if CORSIA is not deemed sufficiently effective, lead to the application of EU ETS to all flights departing the EU and EEA.EEA, which would increase costs. Also in 2023, the EU adopted legislation that will imposeestablished a SAF mandate on fuel supplied at EU airports. TheBeginning in 2025, the mandate initiallyrequired requires that,2% of the jet fuel supplied in the EU,EU 2% mustto be SAF beginning in 2025,SAF, and the percentage increases incrementally over time to 70% in 2050. This mandate ishas expected to increase the cost ofincreased SAF prices in the EU.EU for the airline industry. In 2024, the UK also adopted SAF mandate legislation, and other countries are also considering mandates.

Additional regulation could result in taxation, regulatory or permitting requirements from multiple jurisdictions for the same operations and significant costs for the airline industry, including Delta. In addition to direct costs, such regulation could result in increased fuel costs passed through from fuel suppliers affected by any such regulations. While the specific nature of future actions is hard to predict, new laws or regulations related to environmental matters adopted in the U.S. or other countries could impose significant additional costs on or otherwise adversely affect our operations. Certain airports have also adopted, and others could in the future adopt, greenhouse gas emission or climate-related goals and requirements that could impact our operations or require us to make changes or investments in our infrastructure. We are monitoring and evaluating the potential impact of such developments.

As a result of the discretionary nature of air travel, the airline industry has been cyclical and particularly sensitive to changes in economic conditions.conditions, as well as related consumer perceptions. Because we operate globally, our business is subject to economic and political conditions throughout the world. During periods of unfavorable or volatile economic conditions in the economy in the U.S. or abroad, demand for air travel can be significantly impacted as business and leisure travelers choose not to travel, seek alternative forms of transportation for short trips or conduct business using technological alternatives. If unfavorable economic conditions or negative consumer perceptions occur, particularly for an extended period, our business, financial condition and results of operations may be adversely affected. In addition, significant or volatile changes in exchange rates between the U.S. dollar and other currencies, and the imposition of exchange controls or other currency restrictions, may have a material adverse effect on our liquidity, financial condition and results of operations.

Our international operations are an important part of our route network. Political disruptions and instability around the world can negatively impact the demand and network availability for air travel. Additionally, any deterioration in global trade relations, such as new or increased tariffs or other trade barriers, could result in a decrease in the demand for international air travel.

Our 20242025 operating income was $6.0$5.8 billion, ana improvementdecrease of $474$173 million compared to 2023,2024, and operating income, adjusted (a non-GAAP financial measure) was $6.0$5.8 billion, a decrease of $318$212 million compared to 2023. Operating income, adjusted in 2023 excluded one-time pilot agreement expenses and other items.2024. The changesdecreases in operating income and operating income, adjusted are primarily resultingresult from nearly offsetting increases in both revenue and operating expensesexpenses, as described below. As a result of our strong performance in 20232024 and 2024,2025, we paid profit sharing of $1.4 billion in February 20242025 to our employees and will pay another $1.4$1.3 billion in February 20252026 in recognition of these achievements.

Revenue. Compared to 2023,2024, our 20242025 operating revenue increased $3.6$1.7 billion, or 6%,3%, primarily due to a 6%3% increase in capacity driven by continued strength in demand for domestic and international travel and premium products, asparticularly wellfrom ascorporate ancustomers, increasegrowth in revenueloyalty relatedtravel toawards, increased refinery sales to third parties.parties Totaland revenue,growth adjustedof our Delta TechOps third-party maintenance, repair and overhaul (a"MRO") non-GAAPbusiness. financialIn measure)addition, revenue increased inyear 2024over byyear $2.3 billion, or 4.3%, compareddue to 2023.the AdjustmentsCrowdstrike-caused wereoutage to exclude revenue related to refinery sales to third parties. In Julyin 2024, our operations were significantly disrupted by the CrowdStrike-caused outage. We estimate that this disruptionwhich led to a direct revenue impact of approximately $380 million related to approximately 7,000 flight cancellations over five days,days. whichTotal reducedrevenue, ouradjusted expected(a year-over-yearnon-GAAP capacityfinancial growthmeasure) increased in 2025 by approximately$1.3 0.4billion, percentageor points2.3%, duringcompared to 2024. Adjustments were to exclude refinery sales to third parties.

Operating Expense. Total operating expense increased $3.1$1.9 billion, or 6%,3%, compared to 2023,2024, primarily resultingdue fromto higher employee-relatedemployee costs from increased wageswages, and related expenses, higher volume-related expensescosts associated with thea 6%3% increase in capacitycapacity, and an increase inhigher expenses related to refinery sales to third parties. TheThese CrowdStrike-causedincreases outagewere andpartially operationaloffset recoveryby resultedlower inaircraft fuel costs. In addition, approximately $170 million of additional operating expenses were incurred in 2024 associated with the Crowdstrike-caused outage primarily due to customer expense reimbursements and crew-related costs. Fuel expense was approximately $50 million lower than it would have been as a result of the flight cancellations. Total operating expense, adjusted (a non-GAAP financial measure) increased $2.7$1.5 billion, or 5%,3%, compared to 2023.2024. Current year adjustments were primarily to exclude expenses related to refinery sales to third parties, while prior year adjustments also excluded the pilot agreement and related expenses.parties.

Our total operating cost per available seat mile ("CASM") of 19.3019.31 cents was comparable to 2023,2024, primarily due to lower fuel expense and a 6%3% increase in capacity offset by higher expensesemployee associated with the increase in capacity and related to refinery sales to third parties.costs. Non-fuel unit costs ("CASM-Ex", a non-GAAP financial measure), which excludes fuel, expenses related to refinery sales to third parties and other items, increased 2.8%2.4% to 13.5413.86 cents compared to 2023.2024, which was in line with our long-term target of low-single digit growth, on higher employee costs and investments in the customer experience.

Non-Operating Results. Total non-operating expenseincome was $1.3$363 billionmillion in 2024,2025, compared to total non-operating incomeexpense of $87$1.3 millionbillion in 2023,2024, primarily due to mark-to-market gains on certain of our equity investments in 20232025 partiallycompared offsetto by lower expenseslosses in 2024 associated with our debt reduction initiatives.2024.

Cash Flow. During 2024,2025, operating activities generated $8.0$8.3 billion, primarily from ticket sales and the sale of SkyMiles to our partners. TotalRemuneration cash sales of SkyMiles tofrom American Express related to the SkyMiles program were $7.4$8.2 billion during 2024,2025, an increase of approximately 8%11% compared to 2023.2024. Investing activities resulted in net cash outflows of approximately $3.7$4.2 billion, primarily for $5.1 billion of capital expenditures, partially offset by $1.1 billion of net redemptions of short-term investments.expenditures. After adjusting for our strategic investment in WestJet and certain activities,other items, these results generated $3.4$4.6 billion of free cash flow (a non-GAAP financial measure) in 2024.2025.

Also, during 20242025 we had financing cash outflows of approximately $4.0$4.8 billion primarily related to repayment of our debt and finance leases, including approximately $1.1$2.9 billion for early repayments and the remainder fromfor scheduled maturities. Our proceeds from long-term obligations primarily related to the issuance of $2.0 billion in aggregate principal amount of unsecured notes. Our cash, cash equivalents, short-term investments and aggregate principal amount committed and available to be drawn under our revolving credit facilities ("liquidity") at December 31, 20242025 was $6.1$7.4 billion.

Domestic passenger revenue in 20242025 wasincreased above1% 2023on levelsa as3% weincrease experiencedin capacity compared to 2024. The increase in domestic revenue primarily resulted from strong demand for premium products across theour domestic network. We generated higher growth in premium products revenue compared to main cabin with the delivery of new aircraft that include more premium seat capacity and an increase in yield in premium products compared to main cabin, as we see more consumers choosing these premium offerings. Domestic passenger unit revenue ("PRASM") for 2025 decreased 2% compared to 2024 primarily due to weakness in main cabin demand.

Revenue in the Latin America region revenueremained increasedconsistent duringwith 2024 compared to 2023, due to strong demand for leisure destinations in South America and the Caribbean on a 15%slight increase in capacity. We experienced slight revenue growth in the Caribbean and South America compared to 2024. In South America, we continued to build on the strength of our joint venture with LATAM in South America through additional routes, greater network connectivity,connectivity and a more streamlined airport experience.

Refinery. This represents refinery sales of non-jet fuel products to third parties. These sales increased $1.3$435 billionmillion compared to 2023.2024. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales recorded in other revenue, during each period.

Loyalty Program. This relates to revenues from brand usage by third parties and other performance obligations embedded in miles sold, as well as redemption of miles for non-air travel and other awards. These revenues are mainly driven by customer spend on American Express cards and new cardholder acquisitions.acquisitions, Revenueswhich fromboth ourgrew relationshipdouble-digit withon Americana Expresspercentage increasedbasis compared to 2023 driven by co-brand card spend growth and card account acquisitions.2024.

Miscellaneous. This is primarily composed of revenues related to lounge access, including access provided to certain American Express cardholders, travel products (e.g., car rentals or hotels booked with our commercial partners), codeshare agreements and certaininternational otherjoint commercialventure relationships.partnership contractual settlements. The increase in revenues was primarily driven by growth in travel products, codeshare agreements and otherlounge commercial relationships.access.

Aircraft Fuel and Related Taxes. Fuel expense decreased $503$747 million compared to 20232024 primarily due to a 12%9% decrease in the market price of jet fuel partially offset by a 5%4% increase in consumption on a 6%3% increase in capacity, resulting in a 1% improvement in fuel efficiency. Fuel expense was also approximately $50 million lower than it would have been as a result of the 7,000 flight cancellations over the five-day period following the CrowdStrike-caused outage.capacity.

Ancillary Businesses and Refinery. Ancillary businesses and refinery includes expenses associated with refinery sales to third parties, aircraft maintenance services we provide to third partiesMRO and our vacation package operations. The increase in these expenses was primarily related to higher refinery sales to third parties, which increased $1.3$435 billionmillion compared to 2023.2024. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales. In addition, the expenses related to our MRO business increased $141 million, to $751 million during 2025, due to an approximately 25% growth in that business.

Interest expense, net. Interest expense, net includes interest expense and interest income. This decreased compared to 2023the prior year primarily ondue to reduced interest expense resulting from our debt reduction initiatives, which was partially offset by lower interest income. We are reducing the total amount of interest expense by pre-paying our debt in addition to periodic amortization payments and scheduled maturities.initiatives. During 2024, we made payments of $4.0 billion related to our debt and finance lease obligations. We continued to prioritize strengthening the balance sheet and reducing debt with $4.8 billion of payments on debt and finance lease obligations,obligations includingduring approximately2025. $1.1During the June 2025 quarter, we issued $2.0 billion ofin earlyaggregate repayments.principal This included early extinguishmentamount of $844unsecured millionnotes inand principal related toused a portion of the SkyMilesproceeds Termto repay the Payroll Support Program ("PSP") loan due 2030 ("PSP1 Loan"). andThe various secured andnew unsecured notes,notes andcarry approximatelya $280lower millioninterest forrate financethan leasedthe aircraftrepaid thatPSP1 were purchased.Loan. We continue to seek opportunities to pre-pay our debt, in addition to periodic amortization payments and scheduled maturities, during 2025 and beyond.refinance Interesthigher ratescost on the Payroll Support Program 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 April 2025, January 2026 and April 2026.debt.

Gain/(loss) on investments, net. See Note 4 of the Notes to the Consolidated Financial Statements for additional information on our equity investments measured at fair value on a recurring basis. Net unrealized gains on our equity method investments during 2023 were primarily related to Wheels Up, Hanjin-KAL and LATAM.

Miscellaneous, net. Miscellaneous, net primarily includes employee benefit plans net periodic cost, charitable contributions, our share of our equity method investments' resultsresults, dividend income from our equity investments and foreign exchange gains/(losses). The decrease compared to 2024 primarily relates to lower employee benefit plan costs and an increase in dividend income. See Note 4 of the Notes to the Consolidated Financial Statements for additional information on our equity investments.

We expect our annual effective tax rate to be between 23% and 25% for 2025. In certain periods, we may have adjustments to our net deferred tax liabilities as a result of changes in prior year estimates, mark-to-market adjustments on our equity investments and tax laws enacted during the period, which will impact the effective tax rate for that period. Excluding the mark-to-market results, we project our annual effective tax rate to be between 23% and 25% for 2026.

The refinery operated by our wholly owned subsidiarysubsidiary, MonroeMonroe, primarily produces gasoline, diesel and jet fuel. Monroe has agreements in place to exchange or sell the non-jet fuel products the refinery produces with third parties forto obtain jet fuel consumedfor consumption in our airline operations. The jet fuel produced and procured through exchanging gasoline and diesel fuel produced by the refinery typically provides approximately 200,000 barrels per day, or approximately 75% of our consumption, for use in our airline operations.operations Thethrough refinerythe regularlyproduction optimizesof itsjet fuel and through exchanges and sales of gasoline and exchange activities of non-jetdiesel fuel products based on market conditions and the availability of counterparties for exchanges. Refinery revenues increased in 2024, primarily drivenproduced by the increase in third party refinery sales on reduced exchanges of non-jet fuel products due to the availability of exchange counterparties, and reduced production in 2023 related to the planned maintenance turnaround. The refinery operating income decreased in 2024 compared to 2023 mainly due to lower industry refining margins.refinery.

A refinery is subject to annual EPA requirements to blend renewable fuels into the gasoline and on-road diesel fuel it produces. A refinery may meet its obligation by blending the necessary volumes of renewable fuels, by purchasing Renewable Identification Numbers ("RINs") in the open marketmarket, or through a combination of blending and purchasing RINs. Because Monroe is able to blend only a small amount of renewable fuels, it must purchase the majority of its RINs requirement in the secondary market. Monroe incurred $203$312 million in RINs compliance costs during 2024,2025, compared to $323$203 million incurred in 2023.2024.

Sale of Miles to Participating Companies. Customers earn miles based on their spending with participating companies such as credit card, retail, ridesharing, car rental and hotel companies with which we have marketing agreements to sell miles. Payments are typically due to us monthly based on the volume of miles sold during the period. Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. TotalRemuneration cash sales tofrom American Express werewas $7.4$8.2 billion during 2024,2025, an increase of 8%11% compared to the prior year. See Note 2 of the Notes to the Consolidated Financial Statements for further information regarding the cash sales from marketing agreements.

Fuel. Fuel expense represented approximately 19%17% of our total operating expense during 2024.2025. The market price for jet fuel is volatile, which can impact the comparability of our periodic cash flows from operations. The average fuel price per gallon decreased in 2024.2025. WeFuel expectprices continuedhave higherhistorically marketbeen price volatility compared to historical levelsvolatile due to many factors, including geopolitical events. As capacity increased throughout the year, fuel consumption was higher in 20242025 than 2023.2024. We expect fuel consumption to increase in 20252026 generally aligned with capacity, partially offset by improvements in the fuel efficiency of our fleet.capacity.

Employee Benefit Obligations. We sponsor defined benefit and defined contribution pension plans for eligible employees and retirees. Our funding obligations for defined benefit plans are governed by the Employee Retirement Income Security Act ("ERISA") and any additional applicable legislation. We had no minimum funding requirements inof 2024,$70 million during 2025 and estimate that there will be approximately $80$5 million of minimum funding requirements under these plans in 2025.2026. Payments to defined contribution plans were approximately $1.3$1.4 billion during the year ended December 31, 2024.2025.

Contract Carrier Obligations. We have certain estimated minimum fixed obligations under capacity purchase agreements with third-party regional carriers. These minimum amounts are based on the required minimum levels of flying by the regional carriers under the respective agreements and assumptions regarding the costs associated with such minimum levels of flying. As of December 31, 20242025 the total of these minimum amounts was $7.7$6.0 billionbillion, and range from approximately $700 million to $1.8 billiondecreasing on an annual basis overfrom theapproximately next$1.8 fivebillion years.in 2026 to $300 million in 2030. See Note 109 of the Notes to the Consolidated Financial Statements for more information on our contract carrier obligations.

Operating Lease Obligations. As described further in Note 7 of the Notes to the Consolidated Financial Statements, as of December 31, 20242025 we had a total of $8.4$7.8 billion of minimum operating lease obligations. These minimum lease payments range from approximately $600 million to $1.0 billiondecrease on an annual basis overfrom theapproximately next$1.0 fivebillion years.in 2026 to $500 million in 2030.

Other Obligations. We have certain purchase obligations under which we are required to make minimum payments for goods and services, including, but not limited to, aviation-related, maintenance, technology, sponsorships, marketing, insurance and other third-party services and products. As of December 31, 2024,2025, we had approximately $9.3$11.2 billion of such obligations, which range from approximately $400 million to $1.3 billiondecreasing on an annual basis overfrom theapproximately next$1.4 fivebillion years.in 2026 to $800 million in 2030.

Capital Expenditures. Our capital expenditures (i.e., property and equipment additions in our Consolidated Statements of Cash Flows ("cash flows statement")) were $5.1$4.5 billion and $5.3$5.1 billion in 20242025 and 2023,2024, respectively. Our capital expenditures are primarily related to the purchases of aircraft, fleet modifications, airport construction projects (discussed below), fleet modifications and technology enhancements.

We have committed to future aircraft purchases and have obtained, but are under no obligation to use, long-term financing commitments for a substantial portion of the purchase price of the aircraft. Our expected 20252026 capital spend of approximately $5.0$5.5 billion, which may vary depending on financing decisions, will be primarily for aircraft, including deliveries and advance deposit payments, as well as fleet modifications and technology enhancements. As described in Part I, Item 1. "Business - Environmental Sustainability," aircraft fleet renewal is an important component of our environmental sustainability strategy and the path to achievement of our ambitious climate goals, which will continue to require extensive capital investment in future periods. See Note 10 of the Notes to the Consolidated Financial Statements for additional information regarding our aircraft purchase commitments, which totaled approximately $18.3 billion as of December 31, 2024.

MarchJune 2026 Quarter Financial Highlights

Our operating income for the MarchJune 2026 quarter was $501$1.9 million,billion, a decrease of $68$238 million compared to the MarchJune 2025 quarter.

Revenue. Compared to the MarchJune 2025 quarter, our total revenue increased $1.8$3.1 billion. Passenger revenue increased $822$1.7 millionbillion compared to the MarchJune 2025 quarter on anhigher pricing in response to the rapid increase in revenuefuel forcosts premiumand products,broad particularlybased fromdemand strength across premium, main, corporate customers, and higher loyalty revenue.loyalty. In addition, the increase in total revenue was driven by higher refinery sales to third parties and growth in our cargo and MRO business.businesses. Total revenue, adjusted (a non-GAAP financial measure, which excludes revenue related to refinery sales to third parties) increased in the MarchJune 2026 quarter by $1.2$2.2 billion, or 9.4%,14%, compared to the MarchJune 2025 quarter.

Operating Expense. Total operating expense in the MarchJune 2026 quarter increased $1.9$3.3 billion, or 14%,23%, compared to the MarchJune 2025 quarter, primarily due to higher aircraft fuel costs, expenses related to refinery sales to third parties, and salaries and related costs and aircraft fuel costs. Total operating expense, adjusted (a non-GAAP financial measure, which primarily excludes expenses related to refinery sales to third parties) in the MarchJune 2026 quarter increased $1.2$2.7 billion, or 9%,20%, compared to the MarchJune 2025 quarter.

Our total operating cost per available seat mile ("CASM") increased 13%21% compared to the MarchJune 2025 quarter, while non-fuel unit cost ("CASM-Ex", a non-GAAP financial measure) increased 6%.6.8%.

Non-Operating Results. Total non-operating expenseincome was $715$145 million in the MarchJune 2026 quarter, compared to $249$472 million in the MarchJune 2025 quarter, primarily due to largerlower mark-to-market lossesgains on certain of our equity investments in the MarchJune 2026 quarter compared to the MarchJune 2025 quarter.

Cash Flow. During the MarchJune 2026 quarter, operating activities generated $2.4$1.6 billion, primarily from ticket sales and the sale of SkyMiles to our partners. Remuneration from American Express was $2.2$2.4 billion in the MarchJune 2026 quarter.

Cash flows used in investing activities during the quarter totaled $1.3$1.5 billion primarily from capital expenditures. These operating and investing activities yielded free cash flow (a non-GAAP financial measure) of $1.2$209 billionmillion in the MarchJune 2026 quarter. Additionally, we had cash outflows of $1.6$536 billionmillion related to repayments of our debt and finance leases and proceeds from debt issuance of $1.3 billion.leases.

Results of Operations - Three Months Ended MarchJune 31,30, 2026 and 2025

Compared to the MarchJune 2025 quarter, total revenue increased $1.8$3.1 billion, dueas a result of higher pricing in response to anthe rapid increase fromin premiumfuel products,costs particularlyand frombroad based demand strength across premium, main, corporate customers,and loyaltyloyalty. travelIn awards,addition, the increase in total revenue was driven by higher refinery sales to third parties and growth in our cargo and MRO business.businesses. Cargo revenue increased 39%, driven largely by volume.

Domestic passenger revenue increased 8%15% in the MarchJune 2026 quarter compared to the MarchJune 2025 quarter on a 1%2% increase in capacity. Domestic revenue increased dueon higher pricing in response to strongthe rapid increase in fuel costs and broad based demand forstrength ouracross premiumpremium, products, particularly frommain, corporate customers.and loyalty.

International passenger revenue for the MarchJune 2026 quarter increased 5%8% compared to the MarchJune 2025 quarter. The increase in the Atlantic region is primarily driven by demand forto premiumLondon products.and European leisure markets. Revenue growth in the Latin America region remained consistent with the prior period due toreflects demand strength to the Caribbean and South America,Caribbean, which was partially offset by lower capacity to Mexican leisure demanddestinations due to civil unrest in several of our destinations.locations earlier in 2026. Pacific region revenue growth reflects continued growth in South Korea alongsideenabled through our joint venture partnerwith Korean Air and strong results on increased China capacity.

Refinery. Refinery sales to third parties increased $592$950 million compared to the MarchJune 2025 quarter. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales.

Loyalty and Related. This primarily relates to revenuesrevenue from brand usage by third parties embedded in miles sold. Loyalty and related also includes the redemption of miles for non-travel awards,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). Most of the increase compared to the prior period is driven by higher customer spend on American Express cards.cards and new card acquisitions as we refreshed our co-brand credit card portfolio with new and enhanced travel benefits.

MRO. This represents revenue from our Delta TechOps third-party maintenance, repair and overhaul ("MRO") business. The increase compared to the prior period resulted from largera engineshift in mix to work scopeson andmore fromlegacy timingengines inthan thenext currentgeneration period.engines, Wewhich we expect continuedto growthcontinue throughout 2026, but at a more normalized rate than we experienced in the March 2026 quarter.2026.

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

Salaries and Related Costs. The increase in salaries and related costs primarily resulted from the implementation of 4% base pay increases for eligible employees ofeffective 4%on effectiveboth June 1, 2026 and June 1, 2025 and 4% for Delta pilots on January 1, 2026, as well as higher flight crew costs driven by severe weather-related operational disruptions.2026.

Aircraft Fuel and Related Taxes. Aircraft fuel and related taxes increased $332$1.7 millionbillion compared to the MarchJune 2025 quarter primarily due to aan 10%80% increase in our average jet fuel purchase price, mainly due to increases during the month of March,price and an increase in consumption consistent with the 1% increase in capacity. We expect that fuel consumption for the remainder of 2026 will remain aligned with capacity changes compared to 2025.2025, We expect thiswhile elevated jet fuel costcosts are anticipated to continuepersist until recent market disruptions and geopolitical events are resolved.

MRO Expense. This represents expenses from our Delta TechOps third-party MRO business. The increase compared to the prior period resulted from largera engineshift in mix to work scopeson andmore fromlegacy timingengines inthan thenext currentgeneration period.engines, Wewhich we expect continuedto growthcontinue throughout 2026, but at a more normalized rate than we experienced in the March 2026 quarter.2026.

Interest expense, net. Interest expense, net includes interest expense and interest income. This decreased compared to the prior year primarily due to reduced interest expense resulting from our debt reduction initiatives. During 2025, we reduced our debt and finance lease obligations by approximately $2.0 billion. We have continued to pay down our debt during the Marchsix months ended June 30, 2026 quarter with $1.6$2.1 billion of payments on debt and finance lease obligations, of which $1.2$1.3 billion was early repayments enabled by refinancings with lower interest rates.

In certain periods, we may have adjustments to our net deferred tax liabilities as a result of changes in prior year estimates, the valuation allowance on mark-to-market adjustments on our equity investments, and tax laws enacted during the period, which will impact the effective tax rate for that period. Excluding mark-to-market adjustments on equity investments recognized in the MarchJune 2026 quarter, we project our annual effective tax rate for 2026 will be 23% to 25%.

The refinery operated by Monroe primarilytypically 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. Monroe sells or exchanges its non-jetNon-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. TheThird party refinery typicallysales producesincreased approximatelyin 200,0002026 barrelscompared ofto the three and six months ended June 30, 2025 due to higher market prices for refined products per day, which represents approximately 75% of our daily consumption,products, and ita regularlyshift optimizes thein mix ofto itsmore sales andthan exchanges as exchange activitiesagreements based on market conditions. Certain contracts to exchangefor non-jet fuel products ended during the second half of 2025, which contributed to the increase in third party refinery sales compared to the March 2025 quarter. Third party refinery sales also increased due to higher market prices for refined products.2025.

The refinery generated operating income of $351 million in the June 2026 quarter compared to an operating loss of $39$10 million in the March 2026 quarter compared to a loss of $1 million in the MarchJune 2025 quarter. The lossincrease in operating income in the MarchJune 2026 quarter primarily results from thehigher recognitionindustry ofpricing settlementand lossesrefining on fuel hedge contracts related to inventory that is expected to be sold in the future, which wasmargins, partially offset by higherthe industrynegative refiningimpact margins.from a temporary outage that halted production at the refinery beginning in the middle of June 2026.

Our operating aircraft fleet, purchase commitments and options at MarchJune 31,30, 2026 are summarized in the following table.

The following table summarizes the aircraft operated by regional carriers on our behalf at MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, we had $8.1$7.7 billion in cash, cash equivalents, short-term investments and aggregate undrawn principal amount available under our revolving credit facilities. We expect to meet our liquidity needs for the next twelve months with cash and cash equivalents and cash flows from operations. We expect to meet our long-term liquidity needs with cash flows from operations and financing arrangements.

Undrawn Lines of Credit. As of MarchJune 31,30, 2026, we had approximately $3.1 billion undrawn and available under our revolving credit facilities.

We generated cash flows from operations of $2.4$4.0 billion and $4.2 billion in both the threesix months ended MarchJune 31,30, 2026 and 2025.2025, respectively. We expect to continue generating positive cash flows from operations during the remainder of 2026.

Sale of Miles to Participating Companies. Customers earn miles based on their spending with participating companies such as credit card, retail, ridesharing, car rental and hotel companies with which we have marketing agreements to sell miles. Payments are typically due to us monthly based on the volume of miles sold during the period. Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. Remuneration tofrom American Express was $2.2$4.5 billion in the threesix months ended MarchJune 31,30, 2026, an increase of 10%13% compared to the prior year period. See Note 2 of the Notes to the Condensed Consolidated Financial Statements for further information regarding the cash sales from marketing agreements.

Fuel. Fuel expense represented approximately 18%21% and 17% of our total operating expense for both the threesix months ended MarchJune 31,30, 2026 and 2025.2025, respectively. The market price for jet fuel is dynamic, which can impact the comparability of our periodic cash flows from operations. Fuel consumption was higher during the three and six months ended MarchJune 31,30, 2026 compared to the prior year period due to the increase in capacity. We expect that fuel consumption for the remainder of 2026 will remain aligned with capacity changes compared to 2025.2025, while elevated jet fuel costs are anticipated to persist until recent market disruptions and geopolitical events are resolved.

Our broad-based employee profit sharing program provides that we will pay 10% of that profit to all eligible employees for the first $2.5 billion of annual profit, as defined by the terms of the program, and 20% of annual profit above $2.5 billion. In determining the amount of profit sharing, the program defines profit as pre-tax profit adjusted for profit sharing and certain other items. During the threesix months ended MarchJune 31,30, 2026, we accrued $165$493 million in profit sharing expense based on the year-to-date performance and current expectations for 2026 profit.

Income Taxes. During 2025, we utilized substantially all of our remaining pre-2018 net operating loss carryforwards that were generated in 2017 and earlier and, due to the limitations on post-2017 net operating losses,losses generated after 2017, began making cash federal income tax cash payments. We expect income tax cash payments for the full year to increase in 2026 based on our projected financial results. As of December 31, 2025, we had approximately $2.4 billion of U.S. federal pre-tax net operating loss carryforwards which we expect to utilize a majority of during 2026. These net operating loss carryforwards were primarily generated in 2020 and do not expire.

Capital Expenditures. Our capital expenditures were $1.2$2.7 billion and $2.4 billion for both the threesix months ended MarchJune 31,30, 2026 and 2025.2025, respectively. We have committed to future aircraft purchases and have obtained, but are under no obligation to use, long-term financing commitments for a substantial portion of the purchase price of the aircraft. Our expected 2026 capital spend ofis approximatelyexpected $5.5to be over $5 billion and will be primarily for aircraft, including deliveries and advance deposit payments, as well as fleet modifications and technology enhancements.

In Januarythe 2026,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 Januarythe 2026,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 Februarythe 2026,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.

Debt and Finance Leases. In the threesix months ended MarchJune 31,30, 2026, we had cash outflows of $1.6$2.1 billion related to repayments of our debt and finance lease obligations. We continue to seek opportunities to pre-pay our debt, in addition to periodic amortization and scheduled maturities, and refinance higher cost debt.