Delta Air Lines, Inc., a Delaware corporation, provides scheduled air transportation for passengers and cargo throughout the United States ("U.S.") and around the world. Our Consolidated Financial Statements include the accounts of Delta Air Lines, Inc. and our consolidated subsidiaries and have been prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP"). We are not the primary beneficiary of, nor do we have a controlling financial interest in, any variable interest entity. Accordingly, we have not consolidated any variable interest entity.

We are required to make estimates and assumptions when preparing our Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the amounts reported in our Consolidated Financial Statements and the accompanying notes. Actual results could differ materially from those estimates.

Income Taxes. In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." This standard enhances disclosures related to income taxes, including the rate reconciliation and information on income taxes paid. We adopted this standard effective January 1, 2025. See Note 10, "Income Taxes," for our income tax disclosures.

Disaggregation of Income Statement Expenses. In November 2024, the FASB issued ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)." This standard requires disclosure of specific information about costs and expenses and becomes effective January 1, 2027. We are assessing the impact of this ASU and, upon adoption, may be required to include certain additional disclosures in the footnotes to our Consolidated Financial Statements.

Internal Use Software. In September 2025, the FASB issued ASU No. 2025-06, "Targeted Improvements to the Accounting for Internal-Use Software." This standard is intended to improve the operability and application of guidance related to capitalized software development costs and becomes effective January 1, 2028. We are assessing the potential impact this ASU may have on our Consolidated Financial Statements upon adoption.

Interim Reporting. In December 2025, the FASB issued ASU No. 2025-11, "Interim Reporting (Topic 270)." This standard clarifies interim reporting guidance, develops a list of disclosures required by other Topics and intends to enhance consistency in interim reporting across entities. This standard becomes effective January 1, 2028 with early adoption permitted. We do not expect this standard to have a material impact on our interim reporting.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets ("balance sheets") that sum to the total of the same such amounts shown within the Consolidated Statements of Cash Flows ("cash flows statement").


Reconciliation of cash, cash equivalents and restricted cash
	December 31,
(in millions)	2025		2024		2023
Current assets:
Cash and cash equivalents	$	4,310	$	3,069	$	2,741
Restricted cash included in prepaid expenses and other	135		168		199
Noncurrent assets:
Restricted cash included in other noncurrent assets	56		184		455
Total cash, cash equivalents and restricted cash	$	4,501	$	3,421	$	3,395

Fuel. As part of our strategy to mitigate the cost of the refining margin reflected in the price of jet fuel, our wholly owned subsidiary, Monroe Energy, LLC ("Monroe"), operates the Trainer oil refinery. Refined products (finished goods) and feedstock and blendstock inventories (work-in-process) are carried at the lower of cost and net realizable value. We use jet fuel in our airline operations that is produced by the refinery, purchased directly from third parties and procured through the exchanges with third parties of gasoline, diesel and other refined products ("non-jet fuel products") the refinery produces. Cost is determined using the first-in, first-out method. Costs include the raw material consumed plus direct manufacturing costs (such as labor, utilities and supplies) as incurred and an applicable portion of manufacturing overhead.

Expendables Parts and Supplies. Inventories of expendable parts related to flight equipment, which cannot be economically repaired, reconditioned or reused after removal from the aircraft, are carried at moving average cost and charged to aircraft maintenance materials and outside repairs as consumed. An allowance for obsolescence is provided over the remaining useful life of the related fleet. We also provide allowances for parts identified as excess or obsolete to reduce the carrying costs to the lower of cost or net realizable value. These parts are estimated to have residual value of 5% of the original cost.

To the extent that we receive jet fuel for non-jet fuel products exchanged under buy/sell agreements, we account for these transactions as nonmonetary exchanges. We have recorded these nonmonetary exchanges at the carrying amount of the non-jet fuel products transferred within aircraft fuel and related taxes on our Consolidated Statements of Operations ("income statement").

Changes in fuel prices, interest rates and foreign currency exchange rates impact our results of operations. In an effort to manage our exposure to these risks, we may enter into derivative contracts and adjust our derivative portfolio as market conditions change. Our derivative contracts are recognized at fair value on our balance sheets and had net balances of $1 million and $17 million at December 31, 2025 and 2024, respectively. See Note 3, "Fair Value Measurements," for further information regarding our derivative contracts.

Our long-lived lived assets include property and equipment, net and operating lease right-of-use ("ROU") assets on our balance sheets. Our tangible assets consist primarily of flight equipment, which is mobile across geographic markets. Accordingly, assets are not allocated to specific geographic regions. See Note 7, "Leases," for further information regarding our leases. The following table summarizes our property and equipment:


Property and equipment by classification
		December 31,
(in millions, except for estimated useful life)	Estimated Useful Life	2025		2024
Flight equipment(1)	30-34 years	$	47,981	$	44,722
Ground property and equipment	3-40 years	11,165		10,695
Information technology-related assets	3-15 years	3,167		3,135
Flight and ground equipment under finance leases	Lease term or estimated useful life	1,185		1,196
Advance payments for equipment		964		1,075
Less: accumulated depreciation and amortization(2)		(24,719)		(23,228)
Total property and equipment, net		$	39,743	$	37,595

(2)Includes accumulated amortization for flight and ground equipment under finance leases in the amount of $350 million and $371 million at December 31, 2025 and 2024, respectively.

We record property and equipment at cost and depreciate or amortize these assets on a straight-line basis to their estimated residual values over their estimated useful lives. The estimated useful life for leasehold improvements is the shorter of lease term or estimated useful life. Depreciation and amortization expense related to our property and equipment was $2.4 billion, $2.5 billion and $2.3 billion for the years ended December 31, 2025, 2024 and 2023, respectively. Residual values for owned aircraft, engines, spare parts and simulators are generally 5% to 10% of cost. Modifications that enhance the operating performance or extend the useful lives of airframes or engines are capitalized and amortized over the remaining estimated useful life of the asset or the remaining lease term, whichever is shorter.

We capitalize certain internal and external costs incurred to develop and implement software and amortize those costs over an estimated useful life of three to fifteen years. Included in the depreciation and amortization expense discussed above, we recorded $314 million, $324 million and $340 million for amortization of capitalized software for the years ended December 31, 2025, 2024 and 2023, respectively. The net book value of these assets, which are included in information technology-related assets above, totaled $1.1 billion and $933 million at December 31, 2025 and 2024, respectively.

We review flight equipment, ROU assets and other long-lived assets used in operations for impairment losses when events and circumstances indicate the assets may be impaired. Factors which could be indicators of impairment include, but are not limited to (1) a decision to permanently remove flight equipment or other long-lived assets from operations, (2) significant changes in the estimated useful life, (3) significant changes in projected cash flows, (4) permanent and significant declines in fleet fair values and (5) changes to the regulatory environment. For long-lived assets held for sale, we discontinue depreciation and record impairment losses when the carrying amount of these assets is greater than the fair value less the cost to sell.

To determine whether impairments exist for aircraft used in operations, we group assets at the fleet type level or at the contract level for aircraft operated by third-party regional carriers (i.e., the lowest level for which there are identifiable cash flows) and then estimate future cash flows based on projections of capacity, passenger mile yield, fuel and labor costs and other relevant factors. If an asset group is impaired, the impairment loss recognized is the amount by which the asset group's carrying amount exceeds its estimated fair value. We estimate aircraft fair values using published sources, appraisals and bids received from third parties, as available.

We have a purchasing card with American Express for the purpose of buying jet fuel and crude oil. The card carried a maximum credit limit of $1.1 billion as of December 31, 2025 and must be paid monthly. At both December 31, 2025 and 2024, we had $1.1 billion outstanding on this purchasing card and the activity was classified as a financing activity in our cash flows statement.

We periodically receive credits in connection with the acquisition of aircraft and engines or in connection with delivery delays or manufacturing defects. These credits are applied as a reduction to the cost of the related equipment.

We have marketing alliances with other airlines to enhance our access to domestic and international markets. Some of our marketing arrangements provide for the sharing of revenues and expenses. Revenues and expenses associated with the flights we operate under collaborative arrangements are presented on a gross basis in the applicable line items on our income statement.

We record maintenance costs related to our mainline and regional fleets in aircraft maintenance materials and outside repairs and regional carrier expense, respectively. Maintenance costs are expensed as incurred, except for costs incurred under power-by-the-hour contracts, which are expensed based on actual hours flown. Power-by-the-hour contracts transfer certain risk to third-party service providers and fix the amount we pay per flight hour or per flight cycle to the service provider in exchange for maintenance and repairs under a predefined maintenance program.

We expense advertising costs in passenger commissions and other selling expenses in the year the advertising first takes place. Advertising expense was $405 million, $438 million and $347 million for the years ended December 31, 2025, 2024 and 2023, respectively.