filings.toolsItem 2. MD&A - Supplemental Information
9K characters. Original on sec.gov ·
Item 2. MD&A - Supplemental Information
| Operating expense, adjusted reconciliation | |||||||||||||||||
| Three Months Ended September 30, | |||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||
| Operating expense | $ | 18,732 | $ | 14,989 | |||||||||||||
| Adjusted for: | |||||||||||||||||
| Third-party refinery sales | (2,601) | (1,476) | |||||||||||||||
| MTM adjustments and settlements on hedges | (208) | (5) | |||||||||||||||
| Operating expense, adjusted | $ | 15,924 | $ | 13,508 | |||||||||||||
| Fuel expense, adjusted reconciliation | |||||||||||||||||||||||
| Average Price Per Gallon | |||||||||||||||||||||||
| Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||
| (in millions, except per gallon data) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Total fuel expense | $ | 4,351 | $ | 2,570 | $ | 3.80 | $ | 2.26 | |||||||||||||||
| Adjusted for: | |||||||||||||||||||||||
| MTM adjustments and settlements on hedges | (208) | (5) | (0.18) | (0.01) | |||||||||||||||||||
| Total fuel expense, adjusted | $ | 4,143 | $ | 2,565 | $ | 3.61 | $ | 2.25 | |||||||||||||||
| Average Price Per Gallon | |||||||||||||||||||||||
| Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions, except per gallon data) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Total fuel expense | $ | 11,202 | $ | 7,439 | $ | 3.44 | $ | 2.31 | |||||||||||||||
| Adjusted for: | |||||||||||||||||||||||
| MTM adjustments and settlements on hedges | (57) | 19 | (0.02) | 0.01 | |||||||||||||||||||
| Total fuel expense, adjusted | $ | 11,144 | $ | 7,457 | $ | 3.42 | $ | 2.31 |
| TRASM, adjusted reconciliation | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| TRASM (cents) | 25.46 | ¢ | 21.09 | ¢ | 24.56 | ¢ | 21.04 | ¢ | |||||||||||||||
| Adjusted for: | |||||||||||||||||||||||
| Third-party refinery sales | (3.28) | (1.87) | (2.79) | (1.63) | |||||||||||||||||||
| TRASM, adjusted | 22.18 | ¢ | 19.22 | ¢ | 21.77 | ¢ | 19.41 | ¢ |
| CASM-Ex reconciliation | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| CASM (cents) | 23.63 | ¢ | 18.96 | ¢ | 22.88 | ¢ | 19.11 | ¢ | |||||||||||||||
| Adjusted for: | |||||||||||||||||||||||
| Aircraft fuel and related taxes | (5.49) | (3.25) | (4.93) | (3.30) | |||||||||||||||||||
| Third-party refinery sales | (3.28) | (1.87) | (2.79) | (1.63) | |||||||||||||||||||
| MRO expense | (0.34) | (0.27) | (0.38) | (0.26) | |||||||||||||||||||
| Profit sharing | (0.49) | (0.50) | (0.39) | (0.44) | |||||||||||||||||||
| CASM-Ex | 14.03 | ¢ | 13.08 | ¢ | 14.39 | ¢ | 13.47 | ¢ | |||||||||||||||
| Delta Air Lines, Inc. | September 2026 Form 10-Q | 31 |
Item 2. MD&A - Supplemental Information
Free Cash Flow
The following table shows a reconciliation of net cash provided by operating activities and used in investing activities (GAAP measures) to free cash flow (a non-GAAP financial measure). We present free cash flow because management believes this metric is helpful to investors to evaluate the company's ability to generate cash that is available for use for debt service or general corporate initiatives. Adjustments include:
*•*Net cash flows related to certain airport construction projects and other. Cash flows related to certain airport construction projects are included in our GAAP operating activities and capital expenditures. We have adjusted for these items because management believes investors should be informed that a portion of these capital expenditures from airport construction projects are either reimbursed by a third party or funded with restricted cash specific to these projects.
*•*Strategic investments and related. Certain cash flows related to our investments in and related transactions with other airlines and associated companies are included in our GAAP investing activities. We adjust for this activity because it provides a more meaningful comparison to our airline industry peers.
| Free cash flow reconciliation | |||||||||||
| (in millions) | Three Months Ended September 30, 2026 | ||||||||||
| Net cash provided by operating activities | $ | 1,713 | |||||||||
| Net cash used in investing activities | (1,303) | ||||||||||
| Adjusted for: | |||||||||||
| Net cash flows related to certain airport construction projects and other | 9 | ||||||||||
| Strategic investments and related | 45 | ||||||||||
| Free cash flow | $ | 463 | |||||||||
| Delta Air Lines, Inc. | September 2026 Form 10-Q | 32 |
Item 3. Market Risk
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