Company: UP
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001819516-25-000028
Chunk: 125

Company: Wheels Up Experience Inc.
Filing Date: 2025-05-05
Form: 10-Q
Item: Item 8
Chunk 125
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 as of March 31, 2025$13 $7 $20 

8.LEASES

Leases primarily pertain to certain controlled aircraft, office spaces and operational facilities, which are all accounted for as operating leases. Certain of these operating leases have renewal options to further extend for additional time periods at our discretion.We have certain variable lease agreements with certain aircraft lessors that contain payment terms based on an hourly lease rate multiplied by the number of flight hours for the applicable aircraft during a month. Variable lease payments are not included in the right-of-use asset and lease liability balances but rather are expensed as incurred.The components of net lease cost were as follows (in thousands):Three Months Ended March 31,20252024Operating lease costs$5,618 $7,540 Short-term lease costs868 213 Variable lease payments1,976 4,313 Total lease costs$8,462 $12,066 Lease costs related to leased aircraft and operational facilities are included in Cost of revenue in the condensed consolidated statements of operations. Lease costs related to leased aircraft were $5.4 million and $8.1 million during  the three months ended March 31, 2025 and 2024, respectively.Lease costs related to our leased corporate headquarters and other office space, including expenses for non-lease components, are allocated within the condensed consolidated statements of operations based on employee headcount. Sublease income is presented in General and administrative expenses in the condensed consolidated statements of operations, and was not material for each of the three months ended March 31, 2025 and 2024. As part of our continuing cost reduction initiatives, in the first quarter of 2025, we leased alternative corporate office space in New York City and vacated a larger leased corporate office space in New York City, for which we are actively seeking a sublease tenant. Vacating the former office space was identified as a triggering event for impairment testing for the impacted asset group, including the right-of-use asset and associated leasehold improvements and furniture. We estimated the fair value of the asset group using a discounted cash flow approach, which considered estimated future cash flows associated with the asset group. We recorded a non-cash impairment charge of $20.2 million during the three months ended March 31, 2025 representing the full carrying value of the right of use asset for the vacated space. The impairment charge is presented in General and administrative expense in the condensed consolidated statements of operations