Company: UP
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001628280-25-049230
Chunk: 54

Company: Wheels Up Experience Inc.
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 1
Chunk 54
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 using a discounted cash flows analysis, based on our current estimated incremental borrowing rate for a similar type of borrowing arrangement and taking into account amounts outstanding as of September 30, 2025 in connection with the Credit Support Premium.  

20

9.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 given period. 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 September 30,Nine Months Ended September 30,2025202420252024Operating lease costs$3,359 $6,956 $12,709 $22,005 Short-term lease costs1,730 160 4,395 546 Variable lease payments7,152 5,458 10,214 15,597 Total lease costs$12,241 $12,574 $27,318 $38,148 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 $3.6 million and $12.8 million during the three and nine months ended September 30, 2025, respectively, and $8.4 million and $25.1 million for the three and nine months ended September 30, 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 and nine months ended September 30, 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