Company: UP
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001819516-25-000044
Chunk: 149

Company: Wheels Up Experience Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Item 8
Chunk 149
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 any taxable income or loss generated by WUP is passed through to and included in the taxable income or loss of its members, including Wheels Up. We are also subject to income taxes in the various foreign jurisdictions in which we operate.We recorded income tax expense of $1.0 million and $1.0 million for the three and six months ended June 30, 2025, respectively, and income tax expense of $0.4 million and $0.3 million for the three and six months ended June 30, 2024, respectively. The effective tax rate was (0.5)% and (0.6)% for the three and six months ended June 30, 2025, respectively, and (0.5)% and (0.2)% for the three and six ended June 30, 2024, respectively. Our effective tax rate for the three and six months ended June 30, 2025 differs from the federal statutory rate of 21%, primarily due to a full valuation allowance against the majority of our net deferred tax assets where it is more likely than not that the deferred tax assets will not be realized and geographical mix of our earnings. We currently expect the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested. Accordingly, the Company has not provided for the tax effect, if any, of limited outside basis differences of its foreign subsidiaries. If these foreign earnings are repatriated to the U.S., or if the Company determines that such 

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earnings are repatriated to the U.S., or if the Company determines that such earnings will be remitted in a future period, additional tax provisions may be required.We evaluate the realizability of our deferred tax assets on a quarterly basis and establish valuation allowances when it is more likely than not that all or a portion of the deferred tax assets may not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, and tax-planning strategies. As of June 30, 2025, we concluded, based on the weight of all available positive and negative evidence, that it is more likely than not that the majority of U.S. deferred tax assets will not be realized. Accordingly, a valuation allowance has been established on the majority of our net deferred tax assets in the U.S.  In general, under Section 382 of the Internal Revenue Code of 1986 (as amended, the “Code”), a corporation