Company: UP
Filing Date: 2025-03-11
Form Type: 10-K
Source: 0001819516-25-000012
Chunk: 309

Company: Wheels Up Experience Inc.
Filing Date: 2025-03-11
Form: 10-K
Item: Item 8
Chunk 309
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1,267 Tax credits5,454 6,377 Deferred revenue1,363 1,121 Equity-based compensation2,242 1,851 Interest expense carryforwards40,003 14,210 Other1,772 566 Total deferred tax assets410,074 269,397 Valuation allowance(343,252)(268,045)Deferred tax assets, net$66,822 $1,352 Deferred tax liabilitiesIntangibles$(1,680)$(2,177)OID/DFC interest(64,150)— Other(1,224)(864)Total deferred tax liabilities$(67,054)$(3,041)Net deferred tax liabilities$(232)$(1,689)As of December 31, 2024, our U.S. federal and state net operating loss carryforwards for income tax purposes were $741.1 million and $878.1 million, respectively. Of our total federal net operating losses, $613.9 million can be carried forward indefinitely, and the remainder will begin to expire in 2032 and fully expire in 2037 if not utilized. Our state net operating losses begin to expire in 2027.During the fourth quarter of 2024, the Company performed a Section 382 analysis and a debt-equity analysis related to transactions that occurred in 2023. As a result of the analysis, the Company adjusted its deferred tax assets for net operating losses to reflect Section 382 Recognized Built-In Loss (RBIL), as well as its deferred tax liability related to Original Issue Discount (OID) and Deferred Financing Costs (DFC). However, due to our overall valuation allowance position in the U.S., we do not believe these adjustments will have a material impact on our consolidated financial statements.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 our 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 and tax-planning strategies. As of December 31, 2024 and 2023, we concluded, based on the weight of all available positive and negative evidence, that it is more likely than not that the majority of deferred tax assets will not be realized. Accordingly, a valuation allowance of $343.3 million has been established as of December 31, 2024.