Company: UP
Filing Date: 2025-03-11
Form Type: 10-K
Source: 0001819516-25-000012
Chunk: 288

Company: Wheels Up Experience Inc.
Filing Date: 2025-03-11
Form: 10-K
Item: Item 8
Chunk 288
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olving Equipment Notes as of December 31, 2024. We considered the appraised value of aircraft subject to first-priority liens under the Equipment Notes, as sourced during the third quarter of 2023 and as required under the Equipment Notes, to determine the fair value of the Equipment Notes as of December 31, 2023. 

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The estimated fair value of the Term Loan, which includes amounts outstanding in connection with the Credit Support Premium, is categorized as a Level 3 valuation. The estimated fair value as of December 31, 2024 was estimated using a discounted cash flows analysis, based on our current estimated incremental borrowing rate for a similar type of borrowing arrangement.  The following table presents the changes in the fair value of the Warrant liability (in thousands):Public WarrantsPrivate WarrantsTotal Warrant LiabilityFair value as of December 31, 2022$479 $272 $751 Change in fair value of warrant liability(472)(267)(739)Fair value as of December 31, 20237 5 12 Change in fair value of warrant liability6 2 8 Fair value as of December 31, 2024$13 $7 $20 

10.    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 aircraft owners that contain payment terms based on an hourly lease rate multiplied by the number of flight hours 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 total lease costs are as follows (in thousands):Year Ended December 31,202420232022Operating lease costs$28,630 $38,442 $38,818 Short-term lease costs668 7,215 10,725 Variable lease payments20,542 30,854 17,997 Total lease costs$49,840 $76,511 $67,540 Lease costs related to leased aircraft and operational facilities are included in Cost of revenue in the consolidated statements of operations. Lease costs related to our leased corporate headquarters and other office space, including expenses for non-lease components, are allocated to Technology and development, Sales and marketing and General and administrative expense in the consolidated statements of