Wheels Up Experience Inc.UP

Wheels Up Experience Inc. Leases Disclosure

10-KFiled Mar 10, 20263 min read
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 total lease costs were as follows (in thousands):
Year Ended December 31,
202520242023
Operating lease costs
$16,365 $28,630 $38,442 
Short-term lease costs
6,323 668 7,215 
Variable lease payments
15,058 20,542 30,854 
Total lease costs
$37,746 $49,840 $76,511 
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 leased aircraft were $16.8 million and $33.3 million during the years ended December 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 consolidated statements of operations based on employee headcount. Sublease income is presented in General and administrative expenses in the consolidated statements of operations, and was not material for each of the years ended December 31, 2025, 2024 and 2023.
As part of our 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 one-time 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 consolidated statements of operations for the year ended December 31, 2025.
Supplemental cash flow information related to operating leases was as follows (in thousands):
Year Ended December 31,
202520242023
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows paid for operating leases$17,965 $29,594 $35,914 
Right-of-use assets obtained in exchange for operating lease obligations$97,631 $16,885 $7,989 
Supplemental balance sheet information related to operating leases was as follows:
December 31, 2025December 31, 2024
Weighted-average remaining lease term (in years):
Operating leases6.66.6
Weighted-average discount rate:
Operating leases11.4%10.1%
As of December 31, 2025, maturities of lease liabilities were as follows (in thousands):
Year ending December 31,Operating Leases
2026$31,493 
202731,084 
202828,637 
202928,804 
203025,636 
Thereafter50,324 
Total lease payments 195,978 
Less: Imputed interest(58,020)
Total lease obligations$137,958 

Historical Timeline

Fiscal YearFiled
2025Mar 10, 2026Showing above
2024Mar 11, 2025
2023Mar 7, 2024
2022Mar 31, 2023
2021Mar 10, 2022

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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