Wheels Up Experience Inc
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
UP$2.84-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001819516-24-000047
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001819516-24-000066
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 190 previous paragraphs and 195 current paragraphs.
122 unchanged; 46 reworded; 25 added; 18 removed; 4 previous and 2 current paragraphs rearranged.
Tables are not compared: 9 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
Our Fleet Modernization Strategy
Current report
On October 22, 2024, we announced our current fleet modernization strategy, which we expect will result in the transition from the operation of four current private jet models - Cessna Citation CJ3, X, and Excel/XLS and Hawker 400XP aircraft - to two different private jet models - the Embraer Phenom 300 series and Bombardier Challenger 300 series aircraft, while continuing to operate our King Air 350i aircraft within our Primary Service Area. We intend to achieve this fleet transition through a mix of opportunistic aircraft acquisitions and strategic leasing activity. Upon closing the GrandView Transaction (as defined below), we expect to immediately introduce the acquired Embraer Phenom 300 series fleet into our programmatic membership offerings, as well as offering it to our charter customers. We expect to begin operating Bombardier Challenger 300 series in our fleet by early 2025, with availability on both an as-requested charter basis and on specified routes for our members and customers, and full introduction into our Wheels Up Membership offering across our guaranteed service areas by the end of 2025. We anticipate that the Revolving Equipment Notes Facility (as defined below) will provide us with the flexibility to opportunistically add additional Embraer Phenom 300 series and Bombardier Challenger 300 series aircraft to our fleet during the period of transition.
Current report
We believe that our recently announced fleet modernization strategy will enhance the experience that we deliver to our members and customers, alongside an expected decrease in the average age of our owned and leased aircraft fleet, increase in maintenance availability and reliability, and improvements in fuel efficiency. In addition, we expect to utilize our existing pilot base and seamlessly adapt our maintenance processes to operate the Embraer Phenom 300 series and Bombardier Challenger 300 series aircraft that we expect to acquire by re-training certain of our pilots in the applicable fleet types and scaling our maintenance operations throughout the fleet transition.
Current report
Agreement to Acquire 17 Embraer Phenom and Phenom 300E Aircraft, and Related Assets
Current report
On October 22, 2024, Wheels Up Partners LLC (“WUP LLC”), an indirect subsidiary of the Company, entered into an Asset Purchase Agreement with Grandview Aviation LLC (“Seller”) and Global Medical Response, Inc., the parent entity of Seller (together with Seller, the “Seller Parties” and such agreement, the “Asset Purchase Agreement”), pursuant to which the Company has agreed to acquire from Seller 17 Embraer Phenom 300 and Phenom 300E aircraft, certain related maintenance assets to support the fleet, and Seller’s existing customer program (collectively, the “Acquired Assets” and such transaction, the “GrandView Transaction”). Subject to the terms and conditions of the Asset Purchase Agreement, the purchase price for the Acquired Assets is $105 million, subject to the adjustments described in the Asset Purchase Agreement. The Company anticipates that the transactions contemplated by the Asset Purchase Agreement will close in the month of November 2024, subject to customary closing conditions, including the completion of aircraft inspections.
Current report
The Asset Purchase Agreement contains representations, warranties and covenants by WUP LLC and the Seller Parties that are customary for transactions of this type, which were made solely for the benefit of the parties thereto. Concurrently with the closing under the Asset Purchase Agreement, WUP LLC and Seller expect to enter into: (i) a transition services agreement (the “TSA”), pursuant to which Seller will provide WUP LLC certain specified flight-related services on a temporary basis; and (ii) a master aircraft operating agreement (the “Operating Agreement”), pursuant to which Seller will conduct certain on-demand flight operations using the Acquired Assets after the closing date while such aircraft are transitioned from a U.S. Federal Aviation Administration (“FAA”) operating certificate held by Seller to the FAA operating certificate held by Wheels Up Private Jets LLC (“WUPJ”), an indirect subsidiary of the Company (the “Phenom Fleet Transition”). It is anticipated that the TSA and Operating Agreement will terminate upon completion of the Phenom Fleet Transition. The Company is currently a party to an agreement with Seller pursuant to which Seller has provided the Company’s members and customers with certain dedicated Embraer Phenom 300 and Phenom 300E aircraft since November 2021, which is also expected to terminate at the closing under the Asset Purchase Agreement.
Current report
Committed Financing from Bank of America
Current report
On October 22, 2024, WUP LLC entered into a commitment letter (the “Commitment Letter”) pursuant to which Bank of America, N.A. (“Bank of America”) committed to provide up to $332 million under a senior secured revolving credit facility (the “Revolving Equipment Notes Facility”). Delta is expected to provide credit support for the Revolving Equipment Notes Facility, which will effectively guarantee WUP LLC’s payment obligations thereunder upon the occurrence and continuation of specified events of default. The anticipated maturity date for the Revolving Equipment Notes Facility is five years following the initial closing date. The Company expects that the initial closing for the Revolving Equipment Notes Facility will occur concurrently with the closing under the Asset Purchase Agreement in the month of November 2024.
Current report
The Revolving Equipment Notes Facility is expected to utilize an enhanced equipment trust certificate (EETC) loan structure that is similar to the existing fixed rate equipment notes that were issued by WUP LLC on October 14, 2022 (collectively, the “Equipment Notes”). The Revolving Equipment Notes Facility is expected to be secured by first-priority liens on WUP LLC’s owned aircraft fleet (the “Owned Aircraft”). A term sheet describing, among other things, the material terms that are expected to be included in the definitive documentation for the Revolving Equipment Notes Facility is attached as Annex A to the Commitment Letter. It is anticipated that any principal amounts under the Revolving Equipment Notes Facility paid down between the initial closing date and the third anniversary of the initial closing date (the “Availability Period”), either through regular principal amortization payments or from the early redemption of principal amounts related to any aircraft secured by the Revolving Equipment Notes Facility (without prepayment premiums), will again become available to be reborrowed for the purchase of additional aircraft to be secured by such facility during the Availability Period.
Current report
The Company anticipates that the net proceeds from the initial closing of the Revolving Equipment Notes Facility will be used: (i) to fund the purchase price for the Acquired Assets; (ii) to redeem in-full all outstanding Equipment Notes, which are currently secured by the Equipment Note Collateral (as defined below); and (iii) for general corporate purposes, including the potential acquisition of additional Embraer Phenom 300 series and Bombardier Challenger 300 series aircraft, to the extent there are any remaining net proceeds. As of the date of this Quarterly Report, approximately $148.9 million aggregate principal amount of Equipment Notes were outstanding, and the redemption amount for such Equipment Notes upon the initial closing of the Revolving Equipment Notes Facility, if at all, will include accrued interest thereon and applicable prepayment premiums. In addition, $20.0 million held as a deposit for the benefit of the Equipment Note lenders is expected to be netted against the redemption amount for the Equipment Notes. Assuming the expected uses of net proceeds described above, the netting of the deposit with respect to the Equipment Notes and the consummation of sales of certain Owned Aircraft that are currently under contract prior to the initial closing of the Revolving Equipment Notes Facility, the Company currently expects that upon the initial closing of the Revolving Equipment Notes Facility, approximately $75 to $115 million of net proceeds (before transaction related expenses) will become available for general corporate purposes.
Current report
Under the Commitment Letter, Bank of America will act as sole lead arranger for the Revolving Equipment Notes Facility. The commitment to provide the Revolving Equipment Notes Facility is subject to certain conditions, including the negotiation of definitive documentation and other customary conditions to the commitment. In addition, the Company anticipates that certain conforming amendments to the Credit Agreement (as defined below) will be made to permit the Revolving Equipment Notes Facility. The Company expects to pay certain customary fees and expenses in connection with obtaining and maintaining the Revolving Equipment Notes Facility.
Current report
Key Investor Lock-Up Extension
Current report
On September 22, 2024, the Company entered into Amendment No. 2 to Investment and Investor Rights Agreement (the “Investor Rights Agreement Amendment”), with each of Delta, CK Wheels LLC (“CK Wheels”), Cox Investment Holdings, LLC (“CIH” and, collectively with Delta and CK Wheels, the “Lead Investors”), Whitebox Multi-Strategy Partners, LP (“Whitebox MSP”), Whitebox Relative Value Partners, LP (“Whitebox RVP”), Pandora Select Partners, LP (“Pandora”), Whitebox GT Fund, LP (“Whitebox GT” and, collectively with Whitebox MSP, Whitebox RVP and Pandora, the “Whitebox Entities”) and Kore Air LLC (“Kore” and, collectively with the Whitebox Entities, the “Additional Investors” and, collectively with the Lead Investors, the “Investors”), to amend and extend, among others, certain transfer restrictions set forth in the Investment and Investor Rights Agreement, dated September 20, 2023, by and among, the Company and the Investors (as amended by Amendment No. 1 thereto, dated as of November 15, 2023, the “Investor Rights Agreement”). Pursuant to the Investor Rights Agreement Amendment, the Lead Investors agreed to extend the lock-up restriction with respect to all of their shares of the Company’s Class A common stock, $0.0001 par value per share (“Common Stock”), issued pursuant to the Investor Rights Agreement (“Shares”) for an additional year, until September 20, 2025, and the Additional Investors agreed to extend the lock-up restriction with respect to 72.5% of their Shares for an additional year, until September 20, 2025, in each case subject to limited exceptions for transfers to Permitted Transferees (as defined in the Investor Rights Agreement). Any transfers or sales of Shares held by the Additional Investors that are not subject to the extended lock-up restriction may not be at a price less than the minimum price per share specified in the Investor Rights Agreement Amendment. Pursuant to the Investor Rights Agreement Amendment, approximately 97.2% of the Shares will remain subject to a lock-up restriction until September 20, 2025.
Current report
In addition, on September 22, 2024, the holders that collectively beneficially own in excess of 66.67% of the Registrable Securities (as defined in the Registration Rights Agreement, dated as of September 20, 2023, by and among the Company and the equity holders set forth on Schedule 1 thereto) extended the deadline by which the Company must file an initial shelf registration statement to register the Shares under the Securities Act of 1933, as amended, to September 20, 2025.
Current report
Private Jet Gross Bookings & Total Gross Bookings
Current report
We define Private Jet Gross Bookings as the total gross spend by our members and customers on all private jet flight services under our member programs and charter offerings (excluding all group charter flights, which are charter flights with 15 or more passengers (“Group Charter Flights”), and cargo flight services (“Cargo Services”)). We believe Private Jet Gross Bookings provides useful information about the aggregate amount our members and customers spend with Wheels Up versus our competitors.
Current report
We define Total Gross Bookings as the total gross spend by our members and customers on all private jet flight services under our member programs and charter offerings, Group Charter Flights and Cargo Services. We believe Total Gross Bookings provides useful information about the scale of the overall global aviation solutions that we provide our members and customers.
Current report
For each of Private Jet Gross Bookings and Total Gross Bookings, the total gross spend by our members and customers is the amount invoiced to the member or customer, and includes the cost of the flight and related services, such as catering, ground transportation, certain taxes, fees and surcharges. We use Private Jet Gross Bookings and Total Gross Bookings to provide useful information for historical period-to-period comparisons of our business and to identify trends, including relative to our competitors. Our calculation of Private Jet Gross Bookings and Total Gross Bookings may not be comparable to similarly titled measures reported by other companies.
Current report
Private Jet Gross Bookings per Live Flight Leg
Current report
We use Private Jet Gross Bookings per Live Flight Leg to measure the average gross spend by our members and customers on all private jet flight services under our member programs and charter offerings (excluding Group Charter Flights and Cargo Services) for each Live Flight Leg.
Current report
Gain (loss) on divestiture
Current report
The decrease in Other revenue was primarily attributable to the absence of $5.9 million in software licensing revenue recognized in the third quarter of fiscal year 2023.
Current report
Depreciation and amortization expenses decreased $3.0 million, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily as a result of aircraft sales as we execute our fleet modernization strategy.
Current report
Interest income was relatively consistent for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Current report
Depreciation and amortization expenses decreased $1.6 million, or 3%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily as a result of aircraft sales as we execute our fleet modernization strategy.
Removed paragraphs (18)
Previous report
Our Aircraft Fleet Strategy
Previous report
We calculate Total Private Jet Flight Transaction Value as the sum of total gross spend by members and customers on all private jet flight services, which excludes all group charter flights with 15 or more passengers and cargo flight services. Total Private Jet Flight Transaction Value reflects the Flight revenue recognized from Programmatic Flights (as defined below) and private charter flights by members and customers. “Programmatic Flights” are all flights that were flown subject to a Wheels Up Member Flight Service Agreement, Custom Corporate Agreement or other similar agreement (excluding jet cards) that provides for guaranteed aircraft availability, shorter call-out periods, capped or fixed rate pricing, and other benefits.
Previous report
We calculate Total Flight Transaction Value as Total Private Jet Flight Transaction Value, plus Other Charter FTV (as defined below).
Previous report
We include Total Private Jet Flight Transaction Value and Total Flight Transaction Value as supplemental measures for assessing the size of the markets which we serve.
Previous report
The following table reconciles each of Total Private Jet Flight Transaction Value and Total Flight Transaction Value to Flight revenue, which is the most directly comparable GAAP measure (in thousands):
Previous report
(1) Represents the portion of Flight revenue not attributable to Programmatic Flights.
Previous report
(2) See “Key Operating Metrics” below for more information about Private Jet Charter FTV and Other Charter FTV.
Previous report
We use Total Private Jet Flight Transaction Value per Live Flight Leg to measure the average gross spend by members and customers for each Live Flight Leg. See “Non-GAAP Financial Measures” above for more information regarding our use and definition of Total Private Jet Flight Transaction Value.
Previous report
Private Jet Charter FTV
Previous report
We define Private Jet Charter FTV as the sum of total gross spend by members and customers on all private charter flights that are at market-based rates and are not Programmatic Flights. Private Jet Charter FTV excludes customer gross spend attributable to all group charter flights with 15 or more passengers and cargo flight services. We use Private Jet Charter FTV to measure the size of our private jet charter business relative to the overall industry. See “Non-GAAP Financial Measures” above for more information about the use of Private Jet Charter FTV in the calculation of Total Private Jet Flight Transaction Value and Total Flight Transaction Value.
Previous report
Other Charter FTV
Previous report
We define Other Charter FTV as the sum of total gross spend by customers on all group charter flights with 15 or more passengers and cargo flight services. We use Other Charter FTV to measure the size of our group charter and cargo charter businesses relative to the overall industry. See “Non-GAAP Financial Measures” above for more information about the use of Other Charter FTV in the calculation of Total Flight Transaction Value.
Previous report
Total Charter FTV
Previous report
We define Total Charter FTV as the sum of Private Jet Charter FTV and Other Charter FTV. We use Total Charter FTV to measure the size of our total charter business relative to the overall industry.
Previous report
Cost of revenue decreased by $136.2 million, or 42%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Previous report
$1.6 million reduction in enterprise software and other IT-related charges. The decreases were partially offset by a $0.4 million increase in IT consultant spend.
Previous report
Depreciation and amortization expenses was relatively consistent for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Previous report
Depreciation and amortization expenses increased $1.4 million, or 5%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by increased capitalized software development assets year-over-year.
Reworded paragraphs (46)
Previous wording
Wheels Up has one of the largest and most diverse mixes of available aircraft in the industry. As of June 30, 2024, we had 164 aircraft in our owned and leased fleet that includes Turboprops, Light, Midsize, Super-Midsize and Large-Cabin jets. We utilize our controlled aircraft fleet to support both Wheels Up Membership and Wheels Up Charter flights depending on the member’s or customer’s specific mission. We also have access to a large and diverse fleet and a global network of safety-vetted charter operators, which must continually satisfy our safety standards for aircraft, crew and operations. Together, our controlled aircraft fleet and global network of third-party operators position us to provide our members and customers with the right aircraft for the right mission, and create the opportunity for our members and customers to select a mode of travel that works for their specific needs.
Current wording
Wheels Up has one of the largest and most diverse mixes of available aircraft in the industry. As of September 30, 2024, we had 156 aircraft in our owned and leased fleet that includes Light, Midsize, Super-Midsize and Large-Cabin jets and Turboprops. We utilize our controlled aircraft fleet to support both Wheels Up Membership and Wheels Up Charter flights depending on the member’s or customer’s specific mission. We also have access to a large and diverse fleet and a global network of safety-vetted charter operators, which must continually satisfy our safety standards for aircraft, crew and operations. Together, our controlled aircraft fleet and global network of third-party operators position us to provide our members and customers with the right aircraft for the right mission, and create the opportunity for our members and customers to select a mode of travel that works for their specific needs.
Previous wording
Over time, our member programs and charter offerings have evolved to meet the varying needs of private fliers across the global markets we serve. In June 2024, we announced enhancements to our member programs and charter offerings that are intended to streamline our product portfolio. We believe that our newly aligned product portfolio – Wheels Up Membership and Wheels Up Charter – will simplify the private aviation experience for our members and customers, provide attractive benefits for the full spectrum of private fliers, and grant private fliers the freedom to tailor each trip to their specific needs.
Current wording
Over time, our member programs and charter offerings have evolved to meet the varying needs of private fliers across the global markets we serve. In June 2024, we announced enhancements to our member programs and charter offerings that are intended to streamline our product portfolio. We believe that our newly aligned product portfolio – Wheels Up Membership and Wheels Up Charter – will simplify the private aviation experience for our members and customers, provide attractive benefits for the full spectrum of private fliers, and grant private fliers the freedom to tailor each trip to their specific needs. We anticipate that we will further evolve our service offerings as we implement our fleet modernization strategy and introduce new aircraft types into our controlled fleet.
Previous wording
Private fliers with predictable annual spend can utilize Wheels Up Membership, where a small annual fee and Prepaid Blocks unlock increased flexibility and expanded global access, and for certain fliers, guaranteed availability and recovery within the continental U.S., United Kingdom (“U.K.”) and Europe, subject to certain terms and conditions. We believe that Wheels Up Membership provides the varying benefits and services that suit a range of existing and potential individual and business private fliers. Wheels Up Membership is comprised of two primary membership categories — Individual and UP for Business:
Current wording
Private fliers with predictable annual spend can utilize Wheels Up Membership, where a small annual fee and purchase of Prepaid Blocks unlock increased flexibility and expanded global access, and for certain fliers, guaranteed availability and recovery within the continental U.S., United Kingdom (“U.K.”) and Europe, subject to certain terms and conditions. We believe that Wheels Up Membership provides the varying benefits and services that suit a range of existing and potential individual and business private fliers. Wheels Up Membership is comprised of two primary membership categories — Individual and UP for Business:
Previous wording
We continuously review our aircraft fleet in relation to our anticipated future needs, taking into account the age and composition of our fleet, maintenance costs and availability, anticipated aircraft utilization, and the efficiency of and demand for new aircraft types. We believe that our latest member program changes and the growth of our charter offerings position us well to strategically utilize our owned and leased aircraft fleet alongside an “asset-light” charter model to deliver a greater range of global travel alternatives. Since mid-2023, we have divested certain underperforming or underutilized aircraft in-line with our long-term strategic goals, and expect to continue divestitures over time. As we pursue our long-term fleet strategy, we anticipate the need to acquire or lease newer aircraft as we look to replenish our fleet in the future.
Current wording
Our current fleet modernization strategy is the result of our continuous review of our aircraft fleet in relation to our anticipated future needs, taking into account the age and composition of our fleet, maintenance costs and availability, anticipated aircraft utilization, and the efficiency of and demand for new aircraft types. To achieve our fleet transition, we expect to engage in strategic acquisitions and dispositions of aircraft, as well as enter into leasing arrangements in order to replenish our fleet while maintaining high levels of member and customer service. For example, in October 2024 we agreed to sell all 13 of our owned Cessna Citation X aircraft to an unrelated third party buyer, and expect to enter into leases for a portion of the sold aircraft and amend existing Cessna Citation X leases with the same buyer, which we anticipate will support our transition to Bombardier Challenger 300 series aircraft in the coming years. We believe that our current fleet modernization strategy, latest member program changes and the growth of our charter offerings position us well to strategically utilize our owned and leased aircraft fleet alongside an “asset-light” charter model to deliver a greater range of global travel alternatives.
Previous wording
On June 15, 2024, Wheels Up Partners Holdings LLC (“WUP”) and Wheels Up Partners LLC (“WUP LLC”), each a subsidiary of Wheels Up, entered into the Amended and Restated Commercial Cooperation Agreement, dated as of June 15, 2024 (the “Amended CCA”), with Delta. The Amended CCA replaced the Commercial Cooperation Agreement, dated as of January 17, 2020, which was originally entered into in connection with the closing of Wheels Up’s acquisition of Wheels Up Private Jets LLC (“WUPJ”) from Delta in January 2020 and subsequently amended.
Current wording
On June 15, 2024, Wheels Up Partners Holdings LLC (“WUP”) and WUP LLC, each a subsidiary of Wheels Up, entered into the Amended and Restated Commercial Cooperation Agreement, dated as of June 15, 2024 (the “Amended CCA”), with Delta. The Amended CCA replaced the Commercial Cooperation Agreement, dated as of January 17, 2020, which was originally entered into in connection with the closing of Wheels Up’s acquisition of WUPJ from Delta in January 2020 and subsequently amended.
Previous wording
We continue to implement changes to our aircraft fleet management and maintenance operations that are intended to improve the efficiency of our operations and the availability of our aircraft, as well as reduce our operating costs. In April 2024, we announced that we expect to open a new flagship maintenance facility at Palm Beach International Airport (the “PBI Maintenance Facility”) by the end of 2024. In preparation for the opening of the PBI Maintenance Facility, we are reallocating resources from existing underutilized facilities as a result of, among other actions: the closure of existing maintenance operations in Cincinnati, Ohio and Broomfield, Colorado; the relocation of mobile service units in Sacramento, California, Las Vegas, Nevada, and Salt Lake City, Utah, and certain service units in Burbank, California, to the Eastern U.S.; and the forthcoming relocation of resources currently stationed at the Company’s Fort Lauderdale facility to the PBI Maintenance Facility. We believe these actions will better align our maintenance resources to the Primary Service Area and flight demand density.
Current wording
We continue to implement changes to our aircraft fleet management and maintenance operations that are intended to improve the efficiency of our operations and the availability of our aircraft, as well as reduce our operating costs. In April 2024, we announced that we expect to open a new flagship maintenance facility at Palm Beach International Airport (the “PBI Maintenance Facility”) by the end of the first quarter of 2025. In preparation for the opening of the PBI Maintenance Facility, we are reallocating resources from existing underutilized facilities as a result of, among other actions: the closure of existing maintenance operations in Cincinnati, Ohio and Broomfield, Colorado; the relocation of mobile service units in Sacramento, California, Las Vegas, Nevada, and Salt Lake City, Utah, and certain service units in Burbank, California, to the Eastern U.S.; and the forthcoming relocation of resources currently stationed at the Company’s Fort Lauderdale facility to the PBI Maintenance Facility. We believe these actions will better align our maintenance resources to the Primary Service Area and flight demand density.
Previous wording
We continue to progress with the consolidation of our U.S. Federal Aviation Administration (“FAA”) operating certificates, which is intended to simplify our flight operations by harmonizing our procedures across the entire company. In February 2023, we consolidated our Cessna CJ3 aircraft to one FAA operating certificate. In September 2023, we sold our non-core aircraft management business, which included the disposition of the two related FAA operating certificates. In November 2023, the FAA approved the movement of our Cessna Citation Excel/XLS fleet to WUPJ, which already included our Hawker 400XP fleet, and we completed the fleet transition in March 2024. Additionally, in March 2024, the FAA issued operational authority that allowed us to begin transitioning our King Air 350i, Cessna CJ3 and Cessna Citation X aircraft fleets to a single FAA operating certificate held by WUPJ. In June 2024, we completed the transition of our King Air 350i fleet to WUPJ. In July 2024, we satisfied FAA gatekeeping milestones allowing for the transition of our owned and leased Cessna Citation X fleet to WUPJ. We expect our FAA certificate consolidation and related operational efficiency efforts will continue to contribute meaningfully to our service delivery and financial results in future periods.
Current wording
We continue to progress with the consolidation of our FAA operating certificates, which is intended to simplify our flight operations by harmonizing our procedures across the entire company. In February 2023, we consolidated our Cessna Citation CJ3 aircraft to one FAA operating certificate. In September 2023, we sold our non-core aircraft management business, which included the disposition of the two related FAA operating certificates. In November 2023, the FAA approved the movement of our Cessna Citation Excel/XLS fleet to WUPJ, which already included our Hawker 400XP fleet, and we completed the fleet transition in March 2024. Additionally, in March 2024, the FAA issued operational authority that allowed us to begin transitioning our King Air 350i, Cessna Citation CJ3 and Cessna Citation X aircraft fleets to a single FAA operating certificate held by WUPJ. In June 2024, we completed the transition of our King Air 350i fleet to WUPJ. In July 2024, we satisfied FAA gatekeeping milestones allowing for the transition of our owned and leased Cessna Citation X fleet to WUPJ and have transitioned substantially all of our Cessna Citation X aircraft as of the date of this Quarterly Report. In October 2024, the FAA approved our revised certificated consolidation plans addressing the streamlined addition of the Embraer Phenom 300 and Phenom 300E, and Bombardier Challenger 300 and Challenger 350 aircraft types to the WUPJ FAA operating certificate. We expect our FAA certificate consolidation and related operational efficiency efforts, including the addition of such new aircraft types, will continue to contribute meaningfully to our service delivery and financial results in future periods.
Previous wording
(2)For the three and six months ended June 30, 2024, primarily includes charges for contract termination fees and employee separation programs as part of our ongoing cost reduction and strategic business initiatives. For the three and six months ended June 30, 2023, includes restructuring charges related to the restructuring plan that we announced on March 1, 2023 (the “Restructuring Plan”) and related strategic business initiatives implemented in the first quarter of 2023, as well as expenses incurred during the second quarter of 2023 to support significant changes to our member programs and certain aspects of our operations, primarily consisting of consultancy fees associated with designing and implementing changes to our member programs, and severance and recruiting expenses associated with executive transitions.
Current wording
(2)For the three and nine months ended September 30, 2024, primarily includes charges for contract termination fees and employee separation programs as part of our ongoing cost reduction and strategic business initiatives. For the three and nine months ended September 30, 2023, includes restructuring charges related to the restructuring plan that we announced on March 1, 2023 (the “Restructuring Plan”) and related strategic business initiatives implemented in the first quarter of 2023, as well as expenses incurred during the second quarter of 2023 to support significant changes to our member programs and certain aspects of our operations, primarily consisting of consultancy fees associated with designing and implementing changes to our member programs, and severance and recruiting expenses associated with executive transitions.
Previous wording
(5)Represents a non-cash impairment charge related to goodwill recognized in the second quarter of 2023.
Current wording
(5)Represents a non-cash impairment charge related to goodwill recognized in the second and third quarters of 2023.
Previous wording
(1)For the three and six months ended June 30, 2024, primarily includes charges for employee separation programs as part of our ongoing cost reduction and strategic business initiatives. For the three and six months ended June 30, 2023, includes restructuring charges related to the Restructuring Plan and related strategic business initiatives implemented in the first quarter of 2023.
Current wording
(1)For the three and nine months ended September 30, 2024, primarily includes charges for employee separation programs as part of our ongoing cost reduction and strategic business initiatives. For the three and nine months ended September 30, 2023, includes restructuring charges related to the Restructuring Plan and related strategic business initiatives implemented during 2023.
Previous wording
Total Private Jet Flight Transaction Value and Total Flight Transaction Value
Current wording
In our Annual Report and Quarterly Reports on Form 10-Q for each of the three months ended March 31, 2024 and June 30, 2024, as well as certain other earnings materials furnished in connection therewith, “Total Private Jet Flight Transaction Value” and “Total Flight Transaction Value” were presented as non-GAAP financial measures, and “Total Private Jet Flight Transaction Value per Live Flight Leg” was presented as a key operating metric. To improve the clarity of our reports filed with the U.S. Securities and Exchange Commission and to use comparable terminology to other registrants, beginning with this Quarterly Report, we relabeled “Total Private Jet Flight Transaction Value,” “Total Flight Transaction Value” and “Total Private Jet Flight Transaction Value per Live Flight Leg” as Private Jet Gross Bookings, Total Gross Bookings and Private Jet Gross Bookings per Live Flight Leg, respectively. In addition, we now present Private Jet Gross Bookings and Total Gross Bookings as key operating metrics given their usage. We will no longer present Private Jet Charter FTV or Other Charter FTV, which were included in such past filings.
Previous wording
Membership revenue is comprised of a one-time initiation fee paid at the commencement of a membership and recurring annual dues. Historically, a portion of the initiation fee is applied to annual dues; however, we discontinued initiation fees starting in July 2024. The remainder of the initiation fee, less any flight credits, is deferred and recognized on a straight-line basis over the estimated duration of the member relationship period, which is estimated to be three years. Members are charged recurring annual dues to maintain their membership. Revenue related to the annual dues are deferred and recognized on a straight-line basis over the related contractual period. If a member qualifies to earn Delta miles in the Delta SkyMiles® Program as part of their membership, then a portion of the membership fee is allocated at contract inception.
Current wording
Membership revenue is comprised of a one-time initiation fee paid at the commencement of a membership and recurring annual dues. Historically, a portion of the initiation fee is applied to annual dues; however, we discontinued initiation fees starting in July 2024. The remainder of the initiation fee, less any flight credits, is deferred and recognized on a straight-line basis over the estimated duration of the member relationship period, which is estimated to be three years. Members are charged recurring annual dues to maintain their membership. Revenue related to the annual dues is deferred and recognized on a straight-line basis over the related contractual period. If a member qualifies to earn Delta miles in the Delta SkyMiles® Program as part of their membership, then a portion of the membership fee is allocated at contract inception.
Previous wording
Gain on disposal of assets, net primarily consists of the net working capital adjustment received in the first quarter of 2024 associated with the divestiture of the of our aircraft management business on September 30, 2023, partially offset by losses on disposal of other assets during the period.
Current wording
Gain (loss) on divestiture primarily consists of the net working capital adjustment received in the first quarter of 2024 associated with the divestiture of the of our aircraft management business on September 30, 2023.
Previous wording
Gain on disposal of assets, net
Current wording
Gain (loss) on disposal of assets, net
Previous wording
Interest income primarily consists of interest earned on cash equivalents in money market funds, U.S. treasury bills and time deposits.
Current wording
Interest income primarily consists of interest earned on cash equivalents in money market funds.
Previous wording
The decrease in Membership revenue was primarily driven by a 29% decrease in Active Members year-over-year. The decrease in Active Members was primarily as a result of the regionalization of our member programs and focus on profitable flying.
Current wording
The decrease in Membership revenue was primarily driven by a 38% decrease in Active Members year-over-year. The decrease in Active Members was primarily as a result of the regionalization of our member programs and focus on profitable flying, as well as streamlining our membership offering.
Previous wording
The decrease in Flight revenue was primarily driven by a 29% decrease in Live Flight Legs year-over-year, which resulted in a $68.5 million reduction to Flight revenue, which was primarily due to our focus on more profitable flying.
Current wording
The decrease in Flight revenue was primarily driven by a 23% reduction in Live Flight Legs year-over-year, which resulted in a $49.3 million reduction to Flight revenue, as well as a 6% decrease in Flight Revenue per Live Flight Leg, which resulted in a $10.0 million reduction to Flight revenue primarily due to our focus on more profitable flying.
Previous wording
The decrease in cost of revenue was primarily driven by decrease in revenue. The decrease was also driven by a $7.5 million decrease in expenses associated with setting up our Atlanta Member Operations Center. The decrease was partially offset by $3.7 million in restructuring charges associated with certain employee restructuring actions and a $3.3 million reserve established for certain parts inventory deemed obsolete or in excess of forecasted demand for aircraft maintenance, in each case during the three months ended June 30, 2024.
Current wording
Cost of revenue decreased by $133.0 million, or 44%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease in cost of revenue was primarily driven by decrease in revenue. The decrease was also driven by a $10.6 million decrease in expenses associated with setting up our Atlanta Member Operations Center during fiscal year 2023, as well as a $2.2 million decrease in expenses associated with our FAA certificate consolidation.
Previous wording
Adjusted Contribution Margin increased 240 basis points for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily attributable to the realization of cost savings as a result of the Restructuring Plan and other restructuring actions, as well as discrete cost optimization and operational efficiency measures. See“Non-GAAP Financial Measures” above for a definition of Adjusted Contribution Margin, information regarding our use of Adjusted Contribution Margin and a reconciliation of Gross margin and Adjusted Contribution Margin to Revenue.
Current wording
Adjusted Contribution Margin increased 380 basis points for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily attributable to the realization of cost savings as a result of the Restructuring Plan and other restructuring actions taken during fiscal years 2023 and 2024, as well as discrete cost optimization and operational efficiency measures. See“Non-GAAP Financial Measures” above for a definition of Adjusted Contribution Margin, information regarding our use of Adjusted Contribution Margin and a reconciliation of Gross margin and Adjusted Contribution Margin to Revenue.
Previous wording
Technology and development expenses decreased by $3.9 million, or 27%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily attributable to a $2.7 million reduction in employee compensation and allocable costs driven by headcount reduction actions taken in fiscal year 2023 and a
Current wording
Technology and development expenses decreased by $10.4 million, or 52%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily attributable to a $5.3 million reduction in employee compensation, bonus and allocable costs driven by headcount reduction actions taken during the third quarter of fiscal year 2023, as well as a $4.8 million decrease in enterprise software and other IT expenses, including the absence of a $2.7 million charge in the third quarter of fiscal year 2023 associated with a software implementation project that was abandoned during the period.
Previous wording
Sales and marketing expenses decreased by $1.7 million, or 7%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily attributable to a $0.7 million reduction in employee compensation and allocable costs driven by headcount reduction actions taken in fiscal year 2023, a $0.5 million reduction in equity-based compensation expense and a $0.5 million reduction in advertising spend.
Current wording
Sales and marketing expenses decreased by $2.5 million, or 11%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily attributable to a $2.3 million reduction in employee compensation and allocable costs driven by headcount reduction actions taken during the third quarter of fiscal year 2023, a $0.6 million reduction in sales commissions, primarily driven by a decrease in memberships and lower Flight revenue, and a $0.5 million reduction in other marketing expenses driven by consulting and other marketing spend. The decreases were partially offset by a $0.9 million increase in advertising spend.
Previous wording
General and administrative expenses decreased by $4.1 million, or 10%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily driven by a $5.1 million reduction in consulting expenses associated with strategic planning, the absence of $4.0 million of severance charges associated with executive transitions, a $2.5 million reduction in employee compensation and allocable costs driven by headcount reduction actions taken in fiscal year 2023 and a $0.9 million decrease in legal spend. The decreases were partially offset by an $8.9 million increase in equity-based compensation expense primarily attributable to the Executive Performance Awards (as defined in Note 10).
Current wording
General and administrative expenses decreased by $15.8 million, or 37%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily driven by a $13.6 million reduction in third party consulting spend, including the absence of $10.8 million in charges associated with professional fees incurred for executing the Company’s operational and efficiency initiatives, as well as a $2.4 million reduction in legal expenses of which $1.2 million was attributable to a one-time legal settlement charge. The decrease was also driven by a $2.4 million reduction in employee compensation, bonus and allocable costs driven by headcount reduction actions taken during the third quarter of fiscal year 2023. The decreases were partially offset by a $5.4 million increase in equity-based compensation expense primarily attributable to the Executive Performance Awards (as defined in Note 10).
Previous wording
Interest expense increased $9.0 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was primarily attributable to paid-in-kind interest expense associated with the Term Loan (as defined below) entered into in the second half of 2023.
Current wording
Interest expense increased $4.8 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily attributable to paid-in-kind interest expense associated with the Term Loan (as defined below) entered into during the second half of 2023.
Previous wording
Results of Our Operations for the Six Months Ended June 30, 2024 compared to the Six Months Ended June 30, 2023
Current wording
Results of Our Operations for the Nine Months Ended September 30, 2024 compared to the Nine Months Ended September 30, 2023
Previous wording
The following table sets forth our results of operations for each of the six months ended June 30, 2024 and 2023 (in thousands):
Current wording
The following table sets forth our results of operations for each of the nine months ended September 30, 2024 and 2023 (in thousands):
Previous wording
Revenue decreased for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, as follows (in thousands).
Current wording
Revenue decreased for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, as follows (in thousands).
Previous wording
The decrease in Membership revenue was driven by a 29% decrease in Active Members year-over-year, partially offset by the impact of lower incentive discounts on memberships in the current period. The decrease in Active Members was primarily as a result of the regionalization of our member programs and focus on profitable flying.
Current wording
The decrease in Membership revenue was driven by a 38% decrease in Active Members year-over-year, partially offset by the impact of lower incentive discounts on memberships in the current period. The decrease in Active Members was primarily as a result of the regionalization of our member programs and focus on profitable flying, as well as streamlining our membership offering.
Previous wording
The decrease in Flight revenue was primarily driven by a 27% decrease in Live Flight Legs year-over-year, which resulted in a $124.2 million reduction to revenue during the period, which was primarily due to our focus on more profitable flying.
Current wording
The decrease in Flight revenue was primarily driven by a 25% decrease in Live Flight Legs year-over-year, which resulted in a $173.1 million reduction to revenue during the period, as well as a 8% reduction in Flight Revenue per Live Flight Leg, which resulted in a $38.6 million reduction to Flight revenue, primarily due to our focus on more profitable flying.
Previous wording
The decrease in Other revenue was primarily attributable to the absence of $4.8 million in sales of aircraft inventory, as the Company has reduced its focus on whole aircraft sales, and due to a $1.3 million reduction in revenue from group charter.
Current wording
The decrease in Other revenue was primarily attributable to a $17.1 million reduction in sales of aircraft inventory, as the Company has reduced its focus on whole aircraft sales, and the absence of $7.0 million in software licensing revenue recognized during fiscal year 2023.
Previous wording
Cost of revenue decreased by $291.7 million, or 43%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease in cost of revenue was primarily driven by the decreases in revenue noted above. The decrease was also driven by a $9.9 million decrease in expenses associated with setting up our Atlanta Member Operations Center. The decreases were partially offset by a $2.9 million increase in restructuring charges associated with certain employee restructuring actions implemented in the second quarter of 2024 and a $3.3 million reserve established in the second quarter of 2024 for certain parts inventory deemed obsolete or in excess of forecasted demand for aircraft maintenance.
Current wording
Cost of revenue decreased by $424.8 million, or 43%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease in cost of revenue was primarily driven by the decreases in revenue noted above. The decrease was also driven by a $20.6 million decrease in expenses associated with setting up our Atlanta Member Operations Center and a $3.2 million decrease in expenses associated with our FAA certificate consolidation. The decreases were partially offset by charges for a $3.3 million reserve established for certain parts inventory deemed obsolete or in excess of forecasted demand for aircraft maintenance during the three months ended June 30, 2024, and a $2.8 million increase in restructuring charges associated with certain employee restructuring actions implemented in the second quarter of 2024.
Previous wording
Adjusted Contribution Margin increased 80 basis points for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily attributable to the operational efficiency initiatives discussed above. See“Non-GAAP Financial Measures” above for a definition of Adjusted Contribution Margin, information regarding our use of Adjusted Contribution Margin and a reconciliation of Gross margin and Adjusted Contribution Margin to Revenue.
Current wording
Adjusted Contribution Margin increased 190 basis points for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily attributable to the operational efficiency initiatives discussed above. See“Non-GAAP Financial Measures” above for a definition of Adjusted Contribution Margin, information regarding our use of Adjusted Contribution Margin and a reconciliation of Gross margin and Adjusted Contribution Margin to Revenue.
Previous wording
Technology and development expenses decreased by $8.7 million, or 29%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by a $4.7 million reduction in employee compensation and allocable costs driven by headcount reduction actions taken in fiscal year 2023, including the Restructuring Plan, the absence of $2.3 million of one-time charges associated with the Restructuring Plan recognized during the first quarter of 2023, a $0.9 million reduction in reduction in enterprise software and other IT-related charges, and a $0.5 million reduction in equity-based compensation expense.
Current wording
Technology and development expenses decreased by $19.1 million, or 38%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by a $14.1 million reduction in employee compensation, bonus and allocable costs driven by headcount reduction actions taken in fiscal year 2023, including the absence of $2.3 million of one-time charges associated with the Restructuring Plan recognized during the first quarter of 2023, as well as a $7.1 million decrease in IT-related charges, including the absence of a $2.7 million charge in the third quarter of fiscal year 2023 associated with a software implementation project that was abandoned during the period.
Previous wording
Sales and marketing expenses decreased by $6.0 million, or 12%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by a $2.2 million reduction in employee compensation and allocable costs driven by headcount reduction actions taken in fiscal year 2023, including the Restructuring Plan, the absence of $2.1 million of one-time charges associated with the Restructuring Plan recognized during the first quarter of 2023, a $1.9 million decrease in sales commissions primarily driven by the decrease in year-over-year membership and whole aircraft sales revenues, and a $1.0 million reduction in equity-based compensation expense. The decreases were partially offset by a $1.6 million one-time charge associated with terminating a consultancy agreement in the first quarter of 2024.
Current wording
Sales and marketing expenses decreased by $8.6 million, or 12%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by a $7.3 million reduction in employee compensation and allocable costs driven by headcount reduction actions taken in fiscal year 2023, including the absence of $2.1 million of one-time charges associated with the Restructuring Plan recognized during the first quarter of 2023, a $2.6 million decrease in sales commissions, primarily driven by the decrease in year-over-year membership and revenues from whole aircraft sales, and a $1.3 million reduction in equity-based compensation expense. The decreases were partially offset by a $1.1 million increase in consulting spend, primarily driven by a $1.6 million one-time charge associated with terminating a consultancy agreement in the first quarter of 2024, and a $0.5 million increase in advertising spend.
Previous wording
General and administrative expenses decreased by $7.3 million, or 9%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by a $7.6 million reduction in consulting expenses associated with integration-related activities and strategic planning, the absence of $5.4 million of one-time charges associated with the Restructuring Plan recognized during the first quarter of 2023 and a $4.2 million reduction employee compensation and allocable costs primarily driven by headcount reduction actions taken in fiscal year 2023. The decreases were partially offset by a $9.8 million increase in equity-based compensation expense primarily attributable to the Executive Performance Awards (as defined in Note 10).
Current wording
General and administrative expenses decreased by $23.1 million, or 19%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by a $23.2 million reduction in consulting and legal expenses associated with integration-related activities and strategic planning, a $7.4 million reduction employee compensation and allocable costs primarily driven by headcount reduction actions taken in fiscal year 2023 and the absence of $5.4 million of one-time charges associated with the Restructuring Plan recognized during the first quarter of 2023. The decreases were partially offset by a $15.2 million increase in equity-based compensation expense primarily attributable to the Executive Performance Awards (as defined in Note 10).
Previous wording
Interest income decreased by $5.3 million, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was attributable to holding lower levels of cash equivalents in money market funds during the period.
Current wording
Interest income decreased by $4.8 million, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was attributable to holding lower levels of cash equivalents in money market funds during the period.
Previous wording
Interest expense increased $15.4 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily attributable to paid-in-kind interest expense associated with the Term Loan (as defined below) entered into in the second half of 2023.
Current wording
Interest expense increased $20.2 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily attributable to paid-in-kind interest expense associated with the Term Loan (as defined below) entered into during the second half of 2023.
Previous wording
Other expense, net was relatively consistent for six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Current wording
Other expense, net was relatively consistent for nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Previous wording
Our principal sources of liquidity have historically consisted of financing activities, including proceeds from debt financing transactions, and operating activities, primarily from the increase in deferred revenue associated with the sale of Prepaid Blocks. As of June 30, 2024, we had $141.5 million of cash and cash equivalents and $32.1 million of restricted cash, and our long-term debt obligations consisted primarily of approximately $176.4 million aggregate principal amount outstanding of Equipment Notes (as defined below) and $421.0 million aggregate principal outstanding, including capitalized paid-in-kind interest, associated with the Term Loan (as defined below). In addition, we had a working capital deficit of $585.3 million as of June 30, 2024 and net cash used in operating activities was $100.8 million for the six months ended June 30, 2024. See Part I, Item 1A “Risk Factors—Risks Relating to Our Indebtedness and Contractual Obligations—Our obligations in connection with our contractual agreements, including operating leases and debt financing obligations, could impair our liquidity and thereby harm our business, results of operations and financial condition” in our Annual Report for more information about our contractual obligations.
Current wording
Our principal sources of liquidity have historically consisted of financing activities, including proceeds from debt financing transactions, and operating activities, primarily from the increase in deferred revenue associated with the sale of Prepaid Blocks. As of September 30, 2024, we had $115.9 million of cash and cash equivalents and $32.9 million of restricted cash, and our long-term debt obligations consisted primarily of approximately $165.2 million aggregate principal amount outstanding of Equipment Notes (as defined below) and $431.7 million aggregate principal amount outstanding, including capitalized paid-in-kind interest, associated with the Term Loan (as defined below). In addition, we had a working capital deficit of $617.1 million as of September 30, 2024 and net cash used in operating activities was $115.8 million for the nine months ended September 30, 2024. See Part I, Item 1A “Risk Factors—Risks Relating to Our Indebtedness and Contractual Obligations—Our obligations in connection with our contractual agreements, including operating leases and debt financing obligations, could impair our liquidity and thereby harm our business, results of operations and financial condition” in our Annual Report for more information about our contractual obligations.
Previous wording
In October 2022, WUP LLC, entered into a Note Purchase Agreement, dated as of October 14, 2022 (“Note Purchase Agreement”), pursuant to which WUP LLC issued $270.0 million aggregate principal amount of the equipment notes (collectively, the “Equipment Notes”) using an EETC (enhanced equipment trust certificate) loan structure. The Equipment Notes bear interest at the rate of 12% per annum with annual amortization of the principal amount equal to 10% per annum and balloon payments due at each maturity date. Interest and principal payments on the Equipment Notes began on January 15, 2023 and are payable quarterly on each January 15, April 15, July 15 and October 15. The stated final expected distribution date of the Equipment Notes varies from July 15, 2025 to October 15, 2029 depending on the type of aircraft, subject to certain prepayment requirements under the Omnibus Amendment (as defined below) and WUP LLC’s ability to redeem Equipment Notes prior to maturity. As of June 30, 2024, the Equipment Notes were secured by first-priority liens on 108 of the Company’s owned aircraft fleet and by liens on certain intellectual property assets of the Company and certain of its subsidiaries (the “Equipment Note Collateral”).
Current wording
In October 2022, WUP LLC, entered into a Note Purchase Agreement, dated as of October 14, 2022 (“Note Purchase Agreement”), pursuant to which WUP LLC issued $270.0 million aggregate principal amount of the Equipment Notes using an EETC (enhanced equipment trust certificate) loan structure. The Equipment Notes bear interest at the rate of 12% per annum with annual amortization of the principal amount equal to 10% per annum and balloon payments due at each maturity date. Interest and principal payments on the Equipment Notes began on January 15, 2023 and are payable quarterly on each January 15, April 15, July 15 and October 15. The stated final expected distribution date of the Equipment Notes varies from July 15, 2025 to October 15, 2029 depending on the type of aircraft, subject to certain prepayment requirements under the Omnibus Amendment (as defined below) and WUP LLC’s ability to redeem Equipment Notes prior to maturity. As of September 30, 2024, the Equipment Notes were secured by first-priority liens on 105 of the Company’s owned aircraft fleet and by liens on certain intellectual property assets of the Company and certain of its subsidiaries (the “Equipment Note Collateral”).
Previous wording
During the six months ended June 30, 2024, the Company redeemed in-full the Equipment Notes for 14 aircraft, which reduced the aggregate principal amount outstanding under the Equipment Notes by $26.9 million. As of June 30, 2024, approximately $176.4 million aggregate principal amount of Equipment Notes were outstanding and the carrying value of the 108 aircraft that were subject to first-priority liens under the Equipment Notes was $259.4 million.
Current wording
During the nine months ended September 30, 2024, the Company redeemed in-full the Equipment Notes for 17 aircraft, which reduced the aggregate principal amount outstanding under the Equipment Notes by $32.8 million. As of September 30, 2024, approximately $165.2 million aggregate principal amount of Equipment Notes were outstanding and the carrying value of the 105 aircraft that were subject to first-priority liens under the Equipment Notes was $249.4 million.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current report — wording carried from elsewhere
Gain (loss) on disposal of assets, net, consists of any gains or losses on disposal of other assets during the period.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Total Private Jet Flight Transaction Value per Live Flight Leg
Previous report — wording carried elsewhere
Interest income decreased $1.6 million, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was attributable to holding lower levels of cash equivalents in money market funds during the period.
Previous report — wording carried elsewhere
The decrease in Other revenue was primarily attributable to a $14.3 million reduction in sales of aircraft inventory, as the Company has reduced its focus on whole aircraft sales.
Previous report — wording carried elsewhere
On September 20, 2023, the Company entered into a Credit Agreement (the “Original Credit Agreement”), by and among the Company, as borrower, certain subsidiaries of the Company as guarantors (collectively with the Company, the “Loan Parties”), Delta, CK Wheels LLC (“CK Wheels”) and Cox Investment Holdings, Inc.