Operational improvements and strategic
repositioning continue to progress
Cash balance up sequentially from third
quarter
NEW
YORK, March 7, 2024 /PRNewswire/ -- Wheels Up
Experience Inc. (NYSE:UP) today announced financial results for the
fourth quarter, which ended December 31,
2023.
Fourth Quarter 2023 Highlights
- Total Revenue decreased $162
million year-over-year to $246
million, partially due to the divestiture of the Aircraft
Management business
- Adjusted Contribution decreased $16
million year-over-year to $3
million
- Net loss decreased year-over-year to $81
million, due primarily to the absence of a goodwill
impairment charge in the current quarter
- Adjusted EBITDA improved $6
million year-over-year to a loss of $38 million
"In our first full quarter since the strategic
investment, we have made strong progress on a number of key fronts.
Operationally, we continue to drive performance and strengthen our
team. Commercially, we are rebuilding our sales pipeline, restoring
customer confidence, and are seeing strong momentum in our joint
efforts with the Delta sales teams," said George Mattson, Chief Executive
Officer.
"We made significant progress over the past
quarter to improve our business for a sustainable future," said
Todd Smith, Chief Financial Officer.
"We are continuing to optimize our cost structure and fleet to
focus on profitability. With improving liquidity in the fourth
quarter and our partnership with Delta, we believe we are well
positioned to continue to invest in our business for the long
term."
Recent Initiatives
- Introduced new UP for Business program, offering a tailored
private aviation solution for small and medium-sized enterprises
jointly sold through Wheels Up and Delta sales organizations
offering unmatched flexibility and global capabilities.
- Added incremental $40 million of
investor capital from Kore Capital and Whitebox Advisors,
bringing the Company's total secured new capital to $490 million.
- Achieved or exceeded goals for Total Completion Rate and
On-Time performance in the fourth quarter, inclusive of weather,
air traffic control delays, unscheduled maintenance and customer
delays. Wheels Up continues to lead the industry in the publication
of its service metrics.
- Announced a number of new leadership appointments with a
combined over 250 years of aviation experience to company's
operations team as part of its mission to lead the industry in
performance and reliability.
|
Financial and
Operating Highlights
|
|
|
As of December
31,
|
|
|
|
2023
|
|
2022
|
|
%
Change
|
|
Active
Members(1)
|
9,947
|
|
12,661
|
|
(21) %
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
|
(In thousands,
except Active Users, Live Flight Legs and Flight revenue
per
Live Flight Leg)
|
2023
|
|
2022
|
|
%
Change
|
|
Active
Users(1)
|
10,744
|
|
13,846
|
|
(22) %
|
|
Live Flight
Legs(1)
|
14,374
|
|
19,308
|
|
(26) %
|
|
Flight revenue per Live
Flight Leg
|
$
14,079
|
|
$
14,178
|
|
(1) %
|
|
|
|
|
|
|
|
Revenue
|
$
246,380
|
|
$
408,257
|
|
(40) %
|
|
Net loss
|
$
(81,115)
|
|
$
(224,910)
|
|
64 %
|
|
Adjusted
EBITDA(1)
|
$
(38,122)
|
|
$
(43,705)
|
|
13 %
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31,
|
|
|
|
(In
thousands)
|
2023
|
|
2022
|
|
%
Change
|
|
Live Flight
Legs(1)
|
64,481
|
|
79,664
|
|
(19) %
|
|
Flight revenue per Live
Flight Leg
|
$
13,710
|
|
$
13,470
|
|
2 %
|
|
Total Private Jet
Flight Transaction Value per Live Flight
Leg(1)
|
$
15,863
|
|
$
14,721
|
|
8 %
|
|
|
|
|
|
|
|
Revenue
|
$
1,253,317
|
|
$
1,579,760
|
|
(21) %
|
|
Net loss
|
$
(487,387)
|
|
$
(555,547)
|
|
12 %
|
|
Adjusted
EBITDA(1)
|
$
(145,868)
|
|
$
(185,251)
|
|
21 %
|
|
(1)
|
For information
regarding Wheels Up's use and definition of this measure see
"Definitions of Key Operating Metrics and Non-GAAP Financial
Measures" and "Reconciliations of Non-GAAP Financial Measures"
sections herein.
|
For the fourth quarter:
- Active Members decreased 21% year-over-year to 9,947 offset by
a higher mix of Core members, primarily as a result of
the regionalization of our member programs and focus on more
profitable flying.
- Active Users decreased 22% year-over-year to 10,744.
- Live Flight Legs decreased 26% year-over-year to 14,374
reflecting a slowdown in the industry and our efforts to focus on
profitable flying.
- Flight revenue per Live Flight Leg was relatively consistent
year-over-year.
- Revenue decreased 40% year-over-year primarily driven by the
divestiture of our non-core aircraft management business as well as
reduced flight revenue and aircraft sales.
- Net loss decreased by $143.8
million year-over-year to $81.1
million, due to the absence of a goodwill impairment charge
in the current quarter and lower costs that more than offset the
decline in revenue.
- Adjusted EBITDA loss improved by $5.6
million year-over-year to $38.1
million, reflecting our operational efficiency and other
spend reduction efforts.
About Wheels Up
Wheels Up is a leading provider of on-demand private aviation in
the U.S. and one of the largest companies in the industry. Wheels
Up offers a complete global aviation solution with a large and
diverse fleet and a global network of safety vetted charter
operators, all backed by an uncompromising commitment to safety and
service. Customers can access charter and membership programs, as
well as unique commercial travel benefits through a one-of-a-kind,
strategic partnership with Delta Air Lines. Wheels Up also offers
freight, safety and security solutions and managed services to
individuals, industry, government and civil organizations.
Wheels Up is guided by the mission to deliver a premium solution
for every customer journey. With the Wheels Up mobile app and
website, members and customers have the digital convenience to
search, book and fly.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements"
within the meaning of the federal securities laws. Forward-looking
statements are predictions, projections and other statements about
future events that are based on current expectations and
assumptions and, as a result, are subject to known and unknown
risks, uncertainties, assumptions and other important factors, many
of which are outside of the control of Wheels Up Experience Inc.
("Wheels Up", or "we", "us", or "our"), that could cause actual
results to differ materially from the results discussed in the
forward-looking statements. These forward-looking statements
include, but are not limited to, statements regarding: (i) the
impact of Wheels Up's cost reduction efforts and measures intended
to increase Wheels Up's operational efficiency on its business and
results of operations, including the timing and magnitude of such
expected actions and any associated expenses in relation to
liquidity levels and working capital needs; (ii) Wheels Up's
liquidity, future cash flows and certain restrictions related to
its debt obligations; (iii) the size, demands, competition in and
growth potential of the markets for Wheels Up's products and
services and Wheels Up's ability to serve and compete in those
markets; (iv) the degree of market acceptance and adoption of
Wheels Up's products and services, including member program changes
implemented in June 2023, the UP for
Business member program introduced in November 2023 and any additional new member
programs or other products introduced by Wheels Up; (v) Wheels Up's
ability to perform under its contractual obligations; (vi) the
expected impact of any potential strategic actions involving Wheels
Up or its subsidiaries or affiliates, including realizing any
anticipated benefits relating to any such transactions or asset
sales, and any potential impacts on the trading market and prices
for the Wheels Up's Class A common stock, $0.0001 par value per share; (vii) Wheels Up's
ability to achieve positive Adjusted EBITDA (as defined herein)
pursuant to the schedule that it has announced; and (viii) general
economic and geopolitical conditions, including due to fluctuations
in interest rates, inflation, foreign currencies, consumer and
business spending decisions, and general levels of economic
activity. In addition, any statements that refer to projections,
forecasts, or other characterizations of future events or
circumstances, including any underlying assumptions, are
forward-looking statements. The words "anticipate," "believe,"
continue," "could," "estimate," "expect," "intend," "may," "might,"
"plan," "possible," "potential," "predict," "project," "should,"
"strive," "would" and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that statement is not forward-looking. We have identified
certain known material risk factors applicable to Wheels Up in our
Annual Report on Form 10-K for the year ended December 31, 2022 filed with the U.S. Securities
and Exchange Commission ("SEC"), our Quarterly Report on Form 10-Q
for the three months ended September 30,
2023 filed with the SEC and our other filings with the SEC.
Moreover, it is not always possible for us to predict how new risks
and uncertainties that arise from time to time may affect us. You
are cautioned not to place undue reliance upon any forward-looking
statements, which speak only as of the date made. Except as
required by law, we do not intend to update any of these
forward-looking statements after the date of this press
release.
Use of Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures,
such as Adjusted EBITDA, Adjusted Contribution, Adjusted
Contribution Margin and Flight Transaction Value. These non-GAAP
financial measures are an addition, and not a substitute for or
superior to, measures of financial performance prepared in
accordance with generally accepted accounting principles in
the United States of America
("GAAP") and should not be considered as an alternative to revenue
or any component thereof, net income (loss), operating income
(loss) or any other performance measures derived in accordance with
GAAP. Definitions and reconciliations of non-GAAP financial
measures to their most comparable GAAP counterparts are included in
the sections titled "Definitions of key metrics and non-GAAP
financial measures" and "Reconciliations of non-GAAP financial
measures," respectively, in this press release. Wheels Up believes
that these non-GAAP financial measures of financial results provide
useful supplemental information to investors about Wheels Up.
However, there are a number of limitations related to the use of
these non-GAAP financial measures and their nearest GAAP
equivalents, including that they exclude significant expenses that
are required by GAAP to be recorded in Wheels Up's financial
measures or represent a transaction value that Wheels Up does not
book as revenue. In addition, other companies may calculate
non-GAAP financial measures differently, or may use other measures
to calculate their financial performance, and therefore, Wheels
Up's non-GAAP financial measures may not be directly comparable to
similarly titled measures of other companies. Additionally, to the
extent that forward-looking non-GAAP financial measures are
provided, they are presented on a non-GAAP basis without
reconciliations of such forward-looking non-GAAP financial measures
due to the inherent difficulty in forecasting and quantifying
certain amounts that are necessary for such reconciliations.
For more information on these non-GAAP financial measures, see
the sections titled "Definitions of key metrics and non-GAAP
financial measures" and "Reconciliations of non-GAAP financial
measures" included in this press release.
|
WHEELS UP EXPERIENCE
INC.
CONSOLIDATED BALANCE
SHEETS
(Unaudited, in
thousands, except share data)
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
263,909
|
|
$
585,881
|
|
Accounts receivable,
net
|
38,237
|
|
112,383
|
|
Other
receivables
|
11,528
|
|
5,524
|
|
Parts and supplies
inventories, net
|
20,400
|
|
29,000
|
|
Aircraft
inventory
|
1,862
|
|
24,826
|
|
Aircraft held for
sale
|
30,496
|
|
8,952
|
|
Prepaid
expenses
|
55,715
|
|
39,715
|
|
Other current
assets
|
11,887
|
|
13,338
|
|
Total current
assets
|
434,034
|
|
819,619
|
|
Property and equipment,
net
|
337,714
|
|
394,559
|
|
Operating lease
right-of-use assets
|
68,910
|
|
106,735
|
|
Goodwill
|
218,208
|
|
348,118
|
|
Intangible assets,
net
|
117,766
|
|
141,765
|
|
Restricted
cash
|
28,916
|
|
34,272
|
|
Other non-current
assets
|
110,512
|
|
78,157
|
|
Total
assets
|
$
1,316,060
|
|
$
1,923,225
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current maturities of
long-term debt
|
$
23,998
|
|
$
27,006
|
|
Accounts
payable
|
32,973
|
|
43,166
|
|
Accrued
expenses
|
102,475
|
|
148,947
|
|
Deferred revenue,
current
|
723,246
|
|
1,075,133
|
|
Operating lease
liabilities, current
|
22,869
|
|
29,945
|
|
Intangible liabilities,
current
|
1,525
|
|
2,000
|
|
Other current
liabilities
|
416
|
|
18,023
|
|
Total current
liabilities
|
907,502
|
|
1,344,220
|
|
Long-term debt,
net
|
235,074
|
|
226,234
|
|
Deferred revenue,
non-current
|
983
|
|
1,742
|
|
Operating lease
liabilities, non-current
|
54,956
|
|
82,755
|
|
Warrant
liability
|
12
|
|
751
|
|
Intangible liabilities,
non-current
|
10,677
|
|
12,083
|
|
Other non-current
liabilities
|
6,983
|
|
3,520
|
|
Total
liabilities
|
1,216,187
|
|
1,671,305
|
|
Mezzanine
equity:
|
|
|
|
|
Executive performance
award
|
2,476
|
|
—
|
|
Total mezzanine
equity
|
2,476
|
|
—
|
|
Stockholders'
equity
|
|
|
|
|
Common stock, $0.0001
par value; 1,500,000,000 authorized; 697,131,838 and
25,198,298 shares issued and 696,856,131 and 24,933,857
common shares
outstanding as of as of December 31, 2023 and
December 31, 2022, respectively
|
70
|
|
3
|
|
Additional paid-in
capital
|
1,879,009
|
|
1,545,530
|
|
Accumulated
deficit
|
(1,763,260)
|
|
(1,275,873)
|
|
Accumulated other
comprehensive loss
|
(10,704)
|
|
(10,053)
|
|
Treasury stock, at
cost, 275,707 and 264,441 shares, respectively
|
(7,718)
|
|
(7,687)
|
|
Total Wheels Up
Experience Inc. stockholders' equity
|
97,397
|
|
251,920
|
|
Non-controlling
interests
|
—
|
|
—
|
|
Total stockholders'
equity
|
97,397
|
|
251,920
|
|
Total liabilities
and equity
|
$
1,316,060
|
|
$
1,923,225
|
|
WHEELS UP EXPERIENCE
INC
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited, in
thousands except share and per share data)
|
|
|
Three Months Ended
December 31,
|
Twelve Months Ended
December 31,
|
|
2023
|
|
2022
|
2023
|
|
2022
|
|
Revenue
|
$
246,380
|
|
$
408,257
|
$
1,253,317
|
|
$
1,579,760
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Cost of
revenue
|
250,925
|
|
395,627
|
1,232,506
|
|
1,540,325
|
|
Technology and
development
|
11,608
|
|
14,804
|
61,873
|
|
57,240
|
|
Sales and
marketing
|
17,328
|
|
29,349
|
88,828
|
|
117,110
|
|
General and
administrative
|
23,539
|
|
53,331
|
145,873
|
|
183,531
|
|
Depreciation and
amortization
|
13,506
|
|
19,074
|
58,533
|
|
65,936
|
|
Gain on sale of
aircraft held for sale
|
(5,611)
|
|
(425)
|
(16,939)
|
|
(4,375)
|
|
Impairment of
goodwill
|
—
|
|
118,000
|
126,200
|
|
180,000
|
|
Total costs and
expenses
|
311,295
|
|
629,760
|
1,696,874
|
|
2,139,767
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(64,915)
|
|
(221,503)
|
(443,557)
|
|
(560,007)
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Change in fair value
of warrant liability
|
54
|
|
1,251
|
739
|
|
9,516
|
|
Loss on
divestiture
|
—
|
|
—
|
(2,991)
|
|
—
|
|
Loss on extinguishment
of debt
|
(1,595)
|
|
—
|
(4,401)
|
|
—
|
|
Interest
income
|
31
|
|
2,058
|
6,121
|
|
3,670
|
|
Interest
expense
|
(14,220)
|
|
(7,515)
|
(41,255)
|
|
(7,515)
|
|
Other expense,
net
|
162
|
|
464
|
(660)
|
|
(1,041)
|
|
Total other income
(expense)
|
(15,568)
|
|
(3,742)
|
(42,447)
|
|
4,630
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(80,483)
|
|
(225,245)
|
(486,004)
|
|
(555,377)
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
(632)
|
|
335
|
(1,383)
|
|
(170)
|
|
|
|
|
|
|
|
|
Net
loss
|
(81,115)
|
|
(224,910)
|
(487,387)
|
|
(555,547)
|
|
Less: Net loss
attributable to non-controlling
interests
|
—
|
|
—
|
—
|
|
(387)
|
|
Net loss
attributable to Wheels Up Experience
Inc.
|
$
(81,115)
|
|
$
(224,910)
|
$
(487,387)
|
|
$
(555,160)
|
|
|
|
|
|
|
|
|
Net loss per share
of Common Stock
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
(0.14)
|
|
$
(0.91)
|
$
(3.69)
|
|
$
(22.60)
|
|
|
|
|
|
|
|
|
Weighted-average
shares of Common Stock
outstanding:
|
|
|
|
|
|
|
|
Basic and
diluted
|
576,426,623
|
|
24,783,277
|
132,194,747
|
|
24,567,164
|
|
WHEELS UP EXPERIENCE
INC
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited, in
thousands)
|
|
|
Twelve Months Ended
December 31,
|
|
2023
|
|
2022
|
|
Cash flows from
operating activities
|
|
|
|
|
Net loss
|
$
(487,387)
|
|
$
(555,547)
|
|
Adjustments to
reconcile net loss to net cash (used in) provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
58,533
|
|
65,936
|
|
Amortization of
deferred financing costs and debt discount
|
329
|
|
766
|
|
Payment in kind
interest
|
10,453
|
|
—
|
|
Equity-based
compensation
|
25,633
|
|
88,979
|
|
Change in fair value of
warrant liability
|
(739)
|
|
(9,516)
|
|
Provision for expected
credit losses
|
1,705
|
|
8,129
|
|
Loss on
divestiture
|
2,991
|
|
—
|
|
Loss on extinguishment
of debt
|
4,401
|
|
—
|
|
Gain on sale of
aircraft held for sale
|
(16,939)
|
|
(4,375)
|
|
Impairment of
goodwill
|
126,200
|
|
180,000
|
|
Other
|
5,825
|
|
1,575
|
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
Accounts
receivable
|
30,062
|
|
(23,946)
|
|
Other
receivables
|
(3,164)
|
|
2,537
|
|
Parts and supplies
inventories
|
4,686
|
|
(21,693)
|
|
Aircraft
inventory
|
11,010
|
|
(29,470)
|
|
Prepaid
expenses
|
(17,315)
|
|
(3,058)
|
|
Other non-current
assets
|
(32,289)
|
|
(41,555)
|
|
Operating lease
liabilities, net
|
(552)
|
|
(490)
|
|
Accounts
payable
|
(8,089)
|
|
(9,702)
|
|
Accrued
expenses
|
(35,110)
|
|
19,143
|
|
Deferred
revenue
|
(348,419)
|
|
103,313
|
|
Other current assets
and liabilities
|
2,890
|
|
(1,715)
|
|
Net cash (used in)
provided by operating activities
|
(665,285)
|
|
(230,689)
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
Purchases of property
and equipment
|
(20,168)
|
|
(83,559)
|
|
Acquisition of
businesses, net of cash acquired
|
—
|
|
(75,093)
|
|
Proceeds from sale of
divested business
|
13,200
|
|
—
|
|
Purchases of aircraft
held for sale
|
(4,240)
|
|
(40,105)
|
|
Proceeds from sale of
aircraft held for sale, net
|
68,308
|
|
51,208
|
|
Other
|
267
|
|
—
|
|
Capitalized software
development costs
|
(16,497)
|
|
(27,693)
|
|
Net cash provided by
(used in) investing activities
|
40,870
|
|
(175,242)
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
Purchase of shares for
treasury
|
(28)
|
|
(7,687)
|
|
Purchase of fractional
shares
|
(3)
|
|
—
|
|
Proceeds from notes
payable
|
70,000
|
|
—
|
|
Repayment of notes
payable
|
(70,000)
|
|
—
|
|
Proceeds from
long-term debt
|
382,200
|
|
259,200
|
|
Repayments of
long-term debt
|
(59,523)
|
|
—
|
|
Payment of debt
issuance costs
|
(21,692)
|
|
(6,727)
|
|
Net cash provided by
financing activities
|
300,954
|
|
244,786
|
|
|
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(3,867)
|
|
(5,424)
|
|
|
|
|
|
Net decrease in
cash, cash equivalents and restricted cash
|
(327,328)
|
|
(166,569)
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
620,153
|
|
786,722
|
|
Cash, cash
equivalents and restricted cash, end of period
|
$
292,825
|
|
$
620,153
|
Definitions of Key Operating Metrics
Active Members. We define Active Members as the
number of Connect, Core, and UP for Business membership accounts
that generated membership revenue in a given period and are active
as of the end of the reporting period. We use Active Members to
assess the adoption of our premium offerings which is a key factor
in our penetration of the market in which we operate and a key
driver of membership and flight revenue.
Active Users. We define Active Users as Active
Members and jet card holders as of the reporting date plus unique
non-member consumers who completed a revenue generating flight at
least once in the given quarter and excludes wholesale flight
activity. While a unique consumer can complete multiple revenue
generating flights on our platform in a given period, that unique
user is counted as only one Active User. We use Active Users to
assess the adoption of our platform and frequency of transactions,
which are key factors in our penetration of the market in which we
operate and our growth in revenue.
Live Flight Legs. We define Live Flight Legs as the
number of completed one-way revenue generating flight legs in a
given period. The metric excludes empty repositioning legs and
owner legs related to aircraft under management. We believe Live
Flight Legs are a useful metric to measure the scale and usage of
our platform, and our growth in flight revenue.
Charter FTV. We define Charter FTV as the sum of
total gross spend by members and customers on all private,
on-demand charter flights that are at market-based rates and are
not Programmatic Flights. Charter FTV excludes customer gross spend
attributable to all group charter flights with 15 or more
passengers and cargo flight services. We use 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 Charter FTV in the calculation of
Total Private Jet Flight Transaction Value and Total Flight
Transaction Value.
Other Charter FTV. 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.
Total Private Jet Flight Transaction Value per Live Flight
Leg. We use Total Private Jet Flight Transaction Value per Live
Flight Leg to measure the average price 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.
Definitions of Non-GAAP Financial Measures
Adjusted EBITDA. We calculate Adjusted EBITDA as net
income (loss) adjusted for (i) interest income (expense), (ii)
income tax expense, (iii) depreciation and amortization, (iv)
equity-based compensation expense, (v) acquisition and integration
related expenses and (vi) other items not indicative of our ongoing
operating performance, including but not limited to, restructuring
charges.
We include Adjusted EBITDA because it is a supplemental measure
used by our management team for assessing operating performance.
Adjusted EBITDA is used in conjunction with bonus program target
achievement determinations, strategic internal planning, annual
budgeting, allocating resources and making operating decisions. In
addition, Adjusted EBITDA provides useful information for
historical period-to-period comparisons of our business, as it
removes the effect of certain non-cash expenses and variable
amounts.
Adjusted Contribution and Adjusted Contribution Margin.
We calculate Adjusted Contribution as gross profit (loss) excluding
depreciation and amortization and adjusted further for (i)
equity-based compensation included in cost of revenue, (ii)
acquisition and integration expense included in cost of revenue,
(iii) restructuring expense in cost of revenue and (iv) other items
included in cost of revenue that are not indicative of our ongoing
operating performance. Adjusted Contribution Margin is calculated
by dividing Adjusted Contribution by total revenue.
We include Adjusted Contribution and Adjusted Contribution
Margin as supplemental measures for assessing operating
performance. Adjusted Contribution and Adjusted Contribution Margin
are used to understand our ability to achieve profitability over
time through scale and leveraging costs. In addition, Adjusted
Contribution and Adjusted Contribution Margin provides useful
information for historical period-to-period comparisons of our
business and to identify trends.
Total Private Jet Flight Transaction Value. 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, on-demand
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
rate protection or fixed rates, and other benefits.
We calculate Total Flight Transaction Value as Total Private Jet
Flight Transaction Value, plus the sum of total gross spend by
customers on all group charter flights with 15 or more passengers
and cargo flight services.
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.
|
Reconciliations of
Non-GAAP Financial Measures
Adjusted
EBITDA
The following table
reconciles Adjusted EBITDA to net loss, which is the most directly
comparable GAAP measure (in thousands):
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net
loss
|
$
(81,115)
|
|
$ (224,910)
|
|
$
(487,387)
|
|
$ (555,547)
|
|
Add back
(deduct)
|
|
|
|
|
|
|
|
|
Interest
expense
|
14,220
|
|
7,515
|
|
41,255
|
|
7,515
|
|
Interest
income
|
(31)
|
|
(2,058)
|
|
(6,121)
|
|
(3,670)
|
|
Income tax
expense
|
632
|
|
(335)
|
|
1,383
|
|
170
|
|
Other expense,
net
|
(162)
|
|
(464)
|
|
660
|
|
1,041
|
|
Depreciation and
amortization
|
13,506
|
|
19,074
|
|
58,533
|
|
65,936
|
|
Change in fair value of
warrant liability
|
(54)
|
|
(1,251)
|
|
(739)
|
|
(9,516)
|
|
Loss on
divestiture
|
—
|
|
—
|
|
2,991
|
|
—
|
|
Equity-based
compensation expense
|
3,983
|
|
23,140
|
|
25,633
|
|
88,979
|
|
Acquisition and
integration expenses(1)
|
—
|
|
5,177
|
|
2,108
|
|
21,269
|
|
Restructuring
charges(2)
|
2,749
|
|
4,215
|
|
43,655
|
|
10,380
|
|
Atlanta Member
Operations Center set-up expense(3)
|
3,673
|
|
—
|
|
30,568
|
|
—
|
|
Certificate
consolidation expense(4)
|
576
|
|
—
|
|
11,375
|
|
—
|
|
Impairment of
goodwill(5)
|
—
|
|
118,000
|
|
126,200
|
|
180,000
|
|
Other(6)
|
3,901
|
|
8,192
|
|
4,018
|
|
8,192
|
|
Adjusted
EBITDA
|
$
(38,122)
|
|
$
(43,705)
|
|
$
(145,868)
|
|
$ (185,251)
|
|
__________________
|
|
(1)
|
Consists of expenses
incurred associated with acquisitions, as well as
integration-related charges incurred within one year of acquisition
date primarily related to system conversions, re-branding costs and
fees paid to external advisors.
|
|
(2)
|
For the three and
twelve months ended December 31, 2023, includes restructuring
charges related to the Company's restructuring plan ("Restructuring
Plan") and related strategic business expenses incurred 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
obtaining financing, and severance and recruiting expenses
associated with executive transitions and other employee separation
programs as part of our cost reduction initiatives. For the year
ended December 31, 2022, includes restructuring charges for
employee separation programs following strategic business
decisions.
|
|
(3)
|
Consists of expenses
associated with establishing the Company's Member Operations Center
located in Atlanta Georgia area (the "Atlanta Member Operations
Center") and its operations primarily including redundant operating
expenses during the transition period, relocation expenses for
employees and costs associated with onboarding new employees.
The Atlanta Member Operations Center began operating on May 15,
2023.
|
|
(4)
|
Consists of expenses
incurred to execute consolidation of our U.S. Federal Aviation
Administration ("FAA") operating certificates primarily including
pilot training and retention programs and consultancy fees
associated with planning and implementing the consolidation
process.
|
|
(5)
|
Represents non-cash
impairment charge related to goodwill recognized in the second and
third quarters of 2023, and the third and fourth quarters of
2022.
|
|
(6)
|
For each of the three
and twelve months ended December 31, 2023, includes amounts
reserved during the fourth quarter of 2023 related to Parts and
supplies inventory deemed in excess after evaluation of future
business need offset by an increase in Adjusted EBITDA loss due to
collections of certain aged receivables which reduced Adjusted
EBITDA loss in the reconciliation presented for the year ended
December 31, 2022. For the twelve months ended December 31, 2023,
includes charges related to an individually immaterial litigation
settlement during the third quarter of 2023. For each of the three
and twelve months ended December 31, 2022, includes amounts related
to a one-time charge for certain aged receivables and
inventory.
|
|
|
|
Refer to "Supplemental
Expense Information" below, for further information
|
Refer to "Supplemental Expense Information" below, for further
information
|
Adjusted
Contribution and Adjusted Contribution Margin
The following table
reconciles Adjusted Contribution to gross profit (loss), which is
the most directly comparable
GAAP measure (in thousands):
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenue
|
$
246,380
|
|
$
408,257
|
|
$ 1,253,317
|
|
$ 1,579,760
|
|
Less: Cost of
revenue
|
250,925
|
|
395,627
|
|
1,232,506
|
|
1,540,325
|
|
Less: Depreciation and
amortization
|
13,506
|
|
19,074
|
|
58,533
|
|
65,936
|
|
Gross profit
(loss)
|
(18,051)
|
|
(6,444)
|
|
(37,722)
|
|
(26,501)
|
|
Gross margin
|
(7.3) %
|
|
(1.6) %
|
|
(3.0) %
|
|
(1.7) %
|
|
Add
back:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
13,506
|
|
19,074
|
|
58,533
|
|
65,936
|
|
Equity-based
compensation expense in cost of
revenue
|
830
|
|
3,136
|
|
3,927
|
|
$
14,456
|
|
Acquisition and
integration expense in cost of
revenue(1)
|
—
|
|
2,410
|
|
—
|
|
3,060
|
|
Restructuring expense
in cost of revenue(2)
|
—
|
|
34
|
|
1,075
|
|
34
|
|
Atlanta Member
Operations Center set-up
expense in cost of revenue(3)
|
2,264
|
|
—
|
|
24,704
|
|
—
|
|
Certificate
consolidation expense in cost of
revenue(4)
|
324
|
|
—
|
|
8,044
|
|
—
|
|
Other(5)
|
3,975
|
|
961
|
|
3,975
|
|
961
|
|
Adjusted
Contribution
|
$
2,848
|
|
$
19,171
|
|
$
62,536
|
|
$
57,946
|
|
Adjusted
Contribution Margin
|
1.2 %
|
|
4.7 %
|
|
5.0 %
|
|
3.7 %
|
|
__________________
|
|
|
|
(1)
|
Consists of expenses
incurred associated with acquisitions, as well as
integration-related charges incurred within one year of acquisition
date.
|
|
(2)
|
For the twelve months
ended December 31, 2023, includes restructuring charges related to
the Restructuring Plan and other employee separation programs as
part of our cost reduction initiatives.
|
|
(3)
|
Consists of expenses
associated with establishing the Atlanta Member Operations Center
and its operations primarily including redundant operating expenses
during the transition period, relocation expenses for employees and
costs associated with onboarding new employees. The Atlanta
Member Operations Center began operating on May 15,
2023.
|
|
(4)
|
Consists of expenses
incurred to execute consolidation of our FAA operating certificates
primarily including pilot training and retention programs and
consultancy fees associated with planning and implementing the
consolidation process.
|
|
(5)
|
For the three and
twelve months ended December 31, 2023, includes amounts reserved
during the fourth quarter of 2023 related to Parts and supplies
inventory deemed in excess after evaluation of future business
needs. For the three and twelve months ended December 31, 2022,
includes amounts related to a one-time charge for certain aged
inventory.
|
|
Flight Transaction
Value
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 U.S. GAAP
measure (in thousands). The table below omits
the results of Air Partner before April 1, 2022, the date of
acquisition
|
|
|
Year Ended
December 31,
|
|
2023
|
|
2022
|
|
2021
|
|
Flight
revenue
|
$
884,065
|
|
$ 1,073,094
|
|
$
873,724
|
|
Add back
(deduct):
|
|
|
|
|
|
|
Charter revenue in
Flight revenue(1)
|
(195,092)
|
|
(132,501)
|
|
(180,113)
|
|
Charter
FTV(2)
|
333,898
|
|
232,126
|
|
180,113
|
|
Total Private Jet
Flight Transaction Value
|
1,022,871
|
|
1,172,719
|
|
873,724
|
|
Other Charter
FTV(2)
|
177,345
|
|
164,318
|
|
—
|
|
Total Flight
Transaction Value
|
$ 1,200,216
|
|
$ 1,337,037
|
|
$
873,724
|
|
__________________
|
|
|
|
(1)
|
Represents the portion
of Flight revenue not attributable to Programmatic
Flights
|
|
(2)
|
See "Definitions of Key
Operating Metrics" for more information about Charter FTV and Other
CharterFTV
|
|
Supplemental Revenue
Information
|
|
|
(In
thousands)
|
Three Months Ended
December 31,
|
|
Change
in
|
|
2023
|
|
2022
|
|
$
|
|
%
|
|
Membership
|
$
19,077
|
|
$
23,056
|
|
$
(3,979)
|
|
(17) %
|
|
Flight
|
202,374
|
|
273,743
|
|
(71,369)
|
|
(26) %
|
|
Aircraft
management
|
10,398
|
|
61,846
|
|
(51,448)
|
|
(83) %
|
|
Other
|
14,531
|
|
49,612
|
|
(35,081)
|
|
(71) %
|
|
Total
|
$
246,380
|
|
$
408,257
|
|
$
(161,877)
|
|
(40) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
Twelve Months Ended
December 31,
|
|
Change
in
|
|
2023
|
|
2022
|
|
$
|
|
%
|
|
Membership
|
$
82,857
|
|
$
90,132
|
|
$
(7,275)
|
|
(8) %
|
|
Flight
|
884,065
|
|
1,073,094
|
|
(189,029)
|
|
(18) %
|
|
Aircraft
management
|
175,829
|
|
242,032
|
|
(66,203)
|
|
(27) %
|
|
Other
|
110,566
|
|
174,502
|
|
(63,936)
|
|
(37) %
|
|
Total
|
$
1,253,317
|
|
$
1,579,760
|
|
$
(326,443)
|
|
(21) %
|
|
Supplemental Expense
Information
|
|
|
Three Months Ended
December 31, 2023
|
|
Cost of
revenue
|
|
Technology
and
development
|
|
Sales and
marketing
|
|
General and
administrative
|
|
Total
|
|
Equity-based
compensation expense
|
$
830
|
|
$
319
|
|
$
(17)
|
|
$
2,851
|
|
$
3,983
|
|
Restructuring
charges
|
—
|
|
—
|
|
—
|
|
2,749
|
|
2,749
|
|
Atlanta Member
Operations Center set-up
expense
|
2,264
|
|
—
|
|
—
|
|
1,409
|
|
3,673
|
|
Certificate
consolidation expense
|
324
|
|
—
|
|
—
|
|
252
|
|
576
|
|
Other
|
3,975
|
|
—
|
|
—
|
|
(74)
|
|
3,901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31, 2023
|
|
Cost of
revenue
|
|
Technology
and
development
|
|
Sales and
marketing
|
|
General and
administrative
|
|
Total
|
|
Equity-based
compensation expense
|
$
3,927
|
|
$
2,096
|
|
$
1,764
|
|
$
17,846
|
|
$
25,633
|
|
Acquisition and
integration expenses
|
—
|
|
53
|
|
134
|
|
1,921
|
|
2,108
|
|
Restructuring
charges
|
1,075
|
|
6,940
|
|
2,761
|
|
32,879
|
|
43,655
|
|
Atlanta Member
Operations Center set-up
expense
|
24,704
|
|
201
|
|
—
|
|
5,662
|
|
30,568
|
|
Certificate
consolidation expense
|
8,044
|
|
—
|
|
—
|
|
3,332
|
|
11,375
|
|
Other
|
3,975
|
|
—
|
|
—
|
|
43
|
|
4,018
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2022
|
|
Cost of
revenue
|
|
Technology
and
development
|
|
Sales and
marketing
|
|
General and
administrative
|
|
Total
|
|
Equity-based
compensation expense
|
$
3,136
|
|
$
1,133
|
|
$
2,695
|
|
$
16,176
|
|
$
23,140
|
|
Acquisition and
integration expense
|
2,410
|
|
—
|
|
—
|
|
2,767
|
|
5,177
|
|
Restructuring
charges
|
34
|
|
591
|
|
332
|
|
3,258
|
|
4,215
|
|
Other
|
961
|
|
—
|
|
—
|
|
7,231
|
|
8,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31, 2022
|
|
Cost of
revenue
|
|
Technology
and
development
|
|
Sales and
marketing
|
|
General and
administrative
|
|
Total
|
|
Equity-based
compensation expense
|
$
14,456
|
|
$
3,180
|
|
$
11,009
|
|
$
60,334
|
|
$
88,979
|
|
Acquisition and
integration expense
|
3,060
|
|
—
|
|
—
|
|
18,209
|
|
21,269
|
|
Restructuring
charges
|
34
|
|
591
|
|
332
|
|
9,423
|
|
10,380
|
|
Other
|
961
|
|
—
|
|
—
|
|
7,231
|
|
8,192
|
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SOURCE Wheels Up
