Gogo
Annual Report 2022

Plain-text annual report

20Annual report22 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One): ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiff scal year ended December 31, 2022 OR ☐ TRARR NSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period frff om __________ __ to __________ Commission File Number: 001-35975 Gogo Inc. (Exact name of registrant as specififf ed in its charter) Delaware (State or other jurisdiction of ation or Organization) r Incorpor 27-1650905 (I.R.S. Employer Identififf cation No.) 105 Edgeview Dr., Suite 300 Broomfiff eld, CO 80021 (Address of principal executive offff iff ces) Telephone Number (303) 301-3271 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of Class Common stock, par value $0.0001 per share Prefeff rred Stock Purchase Rights Trading Symbol GOGO GOGO Name of Each Exchange on Which Registered NASDAQ Global Select Market NASDAQ Global Select Market Indicate by check mark if the registrant is a well-known seasoned issuer, as defiff ned in RulRR e 405 of the Securities Act. Yes ☑ No ☐ Indicate by check mark if the registrant is not required to fiff le reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑ Indicate by check mark whether the registrant (1) has fiff led all reports required to be fiff led by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months such shorter period that the registrant was required to fiff le such reports), and (2) has been subject to such fiff ling requirements forff the past 90 days. Yes ☑ No ☐ (or forff Indicate by check mark whether the registrant has submitted electronically everyrr Interactive Data File required to be submitted pursuant to RulRR e 405 of Regulation S-T (§232.405 of this chapta er) during the preceding 12 months (or forff such shorter period that the registrant was required to submit such fiff les). Yes ☑ No ☐ Indicate by check mark whether the registrant is a large accelerated fiff ler, an accelerated fiff ler, a non-accelerated fiff ler or a smaller reporting company. See the defiff nitions of “large accelerated fiff ler,” “accelerated fiff ler,” “smaller reporting company” and “emerging growth company” in RulRR e 12b-2 of the Exchange Act. Large accelerated fiff ler Non-accelerated fiff ler ☑ ☐ Accelerated fiff ler Smaller reporting company Emerging growth company ☐ ☐ ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period forff complying with any new or revised fiff nancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has fiff led a report on and attestation to its management’s assessment of the effff eff ctiveness of its internal control over fiff nancial reporting under Section 404(b) of the Sarbar nes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting fiff rm that prepared or issued its audit report. Yes ☑ No ☐ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the fiff nancial statements of the registrant included in the fiff ling reflff ect the correction of an error to previously issued fiff nancial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recoveryrr analysis of incentive-based compensation received by any of the registrant’s executive offff iff cers during the relevant recoveryrr period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defiff ned in RulRR e 12b-2 of the Exchange Act). Yes ☐ No ☑ The aggregate market value of the voting and non-voting stock held by non-affff iff liates of the registrant as of June 30, 2022, the last business day of the registrant's most recently completed second fiff scal quarter, was $1,054,416,152 based upon the closing price reported forff such date on the NASDAQ Global Select Market. As of Februarr ryrr 24, 2023, 127,910,134 shares of $0.0001 par value common stock were outstanding. Portions of the registrant’s defiff nitive Proxy Statement forff its Annual Meeting of Stockholders scheduled to be held June 6, 2023 are incorpor rr ated by refeff rence into Part III of this Form 10-K. Such proxy statement will be fiff led with the Securities and Exchange Commission within 120 days of the registrant’s fiff scal year ended December 31, 2022. Documents Incorporated By Refeff rence Gogo Inc. INDEX Business Reserved Properties Legal Proceedings Part I. Item 1. Item 1A. Risk Factors Item 1B. Unresolved Staffff Comments Item 2. Item 3. Item 4. Mine Safeff ty Disclosures Part II. Item 5. Market forff Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Item 6. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures About Market Risk Item 8. Item 9. Item 9A. Controls and Procedures Item 9B. Other Inforff mation Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Part III. Item 10. Directors, Executive Offff iff cers and Corpor Item 11. Executive Compensation Item 12. Item 13. Certain Relationships and Related Transactions, and Director Independence Item 14. Part IV. Item 15. Exhibits, Financial Statement Schedules Item 16. Financial Statements and Supplementaryrr Data Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Security Ownership of Certain Benefiff cial Owners and Management and Related Stockholder Matters Principal Accounting Fees and Services Form 10-K Summaryrr ate Governance r Page 5 15 34 34 34 34 35 36 37 52 54 91 91 91 91 93 93 93 94 94 95 99 1 INTRODUCTORYRR NOTE UnlUU ess the contexee t otherwisii e indicates or requires, as used in thisii Annual Repor December 31, 2022, refe eff rences to: (i(( )i “we,” “us,” “our,”r “Gogo,” or the “ComCC pany indirectlyll owned subsidiaries as a combined entitytt ,yy exee cepte where otherwisii e stated or where it isii clear that the term means onlyll Gogo . exee clusive of itstt subsidiaries; and (i(( i)i “f“ iff sii cal,”l when used in refe eff rence to any twtt elve-month period ended December 31, refe eff rsrr to IncII t on ForFF m 10-K isii as of our fiff sii cal year ended December 31. UnlUU ess otherwisii e indicated, inforff mation contained in thisii Annual Repor December 31, 2022. WeWW have made rounding adjustmtt entstt t on ForFF m 10-K and, unless otherwisii e indicated, percentages presented in thisii Annual Repor to reach some of the fiff gur e the fiff sii cal year ended . and itstt directlyll and t on ForFF m 10-K forff ” refe eff r to Gogo IncII t on ForFF m 10-K are approximate. es included in thisii Annual Repor m e e e i On December 1, 2020, we complm eted the previouslyll announced sale of our commercial aviation (“CACC ”)” business to a subsidiaryr kskk on HolHH dings S.A. (“I“ ntII elsll at”)” forff of IntII elsll at JacJJ “TrTT ansaction”)” . As a result,t all periods presented in thisii Annual Repor business as disii continued operations. a purchase price of $400.0 million in cash, subject to certain adjustmtt entstt (t(( he t on ForFF m 10-K have been conforff med to present thett CACC e UponUU the closing of the TrTT ansaction, we and IntII elsll at entered into a netwtt orkrr sharing agreement (t(( he “A“ TGTT NeNN twtt orkrr Sharing Agreement”)” , pursrr uant to which we provide certain in-f- lff ight revenue sharing obligat America, subject to certain revenue guarantees. i i connectivitytt services on our ATGTT netwtt orkrr to IntII elsll at,t subject to certain ions, and pursrr uant to which IntII elsll at has exee clusive commercial aviation access to the ATGTT netwtt orkrr in NorNN th Cautionary Note Regarding Forward-Looking Statements Certain statements in this report may constitutt e “forff ward-looking” statements within the meaning of the Private Securities Litigation Reforff m Act of 1995. These forff ward-looking statements include, without limitation, statements regarding our industry,rr business strategy, plans, goals and expectations concerning our market position, international expansion, futff urt e technologies, futff urt e operations, margins, profiff tabia lity, futff urt e effff iff ciencies, capia tal expenditurt es, liquidity and capia tal resources and other fiff nancial and operating inforff mation. When used in this discussion, the words “anticipate,” “assume,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “forff ecast,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “futff urt e” and the negative of these or similar terms and phrases are intended to identifyff Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actuat materially under “Risk Factors,” “Quantitative and Qualitative Disclosures about Analysis of Financial Condition and Results of Operations” in this report. We undertake no obligation to update or revise publicly any forff ward-looking statements, whether because of new inforff mation, futff urt e events, or otherwise. l results to diffff eff r materially. We describe risks and uncertainties that could cause actuat forff ward-looking statements in this Annual Report on Form 10-K. Market Risk,” and “Management’s Discussion and l results and events to diffff eff r a 2 Summary of Risk Factors The folff lowing summarizes the principal faff ctors that make an investment in our company speculative or risky, all of which are ly described in the Risk Factors section below. This summaryrr should be read in conjunction with the Risk Factors section and more fulff should not be relied upon as an exhaustive summaryrr of the material risks faff cing our business. The folff harm to our business, reputation, revenue, fiff nancial results and prospects, among other impacts: lowing faff ctors could result in Risii kskk Related to Our Business • • • • • • • • • • • • our abia lity to continue to generate revenue frff om the provision of our connectivity services; our reliance on our key OEMs and dealers forff equipment sales; the impact of competition; our reliance on third parties forff equipment components and services; the impact of global supply chain and logistics issues and increasing inflff ation; our abia lity to expand our business outside of the United States; our abia lity to recruir t, train and retain highly skilled employees; the impact of pandemics or other outbrt eaks of contagious diseases, including the COVID-19 pandemic, and the measures implemented to combat them; the impact of adverse economic conditions; our abia lity to fulff ly utilize portions of our defeff rred tax assets; the impact of increased attention to climate change, ESG matters and conservation measures; and our abia lity to evaluate or pursue strategic opportuni t ties. Risii kskk Related to Our TeTT chnology and IntII ellectual Propertytt • • • • • • • • our abia lity to develop and deploy Gogo 5G, Global Broadband or other next generation technologies; our abia lity to maintain our rights to use our licensed 3Mhz of ATG spectrumr additional spectrumr if needed; in the United States and obtain rights to the impact of service interrupt r ions or delays, technology faff ilures, equipment damage or system disrupt r ions or faff ilures; the impact of assertions by third parties of infrff ingement, misappr a opriation or other violations; our abia lity to innovate and provide products and services; our abia lity to protect our intellectuat l property rights; the impact of our use of open-source softff ware; and the impact of equipment faff ilure or material defeff cts or errors in our softff ware. Risii kskk Related to Litigat i ion and Regul e ation • • • • • • • our abia lity to comply with appl a icabla e forff eign ownership limitations; the impact of government regulation of the internet and conflff ict minerals; our possession and use of personal inforff mation; risks associated with participation in the Federal Communications Commission’s (“FCC”) Reimbursement Program, should we decide to participate; our abia lity to comply with anti-bribery,rr anti-corrupt r ion and anti-money laundering laws; the extent of expenses, liaba ilities or business disrupt r ions resulting frff om litigation; and the impact of global climate change and legal, regulatoryrr or market responses to it. 3 Risii kskk Related to Our Inde II btedness • • • • • • the impact of our substantial indebtedness; our abia lity to obtain additional fiff nancing to refiff nance or repay our existing indebtedness; the impact of restrictions and limitations in the agreements and instrumr ents governing our debt; the impact of increases in interest rates; the impact of a substantial portion of our indebtedness being secured by substantially all of our assets; and the impact of a downgrade, suspension or withdrawal of the rating assigned by a rating agency. Risii kskk Related to Our ComCC mon Stock • • • • • • the volatility of our stock price; our abia lity to fulff ly utilize our tax losses; the dilutive impact of futff urt e stock issuances; the impact of our stockholder concentration and of our CEO and Chairman of the Board being a signififf cant stockholder; our abia lity to fulff fiff ll our obligations associated with being a public company; and the impact of anti-takeover provisions, ownership provisions and certain other provisions in our charter, our bylaws, Delaware law, and our existing and any futff urt e credit faff cilities. 4 Item 1. Business Company Overview and Strategy Our MiMM sii sion and our InII dustrtt yr ’s’ Evolutitt on Gogo is the world’s largest provider of broadband connectivity services forff the business aviation market. We have served this market forff more than 25 years. Our mission is to enrich the lives of passengers and the effff iff ciency of operators with the world’s best business aviation in-flff ight connectivity and customer support. We have always sought to provide the best connectivity forff aviation market regardless of technology, and we have a successfulff business aviation aircraftff in North America, which comprise appr the leading provider of in-flff ight connectivity in that market. Gogo started in analogue air-to-ground (“ATG”) technology in the late 1990s, then, as analogue cellular backhaul disappe ATG with our digital broadband 3G and 4G networks beginning in 2010. We expect to commercially launch our four – Gogo 5G – in the four and internationally through distribution agreements with satellite providers. As of December 31, 2022, we had appr ATG business aircraftff online of which appr Gogo Biz, our legacy ATG broadband system. th quarter of 2023. We also continue to provide narrowband satellite services to customers in North America oximately 6,900 oximately 3,600 with ared, migrated to narrowband satellite connectivity in the early 2000s, then back to th ATG network oximately 3,300 were equipped with our AVANAA CE platforff m and appr oximately 63% of the worldwide business aviation flff eet, and we are historyrr of doing so. Until recently, we focff used primarily on the business a a a a a ff ff The business aviation in-flff ight connectivity market is evolving again due to advancements in technology and several change catalysts. The most signififf cant advancement in technology driving change in our industryrr (“LEO”) satellite technology, which provides, among other things, a global service offff eff ring and signififf cantly higher capaa lower latency than alternatives availabla e today. We believe that demand forff changes in the demographi COVID world such as remote work and use of videoconfeff rencing. Further, 66% of business aircraftff in North America were manufaff cturt ed beforff e IFC was availabla e as a linefiff t option. We expect appr fiff ve to seven years with new aircraftff coming pre-installed with in-flff ight connectivity given customer expectations today. cs of our customer base, the prolifeff ration of social appl in-flff ight connectivity will continue to increase because of ications and lifeff style changes that remain in a post- oximately 25% of these aircraftff will be replaced in the next today is the introduction of low earth orbir city and a a a t We view all these signififf cant changes as opportuni t ties to leverage our technological know-how and deep understanding of the business aviation in-flff ight connectivity market to drive greater penetration of our solutions in our markets over the next fiff ve to ten years. As outlined below, we have refiff ned our strategy to capta urt e these opportuni are preparing to launch the fiff rst global broadband service designed forff business aviation (“Global Broadband”). The service will use an electronically steered antenna (“ESA”), specififf cally designed with Hughes Network Systems, LLC (“Hughes”) to address a broad range of business aviation aircraftff , operating on a LEO satellite network operated by Network Access Associates, Ltd. (“OneWeb”). We believe that Global Broadband, in combination with or as an alternative to our ATG systems, will allow us to increase our penetration of the North American heavy jet market and provide an upgrade path forff Global Broadband will allow us to penetrate the business aviation market outside of North America, where feff wer than 6% of business aviation aircraftff are installed with in-flff ight connectivity systems. our existing ATG customer base. In addition, ties, including an announcement in May 2022 that we t NowNN and NeNN xtee StSS rtt atett gye Given the industryrr evolution described above a , we have refiff ned our strategy, ultimately creating what we refeff r to as the “Now and Next Strategy”. The Now and Next Strategy positions Gogo to penetrate the rest of the world business aviation market while maintaining and strengthening our leadership position in North America. The principal elements of our Now and Next Strategy include the folff lowing: • • • • Leveraging our deep understanding of the business aviation in-flff ight connectivity market to accelerate growth by (i) expanding our total addressabla e market through the broadening of the Gogo product line to meet the needs of everyrr segment of the business aviation market; (ii) extending customer use of our services by driving penetration of our AVANA CE platforff m, enhancing ATG networks, and providing easy upgrade paths to Global Broadband and other new technologies; and (iii) providing equivalent or better service at a lower cost of ownership than competitive products to all segments of the business aviation market; Preserving and expanding our relationships with Original Equipment Manufaff cturt ers (“OEMs”), our aftff ermarket dealers, and frff actional jet operators by providing superior customer support, products and services; Maintaining a continuous culturt e of improvement by, among other things, building knowledge and maintaining flff exibility to migrate to new hardware and network technologies as they evolve; and Pursuing a balanced capia tal allocation strategy focff used on maintaining adequate liquidity, investing in strategic initiatives to drive competitive positioning and fiff nancial value, maintaining an appr shareholder value. opriate level of leverage and enhancing a 5 In executing the Now and Next Strategy, we will continue to adhere to the product development principles that have guided us historically. These include, among other things, (i) maintaining product offff eff rings that fiff t the distinct needs of each segment of the business aviation market based on geography, providing easy and low-cost upgrade paths forff on a single softff ware-centric operating system via AVANAA CE, which allows forff points to the aircraftff allowing forff mission, size of aircraftff , and passenger prefeff rences; (ii) building customer loyalty by our customers as their demand forff easy upgrades to superior networks as technology evolves. easy softff ware upgrades and multiple-network access city grows; and (iii) runni ng all of our offff eff rings capaa a rr srr ComCC pem titt tii itt ve Difi fff eff rentitt atortt We believe Gogo is uniquely positioned to thrive in this dynamic industryrr environment, due in part to the competitive diffff eff rentiators described below: Our Product Platforff m. Our product platforff m includes three components – networks, antennas, and airbor each of which is discussed in greater detail below. The comprehensiveness and flff exibility in our product platforff m allows us to align our value proposition with our customers’ priorities and identifyff solutions based on geography, prefeff rence. mission, size of aircraftff and passenger ne equipment and softff ware, a r p Our Distribution Relationships. We believe that our distribution network is unmatched in our industry.rr Our distribution partners include everyrr OEM of business aviation aircraftff and an aftff ermarket network of appr oximately 120 dealers, many of whom we have worked with forff generating revenues and profiff ts forff sales and our speed to market as our distribution partners are willing to invest in marketing and certififf cation effff orff ted relationships with our distribution partners and a proven track record of t and confiff dence in our abia lity to continue to do so. This faff cilitates our decades. We have establa ished trusr them, and they have trusrr ts forff a our equipment. ryrr 24, oximately 457 U.S. and international patents, most of which relate to network technology. We pioneered and have Our Innovative Culture. We continuously innovate and have a strong track record of innovation in our networks. As of Februarr 2023, we held appr a led innovation in our industryrr deployed forff quarter of 2023. foff r nearly 30 years, as evidenced by the three proprietaryrr ATG network technologies that we have th th ATG network – Gogo 5G – in the four the business aviation market. We expect to commercially launch our four ff ff PrPP oductstt ,s SeSS rvices,s CuCC stomtt ersrr and CuCC stomtt u er Suppor t We focff us exclusively on selling in-flff ight connectivity to the business aviation market and implement our value proposition of offff eff ring the best products and services through a comprehensive portfolff aviation partner support, engineering, design and development services and production operations func io consisting of our in-flff ight systems, in-flff ight services, ff tions. g In-Flight Systems. Our customers have a broad range of equipment choices forff solution based on geography, y a mission, size of aircraftff and passenger prefeff rence. Key components of our in-flff ight systems include: their in-flff ight systems, which allows us to provide a Antennas. Gogo has developed three faff milies of ATG antennas, all of which act in pairs and are mounted on the belly of the aircraftff . Gogo currently deploys omni-directional antennas and dual directional antennas, both of which support customers utilizing our 3G and 4G networks. In connection with the launch of Gogo 5G, Gogo will introduce the MB-13 antenna, which is capaa bla e of accessing Gogo’s 4 MHz of licensed spectrumr enabla ing greater throughput than our omni-directional and dual directional antennas. in the 800 MHz band and unlicensed spectrumr in the 2.4 GHz band at the same time, In connection with the launch of Global Broadband, Gogo is working with Hughes to design an ESA that will fiff t on a veryrr broad range of business aviation aircraftff – frff om light jets and turt bopr second half of 2024 and will operate on OneWeb’s high speed, low latency LEO satellite network. ops to large-cabia n jets. The ESA is expected to be delivered in the r Airborne Equipmi ent and Softff wtt are. Our networks and systems are designed to provide the best in-flff ight Internet experience and highest network and system availabia lity across the broadest range of aircraftff wherever they flff y, and a growing number of our installed aircraftff are on the AVANAA CE platforff m. The AVANAA CE platforff m is softff ware-centric and designed to be extensible as it includes hardware built with common components that operate on a single operating system across multiple devices. Approximately 80% of the components included in AVANA CE L5™ and AVANA CE L3™ (a compact version of AVANAA CE L5 designed forff smaller aircraftff ) are common across the two systems. Because of this extensibility, we can add new products, feff aturt es and options; we can increase connectivity speeds by augmenting spectrumr no hardware or aircraftff modififf cations. For example, existing AVANAA CE customers who wish to add Global Broadband service will only have to install an ESA on top of their aircraftff and runrr a power cabla e and ethernet cabla e to the AVANAA CE box inside the aircraftff . For customers operating AVANA CE-equipped aircraftff in North America, AVANA CE’s unique multi-bearer capaa bia lity will allow Gogo to combine capaa satellite networks can provide. We expect AVANAA CE’s common componentryrr certififf cations across multiple products, spectrumrr increase effff iff ciency and improve quality in func to faff cilitate standardization of hardware and FAA frff equencies and networks, and we expect that such standardization will in turt n tions that include supply chain, production operations and customer support. Of the city frff om its ATG network and the OneWeb LEO satellite network to provide more capaa ; and we can add proprietaryrr or third-party ATG or satellite networks, all with minimal or city than stand-alone LEO ff 6 AVANAA CE aircraftff online at December 31, 2022, appr with AVANAA CE L3. a oximately 2,100 were equipped with AVANAA CE L5 and appr a oximately 1,200 ( g In-Flight Services (Service Plans). We provide a wide range of in-flff ight services forff passengers, flff ight and cabia n crews and our aviation partners. We offff eff r a variety of connectivity services tailored to our various networks and technologies that are generally priced on a per-aircraftff per-month basis. We offff eff r service plans ranging frff om unlimited data usage to a pay-as-you-go monthly consumption plan and offff eff r alongside these data plans voice rates, inflff ight entertainment options such as Gogo Vision, and other service feff aturt es. ) Customers and Distribution Partners. We provide in-flff ight connectivity services to a variety of customers needing connectivity, but our end users are primarily aircraftff owners/operators. As of December 31, 2022, our market was comprised of appr business aircraftff in North America, of which appr aircraftff in the rest of the world, of which feff wer than 6% have broadband connectivity. As of December 31, 2022, we had appr a Intelsat), and no customer accounted forff more than 10% of our revenue in 2022. oximately 4,200 customers. Out top ten customers accounted forff oximately 20% of our 2022 service revenue (excluding oximately 30% have broadband connectivity, and appr oximately 14,400 business oximately 24,700 a appr a a a We also sell directly to everyrr OEM of business aviation aircraftff including Bombardier, Dassault Falcon, Embraer, Gulfsff tream, and Textron Aviation. In the aftff ermarket, we sell through a global distribution network of appr Pilatust dealers who are certififf ed by the Federal Aviation Administration (“FAA”) as Maintenance and Repair Organizations. Our independent our equipment. Our customers also include dealers market, resell and obtain FAA-required supplemental type certififf cates (“STC”) forff ate flff ight departments and individuals rr frff actional jet operators such as Flexjet and NetJets, charter operators such as Wheels Up, corpor owning aircraftff . oximately 120 independent a Infrff astructure. The infrff astrucr each of which is described in greater detail below. turt e supporting our in-flff ight connectivity services consists of our networks, towers, and data centers, NeNN twtt orkrr skk and TowTT ersrr . We have developed, deployed and operated our own networks forff more than 25 years, resulting in a in the 800 MHz band and appr experience and know-how that we believe is unmatched by any other provider in our industry.rr We hold the exclusive license to 4MHz of U.S. nationwide spectrumrr dedicated to ATG use, as well as the exclusive rights to the same spectrumr operate a terrestrial network using 3 MHz of licensed spectrumr lower 48 states and parts of Alaska and Canada. All but one of our cell sites are leased frff om tower operators. Our terrestrial network oximately 24,700 business aircraftff based in North America. As of December 31, 2022, this network supported 3.1 Mbps targets appr 3G service and 9.8 Mbps 4G service. Our proprietaryrr ATG network provides lower latency and requires less powerfulff antennas than the networks operated by our geosynchronous (“GEO”) satellite competitors and enabla es us to avoid the interfeff rence issues that can th ATG network – Gogo 5G – in the four accompany use of shared, unlicensed spectrumr quarter of 2023. We have announced completion of key Gogo 5G milestones including fiff nishing construcrr sites that comprise our 5G terrestrial network in the lower 48 states, obtaining a STC and Parts Manufaff cturt the 5G airbor Jet Edge as our 5G launch partner. Customers who elect to not upgrade to Gogo 5G may continue to use our 3G and 4G service over our ATG networks in North America. The 3G and 4G service will also serve as a redundancy network and perforff mance enhancement mechanism forff Gogo 5G. ing Approval (“PMA”) forff flff ight testing and signing an agreement with . We expect to commercially launch our four ne antenna system, qualifyiff ng the airbor oximately 260 terrestrial cell sites in the ne line replaceabla e unit (“LRURR ”) forff tion of our initial 150 cell in Canada. We currently a ff r r ff th In addition, in May 2022 we announced that we have partnered with OneWeb to utilize their global LEO satellite network. They plan to complete launch of their network in April of 2023 and be ready to start offff eff ring aero service in 2024. In addition to the signififf cant perforff mance enhancements provided by the LEO network, Global Broadband expands our total addressabla e market by a appr oximately 14,400 aircraftff in the rest of the world. Ground NeNN twtt orkrr and Data CeCC ntersrr . We lease an extensive, predominantly fiff ber-optic network to connect our appr a oximately 260 cell sites to our two data centers, the Internet and cloud-based services, and our network operations center (“NOC”). Our data centers and cloud-based services provide redundant telecommunications connections to the Internet and contain numerous servers that enabla e the expansive set of feff aturt es that we offff eff r. The NOC monitors daily network operations, conducts network diagnostics and coordinates responses to any perforff mance issues. We augment our abia lity to monitor, maintain and update our in-flff ight systems while aircraftff are on the ground with a terrestrial modem utilizing 3G, 4G and Wi-Fi wireless service. Support Organizations. We strive to deliver a premium customer experience. We accomplish this through the support of the folff pp g lowing func tions. ff CusCC tomer Support. We have created a support and service organization designed to provide operational assistance and comprehensive analytics to our customers. Our customer support organization is grouped into three subfunc teams, operational support, and comprehensive analytics. These teams assist with, among other things, installations, troubleshooting and system activations, and data analysis to evaluate our system and operational perforff mance. We have specialized support forff OEM distribution partners and dealers who are responsible forff installation of our equipment on aircraftff , and we support them in obtaining such certififf cations and installing the equipment through our aircraftff obtaining the FAA certififf cations required forff tions that include account our ff 7 ication engineers. We also deploy our fiff eld service engineering teams in key locations across the United States and Europe to appl a support our customers’ flff ight departments folff departments have access to our technical and logistical support 24 hours a day, seven days a week. lowing installation of our equipment. Both the dealer network and customer flff ight EngiEE neering, Designi and Development (“E“ DEE &D”)” . Our large in-house ED&D operation is responsible forff translating business requirements into products that comply with rigorous avionics certififf cation requirements. Its capaa bia lities include: (i) a radiofrff equency engineering team with expertise in antenna specififf cations, radio technology, spectrumr requirements; (ii) an airbor and its integration with ground systems and leads FAA certififf cation effff orff of turt ning business requirements into technical specififf cations and is responsible forff appl ication development and business systems organization team that manages development of our internal business systems and the a product extensions that sit on the AVANAA CE platforff m; and (v) a network engineering team that designs, implements and manages our ff network and data center infrff astrucr ne equipment ts; (iii) a systems engineering team that manages all aspects ne platforff m development team which manages the design, development and testing of airbor our program management process; (iv) an analysis, network design and regulatoryrr turt e, security and core network func tions. r r Production OpeO rations. Our manufaff cturt ing objective is to produce superior quality products that conforff m to avionics r specififf cations while providing the best value to our customers. Given our highly specialized technology and required production levels, we design, assemble and test our airbor based on our design specififf cations to maximize production effff iff ciencies. We retain the intellectuat airbor r intellectuat l property with these vendors. Our manufaff cturt and our third-party manufaff cturt ers employ at all levels of manufaff cturt forff ecasts to supply chain activities to shipping – are integrated and automated within our enterprrr manufaff cturt ne LRURR s. We also rely on third parties to manufaff cturt e our antennas and we generally share antenna design responsibilities and ing processes include internally designed test fiff xturt es and softff ware that we ing-related business processes – frff om sales ne LRURR s in-house, while relying on third parties to manufaff cturt e specififf c components ing and repair faff cilities are FAA-certififf ed. ise resource planning tools. Our l property associated with the ing. Our manufaff cturt ComCC pem titt tii itt on a We compete against both equipment-providers and GEO- and LEO- satellite based telecommunications service providers, as , to the business aviation market, including Honeywell Aerospace, Collins Aerospace, Satcom Direct, well as resellers of the above Inmarsat, ViaSat and Starlink. In addition, SmartSky Networks, which in 2014 announced that it planned to launch an ATG network in the continental United States in 2016, announced in late 2022 that the network is “live nationwide.” A number of our competitors are focff used on servicing the heavy jet market through GEO satellite services. We may in the futff urt e faff ce competition frff om other operators of LEO or other non-GEO satellite networks. We believe that the principal points of competition in our market are technological capaa bia lities, price, geographi regulatoryrr compliance, quality of support aftff er the sale and timeliness of deliveryrr and installation. c coverage, customer service, product development, conforff mity to customer specififf cations, a Licenses and Regulation FeFF deral Aviatitt on Adminii isii trtt atitt on The FAA prescribes standards and certififf cation requirements forff the manufaff cturt ing of aircraftff and aircraftff components, and certififf es repair stations to perforff m aircraftff maintenance, preventive maintenance and alterations, including the installation and maintenance of aircraftff components. Each type of aircraftff operated in the United States under an FAA-issued standard airworthiness certififf cate must possess an FAA Type Certififf cate, which constitutt es appr airworthiness standards. When a party other than the holder of the Type Certififf cate develops a maja or modififf cation to an aircraftff already type-certififf cated, that party must obtain an FAA-issued STC appr and OEMs to which we sell our equipment are generally responsible forff will be installed, and we support them in those effff orff aircraftff type, such as when they are confiff gured diffff eff rently forff oving the design of the modififf ed aircraftff type. The dealers obtaining STCs forff each aircraftff type on which our equipment diffff eff rent confiff gurations of the same oval of the design of the aircraftff type based on appl ts. Separate STCs typically are required forff diffff eff rent owners and operators. icabla e a a a a y to the FAA forff a Aftff er an STC is obtained, a manufaff cturt er desiring to manufaff cturt e components to be used in the modififf cation covered by the a PMA, which permits the holder to manufaff cturt e and sell components manufaff cturt ed in conforff mity STC must appl with the PMA and its appr modififf cation faff cility’s production quality control system. PMA supplements are obtained to authorize the manufaff cturt e of a particular part in accordance with the requirements of the pertinent PMA, including its production quality control system. We routinely apa ply forff and receive such PMAs and supplements. oved design and data package. In general, each initial PMA is an appr oval of a manufaff cturt ing or a Certain of our FCC licenses are conditioned upon our abia lity to obtain frff om the FAA a “No Hazard Determination” forff our cell sites, which indicates that a proposed strucrr altering certain cell sites, we may fiff rst be required to obtain such a determination. turt e will not, if built as specififf ed, create a hazard to air navigation. When building or Our business depends on our continuing access to, or use of,ff these FAA certififf cations, authorizations and other appr a ovals, and our employment of,ff or access to, FAA-certififf ed engineering and other profeff ssionals. 8 In accordance with these certififf cations, authorizations and other appr a ovals, the FAA requires that we maintain, review and ing faff cility and repair station to ensure that our faff cilities, procedures and quality control systems continue to meet FAA document our quality assurance processes. The FAA may visit our faff cilities at any time as part of our agreement forff manufaff cturt requirements. In addition, we are responsible forff faff ilures or defeff cts, and any changes to our operational faff cilities or FAA-appr include training procedures and drugrr safeff ty-sensitive employees working at our faff cilities or on aircraftff . inforff ming the FAA of signififf cant changes to our organization and operations, product oved quality control systems. Other FAA requirements and alcohol screening forff certififf cation as a a ForFF eigni Aviatitt on Regue latll itt on According to the Convention on International Civil Aviation, the airworthiness of U.S.-registered and FAA type-certififf cated aircraftff on which FAA-certififf ed Gogo equipment is installed is recognized by civil aviation authorities (“CAAs”) worldwide that are ther airworthiness certififf cation forff malities in countries signatories to that Convention. As a result, Gogo does not expect to require furff outside of the United States forff U.S.-registered aircraftff that already have an STC issued by the FAA covering Gogo equipment. For aircraftff registered with a CAA of a countryrr other than the United States, the installation of Gogo equipment requires airworthiness certififf cation frff om an airworthiness certififf cation body. Typically, the CAA of the countryrr responsible forff ensuring the airworthiness of any aircraftff modififf cations under its authority. in which the aircraftff is registered is The FAA holds bilateral agreements with certififf cation authorities around the globe. Bilateral agreements faff cilitate the reciprocal airworthiness technical cooperation between the FAA and its counterparr airworthiness certififf cation of civil aeronautical products that are imported/exported between two signatoryrr countries. A Bilateral Airworthiness Agreement (“BAA”) or Bilateral Aviation Safeff ty Agreement (“BASA”) with Implementation Procedures forff Airworthiness provides forff the CAA of the aircraftff ’s countryrr of registration generally validates STCs issued by the FAA and then issues a Validation Supplemental Type Certififf cate. For countries with which the FAA does not have a BAA or BASA, Gogo must appl y forff appr a required to comply with the airworthiness regulations of the countryrr airworthiness and aviation regulatoryrr registers aircraftff when there are no appl a could impact the timing of our abia lity to provide our service on such aircraftff . in which the aircraftff is registered. In order to obtain the necessaryrr certififf cation, Gogo will be in which the aircraftff is registered. Failure to address all forff eign in which it icabla e bilateral agreements may lead to signififf cant additional costs related to certififf cation and requirements at the commencement of each aircraftff operator’s service in any countryrr oval with the CAA of the countryrr rt CAA. Under a BAA or BASA, certififf cation a U.SUU .SS Depar ee tmtt ent of TrTT anspor s tattt itt on The U.S. Department of Transportation (“DOT”) establa ished an Advisoryrr Committee on Accessible Air Transportation to negotiate and develop a proposed rulr e concerning accommodations forff flff ight entertainment (“IFE”) and closed capta ioning of IFE. The Committee issued a resolution in late 2016 that included its recommendations to the DOT forff it may impact Gogo. According to the Agency RulRR e List – Spring 2022 posted by the Offff iff ce of Inforff mation and Regulatoryrr Affff aff irs, Offff iff ce of Management and Budget, the rulr emaking about a rulr e on IFE. However, since a fiff nal rulr e on IFE has not yet been issued, it is unclear how, if at all, passengers with disabia lities in three basic areas, including in- accessible IFE is a long-term action. a FeFF deral ComCC municatitt ons ComCC misii sion Under the Communications Act of 1934, as amended (the “Communications Act”), the FCC licenses the spectrumrr that we use tion, operation, acquisition and sale of our wireless services. The Communications Act and FCC rulrr es also and regulates the construcrr require the FCC’s prior appr a more than 25% of the equity or voting control of Gogo by non-U.S. individuals or entities. oval of the assignment or transfeff r of control of an FCC license, or the acquisition, directly or indirectly, of Our various services are regulated diffff eff rently by the FCC. For example, we provide some of our voice and data services (not including Gogo Biz or AVANAA CE) by reselling the telecommunications services of two satellite operators. Because we provide these services on a common carrier basis, we are subject to the provisions of Title II of the Communications Act, which require, among other things, that the charges and practices of common carriers be just, reasonabla e and non-discriminatory.rr interconnected voice over Internet protocol (“VoIP”) service. The FCC appl to interconnected VoIP services as it does to common carrier telecommunications services. In addition, we provide an requirements ies many, but not all, of the same regulatoryrr a We offff eff r connectivity service in the United States to business aviation aircraftff and, pursuant to the ATG Network Sharing Agreement, to certain commercial aircraftff operated by Intelsat’s airline customers, through our own faff cilities, using our ATG License, through an a nationwide commercial air-ground radiotelephone license in the 800 MHz band. We obtained and paid forff auction conducted by the FCC. See “ATG License Terms and Conditions.” this spectrumrr ications, services or non-harmfulff The FCC’s current rulr es classifyff broadband Internet access service as a lightly regulated, non-common carrier “inforff mation content, ications, service,” and remove virtuat a appl services or non-harmfulff consideration of any kind; or prioritizing the content and services of broadband providers’ affff iff liates. We remain subject to certain modififf ed transparency obligations that require disclosure of network management practices, perforff mance, and commercial terms. To the extent the FCC lly all of the previously imposed network neutrality restrictions on blocking access to lawfulff Internet traffff iff c on the basis of content, appl traffff iff c in exchange forff devices; impairing or degrading lawfulff Internet traffff iff c over other lawfulff devices; faff voring some lawfulff a 9 ther restricts reasonabla e network management, or to the extent network neutrality proponents prevail on the adoption of furff furff network neutrality restrictions, our business may be affff eff cted. ther Our Internet access service is also subject to the FCC’s data roaming rulrr es, which require commercial mobile data service (“CMDS”) providers like Gogo to negotiate roaming arrangements with any requesting faff cilities-based, technologically compatible providers of CMDS. The rulrr es do not give other providers the right to install equipment on Gogo-equipped aircraftff and do not require the Gogo service to be provided on a discounted basis, although the arrangement must be “commercially reasonabla e.” The rulrr es allow us to take reasonabla e measures to safeff guard the quality of our service against network congestion that may result frff om roaming traffff iff c. In addition, most of our services are subject to various rulr es that seek to ensure that the services are accessible to persons with disabia lities, including requirements related to the pass-through of closed capta ioning forff through our Gogo Vision. certain IP-delivered video content offff eff red In addition to the two ATG licenses, we hold microwave licenses that are used forff backhaul in our terrestrial network and an authorization forff the provision of voice and data services between the United States and forff eign points. ATGTT License TeTT rmrr s and ConCC ditii itt ons The FCC issued our ATG License on October 31, 2006, forff a renewabla e 10-year term. We have satisfiff ed our obligation under the license to provide “substantial service” to aircraftff , and on Januaryrr 25, 2017, we received confiff rmation frff om the FCC that the license has been renewed until October 31, 2026. Our 1 MHz ATG license obtained in 2013 frff om LiveTV Airfone ff , LLC was also originally issued on October 31, 2006, forff a renewabla e 10-year term, although there is no “substantial service” obligation that attaches to this license. Our appl license was subsequently granted forff things, revised the wireless license renewal rulr es. As a result of this order, which appl need to make a showing (or certififf cation) at renewal to demonstrate that the licensee provided and continues to provide service to the public. Because the 1 MHz ATG license has no construcr tion or substantial service requirement, it is not currently clear what level and length of service the FCC will fiff nd adequate when considering the next renewal of the 1 MHz ATG license in 2026. an additional 10-year term. On August 3, 2017, the FCC released an order that, among other ies to the industryrr generally, all licensees will ication to renew our a a Our two ATG licenses contain certain conditions that require us to comply with all appl a icabla e FCC and FAA rulr es as well as all bilateral agreements between the United States and Canada and the United States and Mexico regarding the frff equencies that are allocated forff ATG services. These agreements appl southern borders and in and out of Canadian and Mexican airspace. in areas adjacent to the United States’ northern and y to our use of the spectrumr a A bilateral ATG spectrumrr coordination agreement between the U.S. and Canada has been negotiated and appr a oved and a bilateral agreement between the United States and Mexico is pending. In 2012, Industryrr Canada issued to our Canadian subsidiaryrr a subordinate license that allows us to use Canadian ATG spectrumrr in 2019 the primaryrr license was renewed forff with SkySurf (the “License Agreement”), which commenced on August 14, 2012 and was recently renewed forff expiring July 24, 2032. Provided that the primaryrr spectrumr and Economic Development Canada or “ISED”) to SkySurf remains in effff eff ct on July 24, 2032, the License Agreement is renewabla e at our option forff contingent on the effff eff ctiveness of the primaryrr spectrumr ther fiff ve-year term. The term of the License Agreement, including the second 10-year term and any renewals, is an eight-year term expiring June 29, 2027. In 2012, we entered into a license agreement license agreement issued by Industryrr Canada (now Innovation, Science of which SkySurf Communications Inc. is the primaryrr a second ten-year term licensee, and license. a furff Any futff urt e coordination agreement with Mexico and/or a Mexican ATG licensee could affff eff ct our abia lity to provide our broadband Internet service in the border areas using our current cell sites at current operating power levels and could affff eff ct our abia lity to establa ish or maintain ATG service in the border areas as aircraftff flff y into and out of Mexican airspace. Equipmii ent CeCC rtitt fi iff catitt on We may not lease, sell, market or distribute any radio transmission equipment used in the provision of our services unless such equipment is certififf ed by the FCC as compliant with the FCC’s technical rulr es. All certififf cations required forff in the provision of our services have been obtained. equipment currently used PrPP ivacyc and Datatt SeSS curitii ytt -R- elatll ett d Regue latll itt ons We collect personal inforff mation, such as name, address, e-mail address and credit card inforff mation, directly frff om our users a our users frff om third parties or create records that may be personal inforff mation in connection with our services. We when they register to use our services, along with certain identififf ers associated with devices using our services. We also may obtain inforff mation about use the inforff mation that we collect and create to, forff advertising and content forff disclosure and use of such inforff mation are required in some circumstances to comply with our privacy policies, appl our contractuat Data Security Standard. l obligations to aviation partners and other third parties, as well as industryrr standards such as the Payment Card Industryrr our users and enhance the entertainment options when using our service. Our collection, protection, example, consummate their purchase transaction, customize and personalize icabla e law, and a 10 Notwithstanding that broadband Internet access is currently classififf ed as a Title I inforff mation service, we must continue to our services, including certain provisions comply with certain Communications Act and FCC privacy and data security rulrr es forff a appl cybersecurity requirements, which may subject the Company to additional compliance obligations. icabla e to customer proprietaryrr network inforff mation (“CPNI”). The FCC is currently considering additional CPNI and We are also subject to other feff deral and state consumer privacy and data security requirements. For example, Section 5 of the Federal Trade Commission (“FTC”) Act prohibits “unfaff ir or deceptive acts or practices in or affff eff cting commerce.” Although the FTC’s authority to regulate the non-common carrier services offff eff red by communications common carriers has not been fulff delineated, the FTC may have jurisdiction over some or all of our services. The FTC has brought enforff cement actions under the FTC Act against companies that among other things: (1) collect, use, share or retain personal inforff mation in a way that is inconsistent with the representations, commitments, and promises that they make in their privacy policies and other public statements; (2) have privacy l practices; and (3) faff il to reasonabla y protect the security, the company’s actuat policies that do not adequately inforff m consumers about privacy and confiff dentiality of nonpublic consumer inforff mation. ly a We may also be subject to state laws pertaining to privacy and data security, such as the “mini-FTC Acts,” which prohibit unfaff ir or deceptive acts or practices, along with data security breach notififf cation laws requiring entities holding certain personal data to provide notices in the event of a breach of the security of that data. A feff w states have also imposed specififf c data security obligations. These state mini-FTC Acts, data security breach notififf cation laws, and data security obligations may not extend to all of our services and their appl icabia lity may be limited by various faff ctors, such as whether an affff eff cted party is a resident of a particular state. a Certain states have also enacted specififf c privacy laws to which we may be subject. For example, the Califorff nia Consumer Privacy Act (“CCPA”) took effff eff ct Januaryrr 1, 2020 and provides broad new privacy rights forff Califorff nia consumers, including, among others, the right to obtain copies of their personal inforff mation collected in the past 12 months, the abia lity to opt out frff om the sale of personal inforff mation and the right to demand deletion of personal inforff mation. The CCPA also imposes compliance requirements on companies that do business in Califorff nia and collect personal inforff mation frff om consumers, including, among others, notice, consent and service provider requirements. The CCPA also provides forff data breaches that may increase data breach litigation. The Califorff nia Offff iff ce of the Attorney General has published fiff nal regulations to implement portions of the CCPA. In addition, in November 2020 Califorff nia voters passed the Califorff nia Privacy Rights Act (“CPRARR ”) ballot initiative, which introduced signififf cant amendments to the CCPA. The CPRARR went into effff eff ct on Januaryrr 1, 2023, and new regulations are expected to take effff eff ct in 2023. violations as well as a private right of action forff civil penalties forff Other states have enacted privacy laws: the Virginia Consumer Data Protection Act (“VCDPA”) went into effff eff ct on Januaryrr 1, 2023, the Colorado Privacy Act and the Connecticut Data Privacy Act will take effff eff ct on July 1, 2023 and the Utah Consumer Privacy Act will take effff eff ct on December 31, 2023. These laws provide broad new privacy rights forff right to opt out of targeted advertising and certain profiff ling activities. Regulations relating to the Colorado Privacy Act are expected to be fiff nalized in the course of 2023. Depending on these developments, the measures we are required to take to comply with these laws may be signififf cant. consumers in these states, including the Congress and other state legislaturt es have also been considering additional legislation relating to privacy and data breaches. Should any additional laws be enacted, they could affff eff ct our business. To the extent we collect personal inforff mation of residents of other countries, we may be subject to the data protection regulations of the relevant countries. On May 25, 2018, the General Data Protection Regulation (“GDPR”) of the European Union (“EU”) took effff eff ct, and it has imposed more restrictive privacy-related requirements forff inforff mation about and regulations and may appl Inforff mation Protection and Electronic Documents Act of 2000 (“PIPEDA”) and substantially similar provincial laws may impose data privacy and security obligations on the processing of personal data. The regulation of data privacy and security in other jurisdictions continues to evolve. entities outside the EU that process personal European data subjects. EU member states also have some flff exibility to supplement the GDPR with their own laws certain data processing activities. Additionally, in Canada, the Personal y stricter requirements forff a a In addition, certain countries have laws that restrict the transfeff r of personal inforff mation outside of such countries. For example, Switzerland, the United Kingdom and the member states of the EU impose restrictions on transfeff rring such data to countries, including the U.S., that they do not deem to offff eff r a similar standard of protection as they require. Certain mechanisms appl Swiss, United Kingdom and EU member state laws that permit the cross-border transfeff r of personal inforff mation to countries that are not deemed adequate, such as the United States. Additionally, on July 16, 2020, the European Court of Justice (the highest EU court) rulr ed the EU-US privacy shield to be an invalid data transfeff r mechanism, confiff rmed that the Model Standard Contractuat l Clauses (“SCCs”) remain valid, and leftff unaddressed some issues regarding supplementaryrr measures that may need to be taken to support transfeff rs. On September 27, 2021, new versions of the SCC went into effff eff ct. Depending on the supplementaryrr measures that may need to be taken to support transfeff rs and implement the SCC, our abia lity to lawfulff relevant jurisdictions to the United States or other jurisdictions may be impacted. ly transfeff r personally identififf abla e inforff mation out of y under a 11 Other countries, such as Australia, Brazil, China, India and RusRR sia have also implemented, amended or been considering legislation regarding data protection, data security, breach notififf cation and data transfeff rs/localization. Such laws may affff eff ct our business and, should any additional laws be enacted in countries in which we do business, those laws may also affff eff ct our business. TrTT uthtt inii Bilii lll ill nii g and ConCC sumer PrPP otett ctitt on The FCC’s Trutr h in Billing rulrr es require fulff l and faff ir disclosure of all charges on customer bills forff telecommunications services, except forff include brief,ff clear and non-misleading plain language descriptions of the services provided. States also have the right to regulate wireless carriers’ billing; however, we are not currently aware of any states that impose billing requirements on ATG services. broadband Internet access services. Thus, these rulr es appl y to our satellite-based services. This disclosure must a CACC LEAEE The FCC has determined that faff cilities-based broadband Internet access providers, which include Gogo, are subject to the Communications Assistance forff Law Enforff cement Act, or CALEA, which requires covered service providers to build certain law enforff cement surveillance assistance capaa bia lities into their communications networks and to maintain CALEA-related system security policies and procedures. We have implemented such policies and procedures and, based upon our periodic self-ff assessments, we believe that our network is compliant with CALEA. FCC SeSS cure and TrTT ustett d ComCC municatitt ons NeNN twtt orksrr Reimii bursrr ement PrPP ogram (t(( htt e “FCC Reimii bursrr ement PrPP ogram”) a participation in the FCC Reimbursement Program, reasonabla e costs incurred in the required removal, oved forff On July 15, 2022, the Company was notififf ed that it was appr designed to reimburse providers of advanced communications services forff replacement, and disposal of covered communications equipment or services, that have been deemed to pose a national security risk, frff om their networks. Pursuant to the FCC Reimbursement Program, the FCC appr reimbursements to the Company to cover documented and appr equipment and services in the Company’s terrestrial U.S. networks and replace such equipment and (ii) remove and replace certain equipment installed on aircraftff operated by the Company’s ATG customers that is not compatible with the terrestrial equipment that will replace ZTE equipment. Due to a shortfaff ll in the amount appr appr a a appr rata. Program participants are subject to a number of conditions and requirements under the FCC’s rulr es including a requirement that they submit their fiff rst reimbursement request by July 14, 2023 and certifyff replace and dispose of covered equipment or services within one year folff participants to petition the FCC forff determined whether it will participate in the FCC Reimbursement Program. opriated by Congress to fund oved amount is currently allocated to the Company under the program. If Congress rr that they have developed a plan to permanently remove, lowing the fiff rst reimbursement request. The rulrr es permit one or more six-month extensions of the completion deadline. The Company has not yet oximately $131 million of the appr opriates additional funds oved costs to (i) remove and securely destroy all ZTE communications e, the allocations of the Company and other appr the FCC Reimbursement Program, icants will be increased pro oximately $333 million in oved up to appr this purpos a oved appl forff a a a a a a ff ff Intellectual Property We rely on a combination of intellectuat l property rights, including trade secrets, patents, copyrights, trademarks and domain names, as well as contractuat l restrictions to protect intellectuat l property and proprietaryrr technology owned or used by us. We have patented certain of our technologies in the United States and certain countries outside of the United States. As of Februar ryrr 24, 2023, we held U.S. patents expiring on dates ranging frff om June 2023 to Januaryrr 2041 and forff eign patents expiring on dates ranging frff om November 2024 to August 2039. We do not believe that our business is dependent to any material extent on any single patent or group of patents that we own. We also have a number of patent appl States and we will continue to seek patent protection in the United States and certain other countries to the extent we believe such protection is appr ications pending both in and outside of the United opriate and cost-effff eff ctive. a a We consider our brands to be important to the success of our business and our competitive position. We rely on both trademark registrations and common law protection forff include, among others, “Gogo,” “Gogo Biz” and “Gogo Vision,” although we have not yet obtained registrations forff important marks in all markets in which we currently do business or intend to do business in the futff urt e. Generally, the protection affff orff ded forff trademarks. l, if they are renewed on a timely basis, if registered, and continue to be used properly as trademarks. Our registered trademarks in the United States and certain other countries trademarks is perper our most tuat We license or purchase frff om third parties technology, softff ware and hardware that are critical to providing our products and our use and would be diffff iff cult or time-consuming to services. Much of this technology, softff ware and hardware is customized forff technology and softff ware to third parties to enabla e them to integrate obtain frff om alternative vendors. We also license our proprietaryrr such technology and softff ware into the products they provide to us. Many of our agreements with such third parties are renewabla e forff indefiff nite periods of time unless either party chooses to terminate, although some of our agreements expire aftff er fiff xed periods and require renegotiation prior to expiration in order to extend the term. Among the most material of our technology-related agreements are those forff modems, base stations and antennas. Our agreements forff modems, base stations and antennas do not renew automatically 12 and thus require periodic renegotiation. Such agreements, as well as certain licenses to commercially availabla e softff ware, are material to our business. Under the terms of the Transaction, we retained ownership of the entire patent portfolff io held by Gogo Inc. and its affff iff liates, including patents developed and obtained in connection with our forff mer commercial aviation business. We have granted Intelsat a worldwide, perper (each as defiff ned in the license agreement). use in the commercial aviation and satellite mobility businesses l, non-exclusive license to our patent portfolff io forff tuat We have developed certain ideas, processes, and methods that contribute to our success and competitive position that we consider to be trade secrets. We protect our trade secrets by keeping them confiff dential through the use of internal and external controls, including contractuat indefiff nite period so long as their secrecy is maintained. l protections with employees, contractors, customers and vendors. Trade secrets can be protected forff an Human Capital We believe that our success is the product of an integrated appr a business. Rather than focff using on individual processes, we manage our employee ecosystem holistically by encouraging behaviors, conversations, relationships and activities that represent best practices forff highly engaged workforff ce and in turt n driving satisfaff ction among partners and customers through initiatives that include the folff oach to talent management that touches everyrr part of our a high perforff ming culturt e. We are committed to fosff tering a lowing: • • • • • • Compensation: Our compensation program is designed to attract, retain and reward the best perforff mers. In addition to ly calibrated salaries and bonuses, which are reviewed annually, our employees benefiff t frff om a generous benefiff t carefulff package, including employee stock purchase and 401(k) programs. Additionally, in 2022 and 2021 all of our employees were eligible forff additional equity awards on an annual basis to employees identififf ed as high perforff mers. equity awards through our annual equity program as a part of their compensation. We also grant Training & Development: The continued development of our people is critical to our success. New hires participate in an onboarding and orientation program, which is intended to build knowledge and understanding of our business. We also invest in various profeff ssional development and leadership training initiatives and conduct quarterly forff umr business that provide unique learning and networking opportuni ties across all business func s relevant to our tions. ff t Recognition: Our employees’ success is celebrated. Our recognition programs include service awards, peer-to-peer recognition awards (called Gogo Props), spot bonuses forff and special equity awards forff positive employee experience that champions perforff mance while creating a sense of community. high perforff mers nominated by their managers. We believe these programs promote a signififf cant contributions above and beyond daily work effff orff a ts Talent Review: We employ a comprehensive talent review program to assess the perforff mance and capaa bia lities of each individual. Annually we set company-wide priorities that serve as the basis upon which clear individual objectives are set across the entire workforff ce. Feedback is provided regularly and our annual talent review process identififf es and supports ty to reach high perforff mers in the forff m of additional development opportunt their fulff opriate, we believe we are best abla e to reinforff ce our core values and achieve our strategic objectives. ities so that each employee has the opportuni ty to promote frff om within when appr l potential. By investing in our people and taking the opportuni a t t Culturt e and Engagement: We conduct annual employee engagement surveys to solicit feff edback and help guide planning ts and initiatives that not only support our team members but propel our business forff ward. We on all people-related effff orff have had strong participation in our engagement surveys and are proud that our results benchmark us as a high perforff ming company. Our employees have the opportuni a leadership team during Town Hall meetings we host quarterly. our business strategy and ask questions of our ty to learn more about t a sense of inclusion and belonging. We have forff med a Diversity Council consisting of a tional group of employees who provide input to our DEI initiatives. Most recently, Gogo named an Diversity, Equity & Inclusion (DEI): Gogo seeks to create an environment where each individual’s uniqueness is respected and which allows forff diverse, cross-func ff individual as Vice President, Diversity, Equity and Inclusion who dedicates time and effff orff our DEI strategy and associated initiatives. We have establa ished employee resource groups led by employees with diverse backgrounds, experiences or characteristics who share a common interest in profeff ssional development and improving ate culturt e. Other key initiatives include building awareness of unconscious bias and investing in and seeking to corpor rr expand our engagement with diverse stude nts at targeted colleges and universities. We also publish an annual Diversity and Inclusion report that includes a summaryrr of our various DEI initiatives, together with data highlighting certain DEI metrics relative to our employee population. A copy of the annual Diversity and Inclusion Report can be found website under the heading “Diversity”. t toward evolving and driving on our ff t As of December 31, 2022, women and employees identifyiff ng with minority races comprised appr 30.8%, respectively, of our workforff ce. We have nine members on our Board of Directors of which one is Black and a oximately 28.2% and a 13 woman. Of the fiff ve members on our Executive Leadership Team, two are women and another is Hispanic/Latinx. While Gogo promotes inclusiveness foff r all, we are focff using our recruir pipeline overall, specififf cally including a greater focff us on hiring more women and individuals who are Black. ts on expanding the diversity in our candidate ting effff orff The effff orff ts outlined above People Experience Offff iff cer, who is responsible forff Board of Directors and senior management on the operation and statust a are supported by our dedicated human resources team and led by our Executive Vice President, Chief developing and executing our human capia tal strategy and regularly updates our of our human capia tal activities. As of December 31, 2022, we had 422 employees. No employee is a member of a labor a union. Corporate Inforff mation Gogo Inc. is a holding company that does business through its subsidiaries. Our principal operating subsidiaryrr is Gogo Business Aviation LLC, which is a direct, wholly-owned subsidiaryrr of Gogo Intermediate Holdings LLC. Our principal executive offff iff ces are located at 105 Edgeview Dr., Suite 300, Broomfiff eld, CO 80021. Our telephone number is (303) 301-3271. Our website addresses are www.gogoair.com and www.business.gogoair.com. Available Inforff mation Our websites are located at www.gogoair.com and www.business.gogoair.com, and our investor relations website is located at //// ir.gogoair.com. Our Proxy Statements, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on http:t Form 8-K and amendments to reports fiff led or furff nished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are availabla e frff ee of charge on the investor relations website as soon as reasonabla y practicabla e aftff er we electronically fiff le such material with, or furff nish it to, the SEC. We also provide a link to the section of the SEC's website at www.sec.gov that has all of our public fiff lings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to those reports, our Proxy Statements, and other ownership related fiff lings. We webcast our earnings calls and certain events we participate in or host with members of the investment community on our investor relations website. Additionally, we provide notififf cations of news or announcements regarding our fiff nancial perforff mance, including SEC fiff lings, investor events, press and earnings releases, and blogs as part of our investor relations website. Investors and others can receive notififf cations of new inforff mation posted on our investor relations website in real-time by signing up forff and RSS feff eds. Further corpor guidelines, board committee charters, and code of business conduct, is also availabla e on our investor relations website under the heading “Corpor ated by refeff rence into this Annual Report on Form 10-K or in any other report or document we fiff le with the SEC, and any refeff rences to our websites are intended to be inactive textuat ate Governance.” The contents of our websites are not intended to be incorpor ate governance inforff mation, including our certififf cate of incorpor ation, bylaws, corpor l refeff rences only. ate governance rr rr r r r email alerts 14 Item 1A. Risk Factors ee YouYY thtt isii Annual Repor t on ForFF mrr are not thtt e onlyll ones facff shouldll consider and read carefe uff llll yll allll of thtt e risii ks and uncertaitt nii 10-K- inii cluded inii described belowll inii g us. ThTT e occurrence of anyn of thtt e folff not presentltt yll known tott us or thtt at we currentltt yll belill eve tott be imii matett rial couldll matett riallll yll and adversrr elyll affff eff ct our businii ess,s ee fiff nii ancial conditii itt on and resultll stt of operatitt ons. ThTT isii Annual Repor estitt mii atett s thtt at inii volvll e risii ks and uncertaitt nii nii g stattt ett mentstt as a resultll of spes ll looki ,w as wellll as othtt er inii fn orff mrr atitt on ,KK inii cludinii g our consolill datett d fiff nii ancial stattt ett mentstt and relatll ett d notett s. ThTT e risii ks titt es. Our actual resultll stt couldll difi fff eff r matett riallll yll srr ,s inii cludinii g thtt e risii ks and uncertaitt nii 10-K- alsll o contaitt nii s forff ward-looki frff om thtt ose antitt cipat inii g risii ks or additii itt onal risii ks and uncertaitt nii nii g stattt ett mentstt and thtt e forff ward- ett d inii .ww titt es describei d belowll titt es describei d belowll t on ForFF mrr cifi iff c facff lll owll tortt ll ii titt es Risks Related to Our Business WeWW may be unablell tott contitt nii ue tott generatett revenue frff om thtt e provisii ion of our connectitt vitii ytt services,s which couldll matett riallll yll and adversrr elyll affff eff ct our businii ess and profiff tii abi lii ill tii ytt .yy tt Our business is dependent on our abia lity to continuously attract and retain users of our connectivity and other service offff eff rings, in these effff orff ts or that customer retention levels will not materially decline. For the and we cannot be certain that we will be successfulff fiff scal years ended December 31, 2022, 2021 and 2020, the Gogo service we provided on business aircraftff (which excludes service provided on commercial aircraftff under the ATG Network Sharing Agreement) generated appr oximately 71%, 75% and 78% of our revenue frff om continuing operations, respectively. A signififf cant portion of such service revenue is generated through individual subscription agreements with our customers that cover a single or small number of aircraftff , with the remainder generated through subscription agreements with certain frff actional or charter operators covering larger flff eets of aircraftff . These agreements are generally no more than one-year in duration. As such, we have no assurance that any of such customers will renew their existing agreements with us upon expiration on comparabla e terms or at all, including as a result of a lack of demand or dissatisfaff ction with our services or the availabia lity of superior or less expensive alternatives in the market. In addition, our subscription agreements are generally terminabla e at will by our customers and, if terminated, we may not be abla e to collect amounts we would have otherwise expected to receive during the fulff l term of the agreement. To the extent that our subscribers terminate or faff il to renew their contracts with us forff any reason, our business prospects, fiff nancial condition and results of operations may be materially adversely affff eff cted. a Our subscription agreements do not generally contain minimum commitments forff the usage of our connectivity and other services. We have in the past, and may in the futff urt e, experience periods of reduced usage of our services by our customers or allow customers to suspend their accounts, which could adversely impact our results of operations and profiff tabia lity. For example, we experienced a sharpr decrease in flff ight activity, an increase in account suspensions and a decrease in new plan activities in mid-2020 as a result of reduced travel demand due to the COVID-19 pandemic. WeWW are relill ant on our keye OEOO MEE sMM and dealell rsrr forff equipmii ent salell s. a appr Revenue frff om equipment sales accounted forff oximately 27%, 23% and 21% of our revenue frff om continuing operations forff the fiff scal years ended December 31, 2022, 2021 and 2020, respectively. More than 90% of our equipment revenue in each such fiff scal year was generated frff om contracts with OEMs and aftff er-market dealers. Almost all of our contracts with OEMs and dealers are terminabla e at will by either party on short notice. If one or more key OEMs or dealers terminates its relationship with us forff any reason or our contract expires and is not renewed, our business and results of operations may be materially and adversely affff eff cted. In addition, pursuant to many of our contracts with our OEM distribution partners, we have agreed to deliver equipment and/or services, or delays a fiff xed price and, accordingly, take the risk of any cost overruns including equipment and services not yet in production, forff in the completion of the design and manufaff cturt ing of the product. Certain of our contracts with our OEMs also include provisions that, under specififf ed circumstances, entitle them to the benefiff t of certain more faff vorabla e provisions in other equipment contracts, including with respect to pricing. These provisions, some of which have retroactive effff eff ct, may limit the benefiff ts we realize frff om contracts containing such provisions. Our inabia lity to identifyff and offff eff r improved terms to a distribution partner or customer in accordance with such a provision could negatively affff eff ct our relationship with that distribution partner or customer or give rise to a claim that we are in breach of such contract. r Many of our distribution partners have also not committed to purchase any minimum quantity of our equipment. In certain cases, we must anticipate the futff urt e volume of orders based upon non-binding production schedules provided by OEMs, historical purchasing patterns and inforff mal discussions with customers and dealers as to their anticipated futff urt e requirements. Cancellations, reductions or delays by OEMs and dealers may have a material adverse effff eff ct on our business, fiff nancial condition and results of operations. Some of our dealers are experiencing continuing issues with labor a equipment, leading to a longer period of time between shipment and activation of our equipment. If our dealers are unabla e to eliminate or mitigate these labor shortages, our business, fiff nancial condition and results of operations may be materially adversely affff eff cted. shortages, which has impacted their abia lity to install our a 15 Our distribution partners may be materially adversely impacted by economic downturt ns and market disrur pu tions. See “—A— dversrr e economic conditions, including economic slowdowns, may have a material adversrr e efe fff eff ct on our business.” In anticipation of changing economic conditions, OEMs in particular may be more conservative in their production, which may reduce our market opportuni Further, unfaff vorabla e market conditions could cause one or more of our OEMs or dealers to fiff le forff cy, which may have a material adverse effff eff ct on our business, fiff nancial condition and results of operations. r bankrupt ties. t ComCC pem titt tii itt on couldll resultll inii price reductitt on, reduced revenue and losll s of markerr t positii itt on and couldll harmrr our resultll stt of operatitt ons. Our equipment and services are sold in competitive markets. Some of our current or potential futff urt e competitors are, or could ations and have greater fiff nancial, marketing, production and research and development potentially be, larger, more diversififf ed corpor resources. As a result, they may be better abla e to withstand pricing pressures and the effff eff cts of periodic economic downturt ns. Some of our current or futff urt e competitors may offff eff r a broader product line or broader geographi results of operations may be materially adversely affff eff cted if our competitors: c coverage to customers. Our business and a r • • • • develop equipment or services that are superior to our equipment and services; develop equipment or services that are priced more competitively than our equipment and services; develop methods of more effff iff ciently and effff eff ctively providing equipment and services; or adapta more quickly than we do to new technologies or evolving customer requirements. We believe that the principal points of competition in our business are technological capaa bia lities, geographi a c coverage, price, customer service, product development, conforff mity to customer specififf cations, compliance with regulatoryrr certififf cation requirements, quality of support aftff er the sale and timeliness of deliveryrr and installation. Maintaining and improving our competitive position will require continued investment in technology, manufaff cturt support. If we do not maintain suffff iff cient resources to make these investments or are not successfulff position, our operations and fiff nancial perforff mance will suffff eff r. We may not have the fiff nancial resources, technical expertise or support capaa bia lities to continue to compete successfulff ly. SmartSky recently announced that its ATG network in the continental United States, originally targeted forff nationwide ATG network, and should such competitor be successfulff enter this business using the same or other ATG spectrumrr commercial aircraftff in Europe using a hybrid ATG/satellite network. launch in 2016, is now “live nationwide.” This is the fiff rst time that we have faff ced competition frff om a ing, engineering, quality standards, marketing and customer service and . Another in-flff ight connectivity provider has launched service on in entering our market, other competitors could be prompted to in maintaining our competitive While we have recently announced our plans to launch our LEO-satellite based Global Broadband service, we do not currently offff eff r satellite-based broadband service and could faff ce competition frff om owners of LEO and other new non-GEO satellite constellations should they decide to enter our market. Starlink, a division of Space Exploration Technologies Corp.r LEO satellite network, has been awarded an ESIM (Earth Stations in Motion) license by the FCC that would cover aircraftff and other moving vehicles. In October 2022, Starlink announced that it is taking orders forff equipment deliveries expected to begin in 2023. A faff ilure to successfulff new competitors may have a material adverse impact on our business and results of operations. its planned global in-flff ight connectivity service, with ly anticipate and respond to Starlink and other establa ished and that operates a WeWW depeee nd uponu thtt irii d partitt es,s manyn of which are sinii glell -source providersrr ,s tott manufu acff ture equipmii ent componm entstt ,s provide services forff our netwtt orkrr and inii staltt lll and mainii taitt nii our equipmii ent.tt We rely on third-party suppliers forff all systems, the equipment used at our ATG cell site base stations and the ESA forff equipment components and services that we use to provide our services. Many suppliers of critical components of our equipment are single-source providers. Components forff which we rely on single-source suppliers include, among others, the antennas and modems forff Global Broadband network. We plan to launch Global Broadband using OneWeb as our sole LEO satellite network provider. If we are required forff any reason (including expiration of the contract, termination by one party forff material breach or other termination events) to fiff nd one or more alternative suppliers, we estimate that the replacement process could take up to two years depending upon the component or service, and we may not be abla e to contract with such alternative suppliers on a timely basis, on commercially reasonabla e terms, or at all. Finding and contracting with suppliers of some components may be delayed or made more diffff iff cult by current suppliers’ ownership of key intellectuat property or develop new designs that do not infrff inge on such intellectuat equipment used in our base stations, are highly integrated with other system components, which may furff required forff to provide the links between our data centers and our ground network. If we are not abla e to continue to engage suppliers with the capaa bia lities or capaa cities required by our business, or if such suppliers faff il to deliver quality products, parts, equipment and services in suffff iff cient quantities or on a timely basis consistent with our inventoryrr needs and production schedule, our business, fiff nancial condition and results of operations may be materially adversely affff eff cted. l property that requires alternative suppliers to either obtain rights to such intellectuat l l property. In addition, many of our components, such as the an alternative supplier to deliver a component or service that meets our system requirements. We also rely on third parties ther lengthen the time our 16 The supply of third-party components and services could be interrupt ed or halted by a termination of our relationships, a faff ilure of quality control or other operational problems at such suppliers or a signififf cant decline in their fiff nancial condition. If we are not abla e to continue to engage suppliers with the capaa bia lities or capaa products, parts, equipment and services on a timely basis consistent with our schedule, our business, fiff nancial condition and results of operations may be materially adversely affff eff cted. cities required by our business, or if such suppliers faff il to deliver quality r GlGG obal ll supplu yll chainii challll ell nges and logi sii titt cs isii sues as wellll as inii creasinii g inii fn lff atll itt on have had, and may contitt nii ue tott have,e an ll adversrr e efe fff eff ct on our businii ess,s fiff nii ancial conditii itt on and resultll stt of operatitt ons. In early 2020, many manufaff cturt ers of electronic components reduced their capaa city in response to the reduced demand that accompanied the COVID-19 pandemic. While manufaff cturt ers have begun to increase manufaff cturt city as demand recovers frff om the impact of COVID-19, demand has exceeded supply in certain areas, and global shortages of electronic components have occurred. In addition, inflff ation, changes in trade policies, the imposition of duties and tariffff sff , potential retaliatoryrr countermeasures, public health crises (such as the COVID-19 pandemic) and geopolitical conflff icts continue to adversely impact the availabia lity and price of electronic components. ing capaa We have experienced longer lead times and encountered delays in obtaining electronic components, and we expect longer lead times and delays to continue. While we believe that we have adequate inventoryrr or will be abla e to acquire suffff iff cient electronic components to meet customer demand as currently forff ecasted, increases in demand combined with a continued shortage of electronic components could cause product delays or shortages. We have prepaid the suppliers of certain components to help ensure adequate supply and expect to continue to do so, and we may faff ce price increases forff effff eff cts of the pandemic include global logistics issues such as shipping logjams, workforff ce shortages and carrier capaa all of which may negatively affff eff ct our abia lity to obtain electronic and other components on a timely basis. We cannot predict how long the component shortages or logistics issues will continue. certain components due to the shortages. In addition, the city constraints, WhWW en we expan d our businii ess outstt ide thtt e UnUU itii ett d StSS attt ett s witii htt GlGG obal ll Broadband, we wilii lll be expos ee ed tott a varietytt of risii ks associatett d witii htt tett rnatitt onal operatitt ons thtt at couldll adversrr elyll affff eff ct our businii ess. ee inii Although our operations and business are currently predominately located in the United States, a component of our growth strategy involves the launch and expansion of our Global Broadband operations and customer base internationally. As we expand internationally, we expect that we would be subject to additional risks related to conducting operations outside the United States, including, but not limited to: • • • • • • • • • • • • • diffff iff culties in penetrating new markets due to establa ished and entrenched competitors; diffff iff culties in developing products and services that are tailored to the needs of local customers; the need to adapta and localize our products and services forff specififf c countries; lack of local acceptance or knowledge of our products and services; changes in a specififf c country’rr s or region’s political or economic conditions; diffff iff culties in obtaining required regulatoryrr or other governmental appr a ovals; greater diffff iff culty in enforff cing contracts and managing collections in countries where our recourse may be more limited, as well as longer collection periods; multiple and possibly overlappi a ng tax strucr turt es; unexpected changes in laws and regulatoryrr requirements, including with respect to taxes and trade laws; more stringent regulations relating to communications; privacy and data security and the unauthorized use of,ff or access to, commercial and personal data; and aerospace and liabia lity standards; challenges inherent in effff iff ciently managing employees over large geographi diffff eff ring labor a programs; laws and the need to implement appr a a opriate systems, policies and hiring, benefiff ts and compliance c distances, including compliance with diffff iff culties in managing a business in new markets with diverse culturt es, languages, customs, legal systems, alternative dispute systems and regulatoryrr systems; increased costs associated with international operations, including travel, real estate, infrff astrucrr costs; turt e and legal compliance 17 • • • • • • • • • currency exchange rate flff uctuat into hedging transactions if we chose to do so in the futff urt e; tions and the resulting effff eff ct on our revenue and expenses and the cost and risk of entering the effff eff ct of other economic faff ctors, including inflff ation, pricing and currency devaluation; limitations on our abia lity to reinvest earnings frff om operations in one countryrr other countries; ff to fund the capia tal needs of our operations in laws and business practices faff voring local competitors or general prefeff rences forff local vendors; operating in new, developing or other markets in which there are signififf cant uncertainties regarding the interprrr etation, a appl ication and enforff ceabia lity of laws and regulations, including relating to contract and intellectuat l property rights; limited or insuffff iff cient intellectuat l property protection or diffff iff culties enforff cing our intellectuat l property; political instabia lity, social unrest, terrorist activities, acts of civil or international hostility, such as the current militaryrr conflff ict and escalating tensions between RusRR sia and Ukraine, naturt al disasters and regional or global outbrt eaks of contagious diseases, such as the COVID-19 pandemic; restrictions on the abia lity of U.S. companies to do business in forff eign countries; and exposure to liabia lities under anti-corrupt Act of 1977, as amended (the “FCPA”), the U.K. Briberyrr Act (the “Briberyrr Act”) and similar laws and regulations in other jurisdictions. ion and anti-money laundering laws, including the U.S. Foreign Corrupt r r Practices These and other faff ctors could affff eff ct our abia lity to compete successfulff ly and expand internationally and, consequently, our business, fiff nancial condition and results of operations may be materially adversely affff eff cted. WeWW may faiff strtt atett gye lii tott recruitii ,tt trtt ainii and retaitt nii thtt e highi s of one or more of our keye persrr onnel couldll harmrr .yy ThTT e losll growthtt our businii ess. lyll skilii lll ell d emplm oll yo ees thtt at are necessaryr tott remainii compem titt tii itt ve and exeee cutett our Competition forff key technical personnel in high-technology industries such as ours is intense. We believe that our futff urt e success depends in large part on our continued abia lity to hire, train, retain and leverage the skills of qualififf ed engineers and other highly skilled personnel needed to maintain and grow our ATG networks and related technology and develop and successfulff Global Broadband and other elements of our technology roadmapa and new wireless telecommunications products and technology. We may not be as successfulff ting, training, retaining and utilizing these highly skilled personnel. Any faff ilure to recruir t, train and retain highly skilled employees may have a material adverse effff eff ct on our business. as our competitors at recruirr ly deploy Gogo 5G, We depend on the continued service and perforff mance of our key personnel, including Oakleigh Thorne, our CEO. Such individuals have acquired specialized knowledge and skills with respect to Gogo and its operations. As a result, if any of our key personnel were to leave Gogo, we could faff ce substantial diffff iff culty in hiring qualififf ed successors and could experience a loss of productivity while any such successor obtains the necessaryrr our offff iff cers or key employees. In addition, much of our key technology and systems is custom-made forff personnel. The loss of key personnel, including key members of our management team, could disrupt material adverse effff eff ct on our business. training and expertise. We do not maintain key man insurance on any of our operations and may have a our business by our r PanPP demics or othtt er outbrtt eaks of contagi tt ous disii eases,s inii cludinii g thtt e COCC VIVV DII -19 pandemic,c and thtt e measures imii plm ell mentett d tott combat thtt em have had, and may contitt nii ue tott have,e a matett rial adversrr e efe fff eff ct on our businii ess. We faff ce various risks related to public health issues, including epidemics, pandemics and other outbrt eak of infeff ctious disease. For example, the COVID-19 pandemic caused a signififf cant decline in international and domestic business aviation travel, which materially and adversely affff eff cted our business in 2020. Futurt e pandemics and other outbrt eaks of contagious diseases could result in similar or worse impacts and signififf cant business and operational disrupt ions, travel restrictions, stay-at-home orders and limitations on the availabia lity of workforff ces. ions, including business closures, supply chain disrupt rr r Whether and to what extent futff urt e pandemics and other outbrt eaks of contagious diseases may impact our fiff nancial and operational perforff mance will depend on developments that include the duration, spread and severity of the outbrt eak, the timetaba le forff administering and effff iff cacy of vaccines, the duration and geographi c scope of related travel advisories and restrictions and the extent of the impact of the pandemic or outbrt eak on overall demand forff control, all of which are highly uncertain and cannot be predicted. a commercial and business aviation travel, and other faff ctors beyond our In addition to directly impacting demand forff air travel, COVID-19 has had, and futff urt e pandemics and other outbrt eaks of contagious diseases and any resultant restrictions may have, a material and adverse impact on other aspects of our business, including: • delays and diffff iff culties in completing installations on certain aircraftff ; and 18 • limitations on our abia lity to market and grow our business and to promote technological innovation. In addition, pandemics and other outbrt eaks of contagious diseases may also exacerbar te other risks disclosed in this Annual Report on Form 10-K. For example, COVID-19 has had, and futff urt e pandemics and other outbrt eaks of contagious diseases may have, an adverse effff eff ct on our supply chain. See “—Global supplyll chain challenges and logisii tics isii sues as well as increasing inflff ation have had, and may continue to have, an adversrr e efe fff eff ct on our business, fiff nancial condition and resultstt of operations.” Adversrr e economic conditii itt ons,s inii cludinii g economic slowll downs,s may have a matett rial adversrr e efe fff eff ct on our businii ess. a shortages, inflff ationaryrr pressures, rising interest rates, and fiff nancial and credit market flff uctuat We cannot predict the naturt e, extent, timing or likelihood of any economic slowdown or the strength or sustainabia lity of any economic recovery,rr worldwide, in the United States or in the aviation industry.rr Negative conditions in the general economy both in the United States and globally, including conditions resulting frff om changes in gross domestic product growth, declines in consumer confiff dence, labor decrease in business investments, including spending on air travel and otherwise, and could materially and adversely affff eff ct the growth of our business. In particular, although inflff ation in the United States has been relatively low in recent years, the U.S. economy has ions and governmental stimulus or recently experienced a signififf cant inflff ationaryrr effff eff ct frff om, among other things, supply chain disrupt fiff scal policies adopted in response to the COVID-19 pandemic. While we cannot predict any futff urt e trends in the rate of inflff ation, there is currently signififf cant uncertainty in the near-term economic outlook. Continued inflff ation would furff materials and services, which could negatively impact our profiff tabia lity and cash flff ows. Additionally, we may be unabla e to raise our prices forff operating profiff t and balance sheet may be negatively impacted. our equipment and services in amounts equal to the rate of inflff ation, and if our constrained supply chain continues, our ther raise our costs forff tions could cause a , labor a rr r ions of energy markets. Further, other events outside of our control, including naturt al In addition, geopolitical risks, including those arising frff om political turt moil, trade tension and/or the imposition of trade tariffff sff , terrorist activity and acts of civil or international hostility, are increasing. For instance, the ongoing militaryrr conflff ict between RusRR sia and Ukraine has had negative impacts on the global economy, including by contributing to rapia dly rising costs of living (driven largely by higher energy prices) in Europe and created uncertainty in the global capia tal markets and is expected to have furff economic consequences, including disrupt disasters, climate change-related events and regional or global outbrt eaks of contagious diseases, such as the COVID-19 pandemic, may arise frff om time to time and be accompanied by governmental actions that may increase international tension. Any such events and responses, including regulatoryrr developments, may cause signififf cant volatility and declines in the global markets, disproportionate impacts to certain industries or sectors, disrupt ions to commerce (including to economic activity, travel and supply chains), loss of lifeff and property damage, and may materially and adversely affff eff ct the global economy or capia tal markets, as well as our business and results of operations. If conditions of the general economy or markets in which we operate worsen frff om present levels, it could lead to a decrease in air travel, cause owners and operators of business aircraftff to cut costs by reducing their purchases or use of private aircraftff or their use of in-flff ight Internet access on such aircraftff or reduce the number of airline passengers on commercial aircraftff to which we supply ATG network access. Should an economic slowdown occur in the U.S. or globally, our business and results of operations may be materially adversely affff eff cted. ther global r WeWW may not be ablell tott fuff llll yll utitt lii ill zii e portitt ons of our defe eff rred taxtt comprm ehensive inii come.ee assetstt ,s which wouldll negat e itt velyll imii pacm t our earnrr inii gs and othtt er a For the year ended December 31, 2022, our determination that we are more likely than not to realize a portion of our defeff rred oximately $11.4 million of our valuation allowance. As discussed in more detail in the section tax assets resulted in a release of appr entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates— Defeff rred Income Taxes - Valuation Allowance,” our determination that we are more likely than not to realize a portion of our defeff rred tax assets represents our best estimate and considers both positive and negative faff ctors. We considered positive faff ctors including the sale of our CA business, the reduction in interest expense resulting frff om the Refiff nancing and the settlement of the 2022 Convertible th Notes, strong demand forff fiff scal quarters of 2021. The negative faff ctors included cumulative pre-tax losses frff om continuing operations in the three-year period ending with the current quarter and our relatively short historyrr of pre-tax income frff om continuing operations. It is possible that there will be changes in our business, our perforff mance, our industryrr or otherwise that cause actuat estimate. If those changes result in signififf cant and sustained reductions in our pre-tax income or utilization of existing tax carryfrr orff wards in futff urt e periods, additional valuation allowances may have to be recorded, which could have a material adverse impact on earnings and/or other comprehensive income. our products and services and pre-tax income frff om continuing operations in 2022 and the third and four l results to diffff eff r materially frff om this ff InII creased atttt ett ntitt on tott clill mii atett change,e ESEE G matttt ett rsrr and conservatitt on measures may adversrr elyll imii pacm t our businii ess. Concern over climate change, including the impact of global warming, has led to signififf cant U.S. and international legislative ation—WeWW may be and regulatoryrr effff orff e affff eff cted by global climate change or by legal the GHGs emitted by companies in the airline and transportation industries could harm our publicity in the global marketplt ace about ts to limit greenhouse gas (“GHG”) emissions. See “—R— isii kskk Related to Litigat es to such change.” Increased awareness and any adverse ion and Regul atoryr respons e and regul a e s i 19 reputation and reduce customer demand forff “flff ight shaming,” or advocating that consumers reduce their use of private jets and commercial air travel in faff vor of more environmentally sustainabla e modes of transportation such as boats, trains and buses. To the extent that our customers reduce their use of air travel in response to new environmental regulation or changes in public perception about change, our customers may reduce their usage of our services and, as a result, our business prospects, fiff nancial condition and results of operations may be materially adversely affff eff cted. our services. Environmental activists and organizations have recently promoted the idea of the impact of air travel on climate a In addition, other stakeholders, including shareholders, customers, employees, regulators and suppliers, have also been focff used on ESG matters. Companies that do not adapta evolving, or that are perceived to have not responded appr whether there is a legal requirement to do so, may suffff eff r frff om reputational damage and other adverse consequences. to or comply with investor or other stakeholder expectations and standards, which are opriately to the growing concern regarding ESG issues, regardless of a WeWW may be unsuccessfs uff l at evaluatitt nii g or pursrr uinii g strtt atett gie c opportunitii itt es,s which couldll adversrr elyll affff eff ct our revenue,e fiff nii ancial conditii itt on and resultll stt of operatitt on. Our Board and management continuously assess whether shareholder value would be increased by engaging in strategic and/or fiff nancial relationships, transactions or other opportuni assurance that we will pursue any strategic or fiff nancial relationship, transaction or other opportuni inherently uncertain. Further, the process of evaluating and pursuing any such relationship, transaction or other opportuni involve the dedication of signififf cant resources and the incurrence of signififf cant costs and expenses. If we are unabla e to mitigate these or other potential risks relating to assessing and undertaking strategic opportuni our revenue, fiff nancial condition and results of operation. ties, including those that are suggested to us by third parties. There can be no our business or adversely impact ty, the outcome of which is ties, it may disrupt ty will r t t t t Risks Related to Our Technology and Intellectual Property WeWW may be unsuccessfs uff l or delayll ed inii developi ll nii g and deplee oyll inii g GogoG 5G or othtt er nextee generatitt on tett chnologi ll es. We are currently developing a next generation ATG network using 5G technology and unlicensed spectrumrr , which we intend to ff th quarter of 2023. Gogo 5G will be capaa bla e of working with diffff eff rent spectrumrr ing of the core elements of the network and on other suppliers to provide certain components and services; and (ix) delays installation and operation of such equipment and the provision launch on a commercial, nationwide basis in the four and supporting diffff eff rent next generation technologies. There can be no assurance that we will launch Gogo 5G or any other next generation technology in suffff iff cient time to meet growing user expectations regarding the in-flff ight connectivity experience and to effff eff ctively compete in the business aviation market, due to, among other things, risks associated with: (i) our faff ilure to design and develop a technology that provides the feff aturt es and perforff mance we require; (ii) integrating the solution with our existing ATG ; (iv) the faff ilure of spectrumr network; (iii) the availabia lity of adequate spectrumrr and softff ware to perforff m as expected; (vi) problems arising in the manufaff cturt suppliers on acceptabla e commercial and other terms; (viii) our reliance on single-source suppliers forff manufaff cturt in obtaining or faff ilures to obtain the required regulatoryrr appr under the capta ion “—R— isii kskk Related to Our Business—Global supplyll chain challenges of service to passengers. As disclosed above and logisii tics isii sues as well as increasing inflff ation have had, and may continue to have, an adversrr e efe fff eff ct on our business, fiff nancial condition and resultstt of operations,” we have experienced longer lead times and encountered delays in obtaining certain electronic ing issues with respect to the 5G chip necessitated process revisions and components used in our business. For instance, manufaff cturt this component, and the supplier of the chip inforff med us in August additional testing, which repeatedly delayed the deliveryrr date forff 2022 of late-stage testing issues which will furff the launch of Gogo 5G service into the four expected or its commercial availabia lity is signififf cantly delayed as compared to the timelines we establa ish, our abia lity to meet users' expectations regarding our systems' perforff mance and to effff eff ctively compete in our market may be impaired and our business, fiff nancial condition and results of operations may be materially adversely affff eff cted. ther delay delivery.rr We currently believe that this combination of delays will likely shiftff th quarter of 2023. If Gogo 5G or any other next generation technology faff ils to perforff m as to perforff m as expected; (v) the faff ilure of equipment ing process; (vii) our abia lity to negotiate contracts with the development and ovals forff a a ff WeWW may be unsuccessfs uff l or delayll ed inii developi ll nii g and deplee oyll inii g our GlGG obal ll Broadband service.ee In May 2022, we announced our plans to launch Global Broadband using an ESA designed with Hughes and utilized on a LEO satellite network operated by OneWeb. There can be no assurance that we will launch Global Broadband in suffff iff cient time to effff eff ctively compete in the global business aviation market, if at all, due to, among other things, risks associated with: (i) OneWeb’s faff ilure to launch or delay in launching its LEO satellite network; (ii) the faff ilure of our equipment and softff ware to perforff m as expected; (iii) the faff ilure of the OneWeb network to perforff m as expected; (iv) integrating our hardware and softff ware with the OneWeb network; ing process; (vi) our abia lity to negotiate contracts with suppliers on acceptabla e commercial and (v) problems arising in the manufaff cturt other terms; (vii) our reliance on single-source suppliers forff network; and (viii) delays in obtaining or faff ilures to obtain the required regulatoryrr appr equipment and the provision of service to passengers. As disclosed above Global supplyll chain challenges and logisii tics isii sues as well as increasing inflff ation have had, and may continue to have, an adversrr e ing of the antenna and access to a LEO installation and operation of such under the capta ion “—R— isii kskk Related to Our Business— the development and manufaff cturt ovals forff a a 20 efe fff eff ct on our business, fiff nancial condition and resultstt of operations,” we have experienced longer lead times and encountered delays in obtaining certain electronic components used in our business, and such issues could affff eff ct the development of Global Broadband. If Global Broadband faff ils to perforff m as expected or its commercial availabia lity is signififf cantly delayed as compared to the timelines we establa ish, our abia lity to meet customers’ or end users’ expectations regarding our systems’ perforff mance and to effff eff ctively compete in our market may be impaired and our business, fiff nancial condition and results of operations may be materially adversely affff eff cted. See “Risii kskk Related to Our Business—ComCC pem tition could result in price reduction, reduced revenue and loss of markrr ekk t position and could harm our resultstt of operations.” Furthermore, under our agreement with Hughes we have committed to purchase, over a seven-year period, antennas with an aggregate purchase price of appr in connection with Global Broadband. If we are not successfulff circumstances, be required to honor these commitments. oximately $170 million, and we may make additional fiff nancial commitments in launching Global Broadband, we may nonetheless, depending on the a Our businii ess isii depeee ndent on thtt e availii abi lii ill tii ytt of spes ll ctrtt um. In June 2006, we purchased at FCC auction an exclusive ten-year, 3 MHz license forff ATG spectrumr , and in April 2013, as part ff license. In 2017, our appl , LLC, we acquired an additional 1MHz ATG spectrumrr additional ten-year terms without furff of our acquisition of LiveTV Airfone renew our licenses were granted forff FCC waiver conditions or FCC regulations including forff eign ownership restrictions, permitted uses of the spectrumrr with FAA regulations could result in the revocation, suspension, cancellation or reduction in the term of our licenses or a refusff the FCC to renew the licenses upon expiration. Further, in connection with an appl competitor could fiff le a petition opposing such renewal on anti-competitive or other grounds. On August 3, 2017, the FCC released an order that, among other things, revised the wireless license renewal rulr es. As a result of this order, which appl generally, all licensees will need to make a showing (or certififf cation) at renewal to demonstrate that the licensee provided and continues to provide service to the public. Because the 1 MHz ATG license has no construcr tion or substantial service requirement, it is currently not clear what level and length of service the FCC will fiff nd adequate when considering the next renewal of the 1 MHz ATG license in 2026. While we do not currently use this license, changes in technology may enabla e its use in our network in the futff urt e. An ambiguous renewal requirement could impair our flff exibility to use or otherwise realize the value of such spectrumr ther payment. Any breach of the terms of our FCC licenses, and compliance al by ication to renew our licenses upon expiration, a ies to the industryrr beyond 2026. ications to a a a Our abia lity to offff eff r in-flff ight broadband Internet access through our ATG service currently depends on our abia lity to maintain in the U.S., and our faff ilure to do so may have a material adverse effff eff ct on our business, rights to use the 3 MHz ATG spectrumr fiff nancial condition and results of operations. In addition, our abia lity to meet increasing perforff mance demands and expand our service offff eff rings in the United States will depend in part upon our abia lity to successfulff in the 2.4 GHz band forff to launch Gogo 5G, and may require that we obtain additional our use. Such spectrumr may not be availabla e to us on commercially reasonabla e terms or at licensed or unlicensed spectrumr suitabla e forff could have a material adverse effff eff ct on our business, fiff nancial condition and results of all. Our faff ilure to obtain adequate spectrumrr operations. ly roll-out our plans to employ unlicensed spectrumr concurrent use with the licensed 3 MHz spectrumr Additii itt onal ATGTT spes ell ctrtt um, whethtt er lill censed or unlill censed, isii or may become availii abl ll inii thtt e fuff ture.ee While we have exclusive rights to the only broadband spectrumr licensed by the FCC forff ATG use, the FCC may in the futff urt e decide to auction additional spectrumrr technology or a business plan that allows it to cost effff eff ctively use spectrumr is not prohibited, to provide broadband connectivity. forff ATG use that is not currently designated forff that purpos r e, or a competitor could develop not specififf cally reserved forff ATG, but on which ATG use The availabia lity of additional spectrumrr in the marketplt ace that is availabla e forff ATG use may increase the possibility that we may faff ce competition frff om one or more other ATG service providers in the futff urt e. For example, a prospective competitor has announced that its ATG network in the continental U.S. is availabla e on a nationwide basis. Such network uses the same unlicensed spectrumrr that we intend to aggregate with our licensed spectrumr use in our Gogo 5G network. forff WeWW couldll be adversrr elyll affff eff ctett d ifi we or our thtt ll tett chnology eventstt ,s cyc ber-rr atttt actt ks or othtt er malill cious actitt vitii itt es. lii ures,s damage tott equipmii faiff ent or sys stett m disii ruptu itt ons or faiff irii d partytt supplu ill ersrr or service providersrr sufu fff eff r service inii lii ures arisii inii g frff om, among othtt er thtt tett rruptu itt ons or delayll s,s inii gs,s forff ce majeure We rely heavily on communications, inforff mation systems (both internal and provided by third parties), and the internet to conduct our business. Our brand, reputation and abia lity to attract, retain and serve our customers depend upon the reliabla e perforff mance of our ground network and in-flff ight systems. We have experienced interrupt ions in these systems in the past, and we may in the futff urt e experience service interrupt ions, service delays or technology or systems faff ilures, which may be due to faff ctors beyond our control. If we experience frff equent system or network faff ilures, our reputation, brand and customer retention could be harmed, and such faff ilures could be material breaches of our customer contracts resulting in termination rights, penalties or claims forff damages. r rr Our operations and services depend upon the extent to which our and our suppliers’ equipment is protected against damage or ion frff om fiff re, flff oods, earthquakes, tornadoes, power loss, solar flff ares, telecommunication faff ilures, break-ins, acts of war or interrupt r terrorism and similar events. We and our vendors, like other commercial entities, have been, and will likely continue to be, subject to a 21 fff iff ng, and other computer-related penetrations. Hardware, softff ware or appl es or malicious code (commonly refeff rred to as “malware”), ransomware or other extortion tactics, denial of service variety of forff ms of cyberattacks with the objective of gaining unauthorized access to our systems and data or disrupt operations. These include, but are not limited to, cyberattacks, phishing attacks, account takeover attempts, the introduction of computer virusrr attacks, credential stuft ications developed by us or received frff om third parties may contain exploitabla e vulnerabia lities, bugs, or defeff cts in design, maintenance or manufaff cturt e or other issues that could compromise inforff mation and cybersecurity. The risk of cyberattacks has also increased and will continue to increase in connection with RusRR sia’s invasion of Ukraine. In light of the Ukraine war and other geopolitical events and dynamics, including ongoing tensions with North Korea, Iran and other states, state-sponsored parties or their supporters may launch retaliatoryrr cyberattacks, and may attempt to cause supply chain disrupt may adversely disrupt variety of sources/malicious actors, including, but not limited to, persons who constitutt e an insider threat, who are involved with organized crime, or who may be linked to terrorist organizations or hostile forff eign governments. Those same parties may also attempt to frff audulently induce employees, customers, or other users of our systems to disclose sensitive inforff mation in order to gain access to our data or that of our customers or clients through social engineering, phishing, mobile phone malware, and other methods. or degrade our operations and may result in data compromise. These security attacks can originate frff om a wide ions, or carryrr out other geopolitically motivated retaliatoryrr actions that ing our a r r r There is no assurance that administrative, physical, and technical controls and other preventive actions taken to reduce the risk of cyberattacks and protect our inforff mation technology will prevent physical and electronic break-ins, cyberattacks or other security breaches to such computer systems. In some cases, such physical and electronic break-ins, cyberattacks or other security breaches may not be immediately detected. If we or our vendors faff il to prevent, detect, address and mitigate such incidents, this may impede or our business operations and could adversely affff eff ct our business, fiff nancial condition and results of operations. r interrupt A disaster such as a naturt al catastrophe, epidemic, pandemic, industrial accident, blackout, ransomware, computer virusr other type of malware, terrorist attack, cyberattack or war, unanticipated problems with our or our vendors’ disaster recoveryrr systems (and the disaster recoveryrr systems of such vendors’ suppliers, vendors or subcontractors), could cause our computer systems to be inaccessible to our employees, distributors, vendors or customers or destroy valuabla e data. In addition, in the event that a signififf cant number of our or our vendors’ managers were unavailabla e folff severely compromised. These interrupt employees’ abia lity to perforff m their job responsibilities. In addition, our flff exible, hybrid work model, which allows our employees the option to work fulff abia lity to manage our business. Unanticipated problems with, or faff ilures of,ff our disaster recoveryrr systems and business continuity plans could have a material impact on our abia lity to conduct business and on our results of operations and fiff nancial condition. The faff ilure of our disaster recoveryrr systems and business continuity plans could adversely impact our profiff tabia lity and our business. ly remote, could increase our operational risk, including, but not limited to, cybersecurity risks, and could impair our ions also may interfeff re with our suppliers’ abia lity to provide goods and services and our lowing a disaster, our abia lity to effff eff ctively conduct business could be , or r Regulators’ or others’ scrutr iny of cybersecurity, including new laws or regulations, could increase our compliance costs and operational burdens, especially as regulatoryrr and legislative focff us on cybersecurity matters intensififf es. Regulators, customers, or others may act against us forff any cybersecurity faff ilures. Our continuous technological evaluations and enhancements, including changes designed to update our protective measures, may increase our risk of a breach or gapa in our security. We may incur higher costs to comply with laws related to, or regulators’ scrutr practices. There can be no assurance that our continuous evaluation and enhancement of our cybersecurity and inforff mation security systems will be effff eff ctive in preventing or limiting the impact of futff urt e cyberattacks. iny of,ff our use, collection, management, or transfeff r of data and other privacy Assertitt ons by thtt irii d partitt es of inii fn rff inii gement,tt misii appropriatitt on or othtt er violatll inii ifi iff cant coststt and matett riallll yll adversrr elyll affff eff ct our businii ess and resultll stt of operatitt ons. itt ons by us of thtt eiri couldll resultll inii signi tett llll ell ctual propertytt righi tstt In recent years, there has been signififf cant litigation involving intellectuat l property rights in many technology-based industries, l property rights of third parties. Many companies, including our competitors, are ios of certain competitors and other third parties, we have not exhaustively searched all patents relevant to our including the wireless communications industry.rr We are currently faff cing, and may in the futff urt e faff ce, claims that we or a supplier have violated patent, trademark or other intellectuat devoting signififf cant resources to obtaining patents that could potentially cover many aspects of our business. While we have reviewed the patent portfolff technologies and business and thereforff e it is possible that we may be unknowingly infrff inging the patents of others. Any infrff ingement, misappr opriation or related claims, whether or not meritorious and whether or not they result in litigation, are time-consuming, divert a technical and management personnel and are costly to resolve. As a result of any such dispute, we may have to develop non-infrff inging technology, pay damages, enter into royalty or licensing agreements, cease providing certain products or services, adjust our merchandizing or marketing and advertising activities or take other actions to resolve the claims. These actions, if required, may be costly or unavailabla e on terms acceptabla e to us. In Februar ryrr 2022, a competitor fiff led a patent infrff ingement suit against us and also fiff led a motion forff injunction, which, if granted, would have prevented us frff om proceeding with Gogo 5G until the infrff ingement suit is resolved. The court denied the competitor’s motion forff underlying infrff ingement suit or other infrff ingement suits could require us to develop non-infrff inging technology, pay damages, enter into royalty or licensing agreements, cease providing certain products or services, adjust our sales, marketing and advertising activities aling the denial. Adverse results in the appe injunction but the competitor is appe a preliminaryrr preliminaryrr al, the a a 22 or take other actions to resolve the claims. These actions, if required, may be costly or unavailabla e on terms acceptabla e to us. Even if we are successfulff could adversely affff eff ct our business relating to such disputed technology during its pendency. in defeff nding these claims, such litigation may be time-consuming and costly, divert management resources and Pursuant to our contracts with certain customers, we have agreed to indemnifyff such customers against such claims, and our indemnififf cation obligations generally include defeff nding or paying forff the defeff nse of the action and paying any judgments or other costs assessed against the customer in the event of an adverse outcome. In most cases, our contracts do not capa our indemnififf cation obligations. In addition, certain of our suppliers do not indemnifyff us forff opriation claims arising frff om our use of supplier technology, and we may be liabla e in the event of such claims. Our inabia lity to meet our indemnififf cation obligations and our customers terminating or faff iling to renew their contracts may have a material adverse effff eff ct on our business and fiff nancial condition. third-party infrff ingement or misappr a WeWW or our tett chnology ersrr and passengersrr . ll customtt supplu ill ersrr may be unablell tott contitt nii ue tott inii novatett and provide productstt and services thtt at are usefe uff l tott The market forff our services is characterized by evolving technology, changes in customer and passenger needs and perforff mance expectations, and frff equent new service and product introductions. Our success will depend, in part, on our and our suppliers’ abia lity to continue to enhance existing technology and services or develop new technology and services on a timely and cost-effff eff ctive basis. If we or our suppliers faff il to adapta requirements, our business and results of operations may be materially adversely affff eff cted. We expect to have to invest signififf cant capia tal to keep pace with innovation and changing technology, and if the amount of such investment exceeds our plans or the amount of investment permitted under the 2021 Credit Agreement (as defiff ned below), it may have a material adverse effff eff ct on our results of operations. quickly enough to changing technology, customer requirements and/or regulatoryrr As is common in industries like ours, changing technology may result in obsolescence as we implement new technologies and l property required to manufaff cturt e and support components that meet our specififf cations, and we may be unabla e to contract products and retire old technologies and products. As we encounter such obsolescence, we need to ensure that we have a suffff iff cient supply of parts, products and equipment compatible with our existing technology, as well as access to maintenance, repair and other critical support services, until the transition is completed. Certain suppliers may determine to stop manufaff cturt ing and supplying end- of-ff lifeff parts, products and equipment, or may stop providing related services, prior to completion of our transition. In the event that we are unabla e to obtain suffff iff cient inventoryrr frff om existing suppliers we would be required to engage new suppliers who have access to the intellectuat with such suppliers on commercially reasonabla e terms, or at all. We have implemented policies and procedures intended to ensure that we timely anticipate technology and product transitions and have access to suffff iff cient inventoryrr and services, but if such policies prove ineffff eff ctive and we are unabla e to continue to engage suppliers with the capaa bia lities or capaa transition, or if such suppliers faff il to deliver quality products, parts, equipment and services in suffff iff cient quantities or on a timely basis consistent with our schedule, our business, fiff nancial condition and results of operations may be materially adversely affff eff cted. In addition, folff technologies and products, we may fiff nd that we have either obsolete or excess inventoryrr on hand and might have to write offff unusabla e inventory,rr which could have a material adverse effff eff ct on our results of operations. cities required by our business to effff eff ct a lowing our retirement of end-of-ff lifeff WeWW may be unablell tott protett ct our inii tett llll ell ctual propertytt righi tstt . We regard our trademarks, service marks, copyrights, patents, trade secrets, proprietaryrr technologies, domain names and similar l property as important to our success. We rely on trademark, copyright and patent law, trade secret protection, and intellectuat confiff dentiality agreements with our employees, vendors, customers and others to protect our proprietaryrr obtained patent protection forff we use (including marks we have appl “Gogo Vision” and, as a result, we may have diffff iff culty registering them in certain jurisdictions. We do not own, forff domain www.gogo.com and we have not yet obtained registrations forff business or may do business in the futff urt e. If other companies have registered or have been using in commerce similar trademarks forff services similar to ours in forff eign jurisdictions, we may have diffff iff culty in registering, or enforff cing an exclusive right to use, our marks in those forff eign jurisdictions. certain of our technologies in the United States and certain other countries. Many of the trademarks that ied to register) contain words or terms having a somewhat common usage, such as “Gogo” and our most important marks in all markets in which we do rights. We have sought and example, the a There can be no assurance that the effff orff ts we have taken to protect our proprietaryrr rights will be effff eff ctive, that any patent and a a opriated or infrff inged by others. Furthermore, the intellectuat l ications will lead to issued patents and registered trademarks in all instances, that others will not obtain intellectuat trademark appl property rights to similar or superior technologies, products or services, or that our intellectuat invalidated, misappr countries in which our service is or may in the futff urt e be offff eff red may not protect our intellectuat the laws of the United States. We may need to expend additional resources to defeff nd our intellectuat our inabia lity to do so could impair our business or adversely affff eff ct our international expansion. If we are unabla e to protect our intellectuat which may materially adversely affff eff ct our business and results of operations. l property frff om unauthorized use, our abia lity to exploit our proprietaryrr l property rights to the same extent as l property in these countries and l property laws and enforff cement practices of other technology or our brand image may be harmed, l property will not be challenged, 23 Our use of open-source softff wtt are couldll lill mii itii our abilii ill tii ytt .yy tott commercialill zii e our tett chnology ll Open-source softff ware is softff ware made widely and frff eely availabla e to the public in human-readabla e source code forff m, usually ied, we could faff ce restrictions on our abia lity to commercialize certain of our products and we could be required to: (i) release the with liberal rights to modifyff and improve such softff ware. Some open-source licenses require as a condition of use that proprietaryrr softff ware that is combined with licensed open-source softff ware and distributed must be released to the public in source code forff m and under the terms of the open-source license. Accordingly, depending on the manner in which such licenses were interprr eted and a appl source code of certain of our proprietaryrr softff ware to the public, including competitors, if the open-source softff ware was linked in a manner that would require such release of our proprietaryrr softff ware source code; (ii) seek licenses frff om third parties forff softff ware; and/or (iii) re-engineer our softff ware in order to continue offff eff ring our products. Such consequences may materially adversely affff eff ct our business. replacement ThTT e faiff againii st us thtt at excee service.ee lii ure of our equipmii ent or matett rial defe eff ctstt or errorsrr inii our softff wtt are may damage our repuee tattt itt on, resultll inii claill mii s eed our inii surance coverage,e thtt ereby requirii inii g us tott pay signi ifi iff cant damages,s and imii paim rii our abilii ill tii ytt tott sellll our ff tion resulting frff om an error or defeff ct or a problem with installation or maintenance and such malfunc Our products contain complex systems, components and softff ware that could contain errors or defeff cts, particularly when we incorpor ate new technology or when new softff ware is fiff rst introduced or new versions or enhancements are released. If any of our r products are defeff ctive, we could be required to redesign or recall those products or pay substantial damages or warranty claims. In addition, such events could result in signififf cant expenses and diversion of development and other resources, a reduction in sales or delay in market acceptance of our products and services, loss of existing customers, terminations of,ff faff ilures to renew, penalties or damage claims under aviation partner contracts, harm to our reputation and brand image and increased insurance costs. If our in-flff ight system has a malfunc tion causes physical damage to an aircraftff or impairs its on-board electronics or avionics, signififf cant property loss and serious personal injuryrr or death could result. Any such faff ilure could expose us to substantial personal injuryrr claims, product liabia lity claims or costly repair obligations. The aircraftff operated by our customers may be veryrr costly to repair and the damages in any product liabia lity claims could be material. We carryrr aircraftff and non-aircraftff product liabia lity insurance consistent with industryrr norms; however, such insurance coverage may not be suffff iff cient to fulff ly cover claims. A product recall or a product liabia lity claim not covered by insurance could have a material adverse effff eff ct on our business, fiff nancial condition and results of operations. Further, we indemnifyff some of our customers losses due to third-party claims and in certain cases the causes of such losses may include faff ilure of our products. Should we be forff required by the FAA or otherwise to cease providing the Gogo service, even on a temporaryrr basis, as a result of a product malfunc or defeff ct, our business, fiff nancial condition and results of operations may also be materially adversely affff eff cted. ff ff tion Risks Related to Litigation and Regulation IfII we faiff non-U.SUU .SS persrr ons,s we couldll lii tott complm yll witii htt losll thtt e ComCC municatitt ons Act and FCC regue e our FCC lill cense.ee latll itt ons lill mii itii itt nii g ownersrr hipii and votitt nii g of our capitii altt stoctt k by a Under the Communications Act and appl icabla e FCC regulations, we are effff eff ctively restricted frff om having more than 25% of our capia tal stock owned or voted directly or indirectly by non-U.S. persons, including individuals and entities organized outside the United States or controlled by non-U.S. persons. We have establa ished procedures to ascertain the naturt e and extent of our forff eign ownership, and we believe that the indirect ownership of our equity by forff eign persons or entities is below the 25% cap.a However, as a publicly traded company we may not be abla e to determine with certainty the exact amount of our stock that is held by forff eign persons or entities at any given time. A faff ilure to comply with appl a requiring divestiturt e of the offff eff nding ownership interests, fiff nes, denial of license renewal and/or spectrumr license revocation proceedings, any of which may have a material adverse effff eff ct on our business, fiff nancial condition and results of operations. icabla e restrictions on ownership by non-U.S. persons could result in an order Regue latll itt on by UnUU itii ett d StSS attt ett s and forff eigni latll ett s thtt e civilii aviatitt on manufu acff government agencies,s inii cludinii g thtt e FCC,CC which isii sued our excee ee rii turinii g and repai inii dustrtt ies inii thtt e UnUU itii ett d StSS attt ett s,s may inii crease lusive ATGTT spes ctrtt um lill cense,e and thtt e FAFF A, which regue our coststt of prff ovidinii g service or requiri e us tott change our services. Any breach of the terms of our ATG spectrumr licenses, authorizations and waivers obtained by us frff om time to time, or any violation of the Communications Act or the FCC’s rulrr es, could result in the revocation, suspension, cancellation or reduction in the term of a license or the imposition of fiff nes. From time to time, the FCC may monitor or audit compliance with the Communications Act and the FCC’s rulr es or with our licenses, including if a third party were to bring a claim of breach or noncompliance. In addition, the Communications Act, frff om which the FCC obtains its authority, may be amended in the futff urt e in a manner that could be adverse to us. As discussed in more detail in the section entitled “Business—Licenses and Regulation—Federal Aviation Administration,” FAA appr obtaining ovals required to operate our business include STCs and PMAs. While our distribution partners are responsible forff a STCs, obtaining PMAs is an expensive and time-consuming process that requires signififf cant focff us and resources. Prior to installation 24 a ng shortages), or ovals, could have an adverse effff eff ct on our abia lity to meet our installation installation on aircraftff , or expand our business. Following installation of our equipment, of our equipment, any inabia lity to obtain, delay in obtaining (including as a result of a government shutdown or fundi change in, needed FAA certififf cations, authorizations, or appr commitments, manufaff cturt e and sell parts forff if we were to discover that our equipment or components of our equipment were not in compliance with specififf cations on which the STC authorizing installation was based, or if the FAA’s requirements changed, our non-compliance could result in our incurring material costs to inspect and in some circumstances modifyff or replace such equipment, and could in rare circumstances result in our system being turt ned offff or installed aircraftff being grounded. If we faff il to comply with the FAA’s many regulations and standards that appl a installation, maintenance, preventive maintenance and alteration capaa bia lities are based. In addition, frff om time to time, the FAA or comparabla e forff eign agencies adopt new regulations or amend existing regulations. The FAA could also change its policies regarding the delegation of inspection and certififf cation responsibilities to private companies, which could adversely affff eff ct our business. To the extent that any such new regulations or amendments to existing regulations or policies appl would likely increase. y to our activities, we could lose the FAA certififf cations, authorizations, or other appr y to our activities, our compliance costs ovals on which our manufaff cturt ing, a a ff As a broadband Internet provider, we must comply with the CALEA, which requires communications carriers to ensure that their equipment, faff cilities and services can accommodate certain technical capaa bia lities in executing authorized wiretappi electronic surveillance. Currently, our CALEA solution is fulff enforff cement action by the FCC or law enforff cement agencies forff any delays in complying or faff ilure to comply with, CALEA or similar obligations. Such enforff cement actions could subject us to fiff nes, cease and desist orders or other penalties, all of which may materially adversely affff eff ct our business and fiff nancial condition. Further, to the extent the FCC adopts additional capaa bia lity requirements icabla e to broadband Internet providers, its decision may increase the costs we incur to comply with such regulations. a appl ly deployed in our network. However, we could be subject to an ng and other a We are also subject to regulation by certain forff eign laws and regulatoryrr bodies, including ISED, which issued our exclusive Canadian ATG subordinate spectrumr license and regulates our use of the spectrumr licensed to us. Adverse decisions or regulations of these U.S. and forff eign regulatoryrr bodies may have a material adverse effff eff ct on our business and results of operations. We are unabla e to predict the impact of regulations and other policy changes that could be adopted by the various governmental entities that oversee portions of our business. Our possession and use of peff rsrr onal inii fn orff mrr atitt on present risii ks and expe nses thtt at couldll harmrr breach of our netwtt orkrr securitii ytt or othtt erwisii e,e couldll expos our businii ess. UnUU authtt orizii ed e us tott costltt yll ee ee disii closll ure or manipuii i lill tii itt gat itt on and damage our repuee latll tattt itt on. itt on of such data,tt whethtt er thtt roughu In the ordinaryrr course of our business, we or our third-party providers collect, process and store sensitive data, including personal inforff mation of our employees and customers. The secure processing, maintenance and transmission of this inforff mation (and other sensitive data such as our proprietaryrr business inforff mation and that of our customers and suppliers) is critical to our operations turt e may be vulnerabla e to attacks by and business strategy. Despite our security measures, our inforff mation technology and infrff astrucrr hackers or may be compromised due to employee error, malfeff asance, hardware or softff ware defeff cts or other disrupt ions. Further, our in-cabia n network operates as an open, unsecured Wi-Fi hotspot, and non-encrypt vulnerabla e to access by other users on the same plane. Unauthorized use of our, or our third-party service providers’, networks, computer systems and services could potentially jeopardize the security of confiff dential inforff mation, including personal inforff mation of passengers using our service. Data security threats are constantly evolving and may be diffff iff cult to anticipate or to detect forff periods of time, and may include ransomware attacks, network intrusr ion, data extortion, malware, phishing and other social engineering, business email compromise and insider threats, among others. There can be no assurance that any security measures we, or third parties, take will be effff eff ctive in preventing these activities, given the constantly changing naturt e of the threats. Any such security incidents, unauthorized access or disclosure, or other loss of inforff mation could result in legal claims or proceedings and liabia lity under our contracts with certain customers, which generally require us to indemnifyff third-party claims arising frff om data security breaches. In addition, such incidents may disrupt provide to customers, result in the loss of value of trade secrets, require expensive effff orff our reputation, and cause a loss of confiff dence in our products and services, all of which may have a material adverse effff eff ct on our business prospects, fiff nancial condition and results of operations. passenger and other our operations and the services we ts to investigate, remediate or resolve, damage ed transmissions users send over this network may be the customer forff long rr r r A security incident or data breach, a faff ilure to comply with appl icabla e data protection laws, faff ilure to comply with our policies a and procedures, or a faff ilure or perceived faff ilure to provide users with adequate notice of our privacy policies or other privacy-related obligations to consumers could also subject us to litigation, investigations and regulatoryrr penalties imposed by United States feff deral and state regulatoryrr agencies, non-U.S. regulatoryrr agencies or courts, all of which could have a material adverse effff eff ct on our business, fiff nancial condition and results of operations. As discussed in more detail in the section entitled “Business—Licenses and Regulation—Privacy and Data Security-Related Regulations,” we could also be subject to certain state laws, feff deral and non-U.S. laws that impose data breach notififf cation requirements, specififf c data security obligations, or other consumer privacy-related requirements. Our faff ilure to comply with any of these rulr es or regulations, or an allegation or fiff nding that we faff iled to comply, may have a material adverse effff eff ct on our business, fiff nancial condition and results of operations. These legal requirements are complex, 25 ff a a to ts to comply, we may be found y to the Company establa ish a private right of icabla e data protection law. Even in cases where the appl varied, rapia dly evolving and oftff en subject to interprr etation, and there is a risk that, despite our effff orff be out of compliance with one or more of these requirements. Fines issued forff non-compliance with such requirements may be substantial, including fiff nes issued under the GDPR which can be as high as 4% of global revenue, and an adverse fiff nding by a regulator or court may result in costly and onerous requirements being placed on the Company, a prohibition on engaging in certain aspects of our business or damage to our reputation. Certain data protection laws that appl action. In addition, non-compliance with certain of these requirements could lead to class action or other litigation based on theories that may include breach of contract or negligence, among others. Such litigation could result in material costs to the Company. We cannot be sure that a regulator would deem our security measures to be appr data protection laws. Without more specififf c guidance, we cannot know whether our chosen security safeff guards are adequate according to each appl a safeff guards designed to meet those requirements will be interprr eted by a regulator or court as adequate or that those safeff guards are operating in accordance with the requirements at all times. Given the evolving naturt e of security threats and evolving safeff guards, we cannot be sure that our chosen security safeff guards will protect against security threats to our business, nor can we be certain that we have not already experienced a cybersecurity incident or data breach of which we are unaware. Even security measures that are appr ly protect our or our partners’ a inforff mation technology systems and the data contained in those systems. Moreover, interprr etations or changes to new or existing data protection laws may impose on us responsibility forff our employees and third parties that assist with aspects of our data processing. As a result, our employees’ or third parties’ intentional, unintentional, or inadvertent actions may increase our vulnerabia lity or expose us to security threats, such as phishing attacks, and we may remain responsible forff attack despite the quality and otherwise legal suffff iff ciency of our technical security measures. A cybersecurity incident, data breach or other faff ilure of our security measures may result in litigation, fiff nes, reputational harm, operational disrupt addition, compliance with complex variations in privacy and data security laws may require modififf cations to current business practices, including signififf cant technology effff orff ts that require long implementation timelines, increased costs and dedicated resources. icabla e requirements are explicit, we cannot be certain that opriate given the lack of prescriptive measures in certain opriate, reasonabla e, and/or in accordance with appl icabla e legal requirements may not be abla e to fulff phishing or other social engineering ion, and lost revenue. In a successfulff a a rr We depend on the security of the network infrff astrucr computing, customer support and other vendors. Despite our effff orff data they maintain forff safeff guards that appe contain security vulnerabia lities or backdoors introduced by the vendor or an unauthorized third party, which could jeopardize the security of our systems, data and networks. Such incidents or breaches could expose us to regulatoryrr and litigation risk, operational r disrupt turt e and products of our third-party providers of telecommunications, cloud ts, those third parties may maintain inadequate safeff guards to protect ar adequate. We also rely on hardware and softff ware developed by third parties. Such hardware and softff ware could us or services on which we depend, or they may experience a cybersecurity incident or data breach despite ion and reputational harm and adversely affff eff ct our business. a ShSS ouldll fiff nii ancial conditii itt on. ett thtt e ComCC panm yn partitt cipat ii inii thtt e FCC Reimii bursrr ement PrPP ogram, itii couldll adversrr elyll affff eff ct our resultll stt of operatitt ons and As discussed in more detail in the section entitled “Business — Licenses and Regulation — FCC Secure and Trusr ted a a oved forff all of the appr suffff iff cient to fundff oximately only $131 million of the appr participation in the FCC Reimbursement Program. ff the program, the FCC has allocated to the Company appr reimbursement. There can be no assurance that Congress will appr a Communications Networks Reimbursement Program,” we have been appr We are currently evaluating our participation in the FCC Reimbursement Program. Due to a shortfaff ll in the funds Congress forff oved forff appr a appr ff opriate funds a decide to participate, we will be required to fund amounts to appr requirements establa ished by the FCC, including a requirement that we submit our fiff rst reimbursement request by July 15, 2023, and complete the removal, replacement and disposal of appl lowing such request. The FCC may grant one or more six-month extensions to a participant where it fiff nds that due to faff ctors beyond its control, the participant cannot complete the project by the deadline. Due to a number of faff ctors including supply chain disrupt and the operational and logistical complexity of replacing airbor July 2024, and we intend to seek extensions if we decide to participate. If the FCC does not grant the necessaryrr extensions and the project is not completed by the FCC’s deadline, we could faff ce penalties or other sanctions. . If Congress faff ils to oved expenditurt es of the Company and other participants and we nevertheless the portion of program costs that exceeds the FCC allocation, which currently ng ne equipment, we do not believe that we can complete the project by oximately $202 million. In order to participate in the program, we must comply with various conditions and a opriate any additional funds ions, the current insuffff iff ciency of FCC fundi icabla e equipment within one year folff oximately $333 million opriated by a appr a a a ff ff ff r r In addition, if any of the Company’s customers do not replace their airbor r ne equipment with equipment that is compatible with the replacement terrestrial network equipment prior to the date on which the replacement terrestrial network equipment goes into effff eff ct, the Company will be unabla e to provide service to such customers until the airbor r disrupt ions could have a material adverse effff eff ct on our results of operations and fiff nancial condition. ne equipment is replaced. Such service r FaiFF lii ure tott complm yll witii htt antitt -ii bribei ryr ,yy antitt -ii corruptu itt on and antitt -ii moneye laull nderinii g lawll s couldll subject us tott penaltll itt es and othtt er adversrr e consequences. We are subject to the FCPA, the Briberyrr Act and other anti-corrupt a jurisdictions around the world. The FCPA, the Briberyrr Act and similar appl ion, anti-briberyrr and anti-money laundering laws in various icabla e laws generally prohibit companies, their offff iff cers, r 26 the corruprr directors, employees and third-party intermediaries, business partners and agents frff om making improper payments or providing other improper things of value to government offff iff cials or other persons. We and our third-party intermediaries may have direct or indirect interactions with offff iff cials and employees of government agencies or state-owned or affff iff liated entities and other third parties where we may be held liabla e forff t or other illegal activities of these third-party business partners and intermediaries, our employees, representatives, contractors, resellers and agents, even if we do not explicitly authorize such activities. While we have policies and procedures and internal controls to address compliance with such laws, we cannot assure you that all of our employees and agents will icabla e law, forff which we may be ultimately held responsible. To the extent that we not take actions in violation of our policies and appl learn that any of our employees, third-party intermediaries, agents, or business partners do not adhere to our policies, procedures, or internal controls, we are committed to taking appr opriate remedial action. In the event that we believe or have reason to believe that our directors, offff iff cers, employees, third-party intermediaries, agents, or business partners have or may have violated such laws, we may be required to investigate or have outside counsel investigate the relevant faff cts and circumstances. Detecting, investigating and resolving actuat l or alleged violations can be extensive and require a signififf cant diversion of time, resources and attention frff om senior management. Any violation of the FCPA, the Briberyrr Act, or other appl laundering laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions, fiff nes and penalties, all of which may have a material adverse effff eff ct on our business, fiff nancial condition and results of operations. ion laws and anti-money icabla e anti-bribery,rr anti-corrupt a a a rr ExpeEE nses,s lill abilii ill tii itt es or businii ess disii ruptu itt ons resultll itt nii g frff om lill tii itt gat itt on couldll adversrr elyll affff eff ct our resultll stt of operatitt ons and i fiff nii ancial conditii itt on. Our operations are characterized by the use of new technologies and services across multiple jurisdictions that implicate various t of the potential loss relating to such lawsuits may remain unknown forff statutt es and a range of rulr es and regulations that may be subject to broad or creative interprr etation. This may result in litigation, including class action lawsuits, the outcome of which may be diffff iff cult to assess or quantifyff due to the potential ambiguity inherent in these regulatoryrr schemes and/or the nascence of our technologies and services. Plaintiffff sff may seek recoveryrr of veryrr indeterminate amounts, and the magnitude of time. Any such claims or litigation may be time-consuming and costly, divert management resources, require us to change our products and services, or require us to pay signififf cant monetaryrr damages, which may have a material adverse effff eff ct on our results of operations. For example, we recently settled a securities class action lawsuit in which Gogo Inc. and certain of our current and forff mer executives were defeff ndants, and in Februar which Gogo Inc. is a nominal defeff ndant and members of our Board of Directors and certain current and forff mer executives are defeff ndants. We are required to indemnifyff the directors and current and forff mer offff iff cers who are defeff ndants in the derivative lawsuit forff their defeff nse costs and any judgments resulting frff om such suits. In the futff urt e, we may be subject to additional securities class action or derivative litigation. From time to time, we may also be subject to other claims or litigation in the ordinaryrr course of our business, including forff example, claims related to employment matters. ryrr 2023, we received preliminaryrr court appr oval to settle related derivative lawsuits in substantial periods large or a In addition, costly and time-consuming litigation could be necessaryrr to enforff ce our existing contracts and, even if successfulff , may have a material adverse effff eff ct on our business. In addition, litigation by or against any customer or supplier could have the effff eff ct of negatively impacting our reputation and goodwill with existing and potential customers and suppliers. WeWW may be affff eff ctett d by global ll clill mii atett change or by lell gal e and regue latll ortt yr respons ses tott such change.ee Concern over climate change, including the impact of global warming, has led to signififf cant U.S. and international legislative ts to limit GHG emissions. Increasingly, state and local governments are also considering GHG regulatoryrr and regulatoryrr effff orff requirements. Increased regulation regarding GHG emissions, especially aircraftff emissions, could impose substantial costs on us. We may also incur additional expenses as a result of U.S. and international regulators requiring additional disclosures regarding GHG emissions. The adoption and implementation of new or more stringent international, feff deral, regional, state or local legislation, regulations or other initiatives that impose more stringent standards forff GHG emissions may have a material adverse effff eff ct on our results of operations and fiff nancial condition. Regue latll itt ons relatll ett d tott confn lff ill ct minii eralsll forff ce us tott inii cur additii itt onal expe ee nses and may make our supplu yll chainii more complm ell x.ee We are subject to the Dodd-Frank Wall Street Reforff m and Consumer Protection Act of 2010, which requires us to diligence, disclose and report whether or not our products contain certain minerals and metals, known as “conflff ict minerals.” These requirements could adversely affff eff ct the sourcing, availabia lity and pricing of certain of the materials used in the manufaff cturt e of components in our products and equipment. In addition, we have incurred, and will continue to incur, costs to comply with the disclosure requirements, including costs related to conducting diligence procedures to determine the sources of conflff ict minerals that may be used or necessaryrr icabla e, potential changes to products, processes or sources of supply as a consequence of to the production of our products and, if appl such verififf cation activities. a Risks Related to Our Indebtedness 27 For defiff nitions of capia talized terms used and not defiff ned in the folff lowing Risk Factors, see “Management's Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K. WeWW and our subsidiaries have substantt affff eff ct our fiff nii ancial healtll htt lii ill tii ytt ,yy lill mii opportunitii itt es and reduce thtt e value of yff our inii vestmtt ent.tt , reduce our profiff tii abi titt al debt and may inii cur substantt tt itii our abilii ill tii ytt tott obtaitt nii titt al additii itt onal debt inii thtt e fuff ture,e which couldll adversrr elyll fiff nii ancinii g inii thtt e fuff ture and pursrr ue certaitt nii businii ess As of December 31, 2022, we had total consolidated indebtedness of appr a oximately $714.1 million, all of which was borrowed under the Term Loan Facility. We and our subsidiaries may incur additional debt in the futff urt e, including up to $100.0 million under the Revolving Facility, which could increase the risks described below and lead to other risks. The amount of our debt or such other obligations could have important consequences forff holders of our common stock, including, but not limited to: • • • • • • • • a meaningfulff interest on our indebtedness, thereby reducing the funds ff portion of our cash flff ows frff om operations is expected to be dedicated to the payment of principal and availabla e to us forff other purpos r es; our abia lity to obtain additional fiff nancing forff working capia tal, capia tal expenditurt es, acquisitions, debt service requirements or general corpor may be impaired in the futff urt e; es may be limited, and our abia lity to satisfyff our obligations with respect to our indebtedness ate purpos r rr we may be at a competitive disadvantage compared to our competitors with less debt or with comparabla e debt at more faff vorabla e interest rates and which, as a result, may be better positioned to withstand economic downturt ns; our abia lity to refiff nance indebtedness may be limited or the associated costs may increase; our abia lity to engage in acquisitions without raising additional equity or obtaining additional debt fiff nancing may be impaired in the futff urt e; it may be diffff iff cult forff such indebtedness; us to satisfyff our obligations to our creditors, resulting in possible defaff ults on and acceleration of we may be more vulnerabla e to general adverse economic and industryrr conditions; and our flff exibility to adjust to changing market conditions and our abia lity to withstand competitive pressures could be limited, or we may be prevented frff om making capia tal investments that are necessaryrr or important to our operations in general, our growth strategy and our effff orff ts to improve operating margins of our business units. WeWW may have fuff ture capitii altt needs and may not be ablell tott obtaitt nii additii itt onal fiff nii ancinii g tott ell fuff nd our capitii altt needs on acceptee abl tt tett rmrr s,s or at allll .ll We have frff om time to time evaluated, and we continue to evaluate, our potential capia tal needs in light of increasing demand forff ff city and perforff mance and generally evolving technology in our industry.rr We may utilize any initiative in this regard, including the issuance of new equity securities and our services, limitations on bandwidth capaa one or more types of capia tal raising in order to fund new debt securities, including debt securities convertible into our common stock. Our abia lity to generate positive cash flff ows frff om operating activities and the extent and timing of certain capia tal and other necessaryrr expenditurt es are subject to numerous variabla es, including continuing development and deployment of Gogo 5G, such as costs related to execution of our current technology roadmap,a Global Broadband and other futff urt e technologies. The market conditions and the macroeconomic conditions that affff eff ct the markets in which we operate could have a material adverse effff eff ct on our abia lity to secure fiff nancing on acceptabla e terms, if at all. We may be unabla e to secure additional fiff nancing on faff vorabla e terms or at all or our operating cash flff ows may be insuffff iff cient to satisfyff our fiff nancial obligations under the 2021 Credit Agreement and other indebtedness outstanding frff om time to time. r rr ate purpos Our abia lity to obtain additional fiff nancing forff working capia tal, capia tal expenditurt es, acquisitions, debt service requirements or es is limited by the 2021 Credit Agreement. In the futff urt e, if our subsidiaries are in compliance with certain general corpor incurrence ratios or other covenant exceptions set forff th in the 2021 Credit Agreement, our subsidiaries may be abla e to incur additional indebtedness, which indebtedness may be secured or unsecured, the incurrence of which may increase the risks created by our current substantial indebtedness. Events beyond our control can affff eff ct our abia lity to comply with these requirements. The 2021 Credit Agreement also limits the abia lity of Gogo Inc. to incur additional indebtedness under certain circumstances and limits the amount of cash that our subsidiaries may dividend, transfeff r or otherwise distribute to us. The terms of any additional fiff nancing may furff ther limit our fiff nancial and operating flff exibility. Our abia lity to satisfyff our fiff nancial obligations will depend upon our futff urt e operating perforff mance, the availabia lity of credit generally, economic conditions and fiff nancial, business and other faff ctors, many of which are beyond our control. Furthermore, if fiff nancing is not availabla e when needed, or is not availabla e on acceptabla e terms, we may be unabla e to take advantage of business opportuni of which may have a material adverse effff eff ct on our business, fiff nancial condition and results of operations. Even if we are abla e to ties or respond to competitive pressures, any t 28 obtain additional fiff nancing, we may be required to use the proceeds frff om any such fiff nancing to repay a portion of our outstanding debt. ff If we raise additional funds ther issuances of equity, convertible or seek to reduce our current levels of indebtedness through furff debt securities or other securities convertible into equity, our existing stockholders could suffff eff r signififf cant dilution in their percentage ownership of our company. In addition, any new securities we issue could have rights, prefeff rences and privileges senior to those of holders of our common stock, and we may grant holders of such securities rights with respect to the governance and operations of our business. If we are unabla e to obtain adequate fiff nancing or fiff nancing on terms satisfaff ctoryrr to grow or support our business and to respond to business challenges could be signififf cantly limited. to us, if and when we require it, our abia lity ThTT e agreementstt and inii strtt umentstt governinii g our debt contaitt nii tott operatett our businii ess. abilii ill tii ytt restrtt ictitt ons and lill mii itii attt itt ons thtt at couldll adversrr elyll imii pacm t our The 2021 Credit Agreement contains covenants that, among other things, limit the abia lity of our subsidiaries and, in certain circumstances, us to: • • • • • • • incur additional debt; pay dividends, redeem stock or make other distributions; make certain investments; create liens; transfeff r or sell assets; merge or consolidate with other companies; and enter into certain transactions with our affff iff liates. Our abia lity to comply with the covenants and restrictions contained in the 2021 Credit Agreement may be affff eff cted by economic, ff fiff nancial and industryrr conditions beyond our control. Our faff ilure to comply with obligations under the agreements and instrumr governing our indebtedness may result in an event of defaff ult under such agreements and instrumrr availabla e to remedy these defaff ults. A defaff ult, if not cured or waived, may permit acceleration of our indebtedness. If will have funds our indebtedness is accelerated, we cannot be certain that we will have suffff iff cient funds availabla e to pay the accelerated indebtedness or have the abia lity to refiff nance the accelerated indebtedness on terms faff vorabla e to us or at all. All of these covenants and restrictions could affff eff ct our abia lity to operate our business, may limit our abia lity in the futff urt e to satisfyff currently outstanding obligations and may limit our abia lity to take advantage of potential business opportunt ents ents. We cannot be certain that we ities as they arise. ff An inii crease inii inii tett rest ratett s wouldll inii crease thtt e cost of servicinii g our inii debtett dness and couldll reduce our profiff tii abi tt lii ill tii ytt .yy Our debt outstanding under the Term Loan Facility bears interest, and any indebtedness under our Revolving Facility would bear interest, at variabla e rates. While we have entered into interest rate capsa interest rate risk under these faff cilities. Increases in interest rates would increase the cost of servicing our debt and could materially reduce our profiff tabia lity and cash flff ows. to hedge a portion of our exposure, we remain subject to Any payments made under our interest rate capsa are based on the three-month LIBOR interest rate. The upcoming cessation of the availabia lity of LIBOR may adversely affff eff ct our business, fiff nancial position, results of operations and cash flff ows. On July 27, 2017, the United Kingdom's Financial Conduct Authority (the “FCA”), which regulates LIBOR, announced that it intends to stop encouraging or compelling banks to submit LIBOR quotations aftff er 2021 (the “FCA Announcement”). On March 5, 2021, the ICE Benchmark Administration, which administers LIBOR, and FCA announced that all LIBOR settings will either cease to be provided by any administrator, or no longer be representative immediately aftff er December 31, 2021, forff one-week and two-month U.S. dollar LIBOR settings, and immediately aftff er June 30, 2023 forff settings (the “LIBOR Announcement”). all non-U.S. dollar LIBOR settings and the remaining U.S. dollar LIBOR It is not possible to predict the effff eff ct that the LIBOR Announcement, the discontinuation of LIBOR or the establa ishment of alternative refeff rence rates may have on LIBOR, but fiff nancial products with interest rates tied to LIBOR may be adversely affff eff cted. Once LIBOR ceases to be published, it is uncertain whether it will continue to be viewed as an acceptabla e market benchmark, what rate or rates may become accepted alternatives to LIBOR or what the effff eff ct of any such changes in views or alternatives may be on the markets forff LIBOR-indexed fiff nancial instrumr ents. We amended our 2021 Credit Agreement on Februar ryrr 2, 2023 to transition to the secured overnight fiff nancing rate as administered by the Federal Reserve Bank of New York (“SOFR”) in anticipation of LIBOR’s discontinuation. Any indebtedness under our 2021 Credit Agreement may bear interest at variabla e rates that use the forff ward-looking term rate based on SOFR. SOFR is calculated diffff eff rently than LIBOR and has inherent diffff eff rences, which could give rise to uncertainties, including the limited historical 29 data and volatility in the benchmark rates. We intend to transition our interest rate capsa discontinuation. The fulff l effff eff cts of the transition to SOFR remain uncertain. frff om LIBOR to SOFR beforff e LIBOR’s InII debtett dness under thtt e FacFF ilii ill tii itt es isii secured by substantt titt allll yll allll of our assetstt . As a resultll of thtt ese securitii ytt inii tett reststt ,s such assetstt wouldll onlyll be availii abl ell inii solvll ent,tt tott additii itt on, thtt e exiee sii tett nce of thtt ese securitii ytt ll thtt e extee ett nt thtt e value of such assetstt excee eeded thtt e amount of our secured inii debtett dness and othtt er oblill gat i itt ons. InII tott satitt sii fs yff claill mii s of our general creditii ortt srr or tott holdell rsrr of our equitii ytt securitii itt es,s ifi we were tott become inii tett reststt may adversrr elyll affff eff ct our fiff nii ancial flff ell xiee bii lii ill tii ytt .yy Indebtedness under the Facilities is secured by a lien on substantially all of our assets. Accordingly, if an event of defaff ult were to occur under the 2021 Credit Agreement, to the extent amounts were outstanding under the Facilities, the lenders party to the 2021 Credit Agreement would have a prior right to our assets, to the exclusion of our general creditors in the event of our bankrupt insolvency, liquidation, or reorganization. In that event, our assets would fiff rst be used to repay in fulff obligations under the 2021 Credit Agreement, resulting in all or a portion of our assets being unavailabla e to satisfyff the claims of our unsecured indebtedness. Only aftff er satisfyiff ng the claims of our unsecured creditors and our subsidiaries’ unsecured creditors would any amount be availabla e forff our equity holders. The pledge of these assets and other restrictions may limit our flff exibility in raising es. Because substantially all of our assets are pledged under these fiff nancing arrangements, our abia lity to incur capia tal forff additional secured indebtedness or to sell or dispose of assets to raise capia tal may be impaired, which could have an adverse effff eff ct on our fiff nancial flff exibility. cy, l all indebtedness and other other purpos r rr A downgrade,e suspes nsion or witii htt drawal of thtt e ratitt nii g assigni ed by a ratitt nii g agencyc tott us,s our subsidiaries or our inii debtett dness,s ifi anyn ,yy couldll cause our cost of capitii altt tott inii crease.ee Our Term Loan has been rated by nationally recognized rating agencies and may in the futff urt e be rated by additional rating agencies. We cannot assure you that any rating assigned will remain forff withdrawn entirely by a rating agency if,ff in that rating agency’s judgment, circumstances relating to the basis of the rating, such as adverse changes in our business, so warrant. Any futff urt e lowering of ratings may make it more diffff iff cult or more expensive forff us to obtain additional debt fiff nancing. any given period of time or that a rating will not be lowered or Risks Related to Our Common Stock ThTT e price of our common stoctt k may be volatll itt lii ell ,e and thtt e value of yff our inii vestmtt ent couldll declill nii e.ee The trading price of our common stock has been volatile since our IPO, which occurred on June 21, 2013 and in which shares of ryrr 24, 2023, the price of our common stock common stock were sold at a price of $17.00 per share. From the IPO date through Februar has ranged frff om a closing low of $1.40 per share to a closing high of $34.34 per share. In addition to the faff ctors discussed in this Annual Report on Form 10-K, the trading price of our common stock may flff uctuat which are beyond our control. They include: te widely in response to various faff ctors, many of • • • • • • • • • • • • • aviation industryrr or general market conditions, including those related to disrupt r ions to supply chains and installations; domestic and international economic faff ctors unrelated to our perforff mance; changes in technology or customer usage of Wi-Fi and Internet broadband services; any inabia lity to timely and effff iff ciently roll out Gogo 5G, Global Broadband or other components of our technology roadmap;a new regulatoryrr pronouncements and changes in regulatoryrr guidelines; l or anticipated flff uctuat actuat consolidated basis in the futff urt e or to obtain additional fiff nancing; tions in our quarterly operating results and any inabia lity to generate positive cash flff ows on a changes in or faff ilure to meet publicly disclosed expectations as to our futff urt e fiff nancial perforff mance; changes in securities analysts’ estimates of our fiff nancial perforff mance or lack of research and reports by industryrr analysts; action by institutt ional stockholders or other large stockholders, including futff urt e sales; short-selling or other transactions involving derivatives of our securities; speculation in the press or investment community; investor perception of us and our industry;rr changes in market valuations or earnings of similar companies; 30 • • • • • • announcements by us or our competitors of signififf cant products, contracts, contract amendments, acquisitions or strategic partnerships; developments or disputes concerning patents or proprietaryrr associated with intellectuat l property lawsuits we may initiate, or in which we may be named as defeff ndants; rights, including increases or decreases in litigation expenses faff ilure to complete signififf cant sales; any futff urt e sales of our common stock or other securities; renewal of our FCC licenses and our abia lity to obtain additional spectrumr ; and additions or departurt es of key personnel. In addition, the stock markets have experienced extreme price and volume flff uctuat tions in recent years that have affff eff cted and continue to affff eff ct the market prices of equity securities of many technology companies. Stock prices of many such companies have ted in a manner unrelated or disproportionate to the operating perforff mance of those companies. These broad market flff uctuat tions may adversely affff eff ct the trading price of our common stock. In the past, folff flff uctuat of a company’s securities, class action litigation has oftff en been institutt ed against such company. Any litigation of this type brought against us could result in substantial costs and a diversion of our management’s attention and resources, which may have a material adverse effff eff ct on our business, fiff nancial condition and results of operations. lowing periods of volatility in the market price ThTT e utitt lii ill zii atitt on of our taxtt losll ses couldll be substantt titt allll yll lill mii itii ett d ifi we expe ee rienced an “ownersrr hipii change” as defe iff nii ed inii thtt e .ee InII tett rnal Revenue CodeCC As of December 31, 2022, we had appr a oximately $562 million in feff deral and $448 million in state net operating losses (“NOLs”). The feff deral NOLs will begin to expire in 2032. The state NOLs expire in various tax years beginning in 2023. Under Section 382 of the Code and corresponding provisions of state law, if a corpor ation undergoes an “ownership change,” which is generally defiff ned as an increase of more than 50% of the value of the Company’s stock owned by certain “5-percent shareholders,” as such term is defiff ned in Section 382 of the Code, in its equity ownership over a rolling three-year period, the corpor ation’s abia lity to use its pre-change NOLs and other pre-change tax attributes to offff sff et its post-change income or taxes may be limited. To the extent there becomes a new 5-percent shareholder, we may experience an ownership change under Section 382 of the Code, which may result in the loss or impairment of some or all of our NOLs. The extent of any loss or impairment of our NOLs upon an ownership change would depend on several faff ctors, including the naturt e of the NOLs, our stock price and extent of the ownership change. r r In September 2020, our Board of Directors adopted a Section 382 Rights Agreement (as amended, the “Rights Agreement”), t Company, N.A., as rights agent, and declared a dividend of one Right forff es. The Rights Agreement may make it more the Company to undergo an ownership change by deterring a third party frff om acquiring benefiff cial ownership of 4.9% or es of the Rights Agreement is determined between the Company and Computershare Trusr outstanding share of common stock of the Company outstanding on the record date of October 2, 2020, to the stockholders of record on that date. The Rights Agreement is designed to faff cilitate the Company’s abia lity to protect its NOLs and certain other tax attributes in order to be abla e to offff sff et potential futff urt e income taxes forff diffff iff cult forff more of the shares of our common stock then outstanding. Benefiff cial ownership forff based on meeting one of several criteria, including (i) actuat l or construcrr regulations thereunder and (ii) benefiff cial ownership, directly or indirectly, within the meaning of RulRR es 13d-3 or 13d-5 promulgated th in the Rights Agreement may adversely affff eff ct the marketabia lity of our common under the Exchange Act. The limitations set forff stock by discouraging any individual or entity, together with their affff iff liates and associates, frff om acquiring benefiff cial ownership of 4.9% or more of the shares of our common stock then outstanding. tive ownership pursuant to Section 382 of the Code and related feff deral income tax purpos rr purpos each r In addition, although the Rights Agreement is intended to reduce the likelihood of an ownership change that could adversely affff eff ct utilization of our NOLs, the Rights Agreement has been, and may be, ineffff eff ctive at deterring shareholders frff om becoming 5- percent shareholders. For example, in September 2022 and December 2022, two institutt ional shareholders inadvertently crossed the 4.9% benefiff cial ownership threshold. In both such circumstances, our Board of Directors, rather than allowing a distribution of Rights to be triggered, determined that it was in the best interests of the Company to grant requests by such shareholders that they each be deemed an “Exempt Person” under the Rights Agreement. Each exemption required that the shareholder satisfyff certain ownership conditions intended to prevent an ownership change and protect our abia lity to utilize our NOLs. Moreover, pursuant to the terms of the Rights Agreement, our Board of Directors may determine that it is in the best interests of the Company to exempt certain transactions, which could result in an ownership change, frff om triggering the Rights Agreement. Failure by an “Exempt Person” or other persons exempt frff om certain transaction under the Rights Agreement to comply with the conditions forff such exemptions could result in an ownership change and result in the loss or impairment of some or all of our NOLs. If an ownership change occurs and our abia lity to use our NOLs is materially limited, it would harm our futff urt e operating results by effff eff ctively increasing our futff urt e tax obligations. 31 FuFF ture stoctt k isii suances couldll cause substantt titt al dilii utitt on and a declill nii e inii our stoctt k price.ee We may issue additional shares of common stock or other equity or debt securities convertible into common stock frff om time to time in connection with a fiff nancing, acquisition, litigation settlement, employee arrangement, as consideration to third-party service or equipment providers or otherwise. Additional shares of common stock are also issuabla e upon exercise of outstanding stock options. We may also reserve additional shares of our common stock forff equity incentives. We cannot predict the size of futff urt e issuances or the effff eff ct, if any, that they may have on the market price forff common stock. Any of these issuances could result in substantial dilution to our existing stockholders and could cause the trading price of our common stock to decline. issuance upon the exercise of stock options or other similar forff ms of our A feff w signi ifi iff cant stoctt kholdell LLC and itii stt affff iff lii ill atett s,s couldll exeee concentrtt atett d, or becomes more concentrtt atett d inii rr corpor atett decisii ions. rsrr ,s inii cludinii g affff iff lii ill atett s of Oaklell ighi yn ,yy and ifi rt inii fn lff uence over our companm ThTT orne,e our ChCC airii mrr an of thtt e Board and CECC O,O and GTCTT RCC thtt e ownersrr hipii of our common stoctt k contitt nii ues tott be thtt e fuff ture,e itii couldll prevent our othtt er stoctt kholdell rsrr frff om inii fn lff uencinii g signi ifi iff cant As of December 31, 2022, Oakleigh Thorne, our CEO and the Chairman of our Board of Directors, and the entities affff iff liated managed by GTCR LLC and its affff iff liates (“GTCR”) benefiff cially owned appr with Mr. Thorne (the “Thorne Entities”) benefiff cially owned appr funds ff common stock. As a result, either the Thorne Entities or GTCR alone is abla e to exercise inflff uence over all matters requiring stockholder appr Such abia lity to inflff uence may reduce the market price of our common stock. In addition, together, GTCR and the Thorne Entities would be abla e to exercise control over such matters, which similarly may reduce the market price of our common stock. oximately 22% of the outstanding shares of our common stock, and oximately 25% of the outstanding shares of our ate transactions and the election of directors. the forff eseeabla e futff urt e, including appr oval of signififf cant corpor oval forff a a a a r As our CEO, Mr. Thorne has control over our day-to-day management and the implementation of maja or strategic initiatives and investments by our company, subju ect to authorization and oversight by our Board of Directors. As a member of our Board of Directors, Mr. Thorne owes a fiff duciaryrr duty to our stockholders and must act in good faff ith in a manner he reasonabla y believes to be in the best interests of our stockholders. As a stockholder, Mr. Thorne is entitled to vote his shares, and shares over which he has voting control, in his own interest, which may not always be in the interests of stockholders generally. Our corpor r ate governance guidelines address potential conflff icts between a director’s interests and our interests, and our code of ar to conflff ict with their job responsibilities or our interests and to disclose their outside activities, fiff nancial interests or business conduct, among other things, requires our employees and directors to avoid actions or relationships that might conflff ict or appe a relationships that may present a possible conflff ict of interest or the appe r corpor ate governance guidelines and code of business ethics do not, by themselves, prohibit transactions with the Thorne Entities. arance of a conflff ict to management or corpor a r ate counsel. These FuFF lfll iff lii lll ill nii g our oblill gat i difi fff iff cultll itt es inii satitt sii fs yff inii g thtt ese oblill gat itt ons associatett d witii htt beinii g a publill c companm s or itt ons may have a matett rial adversrr e efe fff eff ct on our resultll stt of operatitt ons and our stoctt k price.ee nsive and titt mii e-consuminii g, and anyn dedd layll ee yn isii expe i As a public company, the Sarbar nes-Oxley Act of 2002 (“Sarbar nes-Oxley”), and the related rulr es and regulations of the SEC, as r ate governance practices and adhere to a variety of reporting well as NASDAQ rulr es, require us to implement various corpor requirements and complex accounting rulr es. Compliance with these public company obligations requires us to devote signififf cant time and resources and places signififf cant additional demands on our fiff nance and accounting staffff and on our fiff nancial accounting and inforff mation systems. We are also required under Sarbar nes-Oxley to document and test the effff eff ctiveness of our internal control over fiff nancial reporting, and our independent registered public accounting fiff rm is required to provide an attestation report on the effff eff ctiveness of our internal control over fiff nancial reporting. In addition, we are required under the Exchange Act to maintain disclosure controls and procedures and internal control over fiff nancial reporting. Any faff ilure to maintain effff eff ctive controls or implement required new or improved controls may materially adversely affff eff ct our results of operations or cause us to faff il to meet our reporting obligations. If we are unabla e to conclude that we have effff eff ctive internal control over fiff nancial reporting, or if our independent registered public accounting fiff rm is unabla e to provide us with an unqualififf ed report regarding the effff eff ctiveness of our internal control over fiff nancial reporting, investors could lose confiff dence in the reliabia lity of our consolidated fiff nancial statements. This could result in a decrease in the value of our common stock. Failure to comply with Sarbar nes-Oxley could potentially subject us to sanctions or investigations by the SEC, NASDAQ, or other regulatoryrr authorities. 32 tt Antitt -ii take over provisii ions inii our chartett r documentstt and Delawll are lawll ,w and certaitt nii provisii ions inii our exiee sii titt nii g and anyn fuff ture creditii facff common stoctt k. ilii ill tii ytt couldll disii courage,e delayll or prevent a change inii contrtt ol ofo our companm yn and may affff eff ct thtt e trtt adinii g price of our Our amended and restated certififf cate of incorpor r ation and amended and restated bylaws include a number of provisions that may discourage, delay or prevent a change in our management or control over us that stockholders may consider faff vorabla e. These provisions include: • • • • • • • Authorization of the issuance of “blank check” prefeff rred stock that could be issued by our Board of Directors to thwart a takeover attempt; Establa ishment of a classififf ed Board of Directors, as a result of which our board is divided into three classes, with each class serving forff at an annual meeting; staggered three-year terms, which prevents stockholders frff om electing an entirely new Board of Directors A requirement that directors only be removed frff om offff iff ce forff cause and only upon a supermaja ority stockholder vote; A provision that vacancies on the Board of Directors, including newly-created directorships, may be fiff lled only by a maja ority vote of directors then in offff iff ce; A limitation on who may call special meetings of stockholders; A prohibition on stockholder action by written consent, thereby requiring all actions to be taken at a meeting of the stockholders; and A requirement of supermaja ority stockholder voting to effff eff ct certain amendments to our amended and restated certififf cate of r incorpor ation and amended and restated bylaws. Additionally, our Board of Directors adopted the Rights Agreement, which is intended to reduce the likelihood of an ownership change under Section 382 of the Code by deterring a third party frff om acquiring benefiff cial ownership of 4.9% or more of the shares of our common stock then outstanding. The Rights Agreement, as well as the provisions described above , may prevent our stockholders frff om receiving the benefiff t frff om any premium to the market price of our common stock offff eff red by a bidder in a takeover context. Even in the absa market price of our common stock if viewed as discouraging takeover attempts in the futff urt e. ence of a takeover attempt, the existence of the Rights Agreement or such provisions may adversely affff eff ct the prevailing a The Rights Agreement as well as the provisions of our amended and restated certififf cate of incorpor rr ation and amended and restated bylaws may also make it diffff iff cult forff provisions may faff cilitate management entrenchment that may delay, deter, render more diffff iff cult or prevent a change in our control, which may not be in the best interests of our stockholders. stockholders to replace or remove our management or Board of Directors. These Under the terms of the 2021 Credit Agreement, a takeover of our company would allow the administrative agent and/or the lenders to terminate their commitments under the 2021 Credit Agreement and declare any and all outstanding amounts to be due and payabla e. This provision may have the effff eff ct of delaying or preventing a takeover of our company that would otherwise be benefiff cial to our stockholders. Our corpor Board of Diri ectortt atett chartett r and bylawll srr tott redeem shares of our common stoctt k frff om non-U.SUU .SS citii itt zii ens. s inii clude provisii ions lill mii rr itii itt nii g ownersrr hipii byb non-U.SUU .SS citii itt zii ens,s inii cludinii g thtt e power of our e The Communications Act and FCC regulations impose restrictions on forff eign ownership of FCC licensees, as described in the the ComCC munications Act risk faff ctor, “—R— isii kskk Related to Our TeTT chnology and IntII ellectual Propertytt —yy ations limiting ownersrr hipi and voting of our capital stock by non-U.S.UU persrr ons we could lose our FCC license.” Our above a and FCC regul corpor r regulations regarding forff eign ownership, including but not limited to, a right to redeem shares of common stock frff om non-U.S. citizens at prices at or below faff ir market value. Non-U.S. citizens should consider carefulff ation prior to investing in our common stock. certififf cate of incorpor ate charter and bylaws include provisions that permit our Board of Directors to take certain actions in order to comply with FCC ly the redemption provisions in our l to complm yll withtt I— fII we faiff rr These restrictions may also decrease the liquidity and value of our stock by reducing the pool of potential investors in our company and making the acquisition of control of us by third parties more diffff iff cult. In addition, these restrictions could adversely affff eff ct our abia lity to attract equity fiff nancing or consummate an acquisition of a forff eign entity using shares of our capia tal stock. 33 Item 1B. Unresolved Staffff Comments None. Item 2. Properties Currently, we lease appr a oximately 120,000 square feff et forff our business in Broomfiff eld, Colorado, under a lease agreement that expires in 2029. In addition, we lease appr metropolitan Chicago area under a lease agreement that expires on May 31, 2032. We believe that our existing faff cilities will be adequate forff oximately 11,700 square feff et in Chicago, Illinois forff the forff eseeabla e futff ut re. those of our employees who live in the a Item 3. Legal Proceedings We are subject to several lawsuits arising out of the conduct of our business. See Note 17, “Commitments and Contingencies,” to our consolidated fiff nancial statements forff a discussion of litigation matters. From time to time we may become involved in legal proceedings arising in the ordinaryrr course of our business. We cannot predict with certainty the outcome of any litigation or the potential forff futff urt e litigation. Regardless of the outcome of any particular litigation and the merits of any particular claim, litigation can have a material adverse impact on our company due to, among other reasons, any injunctive relief granted, which could inhibit our abia lity to operate our business, amounts paid as damages or in settlement of any such matter, diversion of management resources and defeff nse costs. Item 4. Mine Safeff ty Disclosures a Not appl icabla e. 34 Item 5. Market forff Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Inforff mation forff Common Stock Our common stock has been listed on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “GOGO” since June Part II 21, 2013. Holders of Record As of Februarr ryrr 24, 2023, there were 33 stockholders of record of our common stock, and the closing price of our common stock was $14.50 per share as reported on the NASDAQ. Because many of our shares of common stock are held by brokers and other institutt ions on behalf of stockholders, we are unabla e to estimate the total number of stockholders represented by these record holders. Repurchases of Equity Securities None. Recent Sale of Unregistered Securities None. Use of Proceeds frff om Registered Securities None. Securities Authorized forff Issuance Under Equity Compensation Plans See Item 12, “Security Ownership of Certain Benefiff cial Owners and Management and Related Stockholder Matters,” forff inforff mation regarding securities authorized forff issuance. Perforff mance ThiTT sii perfr orff mance graph shall not be deemed “soliciting material” or to be “f“ iff led” with the SEC forff ExEE change Act,t or otherwisii e subject to thett any fiff ling of Gogo IncII . under the Securities Act of 1933, as amended (t(( hett purpos r rr liabilities under that Section, and shall not be deemed to be incorpor “Securities Act”)” , or thett ExEE change Act. es of Section 18 of the ated by refe eff rence into The folff lowing grapha shows a comparison of cumulative total retut rn forff our common stock, the Standard & Poor’s 500 Stock Index (“S&P 500”), the Nasdaq Composite Index (“NASDAQ Composite”) and Standard & Poor’s SmallCapa 600 Index (“S&P SmallCapa assumes that $100 600”) forff was invested at the market close on December 31, 2017 in our common stock, the S&P 500, the NASDAQ Composite and the S&P SmallCapa 600 and assumes reinvestments of dividends, if any. The S&P SmallCapa 600 was chosen because we do not believe we can comparison. The S&P SmallCapa 600 reasonabla y identifyff the period frff om December 31, 2017 through December 30, 2022, the last trading day of 2022. The grapha index or specififf c peer issuer that would offff eff r a meaningfulff an industryrr 35 represents a broad-based index of companies with similar market capia talization. The comparisons in the grapha historical data and are not indicative of,ff nor intended to forff ecast, futff urt e perforff mance of our common stock. below are based upon Item 6. [Reserved] 36 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations folff TheTT lowing disii cussion and analyll syy isii isii operations, liquiditytt and capital resources. YouYY and the related notes contained in thisii Annual Repor the reader undersrr tand our business, fiff nancial condition, resultstt of intended to helpll shouldll read thisii disii cussion in conjunction with our consolidated fiff nancial statementstt e t on ForFF m 10-K.KK On December 1, 2020, we complm eted the previouslyll announced sale of our commercial aviation (“CACC ”)” business to a subsidiaryr kskk on HolHH dings S.A. (“I“ ntII elsll at”)” forff of IntII elsll at JacJJ “TrTT ansaction”)” . As a result,t all periods presented in our consolidated fiff nancial statementstt and other portions of thisii Annual Repe ort on ForFF m 10-K have been conforff med to present the CACC business as disii continued operations. TheTT re was no disii continued operations activitytt a purchase price of $400.0 million in cash, subject to certain adjustmtt entstt (t(( he the CACC business aftff er December 31, 2021. forff TheTT statementstt in thitt sii disii cussion regar e r non-hisii torical statementstt capital resources and othett statementstt are subject to numerous risii kskk and uncertainties, including, but not limited to, the risii kskk and uncertainties described under “R“ isii k FacFF torsrr ” in thitt sii repor statementstt . in thisii disii cussion are forff ward-looking statementstt . TheTT se forff ward-looking frff om those contained in or implm ied by any forff ward-looking t. Our actual resultstt may difi fff eff r materiallyll e ding industryr outlook,kk our exee pex ctations regar e ding our futff ure perfr orff mance, liquiditytt and Our fiff sii cal year ends December 31 and, unless othett rwisii e noted, refe eff rences to yearsrr or fiff sii cal are forff fiff sii cal yearsrr ended December 31. See “— Resultstt of OpeO rations.” Company Overview historyrr of doing so. Until recently, we focff used primarily on Gogo is the world’s largest provider of broadband connectivity services forff the business aviation market. We have served this market forff more than 25 years. Our mission is to enrich the lives of passengers and the effff iff ciency of operators with the world’s best business aviation in-flff ight connectivity and customer support. We have always sought to provide the best connectivity forff aviation market regardless of technology, and we have a successfulff business aviation aircraftff in North America, which comprise appr the leading provider of in-flff ight connectivity in that market. Gogo started in analogue air-to-ground (“ATG”) technology in the late 1990s, then, as analogue cellular backhaul disappe ATG with our digital broadband 3G and 4G networks beginning in 2010. We expect to commercially launch our four – Gogo 5G – in the four and internationally through distribution agreements with satellite providers. In May 2022, in order to furff customers and expand our target market, we announced plans to expand our broadband offff eff rings beyond ATG by launching the fiff rst business aviation (“Global Broadband”). The service will use an electronically steered antenna global broadband service designed forff (“ESA”), specififf cally designed to address a broad range of business aviation aircraftff , operating on a low earth orbir t (“LEO”) satellite network. The antenna will be designed with Hughes Network Systems, LLC (“Hughes”) and utilized on a LEO satellite network operated by Network Access Associates Limited (“OneWeb”). ared, migrated to narrowband satellite connectivity in the early 2000s, then back to th ATG network th quarter of 2023. We also continue to provide narrowband satellite services to customers in North America oximately 63% of the worldwide business aviation flff eet, and we are ther serve our existing the business a a ff ff Our chief operating decision maker evaluates perforff mance and business results forff our operations, and makes resource and operating decisions, on a consolidated basis. As we do not have multiple segments, we do not present segment inforff mation in this Annual Report on Form 10-K. Factors and Trends Affff eff cting Our Results of Operations We believe that our operating and business perforff mance is driven by various faff ctors that affff eff ct the business aviation industry,rr including trends affff eff cting the travel industryrr and trends affff eff cting the customer bases that we target, as well as faff ctors that affff eff ct wireless Internet service providers and general macroeconomic faff ctors. Key faff ctors that may affff eff ct our futff urt e perforff mance include: • • • • • costs associated with the implementation of,ff and our abia lity to implement on a timely basis, our technology roadmap,a including upgrades to and installation of the ATG technologies we currently offff eff r, Gogo 5G, Global Broadband and any other next generation or other new technology; our abia lity to manage issues and related costs that may arise in connection with the implementation of our technology roadmap,a other equipment developers and providers or satellite network providers, some of which are single-source; including technological issues and related remediation effff orff ts and faff ilures or delays on the part of antenna and our abia lity to license additional spectrumr user expectations change; and make other improvements to our network and operations as technology and the number of aircraftff in service in our markets, including consolidations or changes in flff eet size by one or more of our large-flff eet customers; the economic environment and other trends that affff eff ct both business and leisure aviation travel; 37 • • • • • • ions to supply chains and installations, including shortages of electronic components that have resulted in longer disrupt rr lead times and delays in obtaining certain electronic components used in the airbor ne equipment that we manufaff cturt e; r the extent of our customers’ adoption of our products and services, which is affff eff cted by, among other things, willingness to pay forff the services that we provide, the quality and reliabia lity of our products and services, changes in technology and competition frff om current competitors and new market entrants; our abia lity to engage suppliers of equipment components and network services on a timely basis and on commercially reasonabla e terms; our abia lity to fulff ly utilize portions of our defeff rred tax assets; changes in laws, regulations and interprrr etations affff eff cting telecommunications services globally, including those affff eff cting our abia lity to maintain our licenses forff ATG spectrumr in the United States, obtain suffff iff cient rights to use additional ATG spectrumrr and/or other sources of broadband connectivity to deliver our services, including Global Broadband, expand our service offff eff rings and manage our network; and changes in laws, regulations and policies affff eff cting our business or the business of our customers and suppliers globally, including changes that impact the design of our equipment and our abia lity to obtain required certififf cations forff equipment. our Key Business Metrics Our management regularly reviews fiff nancial and operating metrics, including the folff lowing key operating metrics, to evaluate the perforff mance of our business and our success in executing our business plan, make decisions regarding resource allocation and r corpor ate strategies, and evaluate forff ward-looking projections. Aircraftff online (at period end) ATG Satellite Average monthly connectivity service revenue per aircraftff online ATG Satellite Units sold ATG Satellite Average equipment revenue per unit sold (in thousands) ATG Satellite For the Years Ended December 31, 2022 2021 2020 6,935 4,475 6,400 4,567 $ 3,349 268 $ 3,238 250 1,334 206 $ 68 49 869 205 $ 71 54 5,778 4,702 2,951 212 667 199 68 59 $ $ • • • • • ATGTT aircraftff online. We defiff ne ATG aircraftff online as the total number of business aircraftff forff which we provide ATG services as of the last day of each period presented. This number excludes aircraftff receiving ATG service as part of the ATG Network Sharing Agreement with Intelsat. Satellite aircraftff online. We defiff ne satellite aircraftff online as the total number of business aircraftff forff which we provide narrowband satellite services as of the last day of each period presented. Average monthlyll connectivitytt service revenue per ATGTT aircraftff online. We defiff ne average monthly connectivity service revenue per ATG aircraftff online as the aggregate ATG connectivity service revenue forff of months in the period, divided by the number of ATG aircraftff online during the period (expressed as an average of the month end fiff gures forff Intelsat is excluded frff om this calculation. each month in such period). Revenue share earned frff om the ATG Network Sharing Agreement with the period divided by the number Average monthlyll connectivitytt service revenue per satellite aircraftff online. We defiff ne average monthly connectivity service revenue per satellite aircraftff online as the aggregate narrowband satellite connectivity service revenue forff the period divided by the number of months in the period, divided by the number of narrowband satellite aircraftff online during the period (expressed as an average of the month end fiff gures forff each month in such period). UniUU tstt sold. We defiff ne units sold as the number of ATG or narrowband satellite units forff which we recognized revenue during the period. 38 • • Average equipmi equipment revenue frff om all ATG units sold during the period, divided by the number of ATG units sold. ent revenue per ATGTT unit sold.l We defiff ne average equipment revenue per ATG unit sold as the aggregate ent revenue per satellite unit sold. We defiff ne average equipment revenue per satellite unit sold as the Average equipmi aggregate equipment revenue earned frff om all narrowband satellite units sold during the period, divided by the number of narrowband satellite units sold. Key Components of Consolidated Statements of Operations As a result of the Transaction, all periods presented in this Annual Report on Form 10-K have been conforff med to present the CA business as a discontinued operation. We report the fiff nancial results of discontinued operations separately frff om continuing operations to distinguish the fiff nancial impact of disposal transactions frff om ongoing operations. The results of operations and cash flff ows of a discontinued operation are restated forff our consolidated fiff nancial statements forff all comparative periods presented. Refeff r to Note 20, “Discontinued Operations,” to ther inforff mation. furff The folff lowing brieflff y describes certain key components of revenue and expenses as presented in our consolidated statements of operations. Revenue: We generate two types of revenue: service revenue and equipment revenue. Service revenue primarily consists of monthly subscription and usage feff es paid by aircraftff owners and operators forff telecommunication, data, and in-flff ight entertainment services. Service revenue is recognized as the services are provided to the customer. Beginning December 2020, service revenue includes revenue earned frff om the ATG Network Sharing Agreement with Intelsat. Equipment revenue primarily consists of proceeds frff om the sale of ATG and narrowband satellite connectivity equipment and is recognized when control of the equipment is transfeff rred to OEMs and dealers, which generally occurs when the equipment is shipped. CosCC t of Revenue: Cost of service revenue consists of ATG network costs, satellite provider service costs, transaction costs and costs related to network operations. Cost of equipment revenue primarily consists of the costs of purchasing component parts used in the manufaff cturt e of our equipment and the production, installation, technical support and quality assurance costs associated with the equipment sales. EngiEE neering, Designi and Development ExEE pex nses: Engineering, design and development expenses include the costs incurred to design and develop our technologies and products and to obtain and maintain FAA and other regulatoryrr certififf cations. This includes the design, development and integration of our ATG ground networks and airbor ne line replaceabla e units, the design and development of products and enhancements thereto, and program management activities. Engineering, design and development expenses also include costs associated with enhancements to existing products. r Sales and MarMM krr ekk ting ExEE pex nses: Sales and marketing expenses consist of costs associated with activities related to customer sales (including sales commissions), digital marketing and lead generation, advertising and promotions, product management, trade shows and customer service support forff end users. General and Adminisii trative ExEE pex nses: General and administrative expenses include personnel and related operating costs of the business support func ff tions, including fiff nance and accounting, legal, human resources, administrative, inforff mation technology, faff cilities and executive groups. Depre eciation and Amortizii ation: Depreciation expense includes expense associated with the depreciation of our network equipment, offff iff ce equipment and furff niturt e, fiff xturt es and leasehold improvements, which is recorded over their estimated usefulff amortization of our fiff nite-lived intangible assets on a straight-line basis over their estimated usefulff years depending on the assets being amortized. lives. Amortization expense includes the lives, which range frff om three to ten 39 Critical Accounting Estimates Our discussion and analysis of our fiff nancial condition and results of operations are based on our consolidated fiff nancial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of our consolidated fiff nancial statements and related disclosures requires us to make estimates, assumptions and judgments that affff eff ct the reported amounts of assets, liabia lities, revenue, costs and expenses, and related exposures. We base our estimates and assumptions on historical experience and other faff ctors that we believe to be reasonabla e under the circumstances. In some instances, we could reasonabla y use diffff eff rent accounting estimates, and in some instances actuat l results could diffff eff r signififf cantly frff om our estimates. We evaluate our estimates and assumptions on an ongoing basis. To the extent that there are diffff eff rences between our estimates and actuat operations and cash flff ows will be affff eff cted. l results, our futff urt e fiff nancial statement presentation, fiff nancial condition, results of We believe that the assumptions and estimates associated with the valuation allowance related to our defeff rred income tax assets have the greatest potential impact on and are the most critical to fulff ly understanding and evaluating our reported fiff nancial results, and that they require our most diffff iff cult, subjective or complex judgments. For a discussion of our signififf cant accounting policies to which many of these critical estimates relate, see Note 2, “Summaryrr of Signififf cant Accounting Policies,” to our consolidated fiff nancial statements. Note that these critical accounting estimates relate solely to our continuing operations. The accounting policies related to our discontinued operations are discussed in Note 20, “Discontinued Operations,” to our consolidated fiff nancial statements. Defe eff rred IncII ome TaxTT es - ValVV uation Allowance: We account forff the valuation allowance on our defeff rred income tax assets in accordance with Accounting Standards Codififf cation Topic 740, IncII ome TaxTT es (“ASC 740”). On a recurring basis, we assess the need forff a valuation allowance related to our defeff rred income tax assets, which includes consideration of both positive and negative evidence to determine, based on the weight of the availabla e evidence, whether it is more likely than not that some or all of our defeff rred tax assets will not be realized. In our assessment, we consider recent fiff nancial operating results, the scheduled expiration of our net operating losses, potential sources of taxabla e income, the reversal of existing taxabla e diffff eff rences, taxabla e income in prior carryba of fiff nancial reporting losses, primarily driven by our divested CA business, resulting in cumulative pre-tax losses in the three-year period ending with the current quarter which is objectively verififf abla e negative evidence regarding futff urt e profiff tabia lity. Cumulative pre- tax losses frff om continuing operations adjusted forff of the 2022 Convertible Notes (as defiff ned below) result in positive normalized income over the same three-year period. This is objectively verififf abla e positive evidence of our abia lity to generate positive earnings in the futff urt e. ck years (if permitted under tax law) and tax planning strategies. We have a recent historyrr the reduction in interest expense resulting frff om the Refiff nancing and the settlement rr When there is a recent historyrr of operating losses and a returt n to operating profiff tabia lity has not yet been demonstrated, we r purpos es of assessing recoverabia lity of our defeff rred tax assets and instead must use cannot rely on projections of futff urt e earnings forff this assessment. In such cases, we use systematic and logical methods to estimate when defeff rred tax assets our historical earnings forff will reverse and generate tax deductions. The selection of methodologies and assessment of when temporaryrr diffff eff rences will result in deductible amounts involves signififf cant management judgment and is inherently complex and subjective. Our determination that we are more likely than not to realize a portion of our defeff rred tax assets represents our best estimate and considers both positive and negative faff ctors. We considered positive faff ctors including the sale of our CA business, the reduction in interest expense resulting frff om the Refiff nancing and the settlement of the 2022 Convertible Notes, strong demand forff frff om continuing operations in the fiff scal year ended December 31, 2022 and the third and four th fiff scal quarters of 2021. The negative faff ctors included cumulative pre-tax losses frff om continuing operations in the three-year period ending with the current quarter and our relatively short historyrr of pre-tax income frff om continuing operations. It is possible that there will be changes in our business, our perforff mance, our industryrr or otherwise that cause actuat signififf cant and sustained reductions in our pre-tax income or utilization of existing tax carryfrr orff wards in futff urt e periods, additional valuation allowances may have to be recorded with corresponding adverse impacts on earnings and/or other comprehensive income. Such adverse impacts may be material. l results to diffff eff r materially frff om this estimate. If those changes result in our products and services and pre-tax income ff For the year ended December 31, 2022, our determination that we are more likely than not to realize a portion of our defeff rred oximately $11.4 million of our valuation allowance. The remaining valuation allowance is still tax assets resulted in a release of appr required forff carryfrr orff ward, as we determined that it was more likely than not that, as of December 31, 2022, these defeff rred tax assets will not be realized. defeff rred tax assets related to certain state and forff eign NOLs, capia tal losses, and the Section 163(j(( ) interest limitation a See Note 15, “Income Tax,” to our consolidated fiff nancial statements forff additional inforff mation. 40 Recent Accounting Pronouncements See Note 2, “Summary of Significant Accounting Policies,” to our consolidated financial statements for additional information. Results of Operations The folff lowing tabla e sets forff th, foff r the periods presented, certain data frff om our consolidated statements of operations. The inforff mation contained in the tabla e below should be read in conjunction with our consolidated fiff nancial statements and related notes. Consolidated Statements of Operations Data (i(( n thousands)s For the Years Ended December 31, 2021 2020 2022 Revenue: Service revenue Equipment revenue Total revenue Operating expenses: Cost of service revenue (exclusive of items shown below) Cost of equipment revenue (exclusive of items shown below) Engineering, design and development Sales and marketing General and administrative Depreciation and amortization Total operating expenses Operating income Other (income) expense: Interest income Interest expense Loss on extinguishment of debt and settlement of convertible notes Other (income) expense Total other expense Income (loss) frff om continuing operations beforff e income taxes Income tax provision (benefiff t) Net income (loss) frff om continuing operations Net loss frff om discontinued operations, net of tax Net income (loss) Years Ended December 31, 2022 and 2021 Revenue: $ $ 296,329 107,738 404,067 64,427 71,473 29,587 25,471 58,203 12,580 261,741 142,326 (2,386) 38,872 — 123 36,609 105,717 13,658 92,059 — 92,059 $ $ 259,583 76,133 335,716 56,103 46,092 24,874 20,985 51,554 15,482 215,090 120,626 (191) 67,472 83,961 25 151,267 (30,641) (187,230) 156,589 (3,854) 152,735 $ $ 211,987 57,731 269,718 45,073 39,299 25,227 15,135 54,467 14,166 193,367 76,351 (722) 125,787 — (9) 125,056 (48,705) (146) (48,559) (201,477) (250,036) Revenue and percent change forff the years ended December 31, 2022 and 2021 were as folff lows (i(( n thousands, exee cepte forff percent change)e : Service revenue Equipment revenue Total revenue For the Years Ended December 31, 2022 2021 % Change 2022 over 2021 $ $ 296,329 $ 107,738 404,067 $ 259,583 76,133 335,716 14.2% 41.5% 20.4% Revenue increased to $404.1 million forff due to increases in service and equipment revenue. the year ended December 31, 2022, as compared with $335.7 million forff the prior year, Service revenue increased to $296.3 million forff the prior year, primarily due to increases in ATG aircraftff online and average monthly service revenue per ATG aircraftff online. Average monthly service revenue per ATG unit online increased to $3,349 forff the prior year. the year ended December 31, 2022, as compared with $259.6 million forff the year ended December 31, 2022, as compared with $3,238 forff 41 Equipment revenue increased to $107.7 million forff the year ended December 31, 2022, as compared with $76.1 million forff the prior year, primarily due to increases in the number of ATG units sold, with 1,334 ATG units sold during the year ended December 31, 2022 as compared with 869 units forff the prior year. We expect service revenue to increase in the futff urt e as additional ATG aircraftff come online and average monthly connectivity service revenue per ATG aircraftff online increases, due in part to the expected impact of the launch of Gogo 5G. We expect equipment revenue to increase in the futff urt e as a larger number of ATG units, including Gogo 5G units, are sold. In addition, we expect furff revenue growth as we launch Global Broadband. ther CosCC t of Revenue: Cost of service revenue and percent change forff forff percent change)e : exee cepte the years ended December 31, 2022 and 2021 were as folff lows (i(( n thousands, Cost of service revenue Cost of equipment revenue $ $ 64,427 $ 71,473 $ 56,103 46,092 14.8% 55.1% For the Years Ended December 31, 2022 2021 % Change 2022 over 2021 Cost of service revenue increased to $64.4 million forff the year ended December 31, 2022, as compared with $56.1 million forff the prior year, primarily due to increases in personnel costs and ATG network costs as well as a credit forff included in the prior year, with no corresponding credit in the current year. regulatoryrr surcharges We expect cost of service revenue to increase over time, primarily due to service revenue growth and increasing ATG network costs associated with Gogo 5G. In addition, we expect cost of service revenue to increase as we launch Global Broadband. Cost of equipment revenue increased to $71.5 million forff the prior year, primarily due to an increase in ATG units sold. the year ended December 31, 2022, as compared with $46.1 million forff We expect that our cost of equipment revenue will increase with growth in ATG units sold, including Gogo 5G units folff lowing the launch of that service, and Global Broadband units sold folff lowing the launch of that service. EnE ginii eerinii g, Designi and Developmll ent ExpeEE nses: Engineering, design and development expenses increased to $29.6 million forff the year ended December 31, 2022, as compared with $24.9 million forff the prior year, primarily due to commencement of the Global Broadband development program. We expect engineering, design and development expenses as a percentage of service revenue to increase over the next two years, driven by Global Broadband development costs and Gogo 5G program spend, and decrease over the long term as the level of investment decreases and revenue increases. SalSS ell s and MarMM kerr titt nii g ExpeEE nses: Sales and marketing expenses increased to $25.5 million forff the year ended December 31, 2022, as compared with $21.0 million forff the prior year, primarily due to increased personnel, travel, promotional and advertising expenses. We expect sales and marketing expenses as a percentage of service revenue to remain relatively flff at in the futff urt e. GeG neral and Adminii isii trtt atitt ve ExEE pexx nses: General and administrative expenses increased to $58.2 million forff the year ended December 31, 2022, as compared with $51.6 million forff the prior year, primarily due to increases in legal expenses and stock-based compensation expense. We expect general and administrative expenses as a percentage of service revenue to decrease over time. Depree eciatitt on and Amortitt zii atitt on: Depreciation and amortization expense decreased to $12.6 million forff the year ended December 31, 2022, as compared with $15.5 million forff the prior year, primarily due to decreased amortization expense forff capia talized softff ware. We expect that our depreciation and amortization expense will increase in the futff urt e as we launch our Gogo 5G network. 42 Othtt er (I(( nII come)e ExpeEE nse: Other (income) expense and percent change forff forff percent change)e : exee cepte the years ended December 31, 2022 and 2021 were as folff lows (i(( n thousands, Interest income Interest expense Loss on extinguishment of debt and settlement of convertible notes Other expense, net Total Percentage changes that are considered not meaningfulff are denoted with nm. For the Years Ended December 31, 2022 2021 % Change 2022 over 2021 $ $ (2,386) $ 38,872 — 123 36,609 $ (191) 67,472 83,961 25 151,267 1149.2% (42.4)% nm 392.0% (75.8)% Total other expense decreased to $36.6 million forff the prior year, primarily due to the prior year including the loss on extinguishment of debt and settlement of convertible notes as well as and the conversion of lower interest expense in the current year as a result of the Refiff nancing, the benefiff t frff om our interest rate capsa all outstanding 2022 Convertible Notes that occurred in May 2022. the year ended December 31, 2022, as compared with $151.3 million forff We expect our interest expense to flff uctuat partially offff sff et by the impact of our interest rate capsa fiff nancial statements forff additional inforff mation. te with changes in the variabla e rates associated with the Facilities, with increases . See Note 9, “Long-Term Debt and Other Liabia lities,” to our consolidated InII come TaxeTT s: the year ended December 31, 2022 was 12.9%, as compared with 611.0% forff The effff eff ctive income tax rate forff The income tax expense of $13.7 million forff by the partial release of the valuation allowance against our defeff rred income tax assets and the tax benefiff ts associated with stock- based compensation. The income tax benefiff t of $187.2 million forff the year ended December 31, 2021 was a result of a partial release of the valuation allowance related to our defeff rred income tax assets during the year. See Note 15, “Income Tax,” to our consolidated fiff nancial statements forff the year ended December 31, 2022 was primarily due to pre-tax income, partially offff sff et additional inforff mation. the prior year. We expect our income tax provision to increase in the long term as we continue to generate positive pre-tax income, which we expect to be at least partially offff sff et by reversals of our valuation allowance within the next twelve months. Disii contitt nii ued OpeOO ratitt ons: For the year ended December 31, 2021, the loss frff om discontinued operations of $3.9 million was primarily related to stock- based compensation expense, partially offff sff et by the recognition of a gain on sale of discontinued operations recorded as a defeff rred gain on sale at December 31, 2020. See Note 20, “Discontinued Operations,” to our consolidated fiff nancial statements forff additional inforff mation. Years Ended December 31, 2021 and 2020 “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K forff results of operations frff om fiff scal year 2020 to fiff scal year 2021. the year ended December 31, 2021, fiff led with the SEC on March 3, 2022, includes a discussion of changes in our Non-GAAP Measures In our discussion below, we discuss Adjusted EBITDA and Free Cash Flow, as defiff ned below, which are non-GAAP fiff nancial measurements. Management uses Adjusted EBITDA and Free Cash Flow forff business against internally projected results of operations and measuring our perforff mance and liquidity. These supplemental perforff mance measures also provide another basis forff non-operational and unusual or non-recurring items. These supplemental perforff mance measures may varyrr comparabla e to similarly titled measures used by other companies. Adjusted EBITDA and Free Cash Flow are not recognized measurements under GAAP; when analyzing our perforff mance with Adjusted EBITDA or liquidity with Free Cash Flow, as icabla e, investors should (i) evaluate each adjustment in our reconciliation to the corresponding GAAP measure, and the a appl explanatoryrr (loss) attributabla e to common stock as a measure of operating results and (iii) use Free Cash Flow in addition to, and not as an alternative to, consolidated net cash provided by operating activities when evaluating our liquidity. notes regarding those adjustments, (ii) use Adjusted EBITDA in addition to, and not as an alternative to, net income comparing period-to-period results by excluding potential diffff eff rences caused by es, including managing our business planning purpos frff om and may not be ff foot r 43 Defe iff nii itii itt on and Reconcilii ill atitt on of NonNN -GAGG AP MeMM asures EBITDA represents net income (loss) attributabla e to common stock beforff e interest expense, interest income, income taxes and depreciation and amortization expense. Adjusted EBITDA represents EBITDA adjusted forff j (i) stock-based compensation expense included in the results of continuing operations, (ii) the results of discontinued operations, including stock-based compensation expense and the gain on the sale of CA, (iii) loss on extinguishment of debt and settlement of convertible notes and (iv) separation costs related to the sale of CA. Our management believes that the use of Adjusted EBITDA eliminates items that management believes have less bearing on our operating perforff mance, thereby highlighting trends in our core business which may not otherwise be appa expenses, which are indicators management uses to determine whether current spending decisions need to be adjusted in order to meet fiff nancial goals and achieve optimal fiff nancial perforff mance. rent. It also provides an assessment of controllabla e a We believe that the exclusion of stock-based compensation expense frff om Adjusted EBITDA is appr a opriate given the signififf cant variation in expense that can result frff om using the Black-Scholes model to determine the faff ir value of such compensation. The faff ir value of our stock options is determined using the Black-Scholes model and varies based on flff uctuat tions in the assumptions used in this model, including inputs that are not necessarily directly related to the perforff mance of our business, such as the expected volatility, the risk-frff ee interest rate and the expected term of the options. Thereforff e, we believe that the exclusion of this cost provides a clearer view of the operating perforff mance of our business. Further, stock option grants made at a certain price and point in time do not necessarily reflff ect how our business is perforff ming at any particular time. While we believe that investors should have inforff mation a about abia lity to consider our perforff mance using a non-GAAP fiff nancial measure that excludes these costs and that management uses to evaluate our business. any dilutive effff eff ct of outstanding options and the cost of that compensation, we also believe that stockholders should have the We believe it is usefulff forff an understanding of our operating perforff mance to exclude the results of our discontinued operations frff om Adjusted EBITDA because they are not part of our ongoing operations. We believe it is usefulff forff an understanding of our operating perforff mance to exclude the loss on extinguishment of debt and settlement of convertible notes frff om Adjusted EBITDA because this activity is not related to our operating perforff mance. We believe it is usefulff frff om Adjusted EBITDA forff an understanding of our operating perforff mance to exclude separation costs related to the sale of CA forff the year ended December 31, 2021 because of the non-recurring naturt e of this activity. We also present Adjusted EBITDA as a supplemental perforff mance measure because we believe that this measure provides investors, securities analysts and other users of our consolidated fiff nancial statements with important supplemental inforff mation with which to evaluate our perforff mance and to enabla e them to assess our perforff mance on the same basis as management. Free Cash Flow represents net cash provided by operating activities, plus the proceeds frff om our interest rate capsa , less purchases of property and equipment and the acquisition of intangible assets and cash paid to purchase our interest rate capsa inforff mation regarding our liquidity. Free Cash Flow provides meaningfulff . We believe that To conforff m to current year presentation, we included the cash paid forff the year an understanding of our liquidity to include the cash flff ows associated with in Free Cash Flow forff our interest rate capsa forff to faff cilitate a more consistent comparison of net cash paid forff interest and the interest rate changes forff which we are ended December 31, 2021. We believe it is usefulff interest rate capsa hedged. 44 Gogo Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (i(( n thousands, exee cepte per share amountstt )s ted) (( (unaudi Adjd usted EBITDA: Net income (loss) attributabla e to common stock (GAAP) Interest expense Interest income Income tax provision (benefiff t) Depreciation and amortization EBITDA Stock-based compensation expense Loss frff om discontinued operations Loss on extinguishment of debt and settlement of convertible notes Separation costs related to CA sale Adjusted EBITDA Free Cash Flow: Net cash provided by operating activities (GAAP) Consolidated capia tal expenditurt es Proceeds frff om (purchase of)ff interest rate capsa Free cash flff ow MatMM ett rial lill mii itii attt itt ons of NonNN -GAGG AP measures For the Years Ended December 31, 2021 2020 2022 92,059 38,872 (2,386) 13,658 12,580 154,783 19,065 — — — 173,848 103,405 (49,914) 4,292 57,783 $ $ $ $ 152,735 67,472 (191) (187,230) 15,482 48,268 13,345 3,854 83,961 1,550 150,978 66,697 (8,660) (8,629) 49,408 $ $ $ $ (250,036) 125,787 (722) (146) 14,166 (110,951) 7,808 201,477 — — 98,334 4,513 (8,990) — (4,477) $ $ $ $ Although EBITDA, Adjusted EBITDA and Free Cash Flow are measurements frff equently used by investors and securities analysts in their evaluations of companies, EBITDA, Adjusted EBITDA and Free Cash Flow each have limitations as an analytical tool, and you should not consider them in isolation or as a substitutt e forff with GAAP. than, amounts determined in accordance , or more meaningfulff Some of these limitations include: • • • • • • • • • EBITDA and Adjusted EBITDA do not reflff ect interest income or expense; EBITDA and Adjusted EBITDA do not reflff ect cash requirements forff our income taxes; EBITDA and Adjusted EBITDA do not reflff ect depreciation and amortization, which are signififf cant and unavoidabla e operating costs given the level of capia tal expenditurt es needed to maintain our business; Adjusted EBITDA does not reflff ect non-cash components of employee compensation; Adjusted EBITDA does not reflff ect the results of discontinued operations; Adjusted EBITDA forff the year ended December 31, 2021 does not reflff ect the separation costs related to the sale of CA; Adjusted EBITDA does not reflff ect the loss on extinguishment of debt and settlement of convertible notes; Free Cash Flow does not represent the total increase or decrease in our cash balance forff the period; and since other companies in our industryrr or related industries may calculate these measures diffff eff rently frff om the way we do, their usefulff ness as comparative measures may be limited. Liquidity and Capital Resources We have historically fiff nanced our growth and cash needs primarily through the issuance of common stock, non-convertible debt, senior convertible prefeff rred stock, convertible debt, credit faff cilities and cash frff om operating activities. We continually evaluate city requirements, evolving user expectations regarding our ongoing capia tal needs in light of increasing demand forff the in-flff ight connectivity experience, evolving technologies in our industryrr and related strategic, operational and technological opportuni of the types of capia tal raising transactions through which we have historically fiff nanced our growth and cash needs, as well as other means of capia tal raising not previously used by us. ties to raise additional capia tal in the public and private markets, utilizing one or more ties. If needed, we consider opportuni our services, capaa t t 45 See the disclosure below under the heading “Debt Instrumrr ents” forff the defiff nitions of the debt and convertible debt instrumr ents to which we refeff r in this section, as well as the indenturt es and other agreements that govern them. Based on our current plans, we expect that our cash and cash equivalents, cash flff ows provided by operating activities and access to capia tal markets will be suffff iff cient to meet the cash requirements of our business, including capia tal expenditurt e requirements and debt maturt at least the next twelve months and thereaftff er forff the forff eseeabla e futff urt e. ities, forff As detailed in Note 9, “Long-Term Debt and Other Liabia lities,” on April 30, 2021, GIH entered into the 2021 Credit Agreement with Gogo, the lenders and issuing banks party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, which provides forff the Term Loan Facility in an aggregate principal amount of $725.0 million, issued with a discount of 0.5%, and the Revolving Facility, which includes a letter of credit sub-faff cility. On Februarr ryrr 2, 2023, Gogo and GIH entered into an amendment to the Original 2021 Credit Agreement with Morgan Stanley Senior Funding, Inc., as administrative agent, which replaced all refeff rences in the Original 2021 Credit Agreement to LIBOR in respect of the appl Alternative Refeff rence Rates Committee recommended spread adjustment. the Facilities with an adjusted term SOFR rate, plus a credit spread adjustment based on the icabla e interest rates forff a The Term Loan Facility amortizes in nominal quarterly installments equal to 1% of the aggregate initial principal amount thereof per annum, with the remaining balance payabla e upon fiff nal maturt under the Revolving Facility, and all borrowings under the Revolving Facility maturt e on April 30, 2026. ity on April 30, 2028. There are no amortization payments The 2021 Credit Agreement contains covenants that limit the abia lity of GIH and its subsidiaries to incur additional indebtedness. Further, market conditions and/or our fiff nancial perforff mance may limit our access to additional sources of equity or debt fiff nancing, or our abia lity to pursue potential strategic alternatives. As a result, we may be unabla e to fiff nance the growth of our business to the extent that our cash, cash equivalents and short-term investments and cash generated through operating activities prove insuffff iff cient or we are unabla e to raise additional fiff nancing through the issuance of equity, permitted incurrences of debt (by us or by GIH and its subsidiaries), or the pursuit of potential strategic alternatives. The proceeds of the Term Loan Facility were used, together with cash on hand, (i) to redeem in fulff l and pay the outstanding principal amount of the 2024 Senior Secured Notes together with accruer d and unpaid interest and redemption premiums and to pay feff es associated with the termination of the ABL Credit Agreement (together with the redemption of the 2024 Senior Secured Notes, the “Refiff nancing”), and (ii) to pay feff es and expenses incurred in connection with the Refiff nancing and the Facilities (the “Transaction Costs”). The Revolving Facility is availabla e forff working capia tal and general corpor es of Gogo and its subsidiaries and was undrawn as of December 31, 2022. ate purpos r rr In May 2022, the remaining $102.8 million aggregate principal amount of the 2022 Convertible Notes was converted by holders into 17,131,332 shares of common stock. In May 2021, we purchased interest rate capsa with an aggregate notional amount of $650.0 million forff forff $8.6 million. We receive any period in which the three-month USD LIBOR rate increases beyond payments in the amounts calculated pursuant to the capsa icabla e strike rate. The termination date of the capa agreements is July 31, 2027. The notional amounts of the interest rate capsa a the appl periodically decrease over the lifeff of the capsa with the fiff rst reduction of $125 million occurring on July 31, 2023. While the interest rate capsa variabla e rate indebtedness does not decrease in proportion to the periodic decreases in the notional amount hedged under the interest rate capsa In addition, the strike prices periodically increase over the lifeff of the capsa limit our interest rate exposure will decrease in the futff urt e. are intended to limit our interest rate exposure under our variabla e rate indebtedness, which includes the Facilities, if our , then the portion of such indebtedness that will be effff eff ctively hedged against possible increases in interest rates will decrease. . As a result, the extent to which the interest rate capsa will For additional inforff mation on the interest rate capsa , see Note 10, “Derivative Instrumrr ents and Hedging Activities,” to our consolidated fiff nancial statements. 46 Contractual Obligations and Commitments The folff lowing tabla e summarizes our contractuat l obligations, comprised of our material futff urt e cash requirements and defeff rred revenue arrangements, as of December 31, 2022 (i(( n thousands)s . i ConCC trtt actual Oblill gat itt ons: Finance lease obligations Operating lease obligations Purchase obligations (1) Term Loan Facility (2) Interest and feff es on the Facilities (2)(3) Defeff rred revenue arrangements (4) Other long-term obligations (5) Total Total Less than 1 year 1-3 years 3-5 years More than 5 years $ 147 113,682 369,180 714,125 309,035 3,430 41,405 $ 1,551,004 $ $ 141 14,499 123,731 7,250 59,240 3,418 9,146 217,425 $ $ 4 29,314 64,909 14,500 116,839 12 4,723 230,301 $ $ 2 27,239 10,500 14,500 114,278 — 1,865 168,384 $ $ — 42,630 170,040 677,875 18,678 — 25,671 934,894 (1) As of December 31, 2022, our outstanding purchase obligations represented obligations to vendors incurred in order to meet operational requirements in the normal course of business, including the build out of Gogo 5G, Global Broadband, inforff mation technology, research and development, sales and marketing, general and administrative and production related activities. (2) See Note 9, “Long-Term Debt and Other Liabia lities,” to our consolidated fiff nancial statements forff more inforff mation. (3) Interest on the Term Loan Facility is calculated forff (4) Amounts represent obligations to provide services forff which we have already received cash frff om our customers. (5) Other long-term obligations consist of estimated payments (undiscounted) forff futff urt e periods using the interest rate in effff eff ct as of December 31, 2022. our asset retirement obligations, network transmission services and monthly payments of C$0.1 million (using the December 31, 2022 exchange rate) to the licensor of our Canadian ATG spectrumr tax liabia lity payments due to the uncertainty of their timing. license over the estimated 25-year term of the agreement. Other long-term obligations exclude ContCC ractual ComCC mitmtt entstt : We have agreements with various vendors under which we have remaining commitments to purchase hardware components and development services. Such commitments will become payabla e as we receive the hardware components or as development services are provided. See Note 17, “Commitments and Contingencies,” to our consolidated fiff nancial statements forff additional inforff mation. Leases and CeCC ll Site ContCC ractstt : We have lease agreements relating to certain faff cilities and equipment, which are considered operating leases. See Note 16, “Leases,” to our consolidated fiff nancial statements forff additional inforff mation. II Inde mnifi iff cations and Guarantees: In accordance with Delaware law, we indemnifyff our offff iff cers and directors forff certain events or occurrences while the offff iff cer or director is, or was, serving at our request in such capaa futff urt e payments we could be required to make under this indemnififf cation is uncertain and may be unlimited, depending upon circumstances. However, our Directors’ and Offff iff cers’ insurance does provide coverage forff city. The maximum potential amount of certain of these losses. In the ordinaryrr course of business, we may occasionally enter into agreements pursuant to which we may be obligated to pay forff ate credit cards issued to employees. Based on historical experience, we the faff ilure of perforff mance of others, such as the use of corpor believe that the risk of sustaining any material loss related to such guarantees is remote. r We have entered into a number of agreements pursuant to which we indemnifyff or incurred in connection with any patent, copyright, or trademark infrff ingement or misappr opriation claim asserted by a third party with respect to our equipment or services. The maximum potential amount of futff urt e payments we could be required to make under these indemnififf cation agreements is uncertain and is typically not limited by the terms of the agreements. the other party forff a losses and expenses suffff eff red 47 Cash Flows The folff lowing tabla e presents a summaryrr of our cash flff ow activity forff the periods set forff th below (i(( n thousands)s : Cash flff ows frff om continuing operations: Net cash provided by operating activities Net cash used in investing activities Net cash provided by (used in) fiff nancing activities Net cash provided by (used in) discontinued operations Effff eff ct of forff eign exchange rate changes on cash Increase (decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash at beginning of period Cash, cash equivalents and restricted cash at end of period Supplemental inforff mation: Cash, cash equivalents and restricted cash at end of period Less: current restricted cash Less: non-current restricted cash Cash and cash equivalents at end of period For the Years Ended December 31, 2021 2020 2022 $ $ $ $ 103,405 (70,418) (28,388) — 13 4,612 146,268 150,880 150,880 — 330 150,550 $ $ $ $ 66,697 (16,289) (331,037) (9,013) 40 (289,602) 435,870 146,268 146,268 25 330 145,913 $ $ $ $ 4,513 (8,990) 44,479 220,139 (1,946) 258,195 177,675 435,870 435,870 525 — 435,345 Following is a discussion of the year-over-year changes in cash flff ow activities. NeNN t cash provided by operatitt nii g actitt vitii itt es frff om contitt nii uinii g operatitt ons: The folff th below (i(( n thousands)s : set forff lowing tabla e presents a summaryrr of our cash flff ows frff om operating activities frff om continuing operations forff the periods Net income (loss) Non-cash charges and credits Changes in operating assets and liabia lities Net cash provided by operating activities frff om continuing operations For the Years Ended December 31, 2021 2020 2022 $ $ 92,059 51,110 (39,764) 103,405 $ $ 156,589 (69,027) (20,865) 66,697 $ $ (48,559) 42,677 10,395 4,513 For the year ended December 31, 2022, cash provided by operating activities frff om continuing operations was $103.4 million, as compared with cash provided by operating activities frff om continuing operations of $66.7 million forff contributors to the increase in operating cash flff ows were: the prior year. The principal • • A $55.6 million improvement in net income and non-cash charges and credits, as noted above Operations.” a under “—Results of An $18.9 million decrease in cash flff ows related to operating assets and liabia lities resulting frff om: o A decrease in cash flff ows primarily due to the folff lowing: ▪ ▪ ▪ Changes in accounts receivabla e due to higher revenue; Changes in inventories due to additional purchases to meet increased demand and manage supply chain r disrupt ions; and Changes in accounts payaba le and non-current assets and liabia lities primarily due to the timing of payments. o Partially offff sff et by an increase in cash flff ows due to the folff lowing: ▪ ▪ Changes in accruer d interest primarily due to the timing of interest payments as compared with the prior year and lower interest expense resulting frff om the Refiff nancing; and Changes in contract assets and defeff rred revenue due to the timing of revenue recognition and payment or collection of cash. For the year ended December 31, 2021, cash provided by operating activities frff om continuing operations was $66.7 million, as compared with cash provided by operating activities frff om continuing operations of $4.5 million forff contributors to the increase in operating cash flff ows were: the prior year. The principal • A $93.4 million improvement in net income (loss) and non-cash charges and credits, as noted above Operations.” a under “—Results of 48 • A $31.3 million decrease in cash flff ows related to operating assets and liabia lities resulting frff om: o A decrease in cash flff ows primarily due to the folff lowing: ▪ ▪ ▪ Changes in inventories due to increased equipment purchases; Changes in accruerr d interest primarily due to the timing of payments as compared to the prior year and the reduced interest resulting frff om the Refiff nancing; and Changes in prepaid expenses, accounts payabla e and accruer d liabia lities due primarily to the timing of payments. o Partially offff sff et by an increase in cash flff ows due to changes in contract assets as compared to the prior year. Cash paid forff taxes totaled $0.4 million forff each of the years ended December 31, 2022, 2021 and 2020. We expect cash tax payments to be immaterial foff r an extended period of time, subject to the availabia lity of our net operating losses. NeNN t cash used inii inii vestitt nii g actitt vitii itt es frff om contitt nii uinii g operatitt ons: Cash used in investing activities frff om continuing operations was $70.4 million, $16.3 million and $9.0 million, respectively, forff the years ended December 31, 2022, 2021 and 2020. Investing activities are primarily comprised of capia tal expenditurt es related to softff ware development, data center upgrades and cell site construcr 31, 2022 included proceeds of $4.3 million frff om interest rate capsa 31, 2021 included $8.6 million forff December 31, 2022 included the purchase of short-term investments forff tion. Cash used in investing activities forff , while cash used in investing activities forff . Additionally, cash used in investing activities forff the purchase of interest rate capsa $24.8 million. the year ended December the year ended December the year ended NeNN t cash provided by (u(( sed inii )n fiff nii ancinii g actitt vitii itt es frff om contitt nii uinii g operatitt ons: Cash used in fiff nancing activities frff om continuing operations forff the year ended December 31, 2022 was $28.4 million, primarily due to the repurchase of 1.5 million shares of common stock in a private transaction and principal repayments on the Term Loan Facility. See Note 3, “Earnings (Loss) Per Share,” to our consolidated fiff nancial statements forff repurchase of common stock. additional inforff mation on the Cash used in fiff nancing activities frff om continuing operations forff the year ended December 31, 2021 was $331.0 million, primarily due to the redemption of all of our outstanding 2024 Senior Secured Notes (including the make-whole premium payabla e under the indenturt e governing the 2024 Senior Secured Notes) forff a redemption price totaling $1,023.1 million and the payment of $20.3 million of defeff rred fiff nancing feff es associated with the issuance of the Facilities, offff sff et in part by $721.4 million of gross proceeds frff om the Term Loan Facility. Cash provided by fiff nancing activities frff om continuing operations forff the year ended December 31, 2020 was $44.5 million, primarily due to the $51.8 million of proceeds frff om the issuance of additional 2024 Senior Secured Notes, offff sff et by the repurchase of convertible notes, payments on fiff nance leases and stock-based compensation activity. NeNN t cash used inii disii contitt nii ued operatitt ons: Cash used in discontinued operations forff the year ended December 31, 2021 was $9.0 million, primarily due to $7.8 million used in investing activities forff million used in operating activities primarily to pay the employer portion of taxes related to the vesting of equity awards and the exercise of stock options. a payment to Intelsat in settlement of working capia tal adjustments relating to the Transaction and $1.2 CapiCC tii altt ExpeEE nditii ures Our business requires signififf cant capia tal expenditurt es, primarily forff technology development, equipment and capaa city continuing operations forff expansion. Capia tal spending forff ATG network and data centers. We capia talized softff ware development costs related to network technology solutions and new product/tt service offff eff rings. We also capia talized costs related to the build-out of our offff iff ce locations. For the year ended December 31, 2020, capia tal expenditurt es forff equipment related to the roll out and/or upgrade of service to our forff mer airline partners’ flff eets. our forff mer CA business, presented as discontinued operations, included the purchase of airbor the periods presented in this report is associated with the expansion of our ne r Capia tal expenditurt es forff continuing operations forff the years ended December 31, 2022, 2021 and 2020 were $49.9 million, $8.7 million and $9.0 million, respectively. The increase in capia tal expenditurt es in 2022 as compared to 2021 was primarily due to the build out of Gogo 5G, and the decrease in capia tal expenditurt es in 2021 as compared with 2020 was primarily due a decrease in capia talized softff ware, partially offff sff et by an increase in network-related equipment. We expect that our capia tal expenditurt es will decrease over time as we complete the Gogo 5G program. 49 Debt Instruments Following is a discussion of the debt instrumrr ents we had in place as of December 31, 2022 as well as those we utilized during the years ended December 31, 2022, 2021 and 2020. 2021 CrCC edit Agreement On April 30, 2021, Gogo Intermediate Holdings LLC (a wholly owned subsidiaryrr of Gogo Inc.) (“GIH”) entered into a credit agreement (the “Original 2021 Credit Agreement,” and, as it may be amended, supplemented or otherwise modififf ed frff om time to time, the “2021 Credit Agreement”) among Gogo, GIH, the lenders and issuing banks party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, which provides forff (i) a term loan credit faff cility (the “Term Loan Facility”) in an aggregate principal amount of $725.0 million, issued with a discount of 0.5%, and (ii) a revolving credit faff cility (the “Revolving Facility” and together with the Term Loan Facility, the “Facilities”) of up to $100.0 million, which includes a letter of credit sub-faff cility. On Februarr ryrr 2, 2023, Gogo and GIH entered into an amendment to the Original 2021 Credit Agreement with Morgan Stanley Senior Funding, Inc., as administrative agent, which replaced all refeff rences in the Original 2021 Credit Agreement to LIBOR in respect of the appl Alternative Refeff rence Rates Committee recommended spread adjustment. the Facilities with an adjusted term SOFR rate, plus a credit spread adjustment based on the icabla e interest rates forff a The Term Loan Facility amortizes in nominal quarterly installments equal to 1% of the aggregate initial principal amount thereof per annum, with the remaining balance payabla e upon fiff nal maturt under the Revolving Facility, and all borrowings under the Revolving Facility maturt e on April 30, 2026. ity on April 30, 2028. There are no amortization payments The Term Loan Facility bears annual interest at a flff oating rate measured by refeff rence to, at GIH’s option, either (i) an adjusted term SOFR rate (subject to a flff oor of 0.75%) plus an appl Alternative Refeff rence Rates Committee recommended spread adjustments or (ii) an alternate base rate plus an appl 2.75%. icabla e margin of 3.75% and a credit spread adjustment based on the a a icabla e margin of Loans outstanding under the Revolving Facility bear annual interest at a flff oating rate measured by refeff rence to, at GIH’s option, icabla e margin ranging frff om 3.25% to 3.75% per annum either (i) an adjusted term SOFR rate (subject to a flff oor of 0.00%) plus an appl depending on GIH’s senior secured fiff rst lien net leverage ratio and a credit spread adjustment based on the Alternative Refeff rence icabla e margin ranging frff om 2.25% to Rates Committee recommended spread adjustments or (ii) an alternate base rate plus an appl 2.75% per annum depending on GIH’s senior secured fiff rst lien net leverage ratio. Additionally, unused commitments under the Revolving Facility are subject to a feff e ranging frff om 0.25% to 0.50% per annum depending on GIH’s senior secured fiff rst lien net leverage ratio. As of December 31, 2022, the feff e forff unused commitments under the Revolving Facility was 0.25% and the appl margin was 3.25%. icabla e a a a The Facilities may be prepaid at GIH’s option at any time without premium or penalty (other than customaryrr breakage costs), subject to minimum principal payment amount requirements. Subject to certain exceptions and de minimis thresholds, the Term Loan Facility is subject to mandatoryrr prepayments in an amount equal to: (i) 100% of the net cash proceeds of certain asset sales, insurance recoveryrr and condemnation events, subject to reduction to 50% and 0% if specififf ed senior secured fiff rst lien net leverage ratio targets are met; (ii) 100% of the net cash proceeds of certain debt offff eff rings; and (iii) 50% of annual excess cash flff ow (as defiff ned in the 2021 Credit Agreement), subject to reduction to 25% and 0% if specififf ed senior secured fiff rst lien net leverage ratio targets are met. The Revolving Facility includes a fiff nancial covenant set at a maximum senior secured fiff rst lien net leverage ratio of 7.50:1.00, which will appl quarter exceeds 35% of the aggregate of all commitments thereunder. a y if the outstanding amount of loans and unreimbursed letter of credit drawings thereunder at the end of any fiff scal The 2021 Credit Agreement contains customaryrr events of defaff ult, which, if any of them occurred, would permit or require the principal, premium, if any, and interest on all of the then outstanding obligations under the Facilities to be due and payabla e immediately and the commitments under the Revolving Facility to be terminated. 2022 ConvCC ertible NotNN es In November and December 2018, we issued a total of $237.8 million aggregate principal amount of 6.00% Convertible Senior ional buyers, including pursuant to RulRR e 144A Notes due 2022 (the “2022 Convertible Notes”) in private offff eff rings to qualififf ed institutt under the Securities Act, and in concurrent private placements. In Januaryrr 2021, $1.0 million aggregate principal amount of 2022 Convertible Notes was converted by holders and settled through the issuance of 166,666 shares of common stock. On March 17, 2021, Gogo entered into separate, privately negotiated exchange agreements (the “March 2021 Exchange Agreements”) with certain holders of 2022 Convertible Notes. Pursuant to the March 2021 Exchange Agreements, such holders exchanged a total of $28,235,000 aggregate principal amount of 2022 Convertible Notes forff March 24, 2021. The negotiated exchange rate under the March 2021 Exchange Agreements was 181.40 shares of common stock per 5,121,811 shares of our common stock on 50 $1,000 principal amount of the 2022 Convertible Notes, which resulted in a loss on settlement of $4.4 million, which is included in Loss on extinguishment of debt and settlement of convertible notes in our consolidated statements of operations forff the year ended December 31, 2021. On April 1, 2021, Gogo entered into a privately negotiated exchange agreement (the “GTCR Exchange Agreement”) with an ff managed by GTCR. Pursuant to the GTCR Exchange Agreement, GTCR exchanged $105,726,000 aggregate affff iff liate of funds principal amount of 2022 Convertible Notes forff rate under the GTCR Exchange Agreement was 180.32 shares of common stock per $1,000 principal amount of 2022 Convertible Notes, which resulted in a loss on settlement of $14.6 million, which is included in Loss on extinguishment of debt and settlement of convertible notes in our consolidated statements of operations forff 19,064,529 shares of our common stock on April 9, 2021. The negotiated exchange the year ended December 31, 2021. In May 2022, the remaining $102,788,000 aggregate principal amount of 2022 Convertible Notes was converted by holders into 17,131,332 shares of common stock. As of December 31, 2022, there were no outstanding 2022 Convertible Notes. 2024 Senior Secured NotNN es On April 25, 2019 (the “Issue Date”), GIH and Gogo Finance Co. Inc. (a wholly owned subsidiaryrr of GIH) (“Gogo Finance” and, together with GIH, the “Issuers”) issued $905.0 million aggregate principal amount of 9.875% senior secured notes due 2024 (the “2024 Senior Secured Notes”), at a price equal to 99.512% of their faff ce value, under an indenturt e, dated as of April 25, 2019, among the Issuers, Gogo, the subsidiaryrr guarantors party thereto and U.S. Bank National Association, as trusr tee. The Issuers issued an additional $20.0 million of 2024 Senior Secured Notes on May 7, 2019, which were issued at a price equal to 100.5% of their faff ce value, and $50.0 million of 2024 Senior Secured Notes on November 13, 2020, which were issued at a price equal to 103.5% of their faff ce value. The 2024 Senior Secured Notes were guaranteed on a senior secured basis by Gogo and all of GIH’s existing and futff urt e restricted subsidiaries (other than Gogo Finance), subject to certain exceptions. The 2024 Senior Secured Notes and the related guarantees were secured by certain liens on the Company’s collateral, certain of which were released upon the closing of the Transaction and the remainder on the Redemption Date as defiff ned below. The 2024 Senior Secured Notes were redeemed on May 1, 2021 (the “Redemption Date”) at a redemption price equal to 104.938% of the principal amount of the 2024 Senior Secured Notes redeemed, plus accruer d and unpaid interest to (but not including) the Redemption Date. The make-whole premium paid in connection with the redemption was $48.1 million and we wrote offff the remaining unamortized defeff rred fiff nancing costs of $15.2 million and the remaining debt discount of $1.3 million, which together are included in Loss on extinguishment of debt and settlement of convertible notes in our consolidated statements of operations forff year ended December 31, 2021. the ABLBB CrCC edit FacFF ilitytt On August 26, 2019, Gogo Inc., GIH and Gogo Finance entered into a credit agreement (the “ABL Credit Agreement”) with the other loan parties party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Morgan Stanley Senior Funding, Inc., as syndication agent, which provides forff an asset-based revolving credit faff cility (the “ABL Credit Facility”) of up to $30.0 million, subject to borrowing base availabia lity, and includes letter of credit and swingline sub-faff cilities. The obligations under the ABL Credit Agreement were guaranteed by Gogo and all of its existing and futff urt e subsidiaries, subject to certain exceptions and secured by certain collateral of the Company. On April 30, 2021, the ABL Credit Agreement and all commitments thereunder were terminated. As a result of the termination, the remaining unamortized defeff rred fiff nancing costs of $0.3 million were written offff as of May 1, 2021 and included in Loss on extinguishment of debt and settlement of convertible notes in our consolidated statements of operations forff the year ended December 31, 2021. 2020 ConvCC ertible NotNN es In March 2015, we issued $361.9 million aggregate principal amount of 3.75% Convertible Senior Notes due 2020 (the “2020 Convertible Notes”) in a private offff eff ring to qualififf ed institutt 2019, we repurchased a total of $359.4 million aggregate principal amount of the 2020 Convertible Notes, and on March 1, 2020, the remaining $2.5 million aggregate principal amount of the 2020 Convertible Notes maturt ed. ional buyers, pursuant to RulRR e 144A under the Securities Act. In 2018 and ForFF ward TrTT ansactions In connection with the issuance of the 2020 Convertible Notes, we paid appr a oximately $140.0 million to enter into prepaid forff ward stock repurchase transactions (the “Forward Transactions”) with certain fiff nancial institutt pursuant to which we purchased appr maturt Forward Transactions early. the 2020 Convertible Notes, subject to the abia lity of each Forward Counterparr oximately 7.2 million shares of common stock forff ity date forff a ions (the “Forward Counterpar rties”), settlement on or around the March 1, 2020 rty to elect to settle all or a portion of its 51 On December 11, 2019, we entered into an amendment to one of the Forward Transactions (the “Amended and Restated Forward Transaction”) to extend the expected settlement date with respect to appr by one of the Forward Counterprr arties, JPMorgan Chase Bank, National Association (the “2022 Forward Counterpar correspond with the May 15, 2022 maturt shareholders’ equity within our consolidated balance sheets was reduced by appr appr a a appr Transaction. In May 2022, the appr Transactions were delivered to us. As of December 31, 2022, there were no prepaid forff ward stock repurchase transactions outstanding. oximately 5.1 million shares of common stock were delivered to us in connection with the Forward Transactions. In April 2021, oximately 1.5 million shares of common stock were delivered to us in connection with the Amended and Restated Forward oximately 0.6 million shares that were remaining under the Amended and Restated Forward the 2022 Convertible Notes. As a result of the Forward Transactions, total oximately 2.1 million shares of common stock held oximately $140.0 million. In March 2020, ity date forff rty”), to a a a Restricted CasCC h Our restricted cash balances were $0.3 million and $0.4 million, respectively, as of December 31, 2022 and 2021, and consisted primarily of a letter of credit issued forff the benefiff t of the landlord of our offff iff ce location in Chicago, IL. For additional inforff mation on the 2021 Credit Agreement, the 2022 Convertible Notes, the 2024 Senior Secured Notes, the ABL Credit Facility and the 2020 Convertible Notes, see Note 9, “Long-Term Debt and Other Liabia lities,” to our consolidated fiff nancial statements. Item 7A. Quantitative and Qualitative Disclosures About Market Risk ents forff ff the purprr ose of fundi Our exposure to market risk is currently confiff ned to our cash and cash equivalents, short-term investments and debt. We have r speculation or trading purpos ng operations while maximizing the income we receive frff om our investments without not used derivative fiff nancial instrumr preserve our capia tal forff signififf cantly increasing risk. To achieve these objectives, our investment policy allows us to maintain a portfolff and short-term investments through a variety of securities, including U.S. Treasuryrr securities, U.S. government agency securities, and money market funds amounts in bank deposit accounts and money market funds included U.S. Treasuryrr securities. We believe that a change in average interest rates would not affff eff ct our interest income and results of operations by a material amount. However, a change in interest rates could impact our interest income and results of operations to the extent that we invest in a material amount of interest-bearing securities. . Our cash and cash equivalents as of both December 31, 2022 and December 31, 2021 primarily included . As of December 31, 2022, cash equivalents and short-term investments es. The primaryrr objectives of our investment activities are to io of cash equivalents ff ff The risk inherent in our market risk sensitive instrumr ents and positions is the potential loss arising frff om interest rates as discussed below. The sensitivity analyses presented do not consider the effff eff cts that such adverse changes may have on the overall economic activity, nor do they consider additional actions we may take to mitigate our exposure to such changes. Actuat diffff eff r. l results may IntII erest Rate Risii k: We are exposed to interest rate risk on our variabla e rate indebtedness, which includes borrowings under the Term Loan Facility and Revolving Facility (if any). We assess our market risks based on changes in interest rates utilizing a sensitivity analysis that measures the potential impact on earnings and cash flff ows based on a hypothetical one percentage point change in interest rates. As of December 31, 2022, we had interest rate capa agreements to hedge a portion of our exposure to interest rate movements of our variabla e rate debt and to manage our interest expense. Currently, we receive payments in the amounts calculated pursuant to the capsa capa agreements is July 31, 2027. Over the lifeff of the interest rate capsa a the appl any period in which the three-month USD LIBOR rate increases beyond the appl a , the notional amounts of the capsa icabla e strike rate. The termination date of the icabla e strike prices increase. periodically decrease, while forff The notional amount of outstanding debt associated with interest rate capa agreements as of December 31, 2022 was $650.0 icabla e interest rate would impact our annual interest expense by appr million. Based on our December 31, 2022 outstanding variabla e rate debt balance, a hypothetical one percentage point change in the appl the next twelve-month period, a which includes the impact of our interest rate capsa will occur on July 31, 2023. Excluding the impact of our interest rate capsa icabla e interest rate would impact our annual interest expense by appr a appl , a hypothetical one percentage point change in the oximately $7.1 million forff at a strike rate of 0.75% and the $125 million reduction in the notional amount that the next twelve-month period. oximately $1.2 million forff a a Our earnings are affff eff cted by changes in interest rates due to the impact those changes have on interest income generated frff om our cash, cash equivalents and short-term investments. Our cash and cash equivalents and short-term investments as of December 31, 2022 included amounts in bank deposit accounts, money market funds accounts as of December 31, 2021 included amounts in bank deposit accounts and money market funds interest rate risk as a 10% decrease in the average interest rate on our portfolff December 31, 2022, 2021 and 2020 by immaterial amounts. ff io would have reduced interest income forff . We believe we have minimal the years ended and U.S. Treasuryrr securities. Our cash and cash equivalent ff 52 InfII lff ation: We do not believe that inflff ation has had a material effff eff ct on our results of operations. However, there can be no assurance that our business will not be affff eff cted by inflff ation in the futff urt e. 53 Item 8. Financial Statements and Supplementary Data Gogo Inc. Index to Consolidated Financial Statements Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm (PCAOB ID No. 34) Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Comprehensive Income (Loss) Consolidated Statements of Cash Flows Consolidated Statements of Stockholders’ Equity (Defiff cit) Notes to Consolidated Financial Statements Page No. 55 57 58 59 60 61 62 54 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Gogo Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Gogo Inc. and subsidiaries (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity (defiff cit), and cash flff ows, forff each of the three years in the period ended December 31, 2022, and the related notes (collectively refeff rred to as the "fiff nancial statements"). In our opinion, the fiff nancial statements present faff irly, in all material respects, the fiff nancial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flff ows forff each of the three years in the period ended December 31, 2022, in conforff mity with the accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over fiff nancial reporting as of December 31, 2022, based on criteria establa ished in IntII ernal ContCC rol — IntII egre ated FrFF ameworkrr (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated Februar ryrr 28, 2023, expressed an unqualififf ed opinion on the Company's internal control over fiff nancial reporting. (( Basis forff Opinion These fiff nancial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's fiff nancial statements based on our audits. We are a public accounting fiff rm registered with the PCAOB and are required to be icabla e rulrr es and regulations of independent with respect to the Company in accordance with the U.S. feff deral securities laws and the appl the Securities and Exchange Commission and the PCAOB. a a We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perforff m the audit to obtain reasonabla e assurance about whether the fiff nancial statements are frff ee of material misstatement, whether due to error or frff aud. Our audits included perforff ming procedures to assess the risks of material misstatement of the fiff nancial statements, whether due to error or frff aud, and perforff ming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the fiff nancial statements. Our audits also included evaluating the accounting principles used and signififf cant estimates made by management, as well as evaluating the overall presentation of the fiff nancial statements. We believe that our audits provide a reasonabla e basis forff our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising frff om the current-period audit of the fiff nancial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the fiff nancial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the fiff nancial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. InII come TaxeTT s — Realill zii abilii ill tii ytt of Defe eff rred TaxTT Assetstt — Refe eff r tott NotNN ett s 2 and 15 tott thtt e fiff nii ancial stattt ett mentstt The Company recognizes defeff rred income tax assets and liabia lities forff fiff nancial statement and tax basis of assets and liabia lities, appl diffff eff rences are expected to reverse. The Company regularly assesses the need forff assets to determine, based on the weight of the availabla e positive and negative evidence, whether it is more likely than not that some or all of such defeff rred assets will not be realized. The Company’s assessment considers recent fiff nancial operating results, the scheduled expiration of its net operating losses, potential sources of taxabla e income, the reversal of existing taxabla e diffff eff rences, ck years, if permitted under tax law, and tax planning strategies. Management has determined that it is taxabla e income in prior carryba more likely than not that suffff iff cient taxabla e income will be generated in the futff urt e to realize $162.7 million of its defeff rred income tax assets as of December 31, 2022. tax attributes and are based on the diffff eff rences between the the year in which the tax a valuation allowance related to defeff rred income tax ying enacted statutt oryrr tax rates in effff eff ct forff a rr We identififf ed management’s determination that it is more likely than not that suffff iff cient taxabla e income will be generated in the futff urt e to realize defeff rred income tax assets as a critical audit matter because of the signififf cant judgments management makes related to taxabla e income. This required a high degree of auditor judgment and an increased extent of effff orff income tax specialists, when perforff ming audit procedures to evaluate the reasonabla eness of management’s estimates of taxabla e income. t, including the need to involve our HowHH the CrCC itical Audit MatMM ter WasWW Addressed in the Audit Our audit procedures related to the determination that it is more likely than not that suffff iff cient taxabla e income will be generated in the futff urt e to realize defeff rred income tax assets included the folff income tax specialists: lowing, among others, which were perforff med with the assistance of our 55 • • • We tested the effff eff ctiveness of controls over defeff rred income tax assets, including management’s controls over the estimates of taxabla e income and the determination of whether it is more likely than not that the defeff rred income tax assets will be realized. We evaluated the reasonabla eness of the methods, assumptions, and judgments used by management to determine whether it was more likely than not that certain tax attributes and defeff rred income tax assets could be realized. We evaluated whether the sources of management’s estimated taxabla e income were of the appr suffff iff cient to utilize the defeff rred income tax assets under the relevant tax law. This included evaluating management’s assessment of the scheduling of the reversal of existing temporaryrr defeff rred income tax assets, and the availabia lity of tax planning strategies as a source of futff urt e taxabla e income. taxabla e diffff eff rences and carryfrr orff ward lives of the opriate character and a • • • • • We tested the reasonabla eness of management’s adjusted historical taxabla e income to project sources of futff urt e taxabla e income, and perforff med the folff lowing procedures related to historical taxabla e income: Compared the historical taxabla e income to the amounts disclosed in the Company’s historical fiff nancial statements. Evaluated the recurring permanent diffff eff rences included in the historical taxabla e income forff reasonabla eness. Tested the adjustments made to historical taxabla e income forff verififf abla e. nonrecurring items to assess if they were objectively Compared the historical taxabla e income to internal budgets and inforff mation communicated internally, to the Board of Directors and in Company press releases related to fiff scal year 2023 and forff ward. • We evaluated whether there was taxabla e income in prior carryba availabla e under the tax law. rr ck years that was of the appr a opriate character and /s/ Deloitte & Touche LLP Chicago, Illinois Februar ryrr 28, 2023 We have served as the Company’s auditor since 2007. 56 Gogo Inc. and Subsidiaries Consolidated Balance Sheets (i(( n thousands, exee cepte share and per share data) Assets Current assets: Cash and cash equivalents Short-term investments Total cash, cash-equivalents and short-term investments Accounts receivabla e, net of allowances of $1,778 and $894, respectively Inventories Prepaid expenses and other current assets Total current assets Non-current assets: Property and equipment, net Intangible assets, net Operating lease right-of-ff use assets Other non-current assets, net of allowances of $501 and $455, respectively Defeff rred income taxes Total non-current assets Total assets Liabilities and stockholders’ defiff cit Current liabilities: Accounts payabla e Accruerr d liabia lities Defeff rred revenue Current portion of long-term debt Total current liabilities Non-current liabilities: Long-term debt Non-current operating lease liabia lities Other non-current liabia lities Total non-current liabilities Total liabilities Commitments and contingencies (Note 17) Stockholders’ defiff cit Common stock, par value $0.0001 per share; 500,000,000 shares authorized at December 31, 2022 and 2021; 136,531,362 and 117,407,468 shares issued at December 31, 2022 and 2021, respectively; and 127,840,813 and 110,791,954 shares outstanding at December 31, 2022 and 2021, respectively Additional paid-in capia tal Accumulated other comprehensive income Treasuryrr stock, at cost Accumulated defiff cit Total stockholders’ defiff cit Total liabilities and stockholders’ defiff cit December 31, 2022 December 31, 2021 $ $ $ 150,550 24,796 175,346 54,210 49,493 45,100 324,149 104,595 49,509 75,261 43,355 162,657 435,377 759,526 13,646 60,056 3,418 7,250 84,370 690,173 79,241 7,611 777,025 861,395 145,913 — 145,913 37,730 33,976 32,295 249,914 63,672 49,554 70,989 28,425 185,133 397,773 647,687 17,203 59,868 1,825 109,620 188,516 694,760 77,329 7,236 779,325 967,841 14 1,385,933 30,128 (158,375) (1,359,569) (101,869) 759,526 $ 11 1,258,477 1,789 (128,803) (1,451,628) (320,154) 647,687 $ $ $ $ See the NotNN es to ConsCC olidated FiFF nancial Statementstt 57 Gogo Inc. and Subsidiaries Consolidated Statements of Operations per share amountstt )s (i(( n thousands, exee cepte Revenue: Service revenue Equipment revenue Total revenue Operating expenses: Cost of service revenue (exclusive of items shown below) Cost of equipment revenue (exclusive of items shown below) Engineering, design and development Sales and marketing General and administrative Depreciation and amortization Total operating expenses Operating income Other (income) expense: Interest income Interest expense Loss on extinguishment of debt and settlement of convertible notes Other (income) expense, net Total other expense Income (loss) frff om continuing operations beforff e income taxes Income tax provision (benefiff t) Net income (loss) frff om continuing operations Net loss frff om discontinued operations, net of tax Net income (loss) Net income (loss) attributable to common stock per share—basic: Continuing operations Discontinued operations Net income (loss) attributable to common stock per share—basic Net income (loss) attributable to common stock per share—diluted: Continuing operations Discontinued operations Net income (loss) attributable to common stock per share—diluted Weighted average number of shares Basic Diluted $ $ $ $ $ $ For the Years Ended December 31, 2021 2020 2022 296,329 107,738 404,067 64,427 71,473 29,587 25,471 58,203 12,580 261,741 142,326 (2,386) 38,872 — 123 36,609 105,717 13,658 92,059 — 92,059 0.75 — 0.75 0.71 — 0.71 $ $ $ $ $ $ 259,583 76,133 335,716 56,103 46,092 24,874 20,985 51,554 15,482 215,090 120,626 (191) 67,472 83,961 25 151,267 (30,641) (187,230) 156,589 (3,854) 152,735 1.50 (0.04) 1.46 1.28 — 1.28 $ $ $ $ $ $ 211,987 57,731 269,718 45,073 39,299 25,227 15,135 54,467 14,166 193,367 76,351 (722) 125,787 — (9) 125,056 (48,705) (146) (48,559) (201,477) (250,036) (0.59) (2.45) (3.04) (0.59) (2.45) (3.04) 123,268 133,923 103,400 127,205 82,266 82,266 See the NotNN es to ConsCC olidated FiFF nancial Statementstt 58 Gogo Inc. and Subsidiaries Consolidated Statements of Comprehensive Income (Loss) (i(( n thousands)s Net income (loss) Other comprehensive income (loss), net of tax Currency translation adjustments Cash flff ow hedges: Amount recognized in other comprehensive income (loss) Less: income (loss) realized and reclassififf ed to earnings Changes in faff ir value of cash flff ow hedges Other comprehensive income (loss), net of tax Comprehensive income (loss) For the Years Ended December 31, 2021 2022 92,059 $ 152,735 (265) $ 53 34,765 6,161 28,604 28,339 120,398 $ 2,747 (2) 2,749 2,802 155,537 $ $ $ 2020 (250,036) 1,243 — — — 1,243 (248,793) $ $ $ See the NotNN es to ConsCC olidated FiFF nancial Statementstt 59 Gogo Inc. and Subsidiaries Consolidated Statements of Cash Flows (i(( n thousands)s Operating activities frff om continuing operations: Net income (loss) Adjustments to reconcile net income (loss) to cash provided by operating activities: expected credit losses Depreciation and amortization Loss on asset disposals, abaa ndonments and write-downs Provision forff Defeff rred income taxes Stock-based compensation expense Amortization of defeff rred fiff nancing costs and interest rate capsa Accretion of debt discount Loss on extinguishment of debt and settlement of convertible notes Changes in operating assets and liabia lities: Accounts receivabla e Inventories Prepaid expenses and other current assets Contract assets Accounts payabla e Accruerr d liabia lities Defeff rred revenue Accruerr d interest Other non-current assets and liabia lities Net cash provided by operating activities frff om continuing operations Investing activities frff om continuing operations: Proceeds frff om sale of property and equipment Purchases of property and equipment Acquisition of intangible assets—capia talized softff ware Proceeds frff om (purchase of)ff interest rate capsa Purchases of short-term investments Net cash used in investing activities frff om continuing operations Financing activities frff om continuing operations: Proceeds frff om credit faff cility draw Repayments of amounts drawn frff om credit faff cility Repurchase of convertible notes Proceeds frff om issuance of senior secured notes Redemption of senior secured notes Proceeds frff om term loan, net of discount Payment of debt issuance costs Repurchases of common stock Payments on term loan Payments on fiff nance leases Stock-based compensation activity Net cash provided by (used in) fiff nancing activities frff om continuing operations Cash flff ows frff om discontinued operations: Net cash used in operating activities Net cash provided by (used in) investing activities Net cash used in fiff nancing activities Net cash provided by (used in) discontinued operations Effff eff ct of forff eign exchange rate changes on cash Increase (decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash at beginning of period Cash, cash equivalents and restricted cash at end of period Cash, cash equivalents and restricted cash at end of period Less: current restricted cash Less: non-current restricted cash Cash and cash equivalents at end of period Supplemental Cash Flow Inforff mation: Cash paid forff Cash paid forff Non-cash investing activities: interest taxes Purchases of property and equipment in current liabia lities For the Years Ended December 31, 2021 2020 2022 $ 92,059 $ 156,589 $ (48,559) 12,580 1,577 1,047 13,170 19,065 3,215 456 — (17,482) (15,517) 8,351 (2,164) (2,540) (12,031) 1,589 3,647 (3,617) 103,405 — (43,914) (6,000) 4,292 (24,796) (70,418) — — — — — — — (18,375) (7,250) (184) (2,579) (28,388) — — — — 13 4,612 146,268 150,880 150,880 — 330 150,550 41,209 377 10,688 $ $ $ $ $ 15,482 141 284 (187,320) 13,345 4,661 419 83,961 1,925 (5,862) (20,844) (5,638) 3,806 14,099 (1,282) (8,604) 1,535 66,697 1,000 (4,264) (4,396) (8,629) — (16,289) — — — — (1,023,146) 721,375 (21,103) — (3,625) (145) (4,393) (331,037) (1,211) (7,802) — (9,013) 40 (289,602) 435,870 146,268 146,268 25 330 145,913 71,114 376 6,126 $ $ $ $ $ 14,166 64 1,071 (232) 7,808 5,892 13,908 — 1,315 7,091 (277) (9,439) 4,963 4,470 898 787 587 4,513 — (1,818) (7,172) — — (8,990) 26,000 (26,000) (2,498) 51,750 — — — — — (546) (4,227) 44,479 (137,200) 357,393 (54) 220,139 (1,946) 258,195 177,675 435,870 435,870 525 — 435,345 106,051 401 84 $ $ $ $ $ See the NotNN es to ConsCC olidated FiFF nancial Statementstt 60 k c o t S y r u s a e r T d e t a l u m u c c A e v i s n e h e r p m o C d e t a l u m u c c A r e h t O s e i r a i d i s b u S d n a . c n I o g o G ) t i c i ff f e D ( y t i u q E ’ s r e d l o h k c o t S f o s t n e m e t a t S d e t a d i l o s n o C ) a t a d e r a h s t p e e c x ee e , s d n a s u o h t n i (( ( ) 0 9 8 , 8 9 3 ( ) 6 3 0 , 0 5 2 ( 2 6 2 3 4 2 , 1 8 5 4 , 4 1 — ) 0 7 4 , 5 ( — 4 8 9 ) 5 6 6 , 3 ( ) 4 1 1 , 1 4 6 ( 5 3 7 , 2 5 1 3 5 9 4 7 , 2 8 1 3 , 7 3 0 8 7 , 1 — ) 8 0 7 , 6 ( — 5 3 5 1 4 4 , 4 5 1 ) 3 4 9 , 1 2 ( ) 4 5 1 , 0 2 3 ( ) 5 6 2 ( 9 5 0 , 2 9 4 0 6 , 8 2 5 6 0 , 9 1 3 2 0 , 2 1 ) 7 5 2 , 8 ( — 2 4 6 8 8 7 , 2 0 1 ) 5 7 3 , 8 1 ( ) 9 6 8 , 1 0 1 ( — — — — — — — — — — — — — — — ) 7 5 8 , 8 9 ( ) 7 5 8 , 8 9 ( — 0 0 4 , 7 7 0 , 5 0 0 4 , 7 7 0 , 5 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — ) 6 4 9 , 9 2 ( ) 3 0 8 , 8 2 1 ( — 9 4 0 , 8 3 5 , 1 9 4 4 , 5 1 6 , 6 ) 7 9 1 , 1 1 ( ) 5 7 3 , 8 1 ( $ ) 5 7 3 , 8 5 1 ( $ 0 0 1 , 5 7 5 0 0 0 , 0 0 5 , 1 9 4 5 , 0 9 6 , 8 l a t o T t n u o m A s e r a h S ) 6 3 0 , 0 5 2 ( ) 2 4 1 , 6 7 3 , 1 ( t i c i ff f e D — — — — — — — ) 5 6 6 , 3 ( 5 3 7 , 2 5 1 ) 3 4 8 , 9 2 6 , 1 ( — — — — — — — — — 0 8 4 , 5 2 9 5 0 , 2 9 ) 8 2 6 , 1 5 4 , 1 ( — — — — — — — — — — — — — — — — — ) 3 1 0 , 1 ( — 3 5 9 4 7 , 2 — — — — — — — — — ) 5 6 2 ( 9 8 7 , 1 4 0 6 , 8 2 — — — — — — — — ) 6 5 2 , 2 ( — 3 4 2 , 1 ) s s o L ( e m o c n I — — 2 6 2 8 5 4 , 4 1 9 9 4 , 9 7 9 — ) 0 7 4 , 5 ( — — — 0 8 7 , 1 8 1 3 , 7 3 — ) 8 0 7 , 6 ( — 3 8 9 8 5 8 , 8 9 0 9 5 , 8 8 0 , 1 5 3 5 6 4 9 , 9 2 9 3 4 , 4 5 1 ) 3 2 4 , 7 4 ( 7 7 4 , 8 5 2 , 1 — — — 3 2 0 , 2 5 6 0 , 9 1 — ) 7 5 2 , 8 ( — 2 4 6 7 9 1 , 1 1 6 8 7 , 2 0 1 l a n o i t i d d A n I - d i a P l a t i p a C ) 9 6 5 , 9 5 3 , 1 ( $ 8 2 1 , 0 3 $ 3 3 9 , 5 8 3 , 1 $ k c o t S n o m m o C 9 — — — — — — 1 ) 1 ( — 9 — — — — — — — 2 — — — 1 1 — — — — — 1 — 2 — — — 4 1 e u l a V r a P — — — 4 0 1 , 7 8 7 7 8 , 0 4 2 , 8 8 s e r a h S — 9 0 7 , 6 7 3 , 2 — 9 0 2 , 3 6 3 ) 0 0 4 , 7 7 0 , 5 ( 9 9 4 , 0 9 9 , 5 8 — — — — 0 3 9 , 1 9 5 — 8 0 0 , 6 4 3 , 1 — 0 6 5 , 8 4 ) 9 4 0 , 8 3 5 , 1 ( 6 0 0 , 3 5 3 , 4 2 4 5 9 , 1 9 7 , 0 1 1 — — — — 1 8 6 , 8 5 7 — 7 5 4 , 1 8 1 , 1 9 8 4 , 2 5 ) 0 0 1 , 5 7 5 ( ) 0 0 0 , 0 0 5 , 1 ( 2 3 3 , 1 3 1 , 7 1 $ 3 1 8 , 0 4 8 , 7 2 1 k c o t s d e t c i r t s e r f o g n i t s e v n o p u k c o t s n o m m o c s n o i t p o k c o t s f o e s i c r e x e n o p u k c o t s n o m m o c f o f o e c n a u s s I e c n a u s s I s t i n u k c o t s d e t c i r t s e r f o g n i t s e v o t d e t a l e r g n i d l o h h t i w x a T e e y o l p m e h t i w n o i t c e n n o c n i k c o t s n o m m o c f o e c n a u s s I s d r a w a k c o t s d e t c i r t s e r d n a s t i n u s d r a d n a t s g n i t n u o c c a w e n f o n o i t p o d a e h t f o t c a p m I s e r a h s d r a w r o ff f d i a p e r p f o t n e m e l t t e S n a l p e s a h c r u p k c o t s x a t f o t e n , s t n e m t s u j d a n o i t a l s n a r t y c n e r r u C e s n e p x e n o i t a s n e p m o c d e s a b - k c o t S k c o t s d e t c i r t s e r f o g n i t s e v n o p u k c o t s n o m m o c s n o i t p o k c o t s f o e s i c r e x e n o p u k c o t s n o m m o c f o f o e c n a u s s I e c n a u s s I x a t f o t e n , e g d e h w o l ff f h s a c f o s t n e m t s u j d a e u l a v r i a F x a t f o t e n , s t n e m t s u j d a n o i t a l s n a r t y c n e r r u C e s n e p x e n o i t a s n e p m o c d e s a b - k c o t S s t i n u k c o t s d e t c i r t s e r f o g n i t s e v o t d e t a l e r g n i d l o h h t i w x a T e e y o l p m e h t i w n o i t c e n n o c n i k c o t s n o m m o c f o e c n a u s s I s d r a w a k c o t s d e t c i r t s e r d n a s t i n u 0 2 0 2 , 1 3 r e b m e c e D t a e c n a l a B e m o c n i t e N 0 2 0 2 , 1 y r a u n a J t a e c n a l a B s s o l t e N 6 0 - 0 2 0 2 U S A f o n o i t p o d a e h t f o t c a p m I s e r a h s d r a w r o ff f d i a p e r p f o t n e m e l t t e S s e t o n e l b i t r e v n o c f o t n e m e l t t e S n a l p e s a h c r u p k c o t s 1 2 0 2 , 1 3 r e b m e c e D t a e c n a l a B e m o c n i t e N k c o t s d e t c i r t s e r f o g n i t s e v n o p u k c o t s n o m m o c s n o i t p o k c o t s f o e s i c r e x e n o p u k c o t s n o m m o c f o f o e c n a u s s I e c n a u s s I x a t f o t e n , s e g d e h w o l ff f h s a c f o s t n e m t s u j d a e u l a v r i a F x a t f o t e n , s t n e m t s u j d a n o i t a l s n a r t y c n e r r u C e s n e p x e n o i t a s n e p m o c d e s a b - k c o t S s t i n u k c o t s d e t c i r t s e r f o g n i t s e v o t d e t a l e r g n i d l o h h t i w x a T e e y o l p m e h t i w n o i t c e n n o c n i k c o t s n o m m o c f o e c n a u s s I s t i n u s e r a h s d r a w r o ff f d i a p e r p f o t n e m e l t t e S s e t o n e l b i t r e v n o c f o t n e m e l t t e S n a l p e s a h c r u p k c o t s k c o t s n o m m o c f o e s a h c r u p e R 2 2 0 2 , 1 3 r e b m e c e D t a e c n a l a B s tt t n e m e t a t S l a i c n a n i FF F d e t a d i l o s n o CC C o t s e t o NN N e h t e e S 1 6 Gogo Inc. and Subsidiaries Notes to Consolidated Financial Statements 1. Background Gogo (“we”, “us,” or “our”) is the world’s largest provider of broadband connectivity services forff the business aviation market. the business aviation market regardless of technology, and we have a successfulff We have served this market forff more than 25 years. Our mission is to enrich the lives of passengers and the effff iff ciency of operators with the world’s best business aviation in-flff ight connectivity and customer support. We have always sought to provide the best connectivity forff we focff used primarily on business aviation aircraftff in North America, which comprise appr aviation flff eet, and we are the leading provider of in-flff ight connectivity in that market. Gogo started in analogue air-to-ground (“ATG”) a technology in the late 1990s, then, as analogue cellular backhaul disappe early 2000s, then back to ATG with our digital broadband 3G and 4G networks beginning in 2010. We expect to commercially launch our four th quarter of 2023. We also continue to provide narrowband satellite services to ff customers in North America and internationally through distribution agreements with satellite providers. In May 2022, in order to ther serve our existing customers and expand our target market, we announced plans to expand our broadband offff eff rings beyond furff ATG by launching the fiff rst global broadband service designed forff business aviation (“Global Broadband”). The service will use an electronically steered antenna, specififf cally designed to address a broad range of business aviation aircraftff , operating on a low earth orbir t (“LEO”) satellite network. The antenna will be designed with Hughes Network Systems, LLC (“Hughes”) and deployed on a LEO satellite network operated by Network Access Associates Limited (“OneWeb”). historyrr of doing so. Until recently, oximately 63% of the worldwide business ared, migrated to narrowband satellite connectivity in the th ATG network – Gogo 5G – in the four a ff On December 1, 2020, we completed the previously announced sale of our commercial aviation (“CA”) business to a subsidiaryrr of Intelsat Jackson Holdings S.A. (“Intelsat”) forff “Transaction”). a purchase price of $400.0 million in cash, subject to certain adjustments (the At the closing of the Transaction, the parties entered into certain ancillaryrr agreements, including a transition services agreement, an intellectuat l property license agreement and commercial agreements. The transition services agreement has been terminated. The commercial agreements include an ATG network sharing agreement with a 10-year term, pursuant to which we provide certain in- flff ight connectivity services on our current ATG network and, when availabla e, our Gogo 5G network, subject to certain revenue sharing obligations. Under the ATG network sharing agreement, Intelsat has exclusive access to the ATG network forff aviation in North America, subject to minimum revenue guarantees. commercial the years As a result of the Transaction, the CA business is reported in discontinued operations and fiff nancial statements forff ended December 31, 2021 and 2020 have been conforff med to present the CA business as a discontinued operation. There was no discontinued operations activity forff operations separately frff om continuing operations to distinguish the fiff nancial impact of disposal transactions frff om ongoing operations. Discontinued operations reporting occurs only when the disposal of a component or a group of components (i) meets the held-forff -sale classififf cation criteria or is disposed of by sale or other than by sale, and (ii) represents a strategic shiftff that will have a maja or effff eff ct on our operations and fiff nancial results. the CA business aftff er December 31, 2021. We report the fiff nancial results of discontinued Unless otherwise noted, discussion in these Notes to Consolidated Financial Statements refeff rs to our continuing operations. Refeff r to Note 20, “Discontinued Operations,” forff furff ther inforff mation. 2. Summary of Signififf cant Accounting Policies Principles of Consolidation – The consolidated financial statements include our wholly owned subsidiaries. All intercompany transactions and account balances have been eliminated. Prior to the closing of the Transaction, we historically reported our results of operations in three segments: Commercial Aviation-North America (“CA-NA”), Commercial Aviation-Rest of World (“CA-ROW”) and Business Aviation. We managed and reported these businesses separately, as they generally did not share the same customer base, had diffff eff rent products, pricing and expense strucrr operate in a single distinct business segment, Business Aviation, forff which operating perforff mance is measured and resources are allocated on a consolidated basis, consistent with the fiff nancial inforff mation regularly reviewed by the chief operating decision maker, our CEO. Thereforff e, we now report one business segment, comprised of our continuing operations. As we do not have multiple segments, we do not present segment inforff mation in this Annual Report on Form 10-K. turt es, and measured operating perforff mance and allocated resources on diffff eff rent bases. As a result of the Transaction, we Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates the significant estimates and bases 62 such estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances. However, actual results could differ materially from those estimates. Significant Risks and Uncertainties - Our operations are subject to certain risks and uncertainties, including without limitation those associated with fluctuations in operating results, implementation of our technology roadmap, strategic alliances, relationships with customers, suppliers and dealers, supply chain disruptions, funding of our growth, financing terms that may restrict operations, regulatory issues, competition, the economy, technology trends, evolving industry standards and other events that may impact the demand for air travel. Cash, Cash Equivalents and Short-Term Investments - We consider cash and cash equivalents to be short-term, highly liquid investments that have the following characteristics: readily convertible to known amounts of cash, so near their maturities that there is insignificant risk of changes in value due to any changes in market interest rates, and having maturities of three months or less when purchased. We continually monitor positions with, and the credit quality of, the financial institutions with which we invest. The carrying amounts reported in the balance sheets for cash and cash equivalents approximate the fair market value of these assets. We consider short-term investments to be investments with maturities of twelve months or less (but greater than three months). Restricted Cash - Certain cash amounts are restricted as to use and are classified outside of cash and cash equivalents. Cash amounts with restrictions of twelve months or less are included in Prepaid expenses and other current assets and amounts restricted for greater than twelve months are included in Other non-current assets in our consolidated balance sheets. ur restricted cash balances were $0.3 million and $0.4 million, respectively, as of December 31, 2022 and 2021, and consisted the benefiff t of the landlord of our offff iff ce location in Chicago, IL. primarily of a letter of credit issued forff Concentrations of Credit Risk - Financial instruments that potentially subject us to a concentration of credit risk consist principally of cash and cash equivalents. All cash and cash equivalents are invested with creditworthy financial institutions. Our revenue frff om customers domiciled outside of the United States accounted forff less than 10% of our total revenue forff years ended December 31, 2022, 2021 and 2020. Our long-lived assets outside of the United States were less than 10% of our consolidated long-lived assets as of December 31, 2022 and 2021. the Income Tax - We use an asset- and liability-based approach in accounting for income taxes. Deferred income tax assets and liabilities are recorded for tax attributes and are based on the differences between the financial statement and tax basis of assets and liabilities, applying enacted statutory tax rates in effect for the year in which the tax differences are expected to reverse. We regularly assess the need forff a valuation allowance related to our defeff rred income tax assets to determine, based on the weight of the availabla e positive and negative evidence, whether it is more likely than not that some or all of such defeff rred assets will not be realized. We also consider the existence of any uncertain tax positions and, as necessary, provide a reserve for any uncertain tax positions at each reporting date. See Note 15, “Income Tax,” for further details. Inventories - Inventories consist primarily of telecommunications systems and parts and are recorded at the lower of average cost or net realizable value. We evaluate the need for write-downs associated with obsolete, slow-moving and nonsalable inventory by reviewing net realizable inventory values on a periodic basis. See Note 5, “Inventories,” for further details. Property and Equipment and Depreciation - Property and equipment, including leasehold improvements, are stated at historical cost, less accumulated depreciation. Network asset inventory and construction in progress, which include materials, transmission and related equipment, interest and other costs relating to the construction and development of our network, are not depreciated until they are put into service. Network equipment consists of switching equipment, antennas, base transceiver stations, site preparation costs, and other related equipment used in the operation of our network. Depreciation expense totaled $7.9 million for each of the years ended December 31, 2022, 2021 and 2020. Depreciation of property and equipment is computed using the straight- line method over the estimated useful lives for owned assets, which are as follows: Offff iff ce equipment, furff niturt e, fiff xturt es and other Leasehold improvements Network equipment 3-5 years 7-13 years 5-25 years See Note 6, “Composition of Certain Balance Sheet Accounts,” for further details. Improvements to leased property are depreciated over the shorter of the useful life of the improvement or the term of the related lease. We reassess the useful lives of leasehold improvements when there are changes to the terms of the underlying lease. Such reassessment has resulted in the useful life of specific assets being adjusted to a shorter period than originally estimated, resulting in an increase in annual depreciation expense for those assets. Repairs and maintenance costs are expensed as incurred. 63 Software Development Costs - We capitalize costs for network and non-network software developed or obtained for internal use during the application development stage. These costs include purchased software and direct costs associated with the development and configuration of internal use software that supports the operation of our service offerings. These costs are included in Intangible assets, net, in our consolidated balance sheets and, when the software is placed in service, are amortized on a straight-line basis over their estimated useful lives. Costs incurred in the preliminary project and post-implementation stages, as well as maintenance and training costs, are expensed as incurred. With respect to software sold as part of our equipment sales, we capitalize software development costs once technological feasibility has been established. Such capitalized software costs are amortized on a product-by-product basis over the remaining estimated economic life of the product, based on the greater of the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product or the straight-line method. Intangible Assets - Intangible assets with indefinite lives are not amortized but are reviewed for impairment at least annually or whenever events or circumstances indicate the carrying value of the asset may not be recoverable. Our FCC Licenses, as defiff ned in Note 8, “Intangible Assets,” are our only material indefinite-lived intangible assets. We perform our annual impairment test of our FCC Licenses during the fourth quarter of each fiscal year. We assess qualitative faff ctors to determine the likelihood of impairment. Our qualitative analysis includes, but is not limited to, assessing the changes in macroeconomic conditions, regulatoryrr environment, industryrr and market conditions, fiff nancial perforff mance versus budget and any other events or circumstances specififf c to the FCC Licenses. If it is more likely than not that the faff ir value of the FCC Licenses is greater than the carryirr ng value, no furff required. If our qualitative analysis indicates more testing is required, or if we elect not to perforff m a qualitative analysis, we will appl the quantitative impairment test method. ther testing is a y Our quantitative impairment testing of the FCC Licenses uses the Greenfield method, an income-based approach. When performing this quantitative impairment testing, we estimate the value of our FCC spectrum licenses by calculating the present value of the cash flows of a hypothetical new market participant whose only assets are such licenses to determine the fair value of the FCC licenses. The estimate takes into account all costs and expenses necessary to build the Company’s infrastructure during the start-up period, projected revenue, and cash flows once the infrastructure is completed. Since there is limited corroborating data available in the marketplace that would demonstrate a market participant’s experience in establishing an “air-to-ground” business, we utilize our historic results and future projections as the underlying basis for the application of the Greenfield method. We follow the traditional discounted cash flow method, calculating the present value of a new market participant’s estimated debt free cash flows, based on our historical weighted average cost of capital, adjusted to reflect the cost of capital for a new market participant. Although we believe our projected future operating results and cash flows and related estimates regarding fair values are based on reasonable assumptions, projected operating results and cash flows may not always be achieved. The failure to achieve one or more of our assumptions regarding projected operating results and cash flows in the near term or long term could reduce the estimated fair value below carrying value and result in the recognition of an impairment charge. The results of our annual indefinite-lived intangible asset impairment assessments for 2022, 2021 and 2020 indicated no impairment. Intangible assets that are deemed to have a finite life are amortized over their useful lives as follows: Softff ware OEM and dealer relationships Service customer relationships Other intangible assets 3-8 years 10 years 5-7 years 8 years See Note 8, “Intangible Assets,” for further details. Long-Lived Assets - We review our long-lived assets to determine potential impairment whenever events indicate that the carrying amount of such assets may not be recoverable. We do this by comparing the carrying value of the long-lived assets with the estimated future undiscounted cash flows expected to result from the use of the assets, including cash flows from disposition. If we determine an impairment exists, the asset is written down to estimated fair value. There were no impairments of long-lived assets in 2022, 2021 or 2020. Revenue Recognition - Our revenue is primarily earned frff om providing connectivity and entertainment services and through sales of equipment. We account forff revenue in accordance with Accounting Standards Codififf cation Topic 606, Revenue frff om ContCC rt actstt with CusCC tomersrr (“ASC 606”). We determine revenue recognition through the folff lowing steps: • • • • Identififf cation of the contract, or contracts, with a customer; Identififf cation of the perforff mance obligations in the contract; Determination of the transaction price; Allocation of the transaction price to the perforff mance obligations in the contract; and 64 • Recognition of revenue as we satisfyff the perforff mance obligations. Service revenue primarily consists of monthly subscription and usage feff es paid by aircraftff owners and operators forff telecommunication, data, and in-flff ight entertainment services and is recognized as the services are provided to the customer. Equipment revenue primarily consists of proceeds frff om the sale of ATG and narrowband satellite connectivity equipment and is recognized when control of the equipment is transfeff rred to OEMs and dealers, which generally occurs when the equipment is shipped. In all cases, we evaluate whether a contract exists as it relates to collectabia lity of the contract. Once a contract is deemed to exist, we evaluate the transaction price and deliverabla es under the contract. A limited number of contracts contain multiple equipment and service deliverabla es. For these contracts, we account forff distinct good or service as a separate perforff mance obligation. We allocate the contract’s transaction price to each perforff mance obligation using the relative standalone selling price, which is based on the actuat to a similar class of customer. l selling price forff any good or service sold separately each See Note 4, “Revenue Recognition,” forff furff ther inforff mation. Research and Development Costs - Expenditures for research and development are charged to expense as incurred and totaled $29.6 million, $24.9 million and $25.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. Research and development costs are reported as engineering, design and development expenses in our consolidated statements of operations. Warranty - We provide warranties on parts and labor related to our products. Our warranty terms range from two to five years. Warranty reserves are established for costs that are estimated to be incurred after the sale, delivery and installation of the products under warranty. The warranty reserves are determined based on known product failures, historical experience and other available evidence, and are included in accrued liabilities in our consolidated balance sheets. See Note 7, “Composition of Certain Reserves and Allowances,” for the details of the changes in our warranty reserve. Asset Retirement Obligations - We have certain asset retirement obligations related to contractual commitments to remove our network equipment and other assets from leased cell sites upon termination of the site leases. The asset retirement obligations are classified as a noncurrent liability in our consolidated balance sheets. See Note 6, “Composition of Certain Balance Sheet Accounts,” for the details of the changes in our asset retirement obligations. Fair Value of Financial Instruments - We group financial assets and financial liabilities measured at fair value into three levels of hierarchy based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. See Note 13, “Fair Value of Financial Assets and Liabilities,” for further information. Derivatives - We are exposed to interest rate risk on our variabla e rate borrowings. We currently use interest rate capsa as cash flff ow hedges foff r accounting purpos our exposure to interest rate changes, and have designated these interest rate capsa account forff derivative instrumr faff ir value of our cash flff ow hedges to other comprehensive income (loss), net of tax, and subsequently reclassifyff earnings in the period during which the hedged transaction is recognized. in accordance with ASC 815, Derivatives and HeHH dging, which requires companies to recognize all ents as either assets or liabia lities at faff ir value in the balance sheet. We record the effff eff ctive portion of changes in the these interest rate capsa these amounts into to manage es. We r See Note 10, “Derivative Instrumr ents and Hedging Activities,” forff furff ther inforff mation. Earnings (Loss) Per Share - We calculate basic earnings (loss) per share using the weighted-average number of common shares outstanding during the period. We calculate diluted earnings (loss) per share using the weighted-average number of common shares outstanding and all dilutive potential common shares outstanding. See Note 3, “Earnings (Loss) Per Share,” for further information. Stock-Based Compensation Expense - Compensation cost is measured and recognized at fair value for all stock-based payments, including stock options. For time-based vesting stock options, we estimate fair value using the Black-Scholes option- pricing model, which requires assumptions, such as expected volatility, risk-free interest rate, expected life, and dividends. Forfeitures are recognized when they occur. Restricted stock units (“RSUs”) and restricted stock are measured based on the fair market value of the underlying stock on the date of grant. For awards with a market condition (which we have used on a limited basis), we estimate fair value using the Monte Carlo Simulation model, which requires assumptions, such as volatility, risk-free interest rate, expected life and dividends. Our stock-based compensation expense is recognized over the applicable vesting period and is included in the same operating expense line items in the consolidated statements of operations as the base cash compensation paid to the underlying employees. See Note 14, “Stock-Based Compensation and 401(k) Plan,” for further information. 65 Leases – We account for leases in accordance with Accounting Standards Codification Topic 842, Leases (“ASC 842”). We have operating lease agreements forff which we have recorded lease liabilities and right-of-use assets for leases primarily related to cell sites and office buildings. We determine whether a contract contains a lease at contract inception and calculate the lease liabia lity and right-of-ff use asset using our incremental borrowing rate. Our cell site leases generally have terms of fiff ve to ten years, with renewal options forff an additional fiff ve to 25 years. For certain cell sites, the renewal options are deemed to be reasonabla y certain to be an additional fiff ve years. We recognize exercised. Our building leases have original terms of ten years, with renewal options forff operating lease expense on a straight-line basis over the lease term. We have fiff nance leases forff computer and offff iff ce equipment. Covenants within the Term Loan Facility contain certain restrictions on our abia lity to enter into new fiff nance lease arrangements. See Note 16, “Leases,” for further information. Advertising Costs - Costs for advertising are expensed as incurred. Debt Issuance Costs - We defer loan origination fees and financing costs related to our various debt offerings as deferred financing costs. Additionally, we defer fees paid directly to the lenders related to amendments of our various debt offerings as deferred financing costs. We amortize these costs over the term of the underlying debt obligation using the effective interest method and include them in interest expense in the consolidated statement of operations. The fees incurred but not paid directly to the lenders in connection with amendments are expensed as incurred to interest expense. Deferred financing costs associated with future debt issuances are written off in the period during which we determine that the debt will no longer be issued. See Note 9, “Long-Term Debt and Other Liabilities,” for further information. Comprehensive Income (Loss) - Comprehensive income for the years ended December 31, 2022 and 2021 is net income plus or minus unrealized gains and losses on foreign currency translation adjustments and the changes in fair value of cash flow hedges. Comprehensive loss for the year ended December 31, 2020 is net loss plus unrealized gains on foreign currency translation adjustments. Recently Issued Accounting Pronouncements The Company considers the appl a icabia lity and impact of all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB). ASUs not listed below were assessed and determined to be either not appl have minimal impact on our consolidated fiff nancial statements. a icabla e or expected to Accounting standards adopted: On Januaryrr 1, 2022, we adopted ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about a a Government Assistance to increase the transparency of transactions with a government accounted forff by appl contribution accounting model by analogy. ASU 2021-10 requires an entity to disclose inforff mation about the naturt e of the a transactions, including the signififf cant terms and conditions, accounting policy used to account forff the transactions, and the effff eff ct of the transactions on the fiff nancial statements. Adoption of this standard did not have a material impact on our consolidated fiff nancial statements. ying a grant or 3. Earnings (Loss) Per Share Basic and diluted earnings (loss) per share have been calculated using the weighted-average number of common shares outstanding forff the period. The shares of common stock effff eff ctively repurchased in connection with the Forward Transactions (as defiff ned and described in Note 9, “Long-Term Debt and Other Liabia lities”) are considered participating securities requiring the two-class method to calculate basic and diluted earnings per share. Net earnings will be allocated between shares of common stock and participating securities on a one-to-one basis. In periods of a net loss, the shares associated with the Forward Transactions will not receive an allocation of losses, as the counterpar shares outstanding as of December 31, 2021 and 2020 excludes appr associated with the Forward Transactions. ff oximately 0.6 million and 2.1 million shares, respectively, rties to the Forward Transactions are not required to fund losses. Additionally, the calculation of weighted average a The diluted earnings (loss) per share calculations exclude the effff eff ct of stock options, defeff rred stock units, restricted stock units and convertible notes when the computation is anti-dilutive. For the years ended December 31, 2022 and 2021, the weighted average number of shares excluded frff om the computation was 0.5 million and 5.7 million shares, respectively. As a result of the net loss forff the year ended December 31, 2020, all of the outstanding shares of common stock underlying stock options, defeff rred stock units, restricted stock units and convertible notes were excluded frff om the computation of diluted shares outstanding because they were anti- dilutive. 66 During September 2022, we repurchased 1.5 million shares of common stock in a private transaction forff an aggregate purchase price of $18,345,000, or $12.23 per share (the “Repurchase”). The Repurchase decreased the weighted average shares outstanding forff the year ended December 31, 2022. The folff lowing tabla es sets forff th the computation of basic and diluted earnings per share forff the years ended December 31, 2022, , the shares associated with the Forward Transactions are excluded frff om the 2021 and 2020; however, forff computation of basic earnings per share (in thousands, exee cepte the reasons described above a per share amountstt ): Net income frff om continuing operations Less: Participation rights on Forward Transactions allocated to continuing operations Basic Earnings Per Share frff om Continuing Operations Undistributed income frff om continuing operations Effff eff ct of Dilutive Securities frff om Continuing Operations Stock-based compensation 2022 Convertible Notes Diluted Earnings Per Share frff om Continuing Operations Undistributed income frff om continuing operations and assumed conversions Net loss frff om discontinued operations Less: Participation rights on Forward Transactions allocated to discontinued operations Basic Loss Per Share frff om Discontinued Operations Undistributed loss frff om discontinued operations Effff eff ct of Dilutive Securities frff om Discontinued Operations Stock-based compensation 2022 Convertible Notes $ $ $ $ $ Diluted Loss Per Share frff om Discontinued Operations Undistributed loss frff om discontinued operations and assumed conversions $ Earnings per share - basic Earnings per share - diluted 2022 Shares (Denominator) Income (Numerator) 92,059 171 Per Share Amount Income (Numerator) $ 156,589 1,484 2021 Shares (Denominator) Per Share Amount 91,888 123,268 $ 0.75 $ 155,105 103,400 $ 1.50 — 2,770 4,881 5,774 — 7,221 6,674 17,131 — — — — — — 94,658 133,923 $ 0.71 $ $ 162,326 127,205 $ 1.28 (3,854) (36) 123,268 $ — $ (3,818) 103,400 $ (0.04) 4,881 5,774 133,923 $ $ $ 3,615 — 6,674 17,131 — $ (203) 127,205 0.75 0.71 $ $ $ — 1.46 1.28 Net loss frff om continuing operations Net loss frff om discontinued operations Net loss Less: Participation rights of the Forward Transactions Undistributed losses Weighted-average common shares outstanding-basic and diluted Net loss attributabla e to common stock per share-basic and diluted: Net loss frff om continuing operations Net loss frff om discontinued operations Net loss For the Year Ended December 31, 2020 (48,559) (201,477) (250,036) — (250,036) 82,266 (0.59) (2.45) (3.04) $ $ $ $ 67 4. Revenue Recognition Remaining Perforff mance Obligations As of December 31, 2022, the aggregate amount of the transaction price in our customer contracts allocated to unsatisfiff ed roximately $102 million. We have excluded frff om this amount consideration frff om contracts that have perforff mance obligations was appa an original duration of one year or less. Approximately $80 million primarily represents connectivity and entertainment service revenues which are recognized as services are provided, which is expected to occur through the remaining term of the contract. The remaining $22 million of such amount represents futff urt e equipment revenue that is expected to be recognized primarily within the next two years. Disaggregation of revenue The folff lowing tabla e presents our revenue disaggregated by categoryrr (i(( n thousands)s : For the Year Ended December 31, 2021 2022 2020 Service revenue Connectivity Entertainment and other Total service revenue Equipment revenue ATG Satellite Other Total equipment revenue Customer type Aircraftff owner/rr operator/rr service provider OEM and aftff ermarket dealer Total revenue $ $ $ $ $ $ 291,444 $ 4,885 296,329 $ 255,786 $ 3,797 259,583 $ 209,160 2,827 211,987 91,152 $ 9,992 6,594 107,738 $ 61,780 $ 11,048 3,305 76,133 $ 45,200 11,746 785 57,731 296,329 $ 107,738 404,067 $ 259,583 $ 76,133 335,716 $ 211,987 57,731 269,718 Contract balances Our current and non-current contract asset balances totaled $19.9 million and $17.8 million as of December 31, 2022 and 2021, respectively. Contract assets represent the aggregate amount of revenue recognized in excess of billings primarily forff programs. certain sales Our current and non-current defeff rred revenue balances totaled $3.4 million and $1.8 million as of December 31, 2022 and 2021, respectively. Defeff rred revenue includes, among other things, feff es paid forff equipment and subscription connectivity products. Major Customers No customer accounted forff more than 10% of total revenue forff the years ended December 31, 2022, 2021 and 2020 and no customer accounted forff more than 10% of accounts receivabla e as of December 31, 2022 or 2021. 5. Inventories Inventories consist primarily of telecommunications systems and parts and are recorded at the lower of average cost or net realizabla e value. We evaluate the need forff write-downs associated with obsolete, slow-moving and nonsalabla e inventoryrr by reviewing net realizabla e inventoryrr values on a periodic basis. Inventories as of December 31, 2022 and 2021 were as folff lows (in thousands): Work-in-process component parts Finished goods Total inventoryrr December 31, 2022 2021 34,840 14,653 49,493 $ $ 21,570 12,406 33,976 $ $ 68 6. Composition of Certain Balance Sheet Accounts Prepaid expenses and other current assets as of December 31, 2022 and 2021 were as folff lows (in thous tt ands): and receivabla e Interest rate capsa Contract assets Prepaid inventories Insurance receivabla e (1)(( Tenant improvement allowance receivabla es Other Total prepaid expenses and other current assets December 31, 2022 2021 $ $ 28,496 $ 6,494 2,901 — — 7,209 45,100 $ 925 4,533 2,525 17,300 1,936 5,076 32,295 (1)(( See Note 17, “Commitments and Contingencies,” forff additional inforff mation. Property and equipment as of December 31, 2022 and 2021 were as folff lows (in thousands): Offff iff ce equipment, furff niturt e, fiff xturt es and other Leasehold improvements Network equipment Accumulated depreciation Property and equipment, net December 31, 2022 17,242 $ 15,357 179,363 211,962 (107,367) 104,595 $ 2021 12,759 13,545 142,601 168,905 (105,233) 63,672 $ $ Other non-current assets as of December 31, 2022 and 2021 were as folff lows (in thousands): Interest rate capsa Contract assets, net of allowances of $501 and $455, respectively Revolving credit faff cility defeff rred fiff nancing costs Other Total other non-current assets December 31, 2022 2021 $ 25,578 $ 11,359 13,376 1,445 2,956 43,355 $ 13,217 1,879 1,970 28,425 $ Accruerr d liabia lities as of December 31, 2022 and 2021 were as folff lows (in thousands): Employee compensation and benefiff ts Accruer d interest Operating leases Network equipment Warranty reserve Taxes Litigation settlement accruar Other Total accruer d liabia lities l (1)(( December 31, 2022 2021 19,235 $ 9,878 9,094 8,748 2,300 2,282 — 8,519 60,056 $ 13,791 6,231 7,444 3,179 2,450 1,997 17,300 7,476 59,868 $ $ (1)(( See Note 17, “Commitments and Contingencies,” forff additional inforff mation. Other non-current liabia lities as of December 31, 2022 and 2021 consist of the folff lowing (in thousands): 69 Asset retirement obligations Other Total other non-current liabia lities December 31, 2022 2021 $ $ 6,032 $ 1,579 7,611 $ 4,861 2,375 7,236 Changes in our non-current asset retirement obligations forff the years ended December 31, 2022 and 2021 consist of the folff lowing (in thousands): Balance – Januaryrr 1, 2021 Liabia lities incurred Liabia lities settled Accretion expense Foreign exchange rate adjustments Balance – December 31, 2021 Liabia lities incurred Liabia lities settled Accretion expense Foreign exchange rate adjustments Balance – December 31, 2022 Asset Retirement Obligation 4,401 — — 460 — 4,861 682 (43) 553 (21) 6,032 $ $ 7. Composition of Certain Reserves and Allowances Credit Losses — We regularly evaluate our accounts receivabla e and contract assets forff expected credit losses. Our expected accounts receivabla e is developed using historical collection experience, current and futff urt e economic of each customer’s trade accounts receivabla es. Due to the short-term naturt e loss allowance methodology forff and market conditions, and a review of the current statust of such receivabla es, the estimated amount of accounts receivabla e that may not be collected is based on the aging of the accounts receivabla e balances and the fiff nancial condition of customers. Additionally, specififf c allowance amounts are establa ished to record the a appr reconciliation, dispute resolution, payment confiff rmation, consideration of each customer’s fiff nancial condition and macroeconomic conditions. Balances are written offff when determined to be uncollectible. We appl y a similar methodology to our current and non- current contract asset balances. However, due to the inherent additional risk associated with a long-term receivabla e, an additional ied to contract asset balances that will diminish over time as the contract nears its expiration date. provision forff customers that have a higher probabia lity of defaff ult. Our monitoring activities include timely account opriate provision forff credit loss is appl a a Estimates are used to determine the expected loss allowances. Such allowances are based on management’s assessment of anticipated payment, taking into account availabla e historical and current inforff mation as well as management’s assessment of potential futff urt e developments. We are continuously monitoring our assumptions used to determine our expected credit losses, including the impact of COVID-19, which could cause us to record additional material credit losses in futff urt e periods. Changes in our allowances forff credit losses forff the years ended December 31, 2022 and 2021 were as folff lows (in thousands): expected credit losses Balance at Januaryrr 1, 2021 Provision forff Write-offff sff charged against the allowances Other Balance at December 31, 2021 Provision forff Write-offff sff charged against the allowances Other Balance at December 31, 2022 expected credit losses Accounts Receivable Other non-current assets $ $ 1,044 204 (371) 17 894 1,001 (326) 209 1,778 $ $ 375 80 — — 455 46 — — 501 Warranties — We provide warranties on parts and labor a related to our products. Our warranty terms range frff om two to fiff ve years. Warranty reserves are establa ished forff products under warranty. The warranty reserves are determined based on known product faff ilures, historical experience and other availabla e evidence, and are included in accruer d liabia lities in our consolidated balance sheets. costs that are estimated to be incurred aftff er the sale, deliveryrr and installation of the 70 Changes in our warranty reserve forff the years ended December 31, 2022 and 2021 were as folff lows (in thousands): Balance – Januaryrr 1, 2021 ls forff warranties issued Accruar Settlements and adjustments to warranties Balance – December 31, 2021 ls forff warranties issued Accruar Settlements and adjustments to warranties Balance – December 31, 2022 8. Intangible Assets Warranty Reserve 2,400 126 (76) 2,450 1,583 (1,733) 2,300 $ $ Our intangible assets are comprised of indefiff nite- and fiff nite-lived intangible assets and goodwill. We own the rights to 3 MHz of in the nationwide 800 MHz Commercial Air-Ground Radiotelephone band (the “3 MHz FCC License”), which is used ATG spectrumrr in the operation of our ATG network, and the license forff Ground Radiotelephone band (the “1 MHz FCC License”) acquired as part of our acquisition of LiveTV Airfone , LLC. Together we refeff r to the 3 MHz FCC License and the 1 MHz FCC License as the “FCC Licenses.” The FCC Licenses were originally issued with 10-year terms and we have renewed both licenses forff FCC, and renewals of licenses held by others have occurred routinely and at nominal cost. Moreover, we have determined that there are currently no legal, regulatoryrr , contractuat a result, the FCC Licenses are treated as indefiff nite-lived intangible assets which we do not amortize. We reevaluate the usefulff the FCC Licenses each year to determine whether events and circumstances continue to support an indefiff nite usefulff impairment assessment of the FCC Licenses forff l, competitive, economic, or other faff ctors that limit the usefulff subsequent 10-year terms. Such licenses are subject to furff 2022, 2021 and 2020 indicated no impairment. in the nationwide 800MHz Commercial Air- lifeff of lifeff . Our annual lifeff of the FCC Licenses. As 1 MHz of ATG spectrumr ther renewal by the ff Our softff ware relates to the development of internal use softff ware which is used to runrr our network and support our service offff eff rings. Softff ware also includes softff ware embedded in the equipment that we sell to our customers. Our goodwill balance was $0.6 million as of December 31, 2022 and 2021. Our intangible assets, other than goodwill, as of December 31, 2022 and 2021 were as folff ed average remaining usefe ulff lifi eff ): i weight lows (in thousands, exee cepte forff Amortized intangible assets: Softff ware Other intangible assets Service customer relationships OEM and dealer relationships Total amortized intangible assets Unamortized intangible assets: FCC Licenses Total intangible assets Weighted Average Remaining Usefuff l Lifeff (in years) As of December 31, 2022 As of December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount $ 6.4 8.0 $ 59,932 624 8,081 6,724 75,361 (43,950) $ — (8,081) (6,724) (58,755) 15,982 624 — — 16,606 $ 54,128 1,812 8,081 6,724 70,745 $ (39,289) $ — (8,081) (6,724) (54,094) 14,839 1,812 — — 16,651 32,283 107,644 $ $ — (58,755) $ 32,283 48,889 32,283 $ 103,028 $ — (54,094) $ 32,283 48,934 Amortization expense forff the years ended December 31, 2022, 2021 and 2020 was $4.7 million, $7.5 million and $6.3 million, respectively. Amortization expense forff each of the next fiff ve years and thereaftff er is estimated to be as folff lows (in thousands): Years ending December 31, 2023 2024 2025 2026 2027 Thereaftff er Amortization Expense $ $ $ $ $ $ 2,447 2,369 2,192 2,094 1,930 5,574 Actuat l futff urt e amortization expense could diffff eff r frff om the estimated amount as the result of futff urt e investments and other faff ctors. 71 9. Long-Term Debt and Other Liabilities Long-term debt as of December 31, 2022 and 2021 was as folff lows (in thousands): Term Loan Facility 2022 Convertible Notes Total debt Less: defeff rred fiff nancing costs Less: current portion of long-term debt Total long-term debt December 31, 2022 711,263 $ — 711,263 (13,840) (7,250) 690,173 $ December 31, 2021 718,057 102,788 820,845 (16,465) (109,620) 694,760 $ $ 2021 CrCC edit Agreement On April 30, 2021, Gogo and Gogo Intermediate Holdings LLC (“GIH”) (a wholly owned subsidiaryrr of Gogo) entered into a credit agreement (the “Original 2021 Credit Agreement,” and, as it may be amended, supplemented or otherwise modififf ed frff om time to time, the “2021 Credit Agreement”) among Gogo, GIH, the lenders and issuing banks party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, which provides forff (i) a term loan credit faff cility (the “Term Loan Facility”) in an aggregate principal amount of $725.0 million, issued with a discount of 0.5%, and (ii) a revolving credit faff cility (the “Revolving Facility” and together with the Term Loan Facility, the “Facilities”) of up to $100.0 million, which includes a letter of credit sub-faff cility. On Februarr ryrr 2, 2023, Gogo and GIH entered into an amendment to the Original 2021 Credit Agreement with Morgan Stanley Senior Funding, Inc., as administrative agent, which replaced all refeff rences in the Original 2021 Credit Agreement to LIBOR in the Facilities with an adjusted term secured overnight fiff nancing rate as administered by the respect of the appl Federal Reserve Bank of New York (“SOFR”), plus a credit spread adjustment based on the Alternative Refeff rence Rates Committee recommended spread adjustment. icabla e interest rates forff a The Term Loan Facility amortizes in nominal quarterly installments equal to one percent of the aggregate initial principal ity of the Term Loan Facility on April 30, 2028. u amount thereof per annum, with the remaining balance payabla e upon There are no amortization payments under the Revolving Facility, and all borrowings under the Revolving Facility maturt e on April 30, 2026. fiff nal maturt The Term Loan Facility bears annual interest at a flff oating rate measured by refeff rence to, at GIH’s option, either (i) an adjusted term SOFR rate (subject to a flff oor of 0.75%) plus an appl Alternative Refeff rence Rates Committee recommended spread adjustments or (ii) an alternate base rate plus an appl 2.75%. icabla e margin of 3.75% and a credit spread adjustment based on the a a icabla e margin of Loans outstanding under the Revolving Facility bear annual interest at a flff oating rate measured by refeff rence to, at GIH’s option, icabla e margin ranging frff om 3.25% to 3.75% per annum either (i) an adjusted term SOFR rate (subject to a flff oor of 0.00%) plus an appl depending on GIH’s senior secured fiff rst lien net leverage ratio and a credit spread adjustment based on the Alternative Refeff rence Rates Committee recommended spread adjustments or (ii) an alternate base rate plus an appl icabla e margin ranging frff om 2.25% to 2.75% per annum depending on GIH’s senior secured fiff rst lien net leverage ratio. Additionally, unused commitments under the Revolving Facility are subject to a feff e ranging frff om 0.25% to 0.50% per annum depending on GIH’s senior secured fiff rst lien net leverage ratio. a a The Facilities may be prepaid at GIH’s option at any time without premium or penalty (other than customaryrr breakage costs), subject to minimum principal payment amount requirements. Subject to certain exceptions and de minimis thresholds, the Term Loan Facility is subject to mandatoryrr prepayments in an amount equal to: • • • 100% of the net cash proceeds of certain asset sales, insurance recoveryrr and condemnation events, subject to reduction to 50% and 0% if specififf ed senior secured fiff rst lien net leverage ratio targets are met; 100% of the net cash proceeds of certain debt offff eff rings; and 50% of annual excess cash flff ow (as defiff ned in the 2021 Credit Agreement), subject to reduction to 25% and 0% if specififf ed senior secured fiff rst lien net leverage ratio targets are met. The 2021 Credit Agreement contains customaryrr representations and warranties and customaryrr affff iff rmative and negative covenants. The negative covenants include restrictions on, among other things: incurrence of indebtedness or issuance of disqualififf ed equity interests; incurrence or existence of liens; consolidations or mergers; activities of Gogo and any subsidiaryrr holding a license issued by the Federal Communications Commission; investments, loans, advances, guarantees or acquisitions; asset sales; dividends or 72 other distributions on equity; purchase, redemption or retirement of capia tal stock; payment or redemption of certain junior indebtedness; entryrr organizational documents; in each case subject to customaryrr exceptions. into other agreements that restrict the abia lity to incur liens securing the Facilities; and amendment of The Revolving Facility includes a fiff nancial covenant set at a maximum senior secured fiff rst lien net leverage ratio of 7.50:1.00, which will appl quarter exceeds 35% of the aggregate of all commitments thereunder. a y if the outstanding amount of loans and unreimbursed letter of credit drawings thereunder at the end of any fiff scal The 2021 Credit Agreement contains customaryrr events of defaff ult, which, if any of them occurred, would permit or require the principal, premium, if any, and interest on all of the then outstanding obligations under the Facilities to be due and payabla e immediately and the commitments under the Revolving Facility to be terminated. The proceeds of the Term Loan Facility were used, together with cash on hand, (i) to redeem in fulff l and pay the outstanding principal amount of the 2024 Senior Secured Notes (as defiff ned below) together with accruerr d and unpaid interest and redemption premiums and to pay feff es associated with the termination of the ABL Credit Agreement (as defiff ned below and, together with the redemption of the 2024 Senior Secured Notes, the “Refiff nancing”), and (ii) to pay feff es and expenses incurred in connection with the Refiff nancing and the Facilities. The Revolving Facility is availabla e forff working capia tal and general corpor subsidiaries and was undrawn as of December 31, 2022 and 2021. ate purpos es of GIH and its r r As of December 31, 2022 and 2021, the outstanding principal amount of the Term Loan Facility was $714.1 million and $721.4 million, respectively, the unaccreted debt discount was $2.8 million and $3.3 million, respectively, and the net carryirr ng amount was $711.3 million and $718.1 million, respectively. We paid appr a oximately $19.7 million of loan origination and fiff nancing costs related to the Facilities which are being accounted as defeff rred fiff nancing costs on our consolidated balance sheets and are amortized over the terms of the Facilities. Total forff amortization expense was $2.6 million and $1.8 million, respectively, forff included in Interest expense in our consolidated statements of operations. As of December 31, 2022 and 2021, the balance of unamortized defeff rred fiff nancing costs related to the Facilities was $15.3 million and $17.9 million, respectively. the years ended December 31, 2022 and 2021 and is On April 30, 2021, Gogo, GIH, and each direct and indirect wholly-owned U.S. restricted subsidiaryrr of GIH (Gogo and such subsidiaries collectively, the “Guarantors”) entered into a guarantee agreement (the “Guarantee Agreement”) in faff vor of Morgan Stanley Senior Funding, Inc., as collateral agent (the “Collateral Agent”), whereby GIH and the Guarantors guarantee the obligations under the Facilities and certain other secured obligations as set forff into a collateral agreement (the “Collateral Agreement”), in faff vor of the Collateral Agent, whereby GIH and the Guarantors grant a security interest in substantially all of their respective tangible and intangible assets (including the equity interests in each direct material wholly-owned U.S. restricted subsidiaryrr owned by GIH or any Guarantor, and 65% of the equity interests in any non-U.S. subsidiaryrr held directly by GIH or any Guarantor), subject to certain exceptions, to secure the obligations under the Facilities and certain other secured obligations as set forff th in the Guarantee Agreement, and GIH and the Guarantors entered th in the Collateral Agreement. 2022 ConvCC ertible NotNN es On November 21, 2018, we issued $215.0 million aggregate principal amount of 6.00% Convertible Senior Notes due 2022 (the “2022 Convertible Notes”) in private offff eff rings to qualififf ed institutt ional buyers, including pursuant to RulRR e 144A under the Securities Act, and in concurrent private placements. We granted an option to the initial purchasers to purchase up to an additional $32.3 million aggregate principal amount of 2022 Convertible Notes to cover over-allotments, of which $22.8 million was subsequently exercised during December 2018, resulting in a total issuance of $237.8 million aggregate principal amount of 2022 Convertible Notes. In Januaryrr 2021, $1.0 million aggregate principal amount of 2022 Convertible Notes was converted by holders and settled through the issuance of 166,666 shares of common stock. On March 17, 2021, Gogo entered into separate, privately negotiated exchange agreements (the “March 2021 Exchange Agreements”) with certain holders of the 2022 Convertible Notes. Pursuant to the March 2021 Exchange Agreements, such holders exchanged a total of $28,235,000 aggregate principal amount of 2022 Convertible Notes forff March 24, 2021. The negotiated exchange rate under the March 2021 Exchange Agreements was 181.40 shares of common stock per $1,000 principal amount of the 2022 Convertible Notes, which resulted in a loss on settlement of $4.4 million, which is included in Loss on extinguishment of debt and settlement of convertible notes in our consolidated statements of operations forff the year ended December 31, 2021. 5,121,811 shares of our common stock on On April 1, 2021, Gogo entered into a privately negotiated exchange agreement (the “GTCR Exchange Agreement”) with an ff managed by GTCR LLC (“GTCR”). Pursuant to the GTCR Exchange Agreement, GTCR exchanged $105,726,000 19,064,529 shares of our common stock on April 9, 2021. The negotiated affff iff liate of funds aggregate principal amount of 2022 Convertible Notes forff exchange rate under the GTCR Exchange Agreement was 180.32 shares of common stock per $1,000 principal amount of 2022 Convertible Notes, which resulted in a loss on settlement of $14.6 million, which is included in Loss on extinguishment of debt and settlement of convertible notes in our consolidated statements of operations forff the year ended December 31, 2021. 73 As of December 31, 2021, the outstanding principal amount of the 2022 Convertible Notes was $102.8 million and was classififf ed as Current portion of long-term debt in the consolidated balance sheets. In May 2022, the remaining $102,788,000 aggregate principal amount of 2022 Convertible Notes was converted by holders into 17,131,332 shares of common stock. Thorndale Farm Private Equity Fund 2, LLC, an entity affff iff liated with our Chairman and Chief Executive Offff iff cer, held $8,000,000 aggregate principal amount of 2022 Convertible Notes that was converted into 1,333,333 shares of common stock. As of December 31, 2022, there were no outstanding 2022 Convertible Notes. a We incurred appr oximately $8.1 million of issuance costs related to the issuance of the 2022 Convertible Notes that were amortized over the term of the 2022 Convertible Notes using the effff eff ctive interest method. Total amortization expense was $0.4 million, $1.4 million and $1.8 million, respectively, forff included in Interest expense in the consolidated statements of operations. As of December 31, 2021, the balance of unamortized defeff rred fiff nancing costs related to the 2022 Convertible Notes was $0.4 million and was included as a reduction to the carryirr ng amount of the debt in our consolidated balance sheets. See Note 11, “Interest Costs,” forff the years ended December 31, 2022, 2021 and 2020. Amortization expense is additional inforff mation. The 2022 Convertible Notes had an initial conversion rate of 166.6667 shares of common stock per $1,000 principal amount of oximately $6.00 per share of our common stock. 2022 Convertible Notes, which was equivalent to an initial conversion price of appr Prior to conversion, the shares of common stock subject to conversion were considered in the diluted earnings per share calculations under the if-ff converted method if their impact was dilutive. a ForFF ward TrTT ansactions In connection with the issuance of our 3.75% Convertible Senior Notes due 2020 (the “2020 Convertible Notes”), we paid oximately $140.0 million to enter into prepaid forff ward stock repurchase transactions (the “Forward Transactions”) with certain oximately 7.2 million shares of common rties”), pursuant to which we purchased appr ions (the “Forward Counterpar a settlement on or around the March 1, 2020 maturt ity date forff the 2020 Convertible Notes, subject to the abia lity of each rty to elect to settle all or a portion of its Forward Transactions early. appr a fiff nancial institutt stock forff Forward Counterpar On December 11, 2019, we entered into an amendment to one of the Forward Transactions (the “Amended and Restated Forward Transaction”) to extend the expected settlement date with respect to appr by one of the Forward Counterprr arties, JPMorgan Chase Bank, National Association (the “2022 Forward Counterpar correspond with the May 15, 2022 maturt shareholders’ equity within our consolidated balance sheets was reduced by appr appr a a appr Transaction. In May 2022, the appr Transactions were delivered to us. As of December 31, 2022, there were no prepaid forff ward stock repurchase transactions outstanding. oximately 5.1 million shares of common stock were delivered to us in connection with the Forward Transactions. In April 2021, oximately 1.5 million shares of common stock were delivered to us in connection with the Amended and Restated Forward oximately 0.6 million shares that were remaining under the Amended and Restated Forward the 2022 Convertible Notes. As a result of the Forward Transactions, total oximately 2.1 million shares of common stock held oximately $140.0 million. In March, 2020, ity date forff rty”), to a a a 2024 Senior Secured NotNN es On April 25, 2019, GIH and Gogo Finance Co. Inc. (a wholly owned subsidiaryrr of GIH) (“Gogo Finance” and, together with GIH, the “Issuers”) issued $905.0 million aggregate principal amount of 9.875% senior secured notes due 2024 (the “2024 Senior Secured Notes”), at a price equal to 99.512% of their faff ce value, under an indenturt e, dated as of April 25, 2019, among the Issuers, Gogo, the subsidiaryrr guarantors party thereto and U.S. Bank National Association, as trusr tee. On May 7, 2019, the Issuers issued an additional $20.0 million of 2024 Senior Secured notes, which were issued at a price equal to 100.5% of their faff ce value, and $50.0 million of 2024 Senior Secured Notes on November 13, 2020, which were issued at a price equal to 103.5% of their faff ce value. The 2024 Senior Secured Notes were guaranteed on a senior secured basis by Gogo and all of GIH’s existing and futff urt e restricted subsidiaries (other than Gogo Finance), subject to certain exceptions. The 2024 Senior Secured Notes and the related guarantees were secured by certain liens on the Company’s collateral, which were released upon the closing of the Transaction. We paid appr oximately $22.6 million of origination feff es and fiff nancing costs related to the issuance of the 2024 Senior Secured a Notes, which were accounted forff contractuat and $3.7 million, respectively, foff r the years ended December 31, 2021 and 2020. Amortization expense is included in Interest expense in the consolidated statements of operations. as defeff rred fiff nancing costs on our consolidated balance sheets and were being amortized over the l term of the 2024 Senior Secured Notes using the effff eff ctive interest method. Total amortization expense was $1.4 million 74 The 2024 Senior Secured Notes were redeemed on May 1, 2021 (the “Redemption Date”) at a redemption price equal to 104.938% of the principal amount of the 2024 Senior Secured Notes redeemed, plus accruer d and unpaid interest to (but not including) the Redemption Date. The make-whole premium paid in connection with the redemption was $48.1 million. We wrote offff the remaining unamortized defeff rred fiff nancing costs of $15.2 million and the remaining debt discount of $1.3 million, which together are included in Loss on extinguishment of debt and settlement of convertible notes in our consolidated statements of operations forff year ended December 31, 2021. the ABLBB CrCC edit FacFF ilitytt On August 26, 2019, Gogo, GIH and Gogo Finance entered into a credit agreement (the “ABL Credit Agreement”) with the other loan parties party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Morgan Stanley an asset-based revolving credit faff cility (the “ABL Credit Facility”) of Senior Funding, Inc., as syndication agent, which provided forff up to $30.0 million, subject to borrowing base availabia lity, and includes letter of credit and swingline sub-faff cilities. The obligations under the ABL Credit Agreement were guaranteed by Gogo and all of its existing and futff urt e subsidiaries, subject to certain exceptions and secured by collateral of the Company. On April 30, 2021, the ABL Credit Agreement and all commitments thereunder were terminated. As a result of the termination, the remaining unamortized defeff rred fiff nancing costs of $0.3 million were written offff as of May 1, 2021 and included in Loss on extinguishment of debt and settlement of convertible notes in our consolidated statements of operations forff the year ended December 31, 2021. 2020 ConvCC ertible NotNN es In March 2015, we issued $361.9 million aggregate principal amount of 3.75% Convertible Senior Notes due 2020 (the “2020 Convertible Notes”) in a private offff eff ring to qualififf ed institutt 2019, we repurchased a total of $359.4 million aggregate principal amount of the 2020 Convertible Notes, and on March 1, 2020, the remaining $2.5 million aggregate principal amount of the 2020 Convertible Notes maturt ed. ional buyers, pursuant to RulRR e 144A under the Securities Act. In 2018 and 10. Derivative Instruments and Hedging Activities We are exposed to interest rate risk on our variabla e rate borrowings. We currently use interest rate capsa to manage our exposure es. Accordingly, the to interest rate changes, and have designated these interest rate capsa earnings impact of the derivatives designated as cash flff ow hedges is recorded upon the recognition of the variabla e interest payments related to the hedged debt. as cash flff ow hedges forff accounting purpos rr In May 2021, we purchased interest rate capsa with an aggregate notional amount of $650.0 million forff $8.6 million. The cost of the interest rate capsa will be amortized to interest expense using the capla et method, frff om the effff eff ctive date through termination date. We receive payments in the amount calculated pursuant to the capsa increases beyond the appl capsa icabla e strike rate. The notional amounts of the interest rate capsa any period in which the three-month USD LIBOR rate periodically decrease over the lifeff of the forff a . The notional amounts, strike rates and end dates of the capa agreements are as folff (( lows (not ional amountstt in thousands)s : Start Date 7/31/2021 7/31/2023 7/31/2024 7/31/2025 7/31/2026 $ End Date 7/31/2023 7/31/2024 7/31/2025 7/31/2026 7/31/2027 Notional Amounts Strike Rate 650,000 525,000 350,000 250,000 200,000 0.75% 0.75% 1.25% 2.25% 2.75% We record the effff eff ctive portion of changes in the faff ir value of our cash flff ow hedges to other comprehensive income (loss), net these amounts into earnings in the period during which the hedged transaction is recognized. The of tax, and subsequently reclassifyff amounts included in accumulated other comprehensive income will be reclassififf ed to interest expense in the event the hedges are no longer considered effff eff ctive, in accordance with ASC 815, Derivatives and HeHH dging. No gains or losses of our cash flff ow hedges were considered to be ineffff eff ctive and reclassififf ed frff om other comprehensive income (loss) to earnings forff 2022 and 2021. We estimate that appr will be recognized in earnings over the next 12 months. We assess the effff eff ctiveness of the hedge on an ongoing basis. Cash flff ows are classififf ed in the consolidated statement of cash flff ows as investing activities frff om continuing operations. frff om interest rate capsa the years ended December 31, oximately $1.5 million currently recorded in accumulated other comprehensive income (loss) a For the year ended December 31, 2022, we recorded an unrealized gain on the interest rate capsa $9.3 million. For the year ended December 31, 2021, we recorded an unrealized gain on the interest rate capsa tax of $0.9 million. Unrealized gains and losses on interest rate capsa . rate capsa exclude amortization of the purchase price paid forff of $28.4 million, net of tax of of $2.7 million, net of the interest 75 When derivatives are used, we are exposed to credit loss in the event of non-perforff mance by the counterpar rties; however, non- perforff mance is not anticipated. ASC 815, Derivatives and HeHH dging, requires companies to recognize all derivative instrumr either assets or liabia lities at faff ir value in the balance sheet. The faff ir values of the interest rate derivatives are based on quoted market prices forff ents frff om commercial banks (based on signififf cant observabla e inputs - Level 2 inputs). similar instrumr ents as The folff lowing tabla e presents the faff ir value of our interest rate derivatives included in the consolidated balance sheets forff the periods presented (in thousands): Derivatives designated as hedging instruments Current portion of interest rate capsa Non-current portion of interest rate capsa Balance sheet location Prepaid expenses and other current assets Other non-current assets December 31, 2022 2021 $ $ 24,459 25,578 $ $ 925 11,359 FaiFF r ValVV ue MeMM asurement Our derivative assets and liabia lities consist principally of interest rate capsa , which are carried at faff ir value based on signififf cant observabla e inputs (Level 2 inputs). Derivatives entered into by us are typically executed over-the-counter and are valued using discounted cash flff ows along with faff ir value models that primarily use market observabla e inputs. These models take into account a variety of faff ctors including, where appl ity, interest rate yield curves, and counterpar rty credit risks. icabla e, maturt a 11. Interest Costs We capia talize a portion of our interest on funds ff borrowed during the active construcr tion period of maja or capia tal projects. Capia talized interest is added to the cost of the underlying assets and amortized over the usefulff lives of the assets. The folff lowing is a summaryrr of our interest costs forff the years ended December 31, 2022, 2021 and 2020 (i(( n thous tt ands)s : For the Years Ended December 31, 2021 2022 Interest costs charged to expense Amortization of defeff rred fiff nancing costs Accretion of debt discount Amortization of the purchase price of interest rate capsa Interest rate capa benefiff t Interest expense Interest costs capia talized to property and equipment Interest costs capia talized to softff ware Total interest costs $ $ 43,530 $ 3,058 456 157 (8,329) 38,872 920 472 40,264 $ 62,390 $ 4,661 419 2 — 67,472 4 311 67,787 $ 12. Common Stock and Prefeff rred Stock 2020 105,988 5,892 13,907 — — 125,787 — 885 126,672 Common Stock – We have one class of common stock outstanding as of December 31, 2022 and 2021. Our common stock is ation authorizes a total of junior to our preferred stock, if and when issued. Our Third Amended and Restated Certififf cate of Incorpor 500,000,000 shares of common stock with a par value of $0.0001 per share. rr Preferred Stock – Our Third Amended and Restated Certififf cate of Incorpor r ation authorizes 100,000,000 shares of new prefeff rred stock with a par value of $0.01 per share. No shares of this new prefeff rred stock have been issued. The prefeff rred stock may be issued, frff om time to time, in one or more series as authorized by the Board of Directors, which has the authority to designate the terms of any series of prefeff rred stock issued, including, without limitation, the number of shares to be included in such series of prefeff rred stock, any dividend, redemption, conversion rights or voting powers and the designations, prefeff rences and relative participating, optional or other special rights. Shareholder Rights Plan – On September 23, 2020, our Board of Directors adopted a Section 382 Rights Agreement (as amended, the “Rights Agreement”), between the Company and Computershare Trust Company, N.A., as rights agent (the “Rights Agent”), and declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock of the Company, outstanding on the record date of October 2, 2020, to the stockholders of record on that date. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Shares”) at a price of $38.40 per one one-thousandth of a Preferred Share represented by a Right, subject to adjustment. In December 2022, the Company entered into Amendment No. 1 to the Rights Agreement with the Rights Agent, which, among other things, changed the Distribution Date (as defiff ned below) frff om the close of business on the tenth to the thirtieth day aftff er the Stock Acquisition Date (as defiff ned in the Rights Agreement), with certain exceptions. 76 The purpose of the Rights Agreement is to facilitate the Company’s ability to preserve its net operating losses (“NOLs”) and certain other tax attributes in order to be able to offset potential future income taxes for federal income tax purposes. The Company’s ability to use its NOLs and other tax attributes would be substantially limited if it experiences an “ownership change,” as such term is defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). A company generally experiences an ownership change if the percentage of the value of its stock owned by certain “5-percent shareholders,” as such term is defined in Section 382 of the Code, increases by more than 50 percentage points over a rolling three-year period. The Rights Agreement is intended to reduce the likelihood of an ownership change under Section 382 of the Code by deterring any person or group from acquiring beneficial ownership of 4.9% or more of the shares of the Company’s common stock then-outstanding. The Rights are attached to all shares of the Company’s common stock, and until the Distribution Date (as defined below), the Rights will be transferred with and only with the common stock. As long as the Rights are attached to the common stock, the Company will issue one Right with each new share of common stock so that all such shares of common stock will have Rights attached (subject to certain limited exceptions). The Rights will separate and begin trading separately from the common stock, and Right certificates will be caused to evidence the Rights, on the earlier to occur of (i) the close of business on the thirtieth day following public disclosure of facts indicating that a person or group has acquired beneficial ownership of 4.9% or more of the outstanding common stock (an “Acquiring Person”) (or, in the event the Board of Directors determines to effect an exchange in accordance with Section 24 of the Rights Agreement and the Board of Directors determines that a later date is advisable, then such later date) and (ii) the close of business on the tenth business day (or such later date as may be determined by action of the Board of Directors prior to such time as any person becomes an Acquiring Person) following the commencement of a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group of 4.9% or more of the outstanding common stock (the earlier of such dates, the “Distribution Date”). The Rights are not exercisable until the Distribution Date. The Rights will expire on the earlier to occur of (i) the date on which the Board of Directors determines in its sole discretion that (x) the Rights Agreement is no longer necessary for the preservation of material valuable NOLs or tax attributes or (y) the NOLs and tax attributes have been fully utilized and may no longer be carried forward and (ii) the close of business on September 23, 2023. The Rights Agreement was approved by the Company's stockholders at the Company's 2021 annual meeting of stockholders. ff a oval by the Board of Directors, the Company lowing appr under management, “BlackRock”), as promptly as practicabla e, On September 15, 2022, pursuant to the Rights Agreement and folff requested that BlackRock, Inc. (together with its subsidiaries and funds divest suffff iff cient shares of the Company’s common stock to take BlackRock’s benefiff cial ownership below 4.9% so as to not be deemed an “Acquiring Person” under the Rights Agreement. On September 28, 2022, folff lowing confiff rmation that it had divested suffff iff cient shares of the Company’s common stock so as to not be deemed an “Acquiring Person” under the Rights Agreement, the Board of Directors granted a request by BlackRock that it be deemed an “Exempt Person” under the Rights Agreement, subject to BlackRock satisfyiff ng certain ownership conditions, including that neither BlackRock, Inc. nor any subsidiaryrr or individual fundff have an economic interest of 4.9% or more of the Company’s common stock. Additionally, on December 29, 2022, the Board of Directors determined another shareholder not to be deemed an “Acquiring Person” under the Rights Agreement and granted a request frff om the shareholder that it be deemed an “Exempt Person” under the Rights Agreement, subject to such shareholder satisfyiff ng certain ownership conditions. will 13. Fair Value of Financial Assets and Liabilities A three-tier faff ir value hierarchy has been establa ished which prioritizes the inputs used in measuring faff ir value. These tiers include: • • • Level 1 - defiff ned as observabla e inputs such as quoted prices forff identical assets or liabia lities in active markets; Level 2 - defiff ned as observabla e inputs other than Level 1 inputs such as quoted prices forff quoted prices in markets that are not active, or inputs that are observabla e or can be corroborated by observabla e market data forff l term of the assets or liabia lities; and similar assets or liabia lities, substantially the fulff Level 3 - defiff ned as unobservabla e inputs in which little or no market data exists, thereforff e requiring an entity to develop its own assumptions. Refeff r to Note 10, “Derivative Instrumrr ents and Hedging Activities,” forff faff ir value inforff mation relating to our interest rate capsa . Long-TeTT rm Debt: As of December 31, 2022 and 2021, our fiff nancial assets and liabia lities that are disclosed but not measured at faff ir value include the Term Loan Facility, and solely as of December 31, 2021, the 2022 Convertible Notes, which are reflff ected on the consolidated balance sheets at cost. The faff ir value measurements are classififf ed as Level 2 within the faff ir value hierarchy since they are based on quoted market prices of our instrumr ents in markets that are not active. We estimated the faff ir value of the Term Loan Facility, and 77 solely as of December 31, 2021, the 2022 Convertible Notes, by calculating the upfrff ont cash payment a market participant would require to assume these obligations. The upfrff ont cash payments used in the calculations of faff ir value on our consolidated balance sheets, excluding any issuance costs, are the amount that a market participant would be willing to lend at such date to an entity with a credit rating similar to ours and that would allow such an entity to achieve suffff iff cient cash inflff ows to cover the scheduled cash outflff ows under the Term Loan Facility, and solely as of December 31, 2021, the 2022 Convertible Notes. The faff ir value and carryirr ng value of long-term debt as of December 31, 2022 and 2021 was as folff lows (i(( n thousands)s : Term Loan Facility 2022 Convertible Notes December 31, 2022 December 31, 2021 Fair Value (1)(( $ $ 708,000 $ — $ Carrying Value Fair Value (1)(( Carrying Value 711,263 (2)(( — $ $ 723,000 230,000 $ $ 718,057 (2)(( 102,788 (1)(( (2)(( Fair value amounts are rounded to the nearest million. Carryirr ng value of the Term Loan Facility reflff ects the unaccreted debt discount of $2.8 million and $3.3 million, respectively, as of December 31, 2022 and 2021. See Note 9, “Long-Term Debt and Other Liabia lities,” forff ther inforff mation. furff 14. Stock-Based Compensation and 401(k) Plan As of December 31, 2022, we maintained three stock-based incentive compensation plans: the Second Amended and Restated Gogo Inc. 2016 Omnibus Incentive Plan (the “2016 Omnibus Plan”), the Gogo Inc. 2013 Omnibus Incentive Plan (the “2013 Omnibus Plan”), and The Aircell Holdings Inc. Stock Option Plan, collectively refeff rred to as the “Stock Plans,” as well as an Employee Stock the grant of both equity and cash awards, including non- Purchase Plan (“ESPP”), as discussed below. Our Stock Plans provide forff qualififf ed stock options, incentive stock options, stock appr eciation rights, perforff mance awards (shares and units), restricted stock, RSUs, defeff rred share units (“DSUs”) and other stock-based awards and dividend equivalents to eligible employees, directors and consultants, as determined by the Compensation Committee of our Board of Directors (the “Compensation Committee”). a Under the Stock Plans, 33,234,128 shares of common stock were reserved forff issuance. As of December 31, 2022, 6,941,586 grant under our Stock Plans. The contractuat l lifeff of granted options is 10 years. Except as otherwise oved by the Compensation Committee, all options that are unvested as of the date on which a recipient’s employment terminates, futff urt e grants. Options granted beginning in 2010 but prior to the Option Exchange (as defiff ned below) include options that (a) vest certain options granted to non-employee members of certain options granted to non-employee members of shares remained availabla e forff appr a as well as vested options that are not exercised within a prescribed period folff forff in specififf ed increments over a foff ur-year period, (b) vest on the date of grant forff our Board of Directors or (c) vest on the fiff rst anniversaryrr of the date of grant forff our Board of Directors. In June 2020, we consummated an option exchange program that was appr annual meeting held on April 29, 2020 in which previously outstanding eligible options (which excluded options granted forff by non-executive members of our Board of Directors) to purchase 6,664,773 shares of common stock were surrendered and cancelled and we granted replacement options (the “Replacement Options”) in exchange forff the tendered options. Of the 4,168,455 options we granted in 2020, 2,896,383 were Replacement Options. The Replacement Options vested in a single installment on December 31, 2022. oved by our stockholders at the feff ited and become availabla e lowing termination, are forff service a Beginning in 2013, we granted RSUs, which generally vest in equal annual increments over a four -year period. Vested RSUs will be settled, at the discretion of the Compensation Committee, in shares of our common stock or in cash equal to the value of the icabla e number of shares of our common stock on the vesting date. We also granted DSUs to directors, some of which vest on the a appl grant date and others on the fiff rst anniversaryrr of the grant date. DSUs will be settled in shares of our common stock 90 days aftff er the director ceases to serve as a director. We intend to settle RSU and DSU awards in stock and we have the shares availabla e to do so. ff The folff lowing is a summaryrr of our stock-based compensation expense included in the consolidated statements of operations, the years December 31, 2022, 2021 and 2020 (i(( n discontinued operations, forff excluding the stock-based compensation expense forff thousands)s : For the Years Ended December 31, 2021 2020 2022 Cost of service revenue Cost of equipment revenue Engineering, design and development Sales and marketing General and administrative Total stock-based compensation expense $ $ 1,073 $ 1,022 2,532 2,628 11,810 19,065 $ 472 $ 523 1,358 1,615 9,377 13,345 $ 119 235 560 880 6,014 7,808 78 A summaryrr of stock option activity forff the year ended December 31, 2022 is as folff Options outstanding – Januaryrr 1, 2022 Granted Exercised Forfeff ited Expired Options outstanding – December 31, 2022 Options exercisabla e – December 31, 2022 Number of Options 4,802,342 $ — $ (758,681) $ — $ (30,900) $ $ $ 4,012,761 3,708,974 lows: Weighted Average Exercise Price Per Share 4.18 — 2.67 — 17.78 4.36 4.51 Weighted Average Remaining Contractual Lifeff 6.57 Aggregate Intrinsic Value (in thousands) 45,927 $ 5.38 5.32 $ $ 42,396 38,696 As of December 31, 2022, total unrecognized compensation costs related to unvested stock options were appr a oximately $0.4 million which is expected to be recognized over a weighted average period of appr stock options vested in 2022, 2021 and 2020 was appr a a oximately $18 million, $10 million and $16 million, respectively. oximately 1 year. The total grant date faff ir value of We estimate the faff ir value of stock options using the Black-Scholes option-pricing model. No stock options were granted during the year ended December 31, 2022. Weighted average assumptions used and weighted average grant date faff ir value of stock options granted forff the years ended December 31,2021 and 2020 were as folff lows: Approximate risk-frff ee interest rate Average expected lifeff Dividend yield Volatility Weighted average grant date faff ir value of common (years) stock underlying options granted Weighted average grant date faff ir value of stock options granted For the Years Ended December 31, 2021 2020 1.0% 5.50 N/A 77.0% 9.66 6.22 $ $ 0.5% 6.20 N/A 66.8% 2.59 1.56 $ $ The risk-frff ee interest rate assumptions were based on the U.S. Treasuryrr yield curve forff the term that mirrored the expected term in effff eff ct at the time of grant. The expected lifeff of our stock options was determined based upon a simplififf ed assumption that the stock options will be exercised evenly frff om vesting to expiration, as we do not have suffff iff cient historical exercise data to provide a reasonabla e basis upon which to estimate the expected lifeff . The dividend yield was based on expected dividends at the time of grant. Beginning in 2020, we calculated volatility based exclusively on our common stock. The folff lowing tabla e summarizes the activities forff our unvested RSUs and DSUs forff Unvested – Januaryrr 1, 2022 Granted Vested Forfeff ited/canceled Unvested – December 31, 2022 the year ended December 31, 2022: Weighted Average Grant Date Fair Value Number of Underlying Shares 3,998,688 $ 1,513,287 $ (1,897,299) $ (148,451) $ 3,466,225 $ 7.40 17.21 6.50 10.32 12.46 As of December 31, 2022, there was appr a oximately $30 million of unrecognized compensation cost related to unvested employee RSUs. This amount is expected to be recognized over a weighted-average period of appr date faff ir value of RSUs and DSUs vested in 2022 was appr oximately $12 million. a a oximately 2.6 years. The total grant ESPP - In June 2013, the Board of Directors and stockholders appr a oved the ESPP, which became effff eff ctive on June 26, 2013, and in 2017 and 2020, the ESPP was amended to increase the number of shares reserved thereunder. The ESPP allows eligible employees to purchase a limited number of shares of common stock during pre-specififf ed offff eff ring periods at a discount establa ished by the Compensation Committee which may not exceed 15% of the faff ir market value of the common stock at the beginning or end of the offff eff ring period (whichever is lower). Under the ESPP, 2,200,000 shares were reserved forff stock were issued during the year ended December 31, 2022. As of December 31, 2022, 714,091 shares remained availabla e forff purchase under the ESPP. issuance and 52,489 shares of common 401(k) Plan - Under our 401(k) plan, all employees who are eligible to participate are entitled to make tax-defeff rred contributions, subject to Internal Revenue Service limitations. We match 100% of the employee’s fiff rst 4% of contributions made, subject to annual 79 limitations. Our matching contributions were $2.1 million, $1.8 million, and $1.5 million forff 2021 and 2020, respectively. the years ended December 31, 2022, 15. Income Tax For fiff nancial reporting purpos rr es, the income (loss) frff om continuing operations beforff e income taxes included the folff lowing components forff the years ended December 31, 2022, 2021, and 2020 (in thousands): United States Foreign Income (loss) beforff e income taxes $ $ For the Years Ended December 31, 2021 (27,557) $ (3,084) (30,641) $ 2022 105,450 $ 267 105,717 $ 2020 (45,840) (2,865) (48,705) Signififf cant components of the provision (benefiff t) forff income taxes frff om continuing operations forff the years ended December 31, 2022, 2021, and 2020 are as folff lows (in thousands): For the Years Ended December 31, 2021 2020 2022 Current: Federal State Foreign Defeff rred: Federal State Foreign Total $ $ — $ 488 — 488 — $ 90 — 90 11,830 2,464 (1,124) 13,170 13,658 $ (166,706) (20,614) — (187,320) (187,230) $ — 86 — 86 (318) 86 — (232) (146) The provision (benefiff t) forff income taxes frff om continuing operations diffff eff rs frff om income taxes computed at the feff deral statutt oryrr tax rates forff the years ended December 31, 2022, 2021, and 2020 as a result of the folff lowing items: For the Years Ended December 31, 2021 2020 2022 Federal statutt oryrr Effff eff ct of:ff rate Change in valuation allowance State income taxes-net of feff deral tax benefiff t R&D credit Excess tax benefiff ts on stock-based compensation Loss on settlement of 2022 Convertible Notes Other Effff eff ctive tax rate 21.0% 21.0% 21.0% (10.9) 4.0 (0.4) (2.0) — 1.2 12.9% 595.5 3.2 8.3 (3.0) (12.9) (1.1) 611.0% (48.9) 14.0 — 1.2 — 13.0 0.3% 80 Components of the net defeff rred income tax asset as of December 31, 2022 and 2021 are as folff December 31, 2022 lows (in thousands): December 31, 2021 ls Defeff rred income tax assets: Compensation accruarr Stock options Inventoryrr Warranty reserves Fixed assets Capia tal loss Defeff rred revenue Federal net operating loss (NOL) State NOL Foreign NOL Interest carryfrr orff ward UNUU ICAP adjustment Finite-lived intangible assets Operating lease liabia lity R&D credit Section 174 costs Other Total defeff rred income tax assets Defeff rred income tax liabia lities: Indefiff nite-lived intangible assets Right-of-ff use asset Interest rate capa valuation Other Total defeff rred income tax liabia lities Total defeff rred income tax Valuation allowance Net defeff rred income tax asset $ $ 2,912 $ 8,483 990 565 6,438 10,425 18 118,043 26,033 14,430 67,644 4,739 3,334 21,744 3,005 4,624 4,802 298,229 (9,138) (18,525) (10,213) (226) (38,102) 260,127 (97,470) 162,657 $ 2,492 7,839 823 609 5,821 10,425 184 144,591 29,690 15,478 71,778 1,070 3,374 21,118 2,538 — 4,983 322,813 (8,043) (17,684) (909) (324) (26,960) 295,853 (110,720) 185,133 We regularly assess the need forff a valuation allowance related to our defeff rred income tax assets to determine, based on the weight of the availabla e positive and negative evidence, whether it is more likely than not that some or all of such defeff rred assets will not be realized. In our assessments, the Company considers recent fiff nancial operating results, the scheduled expiration of our net operating losses, potential sources of taxabla e income, the reversal of existing taxabla e diffff eff rences, taxabla e income in prior carryba years, if permitted under tax law, and tax planning strategies. Based on our most recent assessment, forff the portion of our defeff rred income tax assets that we are more likely 2022, we released $11.4 million of the valuation allowance forff than not going to utilize. As of December 31, 2022, we can demonstrate an estimate of objectively verififf abla e futff urt e income based on the prior three years of pre-tax income frff om continuing operations, adjusted forff Refiff nancing and the settlement of the 2022 Convertible Notes. This estimate of futff urt e income, along with our assessment of the other positive and negative evidence considered, supports the release of a portion of the valuation allowance. The remaining valuation allowance is still required forff defeff rred tax assets related to certain state and forff eign NOLs, capia tal losses, and the Section 163(j(( ) interest limitation carryfrr orff ward as it was more likely than not as of December 31, 2022 that these defeff rred tax assets will not be realized. If we continue to sustain our current operating perforff mance, additional reversals of our valuation allowance could occur within the next twelve months. the change in interest expense resulting frff om the the year ended December 31, ck rr As of December 31, 2022, the feff deral net operating loss (“NOL”) carryfrr orff ward amount was appr a oximately $562 million, the state NOL carryfrr orff ward amount was appr $292 million. The feff deral NOLs will begin to expire in 2032. The state NOLs expire in various tax years beginning in 2023. The oximately $54 interest carryfrr orff ward does not expire. As of December 31, 2022, the Canadian NOL carryfrr orff ward amount was appr million, and it will begin to expire in 2032. oximately $448 million and the Section 163(j(( ) interest limitation carryfrr orff ward amount was a a Utilization of our NOL, interest and tax credit carryfrr orff wards may be subject to substantial annual limitations due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such annual limitations could result in the expiration of the NOL and tax credit carryfrr orff wards beforff e their utilization. The interest carryfrr orff ward arises frff om the Tax Cuts and Jobs Act and generally limits the interest expense deduction to 30% of income (loss) attributabla e to common stock beforff e interest expense, interest income, income taxes and depreciation and amortization forff attributabla e to common stock beforff e interest expense, interest income and income taxes forff carryfrr orff ward will not expire as it may be carried forff ward indefiff nitely. tax years 2018 to 2021 and 30% of income (loss) 2022 and subsequent years. The interest 81 Uncertain Tax Positions - As of December 31, 2022, the total amount of gross unrecognized tax benefiff ts was $0.8 million, which, if recognized, would impact the Company's effff eff ctive tax rate. As of December 31, 2021, we did not have any gross unrecognized tax benefiff ts. The aggregate change in the balance of gross unrecognized tax benefiff ts, which excludes interest and penalties forff the year ended December 31, 2022 is as folff lows (i(( n thousands)s : Beginning balances Increases related to tax positions taken during a prior year Decreases related to tax positions taken during a prior year Increases related to tax positions taken during the current year Decreases related to settlements with taxing authorities Decreases related to expiration of the statutt e of limitations Ending balances $ $ For the Year Ended December 31, 2022 — 555 — 244 — — 799 We are subject to taxation and fiff le income tax returt ns in the United States feff deral jurisdiction and many states and Canada. With feff w exceptions, as of December 31, 2022, we are no longer subject to U.S. feff deral, state, local or forff eign examinations by tax authorities forff years beforff e 2019. We record penalties and interest relating to uncertain tax positions in the income tax provision line item in the consolidated the years ended December 31, statement of operations. No penalties or interest related to uncertain tax positions were recorded forff 2022, 2021 or 2020. As of December 31, 2022 and 2021, we did not have a liabia lity recorded forff interest or potential penalties. We do not expect a change in the unrecognized tax benefiff ts within the next 12 months. 16. Leases The folff lowing is a summaryrr of our lease expense included in the consolidated statement of operations (i(( n thous tt ands)s : Operating lease cost Finance lease cost: Amortization of leased assets Interest on lease liabia lities Total lease cost For the Years Ended December 31, 2020 2021 2022 11,688 13,203 $ 14,964 $ 156 40 15,160 $ 35 50 13,288 $ 230 113 12,031 $ $ Other inforff mation regarding our leases is as folff lows (i(( n thousands, exee cepte lease terms and disii count rates)s : For the Years Ended December 31, 2021 2022 2020 Supplemental cash flff ow inforff mation Cash paid forff lease liabia lities: amounts included in measurement of Operating cash flff ows used in operating leases Operating cash flff ows used in fiff nance leases Financing cash flff ows used in fiff nance leases Non-cash items: Operating leases obtained Finance leases obtained Weighted average remaining lease term Operating leases Finance leases Weighted average discount rate Operating leases Finance leases $ $ $ $ $ $ $ $ $ $ 15,194 40 184 13,547 11 8 years 1 year 13,930 51 145 $ $ $ 43,148 $ — $ 9 years 2 years 12,733 113 546 5,342 428 7 years 2 years 6.7% 17.0% 7.0% 18.6% 11.2% 10.5% 82 Annual futff urt e minimum lease payments as of December 31, 2022 (i(( n thousands)s : Years ending December 31, 2023 2024 2025 2026 2027 Thereaftff er Total futff urt e minimum lease payments Less: Amount representing interest Present value of net minimum lease payments Reported as of December 31, 2022 Accruer d liabia lities Non-current operating lease liabia lities Other non-current liabia lities Total lease liabia lities Operating Leases Financing Leases $ $ $ $ 14,499 $ 15,087 14,227 14,048 13,191 42,630 113,682 (25,347) 88,335 $ 9,094 $ 79,241 — 88,335 $ 141 4 2 — — — 147 (9) 138 133 — 5 138 As of December 31, 2022, there were no signififf cant leases which had not yet commenced. 17. Commitments and Contingencies Contractual Commitments – We have agreements with various vendors under which we have remaining commitments to purchase hardware components and development services. Such commitments will become payabla e as we receive the hardware components or as development services are provided. In June 2022, we and Hughes entered into a supply and product support agreement (the “SPSA”), providing forff our purchase r ne antennas forff frff om Hughes of airbor use on a LEO satellite network, and the perforff mance by Hughes of services related thereto. Under the SPSA, we commit to purchase, over a seven-year period that will begin on completion of a project milestone currently expected to occur at the end of 2024, antennas with an estimated aggregate purchase price of appr seven-year period, Hughes may not sell substantially similar equipment to other purchasers in our primaryrr oximately $170 million. During that target market. a Indemnififf cations and Guarantees – In accordance with Delaware law, we indemnifyff our offff iff cers and directors forff certain events or occurrences while the offff iff cer or director is, or was, serving at our request in such capaa of futff urt e payments we could be required to make under this indemnififf cation is uncertain and may be unlimited, depending upon circumstances. However, our Directors’ and Offff iff cers’ insurance does provide coverage forff certain of these losses. city. The maximum potential amount In the ordinaryrr course of business, we may occasionally enter into agreements pursuant to which we may be obligated to pay forff ate credit cards issued to employees. Based on historical experience, the faff ilure of the perforff mance of others, such as the use of corpor we believe that the risk of sustaining any material loss related to such guarantees is remote. r We have entered into a number of agreements pursuant to which we indemnifyff or incurred in connection with any patent, copyright, or trademark infrff ingement or misappr opriation claim asserted by a third party with respect to our equipment or services. The maximum potential amount of futff urt e payments we could be required to make under these indemnififf cation agreements is uncertain and is typically not limited by the terms of the agreements. the other party forff a losses and expenses suffff eff red Securities Litigation – On June 27, 2018, a purpor rr ted stockholder of the Company fiff led a putative class action lawsuit in the r tedly on behalf of all purchasers of our securities frff om Februarr the Northern District of Illinois, Eastern Division (the “Court”) styled Pierrelouis v. Gogo Inc., United States District Court forff naming the Company, its forff mer Chief Executive Offff iff cer and Chief Financial Offff iff cer, its current Chief Financial Offff iff cer and its then- current President, Commercial Aviation, as defeff ndants purpor 2017 through May 4, 2018. The complaint asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and RulRR e 10b-5 promulgated thereunder, alleging misrepresentations or omissions by us purpor of and installation and remediation costs associated with CA’s 2KuKK antenna. The plaintiffff sff sought to recover frff om us and the individual defeff ndants an unspecififf ed amount of damages. In December 2018, the plaintiffff sff fiff led an amended complaint and in Februar two independent grounds, fiff nding that the plaintiffff sff faff iled to plausibly allege that the defeff ndants made materially faff lse or misleading statements and that the plaintiffff sff faff iled to plead with particularity that the defeff ndants acted with scienter. The amended complaint was dismissed without preje udice, and in December 2019, the defeff ndants fiff led a second amended complaint. In July 2020, the plaintiffff sff fiff led a motion requesting leave to fiff le a proposed third amended complaint, which was granted by the Court. The plaintiffff sff proceeded to fiff le the third amended complaint in July 2020 and we fiff led a motion to dismiss in September 2020. In April 2021, the Court denied our motion to dismiss, and the defeff ndants fiff led their answer and affff iff rmative defeff nses to the third amended complaint in June 2021. ryrr 2019, we fiff led a motion to dismiss such amended complaint. In October 2019, the judge granted the motion to dismiss on ting to relate to the reliabia lity ryrr 27, r 83 The parties engaged in mediation and reached a tentative resolution that included a cash payment of $17.3 million (funde l our Directors’ and Offff iff cers’ (“D&O”) insurance policy) in exchange forff releases. As a result of this development, the Company accruer d a $17.3 million liabia lity within Accruerr d liabia lities and a corresponding insurance receivabla e in Prepaid expenses and other current assets in the consolidated balance sheets as of December 31, 2021. On April 12, 2022, the parties entered into a Stipulation and Agreement of Settlement memorializing these terms (the “Class Action Settlement”). On May 3, 2022, the Court signed an order (i) preliminarily appr oving the notice to be sent to members of the settlement class; and (iv) scheduling a fiff nal hearing forff August settlement class; (iii) appr 30, 2022, and the insurance carriers subsequently deposited the settlement amount into escrow. On August 31, 2022, the Court issued a fiff nal judgment appr released the $17.3 million liabia lity and corresponding insurance receivabla e aftff er the Court appr oving the Class Action Settlement and dismissing all claims against the defeff ndants with preje udice. The Company a dismissal with preje udice of the class claims and fulff oving the Class Action Settlement; (ii) certifyiff ng the oved the Class Action Settlement. d by a a a a ff Derivative Litigation – On September 25, 2018 and September 26, 2018, two purpor r ted stockholders of the Company fiff led rr substantively identical derivative lawsuits in the Court, styled Nanduri v. Gogo Inc. and Hutsenpiller v. Gogo Inc., respectively. Both lawsuits were purpor tedly brought derivatively on behalf of us and name us as a nominal defeff ndant and name as defeff ndants each then- current member of the Company’s Board of Directors, its forff mer Chief Executive Offff iff cer and Chief Financial Offff iff cer, its then-current President, Commercial Aviation, and its current Chief Executive Offff iff cer and Chief Financial Offff iff cer. The complaints assert claims under Section 14(a) of the Securities Exchange Act of 1934, breach of fiff duciaryrr duty, unjust enrichment, and waste of corpor assets, and allege misrepresentations or omissions by us purpor remediation costs, as well as allegedly excessive bonuses, stock options, and other compensation paid to current offff iff cers and directors and excessive severance paid to forff mer offff iff cers. The plaintiffff sff seek to recover, on our behalf,ff an unspecififf ed amount of damages frff om the individual defeff ndants. The two lawsuits were consolidated and were stayed pending a fiff nal disposition of the motion to dismiss in the class action suit and remain stayed. In addition, a purpor dated June 21, 2021, demanding based on substantially the same allegations, that the Company sue certain current and forff mer Offff iff cers forff , inter alia, breach of fiff duciaryrr duty. The two derivative lawsuits and the litigation demand letter are collectively refeff rred to herein as the “Derivative Matters” and the plaintiffff sff in the two derivative lawsuits and the purpor demand letter are collectively refeff rred to herein as the “Stockholders.” ate ting to relate to the 2KuKK antenna’s reliabia lity and installation and ted stockholder has sent a letter to the Company’s Board of Directors, ted stockholder who sent the litigation r r r rr On Januaryrr 5, 2023, folff lowing mediation, the defeff ndants and the Stockholders entered into Stipulation and Agreement of Settlement (the “Derivative Settlement”) under which the Company, in consideration of dismissal of the two derivative lawsuits with preje udice and a release of all claims asserted against the Company and the individual defeff ndants in the Derivative Matters, will implement certain corpor Under the terms of the Derivative Settlement, the defeff ndants will not be required to pay any damages. We have accruerr d a liabia lity forff attorneys’ feff es within Accruer d liabia lities and a corresponding receivabla e in Prepaid expenses and other current assets in the consolidated balance sheets. ate governance initiatives and cause its D&O insurance carrier to pay the Stockholders’ attorneys’ feff es. r On Februarr ryrr 1, 2023, the Court granted preliminaryrr appr a oval of the proposed Derivative Settlement, appr a oved various notices to be disseminated to the Company’s stockholders and the schedule forff The Derivative Settlement is conditioned on fiff nal Court appr defeff nd them vigorously should the Derivative Settlement forff a dissemination, and scheduled a fiff nal hearing forff April 11, 2023. oval. We believe that the claims are without merit and will continue to any reason not become fiff nal. SmartSkykk Litigation – On Februar the District of Delaware alleging that Gogo 5G infrff inges four ryrr 28, 2022, SmartSky Networks, LLC brought suit against Gogo Inc. and its subsidiaryrr patents ryrr 21, 2023, the plaintiffff amended its complaint to allege that Gogo 5G infrff inges two additional Gogo Business Aviation LLC in the U.S. District Court forff owned by the plaintiffff .ff On Februarr patents recently issued to the plaintiffff .ff The suit seeks an unspecififf ed amount of compensatoryrr damages as well as treble damages forff alleged willfulff infrff ingement and reimbursement of plaintiffff 'ff s costs, disbursements and attorneys' feff es. Under a schedule agreed upon by the parties, faff ct discoveryrr and claim construcrr expert discoveryrr by early-to-mid 2024, with dispositive motions to folff Februar making, using, offff eff ring to sell or selling the Gogo 5G system. On September 26, 2022, the Court issued an order denying the PI Motion. The plaintiffff has appe appe a plaintiffff ’ff s claims are without merit and intend to continue to vigorously defeff nd our position in the infrff ingement suit and defeff nd against the appe forff tion proceedings will be substantially completed by the end of 2023 or early 2024, and low. A trial date has been scheduled forff April 14, 2025. Also on the llate court will schedule oral argument. We believe that the ryrr 28, 2022, the plaintiffff fiff led a motion (the “PI Motion”) requesting that the Court preliminarily enjoin the Company frff om any potential losses under this matter, as we cannot reasonabla y predict the outcome of the litigation or any potential losses. al and the underlying litigation are inherently uncertain. No amounts have been accruer d al will be completed by early March of 2023, aftff er which the appe aled the denial to the U.S. Court of Appeals forff the Federal Circuit. We expect that briefiff ng forff al. The outcomes of the appe a a a a ff From time to time we may become involved in legal proceedings arising in the ordinaryrr course of our business. We cannot predict with certainty the outcome of any litigation or the potential forff futff urt e litigation. Regardless of the outcome of any particular litigation and the merits of any particular claim, litigation can have a material adverse impact on our company due to, among other reasons, any injunctive relief granted, which could inhibit our abia lity to operate our business, amounts paid as damages or in settlement of any such matter, diversion of management resources and defeff nse costs. 84 18. Accumulated Other Comprehensive Income (Loss) The folff lowing is a summaryrr of changes in accumulated other comprehensive income (loss) by component (i(( n thousands)s : Balance at January 1, 2020 Other comprehensive income beforff e reclassififf cations Less: income (loss) realized and reclassififf ed to earnings Net current period comprehensive income Balance at December 31, 2020 Other comprehensive income beforff e reclassififf cations Less: loss realized and reclassififf ed to earnings Net current period comprehensive income Balance at December 31, 2021 Other comprehensive income (loss) beforff e reclassififf cations Less: income realized and reclassififf ed to earnings Net current period comprehensive income (loss) Balance at December 31, 2022 Currency Translation Adjd ustment Change in Fair Value of Cash Flow Hedge Total $ $ $ $ (2,256) $ 1,243 — 1,243 (1,013) $ 53 — 53 (960) (265) — (265) (1,225) $ — $ — — — — $ 2,747 (2) 2,749 2,749 34,765 6,161 28,604 31,353 $ $ (2,256) 1,243 — 1,243 (1,013) 2,800 (2) 2,802 1,789 34,500 6,161 28,339 30,128 85 19. Condensed Financial Inforff mation of Registrant The folff lowing presents the condensed fiff nancial inforff mation of our parent company on a standalone basis. Gogo Inc. Condensed Balance Sheets (i(( n thousands)s Assets: Cash and cash equivalents Prepaid expenses and other current assets Defeff rred income taxes Total assets Liabia lities and stockholders’ defiff cit: Other current liabia lities Current portion of long-term debt Investments and payabla es with subsidiaries Total liabia lities Total stockholders’ defiff cit Total liabia lities and stockholders’ defiff cit December 31, 2022 December 31, 2021 $ $ $ $ 37,174 $ — 172,871 210,045 $ 55,069 25 186,041 241,135 113 $ — 311,801 311,914 (101,869) 210,045 $ 740 102,370 458,179 561,289 (320,154) 241,135 Gogo Inc. Condensed Statements of Operations and Comprehensive Income (Loss) (i(( n thousands)s For the Years Ended December 31, 2021 2020 2022 Interest income Interest expense Loss on extinguishment of debt Other Total other expense Loss beforff e income taxes Income tax provision (benefiff t) Equity (gains) losses of subsidiaries Net income (loss) Comprehensive income (loss) $ $ $ (455) $ 2,770 — 1 2,316 (2,316) 13,658 (108,033) 92,059 $ 92,059 $ (6) $ 9,504 18,948 (4) 28,442 (28,442) (187,230) 6,053 152,735 $ 152,735 $ (451) 29,318 — 4 28,871 (28,871) (146) 221,311 (250,036) (250,036) 86 Gogo Inc. Condensed Statements of Cash Flows (i(( n thousands)s Net income (loss) Accretion of debt discount Amortization of defeff rred fiff nancing costs Loss on extinguishment of debt Subsidiaryrr equity (gains) losses Defeff rred income taxes Other operating activities Net cash used in operating activities Investments and advances with subsidiaries Net cash provided by (used in) investing activities Financing activities: Repurchase of convertible notes Repurchase of common stock Stock-based compensation activity Net cash used in fiff nancing activities Increase (decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash at beginning of period Cash, cash equivalents and restricted cash at end of period Cash, cash equivalents and restricted cash at end of period Less: current restricted cash Less: non-current restricted cash Cash and cash equivalents at end of period $ $ $ $ 2022 For the Years Ended December 31, 2021 152,735 $ — 1,387 18,948 6,053 (187,220) 1,819 (6,278) 11,552 11,552 92,059 $ — 418 — (108,033) 13,170 (627) (3,013) 6,047 6,047 2020 (250,036) 13,255 1,781 — 221,311 (232) (114) (14,035) (45,097) (45,097) — (18,375) (2,579) (20,954) (17,920) — — (5,245) (5,245) (2,498) — (4,227) (6,725) 29 (65,857) 55,094 37,174 $ 37,174 $ — — 37,174 $ 55,065 55,094 $ 55,094 $ 25 — 55,069 $ 120,922 55,065 55,065 — — 55,065 20. Discontinued Operations As discussed in Note 1, “Background,” on December 1, 2020, we completed the sale of our CA business to Intelsat. As a result all periods as discontinued operations. of the Transaction, the CA business is reported forff The folff lowing tabla e summarizes the results of discontinued operations which are presented as Net loss frff om discontinued operations, net of tax, in our consolidated statements of operations (i(( n thousands)s : 87 Revenue: Service revenue Equipment revenue Total revenue Operating expenses: Cost of service revenue (exclusive of items shown below) Cost of equipment revenue (exclusive of items shown below) Engineering, design and development Sales and marketing General and administrative Impairment of long-lived assets Depreciation and amortization Total operating expenses Operating loss Other (income) expense: Gain on sale of CA business Other (income) expense Total other (income) expense: Loss beforff e income taxes Income tax provision (benefiff t) For the Years Ended December 31, 2021 2022 2020 — $ — — 192,616 40,483 233,099 — 145,958 $ — $ — — — — — — — — — — — — — — 6,283 — — 6,283 (6,283) — — — — — — $ (1,598) — (1,598) (4,685) (831) (3,854) $ 33,978 57,167 24,121 40,551 47,375 119,827 468,977 (235,878) (37,958) 3,134 (34,824) (201,054) 423 (201,477) Net loss frff om discontinued operations, net of tax $ The folff lowing discussion relates entirely to discontinued operations. Gain on Sale – Upon the closing of the Transaction on December 1, 2020, we received initial gross proceeds of $386.3 million, cash, debt, transaction expenses and working capia tal. The fiff nal purchase which reflff ects the $400.0 million purchase price, adjusted forff price was subject to change due to customaryrr post-closing purchase price adjustment procedures set forff agreement between Gogo and Intelsat, that were not yet complete. As the post-closing purchase price adjustment was not yet fiff nalized and thereforff e represented a contingent gain, $9.4 million was recorded as a defeff rred gain on sale included within Accruer d liabia lities as of December 31, 2020. During December 2020, we recognized within Gain on sale of CA business a pretax gain on sale of $38.0 million, computed as the $386.3 million of initial gross proceeds less (i) the potential $9.4 million post-closing purchase price adjustment not yet fiff nalized, (ii) the carryirr ng value of the assets and liabia lities transfeff rred in the Transaction and (iii) Transaction- related costs. In October 2021, the independent accounting fiff rm engaged to resolve a dispute between the parties regarding the working capia tal matter determined the fiff nal amount of the working capia tal adjustments to be $7.8 million. In the four 2021, Gogo paid Intelsat the $7.8 million and recognized an additional Gain on sale of CA business of $1.6 million. th in the purchase and sale th quarter of ff Stock-Based Compensation – In August 2020, the Compensation Committee appr a oved modififf cations to the vesting conditions and exercise periods of outstanding equity compensation awards held by certain of our then-current employees who became employees of Intelsat in the Transaction. These modififf cations became effff eff ctive upu on the consummation of the Transaction. Pursuant to such modififf cations, the options and restricted stock units (“RSUs”) held by Intelsat employees generally vested on the earlier of (i) the original vesting date and (ii) December 1, 2021; provided that the employee did not voluntarily resign frff om and was not terminated forff cause by Intelsat prior to such date. Certain of these awards vested based on conditions that are not classififf ed as a service, market or perforff mance condition and as a result such awards were classififf ed as a liabia lity. Other than mark-to-market adjustments, all costs related to stock-based compensation forff of December 31, 2020. For the year ended December 31, 2021, $24.0 million was reclassififf ed frff om Accruer d liabia lities to Additional paid-in capia tal as the awards vested during the period. As of December 31, 2021, there were no remaining liabia lity-classififf ed awards. our prior employees who became employees of Intelsat in the Transaction were recognized as The folff lowing is a summaryrr of our stock-based compensation expense by operating expense line contained within the results of discontinued operations forff the years December 31, 2022, 2021 and 2020 (i(( n thous tt ands)s : 2022 Cost of service revenue Cost of equipment revenue Engineering, design and development Sales and marketing General and administrative Total stock-based compensation expense $ $ — $ — — — — — $ 2021 2020 — $ — — — 4,817 4,817 $ 7,647 — 5,836 7,911 4,413 25,807 See Note 14, “Stock-Based Compensation and 401(k) Plan,” forff additional inforff mation on our stock-based compensation plans. 88 Other Costs Classififf ed to Discontinued Operations – During the year ended December 31, 2021, we incurred $1.5 million of and income tax benefiff t) primarily due additional costs (exclusive of the gain on sale, stock-based compensation expense noted above to employer-paid taxes arising frff om the exercise of stock options by forff mer employees then employed by Intelsat. a Change in Estimates – During the second quarter of 2020, our agreement with Delta Air Lines, Inc. (“Delta”) to provide 2KuKK ryrr 2027 with respect to all aircraftff to service on certain Delta aircraftff was amended to change the contract expiration date frff om Februarr a staggered, flff eet by flff eet expiration schedule under which expiration dates will occur between November 2020 and July 2022 (the “Delta amendment”). As a result, the usefulff dates in the amended agreement. The change in estimated usefulff depreciation during the year ended December 31, 2020. We ceased depreciating these assets and other depreciabla e assets included as part of discontinued operations when the CA business was classififf ed as held forff r remaining defeff rred airbor new expiration dates, which resulted in appr 2020. Amortization of defeff rred airbor ne lease incentives associated with the equipment installed on the 2KuKK flff eets were shortened to align with the lives of the equipment installed on these flff eets were shortened to align with the expiration oximately $42.0 million of accelerated amortization during the year ended December 31, ne lease incentives is a reduction to cost of service revenue. sale. Additionally, the amortization periods forff oximately $41.0 million of accelerated lives resulted in appr the a a r Credit Losses – During the year ended December 31, 2020, we recorded $10.7 million of provisions forff expected credit losses, primarily related to one international airline partner entering bankrupt $0.6 million. rr cy administration, while we had recoveries of appr a oximately Arrangements with Commercial Airlines – For our divested CA business, pursuant to contractuat l agreements with our airline partners, we placed our equipment on commercial aircraftff operated by the airlines in order to deliver our service to passengers on the aircraftff . We had two types of commercial airline arrangements: turt nkey and airline-directed. Under the airline-directed model, we transfeff rred control of the equipment to the airline and thereforff e the airline was our customer in these transactions. Under the turt nkey model, we had not transfeff rred control of our equipment to our airline partner and, as a result, the airline passenger was deemed to be our customer. Transactions with our airline partners under the turt nkey model were accounted forff as an operating lease of space on an aircraftff . We recognized $71.2 million forff the year ended December 31, 2020 as a reduction to our cost of service revenue frff om the amortization of defeff rred airbor r ne lease incentives. Under the turt nkey model, the revenue share paid to our airline partners represented operating lease payments. These payments were deemed to be contingent rental payments as the payments due to each airline were based on a percentage of our CA service revenue generated frff om that airline’s passengers, which was unknown until realized. Thereforff e, we estimated the lease payments due to an airline at the commencement of our contract with such airline. This rental expense is included in cost of service revenue and is partially offff sff et by the amortization of the defeff rred airbor resulting frff om the Delta amendment and a signififf cant reduction in revenue share as a result of COVID-19, the amortization of defeff rred r airbor ne lease incentives exceeded our revenue share expense by $49.1 million forff . Due to the accelerated amortization ne lease incentives discussed above the year ended December 31, 2020. a r Asset Impairment – We reviewed our long-lived assets, including property and equipment, right-of-ff use assets, and other non- potential impairment whenever events indicated that the carryirr ng amount of such assets might not be recoverabla e. current assets, forff We perforff med this review by comparing the carryirr ng value of the long-lived assets to the estimated futff urt e undiscounted cash flff ows expected to result frff om the use of the assets. We grouped certain long-lived assets by airline contract and by technology. If we determined that an impairment existed, the amount of the impairment was computed as the diffff eff rence between the asset group’s carryirr ng value and its estimated faff ir value, folff lowing which the assets were written down to their estimated faff ir values. In light of the COVID-19 pandemic and its impact on air travel, including decreased flff ights, decreased gross passenger t ty and our airline partners’ temporaryrr parking of a signififf cant number of their aircraftff , we conducted a review as of March the CA business opportuni 31, 2020 and determined that the carryirr ng values forff exceeded their estimated undiscounted cash flff ows, which triggered the need to estimate the faff ir value of these assets. Fair value reflff ects our best estimate of the discounted cash flff ows of the impaired assets. For the airbor with the three airline agreements (the “impaired assets”), we recorded an impairment charge of $46.4 million forff period ended March 31, 2020, reflff ecting the diffff eff rence between the carryirr ng value and the estimated faff ir value of the impaired assets. We conducted another review as of June 30, 2020 due to the continuation of the COVID-19 pandemic as well as the signing of the Delta amendment and determined that $1.0 million of defeff rred STC costs was impaired due to the bankrupt As such, we recorded a $1.0 million charge forff the year ended December 31, 2020, charges recorded forff the asset groups related to three of our airline agreements forff impairments of long-lived assets totaled $47.4 million. the three-month period ended June 30, 2020. For ne assets and right-of-ff use assets associated impairment of long-lived assets forff cy of three airline partners. the three-month r r Revenue Recognition We account forff revenue in accordance with Accounting Standards Codififf cation Topic 606, Revenue frff om ContCC rt actstt with CusCC tomersrr (“ASC 606”). CA’s airline-directed contracts contain multiple perforff mance obligations, which primarily include the sale of equipment, installation services, connectivity services and entertainment services. For these contracts, we accounted forff each distinct good or 89 service as a separate perforff mance obligation. We allocated the contract’s transaction price to each perforff mance obligation using the relative standalone selling price, which was based on the actuat any good or service sold separately to a similar class of customer, if availabla e. To the extent a good or service was not sold separately, we used our best estimate of the standalone selling price and maximized the use of observabla e inputs. The primaryrr method we used to estimate the standalone selling price was the expected cost-plus margin appr l selling price forff oach. a The contractuat es includes connectivity and entertainment services, which may be based on a fiff xed monthly feff e per aircraftff or a variabla e feff e based on the volume of connectivity activity, or a combination of both. Examples of variabla e consideration within CA’s airline contracts include megabyt e overages and pay-per-use sessions. l consideration used forff allocation purpos a r We constrained our estimates to reduce the probabia lity of a signififf cant revenue reversal in futff urt e periods, allocated variabla e consideration to the identififf ed perforff mance obligations and recognized revenue in the period the services were provided. Our estimates were based on historical experience, anticipated futff urt e perforff mance, market conditions and our best judgment at the time. For 2020, our estimates included management’s best assumptions forff gross passenger opportuni the continued impact of COVID-19, which included decreased flff ights and ty (“GPO”). t A signififf cant change in one or more of these estimates could have affff eff cted estimated contract value. For example, estimates of variabla e revenue within certain contracts required estimation of the number of sessions or megabyt es that would be purchased over the contract term and the average revenue per connectivity session, which varies based on the connectivity options availabla e to passengers on each airline. Estimated revenue under these contracts anticipated increases in take rates over time and assumed an average revenue per session consistent with our historical experience. a We regularly reviewed and updated our estimates, especially in light of COVID-19, and recognized adjustments under the cumulative catch-up method. Any adjustments under this method were recorded as a cumulative adjustment in the period identififf ed and revenue forff futff urt e periods was recognized using the new adjusted estimate. 90 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures Management, with the participation of our Chief Executive Offff iff cer and the Chief Financial Offff iff cer, evaluated the effff eff ctiveness of the design and operation of the Company’s disclosure controls and procedures (as defiff ned in RulRR es 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of December 31, 2022 that are designed to provide reasonabla e assurance that inforff mation required to be disclosed in this report is recorded, processed, summarized and reported within required time periods. Based upon this evaluation, our Chief Executive Offff iff cer and the Chief Financial Offff iff cer have concluded that our disclosure controls and procedures were effff eff ctive as of December 31, 2022. (b) Management’s Annual Report on Internal Control Over Financial Reporting The management of Gogo Inc. is responsible forff establa ishing and maintaining adequate internal control over fiff nancial reporting as defiff ned in RulRR es 13a – 15(f)ff and 15d – 15(f)ff under the Securities Exchange Act of 1934. Gogo’s internal control over fiff nancial reporting is designed to provide reasonabla e assurance regarding the reliabia lity of fiff nancial reporting and the preparation and faff ir presentation of its published fiff nancial statements in accordance with accounting principles generally accepted in the United States of America. The management of Gogo, with the participation of the Company’s Chief Executive Offff iff cer and Chief Financial Offff iff cer, have assessed the effff eff ctiveness of Gogo’s internal control over fiff nancial reporting as of December 31, 2022, based on the criteria set forff th in Internal Control-Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment, the Company’s management concluded that our internal control over fiff nancial reporting was effff eff ctive as of December 31, 2022. Deloitte & Touche LLP, the Company’s independent registered public accounting fiff rm, has issued an attestation report on our internal control over fiff nancial reporting as of December 31, 2022, which report is included on Page 92 of this Annual Report on Form 10-K under the capta ion entitled “Report of Independent Registered Public Accounting Firm.” Because of its inherent limitations, internal control over fiff nancial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the effff eff ctiveness to futff urt e periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. (c) Changes in Internal Control over Financial Reporting There have been no material changes to our internal control over fiff nancial reporting in connection with the evaluation required by RulRR es 13a-15(f)ff and 15d-15(f)ff under the Exchange Act during the most recent fiff scal quarter that have materially affff eff cted, or are reasonabla y likely to materially affff eff ct, our internal control over fiff nancial reporting. Item 9B. Other Inforff mation None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections a Not appl icabla e. 91 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Gogo Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over fiff nancial reporting of Gogo Inc. and subsidiaries (the “Company”) as of December 31, 2022, based on criteria establa ished in IntII ernal ContCC rol — IntII egre ated FrFF ameworkrr (2013) Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effff eff ctive internal control over fiff nancial reporting as of December 31, 2022, based on criteria establa ished in IntII ernal ContCC rol — IntII egre ated FrFF ameworkrr (2013) issued by the Committee of Sponsoring issued by COSO. (( (( We have also audited, in accordance with the standards of the Publu ic Company Accounting Oversight Board (United States) (PCAOB), the consolidated fiff nancial statements as of and forff Februar ryrr 28, 2023, expressed an unqualififf ed opinion on those fiff nancial statements. the year ended December 31, 2022, of the Company and our report dated Basis forff Opinion The Company’s management is responsible forff maintaining effff eff ctive internal control over fiff nancial reporting and forff the effff eff ctiveness of internal control over fiff nancial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over fiff nancial reporting based on our audit. We are a public accounting fiff rm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. feff deral securities laws and the appl and Exchange Commission and the PCAOB. icabla e rulrr es and regulations of the Securities its assessment of a We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perforff m the audit to obtain reasonabla e assurance about Our audit included obtaining an understanding of internal control over fiff nancial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effff eff ctiveness of internal control based on the assessed risk, and perforff ming such other procedures as we considered necessaryrr opinion. whether effff eff ctive internal control over fiff nancial reporting was maintained in all material respects. in the circumstances. We believe that our audit provides a reasonabla e basis forff our a Defiff nition and Limitations of Internal Control over Financial Reporting A company’s internal control over fiff nancial reporting is a process designed to provide reasonabla e assurance regarding the reliabia lity of es in accordance with generally accepted accounting fiff nancial reporting and the preparation of fiff nancial statements forff principles. A company’s internal control over fiff nancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonabla e detail, accurately and faff irly reflff ect the transactions and dispositions of the assets of the company; (2) provide reasonabla e assurance that transactions are recorded as necessaryrr accordance with generally accepted accounting principles, and that receipts and expenditurt es of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonabla e assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effff eff ct on the fiff nancial statements. to permit preparation of fiff nancial statements in external purpos r Because of its inherent limitations, internal control over fiff nancial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effff eff ctiveness to futff urt e periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Chicago, Illinois Februar ryrr 28, 2023 92 Item 10. Directors, Executive Offff iff cers and Corporate Governance Part III The inforff mation required by this item is incorpor rr ated by refeff rence to our Proxy Statement forff the 2023 Annual Meeting of Stockholders to be fiff led with the Securities and Exchange Commission (“SEC”) within 120 days of the fiff scal year ended December 31, 2022. Item 11. Executive Compensation The inforff mation required by this item is incorpor ated by refeff rence to our Proxy Statement forff rr Stockholders to be fiff led with the SEC within 120 days of the fiff scal year ended December 31, 2022. the 2023 Annual Meeting of Item 12. Security Ownership of Certain Benefiff cial Owners and Management and Related Stockholder Matters Inforff mation appe a aring under the capta ion “Security Ownership of Certain Benefiff cial Owners and Management” in our Proxy the 2023 Annual Meeting of Stockholders to be fiff led with the SEC within 120 days of the fiff scal year ended December 31, Statement forff r 2022 is incorpor ated herein by refeff rence. The folff lowing tabla e sets forff th the number of shares of our common stock reserved forff issuance under our equity compensation plans (which includes amounts forff both continuing and discontinued operations) as of the end of 2022: Plan Category Equity compensation plans appr a oved by security holders Equity compensation plans not appr a oved by security holders Total Number of securities to be issued upon exercise of outstanding options, warrants and rights (#) (a) Weighted average exercise price of outstanding options, warrants and rights ($) (b) Number of securities remaining available forff fuff ture issuance under equity compensation plans (excluding securities reflff ected in column (a))(#) (c) 8,425,904 (1) N/A 8,425,904 4.36 (2) N/A 4.36 7,655,677 (3) N/A 7,655,677 (1) Represents the number of shares associated with options, RSUs and DSUs outstanding as of December 31, 2022. (2) Represents the weighted average exercise price of the 4,012,761 options disclosed in column (a). (3) Represents the number of shares remaining availabla e forff futff urt e issuance under our Second Amended and Restated 2016 Omnibus Incentive Plan (6,939,571 shares), 2013 Omnibus Incentive Plan (2,015 shares) and ESPP (714,091 shares). Of this number, only 4,787,000 shares are availabla e forff of stock (rather than an increase in value) under the 2016 Omnibus Plan and 2013 Omnibus Plan. issuance with respect to RSUs, DSUs and other awards based on the fulff l value 93 Item 13. Certain Relationships and Related Transactions, and Director Independence The inforff mation required by this item is incorpor ated by refeff rence to our Proxy Statement forff rr Stockholders to be fiff led with the SEC within 120 days of the fiff scal year ended December 31, 2022. the 2023 Annual Meeting of Item 14. Principal Accounting Fees and Services The inforff mation required by this item is incorpor ated by refeff rence to our Proxy Statement forff rr Stockholders to be fiff led with the SEC within 120 days of the fiff scal year ended December 31, 2022. the 2023 Annual Meeting of 94 Item 15. Exhibits, Financial Statement Schedules We have fiff led the folff lowing documents as part of this Annual Report on Form 10-K: 1. Consolidated Financial Statements: Part IV Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Comprehensive Income (Loss) Consolidated Statements of Cash Flows Consolidated Statements of Stockholders’ Equity (Defiff cit) Notes to Consolidated Financial Statements 2. 3. Financial Statement Schedules: Page No. 55 57 58 59 60 61 62 All schedules have been omitted because they are not required, not appl submission of the schedule, or the required inforff mation is otherwise included. a icabla e, not present in amounts suffff iff cient to require 4. Exhibits Exhibit Number 2.1**† 3.1 3.2 3.3 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 r r rr r rr p ation (incorpor ated by refeff rence to Exhibit 3.1 to Form 10-Q fiff led ated by refeff rence to Exhibit 4.1 to Gogo Inc. Registration Statement on ated by refeff rence to Exhibit 3.1 to Form 8-K fiff led on September 23, 2020 ated by refeff rence to Exhibit 3.2 to Form 10-Q fiff led on August 7, 2013 (File Description of Exhibits Purchase and Sale Agreement by and among Gogo Inc. and Intelsat Jackson Holdings S.A., dated August 31, 2020 (incorpor ated by refeff rence to Exhibit 2.1 to Form 8-K fiff led on September 1, 2020 (File No. 001-35975)) r Third Amended and Restated Certififf cate of Incorpor on August 7, 2013 (File No. 001-35975)) Amended and Restated Bylaws (incorpor No. 001-35975)) Certififf cate of Designations of Series A Prefeff rred Stock of Gogo Inc., as fiff led with the Secretaryrr of State of the State of Delaware on September 23, 2020 (incorpor (File No. 001-35975)) Form of Common Stock Certififf cate (incorpor Form S-1 (File No. 333-178727)) Registration Rights Agreement, dated as of December 31, 2009, by and between AC Holdco Inc. and the Class A Holders, the Ripplewood Investors, the Thorne Investors and the other investors named therein (incorpor ated by refeff rence to Exhibit 4.3 to Gogo Inc. Registration Statement on Form S-1 (File No. 333-178727)) Description of Capia tal Stock and Registered Securities (incorpor on March 11, 2021 (File No. 001-35975)) Section 382 Rights Agreement, dated as of September 23, 2020, between Gogo Inc. and Computershare Trusrr Company, N.A., as rights agent (incorpor (File No. 001-35975)) Registration Rights Agreement, dated as of April 9, 2021, by and among Gogo Inc., Silver (XII) Holdings, LLC and Silver (Equity) Holdings, LP (incorpor 001-35975)) Amendment to the Registration Rights Agreement, dated as of April 9, 2021, by and between Gogo Inc. (f/ff k/a AC HoldCo Inc.) and Thorndale Farm Gogo, LLC (as assignee to the interests of the Thorne Investors, as defiff ned therein) (incorpor r Amendment to the Registration Rights Agreement, dated as of May 25, 2021, by and among Gogo Inc., Silver (XII) Holdings, LLC and Silver (Equity) Holdings, LP (incorpor August 5, 2021 (File No. 001-35975)) Amendment No. 2 to the Registration Rights Agreement, dated as of March 2, 2022, by and among Gogo Inc., Silver (XII) Holdings, LLC and Silver (Equity) Holdings LP (incorpor ated by refeff rence to Exhibit 4.10 to Form 10-K fiff led on March 3, 2022 (File No. 001-35975)) Amendment No. 1 to Section 382 Rights Agreement, dated as of December 27, 2022, by and between Gogo Inc. and Computershare Trusrr ated by refeff rence to Exhibit 10.3 to Form 8-K fiff led on April 14, 2021 (File No. 001-35975)) ated by refeff rence to Exhibit 10.2 to Form 8-K fiff led on April 14, 2021 (File No. ated by refeff rence to Exhibit 4.1 to Form 8-K fiff led on September 23, 2020 ated by refeff rence to Exhibit 4.3 to Form 10-Q fiff led on ated by refeff rence to Exhibit 4.10 to Form 10-K fiff led t Company, N.A., as rights agent r rr rr r rr rr t 95 10.1.1† 10.1.2† 10.1.3† 10.1.4† 10.1.5† 10.1.6† 10.1.7† 10.1.8† 10.2.1# 10.2.2# 10.2.3# 10.2.4# 10.2.5# 10.2.6# 10.2.7# 10.2.8# 10.2.9# 10.2.10# 10.2.11# 10.2.12# 10.2.13# 10.2.14# r r r rr r rr r r rr ated and Gogo LLC ated by refeff rence to Exhibit 10.1.48 to Form 10-Q fiff led on November 6, ated by refeff rence to Exhibit 10.1.6 to Form 10-K fiff led on March 11, 2021 ated by refeff rence to Exhibit 10.2.14 to Form 10-Q fiff led on May 4, 2017 (File ated by refeff rence to Exhibit 10.1.5 to Form 10-K fiff led on March 11, 2021 (File No. ated by refeff rence to Exhibit 10.1 to Form 8-K fiff led on May 26, 2022 (File No. 001- Qualcomm Technologies, Inc. Master Softff ware Agreement, dated June 13, 2018, by and between Qualcomm Technologies, Inc. and Gogo LLC (incorpor 2018 (File No. 001-35975)) Qualcomm Technologies, Inc. AMSS6695 Softff ware Addendum to Master Softff ware Agreement, dated June 13, 2018, by and between Qualcomm Technologies, Inc. and Gogo LLC (incorpor ated by refeff rence to Exhibit 10.1.49 to Form 10-Q fiff led on November 6, 2018 (File No. 001-35975)) Access Point Patent License Agreement, dated July 6, 2018, by and between Qualcomm Incorpor (incorpor ated by refeff rence to Exhibit 10.1.50 to Form 10-Q fiff led on November 6, 2018 (File No. 001-35975)) r ATG Network Sharing Agreement, dated as of December 1, 2020, by and between Gogo Business Aviation LLC and Gogo LLC (incorpor ated by refeff rence to Exhibit 10.1 to Form 8-K fiff led on December 1, 2020 (File No. 001-35975)) Master Services Agreement, dated as of November 25, 2019, by and between Gogo Business Aviation LLC and Airspan Networks Inc. (incorpor 001-35975)) Supply and Product Support Agreement, dated as of November 25, 2019, by and between Gogo Business Aviation LLC and Airspan Networks Inc. (incorpor (File No. 001-35975)) Master Services Agreement, dated as of May 21, 2022, by and between Gogo Business Aviation LLC and Hughes Network Systems, LLC (incorpor 35975)) Supply and Product Support Agreement, dated as of June 6, 2022, by and between Gogo Business Aviation LLC and Hughes Network Systems, LLC (incorpor ated by refeff rence to Exhibit 10.1 to Form 8-K fiff led on June 14, 2022 (File No. 001-35975)) Employment Agreement, by and between Gogo Business Aviation LLC, as assignee of Gogo LLC, and Barryrr Rowan, effff eff ctive as of April 24, 2017 (incorpor No. 001-35975)) Change in Control Severance Agreement, dated as of April 24, 2017, by and between Gogo Inc. and Barryrr Rowan (incorpor ated by refeff rence to Exhibit 10.2.15 to Form 10-Q fiff led on May 4, 2017 (File No. 001-35975)) r Employment Agreement, dated March 4, 2018, between Gogo Inc., Gogo Business Aviation LLC, as assignee of Gogo LLC, and Oakleigh Thorne (incorpor (File No. 001-35975)) Form of Change in Control Severance Agreement, forff Rowan and Jessica Betjt emann (incorpor (File No. 001-25975)) Amendment No. 1 to the Form of Change in Control Severance Agreement forff Oakleigh Thorne and Barryrr Rowan (incorpor (File No. 001-35975)) Employment Agreement, dated as of Januaryrr 1, 2008, between Gogo Business Aviation LLC, as assignee of Gogo LLC (f/ff k/a Aircell LLC) and Marguerite Elias (incorpor ated by refeff rence to Exhibit 10.2.20 to Form 10-Q fiff led on May 9, 2019 (File No. 001-35975)) Amendment No. 1 to the Employment Agreement, between Gogo Business Aviation LLC, as assignee of Gogo LLC (f/ff k/a Aircell LLC) and Marguerite Elias, effff eff ctive as of December 31, 2008 (incorpor 10.2.21 to Form 10-Q fiff led on May 9, 2019 (File No. 001-35975)) Amendment No. 2 to the Employment Agreement, between Gogo Business Aviation LLC, as assignee of Gogo LLC (f/ff k/a Aircell LLC) and Marguerite Elias, effff eff ctive as of November 30, 2017 (incorpor 10.2.22 to Form 10-Q fiff led on May 9, 2019 (File No. 001-35975)) Director Compensation Policy, effff eff ctive March 4, 2021 (incorpor on May 6, 2021 (File No. 001-35975)) Amended and Restated Employment Agreement, dated as of Februarr (incorpor ated by refeff rence to Exhibit 10.5 to Form 10-Q fiff led on August 5, 2021 (File No. 001-35795)) r Employment Agreement, dated as of August 27, 2018, between Gogo Business Aviation LLC and Sergio Aguirre (incorpor ated by refeff rence to Exhibit 10.6 to Form 10-Q fiff led on August 5, 2021 (File No. 001-35795)) r Form of Director Defeff rred Share Unit Agreement forff Gogo Inc. Omnibus Incentive Plan (incorpor refeff rence to Exhibit 10.7 to Form 10-Q fiff led on August 5, 2021 (File No. 001-35795)) Amendment to Non-Employee Director Options and Defeff rred Stock Units (incorpor 10.8 to Form 10-Q fiff led on August 5, 2021 (File No. 001-35795)) Amendment No. 1, dated March 25, 2022, to the Employment Agreement between Gogo Business Aviation LLC, as assignee of Gogo LLC (f/ff k/a Aircell LLC), and Oakleigh Thorne (incorpor 10-Q fiff led on May 5, 2022 (File No. 001-35975)) named executive offff iff cers other than Oakleigh Thorne, Barryrr ated by refeff rence to Exhibit 10.2.10 to Form 10-K fiff led on March 13, 2020 ated by refeff rence to Exhibit 10.2.18 to Form 10-Q fiff led on May 4, 2018 ated by refeff rence to Exhibit 10.2.12 to Form 10-Q fiff led on May 4, 2018 ated by refeff rence to Exhibit 10.6 to Form 10-Q fiff led ated by refeff rence to Exhibit 10.2.1 to Form named executive offff iff cers other than ated by refeff rence to Exhibit ated by refeff rence to Exhibit ated by refeff rence to Exhibit ryrr 10, 2020, between Gogo LLC and Karen Jackson ated by r rr r rr r r r r rr rr 96 10.2.15# 10.2.16# 10.2.17# 10.2.18# 10.2.19# 10.2.20# 10.2.21# 10.2.22# 10.3.1# 10.3.2# 10.3.3# 10.3.4# 10.3.5# 10.3.6# 10.4.1# 10.4.2# 10.4.3# 10.4.4# 10.4.5# 10.4.6# 10.4.7# 10.4.8# 10.4.9# 10.4.10# 10.4.11# 10.5# 10.6# tal rr rr r rr rr rr tal ated by ated by refeff rence to Exhibit 10.2.2 to Form 10- ated by refeff rence to Exhibit 10.2.4 to Form ated by refeff rence to Exhibit 10.3.1 to Gogo Inc. Registration ated by refeff rence to Exhibit 10.2 to Form 8-K fiff led on Februarr ated by refeff rence to Exhibit 10.1 to Form 8-K fiff led on Februarr ated by refeff rence to Exhibit 10.2.3 to Form 10-Q fiff led on May 5, 2022 (File No. Amendment No. 1, dated March 25, 2022, to the Employment Agreement between Gogo Business Aviation LLC, as assignee of Gogo LLC (f/ff k/a Aircell LLC), and Barryrr Rowan (incorpor Q fiff led on May 5, 2022 (File No. 001-35975)) Amendment No. 1, dated March 25, 2022, to the Employment Agreement between Gogo Business Aviation LLC and Sergio Aguirre (incorpor 001-35975)) Amendment No. 3, dated March 25, 2022, to the Employment Agreement between Gogo Business Aviation LLC, as assignee of Gogo LLC (f/ff k/a Aircell LLC), and Marguerite Elias (incorpor 10-Q fiff led on May 5, 2022 (File No. 001-35975)) Amendment No. 1, dated March 25, 2022, to the Employment Agreement between Gogo Business Aviation LLC, as ated by refeff rence to Exhibit 10.2.5 to Form assignee of Gogo LLC (f/ff k/a Aircell LLC), and Karen Jackson (incorpor 10-Q fiff led on May 5, 2022 (File No. 001-35975)) Employment Agreement, effff eff ctive as of March 11, 2023, by and between Gogo Business Aviation LLC and Jessica Betjt emann (incorpor ryrr 14, 2023 (File No. 001-35975)) Change in Control Severance Agreement, effff eff ctive as of March 11, 2023, by and between Gogo Inc. and Jessica ryrr 14, 2023 (File No. 001-35975)) Betjt emann (incorpor Employment Agreement, effff eff ctive as of November 2, 2022, by and between Gogo Business Aviation LLC and Crysrr Gordon Change in Control Severance Agreement, effff eff ctive as of November 2, 2022, by and between Gogo Inc. and Crysrr Gordon Aircell Holdings Inc. Stock Option Plan (incorpor rr Statement on Form S-1 (File No. 333-178727)) Amendment No. 1 to the Aircell Holdings Inc. Stock Option Plan, effff eff ctive as of June 2, 2010 (incorpor r refeff rence to Exhibit 10.3.2 to Gogo Inc. Registration Statement on Form S-1 (File No. 333-178727)) Amendment No. 2 to the Aircell Holdings Inc. Stock Option Plan, dated as of December 14, 2011(incorpor refeff rence to Exhibit 10.3.3 to Gogo Inc. Registration Statement on Form S-1 (File No. 333-178727)) Amendment No. 3 to the Aircell Holdings Inc. Stock Option Plan, effff eff ctive as of May 31, 2013 (incorpor refeff rence to Exhibit 10.3.4 to Gogo Inc. Registration Statement on Form S-1 (File No. 333-178727)) Form of Stock Option Agreement forff Aircell Holdings Inc. Stock Option Plan (incorpor 10.3.4 to Gogo Inc. Registration Statement on Form S-1 (File No. 333-178727)) Form of Stock Option Agreement forff Aircell Holdings Inc. Stock Option Plan (forff refeff rence to Exhibit 10.3.6 to Gogo Inc. Registration Statement on Form S-1 (File No. 333-178727)) Gogo Inc. Omnibus Incentive Plan (incorpor Form S-1 (File No. 333-178727)) Form of Stock Option Agreement forff Gogo Inc. Omnibus Incentive Plan (incorpor to Form 10-K fiff led on March 14, 2014 (File No. 001-35975)) Form of Restricted Stock Unit Agreement forff Gogo Inc. Omnibus Incentive Plan (incorpor 10.4.3 to Form 10-K fiff led on Februar Form of Restricted Stock Agreement forff Gogo Inc. Omnibus Incentive Plan (incorpor 10.4.4 to Form 10-K fiff led on Februar Form of Stock Option Agreement forff Gogo Inc. 2016 Omnibus Incentive Plan (incorpor 10.4.6 to Form 10-Q fiff led on August 4, 2016 (File No. 001-35975)) Form of Perforff mance Stock Option Agreement forff Gogo Inc. 2016 Omnibus Incentive Plan (incorpor refeff rence to Exhibit 10.4.7 to Form 10-Q fiff led on August 4, 2016 (File No. 001-35975)) Form of Restricted Stock Unit Agreement forff Gogo Inc. 2016 Omnibus Incentive Plan (incorpor Exhibit 10.4.8 to Form 10-Q fiff led on August 4, 2016 (File No.001-35975)) Form of Perforff mance Restricted Stock Unit Agreement forff Gogo Inc. 2016 Omnibus Incentive Plan (incorpor refeff rence to Exhibit 10.4.9 to Form 10-Q fiff led on August 4, 2016 (File No. 001-35975)) Amended and Restated Gogo Inc. 2016 Omnibus Incentive Plan (incorpor defiff nitive proxy statement on Schedule 14A fiff led on April 27, 2018 (File No. 001-35975)) Second Amended and Restated Gogo Inc. 2016 Omnibus Incentive Plan (incorpor 10.4.1 to Form 10-Q fiff led on August 5, 2022 (File No. 001-35975)) Form of Restricted Stock Unit Agreement forff Second Amended and Restated Gogo Inc. 2016 Omnibus Incentive Plan (incorpor ated by refeff rence to Exhibit 10.402 to Form 10-Q fiff led on November 3, 2022 (File No. 001-35975)) r Gogo Inc. Annual Incentive Plan (as amended as of April 14, 2016) (incorpor Form 10-Q fiff led on August 4, 2016 (File No. 001-35975)) Gogo Inc. Section 409A Specififf ed Employee Policy (incorpor r Registration Statement on Form S-1 (File No. 333-178727)) ated by refeff rence to Exhibit 10.5 to Gogo Inc. Registration Statement on ated by refeff rence to Exhibit 10.7 to Gogo Inc. ated by refeff rence to Exhibit 10.4.10 to ated by refeff rence to Annex A to the ated by refeff rence to Exhibit 10.5.2 ryrr 27, 2015 (File No. 001-35975)) ryrr 27, 2015 (File No. 001-35975)) ated by refeff rence to Exhibit ated by refeff rence to Exhibit ated by refeff rence to Exhibit ated by refeff rence to Exhibit June 2013 grants) (incorpor ated by refeff rence to ated by refeff rence to Exhibit ated by ated by ated by ated by ated by rr rr r r rr rr r r r rr rr r rr r r 97 10.7.1# 10.7.2# 10.8.1# 10.8.2# 10.8.3# 10.8.4# 10.8.5# 10.9.1 10.9.2 10.9.3 10.9.4 21.1 23.1 24.1 31.1 31.2 32.1 * 32.2 * 101.INS 101.SCH 101.CAL 101.LAB 101.PRE 101.DEF 104 * ** # † r r r r rr r r r ated by ated by ated by ated by refeff rence to ated by refeff rence to ated by refeff rence to Exhibit ated by refeff rence to Exhibit ated by refeff rence to Exhibit 10.9.4 to Form 10-K fiff led ated by refeff rence to Exhibit 10.9.1 to Form 10-Q fiff led on August 10, 2020 (File Form of Indemnififf cation Agreement entered into between Gogo Inc. and each of its Directors (incorpor rr refeff rence to Exhibit 10.7.1 to Gogo Inc. Registration Statement on Form S-1 (File No. 333-178727)) Form of Indemnififf cation Agreement entered into between Gogo Inc. and each of its Offff iff cers (incorpor refeff rence to Exhibit 10.7.2 to Gogo Inc. Registration Statement on Form S-1 (File No. 333-178727)) Form of Director Defeff rred Share Unit Agreement forff Gogo Inc. Omnibus Incentive Plan (incorpor Exhibit 10.10.2 to Form 10-K fiff led on March 14, 2014 (File No. 001-35975)) Form of Director Stock Option Agreement forff Gogo Inc. Omnibus Incentive Plan (incorpor Exhibit 10.10.3 to Form 10-K fiff led on March 14, 2014 (File No. 001-35975)) Director Compensation Policy, effff eff ctive July 1, 2019 (incorpor on March 13, 2020 (File No. 001-35975)) Form of Director Stock Option Agreement forff Amended and Restated Gogo Inc. 2016 Omnibus Incentive Plan (effff eff ctive April 29, 2020) (incorpor No. 001-35975)) Amendment to Non-Employee Director Stock Option Agreements forff Amended and Restated Gogo Inc. 2016 Omnibus Incentive Plan granted beforff e April 29, 2020 (effff eff ctive April 29, 2020) (incorpor 10.9.2 to Form 10-Q fiff led on August 10, 2020 (File No. 001-35975)) Credit Agreement, dated as of April 30, 2021, among Gogo Inc., Gogo Intermediate Holdings LLC, the lenders and issuing banks party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent (incorpor refeff rence to Exhibit 10.1 to Form 8-K fiff led on May 3, 2021 (File No. 001-35975)) Guarantee Agreement, dated as of April 30, 2021, among Gogo Inc., Gogo Intermediate Holdings LLC and certain of its subsidiaries, and Morgan Stanley Senior Funding, Inc., as collateral agent. (incorpor 10.2 to Form 8-K fiff led on May 3, 2021 (File No. 001-35975)) Collateral Agreement, dated as of April 30, 2021, among Gogo Inc., Gogo Intermediate Holdings LLC and certain of its subsidiaries, and Morgan Stanley Senior Funding, Inc., as collateral agent (incorpor 10.3 to Form 8-K fiff led on May 3, 2021 (File No. 001-35975)) First Amendment to Credit Agreement, dated as of Februar LLC and Morgan Stanley Senior Funding, Inc., as administrative agent List of Subsidiaries Consent of Independent Registered Public Accounting Firm – Deloitte & Touche LLP Power of Attorney (included on signaturt e page) Certififf cation of Chief Executive Offff iff cer pursuant to Exchange Act RulRR es 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbar nes-Oxley Act of 2002 Certififf cation of Chief Financial Offff iff cer pursuant to Exchange Act RulRR es 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbar nes-Oxley Act of 2002 Certififf cation of the Chief Executive Offff iff cer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbar nes-Oxley Act of 2002 Certififf cation of the Chief Financial Offff iff cer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbar nes-Oxley Act of 2002 Inline XBRL Instance Document Inline XBRL Taxonomy Extension Schema Document Inline XBRL Taxonomy Extension Calculation Linkbase Document Inline XBRL Taxonomy Extension Labea Inline XBRL Taxonomy Extension Presentation Linkbase Document Inline XBRL Taxonomy Extension Defiff nition Linkbase Document Cover Page Interactive Data File (forff matted as Inline XBRL and contained in Exhibit 101) This certififf cation accompanies the Form 10-K to which it relates, is not deemed fiff led with the Securities and Exchange Commission and is not to be incorpor ated by refeff rence into any fiff ling of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made beforff e or aftff er the date of the Form 10-K), irrespective of any general incorpor Certain schedules and other similar attachments to such agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furff nish a copy of such omitted documents to the SEC upon request. Indicates management contract or compensatoryrr plan or arrangement. Certain provisions of this exhibit have been omitted pursuant to Item 601 (b)(10)(iv) of Regulation S-K. ryrr 2, 2023, among Gogo Inc., Gogo Intermediate Holdings ation language contained in such fiff ling. ated by refeff rence to Exhibit ls Linkbase Document r r rr 98 Item 16. Form 10-K Summary None. 99 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Gogo Inc. (the registrant) has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on Februar ryrr 28, 2023. SIGNATURES Gogo Inc. By: Name: Title: /s/ Oakleigh Thorne Oakleigh Thorne Chief Executive Offff iff cer and Chairman of the Board (Principal Executive Offff iff cer) KNKK OW ALL MEN BY THESE PRESENTS, that each person whose signaturt e appe a POWER OF ATTORNEY ars below constitutt es and appoi a nts Barryrr ion and resubstitutt cities, to sign any and all amendments to this Annual Report on Form 10-K, and to fiff le the same, with all exhibits thereto, and all tal L. Gordon, and each of them, his or her truerr ion, forff l power of substitutt Rowan and Crysrr separately and fulff capaa other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-faff cts and agents, and each of them, fulff in and about a confiff rming all that said attorneys-in-faff ct and agents or either of them or his or their substitutt e or substitutt es may lawfulff to be done by virtuet and lawfulff him or her and in his or her name, place and stead, in any and all l power and authority to do and perforff m each and everyrr act and thing requisite and necessaryrr es as they or he or she might or could do in person, hereby ratifyiff ng and attorneys-in-faff ct and agents, with fulff ly to all intents and purpos the premises, as fulff ly do or cause l power to act to be done hereof.ff rr This Power of Attorney shall not revoke any powers of attorney previously executed by the undersigned. This Power of Attorney shall not be revoked by any subsequent power of attorney that the undersigned may execute, unless such subsequent power of attorney specififf cally provides that it revokes this Power of Attorney by refeff rring to the date of the undersigned’s execution of this Power of Attorney. For the avoidance of doubt, whenever two or more powers of attorney granting the powers specififf ed herein are valid, the agents appoi nted on each shall act separately unless otherwise specififf ed. a Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the folff lowing persons on behalf of Gogo Inc. and in the capaa cities indicated, on Februarr ryrr 28, 2023. Signature g /s/ Oakleigh Thorne Oakleigh Thorne /s/ Barryrr Rowan Barryrr Rowan /s/ Jessica G. Betjt emann Jessica G. Betjt emann /s/ Mark Anderson Mark Anderson /s/ Robert L. Crandall Robert L. Crandall /s/ Hugh W. Jones Hugh W. Jones /s/ Michele Coleman Mayes Michele Coleman Mayes /s/ Robert H. Mundheim Robert H. Mundheim /s/ Christopher D. Payne Christopher D. Payne /s/ Charles C. Townsend Charles C. Townsend /s/ Harris N. Williams Harris N. Williams Title Chief Executive Offff iff cer and Chairman of the Board (Principal Executive Offff iff cer) Executive Vice President and Chief Financial Offff iff cer (Principal Financial Offff iff cer) Senior Vice President, Finance, Chief Accounting Offff iff cer and Treasurer (Principal Accounting Offff iff cer) Director Director Lead Independent Director Director Director Director Director Director 100 Exhibit 21.1 Name of Subsidiary Jurisdiction of Organization Ownership Percentage List of Subsidiaries of Gogo Inc. AC BidCo LLC Gogo Business Aviation LLC Gogo Connectivity Ltd. Gogo Finance Co. Inc. Gogo Intermediate Holdings LLC Delaware Delaware Canada Delaware Delaware 100% 100% 100% 100% 100% CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Exhibit 23.1 r ation by refeff rence in Registration Statement No. 333-264687 on Form S-3 and We consent to the incorpor Registration Statement Nos. 333-189594, 333-212072, 333-219777, 333-225716, and 333-238295 on Form S-8 of our reports dated Februar ryrr 28, 2023, relating to the fiff nancial statements of Gogo Inc. and the effff eff ctiveness of Gogo Inc.’s internal control over fiff nancial reporting appe December 31, 2022. aring in this Annual Report on Form 10-K forff the year ended a /s/ Deloitte & Touche LLP Chicago, Illinois Februar ryrr 28, 2023 Gogo Inc. CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) OF THE EXCHANGE ACT, AS AMENDED, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Oakleigh Thorne, certifyff that: Exhibit 31.1 1. 2. 3. 4. statement of a material faff ct or omit to state a to make the statements made, in light of the circumstances under which such I have reviewed this Annual Report on Form 10-K of Gogo Inc.; Based on my knowledge, this report does not contain any untruer material faff ct necessaryrr statements were made, not misleading with respect to the period covered by this report; Based on my knowledge, the fiff nancial statements, and other fiff nancial inforff mation included in this report, faff irly present in all material respects the fiff nancial condition, results of operations and cash flff ows of the registrant as of,ff and forff The registrant’s other certifyiff ng offff iff cer and I are responsible forff controls and procedures (as defiff ned in Exchange Act RulRR es 13a-15(e) and 15d-15(e)) and internal control over fiff nancial reporting (as defiff ned in Exchange Act RulRR es 13a-15(f)ff and 15d-15(f)ff ) forff (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedud res to be designed under our supervision, to ensure that material inforff mation relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly durd ing the period in which this report is being prepared; establa ishing and maintaining disclosure , the periods presented in this report; the registrant and have: (b) Designed such internal control over fiff nancial reporting, or caused such internal control over fiff nancial reporting to be designed under our supervision, to provide reasonabla e assurance regarding the reliabia lity of fiff nancial reporting and the preparation of fiff nancial statements forff with generally accepted accounting principles; Evaluated the effff eff ctiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the period covered by this report based on such evaluation; and the effff eff ctiveness of the disclosure controls and procedures, as of the end of es in accordance external purpos a rr (c) (d) Disclosed in this report any change in the registrant’s internal control over fiff nancial reporting that occurred during the registrant’s most recent fiff scal quarter (the registrant’s four th fiff scal quarter in the case of an annual report) that has materially affff eff cted, or is reasonabla y likely to materially affff eff ct, the registrant’s internal control over fiff nancial reporting; and ff 5. The registrant’s other certifyiff ng offff iff cer and I have disclosed, based on our most recent evaluation of internal control over fiff nancial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons perforff ming the equivalent func tions): (a) All signififf cant defiff ciencies and material weaknesses in the design or operation of internal control over ff fiff nancial reporting which are reasonabla y likely to adversely affff eff ct the registrant’s abia lity to record, process, summarize and report fiff nancial inforff mation; and (b) Any frff aud, whether or not material, that involves management or other employees who have a signififf cant role in the registrant’s internal control over fiff nancial reporting. Date: Februarr ryrr 28, 2023 /s/ Oakleigh Thorne Oakleigh Thorne Chief Executive Offff iff cer and Chairman of the Board (Principal Executive Offff iff cer) Gogo Inc. CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) OF THE EXCHANGE ACT, AS AMENDED, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Barry Rowan, certifyff that: Exhibit 31.2 1. 2. 3. 4. statement of a material faff ct or omit to state a to make the statements made, in light of the circumstances under which such I have reviewed this Annual Report on Form 10-K of Gogo Inc.; Based on my knowledge, this report does not contain any untruer material faff ct necessaryrr statements were made, not misleading with respect to the period covered by this report; Based on my knowledge, the fiff nancial statements, and other fiff nancial inforff mation included in this report, faff irly present in all material respects the fiff nancial condition, results of operations and cash flff ows of the registrant as of,ff and forff The registrant’s other certifyiff ng offff iff cer and I are responsible forff controls and procedures (as defiff ned in Exchange Act RulRR es 13a-15(e) and 15d-15(e)) and internal control over fiff nancial reporting (as defiff ned in Exchange Act RulRR es 13a-15(f)ff and 15d-15(f)ff ) forff (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedud res to be designed under our supervision, to ensure that material inforff mation relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly durd ing the period in which this report is being prepared; establa ishing and maintaining disclosure , the periods presented in this report; the registrant and have: (b) Designed such internal control over fiff nancial reporting, or caused such internal control over fiff nancial reporting to be designed under our supervision, to provide reasonabla e assurance regarding the reliabia lity of fiff nancial reporting and the preparation of fiff nancial statements forff with generally accepted accounting principles; Evaluated the effff eff ctiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the period covered by this report based on such evaluation; and the effff eff ctiveness of the disclosure controls and procedures, as of the end of es in accordance external purpos a rr (c) (d) Disclosed in this report any change in the registrant’s internal control over fiff nancial reporting that occurred during the registrant’s most recent fiff scal quarter (the registrant’s four th fiff scal quarter in the case of an annual report) that has materially affff eff cted, or is reasonabla y likely to materially affff eff ct, the registrant’s internal control over fiff nancial reporting; and ff 5. The registrant’s other certifyiff ng offff iff cer and I have disclosed, based on our most recent evaluation of internal control over fiff nancial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons perforff ming the equivalent func tions): (a) All signififf cant defiff ciencies and material weaknesses in the design or operation of internal control over ff fiff nancial reporting which are reasonabla y likely to adversely affff eff ct the registrant’s abia lity to record, process, summarize and report fiff nancial inforff mation; and (b) Any frff aud, whether or not material, that involves management or other employees who have a signififf cant role in the registrant’s internal control over fiff nancial reporting. Date: Februarr ryrr 28, 2023 /s/ Barryrr Rowan Barryrr Rowan Executive Vice President and Chief Financial Offff iff cer (Principal Financial Offff iff cer) Exhibit 32.1 Gogo Inc. CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Oakleigh Thorne, President and Chief Executive Offff iff cer of Gogo Inc. (the “Company”), do hereby certify,ff pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbar nes-Oxley Act of 2002, that to the best of my knowledge: (1) the Annual Report on Form 10-K of the Company forff the year ended December 31, 2022 (the “Report”) fulff ly complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the inforff mation contained in the Report faff irly presents, in all material respects, the fiff nancial condition and results of operations of the Company forff the periods presented therein. Date: Februar ryrr 28, 2023 /s/ Oakleigh Thorne Oakleigh Thorne Chief Executive Offff iff cer and Chairman of the Board (Principal Executive Offff iff cer) Exhibit 32.2 Gogo Inc. CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Barryrr Rowan, Executive Vice President and Chief Financial Offff iff cer of Gogo Inc. (the “Company”), do hereby certify,ff that to the best of my knowledge: pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbar nes-Oxley Act of 2002, (1) the Annual Report on Form 10-K of the Company forff the year ended December 31, 2022 (the “Report”) fulff ly complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the inforff mation contained in the Report faff irly presents, in all material respects, the fiff nancial condition and results of operations of the Company forff the periods presented therein. Date: Februar ryrr 28, 2023 /s/ Barryrr Rowan Barryrr Rowan Executive Vice President and Chief Financial Offff iff cer (Principal Financial Offff iff cer) ®THIS PAGE INTENTIONALLY LEFT BLANK© ®THIS PAGE INTENTIONALLY LEFT BLANK© ®THIS PAGE INTENTIONALLY LEFT BLANK© Board of Directors Executive Officers Oakleigh Thorne Chair of the Board Oakleigh Thorne Mark Anderson Director Managing Director of GTCR LLC Robert L. Crandall Director CEO Sergio Aguirre President and COO Former Chairman and CEO of AMR Jessica Betjemann Corporation and American Airlines Executive Vice President and Chief Financial Officer Hugh Jones Lead Independent Director Leigh Goldfine Co-founder of Basalt Investments, LLC Vice President, Controller and Chief Accounting Officer Michele Coleman Mayes Director Crystal L. Gordon Vice President, General Counsel and Secretary Executive Vice President, General Counsel and Secretary for the New York Public Library Karen Jackson Robert H. Mundheim Director Executive Vice President, Chief People Experience Officer Of Counsel to Shearman & Sterling LLP Professor of Corporate Law and Finance at the University of Arizona James E. Rogers College of Law Christopher Payne Director Former President and COO of DoorDash, Inc. Charles C. Townsend Director Managing General Partner of Bluewater Wireless II, LP Harris N. Williams Director Senior Managing Director of WF Investment Management, LLC Shareholder Information Corporate headquarters 105 Edgeview Drive | Suite 300 Broomfield, Colorado 80021 gogoair.com Common stock listing Gogo common stock is listed on the NASDAQ Global Financial reports A copy of the Gogo Inc. Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission is available on our Investor Relations website at ir.gogoair.com, or via email following a request to Investor Relations at ir@gogoair.com. Select Market under the ticker symbol “GOGO.” Annual meeting Transfer agent and registrar be held at 10 am Central Time, on Tuesday, June 6, 2023. Computershare Trust Company, N.A. The annual meeting will be a virtual meeting conducted The 2023 Annual Meeting of Shareholders will P.O. Box 505000 Louisville, KY 40233 solely online and can be attended by visiting www.virtualshareholdermeeting.com/GOGO2023. All shareholders are cordially Shareholders with questions may call our invited to attend. transfer agent toll-free at 800 962 4284 Investor relations William Davis VP, Investor Relations 105 Edgeview Drive | Suite 300 Broomfield, Colorado 80021 +1 917 519 6994 IR@gogoair.com (cid:44)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:83)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:1083)(cid:85)(cid:80) Deloitte & Touche LLP 111 S. Wacker Drive Chicago, IL 60606 Corporate governance At ir.gogoair.com, shareholders can view the company’s code of business conduct and ethics, code of financial ethics, and corporate governance guidelines. Gogo Inc. 105 Edgeview Drive | Suite 300 Broomfield, Colorado 80021 gogoair.com ©2023 Gogo Inc. 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