NEW YORK--(BUSINESS WIRE)--WeWork Inc. (NYSE: WE) ("WeWork"), a leading global flexible space provider, today reported financial results for its fourth quarter and fiscal year ending December 31, 2021.
- For fiscal year 2021, consolidated gross desk sales totaled 593,000, the equivalent of 35.6 million square feet.
- Total revenue for the fourth quarter 2021 was $718 million, an increase of $57 million quarter-over-quarter.
- Occupancy in the fourth quarter 2021 increased 6 points quarter-over-quarter to 66%, including sold but not yet occupied memberships.
Company Operating Results
- As of December 31, 2021, WeWork's systemwide real estate portfolio consisted of 756 locations across 38 countries, supporting approximately 912,000 workstations and 590,000 physical memberships.
- As of December 31, 2021, WeWork’s consolidated real estate portfolio included 624 locations across 33 countries, supporting approximately 746,000 workstations and 469,000 physical memberships.
- Systemwide gross desk sales totaled 217,000 in the fourth quarter 2021, equating to 13.0 million square feet sold. Consolidated gross desk sales totaled 164,000 in the fourth quarter, equating to 9.9 million square feet sold. Consolidated new desk sales totaled 87,000 in the fourth quarter.
- Physical occupancy continued to trend upwards to 63% as of year-end 2021. Physical occupancy including signed but not yet occupied memberships was 66% as of year-end 2021, up from 60% at the end of the third quarter 2021.
- The average revenue per member (ARPM) for physical memberships was $484 in the fourth quarter, roughly flat quarter-over-quarter as compared to the third quarter ARPM of $485.
- All Access memberships increased to 45,000 by the close of the fourth quarter, an increase of 41% quarter-over-quarter. These All Access memberships represent an incremental 6 percentage points in occupancy.
Company Consolidated Financial Results
- Fourth quarter 2021 revenue was $718 million, representing a 9% increase from $661 million in the third quarter and the second consecutive quarter of sequential revenue growth.
- Fourth quarter 2021 Operating Cash Flow was negative $373 million and Free Cash Flow was negative $467 million.
- Net Loss was $803 million in the fourth quarter 2021, a 5% improvement relative to the third quarter 2021. Net loss net of $103 million of interest and other (income) expense, restructuring costs of negative $48 million driven by net gains on lease terminations, impairment of $241 million driven by building exits and depreciation and amortization of $174 million, stock-based compensation of $48 million, and $2 million of other costs, resulted in Adjusted EBITDA of negative $283 million.
- Adjusted EBITDA was negative $283 million, a $73 million improvement from third quarter 2021 and a $189 million improvement relative to the fourth quarter 2020.
Space-as-a-Service:
WeWork reported systemwide gross desk sales of 217,000 in the fourth quarter 2021, an equivalent of 13.0 million square feet sold, including 113,000 new desk sales. On a consolidated basis, gross desk sales were 164,000 in the fourth quarter 2021, which equates to approximately 9.9 million square feet sold, including 87,000 new desk sales. For the fiscal year 2021, consolidated gross desk sales totaled 593,000, an equivalent of 35.6 million square feet sold.
WeWork continued to represent a significant portion of traditional office leasing activity in 2021. WeWork represented approximately 0.5% of all commercial office space in the U.S., and sold the equivalent of 9% of total traditional office square feet leased across the country in 2021. At the market-level, WeWork’s 2021 gross sales in Manhattan were equivalent to 16% of the traditional office market leasing on a square-foot basis, while WeWork’s portfolio of 5 million square feet in Manhattan accounts for approximately 1% of total office stock. WeWork’s leasing activity represented 17% of Boston’s total square feet leased in the year, 13% of San Francisco total square feet leased, and 14% of Miami’s total square feet leased, despite representing 2% or less of the total office stock in each of those markets.
Across the Company’s European markets, WeWork represented approximately 0.5% of commercial office space, yet sold the equivalent of 8% of total square feet leased in 2021. WeWork’s gross sales in 2021 equated to 39% of London’s traditional office leasing, a market that is leading the shift to flex, 34% of Dublin’s leasing, 8% of Paris’ leasing and 6% of Berlin’s leasing.
WeWork saw sequential gains in occupancy throughout fiscal year 2021. As of December 2021, WeWork’s consolidated physical memberships increased to 469,000, a quarter-over-quarter increase of 9% and year-over-year increase of 21%. Physical occupancy rose to 63% in the fourth quarter 2021, a 7 percentage point increase from the third quarter 2021. Including the incremental 21,000 net memberships already contracted for move-in, physical occupancy including signed but not yet occupied memberships would increase to 66% as of year-end 2021.
WeWork Access:
All Access represented 45,000 memberships as of December 2021, an increase of 41% quarter-over-quarter. As of the fourth quarter, All Access ARPM was approximately $230 per month and WeWork Access achieved a run-rate revenue of approximately $120 million.
WeWork Workplace:
WeWork continues to develop and refine WeWork Workplace, its workspace management software solution for enterprises and operators. For enterprises, the platform intends to enable a seamless and purposeful hybrid work experience by powering online booking, providing meaningful utilization analytics, and helping to optimize space across assets.
In December 2021, WeWork signed its first WeWork Workplace enterprise deal with Organon, a global leader in women’s health, to action their boundaryless workplace strategy across locations in 34 cities that are a mix of WeWork locations, owned locations, and non-WeWork locations.
Business Development:
WeWork continues to identify business development opportunities that align with the company’s overall strategy for accretive and asset-light growth, with a focus on operators with a strong product and cultural fit.
In line with that approach, WeWork announced the acquisition of Common Desk in January 2022. Common Desk, a Dallas-based coworking operator with 23 locations in Texas and North Carolina, operates a majority of its locations under asset-light management agreements with landlords that minimize the Company's operational and capital expenses. The deal closed in March 2022.
In February 2022, WeWork announced a strategic investment in and partnership with Upflex, a platform that aggregates over 4,800 coworking locations around the world. Through the strategic investment, WeWork is able to increase the physical network of spaces available to Access members without added incremental capital investments. Additionally, WeWork will be the exclusive flex workspace operator to sell Upflex inventory to its members, creating an opportunity for WeWork to service members across Upflex’s vast network of third-party spaces in markets where WeWork does not operate.
Liquidity:
WeWork ended the year with $1,974 million in cash and unfunded cash commitments, including approximately $924 million of available cash on hand, $550 million available under our senior secured note facility, and an additional $500 million in letter of credit facility capacity.
Outlook:
WeWork expects to deliver between $3.8 and $4.0 billion systemwide revenue in 2022. On a consolidated basis, the company expects to deliver between $3.35 and $3.5 billion revenue in 2022, including between $740 and $760 million of revenue in Q1 and between $775 and $825 million of revenue in Q2. In Q3 and Q4, the Company expects to achieve revenue of between $900 million and $1 billion, which is the range the Company expects to become Adjusted EBITDA positive. The Company expects that its 2022 beginning cash and available liquidity balance of $1.974 billion, adjusted for the midpoint of the Company’s Adjusted EBITDA guidance of negative $450 million, $240 million of interest, and $200 million of net capex, will give the Company total liquidity of approximately $1.1 billion by the end of fiscal year 2022.
About WeWork
WeWork Inc. (NYSE: WE) was founded in 2010 with the vision to create environments where people and companies come together and do their best work. Since then, we’ve become one of the leading global flexible space providers committed to delivering technology-driven turnkey solutions, flexible spaces, and community experiences. For more information about WeWork, please visit us at wework.com.
Forward-Looking Statements
Certain statements made in this press release may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These forward looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “pipeline,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Although WeWork believes the expectations reflected in any forward-looking statement are based on reasonable assumptions, it can give no assurance that its expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to, WeWork’s ability to refinance, extend, restructure or repay near and intermediate term debt; its indebtedness; its ability to raise capital through equity issuances, asset sales or the incurrence of new debt; retail and credit market conditions; impairments; its liquidity demand; changes in general economic conditions, including as a result of the COVID-19 pandemic; delays in customers and prospective customers returning to the office and taking occupancy as a result of the COVID-19 pandemic and the emergence of variants leading to a parallel delay in receiving the corresponding revenue; and WeWork's inability to implement its business plan or meet or exceed its financial projections. Forward-looking statements speak only as of the date they are made. WeWork discusses these and other risks and uncertainties in its annual and quarterly periodic reports and other documents filed with the U.S. Securities and Exchange Commission. WeWork may update that discussion in its periodic reports, but otherwise takes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.
Use of Non-GAAP Financial Measures
This press release includes certain financial measures not presented in accordance with generally accepted accounting principles in the United States (“GAAP”), including Building Margin, Adjusted EBITDA and Free Cash Flow (including on a forward-looking basis). These financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing our financial results. Therefore, these measures should not be considered in isolation or as an alternative to net loss or other measures of profitability, liquidity or performance under GAAP. You should be aware that WeWork’s presentation of these measures may not be comparable to similarly titled measures used by other companies, which may be defined and calculated differently. WeWork believes that these non-GAAP measures of financial results (including on a forward-looking basis) provide useful supplemental information to investors about WeWork. WeWork’s management uses forward-looking non-GAAP measures to evaluate WeWork’s projected financials and operating performance. Additionally, to the extent that forward-looking non-GAAP financial measures are provided, they are presented on a non-GAAP basis without reconciliations of such forward-looking non-GAAP measures due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations.
Non-GAAP Financial Definitions
Adjusted Earnings Before Interest Expense, Income Tax, Depreciation, and Amortization (“Adjusted EBITDA”)
We also supplement our GAAP results by evaluating Adjusted EBITDA, a non-GAAP measure. We define "Adjusted EBITDA" as net loss before income tax (benefit) provision, interest and other (income) expense, depreciation and amortization expense, stock-based compensation expense, expense related to stock-based payments for services rendered by consultants, income or expense relating to the changes in fair value of assets and liabilities remeasured to fair value on a recurring basis, expense related to costs associated with mergers, acquisitions, divestitures and capital raising activities, legal, tax and regulatory reserves or settlements, significant legal costs incurred by WeWork in connection with regulatory investigations and litigation regarding WeWork's 2019 withdrawn initial public offering and the related execution of the SoftBank Transactions, as defined in Note 1 of the Notes to the Consolidated Financial Statements included in our Quarterly Report for the quarter ended September 30, 2021, net of any insurance or other recoveries, significant non-ordinary course asset impairment charges and, to the extent applicable, any impact of discontinued operations, restructuring charges, and other gains and losses on operating assets.
Free Cash Flow
We also supplement our GAAP results by evaluating Free Cash Flow, a non-GAAP measure. Free Cash Flow is defined as cash flow from operating activities less cash purchases of property and equipment, each as presented in WeWork's Consolidated Statements of Cash Flows calculated in accordance with GAAP. Free Cash Flow is both a performance measure and a liquidity measure that we believe provides useful information to management and investors about the amount of cash generated by or used in the business. Free Cash Flow is also a key metric used internally by our management to develop internal budgets, forecasts and performance targets.
WEWORK INC.
|
||||||||
December 31, |
||||||||
(Amounts in thousands, except share and per share amounts) |
2021 |
2020 |
||||||
Assets |
|
|
||||||
Current assets: |
|
|
||||||
Cash and cash equivalents |
$ |
923,725 |
|
$ |
800,535 |
|
||
Accounts receivable and accrued revenue, net of allowance of $62,515 and $107,806 as of December 31, 2021 and 2020, respectively |
|
129,943 |
|
|
176,521 |
|
||
| Prepaid expenses (including related party amounts of $1,178 and $557 as of December 31, 2021 and 2020, respectively) |
|
179,666 |
|
|
162,843 |
|
||
| Other current assets (including related party amounts of $1,897 and $780 as of December 31, 2021 and 2020, respectively) |
|
238,109 |
|
|
189,329 |
|
||
Total current assets |
|
1,471,443 |
|
|
1,329,228 |
|
||
Property and equipment, net |
|
5,374,225 |
|
|
6,859,163 |
|
||
Lease right-of-use assets, net |
|
13,052,091 |
|
|
15,107,880 |
|
||
Restricted cash |
|
11,274 |
|
|
53,618 |
|
||
Equity method and other investments |
|
199,577 |
|
|
214,940 |
|
||
Goodwill |
|
677,334 |
|
|
679,351 |
|
||
Intangible assets, net |
|
56,729 |
|
|
49,896 |
|
||
| Other assets (including related party amounts of $596,045 and $699,478 as of December 31, 2021 and 2020, respectively) |
|
913,498 |
|
|
1,062,258 |
|
||
| Total assets | $ |
21,756,171 |
|
$ |
25,356,334 |
|
||
| Liabilities | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses (including amounts due to related parties of $93,800 and $14,497 as of December 31, 2021 and 2020 respectively) | $ |
621,090 |
|
$ |
723,411 |
|
||
| Members’ service retainers |
|
420,908 |
|
|
358,566 |
|
||
| Deferred revenue (including amounts from related parties of $5,441 and $9,717 as of December 31, 2021 and 2020, respectively) |
|
119,767 |
|
|
176,004 |
|
||
| Current lease obligations (including amounts due to related parties of $18,433 and $10,148 as of December 31, 2021 and 2020, respectively) | 893,067 |
847,531 |
||||||
| Other current liabilities (including amounts due to related parties of none and $900 as of December 31, 2021 and 2020, respectively) |
|
77,913 |
|
|
83,755 |
|
||
| Total current liabilities |
|
2,132,745 |
|
|
2,189,267 |
|
||
| Long-term lease obligations (including amounts due to related parties of $524,625 and $436,074 as of December 31, 2021 and 2020, respectively) |
|
17,925,626 |
|
|
20,263,606 |
|
||
| Unsecured notes payable (including amounts due to related parties of $1,650,000 and $1,200,000, as of December 31, 2021 and 2020, respectively) |
|
2,200,000 |
|
|
1,200,000 |
|
||
| Warrant liabilities, net (including convertible related party liabilities, net of none and $418,908 as of December 31, 2021 and 2020, respectively) |
|
15,547 |
|
|
418,908 |
|
||
| Long-term debt, net |
|
665,598 |
|
|
688,356 |
|
||
| Other liabilities |
|
230,097 |
|
|
221,780 |
|
||
| Total liabilities |
|
23,169,613 |
|
|
24,981,917 |
|
||
| Commitments and contingencies (Note 23) | ||||||||
| Convertible preferred stock; no shares authorized, issued and outstanding as of December 31, 2021, and 782,507,467 shares authorized, 304,791,824 shares issued and outstanding as of December 31, 2020 | — |
|
7,666,098 |
|
||||
| Redeemable noncontrolling interests |
|
35,997 |
|
|
380,242 |
|
||
WEWORK INC.
|
||||||||
| (Amounts in thousands, except share and per share amounts) |
December 31,
|
December 31,
|
||||||
| Equity | ||||||||
| WeWork Inc. shareholders' equity (deficit): | ||||||||
| Preferred stock; par value $0.0001; 100,000,000 share authorized, zero issued and outstanding as of December 31, 2021, zero shares authorized, issued and outstanding as of December 31, 2020 | — |
|
— |
|
||||
| Common stock Class A; par value $0.0001; 1,500,000,000 shares authorized, 705,016,923 shares issued as of December 31, 2021, and 777,979,845 shares authorized, and 34,297,295 shares issued as of December 31, 2020 |
|
71 |
|
|
3 |
|
||
| Common stock Class B; par value $0.0001; zero shares authorized, issued and outstanding as of December 31, 2021 and 194,080,786 shares authorized and 106,894,492 shares issued and outstanding as of December 31, 2020 | — |
11 |
||||||
| Common stock Class C; par value $0.0001; 25,041,666 shares authorized, 19,938,089 issued and outstanding as of December 31, 2021, and 42,109,087 shares authorized, 20,794,324 shares issued and outstanding as of December 31, 2020 | 2 |
2 |
||||||
| Common stock Class D; par value $0.001; zero shares authorized, issued and outstanding as of December 31, 2021, and 194,080,786 authorized, zero shares issued and outstanding as of December 31, 2020 | — |
|
— |
|
||||
| Treasury stock, at cost; 2,944,212 and zero shares held as of December 31, 2021 and 2020, respectively |
|
(29,245 |
) |
— |
||||
| Additional paid-in capital |
|
12,320,691 |
|
|
2,188,499 |
|
||
| Accumulated other comprehensive income (loss) |
|
(31,069 |
) |
|
(158,810 |
) |
||
| Accumulated deficit |
|
(14,142,517 |
) |
|
(9,703,490 |
) |
||
| Total WeWork Inc. shareholders' deficit |
|
(1,882,067 |
) |
|
(7,673,785 |
) |
||
| Noncontrolling interests |
|
432,628 |
|
|
1,862 |
|
||
| Total equity |
|
(1,449,439 |
) |
|
(7,671,923 |
) |
||
| Total liabilities and equity | $ |
21,756,171 |
|
$ |
25,356,334 |
|
||
The accompanying notes are an integral part of these consolidated financial statements.
WEWORK INC.
|
|||||||||||||
Year Ended December 31, |
|||||||||||||
(Amounts in thousands, except share and per share data) |
2021 |
2020 |
2019 |
||||||||||
| Revenue (including related party revenue of $142,833, $169,783 and $179,651 for the years ended December 31, 2021, 2020 and 2019, respectively. See Note 24) | $ |
2,570,127 |
|
$ |
3,415,865 |
|
$ |
3,458,592 |
|
||||
| Expenses: | |||||||||||||
Location operating expenses—cost of revenue (exclusive of depreciation and amortization of $671,932, $715,413 and $515,309 for the years ended December 31, 2021, 2020 and 2019, respectively, shown separately below) |
|
3,084,646 |
|
|
3,542,918 |
|
|
2,758,318 |
|
||||
Pre-opening location expenses |
|
159,096 |
|
|
273,049 |
|
|
571,968 |
|
||||
Selling, general and administrative expenses |
|
1,010,582 |
|
|
1,604,669 |
|
|
2,793,663 |
|
||||
Restructuring and other related costs |
|
433,811 |
|
|
206,703 |
|
|
329,221 |
|
||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
|
870,002 |
|
|
1,355,921 |
|
|
335,006 |
|
||||
Depreciation and amortization |
|
709,473 |
|
|
779,368 |
|
|
589,914 |
|
||||
Total expenses (including related party expenses of $84,797, $80,524 and $290,748 for the years ended December 31, 2021, 2020 and 2019, respectively. See Note 24) |
|
6,267,610 |
|
|
7,762,628 |
|
|
7,378,090 |
|
||||
Loss from operations |
|
(3,697,483 |
) |
|
(4,346,763 |
) |
|
(3,919,498 |
) |
||||
Interest and other income (expense), net: |
|
|
|
||||||||||
Income (loss) from equity method and other investments |
|
(18,333 |
) |
|
(44,788 |
) |
|
(32,206 |
) |
||||
Interest expense (including related party expenses of $(387,208), $(246,875) and $(11,024) for the years ended December 31, 2021, 2020 and 2019, respectively. See Note 11 and Note 24) |
|
(454,703 |
) |
|
(331,217 |
) |
|
(99,587 |
) |
||||
Interest income |
|
18,973 |
|
|
16,910 |
|
|
53,244 |
|
||||
Foreign currency gain (loss) |
|
(133,646 |
) |
|
149,196 |
|
|
29,652 |
|
||||
Gain (loss) from change in fair value of warrant liabilities (including from related party financial instruments of $(345,271), $819,647, and $(373,738) for the years ended December 31, 2021, 2020 and 2019, respectively. See Note 13) |
(342,939 |
) |
819,647 |
239,145 |
|||||||||
Loss on extinguishment of debt |
|
— |
|
|
(77,336 |
) |
|
— |
|
||||
Total interest and other income (expense), net |
|
(930,648 |
) |
|
532,412 |
|
|
190,248 |
|
||||
| Pre-tax loss | (4,628,131 |
) |
(3,814,351 |
) | (3,729,250 |
) |
|||||||
Income tax benefit (provision) |
(3,464 |
) |
(19,506 |
) |
(45,637 |
) |
|||||||
| Net loss | (4,631,595 |
) | (3,833,857 |
) | (3,774,887 |
) | |||||||
| Net loss attributable to noncontrolling interests: | |||||||||||||
| Redeemable noncontrolling interests — mezzanine | 139,083 |
675,631 |
493,047 |
||||||||||
| Noncontrolling interest — equity | 53,485 |
28,868 |
17,102 |
||||||||||
| Net loss attributable to WeWork Inc. | $ | (4,439,027 |
) | $ | (3,129,358 |
) | $ | (3,264,738 |
) | ||||
| Net loss per share attributable to Class A and Class B common stockholders (see Note 22): | |||||||||||||
| Basic | $ | (18.38 |
) | $ | (22.24 |
) | $ | (23.46 |
) | ||||
| Diluted | $ | (18.38 |
) | $ | (22.24 |
) | $ | (23.46 |
) | ||||
| Weighted-average shares used to compute net loss per share attributable to Class A and Class B common stockholders, basic and diluted | 263,584,930 |
140,680,131 |
139,160,229 |
||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
WEWORK INC.
|
||||||||||||
|
Year Ended
|
|||||||||||
(Amounts in thousands) |
2021 |
2020 |
2019 |
|||||||||
Cash Flows from Operating Activities: |
|
|
||||||||||
Net loss |
$ |
(4,631,595 |
) |
$ |
(3,833,857 |
) |
$ |
(3,774,887 |
) |
|||
Adjustments to reconcile net loss to net cash from operating activities: |
|
|
||||||||||
Depreciation and amortization |
|
709,473 |
|
|
779,368 |
|
|
589,914 |
|
|||
Impairment of property and equipment |
|
— |
|
|
3,066 |
|
|
63,128 |
|
|||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
|
870,002 |
|
|
1,355,921 |
|
|
335,006 |
|
|||
Non-cash transaction with principal shareholder |
|
428,289 |
|
|
— |
|
|
185,000 |
|
|||
Loss on extinguishment of debt |
|
— |
|
|
77,336 |
|
|
— |
|
|||
Stock-based compensation expense |
|
213,669 |
|
|
62,776 |
|
|
358,969 |
|
|||
Cash paid to settle employee stock awards |
|
— |
|
|
(3,141 |
) |
|
— |
|
|||
Issuance of stock for services rendered, net of forfeitures |
|
(2,271 |
) |
|
7,893 |
|
|
20,367 |
|
|||
Non-cash interest expense |
|
209,907 |
|
|
172,112 |
|
|
14,917 |
|
|||
Provision for allowance for doubtful accounts |
|
15,147 |
|
|
67,482 |
|
|
22,221 |
|
|||
(Income) loss from equity method and other investments |
|
18,333 |
|
|
44,788 |
|
|
32,206 |
|
|||
Distribution of income from equity method and other investments |
|
3,328 |
|
|
4,191 |
|
|
— |
|
|||
Foreign currency (gain) loss |
|
133,646 |
|
|
(149,196 |
) |
|
(30,915 |
) |
|||
Change in fair value of financial instruments |
|
342,939 |
|
|
(819,647 |
) |
|
(239,145 |
) |
|||
Contingent consideration fair market value adjustment |
|
— |
|
|
(122 |
) |
|
(60,667 |
) |
|||
Changes in operating assets and liabilities: |
||||||||||||
Operating lease right-of-use assets |
|
1,450,202 |
|
|
1,024,709 |
|
|
(5,850,744 |
) |
|||
Current and long-term lease obligations |
|
(1,606,650 |
) |
|
502,025 |
|
|
7,672,358 |
|
|||
Accounts receivable and accrued revenue |
|
23,485 |
|
|
(32,749 |
) |
|
(175,262 |
) |
|||
Other assets |
|
(76,452 |
) |
|
(28,148 |
) |
|
(126,870 |
) |
|||
Accounts payable and accrued expenses |
|
67,816 |
|
|
(164,190 |
) |
|
390,609 |
|
|||
Deferred revenue |
|
(52,695 |
) |
|
32,803 |
|
|
90,445 |
|
|||
Other liabilities |
|
(30,295 |
) |
|
39,731 |
|
|
38,840 |
|
|||
Deferred income taxes |
|
1,785 |
|
|
(159 |
) |
|
(3,734 |
) |
|||
Net cash provided by (used in) operating activities |
|
(1,911,937 |
) |
|
(857,008 |
) |
|
(448,244 |
) |
|||
| Cash Flows from Investing Activities: | ||||||||||||
Purchases of property and equipment |
|
(296,895 |
) |
|
(1,441,232 |
) |
|
(3,488,086 |
) |
|||
Capitalized software |
|
(39,997 |
) |
|
(22,614 |
) |
|
(40,735 |
) |
|||
| Change in security deposits with landlords |
|
2,526 |
|
|
526 |
|
|
(140,071 |
) |
|||
| Proceeds from asset divestitures and sale of investments, net of cash divested |
|
10,832 |
|
|
1,172,860 |
|
|
16,599 |
|
|||
Contributions to investments |
|
(26,704 |
) |
|
(99,146 |
) |
|
(80,674 |
) |
|||
Loans to employees and related parties |
|
— |
|
|
— |
|
|
(5,580 |
) |
|||
Cash used for acquisitions, net of cash acquired |
|
— |
|
|
— |
|
|
(1,036,973 |
) |
|||
Deconsolidation of cash of ChinaCo, net of cash received |
|
— |
|
|
(54,481 |
) |
|
— |
|
|||
Proceeds from repayment of notes receivable |
|
3,000 |
|
|
— |
|
|
— |
|
|||
| Net cash provided by (used in) investing activities | (347,238 |
) | (444,087 |
) | (4,775,520 |
) | ||||||
WEWORK INC.
|
||||||||||||
Year Ended
|
||||||||||||
| (Amounts in thousands) | 2021 |
2020 |
2019 |
|||||||||
| Cash Flows from Financing Activities: | ||||||||||||
| Proceeds from Business Combination and PIPE financing, net of issuance costs paid |
|
1,209,068 |
|
|
— |
|
|
— |
|
|||
| Taxes paid on withholding shares |
|
(32,542 |
) |
|
— |
|
|
— |
|
|||
| Principal payments for property and equipment acquired under finance leases |
|
(4,626 |
) |
|
(4,021 |
) |
|
(3,590 |
) |
|||
| Proceeds from unsecured related party debt |
|
1,000,000 |
|
|
1,200,000 |
|
|
— |
|
|||
| Proceeds from issuance of convertible related party liabilities |
|
— |
|
|
— |
|
|
4,000,000 |
|
|||
| Proceeds from issuance of debt |
|
708,177 |
|
|
34,309 |
|
|
662,395 |
|
|||
| Repayments of debt |
|
(712,746 |
) |
|
(813,140 |
) |
|
(3,088 |
) |
|||
| Bond repurchase |
|
— |
|
|
— |
|
|
(32,352 |
) |
|||
| Debt and equity issuance costs |
|
(12,091 |
) |
|
(12,039 |
) |
|
(71,075 |
) |
|||
| Proceeds from exercise of stock options and warrants |
|
17,037 |
|
|
212 |
|
|
38,823 |
|
|||
| Proceeds from issuance of noncontrolling interests |
|
80,006 |
|
|
100,628 |
|
|
538,934 |
|
|||
| Distributions to noncontrolling interests |
|
— |
|
|
(319,860 |
) |
|
(40,000 |
) |
|||
| Payments for contingent consideration and holdback of acquisition proceeds |
|
(2,523 |
) |
|
(39,701 |
) |
|
(38,280 |
) |
|||
| Proceeds relating to contingent consideration and holdbacks of |
|
12,177 |
|
|
613 |
|
|
— |
|
|||
| Additions to members’ service retainers |
|
449,861 |
|
|
382,184 |
|
|
703,265 |
|
|||
| Refunds of members’ service retainers |
|
(373,827 |
) |
|
(575,999 |
) |
|
(497,761 |
) |
|||
| Net cash provided by (used in) financing activities |
|
2,337,971 |
|
|
(46,814 |
) |
|
5,257,271 |
|
|||
| Effects of exchange rate changes on cash, cash equivalents and restricted cash |
|
2,050 |
|
|
1,374 |
|
|
3,239 |
|
|||
| Net increase (decrease) in cash, cash equivalents and restricted cash |
|
80,846 |
|
|
(1,346,535 |
) |
|
36,746 |
|
|||
| Cash, cash equivalents and restricted cash—Beginning of period |
|
854,153 |
|
|
2,200,688 |
|
|
2,163,942 |
|
|||
| Cash, cash equivalents and restricted cash—End of period | $ |
934,999 |
|
$ |
854,153 |
|
$ |
2,200,688 |
|
|||
| A reconciliation of net loss, the most comparable GAAP measure, to Adjusted EBITDA is set forth below: | ||||||||||||
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2019 |
|||||||||
Net loss |
$ |
(4,631,595 |
) |
$ |
(3,833,857 |
) |
$ |
(3,774,887 |
) |
|||
Income tax (benefit) provision(a) |
|
3,464 |
|
|
19,506 |
|
|
45,637 |
|
|||
Interest and other (income) expenses, net(a) |
|
930,648 |
|
|
(532,412 |
) |
|
(190,248 |
) |
|||
Depreciation and amortization(a) |
|
709,473 |
|
|
779,368 |
|
|
589,914 |
|
|||
Restructuring and other related costs(a) |
|
433,811 |
|
|
206,703 |
|
|
329,221 |
|
|||
Impairment/(gain on sale) of goodwill, intangibles and other assets(a) |
870,002 |
1,355,921 |
335,006 |
|||||||||
Stock-based compensation expense(b) |
|
109,740 |
|
|
50,758 |
|
|
346,747 |
|
|||
Stock-based payments for services rendered by consultants(b) |
|
(2,271 |
) |
|
7,893 |
|
|
20,367 |
|
|||
Change in fair value of contingent consideration liabilities(c) |
|
— |
|
|
(122 |
) |
|
(60,667 |
) |
|||
Legal, tax and regulatory reserves and settlements |
|
8,525 |
|
|
1,794 |
|
|
3,678 |
|
|||
Legal costs related to regulatory investigations and litigation(d) |
|
26,599 |
|
|
53,048 |
|
|
— |
|
|||
Expense related to mergers, acquisitions, divestitures and capital raising activities |
8,218 |
7,956 |
154,641 |
|||||||||
Adjusted EBITDA |
$ | (1,533,386 |
) | $ | (1,883,444 |
) | $ | (2,200,591 |
) | |||
| (a) | As presented on our condensed consolidated statements of operations. |
| (b) | Represents the non-cash expense of our equity compensation arrangements for employees, directors, and consultants. |
| (c) | Represents the change in fair value of the contingent consideration associated with acquisitions as included in selling, general and administrative expenses on the condensed consolidated statements of operations. |
| (d) | Legal costs incurred by the Company in connection with regulatory investigations and litigation regarding the Company’s 2019 withdrawn initial public offering and the related execution of the SoftBank Transactions, net of any insurance or other recoveries. See section entitled "Legal Matters" in Note 23 of the notes to the condensed consolidated financial statements included elsewhere in this Quarterly Report for details regarding the related regulatory investigations and litigation matters. |
| A reconciliation of location gross profit/(loss), the most comparable GAAP measure, to Building Margin is set forth below: | ||||||||||||
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2019 |
|||||||||
Location Gross Profit / (Loss) including Depreciation & Amortization |
$ |
(1,288,795 |
) |
$ |
(1,125,053 |
) |
$ |
(214,934 |
) |
|||
Depreciation and amortization |
|
671,932 |
|
|
715,413 |
|
|
515,309 |
|
|||
Location Gross Profit / (Loss) excluding Depreciation & Amortization |
|
(616,863 |
) |
|
(409,640 |
) |
|
300,375 |
|
|||
Unconsolidated management fee revenue |
|
(9,468 |
) |
|
(4,730 |
) |
|
(5,473 |
) |
|||
Stock-based compensation expense |
|
14,950 |
|
|
8,975 |
|
|
46,135 |
|
|||
Indirect location operation expenses |
|
99,341 |
|
|
132,165 |
|
|
176,116 |
|
|||
Building Margin |
$ |
(512,040 |
) |
$ |
(273,230 |
) |
$ |
517,153 |
|
|||
|
||||||||||||
Three Months Ended |
Year Ended |
|||||||||||||||||||
(Amounts in thousands) |
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
|||||||||||||||
Revenue: |
|
|
|
|
|
|||||||||||||||
Consolidated Locations membership and service revenue |
$ |
694,119 |
$ |
625,043 |
$ |
563,787 |
|
$ |
575,366 |
$ |
2,458,315 |
|||||||||
Unconsolidated Locations management fee revenue |
2,176 |
2,017 |
1,377 |
3,898 |
|
9,468 |
||||||||||||||
Other revenue |
|
21,470 |
|
|
33,971 |
|
|
28,314 |
|
|
18,589 |
|
|
102,344 |
|
|||||
Total revenue |
|
717,765 |
|
|
661,031 |
|
|
593,478 |
|
|
597,853 |
|
|
2,570,127 |
|
|||||
Expenses: |
|
|
|
|
|
|||||||||||||||
Location operating expenses—cost of revenue (1) |
|
733,341 |
|
|
752,493 |
|
|
780,489 |
|
|
818,323 |
|
|
3,084,646 |
|
|||||
Pre-opening location expenses |
|
41,890 |
|
|
40,367 |
|
|
43,435 |
|
|
33,404 |
|
|
159,096 |
|
|||||
Selling, general and administrative expenses (1) |
277,152 |
233,928 |
225,082 |
274,420 |
1,010,582 |
|||||||||||||||
Restructuring and other related costs |
|
(48,168 |
) |
|
15,934 |
|
|
(27,794 |
) |
|
493,839 |
|
|
433,811 |
|
|||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
240,876 |
87,541 |
242,104 |
299,481 |
870,002 |
|||||||||||||||
Depreciation and amortization |
|
174,316 |
|
|
170,816 |
|
|
180,157 |
|
|
184,184 |
|
|
709,473 |
|
|||||
Total expenses |
|
1,419,407 |
|
|
1,301,079 |
|
|
1,443,473 |
|
|
2,103,651 |
|
|
6,267,610 |
|
|||||
Loss from operations |
|
(701,642 |
) |
|
(640,048 |
) |
|
(849,995 |
) |
|
(1,505,798 |
) |
|
(3,697,483 |
) |
|||||
Interest and other income (expense), net |
|
(102,553 |
) |
|
(206,465 |
) |
|
(68,499 |
) |
|
(553,131 |
) |
|
(930,648 |
) |
|||||
Pre-tax loss |
|
(804,195 |
) |
|
(846,513 |
) |
|
(918,494 |
) |
|
(2,058,929 |
) |
|
(4,628,131 |
) |
|||||
Income taxes benefit (provision) |
|
1,567 |
|
|
2,251 |
|
|
(4,015 |
) |
|
(3,267 |
) |
|
(3,464 |
) |
|||||
Net loss |
|
(802,628 |
) |
|
(844,262 |
) |
|
(922,509 |
) |
|
(2,062,196 |
) |
|
(4,631,595 |
) |
|||||
Net loss attributable to noncontrolling interests |
|
87,201 |
|
|
41,862 |
|
|
33,664 |
|
|
29,841 |
|
|
192,568 |
|
|||||
| Net loss attributable to WeWork Inc. | $ |
(715,427 |
) |
$ |
(802,400 |
) |
$ |
(888,845 |
) |
$ |
(2,032,355 |
) |
$ |
(4,439,027 |
) |
|||||
| (1) | Exclusive of depreciation and amortization shown separately on the depreciation and amortization line. |
A reconciliation of net loss, the most comparable GAAP measure, to Adjusted EBITDA is set forth below: |
||||||||||||||||||||
Three Months Ended |
Year Ended |
|||||||||||||||||||
(Amounts in thousands) |
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
|||||||||||||||
Net loss |
$ |
(802,628 |
) |
$ |
(844,262 |
) |
$ |
(922,509 |
) |
$ |
(2,062,196 |
) |
$ |
(4,631,595 |
) |
|||||
Income tax (benefit) provision |
|
(1,567 |
) |
|
(2,251 |
) |
|
4,015 |
|
|
3,267 |
|
|
3,464 |
|
|||||
Interest and other (income) expense |
|
102,553 |
|
|
206,465 |
|
|
68,499 |
|
|
553,131 |
|
|
930,648 |
|
|||||
Depreciation and amortization |
|
174,316 |
|
|
170,816 |
|
|
180,157 |
|
|
184,184 |
|
|
709,473 |
|
|||||
Restructuring and other related costs |
|
(48,168 |
) |
|
15,934 |
|
|
(27,794 |
) |
|
493,839 |
|
|
433,811 |
|
|||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
240,876 |
87,541 |
242,104 |
299,481 |
870,002 |
|||||||||||||||
Stock-based compensation expense |
|
47,808 |
|
|
4,040 |
|
|
4,294 |
|
|
53,598 |
|
|
109,740 |
|
|||||
Stock-based payments for services rendered by consultants |
1 |
1 |
1 |
(2,274 |
) |
(2,271 |
) |
|||||||||||||
Change in fair value of contingent consideration liabilities |
— |
— |
— |
— |
|
— |
||||||||||||||
Legal, tax and regulatory reserves and settlements |
771 |
258 |
79 |
7,417 |
8,525 |
|||||||||||||||
Legal costs related to regulatory investigations and litigation |
|
1,545 |
|
|
2,735 |
|
|
(1,077 |
) |
|
23,396 |
|
|
26,599 |
|
|||||
Expense related to mergers, acquisitions, divestitures and capital raising activities |
1,685 |
2,724 |
3,303 |
506 |
8,218 |
|||||||||||||||
Adjusted EBITDA |
$ |
(282,808 |
) |
$ |
(355,999 |
) |
$ |
(448,928 |
) |
$ |
(445,651 |
) |
$ |
(1,533,386 |
) |
|||||
|
||||||||||||||||||||
| A reconciliation of location gross profit/(loss), the most comparable GAAP measure, to Building Margin is set forth below: | ||||||||||||||||||||
Three Months Ended |
Year Ended |
|||||||||||||||||||
(Amounts in thousands) |
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
|||||||||||||||
Location Gross Profit / (Loss) including Depreciation & Amortization |
$ |
(200,934 |
) |
$ |
(287,851 |
) |
$ |
(385,644 |
) |
$ |
(414,366 |
) |
$ |
(1,288,795 |
) |
|||||
Depreciation and amortization |
|
163,888 |
|
|
162,418 |
|
|
170,319 |
|
|
175,307 |
|
|
671,932 |
|
|||||
Location Gross Profit / (Loss) excluding Depreciation & Amortization |
|
(37,046 |
) |
|
(125,433 |
) |
|
(215,325 |
) |
|
(239,059 |
) |
|
(616,863 |
) |
|||||
Unconsolidated management fee revenue |
|
(2,176 |
) |
|
(2,017 |
) |
|
(1,377 |
) |
|
(3,898 |
) |
|
(9,468 |
) |
|||||
Stock-based compensation expense |
|
4,776 |
|
|
609 |
|
|
734 |
|
|
8,831 |
|
|
14,950 |
|
|||||
Indirect location operation expenses |
|
25,771 |
|
|
24,205 |
|
|
24,136 |
|
|
25,229 |
|
|
99,341 |
|
|||||
Building Margin |
$ |
(8,675 |
) |
$ |
(102,636 |
) |
$ |
(191,832 |
) |
$ |
(208,897 |
) |
$ |
(512,040 |
) |
|||||
A reconciliation of net cash provided by (used in) operating activities, the most comparable GAAP measure, to Free Cash Flow is set forth below: |
||||||||||||
|
Year Ended December 31, |
|||||||||||
(Amounts in thousands) |
2021 |
2020 |
2019 |
|||||||||
Net cash provided by (used in) operating activities (a) |
$ |
(1,911,937 |
) |
$ |
(857,008 |
) |
$ |
(448,244 |
) |
|||
Less: Purchases of property and equipment (a) |
|
(296,895 |
) |
|
(1,441,232 |
) |
|
(3,488,086 |
) |
|||
Free Cash Flow |
$ |
(2,208,832 |
) |
$ |
(2,298,240 |
) |
$ |
(3,936,330 |
) |
|||
| (a) | As presented on our condensed consolidated statements of cash flows. |
Key Performance Supplemental Information
(Amounts in ones, except percentages) |
December 31,
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
|||||||||||||||
Other key performance indicators: |
|
|
|
|
|
|||||||||||||||
Consolidated Locations (1),(2),(3) |
|
|
|
|
|
|||||||||||||||
Membership and service revenues |
$ |
694,119 |
|
$ |
625,043 |
|
$ |
563,787 |
|
$ |
575,366 |
|
$ |
609,191 |
|
|||||
Workstation Capacity |
|
746,000 |
|
|
766,000 |
|
|
770,000 |
|
|
804,000 |
|
|
865,000 |
|
|||||
Physical Memberships |
|
469,000 |
|
|
432,000 |
|
|
386,000 |
|
|
378,000 |
|
|
387,000 |
|
|||||
All Access and Other Legacy Memberships |
|
45,000 |
|
|
32,000 |
|
|
20,000 |
|
|
15,000 |
|
|
13,000 |
|
|||||
Memberships |
|
514,000 |
|
|
464,000 |
|
|
406,000 |
|
|
393,000 |
|
|
401,000 |
|
|||||
Physical Occupancy Rate |
|
63 |
% |
|
56 |
% |
|
50 |
% |
|
47 |
% |
|
45 |
% |
|||||
Enterprise Physical Membership Percentage |
|
47 |
% |
|
49 |
% |
|
52 |
% |
|
52 |
% |
|
52 |
% |
|||||
Unconsolidated Locations (1),(2),(3) |
|
|
|
|
|
|||||||||||||||
Membership and service revenues(4) |
$ |
132,886 |
|
$ |
119,363 |
|
$ |
101,380 |
|
$ |
89,815 |
|
$ |
86,144 |
|
|||||
Workstation Capacity |
|
166,000 |
|
|
165,000 |
|
|
168,000 |
|
|
160,000 |
|
|
166,000 |
|
|||||
Physical Memberships |
|
121,000 |
|
|
114,000 |
|
|
110,000 |
|
|
97,000 |
|
|
89,000 |
|
|||||
Memberships |
|
121,000 |
|
|
114,000 |
|
|
111,000 |
|
|
97,000 |
|
|
89,000 |
|
|||||
Physical Occupancy Rate |
|
73 |
% |
|
69 |
% |
|
66 |
% |
|
61 |
% |
|
54 |
% |
|||||
Systemwide Locations |
|
|
|
|
|
|||||||||||||||
Membership and service revenues (5) |
$ |
827,005 |
|
$ |
744,406 |
|
$ |
665,167 |
|
$ |
665,181 |
|
$ |
695,335 |
|
|||||
Workstation Capacity |
|
912,000 |
|
|
932,000 |
|
|
937,000 |
|
|
963,000 |
|
|
1,030,000 |
|
|||||
Physical Memberships |
|
590,000 |
|
|
546,000 |
|
|
496,000 |
|
|
475,000 |
|
|
476,000 |
|
|||||
All Access and Other Legacy Memberships |
|
46,000 |
|
|
32,000 |
|
|
20,000 |
|
|
15,001 |
|
|
13,000 |
|
|||||
Memberships |
|
635,000 |
|
|
578,000 |
|
|
517,000 |
|
|
490,000 |
|
|
490,000 |
|
|||||
Physical Occupancy Rate |
|
65 |
% |
|
59 |
% |
|
53 |
% |
|
49 |
% |
|
46 |
% |
|||||
| (1) | For certain key performance indicators the amounts we present are based on whether the indicator relates to a location for which the revenues and expenses of the location are consolidated within our results of operations ("Consolidated Locations") or whether the indicator relates to a location for which the revenues and expenses are not consolidated within our results of operations, but for which we are entitled to a management fee for our advisory services ("Unconsolidated Locations"). As of December 31, 2021, IndiaCo, ChinaCo and Israel locations are our only Unconsolidated Locations |
| (2) | Effective October 2, 2020, the Company deconsolidated ChinaCo and as a result, beginning with the fourth quarter of 2020, the workstation capacity, memberships, occupancy and enterprise memberships percentages for Consolidated Locations excludes the impact of ChinaCo locations, and they are included in Unconsolidated Locations, with no impact on Total Locations. Prior to October 2, 2020, ChinaCo was still consolidated and therefore the key performance indicators for ChinaCo are included in Consolidated Locations. |
| (3) | On June 1, 2021, we closed a franchise agreement with Ampa and transferred the building operations and obligations of our Israel locations to Ampa. Beginning on June 1, 2021, our Israel locations are no longer Consolidated Locations and are classified as Unconsolidated Locations. |
| (4) | Unconsolidated membership and service revenues represents the results of Unconsolidated Locations that typically generate ongoing management fees for the Company at a rate of 2.75-4.00%. |
| (5) | Systemwide Location membership and service revenues represents the results of all locations regardless of ownership, including Consolidated and Unconsolidated Locations. |
Source: We Work
Category: Investor Relations