WeWork Reports Fourth Quarter and Fiscal Year 2021 Financial Results

NEW YORK--()--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.
CONSOLIDATED BALANCE SHEETS
UNAUDITED

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.
CONSOLIDATED BALANCE SHEETS – (CONTINUED)
UNAUDITED

(Amounts in thousands, except share and per share amounts)

December 31,
2021

December 31,
2020

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.
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED

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.
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED

 

Year Ended
December 31,

(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.
CONSOLIDATED STATEMENTS OF CASH FLOWS – (CONTINUED)
UNAUDITED

Year Ended
December 31,

(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,
2021

September 30,
2021

June 30,
2021

March 31,
2021

December 31,
2021

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,
2021

September 30,
2021

June 30,
2021

March 31,
2021

December 31,
2021

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,
2021

September 30,
2021

June 30,
2021

March 31,
2021

December 31,
2021

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,
2021

September 30,
2021

June 30,
2021

March 31,
2021

December 31,
2020

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

Contacts

Investors
Chandler Salisbury
investor@wework.com

Media
Nicole Sizemore
press@wework.com

Contacts

Investors
Chandler Salisbury
investor@wework.com

Media
Nicole Sizemore
press@wework.com