WeWork (\u201cthe Company\u201d), the world\u2019s leading co-working and space-as-a-service platform, today announced the closing of its new $1.75 billion senior secured letter of credit facility. Goldman Sachs is the administrative agent of the new facility. Goldman Sachs, Citibank, DBS Bank, Deutsche Bank, Mizuho, Natixis and Soci\u00e9t\u00e9 G\u00e9n\u00e9rale participated in the syndication as joint lead arrangers and joint bookrunners, and other banks continue to look into participation in the facility.<\/p>\n\n\n\n
WeWork, which in\nDecember entered into the committed facility together with SoftBank Group Corp.\n(\u201cSoftBank\u201d), is not required to post any cash collateral under the new\nfacility, making available approximately $800 million in working capital that\nwas restricted under previous letter of credit facilities.<\/p>\n\n\n\n
\u201cThis new letter of\ncredit facility — which offers better terms and frees up significant balance\nsheet capital — marks the latest milestone in WeWork\u2019s evolution,\u201d said\nMarcelo Claure, Executive Chairman of WeWork. \u201cWe will continue to improve the\ncompany\u2019s financial position, implement our new operating model and pursue\ndisciplined growth on our path to adjusted EBITDA profitability by next year.\u201d<\/p>\n\n\n\n
In addition, WeWork\nentered into a master note purchase agreement in December to formalize\nSoftBank\u2019s commitment to provide up to $2.2 billion in unsecured debt. This\nunsecured debt financing, along with SoftBank\u2019s commitment to provide up to\n$1.1 billion of secured debt financing and SoftBank\u2019s credit support of this\nnew $1.75 billion letter of credit facility, are part of a broader agreement\nwith SoftBank reached last fall to bring significant new funding to the\nCompany.<\/p>\n\n\n\n
WeWork reported key\nfinancial and operational targets for the Company\u2019s strategic and financial\nplan over the next five years. The WeWork targets include:<\/p>\n\n\n\n
\u25cf 2020: First-ever $1 billion revenue quarter[1]<\/sup><\/p>\n\n\n\n \u25cf 2021: Adjusted EBITDA positive[2]<\/sup><\/p>\n\n\n\n \u25cf 2022: Free cash flow positive[3]<\/sup><\/p>\n\n\n\n \u25cf 2023: 1 million memberships[4]<\/sup><\/p>\n\n\n\n \u25cf 2024: $1+ billion of free cash flow<\/p>\n\n\n\n With a successful\nexecution of its fully funded five-year strategic and financial plan, WeWork\nexpects to have additional liquidity of $2.5-3 billion for future growth. The\nCompany also anticipates it will reach 1,000 locations* worldwide by 2021. <\/p>\n\n\n\n In addition to\nWeWork\u2019s strengthened financial position and strategic plan, WeWork has made\nrecent leadership changes, with incoming Chief Executive Officer Sandeep\nMathrani, a proven real estate executive, scheduled to start February 18.\nKirthiga Reddy, a technology executive and Partner at SoftBank Investment\nAdvisers, has joined the WeWork Board of Directors in the designated SoftBank\nVision Fund seat formerly occupied by Ron Fisher. This is part of a planned\ndirector refreshment in line with corporate governance best practices. In\naddition, Mark Schwartz and Steve Langman have voluntarily resigned from the\nBoard of Directors and Lew Frankfurt expects to resign upon completion of the\ninvestment transactions agreed to between WeWork and SoftBank, including the\npreviously announced tender offer. WeWork will continue to appoint new\ndirectors who add strategic value and diverse perspectives to the Company in\nthe months ahead.<\/p>\n\n\n\n *Includes total WeWork locations\n(consolidated and IndiaCo)<\/em><\/p>\n\n\n\n About WeWork<\/strong><\/p>\n\n\n\n WeWork provides\nmembers with space, community, and services through physical and virtual\nofferings. Its mission is to create a world where people work to make a life,\nnot just a living. As of 2019 fourth-quarter close, WeWork had 739 locations\nacross 140 cities and 37 countries, as well as 662,000+ total memberships,\nincluding global enterprises. WeWork is committed to providing members around\nthe world with a better day at work for less.<\/p>\n\n\n\n Definitions<\/strong><\/p>\n\n\n\n 1.<\/em> Represents the first time within the year\nwe will hit $1B in quarterly WeWork Membership & Services Revenue<\/em><\/p>\n\n\n\n 2.<\/em> Adjusted EBITDA – Adjusted EBITDA is\ndefined as net loss before income tax (benefit) provision, all interest and\nother (income) expense, depreciation and amortization expense, stock-based\ncompensation expense, expense related to stock-based payments for services\nrendered by consultants, income or expense relating to the changes in fair\nvalue of assets and liabilities remeasured to fair value on a recurring basis,\nexpense related to costs associated with mergers, acquisitions divestitures,\nand capital raising activities, legal, tax, and regulatory reserves or\nsettlements, significant non-ordinary course asset impairment charges and to\nthe extent applicable any impact of discontinued operations, restructuring\ncharges, and other gains and losses on operating assets. The most directly\ncomparable GAAP measure to adjusted EBITDA is net loss.<\/em><\/p>\n\n\n\n 3.<\/em> We define as “Unlevered Free Cash\nFlow\u201d as \u201cAdjusted EBITDA excluding non-cash GAAP straight-line lease cost\u201d and\namortization of lease incentives” less “Net Capital\nExpenditures”. We define \u201cAdjusted EBITDA plus non-cash GAAP straight-line\nlease cost and amortization of lease incentives\u201d as net loss before income tax\n(benefit) provision, interest and other (income) expense, depreciation and\namortization expense, stock-based compensation expense, expense related to\nstock-based payments for services rendered by consultants, income or expense\nrelating to the changes in fair value of assets and liabilities remeasured to\nfair value on a recurring basis, expense related to costs associated with\nmergers, acquisitions, divestitures and capital raising activities, legal, tax\nand regulatory reserves or settlements, significant non-ordinary course asset\nimpairment charges and, to the extent applicable, any impact of discontinued\noperations, restructuring charges, and other gains and losses on operating\nassets. This figure also excludes the impact of non-cash GAAP straight-line lease\ncost and amortization of lease incentives. We define \u201cnet capital expenditures\u201d\nas the gross purchases of property and equipment, as reported in \u201ccash flows\nfrom investing activities\u201d in the consolidated statements of cash flows, less\ncash collected from landlords for tenant improvement allowances, as reported in\nthe “supplemental cash flow disclosures” schedule in the cash flow\nstatement.<\/em><\/p>\n\n\n\n 4.<\/em> \u201cMembership” to be defined as\n“WeWork Memberships, excludes On Demand memberships and IndiaCo\nmemberships\u201d<\/em><\/p>\n\n\n\n Cautionary note regarding\nforward-looking statements<\/strong><\/p>\n\n\n\n This press release\ncontains \u201cforward-looking statements\u201d, including statements about estimated and\nprojected business, operational and financial metrics (including revenue,\nAdjusted EBITDA, profitability, liquidity, cash and cash flow metrics), plans\n(including our five-year strategic and financial plan), goals (including for\nliquidity, cash, cash flow and our funded business plan), contractual\ncommitments from lenders and others, targets, objectives and other information\nfor future periods. These forward looking statements are often, but not always,\nmade through the use of words or phrases such as \u201cexecute,\u201d \u201cbelieve,\u201d \u201cwill,\u201d\n\u201cmay,\u201d \u201caccess,\u201d \u201cposition,\u201d \u201croadmap,\u201d \u201cbecome,\u201d \u201cexpect,\u201d \u201cplan,\u201d\n\u201creposition,\u201d \u201caim,\u201d \u201ctarget,\u201d \u201cgoal\u201d or other comparable words or phrases of a\nconditional, future or forward-looking nature. These statements are not\nhistorical facts, and are based on management\u2019s current expectations, estimates\nand projections about our industry as well as certain assumptions made by\nmanagement, many of which, by their nature, are inherently uncertain and are\nbeyond our control. It is not possible for us to predict all risks, nor can we\nassess the impact of all factors on our business or the extent to which any\nfactor, or combination of factors, may cause actual results to differ\nmaterially from those contained in any forward-looking statements. In light of\nthese risks, uncertainties and assumptions, the future events, estimates,\nprojections, goals, targets and plans discussed in this press release, and our\nfuture levels of activity and performance, may not occur and actual results\ncould differ materially and adversely from those anticipated or implied in the\nforward-looking statements. Any forward-looking statement speaks only as of the\ndate on which it is made, and we do not undertake any obligation to publicly\nupdate or revise any forward-looking statement, whether as a result of new\ninformation, future developments or otherwise, except as required by law. In\naddition, projections, assumptions, estimates, goals, targets, plans and trends\nof the future performance of the industry in which we operate, and our future\nperformance, are necessarily subject to uncertainty and risk due to a variety\nof factors, including those described above. These and other factors could\ncause results to differ materially from those expressed in the estimates made\nby independent parties and by us. In addition, all projections, estimates,\ngoals, targets, plans, trends or other statements with respect to our future\nresults or future events are based on current management estimates and\nassumptions, some of which may not materialize or may change, and is subject to\nrisks and uncertainties over which we have no control or ability to predict.\nUnanticipated events may occur that could affect the outcome of such\nprojections, estimates, goals, targets, plans, trends and other statements. You\nmust make your own determinations as to the reasonableness of these\nprojections, estimates, goals, targets, plans, trends and other statements and\nshould also note that if one or more estimates change, or one or more\nassumptions are not met, or one or more unexpected events occur, the\nperformance and results set forth in such projections, estimates, goals,\ntargets, plans, trends and other statements may not be achieved. We can give no\nassurance as to its future operations, performance, results or events. In\naddition, this press release includes references to certain financial measures\nnot presented in accordance with generally accepted accounting principles in\nthe United States (GAAP), including free cash flow and adjusted EBITDA. These\nfinancial measures are not measures of financial performance in accordance with\nGAAP and may exclude items that are significant in understanding and assessing\nour financial results and should not be considered in isolation or as an\nalternative to net loss or other measures of our profitability, liquidity or\nperformance under GAAP. You should be aware that our presentation of these\nmeasures may not be comparable to similarly titled measures used by other\ncompanies, which may be defined and calculated differently.<\/p>\n\n\n\n Contacts<\/strong><\/p>\n\n\n\n Erin Clark, erin.clark2@wework.com<\/a> \/ press@wework.com<\/a><\/p>\n","protected":false},"author":883,"featured_media":3000008663,"parent":0,"template":"","meta":{"_acf_changed":false,"footnotes":""},"news_tag":[43919],"class_list":["post-3000008662","news","type-news","status-publish","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"\n