WEWORK INC.

(WE)
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WEWORK INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

05/12/2022 | 04:30pm EDT

Overview


WeWork is the leading global flexible workspace provider, serving a membership
base of businesses large and small through our network of 765 locations,
including 633 Consolidated Locations (as defined in the section entitled "Key
Performance Indicators"), around the world as of March 2022. With our global
footprint, we have worked to establish ourselves as the preeminent brand within
the space-as-a-service category by combining best-in-class locations and design
with member-first hospitality and exceptional community experiences. Since new
management was instituted in 2020, we immediately began to execute a strategic
plan to transform our business. With a more efficient operating model and cost
conscious mindset, moving forward we expect to pursue profitable growth and
focus on the digitization of our real estate in order to enhance our product
offerings, and expand and diversify our membership base, while continuously
meeting the growing demand for flexibility.

In the wake of the 2008 global financial crisis, WeWork opened its first
location in lower Manhattan in 2010 to provide entrepreneurs and small
businesses with flexible, affordable and community-centered office space. The
initial vision was to create environments where people and companies could come
together to "do what they love." Our value proposition proved to be highly
attractive to a range of users, which soon evolved to encompass a growing set of
medium- and large-scale businesses, including our Enterprise Members (as defined
in the section entitled "Key Performance Indicators").

For nearly a decade, WeWork embarked on a high-growth path towards global
expansion. Within four years, the Company grew to 23 locations across eight
cities and opened its first international locations in the United Kingdom and
Israel. In 2019, WeWork filed a registration statement in connection with a
proposed initial public offering which was later withdrawn. Following the
withdrawal of the registration statement, SBG provided WeWork with additional
access to capital to support our day-to-day operations and other capital needs.
Subsequently, the board of directors of WeWork directed a change in leadership.

We rebuilt our leadership team beginning with the appointment of Sandeep
Mathrani as Chief Executive Officer in February 2020. With a new leadership team
comprised of seasoned professionals in the public and private sectors, WeWork
immediately began to execute a strategic plan to transform our business. That
plan included robust expense management efforts, the exit of non-core businesses
and material real estate portfolio optimization. On October 20, 2021, Legacy
BowX consummated its going-public business combination with Legacy WeWork. In
connection with the closing of the Business Combination, Legacy BowX changed its
name to WeWork Inc. and the Company's stock began trading on the NYSE under the
ticker symbol "WE".

WeWork's core business offering provides flexibility across space, time and
cost. Whether users are looking for a dedicated desk, a private office or a
fully customized floor, our members have the flexibility to choose the amount of
space they need and scale with us as their businesses grow. Members also have
the optionality to choose the type of membership that works for them, with a
range of flexible offerings that provide access to space on a monthly
subscription basis, through a multi-year membership agreement or on a
pay-as-you-go basis. Additionally, a WeWork membership provides members with
portability of cost, giving our members the flexibility to move part or all of
an existing commitment to a new market, region or country.

Membership agreements provide our members with access to space along with
certain baseline amenities and services, such as private phone booths, internet,
high-speed business printers and copiers, mail and packaging handling, front
desk services, 24/7 building access, unique common areas and daily enhanced
cleaning for no additional cost.

Beyond the amenities offered, we believe that our community team is what sets us
apart from other space providers in the industry. With a member-first mindset,
our community teams provide an exceptional level

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of hospitality by not only overseeing onsite operations and supporting day-to-day needs, but also focusing on cultivating meaningful relationships with and between our members to deliver a premium experience.

By providing all of the overhead services required to find and operate office space, WeWork significantly reduces the complexity and cost of leasing real estate to a simplified membership model.

Key Performance Indicators


To evaluate our business, measure our performance, identify trends affecting our
business, formulate business plans and make strategic decisions, we rely on our
financial results prepared in accordance GAAP, non-GAAP measures and the
following key performance indicators.

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").

On October 2, 2020, the Company deconsolidated ChinaCo, a previously
consolidated subsidiary of the Company that operated our locations in the
Greater China region. On June 1, 2021, we closed a franchise agreement with Ampa
and transferred the building operations and obligations of our Israel locations
to Ampa. Subsequent to the date of these respective transactions our ChinaCo and
Israel locations are included in our Unconsolidated Locations. For amounts
relating to periods prior to October 2, 2020, and June 1, 2021, ChinaCo and
Israel locations, respectively, remain reflected as Consolidated Locations and
as a result, periods may not be comparable. There is no impact to the combined
Consolidated Locations and Unconsolidated Locations ("Total Locations" or
"Systemwide Locations") indicators as a result of the ChinaCo Deconsolidation or
Israel franchise agreement. As of March 31, 2022, our locations in India, the
Greater China region and Israel are our only Unconsolidated Locations.

Unless otherwise noted, we present our key performance indicators as an
aggregation of Consolidated Locations and Unconsolidated Locations. As presented
in this Form 10-Q, certain amounts, percentages and other figures have been
subject to rounding adjustments. Accordingly, figures shown as totals, dollars
or percentage amounts of changes may not represent the arithmetic summation or
calculation of the figures that precede them. Any totals of key performance
indicators presented as of a period end reflect the count as of the first day of
the last month in the period. First-of-the-month counts are used because the
economics of those counts generally impact the results for that monthly period,
and most move-ins and openings occur on the first day of the month.

Workstation Capacity

Workstation capacity represents the estimated number of workstations available at total open locations.


Workstation capacity is a key indicator of our scale and our capacity to sell
memberships across our network of locations. Our future sales and marketing
expenses and capital expenditures will be a function of our efforts to increase
workstation capacity. The cost at which we build out our workstations affects
our capital expenditures, and the cost at which we acquire memberships and fill
our workstations affects our sales and marketing expenses. As of March 2022, we
had total workstation capacity of 916 thousand, down 5% from 963 thousand as of
March 2021, with the decrease as a direct result of the Company's continued
operational restructuring efforts to exit leases throughout 2021 and the three
months ended March 31, 2022.

Workstation capacity is presented in this Form 10-Q rounded to the nearest thousand. Workstation capacity is based on management's best estimates of capacity at a location based on our inventory management system and sales layouts and is not meant to represent the actual count of workstations at our locations.


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Memberships


Memberships are the cumulative number of WeWork memberships, WeWork All Access
memberships, and WeMemberships (the latter of which are certain predecessor
products). WeWork memberships provide access to a workstation and represent the
number of memberships from our various product offerings, including our standard
dedicated desks, private offices and customized floors. WeWork All Access
memberships are monthly memberships providing an individual with access to
participating WeWork locations. WeMemberships are legacy products that provide
member user login access to the WeWork member network online or through the
mobile application as well as access to service offerings and the right to
reserve space on an à la carte basis, among other benefits. Each WeWork
membership, WeWork All Access membership and other virtual memberships is
considered to be one membership.

The number of memberships is a key indicator of the adoption of our global
membership network, the scale and reach of our network and our ability to fill
our locations with members. Memberships also represent monetization
opportunities from our current and future service offerings. Memberships are
presented in this Form 10-Q rounded to the nearest thousand. Memberships can
differ from the number of individuals using workspace at our locations for a
number of reasons, including members utilizing workspace for fewer individuals
than the space was designed to accommodate.

As of March 2022, we had 681 thousand total memberships, which is an increase of 39% from 490 thousand memberships as of March 2021. This increase in total memberships included a 267% increase in WeWork All Access and Other Legacy Memberships from 15 thousand as of March 2021 to 55 thousand as of March 2022.

Physical Occupancy Rate


Physical occupancy rates are calculated by dividing WeWork memberships by
workstation capacity in a location. Physical occupancy rates are a way of
measuring how full our workspaces are. As of March 2022, our physical occupancy
rate was 68%, compared to 49% as of March 2021. The increase in physical
occupancy rate was due to both a 33% increase in physical memberships as members
continue returning to the office and a 5% decrease in workstation capacity due
to our continued operational restructuring efforts.

Enterprise Physical Membership Percentage

Enterprise memberships represent memberships attributable to Enterprise Members, which we define as organizations with 500 or more full-time employees. Enterprise Members are strategically important for our business as they typically sign membership agreements with longer-term commitments and for multiple solutions, which enhances our revenue visibility.


Enterprise physical membership percentage represents the percentage of our
memberships attributable to these organizations. There is no minimum number of
workstations that an organization needs to reserve in order to be considered an
Enterprise Member. For example, an organization with 700 full-time employees
that pays for 50 of its employees to occupy workstations at our locations would
be considered one Enterprise Member with 50 memberships. As of March 2022, 46%
of our Consolidated Locations physical memberships were attributable to
Enterprise Members, down from 52% as of March 2021. For the three months ended
March 31, 2022, enterprise memberships accounted for 45% of membership and
service revenue compared to 51% for the three months ended March 31, 2021.

Non-GAAP Financial Measures


To evaluate the performance of our business, we rely on both our results of
operations prepared in accordance with GAAP as well as certain non-GAAP
financial measures, including Adjusted EBITDA and Free Cash Flow. These non-GAAP
measures, as discussed further below, are not defined or calculated under
principles, standards or rules that comprise GAAP. Accordingly, the non-GAAP
financial measures we use and refer to should not be viewed as a substitute for
financial measures calculated in accordance

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with GAAP and we encourage you not to rely on any single financial measure to
evaluate our business, financial condition or results of operations. These
non-GAAP financial measures are supplemental measures that we believe provide
management and our investors with a more detailed understanding of our
performance. Our definitions of Adjusted EBITDA and Free Cash Flow described
below are specific to our business and you should not assume that they are
comparable to similarly titled financial measures that may be presented by other
companies.

Adjusted EBITDA

We supplement our GAAP financial results by evaluating Adjusted EBITDA, which is
a non-GAAP measure. We define "Adjusted EBITDA" as net loss before income tax
(benefit) provision, interest and other (income) expenses, net, depreciation and
amortization, restructuring and other related costs, impairment (gain on sale)
of goodwill, intangibles and other assets, stock-based compensation expense,
stock-based payments for services rendered by consultants, change in fair value
of contingent consideration liabilities, legal, tax and regulatory reserves or
settlements, 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, as
defined in Note 1 of the Notes to the Condensed Consolidated Financial
Statements included in this Form 10-Q, net of any insurance or other recoveries,
and expense related to mergers, acquisitions, divestitures and capital raising
activities.

A reconciliation of net loss, the most comparable GAAP measure, to Adjusted
EBITDA is set forth below:

                                                                     Three Months Ended
                                                                          March 31,
       (Amounts in millions)                                         2022             2021
       Net loss                                                 $    (504)         $ (2,062)
       Income tax (benefit) provision(a)                               (1)                3
       Interest and other (income) expenses, net(a)                   147               553
       Depreciation and amortization(a)                               171               184
       Restructuring and other related costs(a)                      (130)              494
       Impairment expense(a)                                           91               299
       Stock-based compensation expense(b)                             13                54

       Other, net(c)                                                    1                29
       Adjusted EBITDA                                          $    (212)         $   (446)


(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)Other, net includes stock-based payments for services rendered by
consultants, change in fair value of contingent consideration liabilities,
legal, tax and regulatory reserves or settlements, 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, as defined in Note 1 of the notes to the condensed
consolidated financial statements included in this Form 10-Q, net of any
insurance or other recoveries, and expense related to mergers, acquisitions,
divestitures and capital raising activities, all as included in selling, general
and administrative expenses on the condensed consolidated statements of
operations.

When used in conjunction with GAAP financial measures, we believe that Adjusted
EBITDA is a useful supplemental measure of operating performance because it
facilitates comparisons of historical performance by excluding non-cash items
such as stock-based payments, fair market value adjustments and impairment
charges and other amounts not directly attributable to our primary operations,
such as the impact of restructuring costs, acquisitions, disposals, non-routine
investigations, litigation and settlements. Depreciation and amortization relate
primarily to the depreciation of our leasehold improvements, equipment and
furniture. These capital expenditures are incurred and capitalized subsequent to
the commencement of our leases and are depreciated over the lesser of the useful
life of the asset or the term of the lease. The initial capital expenditures are
assessed by management as an investing activity, and the related depreciation
and amortization are non-cash charges that are not considered in management's
assessment of the daily operating performance of our locations. As a result, the
impact of

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depreciation and amortization is excluded from our calculation of Adjusted
EBITDA. Restructuring and other related costs relate primarily to the decision
to slow growth and terminate leases and are therefore not ordinary course costs
directly attributable to the daily operation of our locations. In addition,
while the 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 are cash
expenses, these are not expected to be recurring after the matters are resolved
and they do not represent expenses necessary for our business operations.

Adjusted EBITDA is also a key metric used internally by our management to evaluate performance and develop internal budgets and forecasts.


Adjusted EBITDA has limitations as an analytical tool, should not be considered
in isolation or as a substitute for analyzing our results as reported under GAAP
and does not provide a complete understanding of our operating results as a
whole. Some of these limitations are:

•it does not reflect changes in, or cash requirements for, our working capital needs;

•it does not reflect our interest expense or the cash requirements necessary to service interest or principal payments on our debt;

•it does not reflect our tax expense or the cash requirements to pay our taxes;

•it does not reflect historical capital expenditures or future requirements for capital expenditures or contractual commitments;

•although stock-based compensation expenses are non-cash charges, we rely on equity compensation to compensate and incentivize employees, directors and certain consultants, and we may continue to do so in the future; and


•although depreciation, amortization and impairments are non-cash charges, the
assets being depreciated and amortized will often have to be replaced in the
future, and this non-GAAP measure does not reflect any cash requirements for
such replacements.

Free Cash Flow

Because of the limitations of Adjusted EBITDA, as noted above, we also
supplement our GAAP results by evaluating Free Cash Flow, a non-GAAP measure. We
define "Free Cash Flow" as net cash provided by (used in) operating activities
less purchases of property, equipment and capitalized software, each as
presented in the Company's condensed consolidated statements of cash flows and
calculated in accordance with GAAP.

The prior years' financial information has been reclassified to conform to the
current year presentation for the aggregation of Capitalized software of $10
million and $7 million during the three months ended March 31, 2022 and 2021,
respectively, and Purchases of property and equipment into one financial
statement line item, "Purchases of property, equipment and capitalized
software"

A reconciliation of net cash provided by (used in) operating activities, the most comparable GAAP measure, to Free Cash Flow is set forth below:

                                                                           Three Months Ended
                                                                                March 31,
(Amounts in millions)                                                   2022                   2021

Net cash provided by (used in) operating activities (a) $ (338)

              $     (541)
Less: Purchases of property, equipment and capitalized software
(a)                                                                      (74)                    (129)
Free Cash Flow                                                   $      (412)              $     (670)


(a)   As presented on our condensed consolidated statements of cash flows.

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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.

Free Cash Flow has limitations as an analytical tool, should not be considered
in isolation or as a substitute for analyzing our results as reported under GAAP
and does not provide a complete understanding of our results and liquidity as a
whole. Some of these limitations are:

•it only includes cash outflows for purchases of property, equipment and capitalized software and not for other investing cash flow activity or financing cash flow activity;

•it is subject to variation between periods as a result of changes in working capital and changes in timing of receipts and disbursements;


•although non-cash GAAP straight-line lease costs are non-cash adjustments,
these charges generally reflect amounts we will be required to pay our landlords
in cash over the lifetime of our leases; and

•although stock-based compensation expenses are non-cash charges, we rely on equity compensation to compensate and incentivize employees, directors and certain consultants, and we may continue to do so in the future.

Key Factors Affecting the Comparability of Our Results

Restructuring and Impairments

In September 2019, we commenced an operational restructuring program to improve our financial position and refocus on our core space-as-a-service business, establishing an expected path to profitable growth.


During the three months ended March 31, 2021, we were successful in achieving a
49% reduction totaling $259 million in total costs associated with selling,
general and administrative expenses as compared to the three months ended
March 31, 2020. During the three months ended March 31, 2022, we achieved an
additional 24% reduction totaling $66 million compared to the three months ended
March 31, 2021. During the three months ended March 31, 2022, we terminated
leases associated with a total of 13 previously opened locations and 2 pre-open
locations compared to 21 previously opened locations and no pre-open locations
terminated during the three months ended March 31, 2021, bringing the total
terminations since the beginning of the restructuring to 227.

In conjunction with the efforts to right-size our real estate portfolio, the
Company has also successfully amended over 450 leases for a combination of
partial terminations to reduce our leased space, rent reductions, rent
deferrals, offsets for tenant improvement allowances and other strategic
changes. These amendments and full and partial lease terminations have resulted
in an estimated reduction of approximately $9.5 billion in total future
undiscounted fixed minimum lease cost payments that were scheduled to be paid
over the life of the original executed lease agreements, including changes to
the obligations of ChinaCo which occurred during the period it was consolidated.

Management is continuing to evaluate our real estate portfolio in connection
with our ongoing restructuring efforts and expects to exit additional leases
over the remainder of the restructuring period. The Company anticipates that
during the remainder of 2022 there may be additional restructuring and related
costs consisting primarily of lease termination charges, other exit costs and
costs related to ceased use buildings and employee termination benefits, as the
Company is still in the process of finalizing its operational restructuring
plans.

As of March 31, 2022, we believe that the positive changes we have made and our
focused business plan with enhanced cost discipline will set the stage for our
future success as we continue to increase our

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membership offerings and expand our footprint strategically through flexible and capital light growth alternatives.

As the Company continues to execute on its operational restructuring program and experiences the benefits of our efforts to create a leaner, more efficient organization, results may be less comparable period over period.

See Note 5 of the notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for additional information regarding our restructuring and impairment activity.

Growth Strategy Changes


As we enter into more management agreements and/or participating leases, our net
loss, net cash provided by (used in) operating activities, Adjusted EBITDA and
Free Cash Flow may be negatively impacted as we share some of our margin with
landlords or other partners in exchange for them funding the capital
expenditures at a particular location. Under a participating lease, the landlord
typically pays or reimburses us for the full build-out of the space and we
generally do not pay a specified annual rent, but rather rent is determined
based on revenues or profits from the space. Similarly, in a management
agreement, the partner may fund all capital expenditures to build out the space
to our design specifications and maintains full responsibility for the space,
while we function as the manager and receive an agreed upon management fee. In
contrast to standard lease arrangements where we receive the full benefit of the
future margin from a given location, under these alternative arrangements, we
share portions of this future margin with the landlord or other partner. The
percentage of open locations subject to such alternative arrangements was
approximately 25% and 24% as of March 2022 and 2021, respectively.

In March 2022, WeWork closed the acquisition of Common Desk, a Dallas-based coworking operator with 23 locations in Texas and North Carolina, that operates a majority of its locations under asset-light management agreements with landlords.

COVID-19 and Impact on our Business


In late 2019, an outbreak of COVID-19 had emerged and by March 11, 2020, the
World Health Organization declared COVID-19 a pandemic. Since that time,
COVID-19 has resulted in various governments imposing numerous restrictions,
including travel bans, quarantines, stay-at-home orders, social distancing
requirements and mandatory closure of "non-essential" businesses.

We continue to face a period of uncertainty as a result of the ongoing impact of the COVID-19 pandemic on our business and expect there may continue to be a material impact on demand for our space-as-a-service offering in the short-term.


The Company had been, and may continue to be, adversely impacted by member
churn, non-payment (or delayed payment) from members or members seeking payment
concessions or deferrals or cancellations as a result of the COVID-19 pandemic.
Although new sales volumes improved during the second half of 2021, the Company
continued to experience reduced new sales volumes at our locations during the
first quarter of 2022, which negatively affected, and may continue to negatively
affect, the Company's results of operations. We also continue to engage with our
members as it relates to COVID-19 related payment deferral programs.
Additionally, in order to retain our members, we may offer additional discounts
or deferrals that may continue to negatively impact our net loss, net cash
provided by (used in) operating activities, Adjusted EBITDA and Free Cash Flow.
Average revenue per Consolidated Physical Member for the three months ended
March 31, 2022 and 2021 declined 9% and 6%, respectively, as compared to the
three months ended March 31, 2020 prior to impact of COVID-19. The Company is
continuing to actively monitor its accounts receivable balances in response to
the COVID-19 pandemic and also ceased recording revenue on certain existing
contracts where collectability is not probable. During the three months ended
March 31, 2022, there were no significant additions or recoveries on such
contracts.

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In the wake of the onset of the COVID-19 pandemic, we accelerated our efforts to
digitize our real estate offering through the launch of the WeWork All Access
and WeWork On Demand products. WeWork All Access is a monthly subscription-based
model that provides members with access to book space at any participating
WeWork location within their home country. Through WeWork All Access, members
can book dedicated desks, conference rooms and private offices right from their
phones - enabling users to choose when, where and how they work. WeWork On
Demand provides users pay-as-you-go access to book individual workspace or
conference rooms at nearby WeWork locations, giving members the flexibility to
book individual workspace by the hour or conference rooms by the day on the
WeWork On Demand mobile app.

While the total effects of the COVID-19 pandemic on the economy and our business
are uncertain, our senior management team is proactively monitoring its impact
on a daily basis and will continue to adjust our operations as necessary.

We also believe our liquidity position will be sufficient to help us mitigate
the near-term uncertainty associated with COVID-19. As of March 31, 2022, we had
over $1.1 billion of cash and unfunded cash commitments, which includes $519
million of cash and cash equivalents on our condensed consolidated balance
sheet, as well as access to an additional $550 million in undrawn senior secured
debt commitments. In addition to the Company's cash and unfunded cash
commitments as of March 31, 2022, there was $0.6 billion in remaining letter of
credit availability under the 2020 LC Facility (see the section entitled
"-Liquidity and Capital Resources" for additional information on our liquidity
position and undrawn debt availability).

While we cannot reasonably estimate the impact of COVID-19 on our future
financial condition and results of operations, we do anticipate that it will
likely have a continued negative impact in the near-term. Throughout 2021 and
during the three months ended March 31, 2022, we observed indicators of recovery
with an increase of Systemwide Memberships to 681 thousand as of March 2022 from
490 thousand as of December 2020. However, the extent to which the COVID-19
pandemic could continue to impact our business depends on future developments,
including those that are highly uncertain, cannot be predicted and are outside
our control, including new information which may quickly emerge regarding the
severity of the virus, the spread and impact of new variants, the scope of the
pandemic and the actions to contain the virus or treat its impact, vaccination
efforts, as well as actions the Company is taking including the duration of our
location closures, delays in new openings, our ongoing negotiations with
landlords and how quickly we can resume normal operations, among others.

Components of Results of Operations


We assess the performance of our locations differently based on whether the
revenues and expenses of the location are consolidated within our results of
operations, which we refer to as Consolidated Locations, or whether the revenues
and expenses of the location are not consolidated within our results of
operations but we are entitled to a management fee for our services, such as
locations ("IndiaCo locations", "ChinaCo locations" and "Israel locations," and,
collectively, Unconsolidated Locations) operated by WeWork India Services
Private Limited, TBP and Ampa, respectively. The term "locations" includes only
Consolidated Locations when used in the sections entitled "-Components of
Results of Operations" and "-Comparison of the three months ended March 31, 2022
and 2021" but includes both Consolidated Locations and Unconsolidated Locations
when used elsewhere in this Form 10-Q.

Revenue

Revenue includes membership and service revenue as well as other revenue as described below.


Membership revenue represents membership fees, net of discounts, from sales of
WeWork memberships, WeWork All Access Memberships, WeWork On Demand and
WeMemberships. We derive a significant majority of our revenue from recurring
membership fees. The price of each membership varies based on the type of
workplace solution selected by the member, the geographic location of the space
occupied, and any monthly allowances for business services, such as conference
room reservations and printing or

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copying allotments, that are included in the base membership fee. All memberships include access to our community through the WeWork app. Membership revenue is recognized monthly, on a ratable basis, over the life of the agreement, as access to space is provided.


Service revenue primarily includes additional billings to members for ancillary
business services in excess of the monthly allowances mentioned above. Services
offered to members include access to conference rooms, printing, photocopies,
initial set-up fees, phone and IT services, parking fees and other services.

Service revenue also includes commissions we earn from third-party service
providers. We offer access to a variety of business and other services to our
members, often at exclusive rates, and receive a percentage of the sale when one
of our members purchases a service from a third party. These services range from
business services to lifestyle perks. Service revenue also includes any
management fee income for services provided to IndiaCo locations, ChinaCo
locations, and Israel locations (subsequent to the franchise agreement on June
1, 2021). Service revenue is recognized on a monthly basis as the services are
provided.

Other revenue primarily includes our former Powered by We design and development
services in which we offered on-site office management that provides integrated
design, construction and space management services. Also included in other
revenue is other management and advisory fees earned.

Design and development services performed are recognized as revenue over time
based on a percentage of contract costs incurred to date compared to the total
estimated contract cost. The Company identifies only the specific costs incurred
that contribute to the Company's progress in satisfying the performance
obligation. Contracts are generally segmented between types of services, such as
consulting contracts, design and construction contracts, and operate contracts.
Revenues related to each respective type of contract are recognized as or when
the respective performance obligations are satisfied. When total cost estimates
for these types of arrangements exceed revenues in a fixed-price arrangement,
the estimated losses are recognized immediately.

Income generated from sponsorships and ticket sales from WeWork branded events
are recognized upon the occurrence of the event. Other revenues are generally
recognized over time, on a monthly basis, as the services are performed.

Location Operating Expenses

Location operating expenses include the day-to-day costs of operating an open location and exclude pre-opening costs, depreciation and amortization and general sales and marketing, which are separately recorded.

Lease Cost

Our most significant location operating expense is lease cost. Lease cost is recognized on a straight-line basis over the life of the lease term in accordance with GAAP based on the following three key components:


•Lease cost contractually paid or payable represents cash payments due for base
and contingent rent, common area maintenance amounts and real estate taxes
payable under the Company's lease agreements, recorded on an accrual basis of
accounting, regardless of the timing of when such amounts were actually paid.

•Amortization of lease incentives represents the amortization of amounts
received or receivable for tenant improvement allowances and broker commissions
(collectively, "lease incentives"), amortized on a straight-line basis over the
terms of our leases.

•Non-cash GAAP straight-line lease cost represents the adjustment required under
GAAP to recognize the impact of "free rent" periods and lease cost escalation
clauses on a straight-line

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basis over the term of the lease. Non-cash GAAP straight-line lease cost also
includes the amortization of capitalized initial direct costs associated with
obtaining a lease.

Other Location Operating Expenses


Other location operating expenses typically include utilities, ongoing repairs
and maintenance, cleaning expenses, office expenses, security expenses, credit
card processing fees and food and beverage costs. Location operating expenses
also include personnel and related costs for the teams managing our community
operations, including member relations, new member sales and member retention
and facilities management.

Pre-Opening Location Expenses


Pre-opening location expenses include all expenses incurred while a location is
not open for members. The primary components of pre-opening location expenses
are lease cost expense, including our share of tenancy costs (including real
estate and related taxes and common area maintenance charges), utilities,
cleaning, personnel and related expenses and other costs incurred prior to
generating revenue. Personnel expenses are included in pre-opening location
expenses as we staff our locations prior to their opening to help ensure a
smooth opening and a successful member move-in experience. Pre-opening location
expenses also consist of expenses incurred during the period in which a
workspace location has been closed for member operations and all members have
been relocated to a new workspace location, prior to management's decision to
enter negotiations to terminate a lease.

Selling, General and Administrative Expenses


Selling, general and administrative ("SG&A") expenses consist primarily of
personnel and stock-based compensation expenses related to our corporate
employees, technology, consulting, legal and other professional services
expenses, and costs for our corporate offices, such as costs associated with our
billings, collections, purchasing and accounts payable functions. Also included
in SG&A expenses are general sales and marketing efforts, including advertising
costs, member referral fees, and costs associated with strategic marketing
events, and various other costs we incur to manage and support our business.

SG&A expenses also include cost of goods sold in connection with our former Powered by We on-site office design, development and management solutions.


Also included are corporate design, development, warehousing, logistics and real
estate costs and expenses incurred researching and pursuing new markets,
solutions and services, and other expenses related to the Company's growth and
global expansion incurred during periods when the Company was focused on
expansion. These costs include non-capitalized personnel and related expenses
for our development, design, product, research, real estate, growth talent
acquisition, mergers and acquisitions, legal, technology research and
development teams and related professional fees and other expenses incurred such
as growth related recruiting fees, employee relocation costs, due diligence,
integration costs, transaction costs, contingent consideration fair value
adjustments relating to acquisitions, write-off of previously capitalized costs
for which the Company is no longer moving forward with the lease or project and
other routine asset impairments and write-offs.

We expect that overall SG&A expenses will decrease as a percentage of revenue
over time as we continue to execute on our operational restructuring plans aimed
to enhance our operating efficiency and leverage the historical investments in
people and technology that we have made to support the growth of our global
community. With the impact of the COVID-19 pandemic on our mature locations
expected to continue during the remainder of 2022, future sales and marketing
costs may be required to help as we continue to restabilize our mature
locations.

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Restructuring and Other Related Costs and Impairment Expense

See the section entitled "-Key Factors Affecting Comparability of Our Results-Restructuring and Impairments" above for details surrounding the components of these financial statement line items.

Depreciation and Amortization Expense

Depreciation and amortization primarily relates to the depreciation expense recorded on our property and equipment, the most significant component of which are the leasehold improvements made to our real estate portfolio.

Interest and Other Income (Expense)


Interest and other income (expense) is comprised of interest income, interest
expense, loss on extinguishment of debt, earnings from equity method and other
investments, foreign currency gain (loss), and gain (loss) from change in fair
value of related party financial instruments.

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Condensed Consolidated Results of Operations


The following table sets forth the Company's condensed consolidated results of
operations and other key metrics for the three months ended March 31, 2022 and
2021:
                                                                               Three Months Ended
                                                                                   March 31,
(Amounts in millions)                                                                                        2022               2021

Condensed consolidated statements of operations information: Revenue: Condensed Consolidated Locations membership and service revenue

                                                                                                  $     744          $     575
Unconsolidated Locations management fee revenue                                                                  3                  4
Other revenue                                                                                                   18                 19
Total revenue                                                                                                  765                598
Expenses:
Location operating expenses-cost of revenue (1)                                                                736                818

Pre-opening location expenses                                                                                   47                 35
Selling, general and administrative expenses(2)                                                                208                274
Restructuring and other related costs                                                                         (130)               494
Impairment expense                                                                                              91                299
Depreciation and amortization                                                                                  171                184
Total expenses                                                                                               1,123              2,104

Loss from operations                                                                                          (358)            (1,506)

Interest and other income (expense), net                                                                      (147)              (553)

Pre-tax loss                                                                                                  (505)            (2,059)
Income tax benefit (provision)                                                                                   1                 (3)
Net loss                                                                                                      (504)            (2,062)
Noncontrolling interests                                                                                        69                 30
Net loss attributable to WeWork Inc.                                                                     $    (435)         $  (2,032)


(1)Exclusive of depreciation and amortization shown separately on the depreciation and amortization line in the amount of $158 million and $175 million for the three months ended March 31, 2022 and 2021, respectively. (2)Includes cost of revenue in the amount of $13 million and $12 million during the three months ended March 31, 2022 and 2021, respectively.








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                                                                              March(1)
                                                                                    2022              2021(3)
Other key performance indicators (in thousands, except for
revenue in millions and percentages):
Consolidated Locations
Membership and Services Revenue                                                 $     744          $      575
Workstation Capacity                                                                  746                 804
Physical Memberships                                                                  501                 378
All Access and Other Legacy Memberships                                                55                  15
Memberships(2)                                                                        555                 393
Physical Occupancy Rate                                                                67  %               47  %
Enterprise Physical Membership Percentage                                              46  %               52  %

Unconsolidated Locations
Membership and Services Revenue(4)                                              $     132          $       90
Workstation Capacity                                                                  170                 160
Physical Memberships                                                                  125                  97

Memberships                                                                           125                  97
Physical Occupancy Rate                                                                74  %               61  %

Systemwide Locations
Membership and Services Revenue(5)                                              $     876          $      665
Workstation Capacity                                                                  916                 963
Physical Memberships                                                                  626                 475
All Access and Other Legacy Memberships                                                55                  15
Memberships(2)                                                                        681                 490
Physical Occupancy Rate                                                                68  %               49  %


(1)All key performance indicators are presented as of March 2022 and 2021 except
for membership and services revenue, which are presented for the years ended
March 31, 2022 and 2021.

(2)Consolidated Locations and Total Locations Memberships include WeMemberships
of 3 thousand and 5 thousand as of March 2022 and 2021, respectively.
WeMemberships are legacy products that provide member user login access to the
WeWork member network online or through the mobile application as well as access
to service offerings and the right to reserve space on an à la carte basis,
among other benefits.

(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. Included in
Consolidated Locations indicators above as of March 2021 are 12 thousand
workstation capacities and 8 thousand memberships at Israel locations.
Consolidated Locations membership and services revenue include Israel results
prior to June 1, 2021.

(4)Unconsolidated membership and service revenue 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 revenue represents the results of all locations regardless of ownership.

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Condensed Consolidated Results of Operations as a Percentage of Revenue


The following table sets forth our condensed consolidated statements of
operations information as a percentage of revenue for the three months ended
March 31, 2022 and 2021:

                                                                    Three Months Ended
                                                                        March 31,
                                                                                               2022        2021
 Revenue                                                                                       100  %      100  %
 Expenses:
 Location operating expenses-cost of revenue(1)                                                 96  %      137  %

 Pre-opening location expenses                                                                   6  %        6  %

 Selling, general and administrative expenses(1)                                                27  %       46  %

 Restructuring and other related costs                                                         (17) %       83  %
 Impairment expense                                                                             12  %       50  %
 Depreciation and amortization                                                                  22  %       31  %
 Total operating expenses                                                                      147  %      352  %

 Loss from operations                                                                          (47) %     (252) %

 Interest and other income (expense), net                                                      (19) %      (92) %
 Pre-tax loss                                                                                  (66) %     (344) %
 Income tax benefit (provision)                                                                  -  %       (1) %
 Net loss                                                                                      (66) %     (345) %
 Noncontrolling interests                                                                        9  %        5  %
 Net loss attributable to WeWork Inc.                                                          (57) %     (340) %


(1)Exclusive of depreciation and amortization shown separately on the depreciation and amortization line.

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Comparison of the three months ended March 31, 2022 and 2021

Revenue


Comparison of the three months ended March 31, 2022 and the three months ended
March 31, 2021

                                                   Three Months Ended
                                                        March 31,                     Change
(Amounts in million, except percentages)             2022             2021         $          %
Membership and service revenue               $      747              $ 579      $ 168        29  %
Other revenue                                        18                 19         (1)       (5) %
Total revenue                                $      765              $ 598      $ 167        28  %


Total revenue increased $167 million primarily driven by membership and service
revenue, which increased $168 million to $747 million for the three months ended
March 31, 2022, from $579 million for the three months ended March 31, 2021. The
increase in membership and service revenue was primarily driven by a 32%
increase in physical memberships to approximately 501 thousand physical
memberships as of March 2022 from approximately 378 thousand physical
memberships as of March 2021. Throughout 2021 and into 2022, we continued to
offer COVID-19 related discounts help retain our members and, although those
existing members and new members are returning to offices, these discounts have
caused the average revenue per physical member to decrease by approximately 3%
for the three months ended March 31, 2022 compared to the three months ended
March 31, 2021. This caused the average physical memberships to increase at a
greater rate than the increase in physical membership revenue. In response to
the COVID-19 pandemic affecting physical memberships and physical revenues, we
continue to focus our efforts on digitizing our real estate offering through
WeWork All Access and WeWork On Demand, which has resulted in an increase of All
Access memberships from approximately 15 thousand as of March 2021 to
55 thousand as of March 2022. The increase in All Access memberships also
resulted in an increase of All Access and On Demand revenue from $9 million
during the three months ended March 31, 2021 to $36 million during the three
months ended March 31, 2022.

Additionally, there was a 5% decrease in other revenue to $18 million for the
three months ended March 31, 2022, from $19 million for the three months ended
March 31, 2021. Included in the $18 million of other revenue during the three
months ended March 31, 2022 is approximately $13 million related to the 424
Fifth Property development agreement anticipated for completion during the three
months ended June 30, 2022. See Note 16 of the notes to the Condensed
Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q
for additional information on the development agreement.

Location Operating Expenses


Comparison of the three months ended March 31, 2022 and the three months ended
March 31, 2021

                                                        Three Months Ended
                                                             March 31,                     Change
     (Amounts in millions, except percentages)            2022            

2021 $ %

     Location operating expenses                  $      736              $

818 $ (82) (10) %



Location operating expenses decreased $82 million due primarily to continued
lease terminations and a decline in real estate operating lease costs primarily
as a result of COVID-19 and related cost cutting strategies. As a percentage of
total revenue, location operating expenses for the three months ended March 31,
2022 decreased by 41 percentage points to 96% compared to 137% for the three
months ended March 31, 2021. The decrease in location operating expenses as a
percentage of total revenue is a attributed to both our continued cost cutting
strategies compounded by a period over period increase in revenue discussed
above.

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The Company terminated leases associated with a total of 13 previously open
locations during the three months ended March 31, 2022 and 98 previously open
locations during the year ended December 31, 2021. The location decreases were
partially offset by the opening of 8 locations during the three months ended
March 31, 2022 and 30 locations during the year ended December 31, 2021. During
the three months ended March 31, 2022, the Company also successfully amended
over 20 leases for a combination of partial terminations to reduce our leased
space, rent reductions, rent deferrals, offsets for tenant improvement
allowances and other strategic changes.

Our most significant location operating expense is real estate operating lease cost, which includes the following components and changes:


                                                        Three Months Ended
                                                             March 31,                     Change
     (Amounts in millions, except percentages)            2022            

2021 $ %

     Lease cost contractually paid or payable     $      624              $

699 $ (75) (11) %

     Non-cash GAAP straight-line lease cost               30               

34 (4) (12) %

     Amortization of lease incentives                    (70)              

(75) 5 (7) %

     Total real estate operating lease cost       $      584              $

658 $ (74) (11) %




The following table includes the components of real estate operating lease cost
included in location operating expenses as a percentage of membership revenue:

                                                       Three Months Ended
                                                           March 31,
                                                        2022             2021       Change %
    Lease cost contractually paid or payable                   88  %     

124 % (36) %

    Non-cash GAAP straight-line lease cost                      4  %       

6 % (2) %

    Amortization of lease incentives                          (10) %     

(13) % 3 %

    Total real estate operating lease cost                     82  %     

117 % (35) %

The $75 million decrease in lease cost contractually paid or payable was generally due to continued lease terminations throughout the year ended December 31, 2021 and during three months ended March 31, 2022.


The $4 million decrease in non-cash GAAP straight-line lease cost was driven by
continued lease terminations during the three months ended March 31, 2022 and
throughout the year ended December 31, 2021, decreases in lease cost escalations
and the end of free rent periods. The decrease in non-cash GAAP straight-line
lease cost is also attributed to the decrease in our weighted average remaining
lease term. The impact of straight-lining lease cost typically increases
straight-line lease cost adjustments in the first half of the life of a lease,
when lease cost recorded in accordance with GAAP exceeds cash payments made, and
then decreases lease cost in the second half of the life of the lease, when
lease cost is less than the cash payments required. The impact of
straight-lining of lease cost nets to zero over the life of a lease.

The $5 million decrease in amortization of lease incentives benefit was primarily due to locations that incurred amortization of lease incentive benefits during the three months ended March 31, 2021 no longer incurring amortization during the three months ended March 31, 2022 due to lease terminations discussed above.


The remaining net decrease in all other location operating expenses consisted of
decreases related to bad debt expense, stock-based compensation,
telecommunication and other taxes. These decreases were offset by an increase in
consumables, utilities and other various operating costs during the three

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months ended March 31, 2022, driven by an increase in physical occupancy from 47% as of March 2021 to 67% as of March 2022.

Pre-Opening Location Expenses


Comparison of the three months ended March 31, 2022 and the three months ended
March 31, 2021

                                                      Three Months Ended
                                                          March 31,                      Change
  (Amounts in millions, except percentages)             2022              

2021 $ %

  Pre-opening location expenses                $       47                $ 

35 $ 12 34 %



Pre-opening location expenses increased $12 million to $47 million primarily as
a result of the Company's efforts in right-sizing our real estate portfolio to
better match supply with demand in certain markets. In connection with these
right-sizing efforts certain workspace locations have been closed for member
operations and all members have been relocated to a new workspace location,
prior to management's decision to enter negotiations to terminate a lease.

Our most significant pre-opening location expense is real estate operating lease cost for the period before a location is open for member operations, which includes the following components and changes:


                                                   Three Months Ended
                                                        March 31,                                      Change
(Amounts in millions, except percentages)        2022                2021                       $                   %

Lease cost contractually paid or payable $ 33 $ 31

               $        2                   6  %
Non-cash GAAP straight-line lease cost               16                  5                        11                 220  %
Amortization of lease incentives                     (5)                (5)                        -                   -  %
Total pre-opening location real estate
operating lease cost                        $        44          $      31                $       13                  42  %


Selling, General and Administrative Expenses


Comparison of the three months ended March 31, 2022 and the three months ended
March 31, 2021

                                                      Three Months Ended
                                                           March 31,                     Change
 (Amounts in millions, except percentages)              2022             

2021 $ %

 Selling, general and administrative expenses   $      208              $ 

274 $ (66) (24) %



SG&A expenses decreased $66 million to $208 million for the three months ended
March 31, 2022 compared to the three months ended March 31, 2021. As a
percentage of total revenue, SG&A expenses decreased by 19 percentage points to
27% for the three months ended March 31, 2022, compared to 46% for the three
months ended March 31, 2021, driven primarily by our continued focus on our goal
of creating a leaner, more efficient organization. During the three months ended
March 31, 2022, there was a decrease of $34 million of stock-based compensation
compared to the three months ended March 31, 2021. There was an additional
decrease of $30 million due to legal, tax and regulatory reserves or
settlements, and 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.

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Restructuring and other related costs and Impairment expense


Comparison of the three months ended March 31, 2022 and the three months ended
March 31, 2021

                                                    Three Months Ended
                                                         March 31,                      Change
 (Amounts in millions, except percentages)            2022             2021         $            %
 Restructuring and other related costs        $      (130)            $ 494      $ (624)       (126) %
 Impairment expense                           $        91             $ 299      $ (208)        (70) %

Restructuring and other related costs decreased $624 million to $(130) million for the three months ended March 31, 2022, primarily due to a $536 million decrease in employee termination costs, including the following transactions:


                                                  Three Months Ended
                                                       March 31,                                 Change
(Amounts in millions, except percentages)       2022                2021                $                    %
Excess value paid from a principal
shareholder to We Holding LLC and the fair
value of stock purchased in connection
with the Settlement Agreement (Note 5 and
Note 21)                                   $         -          $     428          $    (428)                      N/M
Modification of WeWork Partnership Profits
Interest Units in connection with the
Settlement Agreement (Note 5 and Note 21)            -                102               (102)                      N/M
Other employee termination costs                     2                  8                 (6)                   (75) %
Total employee termination costs           $         2          $     538          $    (536)                  (100) %


N/M = Not meaningful

The decrease in restructuring and other related costs was also due to a $70
million increase to gains on terminated leases associated with a total of 13
previously open locations during the three months ended March 31, 2022 compared
to 21 during the three months ended March 31, 2021. There was also a $8 million
decrease in costs related to ceased use buildings and a $10 million decrease in
legal and other exit costs. Management is continuing to evaluate our real estate
portfolio in connection with the Company's ongoing restructuring efforts and may
exit additional leases throughout 2022.

In connection with the operational restructuring program and related changes in
the Company's leasing plans and the impacts on our operations from certain
macroeconomic events such as COVID-19 and the conflict between Russia and
Ukraine, the Company has also recorded impairment expenses on our long-lived
assets. Impairment expense decreased $208 million to $91 million for the three
months ended March 31, 2022 and included the following components in year:

                                                             Three Months Ended
                                                                 March 31,                                  Change
(Amounts in millions)                       2022          2021                  $                   %

Impairment and write-off of
long-lived assets associated with
restructuring                                        $        56          $      280          $     (224)                 (80) %
Impairment expense, other                                     35                  19                  16                   84  %

Total                                                $        91          $      299          $     (208)                 (70) %


For additional information on restructuring costs and impairments, see Note 5 of
the notes to the Condensed Consolidated Financial Statements included in Part I,
Item 1 of this Form 10-Q and "-Key Factors Affecting Comparability of Our
Results-Restructuring and Impairments" above.

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Depreciation and Amortization Expense


Comparison of the three months ended March 31, 2022 and the three months ended
March 31, 2021

                                                     Three Months Ended
                                                          March 31,                     Change
  (Amounts in millions, except percentages)            2022             

2021 $ %

  Depreciation and amortization expense        $      171              $ 

184 $ (13) (7) %



Depreciation and amortization expense decreased $13 million for the three months
ended March 31, 2022 compared to the three months ended March 31, 2021,
primarily driven by a decrease in depreciable assets as a result of the decrease
in the number of our Consolidated Locations and workstation capacity and
impairment expenses incurred throughout 2021 and into 2022.

Interest and Other Income (Expense), Net


Comparison of the three months ended March 31, 2022 and the three months ended
March 31, 2021

                                                    Three Months Ended
                                                         March 31,                                  Change
(Amounts in millions, except percentages)         2022                  2021                $                   %
Income (loss) from equity method
investments                                $        6               $     (31)         $      37                 (119) %
Interest expense                                 (113)                   (105)                (8)                   8  %
Interest income                                     1                       6                 (5)                 (83) %
Foreign currency (loss)                           (44)                    (71)                27                  (38) %
Gain (loss) on change in fair value of
warrant liabilities                                 3                    (352)               355                 (101) %

Interest and other income (expense), net   $     (147)              $    (553)         $     406                  (73) %


Interest and other income (expense), net decreased $406 million to $(147)
million for the three months ended March 31, 2022 compared to the three months
ended March 31, 2021. The decrease was primarily driven by a $355 million
increase on net gain due to the change in fair value of warrant liabilities due
to a $352 million loss on the SoftBank Senior Unsecured Notes Warrant and 2020
LC Facility Warrant during the three months ended March 31, 2021. During the
three months ended March 31, 2022, the Private Warrants were the only warrant
liabilities outstanding, with an initial fair value at issuance of $18 million.
The warrant liabilities are remeasured each reporting date to fair value through
their exercise dates, with such adjustments driven by changes in the Company's
stock price. See Note 15 of the notes to the Condensed Consolidated Financial
Statements included in Part I, Item 1 of this Form 10-Q for further details on
the Private Warrants.

The income (loss) from equity method investments increased $37 million during
the three months ended March 31, 2022 compared to the three months ended
March 31, 2021. This increase was primarily due to a loss of $29 million related
to equity method investment related to ChinaCo during the three months ended
March 31, 2021, with no comparable loss during the three months ended March 31,
2022. See Note 10 of the notes to the Condensed Consolidated Financial
Statements included in Part I, Item 1 of this Form 10-Q for further details on
equity method and other investments.

Foreign currency losses decreased by $27 million during the three months ended
March 31, 2022 as compared to the three months ended March 31, 2021, primarily
driven by decrease in the foreign currency denominated intercompany transactions
that are of a long-term investment nature as a result of our prior international
expansion and currency fluctuations against the dollar. The $44 million foreign
currency loss during the three months ended March 31, 2022 was primarily
impacted by fluctuations in

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the U.S. dollar-British Pound, U.S. dollar-Euro, U.S. dollar-Japanese Yen, U.S. dollar-South Korean Won and U.S. dollar-Russian Ruble exchange rates.

Interest expense increased by $8 million primarily due to a $10 million increase in interest expense due to the increased principal balance of the SoftBank Senior Unsecured Notes.

Income Tax Benefit (Provision)


Comparison of the three months ended March 31, 2022 and the three months ended
March 31, 2021

                                                     Three Months Ended
                                                         March 31,                       Change
 (Amounts in millions, except percentages)             2022              2021        $           %
 Income tax benefit (provision)               $       1                 $ 

(3) $ 4 (133) %



There was a $4 million net decrease in the tax provision for the three months
ended March 31, 2022, compared to the three months ended March 31, 2021, which
was primarily due to lower withholding taxes paid. This was partially offset by
adjustments to the valuation allowance recorded during the three months ended
March 31, 2022.

Our effective income tax rate during the three months ended March 31, 2022 and
2021 was lower than the U.S. federal statutory rate primarily due to the effect
of certain non-deductible permanent differences, the effect of our operating in
jurisdictions with various statutory tax rates, and valuation allowances.

Net Loss Attributable to Noncontrolling Interests


During 2017 through 2022, various consolidated subsidiaries issued equity to
other parties in exchange for cash as more fully described in Note 9 of the
notes to the Condensed Consolidated Financial Statements included in Part I,
Item 1 of this Form 10-Q. As we have the power to direct the activities of these
entities that most significantly impact their economic performance and the right
to receive benefits that could potentially be significant to these entities,
they remain our consolidated subsidiaries, and the interests owned by the other
investors and the net income or loss and comprehensive income or loss
attributable to the other investors are reflected as noncontrolling interests on
our condensed consolidated balance sheets, condensed consolidated statements of
operations and condensed consolidated statements of comprehensive loss,
respectively.

The increase in the net loss attributable to noncontrolling interests from the
three months ended March 31, 2022, as compared to the three months ended
March 31, 2021, of $39 million is primarily due to the issuance of
noncontrolling interests of LatamCo in September 2021. Included within the three
months ended March 31, 2022, were net losses incurred by JapanCo and LatamCo,
while during the three months ended March 31, 2021, only JapanCo losses were
attributable to noncontrolling interests.

In October 2021, Mr. Neumann converted 19,896,032 vested WeWork Partnership
Profits Interest Units into WeWork Partnership Class A common units. As a result
of the 2.73% ownership of the WeWork Partnership during the three months ended
March 31, 2022, the Company allocated a loss of $11 million through the
noncontrolling interest, as compared to none for the three months ended March
31, 2021.

See Note 10 of the notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for discussion of the Company's non-consolidated VIEs.

Net Loss Attributable to WeWork Inc.

As a result of the factors described above, we recorded a net loss attributable to WeWork Inc. of $(0.4) billion for the three months ended March 31, 2022 compared to $(2.0) billion for the three months ended March 31, 2021.

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Quarterly Results of Operations


The following table sets forth certain unaudited financial and operating
information for the quarterly periods presented and certain non-GAAP financial
measures. The quarterly information includes all adjustments (consisting of
normal recurring adjustments) that, in the opinion of management, are necessary
for a fair presentation of the information presented. This information should be
read in conjunction with the consolidated financial statements and related notes
thereto included elsewhere in this Form 10-Q.

                                                                                                              Three Months Ended
                              March 31,          December 31,           September 30,           June 30,          March 31,           December 31,           September 30,           June 30,           March 31,
(Amounts in millions)           2022                 2021                   2021                  2021               2021                 2020                   2020                  2020               2020
Revenue:
Consolidated Locations
membership and service
revenue                     $      744          $        694          $          625          $     564          $     575          $         609          $          733          $     825          $      961

Unconsolidated Locations
management fee revenue and
cost reimbursement revenue           3                     2                       2                  1                  4                      3                       1                  1                   -
Other revenue                       18                    22                      34                 28                 19                     54                      77                 56                  96
Total revenue                      765                   718                     661                593                598                    666                     811                882               1,057
Expenses:
Location operating
expenses-cost of revenue
(1)                                736                   733                     752                780                818                    814                     924                881                 923
Pre-opening location
expenses                            47                    42                      40                 43                 35                     46                      61                 78                  88

Selling, general and
administrative expenses (1)        208                   278                     234                227                274                    292                     386                393                 533
Restructuring and other
related costs                     (130)                  (48)                     16                (28)               494                     52                      19                 81                  56
Impairment expense                  91                   241                      88                242                299                    546                     254                280                 275
Depreciation and
amortization                       171                   174                     171                180                184                    191                     198                196                 194
Total expenses                   1,123                 1,420                   1,301              1,444              2,104                  1,941                   1,842              1,909               2,069
Loss from operations              (358)                 (702)                   (640)              (851)            (1,506)                (1,275)                 (1,031)            (1,027)             (1,012)
Interest and other income
(expense), net                    (147)                 (103)                   (206)               (68)              (553)                   105                      38                (76)                465
Pre-tax loss                      (505)                 (805)                   (846)              (919)            (2,059)                (1,170)                   (993)            (1,103)               (547)
Income taxes benefit
(provision)                          1                     2                       2                 (4)                (3)                     2                      (6)                (7)                 (9)
Net loss                          (504)                 (803)                   (844)              (923)            (2,062)                (1,168)                   (999)            (1,110)               (556)
Net loss attributable to
noncontrolling interests            69                    88                      42                 34                 30                     28                      58                246                 372
Net loss attributable to
WeWork Inc.                 $     (435)         $       (715)         $     

(802) $ (889) $ (2,032) $ (1,140)

$ (941) $ (864) $ (184)

Adjusted EBITDA (2) $ (212) $ (283) $

(356) $ (449) $ (446) $ (472)

$ (527) $ (436) $ (449)


Net cash provided by (used
in) operating activities    $     (338)         $       (373)         $         (380)         $    (618)         $    (541)         $        (439)         $         (249)         $    (355)         $      186
Less: Purchases of
property, equipment and
capitalized software               (74)                 (105)                    (61)               (42)              (129)                  (192)                   (274)              (323)               (675)
Free Cash Flow              $     (412)         $       (478)         $         (441)         $    (660)         $    (670)         $        (631)         $         (523)         $    (678)         $     (489)


(1) Exclusive of depreciation and amortization shown separately on the
depreciation and amortization line.
(2) A reconciliation of net loss, the most comparable GAAP measure, to Adjusted
EBITDA is set forth below:


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                                                                                                              Three Months Ended
                              March 31,          December 31,           September 30,           June 30,          March 31,           December 31,           September 30,          June 30,           March 31,
(Amounts in millions)           2022                 2021                   2021                  2021               2021                 2020                   2020                 2020               2020
Net loss                    $     (504)         $       (803)         $     

(844) $ (923) $ (2,062) $ (1,168)

    $         (999)         $ (1,110)         $     (556)
Income tax (benefit)
provision                           (1)                   (2)                     (2)                 4                  3                     (2)                      6                 7                   9
Interest and other (income)
expense                            147                   103                     206                 68                553                   (105)                    (38)               76                (465)
Depreciation and
amortization                       171                   174                     171                180                184                    191                     198               196                 194
Restructuring and other
related costs                     (130)                  (48)                     16                (28)               494                     52                      19                81                  56
Impairment expense                  91                   241                      88                242                299                    546                     254               280                 275
Stock-based compensation
expense                             13                    48                       4                  4                 54                      7                       9                12                  23

Other, net                           1                     4                       5                  4                 29                      7                      24                22                  15
Adjusted EBITDA             $     (212)         $       (283)         $         (356)         $    (449)         $    (446)         $        (472)         $         (527)         $   (436)         $     (449)



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