Investor Presentation
Corporate Structure
Represents Restricted Group (excl. Foreign JV's)
Lease Obligations
$41.8b
Breakdown of Parent Lease
Obligations:
Parent Lease Obligations Reduce Over Time (3)
$932mm Letters of Credit
$4.2bn Parent Guaranty
$145mm Surety Bonds
$60.7mm Cash Security
6,000
($mm)
5,000
$932mm Letters of Credit
$1.2b L&T Guaranty (2)
4,000
$4.2b Parent Guaranty (WeWork
Companies LLC guaranteed $4.1b)
3,000
$6.5b
(1)
Total Rent Commitment
Total Parent Lease
Obligations
2,000
1,000
~52%
decrease
$520mm Letters of Credit
$1.9bn Parent Guaranty
6/30/2019 2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
Most of our locations are leased by a 100%-owned SPE that
acts as the lessee and operator of that location.
The landlord typically requires some credit support of the
SPE in the form of a WeWork parent guaranty and either (1)
letters of credit, (2) surety bonds, or (3) cash security based
on deal- and jurisdiction-specific factors and generally
tapers down as the property matures.
Note: All numbers are as of June 30, 2019, per the Company's Lease Security Report. Parent guaranties and Letters of
Credit that are associated with leases that commence in 2020 and beyond have been grouped within the 2019 vintage for
illustrative purposes as we are aware of the additional obligations with each property and the majority of which are
associated with existing properties where we plan to take on an additional floor and will realize a subsequent increase in
parent lease obligations in the coming years. Since providing this information on October 20, 2019, the Company has
revised these figures.
(1)
Total Rent Commitment represents the future undiscounted fixed minimum least cost payments under operating and
finance leases signed as of June 30, 2019.
(2) Guaranty for L&T is for the life of the lease for all contractual lease payments.
(3)
Based on all leases commenced as of June 30, 2019 and excludes the L&T Guaranty.
•
.
•
For a majority of Parent Guaranties, the guaranteed amount burns off over time
(though usually not to zero).
The increase in Parent Guaranties in the second half of 2019 and 2020 compared to
6/30/2019 is driven by signing additional Gate A deals. Typically, a Parent Guaranty is
required on day 1 of a lease.
Landlords typically require 12-18 months of rent in the form of Letters of Credits at
lease commencement. Over time, Letters of Credits gradually burn off to 6-12
months of rent.
The increase in Letters of Credit in the second half of 2019 and 2020 compared to
6/30/2019 is driven by leases that we signed in 2019 but have not yet taken
possession of the property or represents the additional floors that we have signed in
our existing locations, but have not yet taken possession. In this scenario, we often
push not to deliver Letters of Credit at first, but the amount steps up over time as
we take possession of the building or additional floors.
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