Table of Contents WEWORK COMPANIES INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2019 (UNAUDITED) Note 7. Consolidated VIEs and Noncontrolling Interests 424 Fifth Venture During 2019, the Company invested $50 million for a 17.4% interest in a joint venture that simultaneously closed on the acquisition of a $852.8 million real estate investment located in New York City (the “424 Fifth Venture”), including $2.8 million of capitalized transaction costs. The WPI Fund, as defined in Note 11, is also a 39.1% owner in the 424 Fifth Venture. The 424 Fifth Venture was initially capitalized with a $50 million investment from the Company, $112.5 million from the WPI Fund, $125.0 million of equity from other investors and a debt facility of up to $900 million, of which $626.0 million was drawn as of June 30, 2019. The Company also entered into agreements with wholly owned subsidiaries of the 424 Fifth Venture to manage the redevelopment of the property, and to subsequently manage the operations and lease the property from the 424 Fifth Venture after the redevelopment is completed. The lease agreement includes total future minimum lease cost payments of approximately $1.7 billion over the 20-year lease, of which payments totaling $1.2 billion are guaranteed by the Company. The Company’s $50 million contribution to the 424 Fifth Venture was funded through the February 2019 conversion of the $50 million convertible note that was previously issued by the Company to a wholly-owned subsidiary of the WPI Fund during the year ended December 31, 2018. The 424 Fifth Venture is a consolidated variable interest entity in which the Company is its primary beneficiary through its equity ownership, development management agreement and its master lease arrangement with the 424 Fifth Venture. The portion of consolidated equity attributable to the interest of the 424 Fifth Venture’s other investors is reflected as noncontrolling interests within the equity section of the accompanying condensed consolidated balance sheet as of June 30, 2019. The acquisition of real estate by the 424 Fifth Venture was accounted for as an asset acquisition and the purchase price was allocated among the assets purchased, including land of $356.5 million and building of $496.3 million. As of June 30, 2019, the real estate is under development and as a result is included within the Company’s construction in progress balance within the property and equipment table detailed in Note 6. Creator Fund During 2018, the Company launched a fund (the “Creator Fund”) that will make investments in recipients of WeWork’s “Creator Awards” and other investments through use of a venture capital strategy. A wholly-owned subsidiary of the Company is the managing member of the Creator Fund. As of June 30, 2019, the Creator Fund had received contributions from Softbank Group Capital Limited totaling $50.7 million, representing 99.99% of the interest of the Creator Fund, including $6.0 million received during the six months ended June 30, 2019. An affiliate of Softbank Group Capital Limited is a principal stockholder with representation on the Company’s board of directors. The portion of consolidated equity attributable to the interest of the Creator Fund’s investors in the Creator Fund is reflected as noncontrolling interests, within the equity section of the accompanying condensed consolidated balance sheet as of December 31, 2018 and June 30, 2019. WeWork Waller Creek During 2018, the Company formed a 50% owned and consolidated joint venture entity (“WeWork Waller Creek”) to facilitate a 5% unconsolidated investment in a joint venture that acquired a parcel of land and development project in Texas (“Waller Creek”). See Note 11 for additional details. The Company is the managing member of WeWork Waller Creek. As of December 31, 2018 the Company and the other WeWork Waller Creek investor had each funded $3.2 million related to the closing of the land purchase. During the six months ended June 30, 2019, the Company admitted an additional investor into the WeWork Waller Creek entities for $3.3 million. The Company’s effective ownership interest in the WeWork Waller Creek consolidated entity was reduced from 50% to 33% upon the entrance of the new member. The cash received was used by the Company to acquire an additional 2.5% interest in the unconsolidated Waller Creek joint venture. See Note 11 for additional details. The portion of the consolidated equity attributable to the interest of WeWork Waller Creek’s other investors is reflected as a redeemable noncontrolling F-95