Table of Contents WEWORK COMPANIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 directors; however, the services required per the terms of grant are greater in scope than the individual’s responsibilities as a standard director. As of December 31, 2018, two million of these shares were vested and issued. During the years ended December 31, 2016, 2017 and 2018, the Company recorded none, $4.8 million, and $14.4 million, respectively, of general and administrative expenses, associated with the rights to subscribe to ChinaCo Class A ordinary shares granted to non-employee contractors for services rendered. This expense was recorded as an increase in the equity allocated to noncontrolling interests on the Company’s consolidated balance sheet as of December 31, 2018. As of December 31, 2018, there was $60.1 million of total unrecognized expense related to unvested ChinaCo ordinary shares expected to be recognized over a weighted-average period of approximately 3.3 years. In December 2018, one of the Company’s consolidated subsidiaries, PacificCo, entered into an agreement for the Company to operate workspaces within spaces leased by the counterparty in the region. As part of the arrangement, the Company will issue PacificCo Class B ordinary non-voting shares to the counterparty upon achievement of certain performance milestones based on the amount of usable square feet leased by the counterparty that are ultimately used to operate our workspaces. The milestone consideration is subject to an aggregate cap of $20.0 million of PacificCo Class B non-voting ordinary shares. The maximum number of shares eligible for vesting will be determined based on the $20.0 million divided by $10.00 per share or if the PacificCo ordinary shares are listed on a national exchange or trading system, the average closing price of the ordinary shares for 30 days prior to the date such shares are issued. As of the December 2018 grant date, the PacificCo Class B ordinary shares had a fair value of $4.93 per share. The Company accrues expense when the achievement of the performance milestones becomes probable, and has not recognized any expense in relation to this arrangement during the year ended December 31, 2018. Note 22. Net Loss Per Share We compute net loss per share of Class A common stock and Class B common stock under the two-class method required for multiple classes of common stock and participating securities. The rights, including the liquidation and dividend rights, of the Class A common stock and Class B common stock are substantially identical, other than voting rights. Accordingly, the Class A common stock and Class B common stock share in our net losses. Our participating securities includes Series A, B, C, D-1, D-2, E, F, G and Acquisition Preferred Stock, as the holders of these series of preferred stock are entitled to receive a noncumulative dividend on a pari passu basis in the event that a dividend is paid on common stock, and holders of certain vested RSUs that have a non-forfeitable right to dividends in the event that a dividend is paid on common stock. The holders of our Junior Preferred Stock are not entitled to receive dividends and are not included as participating securities. The holders of Series A, B, C, D-1, D-2, E, F, G and Acquisition Preferred Stock as well as the holders of certain vested RSUs with a non-forfeitable right to dividends, do not have a contractual obligation to share in our losses. As such, our net losses for the years ended December 31, 2016, 2017 and 2018 were not allocated to these participating securities. Basic net loss per share is computed by dividing net loss attributable to WeWork Companies Inc. attributable to its Class A common and Class B common stockholders by the weighted-average number of shares of our Class A common stock and Class B common stock outstanding during the period. For the computation of diluted net loss per share, net loss per share attributable to common stockholders for basic net loss per share is adjusted by the effect of dilutive securities, including awards under our equity compensation plans. Diluted net loss per share attributable to common stockholders is computed by dividing the resulting net loss attributable to WeWork Companies Inc. attributable to its Class A common and Class B common stockholders by the weighted-average number of fully diluted common shares outstanding. In the years ended December 31, 2016, 2017 and 2018, our potential dilutive shares, such as stock options, restricted stock, RSUs, warrants, convertible notes, and shares of convertible Series A, B, C, D-1, D-2, E, F, G, Acquisition and Junior Preferred Stock were not included in the computation of diluted net loss per share as the effect of including these shares in the computation would have been anti-dilutive. F-56