Table of Contents WEWORK COMPANIES INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2019 (UNAUDITED) consolidated balance sheets. The December 31, 2018 receivable was fully collected in February 2019 and $0.6 million of the June 30, 2019 receivable was collected in July 2019. In addition, during the six months ended June 30, 2019, the Company recorded revenue of approximately $113,000 relating to services rendered to a principal stockholder, executive officer and director of the Company. The Company has entered into three separate operating lease agreements for space in buildings that are partially owned by an individual that is a principal stockholder, executive officer and director of the Company. A significant shareholder of the Company’s Class B stock is also a partial owner of one of the buildings. During the six months ended June 30, 2018 and 2019, the Company recognized $3.0 million and $2.9 million, respectively, of lease cost expense related to these leases, made cash payments totaling $3.1 million and $3.2 million, respectively and received cash tenant incentives of $10.3 million and none, respectively. Future minimum lease cost payments under these leases, inclusive of escalation clauses and exclusive of contingent rent payments, are approximately $218.8 million as of June 30, 2019. Future minimum lease cost payments are also inclusive of future tenant incentive receivables of approximately $19.0 million as of June 30, 2019. The Company has entered into a finance lease agreement for space in a building partially owned by a principal stockholder, executive officer and director of the Company. A significant shareholder of the Company’s Class B stock is also a partial owner of the building. During the six months ended June 30, 2018 and 2019, the Company recognized $0.8 million and $0.8 million, respectively, of interest expense related to this finance lease, made cash payments totaling $1.0 million and $1.0 million, respectively and received no cash tenant incentives in either period. Future lease cost payments with respect to obligations under this finance lease are approximately $17.8 million as of June 30, 2019. There are no future tenant receivables associated with the lease. As of June 30, 2019, the Company has several operating lease agreements for space in buildings owned by entities in which the Company has an equity method investment. During the six months ended June 30, 2018 and 2019, the Company recognized $0.5 million and $7.7 million, respectively, of lease cost expense related to these leases, made cash payments totaling $0.6 million and $4.5 million, respectively and received cash tenant incentives of none and $2.9 million, respectively. Future minimum lease cost payments under these leases, inclusive of escalation clauses and exclusive of contingent rent payments, are approximately $386.9 million as of June 30, 2019. Future minimum lease cost payments are also inclusive of future tenant incentive receivables of approximately $1.6 million as of June 30, 2019. As of June 30, 2019, the Company has several operating lease agreements for space in buildings that are owned by the WPI Fund. The Company is a 50% owner of the unconsolidated entities that are the general partner and asset manager of the WPI Fund. The other 50% owner of both the general partner and the asset manager of the WPI Fund is an affiliate of Rhône Group LLC. Rhône Group LLC is also a shareholder of the Company and Rhône Group LLC’s controlling member is also a director of the Company. During the six months ended June 30, 2018 and 2019, the Company recognized none and $2.6 million, respectively, of lease cost expense related to these leases, made no cash payments in either period and received no cash tenant incentives in either period. Future minimum lease cost payments under these leases, inclusive of escalation clauses and exclusive of contingent rent payments, are approximately $650.0 million as of June 30, 2019. Future minimum lease cost payments are also inclusive of future tenant incentive receivables of approximately $53.3 million as of June 30, 2019. During 2017, the Company also received from the WPI Fund unsecured loans totaling $26.1 million, at an interest rate of 1.52%, in order to secure a potential investment opportunity that was being evaluated with the Company and the WPI Fund. During the six months ended June 30, 2018, the Company recognized approximately $0.2 million of interest expense related to these unsecured loans. The loans were paid off in full by the Company upon maturity on April 13, 2018 in connection with the completion of the investment. As of December 31, 2018 and June 30, 2019, the Company had $5.7 million and $10.6 million, respectively, in outstanding recourse promissory notes to certain employees of the Company. As of June 30, 2019, the promissory F-124