Table of Contents • varying laws, rules, regulations and practices regarding protection and enforcement of intellectual property rights, including trademarks; • laws and regulations regarding consumer and data protection and security, and encryption that may be more restrictive than comparable laws and regulations in the United States; • corrupt or unethical practices in foreign jurisdictions that may subject us to compliance costs, including competitive disadvantages, or exposure under applicable anti-corruption and anti-bribery laws; • compliance with applicable export controls and economic sanctions, such as those administered by the United States Office of Foreign Assets Control; • fluctuations in currency exchange rates and compliance with foreign exchange controls and limitations on repatriation of funds; and • unpredictable disruptions as a result of security threats or political or social unrest and economic instability. Finally, continued expansion in markets outside the United States will require significant financial and other investments. These investments include property sourcing and leasing, marketing to attract and retain new members, developing localized infrastructure and services, developing relationships with local partners and third-party service providers, further developing corporate capabilities able to support operations in multiple countries, and potentially entering into strategic transactions with or even acquiring companies based outside the United States and integrating those companies with our existing operations. If we continue to invest substantial time and resources to expand our operations outside the United States, but cannot manage these risks effectively, the costs of doing business in those markets, including the investment of management attention, may be prohibitive, or our expenses may increase disproportionately to the revenue generated in those markets. As we continue to grow our global platform in new markets, certain metrics may be impacted by the geographic mix of our platform. For example, average revenue per WeWork membership has declined as we have expanded internationally into lower-priced markets, which is a trend we expect could continue in the near-term. Also, our overall contribution margin percentage may decline as certain lower margin markets, including markets with a larger target member population such as China, Latin America and Southeast Asia become a larger portion of our portfolio. Our contribution margin metrics may also be impacted by the speed at which we can open locations and stabilize occupancy at those locations as well as the average revenue per WeWork membership that we generate. We face risks arising from strategic transactions such as acquisitions and investments that we evaluate, pursue and undertake. From time to time, we evaluate potential strategic acquisition or investment opportunities, and from time to time we pursue and undertake certain of those opportunities. We have expanded rapidly, including through acquisitions of companies engaged in a variety of businesses, including Meetup (an online platform that brings people together offline) and Flatiron School (a software programming education platform). We plan to continue to pursue and complete acquisitions or investments, some of which may be material and may not create the value that we expect. We also plan to continue or accelerate investments in real estate vehicles, including as we grow our ARK real estate acquisition and management platform. Any transactions that we enter into could be material to our financial condition and results of operations. We have limited experience in completing and integrating major acquisitions. The process of acquiring and integrating another company or technology could create unforeseen operating difficulties and expenditures and could entail unforeseen liabilities that are not recoverable under the relevant transaction agreements or otherwise. The integration of acquisitions involves a number of significant risks which may include but are not limited to: • the assimilation and retention of personnel, including management personnel, in the acquired businesses; • accounting, tax, regulatory and compliance issues that could arise; • expenses and difficulties in the transition and integration of operations and systems; 35