Table of Contents WEWORK COMPANIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 Note 9. Equity Method and Other Investments The Company’s investments consist of the following: December 31, (Amounts in thousands, except percentages) 2017 2018 Carrying Carrying Percentage Investee Investment Type Value Value Cost Basis Ownership (1) DSQ Equity method investment / Note receivable $ — $ 52,291 $ 53,067 10% (2) WPI Fund Equity method investment / Investment in convertible notes 7,759 66,592 65,568 4% (3) The Wing Equity method investment / Equity securities 38,000 59,163 52,000 23% (4) 210 North Green Equity method investment 697 — — —% (5) Waller Creek Equity method investment — 6,464 6,464 5% (6) Creator Fund Investments Various 4,833 28,008 27,880 Various (7) IndiaCo Investment in convertible notes 5,928 5,319 5,248 N/A Other Various — 598 738 Various Total equity method and other investments $ 57,217 $ 218,435 $ 210,965 (1) During 2017, the Company entered into an agreement for the acquisition of DSQ and as of December 31, 2017 had funded approximately $77.8 million for a non-refundable deposit relating to this purchase agreement, as discussed in Note 3. The Company subsequently assigned its right to purchase DSQ to DSQ Partners. DSQ Partners closed on the acquisition of DSQ in April 2018 and the Company received a reimbursement of approximately $25.0 million, which represented the difference between the deposit funded and the Company’s 10% share of the total capital contribution requirements of DSQ Partners. The net balance of $53.1 million, represents the Company’s investment in DSQ Partners including capitalized legal costs associated with the investment. The investment balance as of December 31, 2018, includes a note receivable with an outstanding balance of $25.1 million that accrues interest at a rate of 6.08% and matures in April 2028. The remaining $27.2 million investment is an equity method investment. The Company was a tenant in one of the properties within DSQ prior to the acquisition by DSQ Partners and subsequent to the acquisition signed new leases for additional space in other locations within DSQ. See Note 24 for additional details. (2) During 2017, the Company subscribed for a total of $27.0 million in capital commitments to a new real estate investment fund (the “WPI Fund”), including its commitments as a 50% owner of the unconsolidated entity that is the general partner of the WPI Fund and its commitments as a limited partner of the WPI Fund. The Company is also a 50% owner in the unconsolidated entity that is the asset manager for 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 L.L.C. Rhône Group L.L.C. is also a shareholder of WeWork Companies Inc. and Rhône Group L.L.C.’s controlling member is also a director of WeWork Companies Inc. Of the total capital commitments, the Company had funded approximately $15.5 million as of December 31, 2018. During 2018, the Company also funded an additional $50.0 million for a convertible note to a wholly-owned subsidiary of the WPI Fund. During February 2019, this note converted into equity in the 424 Fifth Venture as defined and discussed in Note 26. The WPI Fund expects to invest primarily in real estate with current or expected vacancy that would be suitable for, and that would benefit from, WeWork occupancy as well as potential investments in properties at which or near where WeWork is already a tenant. (3) During 2017, the Company acquired a 25% interest, comprised of common and preferred shares, in Refresh Club, Inc. (“The Wing”) for $38.0 million, which was accounted for as an equity method investment. The Wing is a network of co-working and community spaces for women and its mission is to create space for women to advance their pursuits and build community together. During 2018, the Company acquired an additional $14.0 million of preferred shares in connection with a new round of financing by The Wing, which resulted in the Company’s ownership decreasing to 23%. The preferred shares, including both the preferred shares acquired during 2017 and the preferred shares acquired during 2018, were determined to be equity securities without a readily determinable fair value and are measured using the measurement alternative. The common shares acquired during 2017 remained an equity method investment. As this additional round of financing in 2018 represented an orderly market transaction, the preferred shares acquired during 2017 were revalued based primarily on Level 3 inputs of the fair value hierarchy, including the enterprise value implied by the new round of financing and other inputs. The Company recorded an associated $8.0 million gain, which is reflected in the income (loss) from equity method and other investments on the accompanying consolidated statement of operations for the year ended December 31, 2018. (4) As of December 31, 2017, the Company held a 5% investment in the landlord entity at the Company’s leased location at 210 North Green in Chicago, Illinois. In January 2018, the Company received $2.2 million for the sale of this investment. The $1.5 million gain has been deferred as a result of the Company’s continuing involvement through its capital lease at this location. See Note 24 for additional details. (5) During 2018, the Company acquired a 5% interest in Waller Creek, through WeWork Waller Creek, for $6.5 million. Waller Creek is a joint venture established to acquire a parcel of land in Texas and develop, manage, operate, and eventually sell the developed property. Waller Creek closed on the $126.0 million acquisition of land in December 2018. (6) During 2018, the Company launched the Creator Fund that will make investments in recipients of WeWork’s Creator Awards and other investments through use of a venture capital strategy. The Creator Fund is a consolidated subsidiary owned 99.99% by related party noncontrolling interest holders. The Creator Fund has invested in other companies through Simple Agreements for Future Equity (“SAFE”), equity securities, or convertible notes. SAFE investments will convert into equity issued in the subject entity’s next qualifying equity financing round, typically, at either the issue price or a discount to the issue price. The SAFE is also senior to any equity claims upon a change of control and/or dissolution of the subject entity prior to the conversion of the security. As the Creator Fund does not have significant influence over these investees and the investments do not have a readily determinable fair value, these investments are recognized at the initial cost basis, subject to impairment and remeasured using the measurement alternative. Under the measurement alternative, changes in fair value are recognized in connection with orderly market transactions. During the years ended December 31, 2017, and 2018, the Creator Fund made investments totaling $5.4 million and $22.5 million respectively. F-33