Table of Contents WEWORK COMPANIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 (7) In November 2016, the Company entered into an agreement with WeWork India Services Private Limited (“IndiaCo”), an affiliate of Embassy Property Developments Private Limited (“Embassy”), to subscribe for convertible debentures to be issued by IndiaCo in an aggregate principal amount of INR, which equated to $5.2 million as of December 31, 2018. The Company fully funded this investment in April 2017. The debentures will earn interest at a coupon rate of 6% per annum and have a maximum term of twenty years. The Company also has a buy-out option that it may exercise to purchase Embassy’s equity shares in IndiaCo, at fair value, after June 30, 2021 or earlier upon the occurrence of certain triggering events. The debentures are convertible into equity shares of IndiaCo upon certain trigger events which include: (i) changes in control, and (ii) defaults in regards to certain agreed upon provisions. IndiaCo will construct and operate workspace locations in India using WeWork’s branding, advice, and sales model. Per the terms of the agreement, the Company will receive an advisory fee from IndiaCo based on an agreed upon profit allocation. The Company earned none, $0.5 million and $3.7 million, respectively, in advisory fee income from IndiaCo during the years ended December 31, 2016, 2017 and 2018, respectively. The advisory fee income is included within revenue in the accompanying consolidated statements of operations. The Company early adopted the provisions of ASU 2016-01 as of the third quarter of 2018 and elected the measurement alternative, to be applied prospectively, for all non-marketable equity investments that no longer qualify for cost measurement under the ASU. On a quarterly basis, management qualitatively assesses whether each equity security measured under the measurement alternative is impaired. When the qualitative assessment indicates that impairment exists, the investment is written down to fair value, with the full difference between the fair value of the investment and its carrying amount recognized in earnings. As of December 31, 2018, the WPI Fund, The Wing, IndiaCo and certain other entities, in which the Company has invested, are unconsolidated VIEs. In all cases, the Company is not the primary beneficiary, as the Company does not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance. None of the debt held by these investments is recourse to us. Our maximum loss is limited to the amount of our net investment in these VIEs and any unfunded commitments as discussed below. During the years ended December 31, 2016, 2017 and 2018, the Company recorded approximately $(0.4) million, $(30.9) million, and $(12.6) million, respectively, for its share of net losses related to its equity method and other investments included in income (loss) from equity method and other investments in the consolidated statement of operations. During the years ended December 31, 2017 and 2018, the Company contributed a total of $56.5 million, and $174.5 million, respectively, to its investments and received distributions on sale of its investments totaling $12.8 million and $2.2 million, respectively. As of December 31, 2018 the Company had a total of $21.6 million in unfunded capital commitments to its investments; however, if requested, in each case, the Company may elect to contribute additional amounts in the future. Note 10. Other Current Liabilities Other current liabilities consists of the following: December 31, (Amounts in thousands) 2017 2018 (1) Current portion of acquisition holdbacks $ 14,665 $ 42,677 (1) Contingent consideration relating to acquisitions payable in stock — 129,811 (1) Contingent consideration relating to acquisitions payable in cash — 10,520 Current portion of long-term debt — 2,706 Current portion of deferred rent 38,143 71,034 Other current liabilities 11,845 13,892 Total other current liabilities $ 64,653 $270,640 (1) See Note 6 for further details on holdbacks, contingent consideration, and the related acquisitions. F-34