Table of Contents WEWORK COMPANIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 is included in location operating expenses on the accompanying consolidated statement of operations. Rent expense for Meetup, Inc., Flatiron School and Conductor is included in other operating expenses on the accompanying consolidated statement of operations, while rent expense for other We Company offerings is included in growth and new market development expenses on the accompanying consolidated statement of operations. Rent expense for the Company’s corporate offices is included in general and administrative expenses on the accompanying consolidated statements of operations. A large majority of the Company’s lease agreements contain provisions for free rent periods, rent escalation, tenant improvement allowances, brokerage commissions received by the Company for negotiating the Company’s leases, and/or contingent rent. For leases that qualify as operating leases, the Company recognizes the associated rent expense on a straight-line basis over the term of the lease beginning on the date of initial possession, which is generally when the Company enters the leased premises and begins to make improvements in preparation for its intended use. Rent contractually paid or payable for each period presented below represents cash payments for base and contingent rent payable under the Company’s lease agreements, recorded on an accrual basis of accounting, regardless of the timing of when such amounts were actually paid. The non-cash adjustment to record free rent periods and rent escalation clauses on a straight-line basis over the term of the lease beginning on the date of initial possession is presented as “adjustments for impact of straight-lining of rent” below. The Company expends cash for leasehold improvements and to build out and equip its leased locations. Generally, a portion of the cost of leasehold improvements is reimbursed to us by our landlords as a tenant improvement allowance. The Company may also receive a broker commission for negotiating certain of the Company’s leases. When contractually due to us, these amounts are recorded as a lease incentive receivable and an increase in the deferred rent liability on the consolidated balance sheets and then the deferred rent liability established is amortized on a straight-line basis over the lease term as a reduction to rent expense. The amortization of cash received for tenant improvement allowances and broker commissions is presented as “amortization of lease incentives” below. Year Ended December 31, 2016 Reported in: Growth and Location Pre-opening Other General & New Market Operating Location Operating Administrative Development (Amounts in thousands) Expenses Expenses Expenses Expenses Expenses Total Rent contractually paid or payable $ 171,330 $ 10,822 $ — $ 2,355 $ — $ 184,507 Adjustments for impact of straight-lining of rent 92,723 94,526 — 1,497 — 188,746 Amortization of lease incentives (22,465) (1,735) — (276) — (24,476) Total rent expense $ 241,588 $ 103,613 $ — $ 3,576 $ — $ 348,777 F-41