DRS/A 1 filename1.htm Document

As confidentially submitted to the Securities and Exchange Commission pursuant to Section 6(e) of the Securities Act of 1933 on May 14, 2019, as Amendment No. 2 to the Confidential Submission.
This draft registration statement has not been publicly filed with the Securities and Exchange Commission
and all information herein remains strictly confidential.
Registration No. 333-
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________________________
WeWork Companies Inc.
(Exact name of registrant as specified in its charter)
____________________________________
Delaware
(State or other jurisdiction of incorporation or organization)
7380
(Primary Standard Industrial Classification Code Number)
46-2918595
(I.R.S. Employer Identification Number)
____________________________________
115 West 18th Street
New York, New York 10011
Telephone: (646) 491-9060
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
____________________________________
Jennifer Berrent
Co-President and Chief Legal Officer
Jared DeMatteis
Deputy Chief Legal Officer
115 West 18th Street
New York, New York 10011
Telephone: (646) 491-9060
____________________________________
With copies to:
Graham Robinson
Ryan J. Dzierniejko
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
Roxane F. Reardon
John C. Ericson
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Telephone: (212) 455-2000
Facsimile: (212) 455-2502
____________________________________
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
 
Accelerated filer
o
Non-accelerated filer
x
 
Smaller reporting company
o
 
 
 
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. o
____________________________________
CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities to Be Registered
Proposed
Maximum
Aggregate
Offering
Price
(1)(2)
Amount of Registration Fee
Class A common stock, par value $0.001 per share
 
 
(1)
Includes                   shares of Class A common stock that the underwriters have the option to purchase to cover overallotments, if any.
(2)
Estimated solely for purposes of calculating the registration fee in accordance with Rule 457 under the Securities Act of 1933.
The Registrant hereby amends this Registration Statement on such date as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.



Subject to completion, dated May 14, 2019
The information in this preliminary prospectus is not complete and may be changed. The securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Prospectus
          Shares
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WeWork Companies Inc.
Class A Common Stock
This is an initial public offering of Class A common stock by WeWork Companies Inc. The estimated initial public offering price is between $              and $            per share.
We intend to apply to list our Class A common stock on the            (the “          ”) under the symbol “WE”.
Upon completion of this offering, we will have two classes of authorized common stock: Class A common stock and Class B common stock, referred to together in this prospectus as our common stock. The rights of the holders of the shares of Class A common stock and Class B common stock are generally identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to ten votes per share and is automatically convertible into one share of Class A common stock under certain circumstances, including in connection with certain transfers to third parties. Holders of our Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise set forth in this prospectus or as required by applicable law. Outstanding shares of Class B common stock will represent approximately          % of the total voting power of our outstanding capital stock upon completion of this offering (or approximately          % of the total voting power of our outstanding capital stock if the underwriters exercise in full their option to purchase additional shares of our Class A common stock). Adam Neumann, our Co-Founder and Chief Executive Officer, will hold or have the ability to control approximately          % of the total voting power of our outstanding capital stock upon completion of this offering (or approximately          % of the total voting power of our outstanding capital stock if the underwriters exercise in full their option to purchase additional shares of our Class A common stock).
We will be treated as an “emerging growth company” under the federal securities laws for certain purposes until we complete this offering. As a result, we have elected to be subject to reduced public company reporting requirements.
Following this offering, we will be a “controlled company” within the meaning of the corporate governance rules of the        . See “ManagementDirector independence”.
Investing in our Class A common stock involves risks. See “ Risk factors ” beginning on page 18.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
 
Per Share
 
Total
Initial public offering price
$
 
(1) 
Underwriting discounts and commissions(2)
$
 
(1) 
Proceeds to us, before expenses
$
 
(1) 
 
 
 
 
(1)
Assumes no exercise of the underwriters’ option to purchase additional shares of our Class A common stock described below.
(2)
See “ Underwriting ” for a description of compensation payable to the underwriters.
We have granted the underwriters an option for a period of 30 days from the date of this prospectus to purchase from us up to           additional shares of our Class A common stock at the initial public offering price, after deducting underwriting discounts and commissions. See “ Underwriting ”.
The underwriters expect to deliver the shares of Class A common stock against payment in New York, New York on          , 20  .
The date of this prospectus is             , 20    .





Table of contents
______________________________________
You should rely only on the information contained in this prospectus or contained in any free writing prospectus that we have filed with the Securities and Exchange Commission (the “SEC”). Neither we nor the underwriters have authorized anyone to provide you with additional information or information different from that contained in this prospectus or in any free writing prospectus that we have filed with the SEC. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are offering to sell, and seeking offers to buy, our Class A common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our Class A common stock. Our business, financial condition, results of operations and prospects may have changed since that date.
For investors outside the United States: Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of Class A common stock and the distribution of this prospectus outside the United States.
This prospectus contains references to our trademarks, trade names and service marks and to those belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this prospectus may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, trade names and service marks. We do not intend our use or display of other companies’ trademarks, trade names or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
This prospectus contains industry, market and competitive position data that is based on industry publications and studies conducted by independent third parties that we believe to be reliable. However, we have not independently verified market and industry data from third-party sources and the accuracy and completeness of this information cannot be guaranteed. In some cases, we do not expressly refer to the sources from which this data is derived. In that regard, when we refer to a source of this type of data in any paragraph, you may assume that other data of this type appearing in the same paragraph is derived from the same sources, unless otherwise expressly stated or the context otherwise requires. Forecasts and projections are based on historical market data and other third-party sources, and forecasted or projected amounts may not be achieved. Forward-looking information obtained from third-party sources is subject to the same qualifications and the uncertainties regarding the other forward-looking statements in this prospectus. See “ Risk factors ” and “ Cautionary note regarding forward-looking statements ”.

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Components of our WeWork offering
Member
 
 
Individuals and organizations that purchase Memberships, including freelancers, small- and medium-sized businesses and enterprises.
 
 
 
 
Desk
 
 
Physical WeWork workspaces available for sale and immediate use by members.
 
 
 
 
Space
 
 
Workspaces designed to meet the needs of our members (whether a Desk, a headquarters or an entire building).
 
 
 
 
Membership
 
 
Access to a Desk or Desks at WeWork locations or virtual access to the WeWork community.
WeWork Memberships: Physical memberships that permit a member to occupy a Desk at a WeWork location.
We Memberships: Virtual memberships that provide access to our service offerings and our member network online, as well as the right to reserve a Desk or conference room on an à la carte basis.
 
 
 
 
Location
 
 
Buildings where there are Desks available for access by members.
Mature Locations: Locations that have been open for member operations for more than           months.
Non-Mature Locations: Locations that have been open for member operations for           months or less.
 
 
 
 
Market
 
 
Groups of locations based on geographic strategy.
 
 
 
 
Territory
 
 
Groups of markets based on geographic strategy.
 
 
 
 
Region
 
 
Groups of territories based on geography, culture and language.
 
 
 
 
Global
 
 
Our global physical platform
See “ Prospectus summary Summary consolidated financial and operating information Key performance indicators ” for more information about these components of our business.

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Non-GAAP financial measures
To evaluate the performance of our business, we rely on both our results of operations recorded in accordance with GAAP and certain non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Community Adjusted EBITDA and Community Adjusted EBITDA Margin. We also report Adjusted EBITDA before Growth Investments as required under the indenture that governs our Senior Notes. These measures, as defined below, are not defined or calculated under principles, standards or rules that comprise GAAP. Accordingly, the non-GAAP financial measures we use and refer to should not be viewed as a substitute for net loss or any other performance measure derived in accordance with GAAP or as a substitute for cash flows from operating activities as a measure of liquidity, and we encourage you not to rely on any single financial measure to evaluate our business, financial condition or results of operations. Our definitions of Adjusted EBITDA and the other metrics described below are specific to our business, and you should not assume that they are comparable to similarly titled financial measures of other companies.
In addition to helping us evaluate the performance of our business, we believe that these non-GAAP metrics are also used by our bondholders and other investors to measure the performance of our business. Under the indenture that governs our Senior Notes, we are required to report Adjusted EBITDA, Adjusted EBITDA before Growth Investments and Community Adjusted EBITDA to the holders of our Senior Notes. However, Adjusted EBITDA, Adjusted EBITDA before Growth Investments and Community Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as a substitute for analyzing our results as reported under GAAP. Some of these limitations are:
they do not reflect changes in, or cash requirements for, our working capital needs;
they do not reflect our interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
they do not reflect our tax expense or the cash requirements to pay our taxes;
they do not reflect historical capital expenditures or future requirements for capital expenditures or contractual commitments;
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and these metrics do not reflect any cash requirements for such replacements;
Adjusted EBITDA before Growth Investments and Community Adjusted EBITDA do not reflect our sales and marketing expenses, growth and new market development expenses, and pre-opening community expenses, although we will need to maintain some level of sales and marketing expenses even with respect to our Mature Locations, and all of these expenses are important to our ability to execute our strategy and grow our business; and
Community Adjusted EBITDA does not reflect our general and administrative expenses, although those expenses support all our operations, including at the level of each workspace community.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA is defined as net loss before income tax (benefit) provision, interest and other (income) expense, depreciation and amortization expense, Adjustments for Impact of Straight-lining of Rent (as defined below), stock-based compensation expense, expense related to stock-based payments for services rendered by consultants and income or expense relating to the change in fair value of contingent consideration payable in stock. Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of total revenue.
Our most significant operating expense is rent expense. We evaluate rent expense recognized on a straight-line basis over the life of the lease term in accordance with GAAP based on three key components — Rent Contractually Paid or Payable, Adjustments for Impact of Straight-lining of Rent and the Amortization of Lease Incentives as defined below. Adjusted EBITDA and all of our other non-GAAP metrics discussed below include the impact of Rent Contractually Paid or Payable and Amortization of Lease Incentives, but add back Adjustments for Impact of Straight-lining of Rent.
“Rent Contractually Paid or Payable” for each period presented represents cash payments for base and contingent rent payable under our lease agreements, recorded on an accrual basis of accounting, regardless of the timing of when such amounts were actually paid. A substantial majority of our lease agreements contain provisions for rent holidays/free rent and rent escalation clauses.

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“Adjustments for Impact of Straight-lining of Rent” represents the non-cash adjustment to record rent holidays and rent escalation clauses on a straight-line basis over the term of the lease.
“Amortization of Lease Incentives” represents the amortization of cash received for tenant improvement allowances and broker commissions. Generally, a portion of the cost of leasehold improvements is reimbursed to us by our landlords as a tenant improvement allowance. We may also receive a broker commission for negotiating certain of our leases. When contractually due to us, these amounts are recorded as deferred rent on the consolidated balance sheet and are amortized on a straight-line basis over the lease term as a credit/benefit to rent expense.
Rent expense excluding Adjustments for Impact of Straight-lining of Rent is referred to as “Adjusted Rent”.
Straight-line rent is added back in our non-GAAP metrics because our leases are all long term, on average initial lease terms are approximately 15 years, and this adjustment typically represents a significant non-cash expense in the earlier portion of the life of a lease and is not reflective of our leases’ current cash obligations, which also typically include step-ups in rent. Management believes that adding back this amount provides a useful supplemental measure of operating performance. Adjusted EBITDA does not deduct the benefit recognized from the Amortization of Lease Incentives as we view the lease incentives received as a financing decision. The cash we receive is used to offset the significant capital expenditure investments we make in building our communities. We have chosen to finance a portion of our capital expenditures through the advance of significant tenant improvement allowances from our landlords. Had we made the decision to instead finance that portion of our capital expenditures through a traditional loan or through drawings under our Senior Credit Facility, our monthly rent expense for that location would likely be reduced, and those payments could instead be used to pay down principal and interest on the loan, which payments would not have impacted our Adjusted EBITDA calculation. As a result, management believes including the Amortization of Lease Incentives results in a useful supplemental measure of operating performance that is neutral regarding the financing decisions made with respect to our capital expenditures. We believe the inclusion of Amortization of Lease Incentives also helps increase comparability when comparing locations across our portfolio, as in some cases we are not able to negotiate a tenant improvement allowance into the terms of our leases, and these types of arrangements are not as common in certain areas of the world where we are opening new locations.
When used in conjunction with GAAP financial measures, Adjusted EBITDA and Adjusted EBITDA Margin are supplemental measures of operating performance that we believe are useful measures to facilitate comparisons to historical performance and competitors’ operating results. Adjusted EBITDA is also a key metric used internally by our management to evaluate performance and develop internal budgets and forecasts.
Community Adjusted EBITDA and Community Adjusted EBITDA Margin
We use Community Adjusted EBITDA and Community Adjusted EBITDA Margin as additional supplemental measures of performance. Community Adjusted EBITDA represents our Adjusted EBITDA further adjusted to remove other revenue, other operating expenses, what we refer to as “Growth Investments” (which are sales and marketing expenses, growth and new market development expenses and pre-opening community expenses) and general and administrative expenses. Community Adjusted EBITDA Margin measures Community Adjusted EBITDA as a percentage of total membership and service revenue. We use these metrics as a way of analyzing the core operating performance of our locations, inclusive of community support functions but excluding the impact of general and administrative expenses, which are not incurred at the location level and do not relate directly to the operation of our communities. We believe the use of these metrics enables greater comparability of the operating performance of our locations from period to period.
Adjusted EBITDA before Growth Investments
We also use Adjusted EBITDA before Growth Investments as a supplemental performance measure. Certain of the restrictions included in the indenture that governs our Senior Notes are subject to us having a minimum amount of Adjusted EBITDA before Growth Investments for the most recent four consecutive fiscal quarters. See “Management’s discussion and analysis of financial condition and results of operations—Quarterly results of operations” for our definition of Adjusted EBITDA before Growth Investments and a reconciliation of Adjusted EBITDA before Growth Investments to net loss.

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Prospectus summary
This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before deciding whether to purchase our Class A common stock in this offering. You should read the entire prospectus carefully, including the sections titled “Risk factors” and “Cautionary note regarding forward-looking statements”, before making an investment decision.
Unless otherwise indicated or the context otherwise requires, all references in this prospectus to “we”, “our”, “us”, “the Company” and “our company” refer to WeWork Companies Inc. and its consolidated subsidiaries. Certain amounts, percentages and other figures presented in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals, dollars or percentage amounts of changes may not represent the arithmetic summation or calculation of the figures that precede them.
Our business
We founded WeWork in 2010 to empower people to do what they love. We started with just one location, a vision for a movement and the conviction that there was an entrepreneurial spirit that was being underserved. We had a deeply-held cultural belief that, in all things, we are better together. Our intention was always bigger than just work - it was about supporting people in all aspects of their lives. We believed that if we could create an inclusive network supported by a global platform of space, community and services, we could help people live life with purpose and have a meaningful impact on the world.
We believe that space has the power to unlock the potential of individuals and organizations of all sizes. When we founded the company, it was clear to us that the existing market for physical space did not offer the flexibility that individuals and modern organizations required. We pioneered the “Space-as-a-Service” membership model, offering our members the optionality of space geared towards their distinct and ever-changing needs. Our innovative and dynamic space offerings are aimed at meeting the needs of any individual or organization wherever or whenever they need it - whether it is a desk, an office, a headquarters or an entire building. We provide our members with flexibility, mobility as well as variable and lower costs. Our “Space-as-a-Service” membership model is revolutionizing how people and organizations utilize space, and in so doing disrupting real estate, the largest asset class in the world.
We have built a vast global network of beautifully designed spaces that are distinctively local in their look and feel. We intentionally design our spaces to inspire creativity, focus and collaboration and to warmly welcome members into our inclusive and vibrant community. Our community creates an energy in our space that is palpable. We believe it provides an automatic culture enhancement for our members.
We also provide our members with value-added services to support and empower our members to do their life’s work. Through partnerships with relevant providers, we offer a multitude of ways to support our members’ growth.
Our entire platform is powered by our purpose-built technology and operating expertise. Our proprietary data, analytics and technology inform everything we do operationally across finding, building, filling and running our spaces. The broad appeal of our platform has attracted a diversified member base, ranging from entrepreneurs and freelancers to small- and medium-sized businesses to large global enterprises. As of December 31, 2018, our platform reached over 400,000 Memberships across 425 locations in 100 cities and 27 countries.
The global success of our WeWork offering not only validated our ambition and intention as a brand, but also created a unique opportunity to further extend our platform. In January 2019, we formed The We Company to allow us to pursue three important missions: work, live and grow. More than just providing a place to work, we began a movement towards humanizing work and all aspects of life.
Trends enabling change
We believe that people are seeking deeper connections to their community, which requires an integration of working, living and growing. We believe we are uniquely positioned to capitalize on the trends underlying this change.
Urbanization . People are moving to urban centers, prioritizing economic opportunities and accessibility to services. According to a United Nations study, 55% of the world’s population today lives in urban areas, a proportion that is expected to increase to 70% by 2050. This increased population density puts pressure on urban infrastructure and resources. We believe the future of the global economy depends on the vitality of cities, and the future of cities depends

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on innovative design, technology and operational real estate solutions that can accommodate this densely urbanized world.
Rise of the independent economy . We are witnessing a major technological transformation and an unprecedented shift in work. According to a study by McKinsey, within the next decade, independent workers, freelancers and entrepreneurs could make up half of the American workforce. This revolution has the potential to accelerate innovation and enhance the quality of life for billions of people around the world.
Tech-enabled workspace evolution . Greater need for employee mobility, advancements in technology and a rise in flexible work arrangements have led to an increase in workplace collaboration and workspace density. We believe that the nature of work is evolving to require more space for shared activities and access to globally integrated products and services in order to increase efficiency and connectivity. Modernizing the workplace and providing tech-enabled environments require extensive knowledge around design, construction and operation of real estate, as well as the technological tools that analyze space utilization and enable real-time alterations.
Focus on enhancing corporate culture. Individuals are increasingly prioritizing work-life integration, while organizations are increasingly focusing on enhancing corporate culture. However, many organizations do not have the expertise in the optimization and “humanization” of spaces. As a result, they are turning to third-party human capital management providers to curate work environments that are more community and culture-driven.
Importance of sustainability. The United Nations estimates that real estate accounts for approximately 40% of the world’s energy consumption and one-third of all carbon emissions. The combination of rapid urbanization and the urgent threat of climate change create an existential responsibility for policymakers and urban citizens to favor density, innovation and efficiency in real estate.
Mission-driven brands. Consumers are gravitating towards working with and for brands that value community engagement and embrace social and environmental responsibility. Individuals and organizations are therefore looking to partner with companies that are driven by having a meaningful impact on the world.
Financial and operational flexibility . Companies are looking to turn long-term obligations into flexible solutions that can expand and contract with their needs, and are making use of “as-a-service” models for aspects of their operations that have been typically viewed as fixed costs.
Our platform
We believe space has the power to unlock the potential of individuals and organizations of all sizes. When we founded WeWork in 2010, it was clear to us that the existing market for physical space did not offer the flexibility that modern organizations require. We therefore pioneered our “Space-as-a-Service” membership model, offering our members the optionality of space geared towards their distinct needs on a flexible basis.
The foundation of our platform has always been space, community and services, and we believe we are the only company in the world that offers all three at global scale:
Global physical space. Our physical platform includes beautifully-designed spaces offered through our pioneering “Space-as-a-Service” membership model.
Vibrant connected community. Our community is not only global, but also local, built one person at a time and brought together and connected by our community managers.
Value-added services. The breadth and depth of our services are deeply valued by our members, and we believe we have significant opportunities to scale and expand our offerings.

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Global physical space
Our core workspace solution provides members with a furnished and fully-serviced workspace on a flexible basis in a physical WeWork location. Our membership agreements offer access to inspirational and collaborative shared spaces and amenities, such as private phone booths, internet, high-speed business printers and copiers, mail and packaging handling, front desk services, 24/7 building access, unique common areas, daily cleaning, fresh fruit, water and micro-roasted coffee for no additional cost. Members join the WeWork community by entering into membership agreements, ranging from month-to-month to multi-year, for one or more of the following WeWork offerings:
On demand space . Mobile employees need an office wherever work takes them. Our offerings include unlimited on-demand and pay-as-you-go access to our global portfolio of 425 locations across 100 cities as of December 2018.
Global access. Access to all WeWork locations and our member network online. Includes pay-as-you-go hot desk bookings, conference rooms, printing credits and other amenities.
By-the-hour or by-the-day. Access to a desk or a conference room booked by-the-hour or by-the-day with no membership required.
Dedicated space. We can accommodate teams of any size with our off-the-shelf solutions and access to shared common space.
Co-working and shared workspace. Flexible desks and shared collaborative space that individuals can purchase for one or more months at a time.
Private offices. Enclosed, secure, furnished offices in a single location that can accommodate teams of any size.
Office suites. Turnkey, private offices that are built with the needs of larger companies in mind. Space includes dedicated meeting rooms, lounges and executive offices, along with access to additional shared spaces and amenities.
Custom space. Members get more control over their spaces, powered by our insights and experiences transforming workspaces for enterprise clients.
Headquarters by WeWork. A standalone, private and full-floor solution dedicated to only one member at a WeWork location. This includes pre-configured layouts and options for personalization and branding.
Fully-custom configuration. Leveraging our full suite of space options, clients can fully tailor their space type and layout and incorporate their brand identity to make the space their own, whether the space is located in a WeWork location or in the client’s own space. We can also provide building management services and our proprietary technology to enhance their experience.
Our disruptive approach to workspace has powered our growth and created a platform that is truly global. Yet despite our global presence, our space is distinctively local - tailored to the needs, tastes and cultural norms of each city we enter. In New York City, our buildings intentionally incorporate local architectural elements, such as wooden beams, exposed brick and industrial floors. In Tokyo, we design and build meeting rooms to be larger to accommodate members that tend to include entire teams at all meetings. In Paris, our Rue la Fayette location incorporates the building’s Art Deco style and monumental glass ceiling to combine the traditional with the modern.
While each WeWork location we open is unique, our design intentionally incorporates certain universal elements that collectively create our quintessential WeWork energy no matter where in the world you are. Open floorplans, communal lounges, centrally-located refreshments and exposed interconnected staircases are intended to bring people together to encourage collaboration. Meanwhile, each location offers multiple ways to conduct meetings of every size - from shared lounges to private nooks to multifunctional phone booths. Our design choices are intended to inspire creativity by prioritizing natural sunlight, bright colors and comforts more akin to the living room than the office. We place design at the core of everything we do, but we are able to quickly and efficiently enter new markets because of our end-to-end control over the sourcing and building process.

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Vibrant connected community
Everything we do is designed, built and executed to encourage a sense of belonging. While the flexibility, affordability and enhanced design of our space is what attracts members to our platform, it is the shared sense of community that allows them to unleash their greatest potential.
When members join our platform, they gain instant access to our global member network. We host curated social and professional events, ranging from office hours with venture capitalists to happy hours with colleagues. Our network is as digital as it is physical, with opportunities to build professional partnerships, find clients or connect socially with members from across the globe.
Value-added services
We offer an increasingly broad array of services so our members can focus on their life’s work and grow both personally and professionally. At the core of our WeWork offering are basic amenities required to run any business, including internet, printing and conference rooms, some of which are included with our Membership offerings. We also offer access to professional services including healthcare, payroll, compliance and technology services as well as lifestyle perks.
We plan to increase the breadth and relevance of our service offerings, providing members a one-stop solution to run their businesses seamlessly. Additional services allow us to increase the revenue we derive from our members, as we are able to deliver services at scale to members that are already using our locations and are an embedded part of our community.
Our global platform also provides opportunities to develop strategic partnerships. Partners can leverage our physical scale and logistics platform to access our rich and diverse community of members. Our members gain access to popular consumer brands with the convenience of our WeWork platform. To date we have developed relationships with a number of parties, including Rent the Runway and sweetgreen. We expect to continue to enter into additional partnerships to provide our members differentiated services.
business1aa04.jpg
Our partnership has provided Rent the Runway with a solution that enhances the value of their apparel and accessories rental subscription service by providing access to physical drop-boxes at WeWork locations. This partnership has provided our busy, on-the-go members with a differentiating amenity
sweetgreenlogo.jpg
In 2018, we launched a collaboration with sweetgreen to develop and incubate their Outpost delivery model, expanding to select WeWork locations around the United States. The partnership has unlocked the power of lunchtime demand, enhancing the experience we deliver to our members and providing sweetgreen with a new ability to enter the lunchtime delivery market at scale.
We Company Offerings and other investments
We have leveraged our global physical platform to extend our offerings beyond work, including through our live and grow missions. Through these We Company Offerings, we consistently seek opportunities to enhance value to our members and further our mission of fostering community and collaboration. As we consider investing in and growing new offerings to extend our global physical platform, we apply a disciplined and intentional approach by which we incubate, launch and then scale.
Incubate. A seed stage business line: a major initiative or region that is focused on developing a plan and demonstrating traction.
Launch. An early stage business line: a major initiative or region that is focused on executing a plan and achieving milestones or revenue targets.
Scale. A growth stage business line: a major initiative or region focused on expansion, improving operations and execution.
This categorization enables us to invest in new products and services while also being able to effectively resource, staff and scale our business in a disciplined manner. This model has allowed us to efficiently develop and deliver innovative and customized products and services and enter into partnerships that benefit our members.

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Our current We Company Offerings include:
Flatiron School . Acquired in 2017, Flatiron is a software engineering education platform that offers online and in-person classes to professionals looking to further their careers in the technology sector.
Meetup . Acquired in 2017, Meetup is a subscription-based online platform that facilitates in-person meetings, social gatherings, seminars and networking events across a variety of topics.
Conductor . Acquired in 2018, Conductor is a marketing technology platform that offers marketing intelligence and search engine optimization tools.
WeLive . Opened in 2016, WeLive is residential shared living space.
Rise by We . Opened in 2017, Rise by We is a health and wellness center.
WeGrow . Opened in 2018, WeGrow is a school serving children ages 2-11 for the 2019-2020 school year.
In 2019, we also launched a global real estate acquisition and management platform (“ARK”) that focuses on acquiring, developing and managing real estate assets in global gateway cities and high-growth secondary markets that would benefit from our occupancy or involvement as an operator of physical space. ARK leverages access to our site selection process and proprietary technology, as well as our relationships with partners and enterprise member organizations, to secure and control a broad range of strategic real estate opportunities that might not otherwise be available to us.
Value proposition
Our platform creates significant value for our members, landlords, partners and neighborhoods. Altogether, providing value for each of our constituents creates network effects that propel our expansion: as our Membership base grows and diversifies, we can provide incremental value to landlords and partners through higher quality tenants and increasing asset values. That, in turn, has economic ripple effects throughout cities and neighborhoods, improving the WeWork experience - and in turn growing our Membership base.
Members
We believe the value we provide our members enhances and supports their professional and personal growth.
Flexibility, mobility and speed. We offer a variety of solutions to meet the on-demand needs of our diverse Membership base. Our membership agreements provide more flexibility than traditional real estate options, allowing our members the optionality to upsize, right-size or relocate as needed. Our members can also utilize our global platform to quickly expand to new geographies without the need to navigate local real estate markets.
Reduced Costs. We believe that we offer a significant cost advantage relative to a standard lease in our major markets, including both flagship and growth cities.
Services. From standard amenities to value-added offerings, we offer our members access to resources to grow personally and professionally, including through strategic partnerships with retail, technology and professional services companies.
Enhanced culture. We provide access to beautiful, inspirational spaces designed to maximize creativity and human connection, and curated events that enable our global community to connect with one another.
Landlords and real estate investors
Our landlords and real estate investors benefit from WeWork in the form of substantial value and convenience.
“WeWork effect” . Landlords have a track record of attracting higher value tenants and retail in locations with a WeWork presence thanks to the economic activity we generate in and around the buildings we occupy. Rent growth in buildings where WeWork occupies space often outpaces rent growth in the neighborhood as a whole, especially in neighborhoods where office space is traditionally less prevalent.
“Tenant-in-tow” . In many locations, we lease a significant portion of the buildings we occupy and are immediately able to absorb vacancies, often due to our broad and deep base of enterprise member relationships. This has helped us

5



cultivate strong relationships with leading global landlords, providing us access to premier real estate portfolios around the world.
Partnership opportunities. As we scale, we intend to pursue capital-efficient partnerships with building owners as an alternative to standard leases. These partnerships enable landlords to share in the upside we generate via participating leases, joint ventures and equity partnerships. Alternative partnerships can take a variety of forms and structures, but are typically characterized by low upfront capital expenditure requirements by us and a pre-structured revenue-sharing or profit-sharing arrangement. Depending on the agreed deal structure, operating costs and other building costs may or may not be paid from the revenue or profit distribution waterfall. In certain cases, the nature of the partnership may also be more of a management consulting arrangement in which we receive a fee (which may be a percentage of revenue, such as for our IndiaCo Locations) in exchange for services we provide to a landlord entity. Landlords are incentivized to enter into these arrangements because the arrangements may over time ultimately provide them higher returns relative to a standard lease.
Partners
Our global platform provides other strategic partners, such as sweetgreen and Rent-the-Runway, a unique opportunity to leverage our physical scale and attractive member base to sell products and services that enhance our member experience, diversify our business and create value.
Access to our members. Partners gain instant access to our member base, which includes a highly attractive demographic of young, well-educated millennial professionals.
Global platform. When partners join our network, they gain access to a truly global, scaled platform that includes logistics expertise across the world, enabling them to efficiently deliver their products and services to our members.
Cities and neighborhoods
Our value is not confined to our workspaces, and our locations globally create ripple effects throughout nearby neighborhoods and the cities in which we have a presence.
Economic ripple effects. According to our 2019 Global Impact Report, we directly employ more than 11,000 employees and support an estimated 680,000 jobs. We estimate that the WeWork economy creates an approximately two times economic multiplier for cities in the United States. Globally, the average economic multiplier is 1.7.
Innovation. Our members, like our company, create value for our neighborhoods through innovation and inspiration. Our members include many entrepreneurs in major United States cities, and the innovation economy (defined as the technology, creative, professional services and advanced manufacturing verticals) accounts for a large percentage of WeWork Memberships.
Sustainability. We remain dedicated to ensuring that our spaces are healthy and productive for the environment and that our members make choices with sustainability in mind. For instance, according to our Global Impact Report, because our broad geographic reach allows members to work closer to where they live, more than two thirds of members use sustainable forms of public transit to get to our locations.
Social and civic impact . Through our Veterans in Residence program, we provide fully sponsored workspaces and business mentorship to hundreds of transitioning service members across the United States. We have also launched our Refugee Initiative to expand economic opportunity through direct hiring and offer support, skills and networks to displaced individuals.
Our superpowers
First-mover advantage with category-defining brand. As the pioneer of our “Space-as-a-Service” membership model, we have successfully created a new category that is disrupting work culture. We have developed a globally recognized brand in our core markets driven by the strong demand for our platform, which we believe demonstrates our superior value proposition for members. We believe that our established brand provides us the opportunity to drive increased penetration within existing markets. It has also increased our unaided awareness metrics significantly, reinforcing the strength of the brand.

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Our global scale makes our platform extremely difficult to replicate. Today, our expansive platform spans 425 locations, 100 cities, 27 countries and five continents. Not only does this scale allow us to grow faster - it has allowed us to cultivate deep relationships with landlords and other real estate partners, resulting in access to premier properties and improved lease terms. Reaching this scale and cultivating favorable relationships with landlords and partners requires a substantial amount of capital and time, and we believe this makes our platform extremely difficult to replicate.
We strive to build for less, build faster and get more capital invested in our platform. With scale, we are able to decrease costs required to build out desks, which provides us a significant competitive advantage. In addition, while the amount of time required to open a new location depends on a number of factors, we have enhanced our processes to minimize delays.
Compelling unit economics driven by our operational expertise. Over the last nine years, we have developed core expertise in finding, building, filling and running our global portfolio of workspaces. We have invested heavily in the teams, processes and technologies that allow us to deliver on our promise with precision, speed and quality control, while driving down our buildout costs on a per desk basis. Furthermore, our global brand and operating efficiency allow us to rapidly fill desks as we open new locations, while improving operating leverage as we scale.
Visible revenue base with a committed backlog. We are strategic in our choice of locations and we typically target locations in major economic and cultural hubs that are more conducive to scaling our business and more resilient to an economic downturn. In recent years, we have focused on expanding the average terms of our membership agreements.
Our proprietary technology enables us to scale at an unprecedented rate in the real estate industry. Our technology is a fundamental differentiator and key driver of our ability to scale. It is used in every facet of our operations - from finding and constructing our locations to creating a productive and collaborative environment for our members. Our technology and software provide important insights. We can use data from existing locations to help us optimize future locations. Full visibility into our location pipeline allows us apply these learnings quickly and smoothly, and our systems empower us to open new locations without sacrificing quality or speed.
Differentiated community-driven culture attracting large and diverse member base. Our culture is characterized by our commitment to community and collaboration which, in turn, drives greater productivity, creativity and meaning for our members. Our differentiated culture is a key driver of our ability to attract and retain members, and has allowed us to grow a broad base of members across industry, company size and geography, with stable and increasing member cohorts over time.
Compelling value proposition that prioritizes member experience. In addition to our community-driven culture, we provide our members with a more cost effective and flexible solution supplemented with value-added services. Our global footprint and strong landlord relationships provide us with access to a broad range of available properties and favorable tenant improvement arrangements that help us finance our build out costs.
Performance-driven culture led by visionary management team. Led by our visionary co-founder Adam Neumann, and a strong management team, we inspire a culture of innovation, collaboration and purpose that is critical to our success. Reinforced by community team members who serve as our ambassadors, our community management philosophy is one of empowerment. We trust our community managers to create an environment that suits their unique ecosystem.
Our growth levers
Expand global footprint in new and existing markets .
Grow our member base, with a particular focus on enterprise .
Enrich member experience with new products and services.
Invest in technology to deliver space, build community and improve experience.
Diversify model via alternative partnerships with landlords.
Risk factors
Our business is subject to a number of risks and uncertainties, as more fully described under “Risk factors” in this prospectus. These risks could materially and adversely impact our business, financial condition, results of operations and prospects,

7



which could cause the trading price of our Class A common stock to decline and could result in a loss of all or part of your investment. Some of these risks include:
the sustainability of our rapid growth and our ability to manage our growth effectively;
the success of our business strategy, including our plans to enter into new markets and launch additional product and service offerings;
our ability to achieve profitability at a company level in light of our history of losses;
our ability to retain existing members and attract new members;
our ability to open new locations with satisfactory arrangements in sufficient numbers or at sufficient rates to continue the future growth of our member base and our business;
risks related to the long-term and fixed-cost nature of our leases;
risks related to operating in foreign jurisdictions;
our ability to maintain the value and reputation of our brand;
risks related to our transactions with related parties;
our Co-Founder and Chief Executive Officer has control over key decision-making as a result of his control over a majority of the total voting power of our outstanding capital stock; and
the success of our strategic partnerships.
Implications of being an emerging growth company
We will be treated as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), for certain purposes until the earlier of the date we complete this offering and December 31, 2019. As such, we are permitted to rely on exemptions from certain disclosure and other requirements that are applicable to other public companies that are not emerging growth companies. In particular, in this prospectus, we have taken advantage of certain reduced disclosure obligations that apply to emerging growth companies regarding the provision of selected financial data and executive compensation arrangements. We will also take advantage of the extended transition period for complying with new or revised accounting standards available to emerging growth companies. Accordingly, the information contained in this prospectus may be different from the information you might receive from other public companies. See “ Management’s discussion and analysis of financial condition and results of operations JOBS Act ” for further information on being treated as an emerging growth company.
Our principal stockholder and our status as a controlled company
Following the completion of this offering, as a result of his share ownership, together with his voting arrangements with certain stockholders, Adam Neumann, our Co-Founder and Chief Executive Officer, will be able to exercise voting control with respect to an aggregate of              shares of our Class A common stock and             shares of our Class B common stock, representing approximately          % of the total voting power of our outstanding capital stock (or approximately           % of the total voting power of our outstanding capital stock if the underwriters exercise in full their option to purchase additional shares of our Class A common stock). Accordingly, Adam will continue to have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of our directors.
Because Adam will control a majority of our outstanding voting power, we will be a “controlled company” under the corporate governance rules for           -listed companies. Therefore, we may elect not to comply with certain corporate governance standards, such as the requirement that our board of directors have a compensation committee composed entirely of independent directors. For at least some period following completion of this offering, we intend to take advantage of these exemptions.

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Organizational structure
prospectussummary1b1.jpg
WeWork Companies Inc. is a holding company for subsidiaries that provide a global network of physical locations, the infrastructure required to operate those locations and a suite of product and service offerings.
We are a global organization but are highly localized to reflect the unique needs, tastes and customs of our members. Our organization is structured to facilitate this. A central corporate function supports regional groups, which in turn support those responsible for our operations within a particular territory, market or location.
In each country in which we operate, we or our partners lease property to provide a physical platform upon which we offer a curated selection of products and services, historically built around our core WeWork offering. Our operations are supported by a set of services and intellectual property provided by our central corporate function, as well as our or our partners’ employees within the country.
As we have expanded into markets in Asia, we have formed a number of joint ventures and strategic partnerships to drive growth in a capital-efficient manner. We operate in China, Japan and the broader Pacific region through a series of joint ventures that have been supported by a total of approximately $2.0 billion of capital and capital commitments from strategic partners. We also operate in India and certain other jurisdictions through management agreements and revenue-sharing arrangements with third parties. Partnering with local investors in these regions has delivered local relationships, which we leverage to identify and source potential locations as well as high quality local talent.
We also recently launched a real estate acquisition and management platform, ARK, through our ownership of its general partner and investment manager. ARK’s master fund, which is primarily capitalized by third-party limited partners or similar members, is focused on acquiring, developing and managing real estate assets that we and ARK believe would benefit from WeWork’s occupancy. We believe that this relationship will contribute to the growth of our global physical platform by allowing us to access opportunities that we otherwise might not be able to capture. Similar to our joint ventures and strategic partnerships in emerging markets, our partnership with ARK will allow us to grow our business in a capital-efficient manner. ARK is structured as an investment fund, and we also receive management fees based on the capital that ARK manages and are entitled to incentive allocations based on the value of the real estate assets that ARK acquires.
Corporate information
Our predecessor was originally organized on March 23, 2010. On October 8, 2011, our predecessor transferred all of its assets to WeWork Companies LLC, a Delaware limited liability company. On May 30, 2013, WeWork Companies LLC converted into WeWork Companies Inc., a Delaware corporation and the issuer of the shares of Class A common stock being offered in this offering.

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Our principal executive offices are located at 115 West 18th Street, New York, New York 10011, and our telephone number is (646) 491-9060. Our website address is www.we.co. Information contained on, or accessible through, our website is not a part of this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference.

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The offering
Shares offered by us in this offering:
 
 
 
Class A common stock
              shares.
 
 
Option to purchase additional shares of Class A common stock
              shares.
 
 
Shares to be outstanding upon completion of this offering:
 
 
 
Class A common stock
              shares (or              shares if the underwriters exercise in full their option to purchase additional shares of our Class A common stock).
 
 
Class B common stock
              shares.
 
 
Voting rights:
 
 
 
Class A common stock
One vote per share, representing, in the aggregate, approximately         % of the combined voting power of our capital stock outstanding upon completion of this offering (or         % if the underwriters exercise in full their option to purchase additional shares of our Class A common stock).
 
 
Class B common stock
10 votes per share, representing, in the aggregate, approximately          % of the combined voting power of our capital stock outstanding upon completion of this offering (or          % if the underwriters exercise in full their option to purchase additional shares of our Class A common stock).
Holders of our Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise set forth in this prospectus or as required by applicable law. Adam Neumann, our Co-Founder and Chief Executive Officer, will hold or have the ability to control approximately          % of the total voting power of our outstanding capital stock upon completion of this offering (or approximately          % of the total voting power of our outstanding capital stock if the underwriters exercise in full their option to purchase additional shares of our Class A common stock) and will have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of our directors. See “Description of capital stock”.
 
 
Conversion rights:
 
 
 
Class A common stock
Our Class A common stock is not convertible into any other class of shares, including our Class B common stock.
 
 
Class B common stock
Our Class B common stock is convertible into shares of our Class A common stock on a one-for-one basis at the option of the holder. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, except for certain transfers described in our restated certificate of incorporation. See “Description of capital stock—Class A common stock and Class B common stock—Conversion” for more information.
 
 

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Use of proceeds
Assuming an initial public offering price of $           per share, which is the midpoint of the price range set forth on the cover page of this prospectus, we estimate that the net proceeds to us from the sale of our Class A common stock in this offering will be $              (or $              if the underwriters exercise in full their option to purchase additional shares of our Class A common stock), after deducting underwriting discounts and commissions and estimated offering expenses.
 
The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our Class A common stock and enable access to the public equity markets for us and our stockholders. We currently intend to use the net proceeds of this offering for general corporate purposes, including working capital, operating expenses and capital expenditures. Pending their use, we intend to invest the net proceeds of this offering in short-term, investment grade, interest-bearing instruments or hold them as cash. See “Use of proceeds”.
 
 
Dividends
We do not expect to pay dividends on our Class A common stock or our Class B common stock in the foreseeable future. See “Dividend policy”.
 
 
Listing
We intend to apply to list our Class A common stock on the            under the trading symbol “WE”.
 
 
Risk factors
Investing in our Class A common stock involves risks. See “Risk factors” for a discussion of certain factors that you should carefully consider before making an investment decision.
The number of shares of Class A common stock and Class B common stock to be outstanding upon completion of this offering is based on               shares of Class A common stock and               shares of Class B common stock to be outstanding immediately prior to the completion of this offering. Unless otherwise noted, these references exclude:
              shares of Class A common stock issuable upon the exercise of stock options outstanding as of               , 2019 at a weighted average exercise price of $        per share;
              shares of Class B common stock issuable upon the exercise of stock options outstanding as of               , 2019 at a weighted average exercise price of $        per share;
              shares of Class A common stock issuable upon the exercise of warrants outstanding as of               , 2019 at an exercise price of $13.12 per share, which warrants were issued to members at our first WeWork location;
              shares of Class A common stock issuable upon the exercise of warrants outstanding as of               , 2019 at an exercise price of $0.001 per share;
              shares of Class A common stock underlying restricted stock units outstanding as of               , 2019; and
              shares of Class A common stock reserved for future issuance under the new equity incentive plan we intend to adopt prior to the completion of this offering. See “ Executive compensation WeWork Companies Inc. 2019 Omnibus Incentive Plan ”.
Unless otherwise indicated, the information contained in this prospectus is as of the date set forth on the cover of this prospectus and assumes:
no exercise of the outstanding options or warrants described above;
the exercise of warrants held by SB WW Holdings (Cayman) Limited into an aggregate of              shares of Class A common stock upon completion of this offering;
the conversion of a convertible promissory note held by SB WW Holdings (Cayman) Limited into               shares of Class A common stock upon completion of this offering;

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the conversion of a convertible promissory note held by one of our other investors into                shares of Series C preferred stock, which will convert into shares of Class A common stock upon completion of this offering;
the conversion of all our outstanding Series A, Series B, Series C, Series D-1, Series D-2, Series E, Series F and Series G preferred stock (collectively, our “senior preferred stock”), and all of our Series AP-1, Series AP-2 and Series AP-3 preferred stock (collectively, our “acquisition preferred stock”), into shares of Class A common stock upon completion of this offering;
the conversion of all of our outstanding junior preferred stock into an aggregate of           shares of Class B common stock upon completion of this offering;
the filing of our restated certificate of incorporation immediately prior to the completion of this offering;
the effectiveness of our amended and restated bylaws upon the completion of this offering;
an initial public offering price of $        per share, which is the midpoint of the price range set forth on the cover page of this prospectus; and
that the underwriters’ option to purchase additional shares of our Class A common stock is not exercised.

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Summary consolidated financial and operating information
The following summary consolidated financial information for the years ended December 31, 2016, 2017 and 2018 and as of December 31, 2017 and 2018 has been derived from our audited consolidated financial statements and notes thereto included elsewhere in this prospectus. Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), and are presented in U.S. dollars. Our historical results are not necessarily indicative of the results to be expected for any future period.
The information presented below should be read in conjunction with the information under “Management’s discussion and analysis of financial condition and results of operations” and our consolidated financial statements and related notes appearing elsewhere in this prospectus.
 
Year Ended December 31,
(Amounts in thousands, except share and per share data)
2016
 
2017
 
2018
Consolidated statement of operations information:
 
 
 
 
 
Revenue
$
436,099

 
$
886,004

 
$
1,821,751

 
 
 
 
 
 
Expenses:
 
 
 
 
 
Community operating expenses (1)
433,167

 
814,782

 
1,521,129

Other operating expenses (1)

 
1,677

 
106,788

Pre-opening community expenses
115,749

 
131,324

 
357,831

Sales and marketing expenses
43,428

 
143,424

 
378,729

Growth and new market development expenses
35,731

 
109,719

 
477,273

General and administrative expenses (2)
115,346

 
454,020

 
357,486

Depreciation and amortization
88,952

 
162,892

 
313,514

Total expenses
832,373

 
1,817,838

 
3,512,750

 
 
 
 
 
 
Loss from operations
(396,274
)
 
(931,834
)
 
(1,690,999
)
Interest and other income (expense), net
(33,400
)
 
(7,387
)
 
(237,270
)
Pre-tax loss
(429,674
)
 
(939,221
)
 
(1,928,269
)
Income tax benefit (provision)
(16
)
 
5,727

 
850

Net loss
(429,690
)
 
(933,494
)
 
(1,927,419
)
Net loss attributable to noncontrolling interests

 
49,500

 
316,627

Net loss attributable to WeWork Companies Inc.
$
(429,690
)
 
$
(883,994
)
 
$
(1,610,792
)
Net loss per share attributable to Class A and Class B common stockholders: (3)
 
 
 
 
 
Basic
$
(2.66
)
 
$
(5.54
)
 
$
(9.87
)
Diluted
$
(2.66
)
 
$
(5.54
)
 
$
(9.87
)
Weighted-average shares used to compute net loss per share attributable to Class A and Class B common stockholders, basic and diluted
161,324,940

 
159,689,116

 
163,148,918

Pro forma net loss per share attributable to Class A and Class B common stockholders: (3)
 
 
 
 
 
Basic
 
$
(4.76
)
Diluted
 
$
(4.76
)
Weighted-average shares used to compute pro forma net loss per share attributable to Class A and Class B common stockholders, basic and diluted
 
338,368,587

 
 
 
 
 
 
(1)
Exclusive of depreciation and amortization shown separately on the depreciation and amortization line.
(2)
Includes stock-based compensation expense of $17.4 million, $260.7 million and $18.0 million in 2016, 2017 and 2018, respectively.
(3)
See Note 22 to our consolidated financial statements included elsewhere in this prospectus for a description of how we compute basic and diluted net loss per share attributable to Class A and Class B common stockholders and pro forma basic and diluted net loss per share attributable to Class A and Class B common stockholders.

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As of December 31, 2018
(Amounts in thousands)
Actual
 
Pro forma(1)
 
Pro forma as adjusted(2)
Consolidated balance sheet information:
 
 
 
 
 
Cash and cash equivalents
$
1,744,209

 
$
 
$
Total current assets
2,464,078

 
 
 
 
Property and equipment, net
4,368,772

 
 
 
 
Total assets
8,644,916

 
 
 
 
Total liabilities
6,284,159

 
 
 
 
Total convertible preferred stock included as temporary equity
3,498,696

 
 
 
 
Total noncontrolling interests included as temporary equity
1,320,637

 
 
 
 
Total equity
(2,458,576
)
 
 
 
 
 
 
 
 
 
 
(1)
The pro forma balance sheet information in this table gives effect to the exercise of warrants held by SB WW Holdings (Cayman) Limited into shares of Class A common stock, the conversion of a convertible promissory note held by SB WW Holdings (Cayman) Limited into shares of Class A common stock, the conversion of a convertible promissory note held by one of our other investors into shares of Series C preferred stock and then into shares of Class A common stock, the conversion of all of our outstanding senior preferred stock and acquisition preferred stock into shares of Class A common stock and the conversion of all of our outstanding junior preferred stock into shares of Class B common stock, each of which will occur upon completion of this offering. The pro forma balance sheet information in this table also gives effect to stock-based compensation expense of approximately $        million associated with restricted stock units, for which the portion of the service period had been rendered as of               ,        . This pro forma adjustment related to stock-based compensation expense of approximately $               million has been reflected as an increase to additional paid-in capital and accumulated deficit. See Note 2 to our consolidated financial statements included elsewhere in this prospectus.
(2)
The pro forma as adjusted balance sheet information in this table gives effect to the transactions described in note (1) above as well as the issuance by us of                shares of Class A common stock in this offering at an assumed initial public offering price of $          per share, the midpoint of the price range set forth on the cover page of this prospectus, and the application of the net proceeds therefrom as described in “Use of proceeds”.
Key performance indicators
In connection with the management of our WeWork offering, we identify, measure and assess a variety of operational metrics that we refer to as key performance indicators. The principal metrics we use in managing and evaluating our business are set forth below.
Any totals of the key performance indicators presented as of a period end reflect the count as of the first day of the last month in the period. The first day of the month is traditionally one of the most active days at each of the Company’s locations as most move-ins and openings occur on the first of the month as part of our move-in, move-out (“MIMO”) process, where we support members who are new, existing, transferring or growing. First-of-the-month counts are used because the economics of those counts generally impact the results for that monthly period.
 
As of December 31,
(Amounts in ones, except percentages)
2016
 
2017
 
2018
Total Locations (1)
111

 
200

 
425

Desks(2)
107,000

 
214,000

 
466,000

Desks added during the year ended
63,000

 
107,000

 
252,000

Memberships (3) 
87,000

 
186,000

 
401,000

Enterprise Membership Percentage (4)
19
%
 
29
%
 
37
%
Mature Locations(5)
 
 
 
 
 
 
 
 
 
 
 
(1)
“Locations” represents the number of buildings (or groups of buildings to the extent they are marketed as a single branded place) where there are Desks available for access by members. We assess the performance of our locations differently based on whether the revenues and expenses of the location are consolidated within our results of operations (“Consolidated Locations”) or whether the revenues and expenses of the location are not consolidated within our results of operations but we are entitled to a management fee for our services, such as our locations in India (“IndiaCo Locations”). The term “locations” includes IndiaCo Locations when used throughout this prospectus (other than in“ Management’s discussion and analysis of financial condition and results of operations Consolidated results of operations ”, where it includes only Consolidated Locations).
(2)
“Desks” represents the estimated number of physical WeWork workspaces available for sale and immediate use by members. The workspace could be a dedicated office area, a shared office area or a common area that is accessed on a first-come, first-served basis (a “hot desk”). “Desks” includes the estimated capacity of “hot desks” at each location. Desks represent management’s best estimate of desk capacity at a location based on our desk

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inventory management system and/or sales layouts and is not meant to represent actual counts of desks at our locations. As presented in this prospectus, “Desks” is rounded to the nearest thousand.
(3)
“Memberships” represents the cumulative number of WeWork Memberships and We Memberships. Memberships can differ from the number of individuals using space at WeWork locations for a number of reasons, including members utilizing space for fewer individuals than the space was designed to accommodate. Memberships presented are shown rounded to the nearest thousand. “WeWork Memberships” are physical memberships that permit a member to occupy a Desk at a WeWork location. “We Memberships” are virtual memberships that provide access to our service offerings and our member network online, as well as the right to reserve a Desk or conference room on an à la carte basis. We Memberships also include certain memberships that provide global access to every WeWork location common area on a first-come, first-served basis. Each WeWork Membership and We Membership is considered to be one Membership.
(4)
“Enterprise Membership Percentage” represents the percentage of our total WeWork Memberships attributable to Enterprise Member Organizations. Enterprise Membership Percentage is presented as a percentage of our total WeWork Memberships. An “Enterprise Member Organization” is an organization with 500 or more full-time employees and at least one WeWork Membership. There is no minimum number of Memberships that an organization needs to reserve in order to be considered an Enterprise Member Organization.
(5)
“Mature Locations” are locations that have been open for member operations for more than        months. We assess the performance of these locations differently from the performance of locations that have been open for        months or less (“Non-Mature Locations”) and locations that have not yet opened for member operations (“Pre-Open Locations”).
Other key financial measures
 
Year Ended December 31,
(Amounts in thousands, except percentages)
2016
 
2017
 
2018
Adjusted EBITDA(1)
$
(94,322
)
 
$
(193,327
)
 
$
(665,653
)
Adjusted EBITDA Margin
(21.6
)%
 
(21.8
)%
 
(36.5
)%
Community Adjusted EBITDA(1)
$
95,943

 
$
233,147

 
$
467,125

Community Adjusted EBITDA Margin
22.1
 %
 
26.9
 %
 
27.5
 %
 
 
 
 
 
 
(1)
The following table reconciles our net loss to Adjusted EBITDA and Community Adjusted EBITDA for the periods presented:
 
Year Ended December 31,
(Amounts in thousands) 
2016
 
2017
 
2018
Net loss
$
(429,690
)
 
$
(933,494
)
 
$
(1,927,419
)
Income tax (benefit) provision
16

 
(5,727
)
 
(850
)
Interest and other (income) expense
33,400

 
7,387

 
237,270

Depreciation and amortization
88,952

 
162,892

 
313,514

Adjustments for impact of straight-lining of rent(a)
188,746

 
272,927

 
542,842

Stock-based compensation expense(b)
22,660

 
295,362

 
69,400

Stock-based payments for services rendered by consultants(b)
1,594

 
7,326

 
18,957

Change in fair value of contingent consideration payable in stock(c)

 

 
80,633

Adjusted EBITDA
(94,322
)
 
(193,327
)
 
(665,653
)
Other revenue (d)
(1,744
)
 
(19,106
)
 
(124,415
)
Other operating expenses(e)

 
1,322

 
102,230

Sales and marketing(e)
42,653

 
139,180

 
372,386

Growth and new market development(e)
33,245

 
98,336

 
376,171

Pre-opening community expenses(e)
21,223

 
23,039

 
89,238

General and administrative expenses(e)
94,888

 
183,703

 
317,168

Community Adjusted EBITDA
$
95,943

 
$
233,147

 
$
467,125

 
 
 
 
 
 
(a)
Represents the non-cash adjustment to record rent holidays and rent escalation clauses on a straight-line basis over the term of the applicable lease agreement. See “Non-GAAP financial measures—Adjusted EBITDA and Adjusted EBITDA Margin”.
(b)
Represents the non-cash expense of our equity compensation arrangements for our directors, executive officers, other employees and consultants. Stock-based compensation expense for the year ended December 31, 2017 includes $271.0 million related to a secondary stock offering which occurred in October 2017 (the “2017 Secondary Offering”), through which common shares were acquired from employees at a price greater than the fair market value of the shares, which resulted in non-cash expense. We rely on equity compensation to compensate and incentivize these individuals, and we may continue to do so in the future.
(c)
Represents the non-cash expense associated with the remeasurement of the contingent consideration payable in stock associated with acquisitions.
(d)
Includes all other revenue not related to membership and service revenue. See “Management’s discussion and analysis of financial condition and results of operations—Components of results of operations” for a discussion of components of revenue.

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(e)
Represents the amounts as presented on our consolidated statements of operations, excluding amounts already added back above, see “Management’s discussion and analysis of financial condition and results of operations—Components of results of operations” for more information on the components of these expense amounts.

17



Risk factors
Investing in our Class A common stock involves a high degree of risk. You should consider and read carefully all of the risks and uncertainties described below, as well as the other information included in this prospectus, including our consolidated financial statements and related notes appearing elsewhere in this prospectus, before making an investment decision. The risks described below are not the only risks we face. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition, results of operations or prospects. In that case, the trading price of our Class A common stock could decline, and you may lose all or part of your original investment. This prospectus also contains forward-looking statements that involve risks and uncertainties. Please refer to “Cautionary note regarding forward-looking statements” for more information regarding forward-looking statements.
Risks relating to our business
Our business has grown rapidly, and we may fail to manage our growth effectively.
We have experienced rapid growth in our business, including in the number of our WeWork locations and in the size of our membership base. This rapid growth places a significant strain on our existing resources. Difficulties associated with our continued growth could result in harm to our reputation and could have a material adverse effect on our business, including our prospects for continued growth, and on our financial condition, results of operations and cash flows.
We expect our capital expenditures and operating expenses to increase on an absolute basis as we continue to invest in additional locations, launch additional product and service offerings, hire additional team members and increase our marketing efforts. In particular, we expect to invest in local infrastructure to support our continued growth. As we decentralize and localize certain decision-making and risk management functions, we may discover that our internal processes are ineffective or inefficient. In particular, to manage our rapid growth, we will need to enhance our reporting systems and procedures and continue to improve our operational, financial, management, sales and marketing and information technology infrastructure. Continued growth could also strain our ability to maintain reliable service levels for our members. If we do not manage our growth effectively, increases in our capital expenditures and operating expenses could outpace any increases in our revenue, which could have a material adverse effect on our results of operations.
Our rapid growth may not be sustainable.
Our historical growth rates may not be indicative of future growth. The market for our WeWork offering or our We Company Offerings may not continue to grow at the rate we expect or at all, and our total memberships may decline as a result of increased competition in the “Space-as-a-Service” sector or the maturation of our business. Additionally, as we grow, the ability of our management to source sufficient reasonably-priced real estate opportunities of the type we have historically targeted or to develop and launch additional product and service offerings may become more limited.
Our business strategy includes entering into new markets and introducing new product and service offerings. This strategy is inherently risky, may not be successful and could be costly.
As part of our growth strategy, we intend to continue expansion into (i) new markets within the United States and throughout the world, (ii) new products and services, such as integrated design, general contracting construction services, search marketing, residential living, retail, education and fitness and (iii) new strategic opportunities, including real estate acquisition. Such expansion efforts also generally involve significant risks and uncertainties, including distraction of management from existing product and service offerings and the operations of our existing locations. As we attempt to grow our foothold in an evolving industry and acquire new businesses that enhance value for our members, we may encounter issues and risks not discovered in our development or analysis of such expansion efforts. Our operations in any new markets or products and services into which we expand may also generate less revenue or cash flow than our core WeWork offering.
Our expansion efforts have required, and we expect them to continue to require, substantial resources and management attention. We spend significant time, money, energy and other resources trying to understand our members’ needs and working to accommodate them, which may include exploring and negotiating for new product and service offerings. However, as we expand into new markets and new product and service offerings, our members may not be satisfied with our product and service offerings, including any new offerings that we launch. The time, money, energy and other resources we dedicate to exploring and pursuing new product and service offerings may be greater than the short-term, and potentially the total, returns from these new offerings.

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We will also face new operational risks and challenges as we enter into new markets, territories and regions. Expansion into foreign jurisdictions subjects us to legal, regulatory, economic and political risks that may be different from and additional to those that we face in jurisdictions where we currently operate, and we may operate at a disadvantage relative to competitors who are more familiar with local market practices and networks. Expansion into new product and service offerings subjects us to similar risks as we compete with the many established participants in those markets, additional regulatory and legal risks, and execution risks as we implement new business practices and integrate a new mission into our existing range of offerings. To the extent the benefits of our expansion efforts do not meet our expectations, we may recognize a loss on our investment or gains that do not justify our investment. See “— We plan to continue expanding our business into markets outside the United States, which will subject us to risks associated with operating in foreign jurisdictions ”.
Our success in this regard may increasingly depend on the financial success and cooperation of local partners and other third parties. For more information, see “— Our growth and success depends on our ability to maintain the value and reputation of our brand and the success of our strategic partnerships ”.
We have a history of losses and, especially if we continue to grow at an accelerated rate, we may be unable to achieve profitability at a company level (as determined in accordance with GAAP) for the foreseeable future.
We had an accumulated deficit as of December 31, 2017 and 2018 and had net losses and negative Adjusted EBITDA for the years ended December 31, 2016, 2017 and 2018. Our accumulated deficit and net losses have historically resulted primarily from the substantial investments required to grow our business, including the significant increase in recent periods in the number of locations we operate. We expect that these costs and investments will continue to increase as we continue to grow our business. We also intend to invest in maintaining our high level of member service and support, which we consider critical to our continued success. We also expect to incur additional general and administrative expenses as a result of our growth. These expenditures will make it difficult for us to achieve profitability, and we cannot predict whether we will achieve profitability in the near term or for the foreseeable future.
Our operating costs and other expenses may be greater than we anticipate, and our investments to make our business and our operations more efficient may not be successful. Increases in our costs, expenses and investments may reduce our margins and materially adversely affect our business, financial condition and results of operations. In addition, recently opened or future locations may not generate revenue or cash flow comparable to those generated by our existing mature locations, and our mature locations may not be able to continue to generate those levels of revenue, or cash flow. Further, our We Company Offerings, such as WeLive, Rise by We, WeGrow, Flatiron School, Meetup and Conductor, and additional We Company Offerings that we may launch or acquire in the future, may not generate the levels of revenue or cash flow that we expect them to generate. For any of these reasons, we may be unable to achieve profitability for the foreseeable future and may face challenges in growing our cash flows.
We may not be able to continue to retain existing WeWork members, most of whom enter into membership agreements with short-term commitments, or to attract new members in sufficient numbers or at sufficient rates to sustain and increase our WeWork Memberships or at all.
We principally generate revenues through the sale of WeWork memberships. We have in the past experienced, and expect to continue to experience, member terminations. In many cases, our members may terminate their membership agreements with us at any time upon as little notice as one calendar month. Members may cancel their memberships for many reasons, including a perception that they do not make sufficient use of our available space and services, that they need to reduce their expenses or that alternative work environments may provide better value or a better experience.
Our results of operations could be adversely affected by declines in demand for our WeWork Memberships. Demand for our WeWork Memberships may be negatively affected by a number of factors, including geopolitical uncertainty, competition, decline in our reputation and saturation in the markets where we operate. Prevailing general and local economic conditions may also negatively affect the demand for our WeWork Memberships, particularly from current and potential members that are small- and mid-sized businesses and may be disproportionately affected by adverse economic conditions.
Substantially all of our leases with our landlords are for terms that are significantly longer than the terms of our membership agreements with our members. The average length of the initial term of our U.S. leases is approximately 15 years, and future minimum rental payments for our operating leases totaled $34.0 billion as of December 31, 2018. If we are unable to replace members who may terminate their membership agreements with us, our cash flows and ability to make payments under our lease agreements with our landlords may be adversely affected. These same factors that reduce demand for our WeWork Memberships may not have the same impact on a landlord that has longer commitments from its tenants than we have from our members.

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We must continually add new members both to replace departing members and to expand our current member base. We may not be able to attract new members in sufficient numbers to do so. Even if we are able to attract new members to replace departing members, these new members may not maintain the same level of involvement in our community. In addition, the revenue we generate from new members may not be as high as the revenue generated from existing members because of discounts we may offer to these new members, and we may incur marketing or other expenses, including referral fees, to attract new members, which may further offset our revenues from these new members. However, for these and other reasons, we could experience a decline in revenue, and any such trend could adversely affect our results of operations.
A high number of our members are concentrated in major metropolitan areas. An economic downturn or subsequent declines in market rents in any of these areas may result in increased member terminations and could adversely affect our results of operations.
A significant portion of our member base consists of small- and mid-sized businesses and freelancers who may be disproportionately affected by adverse economic conditions. In addition, our concentration in specific markets magnifies the risk to us of localized economic conditions in those markets or other markets within the same territory. For the year ended December 31, 2018, we generated the majority of our revenue from locations in the United States and the United Kingdom. The majority of our United States revenue was generated from our WeWork spaces in the greater New York City, Los Angeles, San Francisco, Washington, D.C. and Boston markets. A majority of our locations in the United Kingdom are in London. Economic downturns in these markets or other markets in which we are growing our number of locations may have a disproportionate effect on our ability to retain members, in particular members that are small- and mid-sized businesses, and our revenue and thereby require us to expend time and resources on sales and marketing activities that may not be successful and could impair our results of operations. In addition, our business may be affected by generally prevailing economic conditions in the markets where we operate, which can result in a general decline in real estate activity, reduce demand for our services and exert downward pressure on our revenue.
We may not be able to successfully negotiate satisfactory arrangements in respect of spaces that we occupy, or renew or replace existing spaces on satisfactory terms or at all, any of which will necessarily constrain our ability to grow our member base.
We currently lease real estate for the majority of our locations, and we are actively pursuing revenue-sharing arrangements and other types of partnerships with real estate owners. If we are unable to negotiate these lease and other arrangements on satisfactory terms, we may not be able to expand our location base.
Our occupancy agreement renewal options are typically tied to upward-only rent reviews, whereby rent for any given lease renewal term is equal to the greater of the rent in effect for the period immediately prior to the rent review date and the then-prevailing net effective rent in the open market. As a result, increases in rental rates in the markets in which we operate, particularly those markets where initial terms under our leases are shorter, could adversely affect our business, financial condition, results of operations and prospects.
In addition, our ability to negotiate favorable terms to extend an expiring occupancy agreement or in connection with an alternate location will depend on then-prevailing conditions in the real estate market, such as overall rental cost increases, competition from other would-be tenants for desirable leased spaces and our relationships with current and prospective building owners and landlords, and may depend on other factors that are not within our control. If we are not able to renew or replace an expiring occupancy agreement, we will incur significant costs related to vacating that space and redeveloping whatever alternative space we are able to find, if any. In addition, if we are forced to vacate a space, we could lose members who purchased memberships based on the design, location or other attributes of that particular space and may not be interested in the other spaces we have available.
The average length of the initial term of our U.S. leases is approximately 15 years. As we continue to expand our presence into certain international markets, including Europe, Latin America, China, Japan and the Pacific, local market practices may require us to enter into occupancy agreements that have shorter initial terms, which reduces the certainty of our future obligations with respect to these locations and the continued availability of our occupied spaces at these locations.
The long-term and fixed cost nature of our leases may limit our operating flexibility and could adversely affect our liquidity and results of operations.
We currently lease a significant majority of our locations under long-term leases that, with very limited exceptions, do not contain early termination provisions. Our obligations to landlords under these agreements extend for periods that significantly exceed the length of our membership agreements with our members, which may be terminated by our members upon as little

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notice as one calendar month. Our leases generally provide for fixed monthly payments that are not tied to member usage or the size of our member base, and all of our leases contain minimum rental payment obligations. As a result, if members at a particular space terminate their membership agreements with us and we are not able to replace these departing members, our rent expense may exceed our revenue. In addition, in an environment where cost for real estate is decreasing, we may not be able to lower our fixed monthly payments under our leases at rates commensurate with the rates at which we would be pressured to lower our monthly revenue, which may also result in our rent expense exceeding our revenue. In any such event, we would not have the ability to reduce our rent under the lease or otherwise terminate the lease in accordance with its terms.
If we experience a prolonged reduction in revenues at a particular space, our results of operations in respect of that space would be adversely affected unless and until the lease expires or we are able to assign the lease or sublease the space to a third party. Our ability to assign a lease or sublease the space to a third party may be constrained by provisions in the lease that restrict these transfers without the prior consent of the landlord. Additionally, we could incur significant costs if we decide to assign or sublease unprofitable leases, as we may incur transaction costs associated with finding and negotiating with potential transferees, and the ultimate transferee may require upfront payments or other inducements. If we default under the terms of the lease and cease operations at the leased spaces, we could be exposed to breach of contract and other claims, which could result in direct and indirect costs to us and could result in operational disruptions that could harm our reputation and brand.
In addition, while our leases are often held by special purpose entities, our consolidated financial condition and results of operations depend on the ability of our subsidiaries to perform their obligations under these leases over time. Our business reputation, financial condition and results of operations depend on our subsidiaries’ ongoing compliance with their leases. We may determine that it is necessary to fund the lease payments of our subsidiaries beyond the terms of our limited parent guarantees (if applicable), in which case any difficulty of our subsidiaries in performing their obligations under our leases in a given region could affect our liquidity in that region or on a consolidated basis. We are also pursuing strategic alternatives to pure leasing arrangements, including revenue-sharing arrangements and other partnerships with respect to spaces. Some of our revenue-sharing agreements contain penalties that are payable in the event we terminate the arrangement. In addition, we have limited experience to date with these types of transactions, and we may not be able to successfully complete additional transactions on commercially reasonable terms or at all.
We have engaged in transactions with related parties, and such transactions present possible conflicts of interest that could have an adverse effect on our business and results of operations .
We have entered into a number of transactions with related parties, including our significant stockholders, directors and executive officers. For example, we have entered into several transactions with our Co-Founder and Chief Executive Officer, Adam Neumann, including occupancy agreements with landlord entities in which Adam has a significant ownership interest. We have similarly entered into occupancy agreements with landlord entities in which other members of our board of directors have a significant ownership interest, such as through a real estate investment fund (the “Real Estate Fund”). See “ Certain relationships and related party transactions—Real estate transactions ”. We may in the future enter into additional transactions with entities in which members of our board of directors and other related parties hold ownership interests.
Transactions with a landlord entity in which our directors, officers and significant stockholders hold ownership interests present potential for conflicts of interest, as the interests of the landlord entity and its shareholders may not align with the interests of our stockholders with respect to the negotiation of, and certain other matters related to, our occupancy agreement with that landlord entity. For example, conflicts may arise in connection with decisions regarding the structure and terms of the occupancy agreement, tenant improvement allowances or termination provisions. Conflicts of interest may also arise in connection with the exercise of contractual remedies under these occupancy agreements, such as the use of offsets for unreimbursed tenant improvement allowances or the treatment of events of default.
Our occupancy agreements with landlords generally provide that, if the landlord declines to reimburse us for buildout expenses or other tenant improvement allowances for which we have the right to be reimbursed under the relevant occupancy agreement, we may apply such receivables as an offset to our related rental obligations on those impacted occupancy agreements. Certain of our occupancy agreements with related parties, including those with landlord entities in which Adam holds a significant ownership interest, provide for tenant improvement allowances. If any of these entities declined to reimburse us for buildout expenses to which we were entitled under the relevant occupancy agreement, we expect that we would apply such receivables as an offset to our related rental obligations on those impacted occupancy agreements.
Pursuant to our related party transactions policy, all additional material related party transactions that we enter into require either (i) the unanimous consent of our audit committee or (ii) the approval of a majority of the members of our Board of Directors. Nevertheless, these transactions, individually or in the aggregate, may have an adverse effect on our business and

21



results of operations, and we may have achieved more favorable terms if such transactions had not been entered into with related parties.
Some of the counterparty risks we face with respect to our members are heightened in the case of Enterprise Member Organizations.
WeWork Memberships attributable to Enterprise Member Organizations generally account for a high proportion of our revenue at a particular location, and a default by an Enterprise Member Organization under its agreement with us could cause a significant reduction in the operating cash flow generated by the location where that Enterprise Member Organization is situated. Enterprise Member Organizations, which often sign membership agreements with longer terms and for a greater number of Memberships than our other members, accounted for 32% of our total membership and service revenue for the year ended December 31, 2018. We would also incur certain costs following an unexpected vacancy by an Enterprise Member Organization. The greater amount of available space generally occupied by any Enterprise Member Organization relative to our other members means that the time and effort required to execute a definitive agreement is greater than our membership agreements with individual members or small- or mid-sized businesses. In some instances, we agree to varying levels of customization of the space we license to these Enterprise Member Organizations. Enterprise Member Organizations may nevertheless delay commencement of their membership agreements, fail to make membership fee payments when due, or declare bankruptcy or otherwise default on their obligations to us. Any of these events could result in the termination of that Enterprise Member Organization’s agreement with us and sunk costs and transaction costs that are difficult or impossible for us to recover.
We are exposed to risks associated with the development and construction of the spaces we occupy.
Opening new locations subjects us to risks that are associated with development projects in general, such as delays in construction, contract disputes and claims, and fines or penalties levied by government authorities relating to our construction activities. We may also experience delays opening a new space as a result of delays by the building owners or landlords in completing their base building work or as a result of our inability to obtain, or delays in our obtaining, all necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations. We seek to open new spaces on the first day of a month and delays, even if the delay only lasts a few days, can cause us to defer opening a space by a full month. Failure to open a space on schedule may damage our reputation and brand and may also cause us to incur expenses in order to rent and provide temporary space for our members or to provide those members with discounted membership fees.
In developing our spaces, we generally rely on the continued availability and satisfactory performance of unaffiliated third-party general contractors and subcontractors to perform the actual construction work, and in many cases to select and obtain the related building materials. As a result, the timing and quality of the development of our occupied spaces depends on the performance of these third parties on our behalf.
We do not have long-term contractual commitments with general contractors, subcontractors or materials suppliers. The prices we pay for the labor or materials provided by these third parties, or other construction-related costs, could unexpectedly increase, which could have an adverse effect on the viability of the projects we pursue and on our results of operations and liquidity. Skilled parties and high-quality materials may not continue to be available at reasonable rates and in the markets in which we pursue our construction activities.
The people we engage in connection with a construction project are subject to the usual hazards associated with providing construction and related services on construction project sites, which can cause personal injury and loss of life, damage to or destruction of property, plant and equipment, and environmental damage. Our insurance coverage may be inadequate in scope or coverage amount to fully compensate us for any losses we may incur arising from any such events at a construction site we operate or oversee. In some cases, general contractors and their subcontractors may use improper construction practices or defective materials. Improper construction practices or defective materials can result in the need to perform extensive repairs to our spaces, loss of revenue during the repairs and, potentially, personal injury or death. We also can suffer damage to our reputation, and may be exposed to possible liability, if these third parties fail to comply with applicable laws.
Supply chain interruptions may increase our costs or reduce our revenues.
We depend on the effectiveness of our supply chain management systems to ensure reliable and sufficient supply, on reasonably favorable terms, of materials used in our construction and development and operating activities, such as furniture, lighting, millwork, wood flooring, security equipment and consumables. The materials we purchase and use in the ordinary course of our business are sourced from a wide variety of suppliers in countries around the world. Disruptions in the supply chain may result from weather-related events, natural disasters, trade restrictions, tariffs, border controls, acts of war, terrorist

22



attacks, third-party strikes or ineffective cross dock operations, work stoppages or slowdowns, shipping capacity constraints, supply or shipping interruptions or other factors beyond our control. In the event of disruptions in our existing supply chain, the labor and materials we rely on in the ordinary course of our business may not be available at reasonable rates or at all. In some cases, we may rely on a single source for procurement of construction materials or other supplies in a given territory or region. Any disruption in the supply of certain materials could disrupt operations at our existing locations or significantly delay our opening of a new location, which may cause harm to our reputation and results of operations.
We incur costs relating to the maintenance, refurbishment and remediation of our spaces.
The terms of our occupancy agreements generally require that we ensure that the spaces we occupy are kept in good repair throughout the term of the occupancy agreement. The terms of our occupancy agreements may also require that we return the space to the landlord at the end of the term of the occupancy agreement in the same condition it was delivered to us, which, in such instances, will require removing all fixtures and improvements to the space. The costs associated with this maintenance, removal and repair work may be significant.
We also anticipate that we will be required to periodically refurbish our spaces to keep pace with the changing needs of our members. Extensive refurbishments may be more costly and time-consuming than we expect and may adversely affect our results of operations and financial condition. Our member experience may be adversely affected if extensive refurbishments disrupt our operations at our locations.
Our growth and success depends on our ability to maintain the value and reputation of our brand and the success of our strategic partnerships .
Our brand is integral to our business as well as to the implementation of our strategies for expanding our business. In January 2019, we launched a global rebranding effort that may require significant resources and expenses and may affect our ability to attract and retain members, all of which may have a material adverse effect on our business or results of operations.
Maintaining, promoting and positioning our brand will depend largely on our ability to provide a consistently high quality member experience and on our marketing and community-building efforts. To the extent our locations or product or service offerings are perceived to be of low quality or otherwise are not compelling to new and existing members, our ability to maintain a positive brand reputation may be adversely affected.
In addition, failure by third parties on whom we rely but whose actions we cannot control, such as general contractors and construction managers who oversee our construction activities or facilities management staff, to uphold a high standard of workmanship, ethics, conduct and legal compliance could subject us to reputational harm based on their association with us and our brand. As we pursue our growth strategies of entering into joint ventures, revenue-sharing arrangements and other partnerships with local partners in non-U.S. jurisdictions, such as through ChinaCo, JapanCo, PacificCo and IndiaCo, we become increasingly dependent on third parties whose actions we cannot control. In connection with these joint ventures and other partnerships, we have entered into certain agreements that provide our partners with exclusivity or other preemptive rights that may limit our ability to pursue business opportunities in the manner that we desire.
We receive a high degree of media coverage domestically and internationally and we believe that much of our reputation depends on word-of-mouth and other non-paid sources of opinion, including on the internet. Unfavorable publicity or consumer perception or experience of our spaces, practices, or product or service offerings could adversely affect our reputation, resulting in difficulties in attracting and retaining members and business partners, and limiting the success of our community-building efforts and the range of products and services we are able to offer.
Historically, many of our members have signed up for memberships because of positive word-of-mouth referrals by existing members, which has reduced our need to rely on traditional marketing efforts. To the extent that we are unable to maintain a positive brand reputation organically, we may need to rely more heavily on traditional marketing efforts to attract new members, which would increase our marketing expenses both in absolute terms and as a percentage of our member acquisition costs.
If our employees, members of our community or other people who enter our spaces act badly, our business and our reputation may be harmed.
Our emphasis on our values makes our reputation particularly sensitive to allegations of violations of community rules or applicable laws by our members, employees or other people who enter our spaces. While we verify the identity of any individual interested in joining our community, we do not conduct extensive background checks or otherwise extensively vet potential members prior to entering into membership agreements that provide them access to our locations. If our members,

23



employees or other people violate our policies or engage in illegal or unethical behavior, or are perceived to do so, we may be the subject of negative publicity and our reputation may be harmed. These bad acts may also encourage existing members to leave our locations and make it more difficult to recruit new members at that location, which would adversely impact our results of operations for the affected location.
If our pricing and related promotional and marketing plans are not effective, our business and prospects may be negatively affected.
Our business and prospects depend on the impact of pricing and related promotional and marketing plans and our ability to adjust these plans to respond quickly to economic and competitive conditions. If our pricing and related promotional and marketing plans are not successful, or are not as successful as those of competitors, our revenue, membership count and market share could decrease, thereby adversely impacting our results of operations.
We may invest or use the proceeds of this offering in ways which may not yield a return.
Our mission and values are integral to everything we do, and many of our strategic and investment decisions are geared toward improving the experience of our members and the attractiveness of our community. While we believe that pursuing these goals will produce benefits to our business in the long-term, these decisions may adversely impact our short- or medium-term operating results and the long-term benefits that we expect to result from these initiatives may not materialize within the timeframe we expect or at all, which could harm our business and financial results. Investors in this offering will need to rely upon the judgment of our management with respect to the use of proceeds from this offering.
We may be unable to adequately protect or prevent unauthorized use of our trademarks and other proprietary rights and we may be prevented by third parties from using or registering our trademarks or other intellectual property.
To protect our trademarks and other proprietary rights, we rely and expect to continue to rely on a combination of protective agreements with our team members and third parties (including local or other strategic partners we may do business with), physical and electronic security measures, and trademark, copyright, patent and trade secret protection laws. In certain jurisdictions, rights in trademarks are derived from registration of the trademark. We may not have trademark rights in a jurisdiction where our trademarks are not registered, including with respect to any new brands and existing brands associated with new product lines. We have obtained a strategic set of trademark, copyright and patent applications or registrations in the United States and other jurisdictions and have filed, and we expect to file from time to time, additional trademark, copyright and patent applications. Nevertheless, these applications may not proceed to registration or issuance and in any event may not be comprehensive (particularly with respect to non-U.S. jurisdictions), third parties may challenge any trademarks, copyrights or patents issued to or held by us, the agreements (including license agreements with local or other strategic partners) and security measures we have in place may be inadequate or otherwise fail to effectively accomplish their protective purposes, third parties may infringe or misappropriate our intellectual property rights, and we may not be successful in asserting intellectual property rights against third parties. Third parties may also take the position that we are infringing their rights, and we may not be successful in defending these claims. For example, we have received correspondence from third parties asserting potential claims of trademark infringement with respect to some of our WE names and trademarks. We dispute these assertions. Additionally, we may not be able to enforce or defend our proprietary rights or prevent infringement or misappropriation without substantial expense to us and a significant diversion of management time and attention from our business strategy.
We currently hold various domain names relating to our brand, most importantly wework.com, we.co, wegrow.com and welive.com, as well as several other @we and @wework social media handles. Competitors and others could attempt to capitalize on our brand recognition by using domain names or social media handles similar to those we hold. We may be unable, without significant cost or at all, to maintain or protect our use of domain names and social media handles or prevent third parties from acquiring domain names or social media handles that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights in our domain names.
If the measures we have taken to protect our proprietary rights are inadequate to prevent unauthorized use or misappropriation by third parties or such rights are diminished or we are prevented from using intellectual property due to successful third-party challenges, the value of our brand and other intangible assets may be diminished and our business and results of operations may be adversely affected.

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We rely on a combination of proprietary and third-party technology systems to support our business and member experience, and, if these systems experience difficulties, our business, financial condition, results of operations and prospects may be materially adversely affected.
We use a combination of proprietary technology and technology provided by third-party service providers to support our business and our member experience. For example, the WeWork app, which we developed in-house but which incorporates third-party and open source software where appropriate, connects local communities and develops and deepens connections among our members, both at particular spaces and across our global network.
We also use technology of third-party service providers to help manage the daily operations of our business. For example, we rely on our own internal systems as well as those of third-party service providers to process membership payments and other payments from our members. Our products and services may not continue to be supported by the applicable third-party service providers on commercially reasonable terms or at all, and we may not be able to attract and retain sufficiently skilled and experienced technical or operations personnel and third-party contractors to operate and maintain these technologies and systems. Moreover, we may be subject to claims by third parties who maintain that our service providers’ technology infringes the third party’s intellectual property rights. Although our agreements with our third-party service providers often contain indemnities in our favor with respect to these eventualities, we may not be indemnified for these claims or we may not be successful in obtaining indemnification to which we are entitled.
To the extent we experience difficulties in the operation of technologies and systems we use to manage the daily operations of our business or that we make available to our members, our ability to operate our business, retain existing members and attract new members may be impaired. We may not be able to attract and retain sufficiently skilled and experienced technical or operations personnel and third-party contractors to operate and maintain these technologies and systems, and our current product and service offerings may not continue to be, and new product and service offerings may not be, supported by the applicable third-party service providers on commercially reasonable terms or at all. Also, any harm to our members’ personal computers or other devices caused by our software, such as the WeWork app, or other sources of harm, such as hackers or computer viruses, could have an adverse effect on the member experience, our reputation and our results of operations and financial condition.
If our proprietary information and/or member data we collect and store, particularly billing and personal data, were to be accessed by unauthorized persons, our reputation, competitive advantage and relationships with our members could be harmed and our business could be materially adversely affected.
We generate significant amounts of proprietary, sensitive and otherwise confidential information relating to our business and operations, and we collect, store and process confidential and personal data regarding our members, including member names and billing data. Our proprietary information and member data is maintained on our own systems as well as the systems of third-party service providers.
Similar to other companies, our information technology systems face the threat of cyber-attacks, such as security breaches, phishing scams, malware and denial-of-service attacks. Our systems or the systems of our third-party service providers could experience unauthorized intrusions or inadvertent data breaches, which could result in the exposure or destruction of our proprietary information and/or members’ data.
Because techniques used to obtain unauthorized access to systems or sabotage systems change frequently and may not be known until launched against us or our service providers, we and they may be unable to anticipate these attacks or implement adequate preventative measures. In addition, any party who is able to illicitly obtain identification and password credentials could potentially gain unauthorized access to our systems or the systems of our third-party service providers. If any such event occurs, we may have to spend significant capital and other resources to notify affected individuals, regulators and others as required under applicable law, mitigate the impact of the event and develop and implement protections to prevent future events of that nature from occurring. From time to time, employees make mistakes with respect to security policies that are not always immediately detected by compliance policies and procedures. These can include errors in software implementation or a failure to follow protocols and patch systems. Employee errors, even if promptly discovered and remediated, may disrupt operations or result in unauthorized disclosure of confidential information. We have experienced unauthorized breaches of our systems prior to this offering, which we believe did not trigger any legal notification obligations or have a material effect on our business.
If a data security incident occurs, or is perceived to occur, we may be the subject of negative publicity and the perception of the effectiveness of our security measures and our reputation may be harmed, which could damage our relationships and result in the loss of existing or potential members and adversely affect our results of operations and financial condition. In

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addition, even if there is no compromise of member information, we could incur significant regulatory fines, be the subject of litigation or face other claims. In addition, our insurance coverage may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks and other related data and system incidents.
Although we expect to become Payment Card Industry Data Security Standard (PCI DSS) compliant in 2019, our practices with respect to this type of information are evolving and do not yet fully comply with that industry standard and other applicable guidelines. Additionally, if new operating rules or interpretations of existing rules are adopted regarding the processing of credit cards that we are unable to comply with, we could lose the ability to give members the option to make electronic payments, which could result in the loss of existing or potential members and adversely affect our business.
Our reputation, competitive advantage, financial position and relationships with our members could be materially harmed if we are unable to comply with complex and evolving data protection laws and regulations, and the costs and resources required to achieve compliance may have a materially adverse impact on our business.
The collection, protection and use of personal data are governed by privacy laws and regulations enacted in the United States, Europe, Asia and other jurisdictions around the world in which we operate. These laws and regulations continue to evolve and may be inconsistent from one jurisdiction to another. Compliance with applicable privacy laws and regulations may increase our costs of doing business and adversely impact our ability to conduct our business and market our products and services to our members and potential members.
For example, we are subject to the European Union’s General Data Protection Regulation (“GDPR”) in a number of jurisdictions. The GDPR imposes significant new obligations, and compliance with these obligations depends in part on how particular regulators apply and interpret them. If we fail to comply with the GDPR, or if regulators assert we have failed to comply with the GDPR, it may lead to regulatory enforcement actions, which can result in monetary penalties of up to 4% of worldwide revenue, private lawsuits and/or reputational damage. Further, any U.K. exit from the European Union will increase uncertainty regarding applicable laws and regulations pending more clarity on the terms of that exit.
Additionally, in June 2018, California passed the California Consumer Privacy Act (“CCPA”), which provides new data privacy rights for consumers and new operational requirements for companies, effective in 2020. The CCPA creates a private right of action that could lead to consumer class actions and other litigation against us, with statutory damages of up to $750 per violation. The California Attorney General will also maintain authority to enforce the CCPA and will be permitted to seek civil penalties for intentional violations of the CCPA of up to $7,500 per violation. Other U.S. states and the U.S. Congress are in the process of considering legislation similar to California’s legislation. If we fail to comply with the CCPA or other federal or state data protection laws, or if regulators or plaintiffs assert we have failed to comply with them, it may lead to regulatory enforcement actions, private lawsuits and/or reputational damage.
We are also subject to China’s Cybersecurity Law, which took effect in 2017. China’s Cybersecurity Law and its implementing regulations lay out requirements on cybersecurity, data localization and data protection, subjecting many previously under-regulated or unregulated activities to government scrutiny under provisions that have not yet been subject to public interpretation by enforcement authorities. Likewise, in Canada we are subject to Canada’s Personal Information and Protection of Electronic Documents Act (“PIPEDA”). PIPEDA provides Canadian residents with privacy protections and sets out rules for how companies may collect, use and disclose personal information in the course of commercial activities. The costs of compliance with, and other burdens imposed by, these and other international data privacy and security laws may limit the use and adoption of our products and services and could have a materially adverse impact on our business. Any failure or perceived failure by us or third-party service-providers to comply with international data privacy and security laws may lead to regulatory enforcement actions, fines, private lawsuits or reputational damage.
Our future success depends in large part on the continued service of Adam Neumann, our Co-Founder and Chief Executive Officer, which cannot be ensured or guaranteed.
Adam Neumann, our Co-Founder and Chief Executive Officer, is critical to our operations. He is key to setting our strategic direction and the strength of our culture. Adam provides a unique combination of skills ranging from vision to real estate acumen to communications with investors, members and employees. We have no employment agreement in place with Adam, and there can be no assurance that Adam will continue to work for us or serve our interests in any capacity.

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Adam Neumann will control a majority of our voting stock upon completion of this offering and may also pursue corporate opportunities independent of us that could present potential conflicts with our and our stockholders’ interests.
Following the completion of this offering, as a result of his share ownership, together with his voting arrangements with certain stockholders, Adam Neumann, our Co-Founder and Chief Executive Officer, will be able to exercise voting control with respect to an aggregate of           shares of our Class A common stock and           shares of our Class B common stock, representing approximately           % of the total voting power of our outstanding capital stock (or approximately           % of the total voting power of our outstanding capital stock if the underwriters exercise in full their option to purchase additional shares of our Class A common stock). As a result, Adam will continue to have the ability to control significant corporate activities, including:
the election of our board of directors and, through our board of directors, decision-making with respect to our business strategy and company policies, and the appointment and removal of our corporate officers;
acquisitions and dispositions of businesses and assets, mergers and other business combinations;
issuances of shares of our capital stock; and
payment of dividends.
Adam’s voting control will limit the ability of other stockholders to influence corporate activities and, as a result, we may take actions that stockholders other than Adam do not view as beneficial. Adam’s voting control may also inhibit transactions involving a change of control of our company, including transactions in which you as a holder of our Class A common stock might otherwise receive a premium for your shares. As a stockholder, even a controlling stockholder, Adam is entitled to vote his shares, and shares over which he has voting control as a result of voting arrangements, in his own interests, which may not be the same as, or may conflict with, the interests of our other stockholders. For a description of the voting arrangements affecting our capital stock, see “ Description of capital stock Voting arrangements ”.
Further, following the completion of this offering, Softbank and its affiliates will beneficially own             shares of our Class A common stock representing approximately             % of the total voting power of our outstanding capital stock (or approximately             % of the total voting power of our outstanding capital stock if the underwriters exercise in full their option to purchase additional shares of our Class A common stock).  Softbank and its affiliates have also entered into certain investment agreements as a result of which they may acquire additional shares of our capital stock in the future. Therefore, even if Adam were to sell a significant number of his shares of our voting stock, the voting power of our outstanding capital stock may continue to be significantly concentrated and the ability of others to influence our corporate matters may continue to be significantly limited.
We are a “controlled company” as defined in the            rules, and are able to rely on exemptions from certain corporate governance requirements that provide protection to stockholders of companies that are not controlled companies.
Upon completion of this offering, Adam Neumann will own or control more than 50% of the total voting power of our capital stock and, as such, we will be a controlled company under the rules of the            . As a controlled company, we may take advantage of exemptions under the rules of the           with respect to certain corporate governance requirements, such as the requirements that (1) a majority of our board of directors be independent directors and (2) we have a compensation committee composed entirely of independent directors.
For so long as we are a controlled company, you will not have the same protections afforded to stockholders of companies that are subject to these and all of the other corporate governance requirements of the rules of the           .
We plan to continue expanding our business into markets outside the United States, which will subject us to risks associated with operating in foreign jurisdictions .
Expanding our operations into markets outside the United States has been an important part of our growth strategy. For example, for the year ended December 31, 2018, 59% of our revenue was attributable to our operations in the United States, and 41% of our revenue was attributable to our operations elsewhere, compared with 69% and 31% for the year ended December 31, 2017. We expect to continue to expand our operations in markets outside the United States in the coming years.
While we have already expanded our operations to a number of non-U.S. markets, the success of our expansion into additional non-U.S. markets will depend on our ability to attract local members. Our WeWork offering may not appeal to

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potential members in all territories in the same way it appeals to our members in territories where we currently operate. In addition, local competitors may have a substantial competitive advantage over us in a given territory or market because of their greater understanding of, and focus on, customers in that territory or market, as well as their more established local infrastructure and brands. We may also be unable to hire, train, retain and manage the personnel we require in order to manage our international operations effectively, on a timely basis or at all, which may limit our growth in these markets.
Operating in international markets requires significant resources and management attention and subjects us to regulatory, economic and political risks that may be different from and incremental to those that we face in the United States, including:
the need to adapt the design and features of our spaces and services to accommodate specific cultural norms and language differences;
difficulties in understanding and complying with local laws and regulations in foreign jurisdictions, including local labor laws, tax laws, environmental regulations and rules and regulations related to occupancy of our workspaces;
varying local building codes and regulations relating to building design, construction, safety, environmental protection and related matters;
significant reliance on third parties with whom we may engage in joint ventures, strategic alliances or ordinary course contracting relationships whose interests and incentives may be adverse to or different from ours or may be unknown to us;
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 anticorruption 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
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 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.
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), Flatiron School (a software programming education platform), Conductor (a marketing technology platform), Teem (a space scheduling and workplace analytics platform) and Euclid (a spatial-analytics 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 through the Real Estate Fund and as we launch and grow our ARK real estate investment 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

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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;
unanticipated expenses incurred or charges to earnings based on unknown circumstances or liabilities;
failure to realize the synergies and other benefits we expect from the acquisition, at the pace we anticipate or at all;
general economic conditions in the markets in which the acquired business operates; and
difficulties encountered in conducting business in markets where we have limited experience and expertise.
If we are unable to successfully complete and integrate our strategic acquisitions in a timely manner, our business, growth strategies and results of operations could be adversely affected.
We have entered into certain agreements that may limit our ability to directly acquire ownership interests in properties in the near term, and our control and joint ownership of certain properties with third-party investors may create conflicts of interest.
We control ARK, our newly launched real estate investment platform, through our ownership of its general partner and investment manager. ARK’s master fund is focused on real estate assets that we and ARK believe would benefit from WeWork’s occupancy. In connection with the formation of ARK, we agreed that ARK would be the exclusive general partner and investment manager for any real estate investment vehicle managed by, or otherwise affiliated with, WeWork. We also agreed to make commercial real estate and other real estate-related investment opportunities that meet ARK’s investment mandate available to ARK on a first look basis. Because of these requirements, which are in effect at least until there are no investment vehicles managed or sponsored by ARK that are actively investing, we may be required to acquire ownership interests in properties through ARK that we otherwise could have acquired through one of our operating subsidiaries, which may prevent us from realizing the full benefit of certain attractive investment opportunities and thereby adversely affect our growth prospects.
Additionally, ARK focuses on investing in or owning properties that we and ARK believe would benefit from WeWork’s occupancy, and we expect a WeWork entity to occupy a meaningful portion of each property acquired by ARK. Our ownership interest in ARK may create situations where our interests with respect to the exercise of ARK’s management rights in respect of its investments, as well as ARK’s duties to limited partners in ARK-managed investment vehicles, may be in conflict with our own independent economic interests as a tenant and operator of WeWork locations. For example, conflicts may arise in connection with decisions regarding the structure and terms of the occupancy agreements entered into between us and ARK, tenant improvement allowances or guarantee or termination provisions. Conflicts of interest may also arise in connection with the exercise of contractual remedies under such occupancy agreements , such as the use of offsets for unreimbursed tenant improvement allowances or the treatment of events of default.
Our ownership interest in ARK may impact our results of operations.
Although investments through ARK will mostly be capitalized by third-party equity capital commitments from limited partners or similar members, ARK’s general partner and its investment manager are our subsidiaries and, accordingly any investment in real estate through ARK will be reflected in our consolidated financial statements. The inclusion of particularly large ARK transactions, including any debt financing arrangements in respect of any of those transactions, may affect the comparability of our results of operations from period to period.
Additionally, investments through ARK may require that we incur or guarantee debt, which we expect will generally be through loans secured by assets or properties that ARK acquires. In particular, an entity in which we hold an interest has incurred a secured loan to purchase certain property, which we have leased from that entity. The secured loan is recourse to us in certain limited circumstances, and we also provided performance guarantees relating to the development of that property.

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Our business will suffer if we are unable to hire, develop, retain and motivate highly skilled and dedicated team members to support our mission.
We strive to attract and motivate team members who share a dedication to the member community and our vision, but we may not be successful in doing so. Our success depends on our ability to identify, hire, develop, motivate, retain and integrate highly qualified personnel dedicated to our mission for all areas of our business. Our U.S.-based team members, including most of our senior management, work for us on an at-will basis. Other companies, including competitors, may be successful in recruiting and hiring team members away from us, and it may be difficult for us to find suitable replacements on a timely basis, on competitive terms or at all. If we are unable to effectively manage our hiring needs or successfully integrate new hires, our employee morale, productivity and retention could suffer, which could adversely affect our business, financial condition and results of operations. Additionally, the success of each of our new and existing locations depends on our ability to hire and retain dedicated community managers and team members. As we enter new geographic markets and launch new products and services, we may experience difficulty attracting employees in the areas we require who are dedicated to our mission.
We may not be able to compete effectively with others.
Our WeWork offering has few barriers to entry. While we consider ourselves to be a leader in the “Space-as-a-Service” sector, with core competencies in sourcing, design and operating new locations, our reported success may encourage people to launch competing flexible workspace offerings. If new companies decide to launch competing solutions in the markets in which we operate, or if any existing competitors obtain a large-scale capital investment, we may face increased competition for members.
In addition, some of the business services we offer or plan to offer are provided by one or more large, national or international companies, as well as by regional and local companies of varying sizes and resources, some of which may have accumulated substantial goodwill in their markets. Some of our competitors may also be better capitalized than we are, have access to better lease terms than we do, have operations in more jurisdictions than we do or be able or willing to provide services at a lower price than we are. Our inability to compete effectively in securing new or repeat business could hinder our growth or adversely impact our operating results.
Our limited operating history and evolving business make it difficult to evaluate our current business and future prospects.
Our limited operating history and the growth of our business make it difficult to accurately assess our future prospects. It may not be possible to discern fully the economic and other business trends that we are subject to. Elements of our business strategy are new and subject to ongoing development as our operations mature. In addition, it may be difficult to evaluate our business because there are few other companies that offer the same or a similar range of product and service offerings as we do.
Certain of the measures we use to evaluate our financial and operating performance are subject to inherent challenges in measurement and may be impacted by subjective location-driven determinations and not necessarily by changes in our business.
We track certain operational metrics, including key performance indicators and key financial measures such as Desks, Memberships and Enterprise Membership Percentage, with internal systems and tools that are not independently verified by any third party. Our internal systems and tools have a number of limitations, and our methodologies for tracking these metrics may change over time. In addition, limitations or errors with respect to how we measure data or with respect to the data that we measure may affect our understanding of certain details of our business, which could affect our long-term strategies. If the internal systems and tools we use to track these metrics understate or overstate performance or contain algorithmic or other technical errors, the data we report may not be accurate. If investors do not perceive our operating metrics to be accurate, or if we discover material inaccuracies with respect to these figures, our reputation may be significantly harmed, and our results of operations and financial condition could be adversely affected.
While the metrics presented in this prospectus are based on what we believe to be reasonable assumptions and estimates, there are inherent challenges in measuring how our offerings are used across our global physical platform. For example, certain of the key performance indicators and other key financial measures that we use to assess the performance of our business are derived from estimated Desks or the number of Desks added over a given period of time. We define “Desks” as the estimated number of physical WeWork workspaces available for sale and immediate use by members, which includes the estimated capacity of “hot desks” at each location. Hot desk capacity can vary on a location-by-location basis and is estimated on a location-by-location basis by a community manager based on the characteristics and distinct local personality

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of the relevant community and the demand for hot desks in the location, and a community manager in a given location may choose to change the hot desk capacity at any time. Our core competency is in evaluating and programming the space available for efficient use, and we encourage community managers to actively consider what would be best for their particular location. While changes in hot desk capacity would impact the comparability of certain of the key performance indicators that we use to assess the performance of our business, hot desk capacity has remained a relatively stable portion of our overall Desks, at a rate of less than 5%, and overall Desks are primarily impacted by new location openings and expanding our presence in existing locations through phased openings.
Our Committed Revenue Backlog may not be indicative of future revenues.
Our “Committed Revenue Backlog” represents total non-cancelable contractual commitments, net of discounts, remaining under agreements entered into as of a given date, which will be recognized as revenue subsequent to such date. For membership agreements with month-to-month commitments commencing in a future month, the contractual commitment recorded within backlog is one month of revenue. Existing month-to-month membership agreements are not included in backlog.
As of December 31, 2018, our Committed Revenue Backlog was $2.6 billion. Revenue reflected in our Committed Revenue Backlog may be affected by unexpected cancellations or renegotiations. Committed Revenue Backlog is not necessarily indicative of future earnings or revenues and we cannot assure that we will ultimately realize our Committed Revenue Backlog.
If our employees were to engage in a strike or other work stoppage or interruption, our business, results of operations, financial condition and liquidity could be materially adversely affected.
Although we believe that our relations with our employees are good, if disputes with our employees arise, or if our workers engage in a strike or other work stoppage or interruption, we could experience a significant disruption of, or inefficiencies in, our operations or incur higher labor costs, which could have a material adverse effect on our business, results of operations, financial condition and liquidity. In addition, some of our employees outside of the United States are represented or may seek to be represented by a labor union or workers’ council.
We may be subject to litigation and other legal proceedings which could adversely affect our business, financial condition and results of operations.
We have in the past been, are currently and may in the future become involved in private actions, class actions, investigations and various other legal proceedings, including from members, employees, commercial partners, third-party license holders, competitors and government agencies, among others. The result of any such litigation, investigations and legal proceedings are inherently unpredictable and may be expensive. Claims against us, whether meritorious or not, could require significant amounts of management time and corporate resources to defend and could be harmful to our reputation. If any of these legal proceedings were to be determined adversely to us, or if we were to enter into settlement arrangements, we could be exposed to monetary damages or be forced to change the way in which we operate our business, which could have an adverse effect on our business, financial condition and results of operations.
Our business could be adversely affected by natural disasters, public health crises, political crises or other unexpected events for which we may not be sufficiently insured.
Natural disasters and other adverse weather and climate conditions, public health crises, political crises such as terrorist attacks, war and other political instability, or other unexpected events could disrupt our operations, damage one or more of our locations, or prevent short- or long-term access to one or more of our locations. Many of our spaces are located in the vicinity of disaster zones, including flood zones in New York City and potentially active earthquake faults in the San Francisco Bay Area and Mexico City. Many of our locations are concentrated in metropolitan areas or located in or near prominent buildings, which may be the target of terrorist attacks. Although we carry comprehensive liability, fire, extended coverage and business interruption insurance with respect to our spaces, there are certain types of losses that we do not insure against because they are either uninsurable or not insurable on commercially reasonable terms. Should an uninsured event or a loss in excess of our insured limits occur, we could lose some or all of the capital invested in, and anticipated future revenues from, the affected spaces, and we may nevertheless continue to be subject to obligations related to those spaces.

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Economic and political instability and potential unfavorable changes in laws and regulations in international markets could adversely affect our results of operations and financial condition.
Our business may be affected by political instability and potential unfavorable changes in laws and regulations in international markets in which we operate. For example, the United Kingdom’s anticipated exit from the European Union, known as “Brexit,” could impact our operations in the United Kingdom in the short term through volatility in the British Pound as the United Kingdom negotiates its anticipated exit from the European Union. In the longer term, any impact from Brexit on our operations in the United Kingdom will depend, in part, on the outcome of tariff, trade, regulatory and other negotiations. Additionally, there are concerns regarding potential changes in the future relationship between the United States and various other countries, most significantly China, with respect to trade policies, treaties, government regulations and tariffs. It remains unclear how the United States or foreign governments will act with respect to tariffs, international trade agreements and policies. The implementation by China or other countries of higher tariffs, capital controls, new adverse trade policies or other barriers to entry could have an adverse impact on our business, financial condition and results of operations.
Risks relating to our financial condition
Our ability to draw amounts under our Senior Credit Facility depends on our compliance with certain financial covenants and on our level of unrestricted and unencumbered cash.
Our Bank Facilities (as defined herein) are important sources of our liquidity. Our ability to draw amounts and to issue letters of credit under the Senior Credit Facility depends on our compliance with certain financial covenants and our maintenance of minimum levels of total consolidated cash.
We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
Our ability to make scheduled payments or refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able to effect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. The agreements that govern our indebtedness restrict our ability to dispose of certain assets and use the proceeds from those dispositions and may also restrict our ability to raise debt or certain types of equity capital to be used to repay other indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due. See “Description of indebtedness”.
In addition, we conduct a substantial portion of our operations through our subsidiaries. Accordingly, repayment of our indebtedness is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise. In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness.
If we cannot make scheduled payments on our debt, we will be in default and, as a result, lenders under any of our existing and future indebtedness could declare all outstanding principal and interest to be due and payable, the lenders under our debt instruments could terminate their commitments to loan money, our secured lenders could foreclose against the assets securing such borrowings and we could be forced into bankruptcy or liquidation.
We may require additional capital, which may not be available on terms acceptable to us or at all.
We incurred net losses in the years ended December 31, 2016, 2017 and 2018, and w e do not intend to achieve positive GAAP net income in the near term . As a result, we may require additional financing. Our ability to obtain financing will depend on, among other things, our development efforts, business plans, operating performance, investor demand and the condition of the capital markets at the time we seek financing. To the extent we use available funds or are unable to draw on our Bank Facilities, we may need to raise additional funds, which may not be available to us on favorable terms when

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required, or at all. In the event that we are unable to obtain additional financing on favorable terms, our interest expense and principal repayment requirements could increase significantly, which could harm our business, revenue and financial results.
We incur significant costs related to the development of our spaces, which we may be unable to recover in a timely manner or at all.
At each of our locations, we create beautiful spaces that inspire our members to create, collaborate and connect. Development of a space for members typically takes several months from the date we take possession of the space under the relevant occupancy agreement to the opening date. During this time, we incur substantial upfront costs without recognizing any revenues from the space.
With respect to sales to Enterprise Member Organizations, there are a number of different products we offer. To the extent Enterprise Member Organizations require customized spaces, we generally enter into multi-year agreements that tend to provide additional Committed Revenue Backlog to us to help offset any increased upfront costs related to the development of these spaces. In addition, as we go forward, we intend to continue to finance upfront development costs by attempting to secure cost reimbursements from landlords, focusing on management agreements and other partnerships where landlords finance significant development costs for our locations, and securing funding through capital markets and other financing transactions. We expect the capital expenditures associated with the development of our spaces to continue to be one of the primary costs of our business. See “Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources”. If we are unable to complete our development and construction activities for any reason, including an inability to secure adequate funding, or conditions in the real estate market or the broader economy change in ways that are unfavorable, we may be unable to recover these costs in a timely manner or at all.
Our development activities are also subject to cost and schedule overruns as a result of many factors, some of which are beyond our control and ability to foresee, including increases in the cost of materials and labor. In addition, while many of our existing occupancy agreements provide for reimbursement by the landlord or building owner of a portion of the construction and development expenses we incur, our landlords or building owners may not reimburse us for these expenses in a timely manner and we may not continue to be granted these provisions in future occupancy agreements that we negotiate. To be eligible for reimbursement of these development expenses, we are also required to compile invoices, lien releases and other paperwork from our contractors, which is a time-consuming process that requires the cooperation of third parties whom we do not control. We may make errors in pursuing these reimbursement entitlements in accordance with the strict requirements of the landlords or building owners we deal with. In addition, we are subject to counterparty risk with respect to these landlords and building owners.
Changes to accounting rules or regulations and our assumptions, estimates and judgments may adversely affect the reporting of our business, our financial condition and our results of operations.
Our consolidated financial statements are prepared in accordance with U.S. GAAP. New accounting rules or regulations and varying interpretations of existing accounting rules or regulations have occurred and may occur in the future. For example, in February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), codified as ASC Topic 842, Leases. This update requires a lessee to recognize on its balance sheet right-of-use assets and lease liabilities for any leases with a lease term of more than twelve months. Long-term l eases are our primary means of securing real estate to deliver “Space-as-a-Service” to our members. While we are currently evaluating the impact ASU 2016-02 will have on our consolidated financial position, results of operations and cash flows, we expect that our adoption of ASU 2016-02 will have a material impact on our consolidated balance sheet. As of December 31, 2018, future minimum rental payments for our operating leases totaled $34.0 billion . We expect that the majority of these operating leases will be impacted by ASU 2016-02, resulting in an increase in right-of-use assets and lease liabilities based on the present value of future lease payments. This and other f uture changes to accounting rules or regulations could also have a material adverse effect on the reporting of our business, financial condition and results of operations.
Additionally, our assumptions, estimates and judgments related to complex accounting matters could significantly affect our results of operations. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for judgments about the carrying values of assets, liabilities and equity, as well as the amount of revenue and expenses that are not readily apparent from other sources. Our financial condition and results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions.

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Fluctuations in exchange rates may adversely affect us.
Our international businesses typically earn revenue and incur expenses in local currencies, primarily the British Pound, Euro and Chinese Yuan. For example, we earned approximately 41% and 31% of our revenues from subsidiaries whose functional currency is not the U.S. dollar for the years ended December 31, 2018 and 2017, respectively. As foreign currency exchange rates change, translation of the statements of operations of our international businesses into U.S. dollars affects year-over-year comparability of our operating results.
Risks relating to laws and regulations affecting our business
Our extensive foreign operations and contacts with landlords and other parties in a variety of countries subject us to risks under U.S. and other anti-corruption laws, as well as applicable export controls and economic sanctions.
Under the Foreign Corrupt Practices Act (the “FCPA”) and similar anti-corruption laws and local laws prohibiting certain corrupt payments to government officials or agents, we may become liable for the actions of our directors, officers, employees, agents or other strategic or local partners or representatives over whom we may have little actual control. We are continuously engaged in sourcing and negotiating new locations around the world, and certain of the landlords, real estate agents or other parties with whom we interact may be government officials or agents, even without our knowledge. As we increase our international sales and business operations, our contacts with foreign public officials, and therefore our potential exposure to liability under laws such as the FCPA, are likely to increase.
Additionally, as we pursue our growth strategy of entering into joint ventures, revenue-sharing arrangements and other partnerships with local partners in non-U.S. jurisdictions, our use of intermediaries, and therefore our potential exposure to liability under laws such as the FCPA, are likely to increase.
Similarly, our international sales and business operations expose us to potential liability under a wide variety of U.S. and international laws and regulations relating to economic sanctions and export control, such as those administered by the U.S. Office of Foreign Assets Control. Failure to comply with these laws and regulations could result in substantial fines, sanctions, civil or criminal penalties, competitive or reputational harm, litigation or regulatory action and other consequences that might adversely affect our results of operations and our financial condition.
Our business is subject to a variety of U.S. and non-U.S. laws, many of which are evolving and could limit or otherwise negatively affect our ability to operate our business.
Laws and regulations are continuously evolving, and compliance is costly and can require changes to our business practices and significant management time and effort. It is not always clear how existing laws apply to our business model. We strive to comply with all applicable laws, but the scope and interpretation of the laws that are or may be applicable to us is often uncertain and may conflict across jurisdictions.
Existing local building codes and regulations, and any future changes to these codes or regulations, may increase our development costs or delay the development of our spaces.
Our development activities are subject to local, state and federal laws, as well as the oversight and regulation in accordance with local building codes and regulations relating to building design, construction, safety, environmental protection and related matters. We are responsible for complying with the requirements of individual jurisdictions and must ensure that our development activities comply with varying standards by jurisdiction. Any existing or new government regulations or ordinances that relate to our development activities may result in significant additional expenses to us and, as a result, might adversely affect our results of operations.
Changes in tax laws and unanticipated tax liabilities could adversely affect the taxes the Company pays and therefore its financial condition and results of operations.
As a global company, we are subject to taxation in numerous countries, states and other jurisdictions. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political and other conditions, and significant judgment is required in applying the relevant provisions of tax law.
If such law changes were to be adopted or if the tax authorities in the jurisdictions where we operate were to challenge our application of relevant provisions of applicable tax laws, we could be adversely affected.

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Risks relating to this offering and ownership of our Class A common stock
The dual class structure of our common stock has the effect of concentrating voting control with holders of our Class B common stock and limiting your ability to influence corporate matters.
Our Class B common stock has ten votes per share, whereas our Class A common stock, which is being offered by us in this offering, has one vote per share. When this offering is completed, our outstanding Class B common stock will represent           % of the total voting power of our outstanding capital stock (or           % of the total voting power of our outstanding capital stock if the underwriters exercise in full their option to purchase additional shares of our Class A common stock). Due to the ten-to-one voting ratio between our Class B common stock and Class A common stock, the holders of our Class B common stock collectively will continue to control a majority of the combined voting power of our capital stock, even when the outstanding shares of Class B common stock represent a small minority of the economic interest in our capital stock, and will be able to significantly influence matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transaction. This concentrated control will significantly limit your ability to influence corporate matters. In addition, if in the future we issue additional shares of Class B common stock, which carry ten votes per share, holders of shares of Class A common stock carrying one vote per share will have their voting interests diluted disproportionate to their economic dilution.
Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions. The conversion of Class B common stock to Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term. See “Description of capital stock” for descriptions of our Class A common stock and our Class B common stock and the rights associated with each.
The difference in the voting rights of our Class A common stock and our Class B common stock may harm the value and liquidity of our Class A common stock.
The difference in the voting rights of our Class A common stock and Class B common stock could harm the value of our Class A common stock to the extent that any investor or potential future purchaser of our Class A common stock ascribes value to the right of the holders of our Class B common stock to ten votes per share. The existence of two classes of common stock with voting rights could also result in less liquidity for either class of stock than if there were only one class of our common stock.
Our dual class structure may depress the trading price of our Class A common stock.
Our dual class structure may result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indexes. S&P Dow Jones and FTSE Russell have announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500. These changes exclude companies with multiple classes of shares of common stock from being added to these indices. In addition, several stockholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual class structure of our common stock may prevent the inclusion of our Class A common stock in these indices and may cause stockholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a less active trading market for our Class A common stock. Any actions or publications by stockholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A common stock.
Purchasers in this offering will experience immediate and substantial dilution in the book value of their investment.
The initial public offering price of our Class A common stock is substantially higher than the pro forma net tangible book value per share of our Class A common stock outstanding prior to this offering. Therefore, if you purchase our Class A common stock in this offering, you will incur an immediate substantial dilution of $           in pro forma net tangible book value per share from the price you paid (calculated based on the assumed initial public offering price of $           per share, which represents the midpoint of the estimated offering price range set forth on the cover of this prospectus). For additional information about the dilution that you will experience immediately upon completion of this offering, see “Dilution”.

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There has been no prior public market for our Class A common stock, the price of our Class A common stock may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price.
Prior to this offering, there has been no public market for shares of our Class A common stock. The initial public offering price of our Class A common stock was determined through negotiation between us and the underwriters. This price does not necessarily reflect the price at which investors in the market will be willing to buy and sell shares of our Class A common stock following completion of this offering. In addition, the market price of our Class A common stock following completion of this offering may be higher or lower than the initial public offering price. The market price of our Class A common stock following completion this offering will depend on a number of factors, many of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose part of your investment in our Class A common stock since you might be unable to sell your shares at or above the price you paid in this offering. Factors that could cause fluctuations in the market price of our Class A common stock include the following:
actual or anticipated changes in our operating results;
actual or anticipated developments in our industry or our business, our competitors’ businesses or the competitive landscape generally;
rumors and market speculation involving us or other companies in our industry;
additions or departures of key management or other personnel;
litigation or disputes involving us, our industry or both, or investigations by regulators into our operations or those of our competitors;
announced or completed acquisitions of businesses or technologies by us or our competitors;
new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
changes in accounting standards, policies, guidelines, interpretations or principles;
sales of shares of our stock by us, our insiders or our other stockholders;
the failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company or our failure to meet these estimates or the expectations of investors; and
general economic conditions and slow or negative growth in any of our significant markets.
The stock markets have experienced extreme volatility in recent years that has been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the market price of our Class A common stock. In the past, following periods of volatility in the market price of a company’s securities, class action litigation has often been instituted against the company. Any litigation of this type brought against us could result in substantial costs and a diversion of management’s attention and resources.
Our quarterly operating results may fluctuate, which could cause our stock price to decline.
Our quarterly operating results may fluctuate for a variety of reasons, many of which are beyond our control, including:
our success in retaining existing members and attracting new members, including our ability to adapt to rapidly evolving market trends and member preferences;
fluctuations in revenue generated from our members, including as a result of variability in our membership levels and use of our product and service offerings;
the amount and timing of our operating expenses;
the timing and success of openings of new spaces;
the impact of competitive developments in the markets in which we operate and our response to those developments;
economic and market conditions, particularly those affecting our industry; and

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other risks and factors described in this “Risk factors” section.
The occurrence of any one of the events contemplated above, or the cumulative effect of the occurrence of one or more of such factors, could cause our quarterly results to fluctuate significantly. As a result, quarterly comparisons of results may not be meaningful, and you should not rely on the historical results of one quarter as an indication of future performance, and interim period results are not necessarily indicative of the results for the full year.
An active trading market for our Class A common stock may never develop or be sustained.
We intend to apply to list our Class A common stock on the            under the symbol “WE”. However, we cannot assure you that an active trading market for our Class A common stock will develop on that exchange or elsewhere or, if developed, that any market will be sustained. Accordingly, we cannot assure you of the likelihood that an active trading market for our Class A common stock will develop or be maintained, the liquidity of any trading market, your ability to sell your shares of our Class A common stock when desired or the prices that you may obtain for your shares. An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to acquire other companies or technologies using our shares as consideration.
If equity research analysts publish unfavorable commentary or downgrade our Class A common stock, the price and trading volume of our Class A common stock could decline.
The trading market for our Class A common stock could be affected by whether equity research analysts publish research or reports about us and our business. We cannot predict at this time whether any research analysts will publish research and reports on us and our Class A common stock. If one or more equity analysts do cover us and our Class A common stock and publish research reports about us, the price or trading volume of our Class A common stock could decline if one or more securities analysts downgrade our Class A common stock or if those analysts issue other unfavorable commentary or cease publishing reports about us or our business.
Although we ceased to be an “emerging growth company,” we can continue to take advantage of certain reduced disclosure requirements in this registration statement, which may make our Class A common stock less attractive to investors.
We ceased to be an emerging growth company as defined in the JOBS Act on December 31, 2018. However, because we ceased to be an emerging growth company after we confidentially submitted our registration statement related to this offering to the SEC, we will be treated as an emerging growth company for certain purposes until the earlier of the date on which we complete this offering and December 31, 2019. As such, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies including reduced disclosure obligations regarding the provision of selected financial data and executive compensation arrangements. We cannot predict if investors will find our Class A common stock less attractive because we have relied on these exemptions. If some investors find our Class A common stock less attractive as a result, there may be less demand for our Class A common stock and the price that some investors are willing to pay for our Class A common stock may decrease.
We will incur increased costs and regulatory burden and devote substantial management time as a result of being a public company.
Prior to this offering, we were not subject to the continuous disclosure requirements of U.S. securities laws and the rules, regulations and policies of the                     . As a public company, we will incur increased legal, accounting and other costs not incurred as a private company. We will be subject to, among other things, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the corporate governance requirements found in the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and related rules and regulations of the SEC, as well as the rules and regulations implemented by the                     . We expect that compliance with these requirements will increase our legal, accounting and financial compliance costs and will make some activities more difficult, time consuming and costly. In addition, we expect that our management and other personnel will need to divert attention from operational and other business matters to devote substantial time to these public company requirements, which could adversely affect our business, financial condition and results of operations.
We have not yet determined whether our existing disclosure controls and internal controls over financial reporting are compliant with Section 404 of the Sarbanes-Oxley Act. Additionally, our current internal control systems and procedures may not be adequate to support our rapid growth. Any failure of our internal systems, controls and procedures could have an adverse effect on our stated results of operations and harm our reputation.
Pursuant to Section 404 of the Sarbanes-Oxley Act (“Section 404”) and the related rules adopted by the SEC and the Public Company Accounting Oversight Board, our management will be required to report on the effectiveness of our disclosure

37



controls and internal control over financial reporting, and our auditor will be required to deliver an attestation report on the effectiveness of our disclosure controls and internal control over financial reporting, starting with the second annual report that we file with the SEC after the completion of this offering. Because we are not currently required to comply with Section 404, we are not currently required to make an assessment of the effectiveness of our internal controls, or to deliver a report that assesses the effectiveness of our internal control over financial reporting. We have not yet determined whether our existing internal controls over financial reporting are compliant with Section 404. This process will require the investment of substantial time and resources, including by our Chief Financial Officer and other members of our senior management. In addition, we cannot predict the outcome of this determination and whether we will need to implement remedial actions. Management’s assessment of our internal control systems and procedures may identify weaknesses and conditions that need to be addressed or other matters that may raise concerns for investors. The determination and any remedial actions required could result in us incurring additional costs that we did not anticipate. Additionally, any actual or perceived weakness or condition that needs to be addressed in our internal control systems may have an adverse impact on our business.
Irrespective of compliance with Section 404, as we mature, we will need to further develop our internal control systems and procedures to keep pace with our rapid growth. Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. We are in the process of developing and implementing an enterprise risk management framework, but this development and implementation may not proceed smoothly or on our projected timetable, and this framework may not fully protect us against operational risks and losses.
We have made, and will continue to make, changes to our financial management control systems and other areas to manage our obligations as a public company, including corporate governance, corporate controls, disclosure controls and procedures and financial reporting and accounting systems. However, these and other measures that we might take may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis. If we fail to maintain effective systems, controls and procedures, including disclosure controls and internal controls over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations and prevent fraud could be adversely impacted. We may also experience higher than anticipated operating expenses, as well as higher independent auditor fees, during and after the implementation of these changes.
If we are unable to implement any of the changes to our internal control over financial reporting effectively or efficiently or are required to do so earlier than anticipated, it could adversely affect our operations, financial reporting and results of operations. Additionally, we do not expect that our internal control systems, even if timely and well established, will prevent all errors and all fraud. Internal control systems, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.
Our management will have broad discretion over the use of the proceeds we receive from this offering and might not use them effectively, which could affect our results of operations and cause our share price to decline.
Our management will have broad discretion to use our net proceeds from this offering, and you will be relying on the judgment of our management regarding the application of these proceeds. Our management might not apply our net proceeds from this offering in ways that increase the value of your investment. Our management might not be able to yield a significant return, if any, on any investment of these net proceeds. You may not agree with the decision of our management and will not have the opportunity to influence our decisions on how to use our net proceeds from this offering.
Future sales, or the perception of future sales, of our Class A common stock may depress the price of our Class A common stock.
The market price of our Class A common stock could decline significantly as a result of sales of a large number of shares of our stock in the market after this offering. The perception that these sales might occur could depress the market price of Class A common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
Upon completion of this offering, we will have outstanding                 shares of Class A common stock (or                 shares if the underwriters exercise in full their option to purchase additional shares of our Class A common stock) and                  shares of Class B common stock. The shares of Class A common stock offered in this offering will be freely tradable without restriction under the Securities Act of 1933, as amended (“the “Securities Act”), except for any shares of Class A common stock that may be held or acquired by our directors, executive officers and other affiliates, as that term is defined in the Securities Act, which will be restricted securities under the Securities Act. Restricted securities may not be sold in the public market unless the sale is registered under the Securities Act or an exemption from registration is available.

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In connection with this offering, we, each of our executive officers and directors and holders of substantially all of our Class A common stock (including securities convertible into or exchangeable for shares of our Class A common stock) have entered into lock-up agreements under which they have agreed not to sell or otherwise transfer their shares for a period of        days after the date of this prospectus. These lock-up provisions are subject to certain exceptions and may be waived by           at any time. Although we have been advised that there is no present intention to do so,           may, in its sole discretion and without notice, release all or any portion of the shares from the restrictions in any of the lock-up agreements described above. See “Underwriting”.
We have also issued securities in connection with investments or acquisitions and may do so again in the future. The number of shares of our capital stock issued in connection with an investment or acquisition could constitute a material portion of the then outstanding shares of our Class A common stock.
We do not expect to declare any dividends in the foreseeable future.
We do not anticipate declaring or paying any dividends on our Class A common stock or Class B common stock for the foreseeable future. Instead, we anticipate that all of our future earnings will be retained to support our operations and to finance the growth and development of our business. Consequently, investors may need to rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our Class A common stock. Any future determination relating to our dividend policy will be made by our board of directors and will depend on a number of factors. See “ Dividend policy ”.
Provisions in our restated certificate of incorporation and amended and restated bylaws or Delaware law may discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our Class A common stock.
Delaware corporate law contains, and we expect that our restated certificate of incorporation and amended and restated bylaws will contain, provisions that could discourage, delay or prevent a change in control of our company or changes in our management that the stockholders of our company may deem advantageous.
Any provision of our restated certificate of incorporation, our amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock.

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Cautionary note regarding forward-looking statements
This prospectus contains forward-looking statements that reflect our current views with respect to, among other things, future events and our future business, financial condition, results of operations and prospects. These statements are often, but not always, made through the use of words or phrases such as “may”, “should”, “could”, “predict”, “potential”, “believe”, “will likely result”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would” and “outlook”, or the negative version of those words or phrases or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry as well as certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including those described in “Risk factors” and other cautionary statements included in this prospectus, which you should consider and read carefully. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this prospectus, and our future levels of activity and performance, may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. As a result, you should not regard any of these forward-looking statements as a representation or warranty by us or any other person or place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus forms a part completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by the cautionary statements contained in this section and elsewhere in this prospectus.

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Use of proceeds
We estimate that our net proceeds from this offering will be approximately $               (or $                if the underwriters exercise in full their option to purchase additional shares of our Class A common stock), based on an assumed initial public offering price of $         per share (the midpoint of the price range set forth on the cover page of this prospectus), after deducting underwriting discounts and commissions and estimated offering expenses payable by us.
The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our Class A common stock and enable access to the public equity markets for us and our stockholders. We currently intend to use the net proceeds of this offering for general corporate purposes, including working capital, operating expenses and capital expenditures. Our management will have broad discretion in the application of the net proceeds of this offering, and investors will be relying on the judgment of our management in this regard. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business. Pending their use, we intend to invest the net proceeds of this offering in short-term, investment grade, interest-bearing instruments or hold them as cash.
A $1.00 increase (decrease) in the assumed initial public offering price of $       per share would increase (decrease) the net proceeds to us from this offering by $               (or $               if the underwriters exercise in full their option to purchase additional shares of Class A common stock) after deducting underwriting discounts and commissions and estimated offering expenses payable by us, assuming that the number of shares offered by us remains the same. Similarly, each increase (decrease) of one million shares in the number of shares of Class A common stock offered by us would increase (decrease) the net proceeds to us from this offering by $               (or $               if the underwriters exercise in full their option to purchase additional shares of Class A common stock) after deducting underwriting discounts and commissions and estimated offering expenses payable by us, assuming that the initial public offering price remains the same.

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Dividend policy
We have never declared or paid any dividends on our capital stock. We do not intend to pay dividends on our Class A common stock or our Class B common stock for the foreseeable future. Instead, we anticipate that all of our future earnings will be retained to support our operations and to finance the growth and development of our business. Any future determination relating to our dividend policy will be made by our board of directors and will depend on a number of factors, including:
our historic and projected financial condition, liquidity and results of operations;
our capital levels and needs;
tax considerations;
any acquisitions or potential acquisitions that we may consider;
statutory and regulatory prohibitions and other limitations;
general economic conditions; and
other factors deemed relevant by our board of directors.
The agreements governing our Bank Facilities and the indenture governing our senior notes also impose certain restrictions on distributions by us to our stockholders, and the terms of any credit agreements or other borrowing arrangements we enter into in the future may restrict our ability to pay cash dividends. See “Description of indebtedness”.
As a Delaware corporation, we are subject to certain restrictions on the payment of dividends under the Delaware General Corporation Law (the “DGCL”). Generally, a Delaware corporation may only pay dividends either out of surplus or out of the current or the immediately preceding year’s net profits. Surplus is defined as the excess, if any, at any given time, of the total assets of a corporation over its total liabilities and statutory capital. The value of a corporation’s assets can be measured in a number of ways and may not necessarily equal their book value.

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Capitalization
The following table shows our cash and cash equivalents and capitalization as of                ,       :
on an actual basis;
on a pro forma basis to give effect to the exercise of warrants held by SB WW Holdings (Cayman) Limited for shares of Class A common stock, the conversion of a convertible promissory note held by SB WW Holdings (Cayman) Limited into shares of Class A common stock, the conversion of a convertible promissory note held by one of our other investors into shares of Series C preferred stock and then into shares of Class A common stock, the conversion of all of our outstanding senior preferred stock and acquisition preferred stock into shares of Class A common stock and the conversion of all of our outstanding junior preferred stock into shares of Class B common stock, each of which will occur upon completion of this offering; and
on a pro forma as adjusted basis to give effect to the transactions described in the preceding bullet point as well as the issuance by us of                 shares of Class A common stock in this offering at an assumed initial public offering price of $           per share, the midpoint of the price range set forth on the cover page of this prospectus, and the application of the net proceeds therefrom as described in “Use of proceeds”.
The pro forma and pro forma as adjusted information below is illustrative only, and our cash and cash equivalents and total capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of our initial public offering determined at pricing.
You should read the following table together with “Selected historical consolidated financial and operating information” and “ Management’s discussion and analysis of financial condition and results of operations ” and our audited consolidated financial statements and related notes appearing elsewhere in this prospectus.
 
As of                ,
(Amounts in thousands)
Actual
 
Pro forma
 
Pro forma as adjusted (1)
Cash and cash equivalents:
 
 
 
 
 
Total cash and cash equivalents
$
 
$
 
$
Long-term debt and capital lease obligations:
 
 
 
 
 
Bank Facilities
$
 
$
 
$
Capital lease obligations
 
 
 
 
 
Long-term debt, net
 
 
 
 
 
Convertible related party liabilities, net
 
 
 
 
 
Total long-term debt and capital lease obligations
 
 
 
 
 
Convertible preferred stock, $0.001 par value (2)
 
 
 
 
 
Noncontrolling interests
 
 
 
 
 
Equity:
 
 
 
 
 
Class A common stock, $0.001 par value (3)
 
 
 
 
 
Class B common stock, $0.001 par value (4)
 
 
 
 
 
Additional paid-in capital (5)
 
 
 
 
 
Additional other comprehensive income (loss)
 
 
 
 
 
Retained earnings (accumulated deficit) (5)
 
 
 
 
 
Noncontrolling interests
 
 
 
 
 
Total equity
 
 
 
 
 
Total capitalization
$
 
$
 
$
 
 
 
 
 
 
(1)
A $1.00 increase (decrease) in the assumed initial public offering price of $       per share (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total equity and total capitalization by $               after deducting underwriting discounts and commissions and estimated offering expenses payable by us, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. If the underwriters’ option to purchase additional shares of our Class

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A common stock is exercised in full, the pro forma as adjusted amount of each of cash and cash equivalents, additional paid-in capital, total equity and total capitalization would increase by approximately $               , after deducting underwriting discounts and commissions and estimated expenses payable by us.
(2)
Actual: Series A Convertible Preferred Stock –                shares authorized, issued and outstanding; Series B Convertible Preferred Stock –                shares authorized, issued and outstanding; Series C Convertible Preferred Stock –                shares authorized and                shares issued and outstanding; Series D-1 Convertible Preferred Stock –                shares authorized, issued and outstanding; Series D-2 Convertible Preferred Stock –                shares authorized, issued and outstanding; Series E Convertible Preferred Stock –                shares authorized, issued and outstanding; Series F Convertible Preferred Stock –               shares authorized and                shares issued and outstanding; Series G Convertible Preferred Stock –                shares authorized and                shares issued and outstanding; Acquisition Preferred Stock –                shares authorized and                shares issued and outstanding; and Junior Non-Voting Preferred Stock –                shares authorized, issued and outstanding. Pro forma and pro forma as adjusted: no shares authorized, issued or outstanding.
(3)
Actual:                 shares authorized,           shares issued and outstanding. Pro forma:           shares authorized and           shares issued and outstanding. Pro forma as adjusted:                shares authorized and                shares issued and outstanding.
(4)
Actual:                 shares authorized and           shares issued and outstanding. Pro forma and pro forma as adjusted:           shares authorized and           shares issued and outstanding.
(5)
Pro forma and pro forma as adjusted gives effect to stock-based compensation expense of approximately $        million associated with restricted stock units, for which the portion of the service period had been rendered as of               , 2019. This pro forma adjustment related to stock-based compensation expense of approximately $               million has been reflected as an increase to additional paid-in capital and accumulated deficit. See Note 2 to our consolidated financial statements included elsewhere in this prospectus.
The number of shares of Class A common stock and Class B common stock to be outstanding on a pro forma and pro forma as adjusted basis excludes:
              shares of Class A common stock issuable upon the exercise of stock options outstanding as of               , 2019 at a weighted average exercise price of $        per share;
              shares of Class B common stock issuable upon the exercise of stock options outstanding as of               , 2019 at a weighted average exercise price of $        per share;
              shares of Class A common stock issuable upon the exercise of warrants outstanding as of               , 2019 at an exercise price of $13.12 per share;
              shares of Class A common stock issuable upon the exercise of warrants outstanding as of               , 2019 at an exercise price of $0.001 per share;
              shares of Class A common stock underlying restricted stock units outstanding as of               , 2019; and
              shares of Class A common stock reserved for future issuance under the new equity incentive plan we intend to adopt prior to the completion of this offering.

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Dilution
If you invest in our Class A common stock, your ownership interest will be diluted to the extent that the initial public offering price per share of our Class A common stock exceeds the pro forma as adjusted net tangible book value per share of our Class A common stock immediately following the completion of this offering.
Our historical net tangible book value per share as of                     , 2019 was $            , or $          per share. Net tangible book value per share is determined as of any date by subtracting our total liabilities from the total book value of our tangible assets (equal to our total assets less intangible assets) and dividing the difference by the number of shares of Class A common stock and Class B common stock deemed to be outstanding as of that date.
Our pro forma net tangible book value per share as of                     , 2019 was $            , or $          per share. Pro forma net tangible book value per share is determined as of any date by subtracting our total liabilities from the total book value of our tangible assets (equal to our total assets less intangible assets) and dividing the difference by the number of shares of Class A common stock and Class B common stock deemed to be outstanding as of that date, after giving effect to the conversion of all of our outstanding senior preferred stock and acquisition preferred stock into shares of Class A common stock and the conversion of all of our outstanding junior preferred stock into shares of Class B common stock, but not the completion of this offering.
After giving effect to our sale of              shares of Class A common stock in this offering at an assumed initial public offering price of $        per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of                     , 2019 would have been $            , or $         per share. This amount reflects an immediate increase in pro forma as adjusted net tangible book value of $          per share to our existing stockholders and an immediate dilution in pro forma as adjusted net tangible book value of $        per share to new investors purchasing shares of Class A common stock in this offering. The following table illustrates this dilution on a per share basis:
Assumed initial public offering price per share
 
 
 
Pro forma net tangible book value per share at                , 2019
 
 
 
Increase in pro forma net tangible book value per share attributable to this offering
 
 
 
Pro forma as adjusted net tangible book value per share upon completion of this offering
 
 
 
Dilution per share to new investors in this offering
 
 
 
 
 
 
 
The dilution information discussed above is illustrative only and will change based on the actual initial public offering price and other terms determined at the time of pricing of this offering. A $1.00 increase (decrease) in the assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) pro forma as adjusted net tangible book value per share immediately following the completion of this offering by $         per share and increase (decrease) the dilution to new investors by $         per share, in each case after deducting underwriting discounts and commissions and estimated offering expenses payable by us, assuming the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same.
If the underwriters exercise in full their option to purchase additional shares of Class A common stock, the pro forma as adjusted net tangible book value immediately following the completion of this offering would be $          per share and the dilution to new investors would be $           per share, in each case assuming an initial public offering price of $           per share, the midpoint of the range set forth on the cover of this prospectus.

45



The following table summarizes, as of                     , 2019, on a pro forma as adjusted basis as described above, the difference between existing stockholders and new investors in this offering with respect to the aggregate number of shares of common stock purchased and with respect to the total consideration and the average price per share paid to us by our existing stockholders and to be paid to us by the new investors in this offering.
 
Shares purchased
 
Total consideration
 
Average price per share
 
Number
 
Percent
 
Amount
 
Percent
 
Existing stockholders
 
 
%

 
$
 
%

 
$
New investors
 
 
 
 
 
 
 
 
 
Total
 
 
100.0
%
 
$
 
100.0
%
 
$
 
 
 
 
 
 
 
 
 
 
If the underwriters exercise in full their option to purchase additional shares of Class A common stock, the number of shares held by existing stockholders upon completion of this offering would be reduced to        % of the total number of shares outstanding upon completion of this offering, and the number of shares held by new investors would increase to              shares, or        % of the total number of shares outstanding upon completion of this offering.
The foregoing discussion assumes no exercise of (i) options to purchase       shares of Class A common stock at a weighted average exercise price of $        per share, (ii) options to purchase        shares of Class B common stock at a weighted average exercise price of $        per share, (iii) warrants to purchase         shares of Class A common stock at an exercise price of $13.12 per share, (iv) warrants to purchase         shares of Class A common stock at an exercise price of $0.001 per share and (v) restricted stock units underlying            shares of Class A common stock at a weighted average exercise price of $        per share, and excludes             shares of Class A common stock reserved for future issuance under the new equity incentive plan we intend to adopt prior to the completion of this offering, as described in “ Executive compensation —WeWork Companies Inc. 2019 Omnibus Incentive Plan”. To the extent that options or warrants are exercised, new awards are issued under our new equity incentive plan or we issue additional shares of common stock in the future, in each case that have an exercise or purchase price that is less than the offering price of the shares of Class A common stock in this offering, new investors in this offering will experience further dilution.

46



Selected historical consolidated financial and operating information
The following selected historical consolidated financial information as of December 31, 2017 and 2018 and for the years ended December 31, 2016, 2017 and 2018 has been derived from our audited consolidated financial statements and notes thereto included elsewhere in this prospectus. Our consolidated financial statements have been prepared in accordance with GAAP and are presented in U.S. dollars. Our historical results are not necessarily indicative of the results to be expected for any future period.
The information presented below should be read in conjunction with the information under “Management’s discussion and analysis of financial condition and results of operations” and our consolidated financial statements and related notes appearing elsewhere in this prospectus.
 
Year Ended December 31,
(Amounts in thousands, except share and per share data)
2016
 
2017
 
2018
Consolidated statement of operations information:
 
 
 
 
 
Revenue
$
436,099

 
$
886,004

 
$
1,821,751

 
 
 
 
 
 
Expenses:
 
 
 
 
 
Community operating expenses (1)
433,167

 
814,782

 
1,521,129

Other operating expenses (1)

 
1,677

 
106,788

Pre-opening community expenses
115,749

 
131,324

 
357,831

Sales and marketing expenses
43,428

 
143,424

 
378,729

Growth and new market development expenses
35,731

 
109,719

 
477,273

General and administrative expenses (2)
115,346

 
454,020

 
357,486

Depreciation and amortization
88,952

 
162,892

 
313,514

Total expenses
832,373

 
1,817,838

 
3,512,750

 
 
 
 
 
 
Loss from operations
(396,274
)
 
(931,834
)
 
(1,690,999
)
Interest and other income (expense), net
(33,400
)
 
(7,387
)
 
(237,270
)
Pre-tax loss
(429,674
)
 
(939,221
)
 
(1,928,269
)
Income tax benefit (provision)
(16
)
 
5,727

 
850

Net loss
(429,690
)
 
(933,494
)
 
(1,927,419
)
Net loss attributable to noncontrolling interests

 
49,500

 
316,627

Net loss attributable to WeWork Companies Inc.
$
(429,690
)
 
$
(883,994
)
 
$
(1,610,792
)
Net loss per share attributable to Class A and Class B common stockholders: (3)
 
 
 
 
 
Basic
$
(2.66
)
 
$
(5.54
)
 
$
(9.87
)
Diluted
$
(2.66
)
 
$
(5.54
)
 
$
(9.87
)
Weighted-average shares used to compute net loss per share attributable to Class A and Class B common stockholders, basic and diluted
161,324,940

 
159,689,116

 
163,148,918

Pro forma net loss per share attributable to Class A and Class B common stockholders: (3)
 
 
 
 
 
Basic
 
$
(4.76
)
Diluted
 
$
(4.76
)
Weighted-average shares used to compute pro forma net loss per share attributable to Class A and Class B common stockholders, basic and diluted
 
338,368,587

 
 
 
 
 
 
(1)
Exclusive of depreciation and amortization shown separately on the depreciation and amortization line.
(2)
Includes stock-based compensation of $17.4 million, $260.7 million and $18.0 million in 2016, 2017 and 2018, respectively.
(3)
See Note 22 to our consolidated financial statements included elsewhere in this prospectus for a description of how we compute basic and diluted net loss per share attributable to Class A and Class B common stockholders and pro forma basic and diluted net loss per share attributable to Class A and Class B common stockholders.

47



 
As of December 31,
(Amounts in thousands)
2017
 
2018
Consolidated balance sheet information:
 
 
 
Cash and cash equivalents
$
2,020,805

 
$
1,744,209

Total current assets
2,427,096

 
2,464,078

Property and equipment, net
2,337,092

 
4,368,772

Total assets
5,364,072

 
8,644,916

Total non-current liabilities
1,755,924

 
4,675,071

Total liabilities
2,406,511

 
6,284,159

Total convertible preferred stock included as temporary equity
3,405,435

 
3,498,696

Total noncontrolling interests included as temporary equity
854,577

 
1,320,637

Total equity
(1,302,451
)
 
(2,458,576
)
 
 
 
 
 
Year Ended December 31,
(Amounts in thousands)
2016
 
2017
 
2018
Consolidated cash flow information:
 
 
 
 
 
Net cash provided by (used in) operating activities
$
176,905

 
$
243,992

 
$
(176,729
)
Net cash used in investing activities
(818,525
)
 
(1,376,767
)
 
(2,475,798
)
Net cash provided by financing activities
727,908

 
2,724,315

 
2,658,469

Effects of exchange rate changes
(2,261
)
 
(763
)
 
(13,119
)
Net increase (decrease) in cash, cash equivalents, and restricted cash
$
84,027

 
$
1,590,777

 
$
(7,177
)
 
 
 
 
 
 

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Management’s discussion and analysis of financial condition and results of operations
The following discussion and analysis of our financial condition and results of operations should be read together with our audited consolidated financial statements and the related notes and the other financial information included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results, performance and achievements could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this prospectus, particularly under “Risk factors”. Our historical results are not necessarily indicative of the results to be expected for any future period.
Overview
Our business has evolved from its origins as a flexible, community-oriented workspace for entrepreneurs and small companies to a one-stop global workspace solution for companies of all sizes, including many of the Fortune 500. The broad appeal of our offering and brand has attracted a diverse member base and enabled us to achieve significant scale in a short period of time.
We opened our first shared workspace location in 2010 in downtown Manhattan and have since become a globally scaled platform centered around flexibility and collaboration. As of December 1, 2018, our 425 locations served approximately 401,000 memberships across 27 countries. For the year ended December 31, 2018, we generated a net loss of $(1,927.4) million, Community Adjusted EBITDA of $467.1 million and Adjusted EBITDA loss of $(665.7) million.
We primarily generate revenue from WeWork membership fees. Through our WeWork offering, we provide our members with a complete, one-stop solution for their space needs, strategically designed to maximize collaboration and productivity. Our memberships offer access not only to beautifully designed spaces, but also to amenities, services, events, and to our global network of members.
We intend to continue to invest in our growth given the size of the market opportunity we believe is available to us and the improved returns on invested capital we expect we can realize by continuing to scale our platform, drive down our development costs and increase operating efficiencies. We believe that over time these investments will result in revenue increasing faster than the increase in our overall expenses as our global platform grows. As we scale rapidly, we expect that the costs and investments associated with this expansion will continue to increase, and we expect to continue to incur losses. We do not intend to achieve positive GAAP net income in the near term.
WeWork
Members join WeWork by entering into flexible membership agreements with us, which can range from month-to-month to multi-year arrangements. As our WeWork offering and brand have evolved, we have been able to attract members across a range of industries and at all stages of development, ranging from startups to large multi-national enterprises.
Memberships
We derive substantially all of our revenue from the fees associated with memberships.
Members can choose from a variety of products to suit all of their needs. Our off-the-shelf solutions allow our members access to space and amenities or private offices within our shared workspaces. Additionally, we offer a virtual membership solution that provides user login access to the WeWork member network, as well as access to our service offerings and the right to reserve space, among other benefits.
Locations
As of December 1, 2018, we operate 425 locations across 100 cities spanning 27 countries. In addition to expanding to new locations, part of our strategy is to open new locations near existing locations to drive economies of scale and benefit from existing brand awareness and strong network effects.
We monitor our portfolio by Mature and Non-Mature Locations, based on the number of months they have been in operation. We believe our Mature Locations, defined as Locations that have been open for member operations for more than months, are representative of our steady-state performance. Mature Locations comprised % of our locations as of .

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Key performance indicators and financial measures
In connection with our WeWork offering, we identify, measure and assess a variety of operational metrics that we refer to as key performance indicators. The most important metrics we use in managing and evaluating our business are Memberships and Desks.
Memberships represent the cumulative number of WeWork Memberships and We Memberships. Memberships are indicative of our scale and growth.
Desks represent the estimated number of physical WeWork workspaces available for sale and immediate use by members. Desks represent management’s best estimate of desk capacity at a location based on our desk inventory management system and/or sales layouts and are not meant to represent actual counts of desks at our locations.
See “ Summary consolidated financial and operating information Key performance indicators ” for information about these two key components of our business.
To evaluate the performance of our business, we monitor both financial metrics recorded in accordance with GAAP and certain non-GAAP financial measures detailed below. All of our non-GAAP measures discussed below exclude certain non-cash amounts including straight-line rent, stock-based compensation expense, expense related to stock-based payments for services rendered by consultants and income or expense relating to the change in fair value of contingent consideration payable in stock.
When evaluating our business using non-GAAP financial measures, we think about the performance of our business in two categories: (i) the day-to-day operation of our existing portfolio of core WeWork buildings/communities that provide “Space-as-a-Service” to our members; and (ii) our current investments in future desk delivery and the expansion of our global community and the services we can provide to that expanded community, together with our investments in the global and regional infrastructure that supports our current portfolio and serves as the foundation for this future growth.
Community Adjusted EBITDA represents membership and service revenue minus community operating expenses, excluding the impact of straight-line rent and stock-based compensation as discussed above. Community operating expenses, our largest category of expenses, are the costs associated with servicing members in our locations and consist primarily of rent and tenancy expenses, core operating expenses such as utilities and internet, and the cost of supporting a dynamic and vibrant community in our buildings, including salaries of our building staff and the cost of amenities. We use Community Adjusted EBITDA as a supplemental indicator of the day-to-day operations of our existing portfolio of core locations.
Adjusted EBITDA represents Community Adjusted EBITDA plus other revenue minus other operating expenses, general and administrative expenses and Growth Investments. Growth Investments, which consist of pre-opening community expenses, sales and marketing expenses and growth and new market development expenses, all primarily relate to opening new buildings, entering new markets and developing new offerings and represent our current investment in future desk delivery and the expansion of our global community and We Company Offerings, all excluding the impact of the non-cash items discussed above.
Key factors affecting our performance
The performance of our WeWork offering is impacted by the following factors:
Global footprint expansion
We have embarked on a strategic worldwide expansion program, opening locations in new markets as well as opening new locations in markets where we previously operated. We have grown from 44,000 Desks as of December 1, 2015 to 466,000 Desks as of December 1, 2018 . We have invested heavily in corporate infrastructure, sales and marketing and new market development to support and accelerate our international expansion. Our ability to continue to grow our global footprint efficiently will impact our financial performance.
Membership growth
We believe that several macroeconomic trends, including urbanization of the workforce and evolving work culture, have led to increased demand for WeWork Memberships. Our membership base, which consisted of approximately 401,000 memberships as of December 1, 2018 , has also grown along with our physical expansion. As increasing our membership is a

50



key pillar of growing our business, we expect to spend meaningfully in the near-term on growth initiatives. The ability to continue growing our membership base will affect our financial performance.
Enterprise growth
Our recent success with Enterprise Member Organizations has fueled growth while increasing diversification of our member mix. Our Enterprise Membership Percentage grew from 14% of WeWork Memberships as of January 1, 2016 to 37% as of December 1, 2018.
For the months ended December 31, 2017 and 2018, total revenue was approximately $96 million and $203 million, respectively, of which membership and service revenue was approximately $95 million and $185 million, respectively. For the three months ended December 31, 2017 and 2018, total revenue was approximately $283 million and $576 million , respectively, of which membership and service revenue was approximately $271.8 million and $529.4 million. Enterprise Members accounted for 28% and 36% of total membership and service revenue for the months ended December 31, 2017 and 2018, respectively, 27% and 35% for the three months ended December 31, 2017 and 2018, respectively and 24% and 32% of total membership and service revenue for the years ended December 31, 2017 and 2018, respectively.
As of December 1, 2018 , companies representing over one third of the Global Fortune 500 were either existing Enterprise Member Organizations or had signed future commitments with us. Enterprise Member Organizations have become our fastest-growing member type and often sign longer-term membership agreements for a greater number of WeWork Memberships relative to some of our other members, providing us increased revenue visibility. We plan to continue to invest in sales, design and development teams dedicated to Enterprise Member Organizations. If our ability to acquire more Enterprise Member Organizations at favorable terms were to change, it would impact our financial performance and revenue visibility.
Additional service and product offerings
We have recently launched or acquired new products and services that add value to our members. We believe that as we grow our member base, our We Company Offerings, including through our WeLive and WeGrow brand lines, have the potential to become substantial revenue streams in the future. We expect to continue making significant investment into products and services that support our WeWork offering. If these efforts do not scale successfully, it may impact our growth prospects and our ability to achieve profitability.
Recent acquisition activity
We have made, and intend to selectively pursue, strategic acquisitions to expand our global platform of offerings and services. For example, in April 2018, ChinaCo, PacificCo and a consolidated wholly-owned subsidiary of the Company (“WeWork Australia”) acquired 100% of the issued and outstanding stock of naked Hub Holdings Ltd. (“NH Holdings”), naked Hub Vietnam Holdings Limited (“NH Vietnam”), and naked Hub Australia Pty Ltd (“NH Australia” and, together with NH Holdings and NH Vietnam, “naked Hub”). naked Hub, formerly the co-working arm of Shanghai-based luxury resort company Naked Retreats, had approximately 8,000 members across 25 locations, primarily in Shanghai and Beijing, along with locations in Australia, Hong Kong and Vietnam, as of the acquisition date. This and other acquisitions may impact the comparability of our results of operations and the success of our strategic acquisitions may affect our future financial results.
Recent developments
In March 2019, SB WW Holdings (Cayman) Limited (“SBWW Cayman”) launched a tender offer to purchase up to $1.0 billion of shares of our outstanding equity securities (including vested options, exercisable warrants, and convertible notes) from our equity holders. This tender offer expired on April 11, 2019, and SBWW Cayman purchased 18,518,518 shares of capital stock from equity holders on April 15, 2019 for approximately $1.0 billion in the aggregate. Upon the closing of this offering, all shares of preferred stock sold in the tender offer will convert into shares of our Class A common stock.
In April 2019, we also entered into an agreement to acquire Managed by Q Inc., an office management platform, for a total contract price of $220.0 million to be paid $100.0 million in cash and the remainder in Series AP-3 Acquisition Preferred Stock. The closing of this acquisition is subject to the satisfaction of customary closing conditions.

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Components of results of operations
Revenue
Revenue includes membership and service revenue as well as other revenue as described below.
Membership revenue represents license fees, net of discounts, from sales of our WeWork Memberships, We Memberships and WeLive memberships. We derive a significant majority of our revenue through the sale of WeWork Memberships. The price of each membership is variable, based on the particular characteristics and geographical location of the space occupied by the member and any monthly allowances for conference room hours and prints/copies included in the base membership license fee. All memberships include access to the WeWork member network. Membership revenue is recognized monthly, on a ratable basis, over the life of the agreement, as access to office space is provided.
Service revenue primarily includes billings to members for ancillary services in excess of the monthly allowances included with their WeWork Memberships, We Memberships or WeLive memberships. Services offered to members include access to conference rooms, printing, photocopies, initial set-up fees, phone and IT services, parking fees and other services.
We have also invested in a business in India that provides “Space-as-a-Service” under the WeWork name. The revenue and expenses from these locations, which we refer to as IndiaCo Locations, are not consolidated within our results of operations. However, the management fee income from services provided to the IndiaCo Locations are included in service revenue.
Service revenue also includes commissions earned by the Company from third-party service providers. We offer various services and benefits to our members, often at exclusive rates, and receive a percentage of the sale when one of our members purchases a service from a third-party. Our services partnerships range from deals on clothing and gym memberships to below-market rates for personal and business services. Service revenue is recognized on a monthly basis as the services are provided.
Service revenue does not include any revenue recognized by We Company Offerings. For example, services provided by Meetup, Flatiron School and Conductor are not included in our service revenue, even if those services have been delivered to a WeWork member. All revenue recognized by our We Company Offerings not providing “Space-as-a-Service” are included in other revenue.
Other revenue includes revenue from design and development services performed and recognized using the percentage-of-completion method based primarily on contract cost incurred to date compared to total estimated contract cost, as well as income generated from sponsorships and ticket sales from WeWork and We Company branded events and revenue generated by any new products or services not directly related to the membership and service revenue earned through the operation of our WeWork and WeLive offerings, such as Flatiron School, Meetup and Conductor.
Community operating expenses
Community operating expenses include the day-to-day costs of operating an open WeWork location and exclude pre-opening costs, depreciation and amortization and general sales and marketing, which are separately recorded.
Rent expense
Our most significant community operating expense is rent expense. Rent expense is recognized on a straight-line basis over the life of the lease term in accordance with GAAP based on the following three key components:
Rent Contractually Paid or Payable represents cash payments for base and contingent rent payable under our lease agreements, recorded on an accrual basis of accounting, regardless of the timing of when such amounts were actually paid.
Adjustments for Impact of Straight-lining of Rent represents the non-cash adjustment to record rent holidays and rent escalation clauses on a straight-line basis over the term of the lease.
Amortization of Lease Incentives represents the amortization of cash received for tenant improvement allowances and broker commissions.

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Tenancy costs
Community operating expenses also include our share of real estate and related taxes and common area maintenance charges (“CAM”) relating to our leased locations used for member community operations. Real estate and related taxes and CAM are collectively referred to as tenancy costs.
Other community operating expenses
Other community operating expenses typically include utilities, maintenance, cleaning expenses, office expenses, security expenses, credit card processing fees, and food and beverage costs. Community operating expenses also include personnel and related costs for the teams managing our community operations, including member relations, new member sales and member retention and facilities management, as well as costs for corporate functions that directly support the operations of our communities, such as personnel costs associated with our billings, collections, purchasing and accounts payable functions. As our global community continues to expand, we expect to achieve further economies of scale on these community support functions, which is expected to have a positive impact on our future margins.
Other operating expenses
Other operating expenses relate to costs of operating and providing goods and services by We Company Offerings that have surpassed the initial incubation phase of their development, including Meetup, Flatiron School and Conductor, in the period subsequent to their acquisition.
Growth Investments
Pre-opening community expenses, sales and marketing expenses and growth and new market development expenses, collectively, are referred to as “Growth Investments” and represent investments in the business that we believe will support our ability to continue to grow our global platform.
Pre-opening community expenses
Pre-opening community expenses include all expenses incurred before a location opens for member operations. The primary components of pre-opening community expenses are rent expense, our share of tenancy costs including real estate and related taxes and CAM, utilities, cleaning, personnel and related expenses, and other costs of opening our locations. Personnel expenses are included in pre-opening costs as we staff our locations prior to their opening to help ensure a smooth opening and a successful member move-in experience.
Sales and marketing expenses
Sales and marketing expenses consist primarily of expenses related to our general sales and marketing efforts, including advertising costs, member referral fees, personnel and related expenses related to our sales, marketing, branding, public affairs and events teams, and other costs associated with strategic marketing events. Strategic events, such as our WeWork Creator Awards program, are investments we make in the continued expansion of our business. We have also made investments in our sales and marketing organization. Our sales and marketing efforts are primarily focused on Pre-Open Locations and Non-Mature Locations.
Growth and new market development expenses
To execute on our growth opportunities, we have dedicated departments that are responsible for identifying, sourcing and managing the construction of our new locations and researching, exploring and initiating new markets and product or service offerings.
Growth and new market development expenses consist primarily of non-capitalized design, development, warehousing, logistics and real estate costs, expenses incurred researching and pursuing new markets, products and services, and other expenses related to our growth and global expansion. These costs include non-capitalized personnel and related expenses for our development, design, product, research, real estate, talent acquisition, mergers and acquisitions, legal, and technology research and development teams and related professional fees and other expenses incurred such as recruiting fees, employee relocation costs, due diligence costs, integration costs, transaction costs, contingent consideration fair value adjustments relating to acquisitions and impairments and write-offs.

53



Growth and new market development expenses also include cost of goods sold in connection with our on-site office design, development and management solutions, and costs of providing goods and services by We Company Offerings that are still in the initial incubation stage of their development and which are not included in other operating expenses above.
General and administrative expenses
General and administrative expenses consist primarily of personnel and related expenses and stock-based compensation expense related to corporate employees, technology, consulting, legal and other professional services expenses, costs for our corporate offices and various other costs we incur to manage and support our business.
Interest and other income (expense)
Interest and other income (expense) is comprised of interest income, interest expense, earnings from equity method and other investments, and foreign currency gain (loss). Interest expense primarily includes non-cash interest expense associated with the imputed interest and fair value adjustments of the embedded derivative associated with our Convertible Note (as defined under “— Liquidity and capital resources Convertible note and warrant agreements ”), accretion of asset retirement obligations and the amortization of deferred financing costs, interest expense recorded in connection with capital lease liabilities, interest expense relating to our Senior Notes (as defined under “— Liquidity and capital resources Senior Notes ”) and interest expense recorded in connection with outstanding letters of credit issued under our Senior Credit Facility and our Letter of Credit Facility (each as defined under “— Liquidity and capital resources Bank Facilities ”) as required by our various leases.

54



Consolidated results of operations
The following table sets forth our consolidated results of operations and other key metrics for the years ended December 31, 2016, 2017, and 2018:
(Amounts in thousands, except percentages and where noted)
Year Ended December 31,
2016
 
2017
 
2018
Consolidated statement of operations information:
 
 
 
 
 
Revenue
$
436,099

 
$
886,004

 
$
1,821,751

 
 
 
 
 
 
Expenses:
 
 
 
 
 
Community operating expenses(1)
433,167

 
814,782

 
1,521,129

Other operating expenses(1)

 
1,677

 
106,788

Pre-opening community expenses
115,749

 
131,324

 
357,831

Sales and marketing expenses
43,428

 
143,424

 
378,729

Growth and new market development expenses
35,731

 
109,719

 
477,273

General and administrative expenses(2)
115,346

 
454,020

 
357,486

Depreciation and amortization
88,952

 
162,892

 
313,514

Total expenses
832,373

 
1,817,838

 
3,512,750

Loss from operations
(396,274
)
 
(931,834
)
 
(1,690,999
)
Interest and other income (expense), net
(33,400
)
 
(7,387
)
 
(237,270
)
Pre-tax loss
(429,674
)
 
(939,221
)
 
(1,928,269
)
Income tax benefit (provision)
(16
)
 
5,727

 
850

Net loss
(429,690
)
 
(933,494
)
 
(1,927,419
)
Net loss attributable to noncontrolling interests

 
49,500

 
316,627

Net loss attributable to WeWork Companies Inc.
$
(429,690
)
 
$
(883,994
)
 
$
(1,610,792
)
 
 
 
 
 
 
Key performance indicators and other key financial measures:
 
 
 
 
 
Desks (in ones)
107,000

 
214,000

 
466,000

Memberships (in ones)
87,000

 
186,000

 
401,000

Adjusted EBITDA(3)
$
(94,322
)
 
$
(193,327
)
 
$
(665,653
)
Adjusted EBITDA Margin
(21.6
)%
 
(21.8
)%
 
(36.5
)%
Community Adjusted EBITDA(3)
$
95,943

 
$
233,147

 
$
467,125

Community Adjusted EBITDA Margin
22.1
 %
 
26.9
 %
 
27.5
 %
 
 
 
 
 
 
(1)
Exclusive of depreciation and amortization shown separately on the depreciation and amortization line.
(2)
Includes stock-based compensation of $17.4 million, $260.7 million and $18.0 million in 2016, 2017 and 2018, respectively.
(3)
Refer to “ Non-GAAP financial measures ” for definitions of these metrics and “ Summary consolidated financial and operating information Other key financial measures ” for a reconciliation to the most comparable GAAP measure.

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Consolidated results of operations as a percentage of revenue
The following table sets forth our consolidated statements of operations information as a percentage of revenue for the years ended December 31, 2016, 2017 and 2018:
 
Year Ended December 31,
 
2016
 
2017
 
2018
Revenue
100
 %
 
100
 %
 
100
 %
 
 
 
 
 
 
Expenses:
 
 
 
 
 
Community operating expenses(1)
99
 %
 
92
 %
 
83
 %
Other operating expenses(1)
 %
 
 %
 
6
 %
Pre-opening community expenses
27
 %
 
15
 %
 
20
 %
Sales and marketing expenses
10
 %
 
16
 %
 
21
 %
Growth and new market development expenses
8
 %
 
12
 %
 
26
 %
General and administrative expenses
26
 %
 
51
 %
 
20
 %
Depreciation and amortization
20
 %
 
18
 %
 
17
 %
Total operating expenses
191
 %
 
205
 %
 
193
 %
 
 
 
 
 
 
Loss from operations
(91
)%
 
(105
)%
 
(93
)%
Interest and other income (expense), net
(8
)%
 
(1
)%
 
(13
)%
Pre-tax loss
(99
)%
 
(106
)%
 
(106
)%
Income tax benefit (provision)
 %
 
1
 %
 
 %
Net loss
(99
)%
 
(105
)%
 
(106
)%
Net loss attributable to noncontrolling interests
 %
 
6
 %
 
17
 %
Net loss attributable to WeWork Companies Inc.
(99
)%
 
(100
)%
 
(88
)%
 
 
 
 
 
 
(1)
Exclusive of depreciation and amortization shown separately on the depreciation and amortization line.

56



Comparison of the years ended December 31, 2016, 2017 and 2018
Revenue
Comparison of the year ended December 31, 2017 and the year ended December 31, 2018
 
Year Ended December 31,
 
Change
(Amounts in thousands, except percentages)
2017
 
2018
 
$
 
%
Revenue
$
886,004

 
$
1,821,751

 
$
935,747

 
106
%
 
 
 
 
 
 
 
 
Total revenue increased $935.7 million to $1.8 billion for the year ended December 31, 2018, primarily driven by an increase in membership and service revenue, which increased $830.4 million to $1.7 billion for the year ended December 31, 2018, from $866.9 million for the year ended December 31, 2017. The growth in revenue was primarily driven by growth in our membership base, including growth within existing locations, growth from new location openings, growth from acquisitions of locations, and growth in our We Memberships. The WeWork community has grown to approximately 357,000 WeWork Memberships as of December 31, 2018 from 171,000 as of December 31, 2017 and to approximately 30,000 We Memberships as of December 31, 2018 from 12,000 as of December 31, 2017. As of December 31, 2018 there were 410 locations compared to 197 as of December 31, 2017.
The increase in membership and service revenue due to growth in the WeWork community was slightly offset by a decline in average revenue per WeWork membership of $370 to $6,558 for the year ended December 31, 2018 from $6,928 for the year ended December 31, 2017 . Average revenue per WeWork Membership has experienced a decline primarily due to our expansion into global markets with different pricing structures. In some cases we also use discounts to attract members as we open new locations at a faster rate, or to encourage longer contract terms. We calculate average revenue per WeWork Membership using our membership and service revenue (other than membership and service revenue generated from the sale of WeLive memberships and related services and other than management fee income from services provided to IndiaCo Locations) divided by the average of the number of WeWork Memberships (other than WeWork Memberships associated with IndiaCo Locations) as of the first day of each month in the period.
Other revenue increased $105.3 million to $124.4 million for the year ended December 31, 2018, from $19.1 million for the year ended December 31, 2017, due to the acquisition of several companies including Meetup, Flatiron School, and Conductor and revenue from our on-site office management solution with integrated design, construction and space management services and various other activities not directly related to our “Space-as-a-Service” business.
Comparison of the year ended December 31, 2016 and the year ended December 31, 2017
 
Year Ended December 31,
 
Change
(Amounts in thousands, except percentages)
2016
 
2017
 
$
 
%
Revenue
$
436,099

 
$
886,004

 
$
449,905

 
103
%
 
 
 
 
 
 
 
 
Total revenue increased $449.9 million to $886.0 million for the year ended December 31, 2017, primarily driven by an increase in membership and service revenue, which increased $432.5 million to $866.9 million for the year ended December 31, 2017 from $434.4 million for the year ended December 31, 2016. The growth in revenue was primarily driven by growth in our membership base, including growth within existing locations, growth from new location openings and growth in our We Memberships. The WeWork community has grown to approximately 171,000 WeWork Memberships as of December 31, 2017 from 81,000 as of December 31, 2016 and to approximately 12,000 We Memberships as of December 31, 2017 from 6,000 as of December 31, 2016 . As of December 31, 2017 there were 197 locations compared to 111 as of December 31, 2016 . Additionally, the Company opened two WeLive locations during 2016 .
The increase in membership and service revenue due to growth in the WeWork community was slightly offset by a decline in average revenue per WeWork Membership of $456 to $6,928 for the year ended December 31, 2017 from $7,384 for the year ended December 31, 2016 . Average revenue per WeWork Membership has experienced a decline primarily as we have expanded into many different global markets with different pricing structures and in some cases may also use discounts to attract members as we open new locations at a faster rate.

57



Other revenue increased $17.4 million to $19.1 million for the year ended December 31, 2017, from $1.7 million for the year ended December 31, 2016 due to the launch of our on-site office management solution with integrated design, construction and space management services, which represented $13.7 million of the increase in other revenue during the year ended December 31, 2017. During 2017, we also acquired Meetup and Flatiron School. The collective revenue earned by these companies for the periods subsequent to their acquisitions during the year ended December 31, 2017 contributed $3.2 million of the increase. The remaining increase in other revenue of $0.5 million relates to revenue from various other activities not directly related to our “Space-as-a-Service” business.
Community operating expenses
Comparison of the year ended December 31, 2017 and the year ended December 31, 2018
 
Year Ended December 31,
 
Change
(Amounts in thousands, except percentages)
2017
 
2018
 
$
 
%
Rent expense
$
458,521