Document

EX-99.1 2 a2023q1epexhibit991.htm EX-99.1 Document

Executive Summary

We own and operate 18.0 million square feet of Class A office properties and 5,032 apartment units (excluding our residential development pipeline) in the premier coastal submarkets of Los Angeles and Honolulu.

Quarterly Results: For the quarter ended March 31, 2023 compared to the quarter ended March 31, 2022:

•Our revenues increased by 5.7% to $252.4 million, reflecting the addition of new units to our multifamily portfolio, which increased by 617 units, and higher in-place office and multifamily rental rates.

•Our net income attributable to common stockholders decreased by 28.0% to $18.4 million, or $0.10 per diluted share.

•Our FFO decreased by 5.0% to $98.6 million, or $0.47 per fully diluted share, primarily as a result of higher interest expense on our floating rate debt.

•Our AFFO decreased by 13.5% to $81.4 million. Although our leasing costs per square foot remain low, we paid the tenant improvement costs this quarter to move in a large number of tenants with whom we executed leases last year.

•Our same property Cash NOI decreased by 1.5% to $148.8 million, with higher rental revenues and parking revenue offset by continued inflationary pressure on utilities and wages.

Leasing: During the first quarter, we signed 235 office leases covering approximately 625,000 square feet, including 168,000 square feet of new leases. The slowdown in the leasing pipeline that we mentioned on our last call resulted in a decline in our leased rate, even though we actually signed more leases in the quarter than usual. We continue to have strong demand from tenants under 10,000 square feet, who dominate our markets. But because larger tenants have become more conservative in response to recessionary concerns, we leased less total square footage. Comparing the office leases we signed during the first quarter to the expiring leases for the same space, straight-line rents increased by 6.0% and cash rents decreased by 6.7%. Our multifamily portfolio remains essentially fully leased at 99.3%.

Dividends: On April 14, 2023, we paid a quarterly cash dividend of $0.19 per common share, or $0.76 on an annualized basis.

Balance Sheet: Our balance sheet and cash flow after dividends are strong. We have no outstanding debt maturing until December 2024 and almost half of our office portfolio remains unencumbered. Our debt is all non-recourse, secured by first trust deed mortgages at the property level. We have no corporate level debt and no corporate covenants. We have a perfect 30 year debt repayment record and are confident we will maintain it during this downturn. Our cash flow after dividends remains one of the best in our industry and we use less than half of our AFFO for dividends, leaving us with substantial liquidity.

Stock Repurchase: During late March and early April, we repurchased 6 million shares of our common stock at an average cost of $12.32 per share.

Guidance: We are adjusting our assumption for average office occupancy, which we now expect to be between 81% and 83% for the year. As a result, we adjusted our expected range of same property cash NOI growth to be between -1.5% and -0.5%, and for straight-line revenue to be between $1 million and $3 million. These adjustments are offset by the benefit of our stock repurchase so our guidance range for full year FFO per fully diluted share remains between $1.87 and $1.93. We expect Net Income Per Common Share - Diluted to be between $0.35 and $0.41. Our guidance does not include the impact of future property acquisitions or dispositions, stock sales or repurchases, financings, property damage insurance recoveries, impairment charges or other possible capital markets activities. See page 22.

NOTE: See the non-GAAP reconciliations for FFO & AFFO on page 8 and same property NOI on page 10.

See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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Table of Contents


COMPANY OVERVIEW

Corporate Data			3
Property Map			4
Board of Directors and Executive Officers			5

FINANCIAL RESULTS

Consolidated Balance Sheets			6
Consolidated Operating Results			7
Funds from Operations & Adjusted Funds From Operations			8
Same Property Statistics & Net Operating Income			9
Reconciliation of Same Property NOI to Net Income			10
Financial Data for JVs & Fund			11
Loans			12

PORTFOLIO DATA

Office Portfolio Summary			13
Office Percentage Leased and In-Place Rents			14
Office Lease Diversification			15
Largest Office Tenants			16
Office Industry Diversification			17
Office Lease Expirations			18
Office Lease Expirations – Next Four Quarters			19
Office Leasing Activity			20
Multifamily Portfolio Summary			21


GUIDANCE

2023 Guidance			22
Reconciliation of 2023 Non-GAAP Guidance			23

DEFINITIONS			24

Forward Looking Statements (FLS)

This First Quarter 2023 Earnings Results and Operating Information, which we refer to as our Earnings Package (EP), supplements the information provided in our reports filed with the Securities and Exchange Commission (SEC). It contains FLS within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and we claim the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements related to the expectations regarding the performance of our business, financial results, liquidity and capital resources and other non-historical statements. In some cases, these FLS can be identified by the use of words such as “expect,” "potential,” “continue,” “may,” “will,” “should,” “could,” “seek,” “project,” “intend,” “plan,” “estimate,” "anticipate,” or the negative version of these words or other similar words which are predictions of or indicate future events or trends and which do not relate solely to historical matters. FLS presented in this EP, and those that we may make orally or in writing from time to time, are based on our beliefs and assumptions. Our actual results will be affected by known and unknown risks, trends, uncertainties and factors, some of which are beyond our control or ability to predict, including, but not limited to: adverse economic and real estate developments in Southern California and Honolulu; a general downturn in the economy; decreased rental and occupancy rates or increased tenant incentives; reduced demand for office space, including as a result of remote work and flexible working arrangements that allow work from remote locations other than the employer’s office premises; defaults on, and early terminations and non-renewal of, leases by tenants; inflation; higher interest rates and operating costs; failure to generate sufficient cash flows to service our debt; difficulties in acquiring properties; failure to successfully operate properties; failure to maintain our REIT status; adverse changes in rent control laws and regulations; environmental uncertainties; risks related to natural disasters; fire and other property damage, lack of or insufficient insurance; inability to successfully expand into new markets or submarkets; risks associated with property development; conflicts of interest with our officers; changes in real estate and zoning laws and increases in real property tax rates; possible future terrorist attacks; and other risks and uncertainties detailed in our Annual Report on Form 10-K for 2022, and other documents filed with the SEC. Although we believe that our assumptions underlying our FLS are reasonable, they are not guarantees of future performance and some will inevitably prove to be incorrect. As a result, our actual future results can be expected to differ from our expectations, and those differences could be material. Accordingly, please use caution in relying on any FLS in this EP to anticipate future results or trends. This EP and all subsequent written and oral FLS attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our FLS.


						Company Overview

Corporate Data

as of March 31, 2023


Office Portfolio

	Consolidated		Total
Properties	68		70
Rentable square feet (in thousands)	17,594		17,980
Leased rate	85.6	%	85.5	%
Occupancy rate	83.5	%	83.5	%


Multifamily Portfolio

			Total
Properties			14
Units			5,032
Leased rate(1)			99.3	%


Market Capitalization (in thousands, except price per share)

Fully Diluted Shares outstanding as of March 31, 2023	207,193
Common stock closing price per share (NYSE:DEI)	$	12.33
Equity Capitalization	$	2,554,686


Net Debt (in thousands)

	Consolidated		Our Share

Debt principal(2)	$	5,220,690	$	4,245,508
Less: cash and cash equivalents(3)	(301,979)		(163,318)
Net Debt	$	4,918,711	$	4,082,190


Leverage Ratio (in thousands, except percentage)

Pro Forma Enterprise Value	$	6,636,876
Our Share of Net Debt to Pro Forma Enterprise Value	62		%


AFFO Payout Ratio(4)

Three months ended March 31, 2023	48.7	%

_______________________________________________

(1) Both the numerator and denominator used in calculating the percentage of units leased do not include 117 units at one property temporarily unoccupied as a result of a fire. For newly developed buildings going through initial lease up, units are included in both the numerator and denominator as they are leased.

(2) See page 12 for a reconciliation of consolidated debt principal and our share of debt principal to consolidated debt on the balance sheet.

(3) Our share of cash and cash equivalents is calculated starting with our consolidated cash and cash equivalents of $302.0 million, then deducting the other owners' share of our JVs' cash and cash equivalents of $143.5 million and then adding our share of our unconsolidated Fund's cash and cash equivalents of $4.8 million.

(4) Payout ratio based on $0.19 cent dividend payable to shareholders of record as of March 31, 2023.

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Company Overview

Property Map

as of March 31, 2023

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						Company Overview

Board of Directors and Executive Officers

as of March 31, 2023

BOARD OF DIRECTORS

__________________________________________________________________________________________________________________________________


Dan A. Emmett			Our Executive Chairman of the Board
Jordan L. Kaplan			Our Chief Executive Officer and President
Kenneth M. Panzer			Our Chief Operating Officer
Leslie E. Bider			Retired Executive and Investor
Dorene C. Dominguez			Chairwoman and CEO of Vanir Group of Companies
Dr. David T. Feinberg			Chairman, Oracle Health
Ray C. Leonard			President, Sugar Ray Leonard Foundation
Virginia A. McFerran			Technology and Data Science Advisor
Thomas E. O’Hern			Chief Executive Officer, Macerich
William E. Simon, Jr.			Partner Emeritus, Simon Quick Advisors
Shirley Wang			Founder and CEO, Plastpro Inc.

EXECUTIVE OFFICERS

__________________________________________________________________________________________________________________________________


Dan A. Emmett			Chairman of the Board
Jordan L. Kaplan			Chief Executive Officer and President
Kenneth M. Panzer			Chief Operating Officer
Peter D. Seymour			Chief Financial Officer
Kevin A. Crummy			Chief Investment Officer

CORPORATE OFFICE

1299 Ocean Avenue, Suite 1000, Santa Monica, California 90401

Phone: (310) 255-7700

For more information, please visit our website at www.douglasemmett.com or contact:

Stuart McElhinney, Vice President, Investor Relations

(310) 255-7751

smcelhinney@douglasemmett.com

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						Financial Results

Consolidated Balance Sheets

(Unaudited; In thousands)


	March 31, 2023		December 31, 2022

Assets
Investment in real estate, gross	$	12,317,670	$	12,292,973
Less: accumulated depreciation and amortization	(3,367,802)		(3,299,365)
Investment in real estate, net	8,949,868		8,993,608

Ground lease right-of-use asset	7,452		7,455
Cash and cash equivalents	301,979		268,837
Tenant receivables	4,818		6,879
Deferred rent receivables	114,853		114,980
Acquired lease intangible assets, net	3,388		3,536
Interest rate contract assets	218,298		270,234
Investment in unconsolidated Fund	47,263		47,976
Other assets	29,791		33,941
Total assets	$	9,677,710	$	9,747,446

Liabilities
Secured notes payable and revolving credit facility, net	$	5,193,005	$	5,191,893
Ground lease liability	10,843		10,848
Interest payable, accounts payable and deferred revenue	165,873		140,925
Security deposits	61,727		61,429
Acquired lease intangible liabilities, net	28,179		31,364
Interest rate contract liabilities	1,135		1,790
Dividends payable	33,142		33,414
Total liabilities	5,493,904		5,471,663

Equity
Douglas Emmett, Inc. stockholders' equity:
Common stock	1,744		1,758
Additional paid-in capital	3,476,811		3,493,307
Accumulated other comprehensive income	151,076		187,063
Accumulated deficit	(1,134,472)		(1,119,714)
Total Douglas Emmett, Inc. stockholders' equity	2,495,159		2,562,414
Noncontrolling interests	1,688,647		1,713,369
Total equity	4,183,806		4,275,783
Total liabilities and equity	$	9,677,710	$	9,747,446

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Financial Results

Consolidated Operating Results

(Unaudited; In thousands, except per share data)


	Three Months Ended March 31,
		2023		2022

Revenues
Office rental
Rental revenues and tenant recoveries(1)		$	176,345	$	180,427
Parking and other income		27,013		22,713
Total office revenues		203,358		203,140

Multifamily rental
Rental revenues		43,973		31,228
Parking and other income		5,062		4,514
Total multifamily revenues		49,035		35,742

Total revenues		252,393		238,882

Operating Expenses
Office expenses		72,768		67,374
Multifamily expenses		16,888		10,173
General and administrative expenses		10,940		11,240
Depreciation and amortization		93,176		89,365
Total operating expenses		193,772		178,152



Other income		3,283		367
Other expenses		(520)		(183)
Income from unconsolidated Fund		289		247
Interest expense		(45,511)		(34,902)



Net income		16,162		26,259
Net loss (income) attributable to noncontrolling interests		2,211		(745)
Net income attributable to common stockholders		$	18,373	$	25,514

Net income per common share - basic and diluted		$	0.10	$	0.14


Dividends declared per common share		$	0.19	$	0.28

Weighted average shares of common stock outstanding - basic and diluted		175,765		175,656

_______________________________________________________________________

(1)Rental revenues and tenant recoveries include tenant recoveries of $13.1 million and $15.2 million for the three months ended March 31, 2023 and 2022, respectively.

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Financial Results

Funds From Operations & Adjusted Funds From Operations(1)

(Unaudited; in thousands, except per share data)

The table below presents a reconciliation of Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) to Net income attributable to common stockholders:


	Three Months Ended March 31,
		2023		2022
Funds From Operations (FFO)
Net income attributable to common stockholders		$	18,373	$	25,514
Depreciation and amortization of real estate assets		93,176		89,365
Net (loss) income attributable to noncontrolling interests		(2,211)		745
Adjustments attributable to unconsolidated Fund(2)		745		694
Adjustments attributable to consolidated JVs(2)		(11,471)		(12,555)



FFO		$	98,612	$	103,763

Adjusted Funds From Operations (AFFO)
FFO		$	98,612	$	103,763
Straight-line rent		126		111
Net accretion of acquired above- and below-market leases		(3,037)		(1,797)
Loan costs, loan premium amortization and swap amortization		2,034		1,514
Recurring capital expenditures, tenant improvements and capitalized leasing expenses(3)		(27,249)		(16,795)
Non-cash compensation expense		5,473		5,633
Adjustments attributable to unconsolidated Fund(2)		(97)		(318)
Adjustments attributable to consolidated JVs(2)		5,540		1,981
AFFO		$	81,402	$	94,092

Weighted average shares of common stock outstanding - diluted		175,765		175,656
Weighted average units in our operating partnership outstanding		32,924		31,445
Weighted average fully diluted shares outstanding		208,689		207,101

Net income per common share - basic and diluted		$	0.10	$	0.14
FFO per share - fully diluted		$	0.47	$	0.50
Dividends paid per share(4)		$	0.19	$	0.28

__________________________________________________________

(1)Presents the FFO and AFFO attributable to our common stockholders and noncontrolling interests in our Operating Partnership, including our share of our consolidated JVs and our unconsolidated Fund.

(2)Adjusts for the portion of each other listed adjustment item on our share of the results of our unconsolidated Fund and for each other listed adjustment item that is attributed to the noncontrolling interests in our consolidated JVs.

(3)Under the GAAP lease accounting rules, we expense non-incremental leasing expenses (leasing expenses not directly related to the signing of a lease) and capitalize incremental leasing expenses. Since non-incremental leasing expenses are included in the calculation of net income attributable to common stockholders and FFO, the capitalized leasing expenses adjustment to AFFO only includes incremental leasing expenses.

(4)Reflects dividends paid within the respective periods.

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Financial Results

Same Property Statistics & Net Operating Income (NOI)(1)

(Unaudited; in thousands, except statistics)



	As of March 31,
	2023		2022
Office Statistics
Number of properties	67		67
Rentable square feet (in thousands)	17,561		17,561
Ending % leased	85.5	%	87.6	%
Ending % occupied	83.5	%	84.5	%
Quarterly average % occupied	83.6	%	84.7	%

Multifamily Statistics
Number of properties	10		10
Number of units	3,449		3,449
Ending % leased	99.2	%	99.7	%



	Three Months Ended March 31,				% Favorable
	2023		2022		(Unfavorable)
Net Operating Income (NOI)
Office revenues	$	202,182	$	200,019	1.1	%
Office expenses	(72,595)		(66,177)		(9.7)	%
Office NOI	129,587		133,842		(3.2)	%

Multifamily revenues	29,789		27,558		8.1	%
Multifamily expenses	(9,465)		(8,560)		(10.6)	%
Multifamily NOI	20,324		18,998		7.0	%

Total NOI	$	149,911	$	152,840	(1.9)	%

Cash Net Operating Income (NOI)
Office cash revenues	$	201,113	$	198,290	1.4	%
Office cash expenses	(72,595)		(66,177)		(9.7)	%
Office cash NOI	128,518		132,113		(2.7)	%

Multifamily cash revenues	29,786		27,555		8.1	%
Multifamily cash expenses	(9,465)		(8,560)		(10.6)	%
Multifamily cash NOI	20,321		18,995		7.0	%

Total Cash NOI	$	148,839	$	151,108	(1.5)	%

_________________________________________________

(1) The amounts presented include 100% (not our pro-rata share). See page 10 for a reconciliation of these non-GAAP measures to net income attributable to common stockholders.

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Financial Results

Reconciliation of Same Property NOI to Net Income

(Unaudited and in thousands)


	Three Months Ended March 31,
	2023		2022

Same property office cash revenues	$	201,113	$	198,290
Non-cash adjustments per definition of NOI	1,069		1,729
Same property office revenues	202,182		200,019



Same property office expenses	(72,595)		(66,177)

Office NOI	129,587		133,842

Same property multifamily cash revenues	29,786		27,555
Non-cash adjustments per definition of NOI	3		3
Same property multifamily revenues	29,789		27,558



Same property multifamily expenses	(9,465)		(8,560)

Multifamily NOI	20,324		18,998

Same Property NOI	149,911		152,840
Non-comparable office revenues	1,176		3,121
Non-comparable office expenses	(173)		(1,197)
Non-comparable multifamily revenues	19,246		8,184
Non-comparable multifamily expenses	(7,423)		(1,613)
NOI	162,737		161,335
General and administrative expenses	(10,940)		(11,240)
Depreciation and amortization	(93,176)		(89,365)
Other income	3,283		367
Other expenses	(520)		(183)
Income from unconsolidated Fund	289		247
Interest expense	(45,511)		(34,902)



Net income	16,162		26,259
Net loss (income) attributable to noncontrolling interests	2,211		(745)
Net income attributable to common stockholders	$	18,373	$	25,514

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Financial Results

Financial Data for JVs & Fund

(Unaudited, in thousands)













	Three Months Ended March 31, 2023

	Wholly-Owned Properties		Consolidated JVs(1)		Unconsolidated Fund(2)

Revenues	$	189,655	$	62,738	$	4,642
Office and multifamily operating expenses	$	65,435	$	24,221	$	1,606
Straight-line rent	$	(772)	$	646	$	(4)
Above/below-market lease revenue	$	272	$	2,765	$	—
Cash NOI attributable to outside interests(3)	$	—	$	17,648	$	1,771
Our share of cash NOI(4)	$	124,720	$	17,458	$	1,269

______________________________________________________

(1) Represents stand-alone financial data (with property management fees excluded from operating expenses as a consolidating entry) for four consolidated JVs that we manage. We own a weighted average interest of approximately 46% (based on square footage) in the four JVs, which owned a combined sixteen Class A office properties totaling 4.2 million square feet and two residential properties with 470 apartments in our submarkets. We are entitled to (i) distributions based on invested capital, (ii) fees for property management and other services, (iii) reimbursement of certain acquisition-related expenses and certain other costs and (iv) additional distributions based on Cash NOI.

(2) Represents stand-alone financial data (with property management fees excluded from operating expenses as a consolidating entry) for one unconsolidated Fund that we manage. We own an interest of approximately 34% in the Fund, which owns two Class A office properties totaling 0.4 million square feet in our submarkets. We are entitled to (i) priority distributions, (ii) distributions based on invested capital, (iii) a carried interest if the investors’ distributions exceed a hurdle rate, (iv) fees for property management and other services and (v) reimbursement of certain costs.

(3) Represents the share of Cash NOI allocable under the applicable agreements to interests other than our Fully Diluted Shares.

(4) Represents the share of Cash NOI allocable to our Fully Diluted Shares.

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Financial Results


Loans (As of March 31 2023, unaudited)


Maturity Date(1)		Principal Balance (In Thousands)		Our Share(2) (In Thousands)		Effective Rate(3)	Swap Maturity Date

Consolidated Wholly-Owned Subsidiaries

3/3/2025	(4)	$	335,000	$	335,000	LIBOR + 1.30%	N/A
4/1/2025	(4)	102,400		102,400		LIBOR + 1.25%	N/A
8/15/2026		415,000		415,000		3.07%	8/1/2025
9/19/2026		400,000		400,000		2.44%	9/1/2024
9/26/2026		200,000		200,000		2.36%	10/1/2024
11/1/2026		400,000		400,000		2.31%	10/1/2024
6/1/2027		550,000		550,000		LIBOR + 1.37%	N/A
5/18/2028		300,000		300,000		2.21%	6/1/2026
1/1/2029		300,000		300,000		2.66%	1/1/2027
6/1/2029		255,000		255,000		3.26%	6/1/2027
6/1/2029		125,000		125,000		3.25%	6/1/2027
6/1/2038	(6)	28,290		28,290		4.55%	N/A
8/21/2023	(7)	—		—		LIBOR + 1.15%	N/A
Subtotal		3,410,690		3,410,690

Consolidated JVs

12/19/2024	(5)	400,000		80,000		LIBOR + 1.30%	N/A
5/15/2027		450,000		400,500		2.26%	4/1/2025
8/19/2028		625,000		187,500		2.12%	6/1/2025
4/26/2029		175,000		96,250		3.90%	5/1/2026
6/1/2029		160,000		32,000		3.25%	7/1/2027
Total Consolidated Loans	(8)	$	5,220,690	$	4,206,940

Unconsolidated Fund

9/14/2028		$	115,000	$	38,568	2.19%	10/1/2026

Total Loans				$	4,245,508

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Except as noted below, our loans and revolving credit facility: (i) are non-recourse, (ii) are secured by separate collateral pools consisting of one or more properties, (iii) require interest-only monthly payments with the outstanding principal due at maturity, and (iv) contain certain financial covenants which could require us to deposit excess cash flow with the lender under certain circumstances unless we (at our option) either provide a guarantee or additional collateral or pay down the loan within certain parameters set forth in the loan documents. Certain loans with maturity date extension options require us to meet minimum financial thresholds in order to exercise those extension options.

(1)Maturity dates include the effect of extension options.

(2)"Our Share" is calculated by multiplying the principal balance by our share of the borrowing entity's equity, and is used to calculate the non-GAAP measure "Our Share of Net Debt" - see Corporate Data on page 3.

(3)Effective rate as of March 31, 2023. Includes the effect of interest rate swaps and excludes the effect of prepaid loan costs.

(4)Swaps expired on March 1, 2023.

(5)Swaps expired on January 1, 2023.

(6)Requires monthly payments of principal and interest. Principal amortization is based upon a 30-year amortization schedule.

(7)$400.0 million revolving credit facility. The unused commitment fees range from 0.10% to 0.15%.

(8)Our consolidated debt on the balance sheet (see page 6) of $5.19 billion is calculated by adding $3.4 million of unamortized loan premium and deducting $31.1 million of unamortized deferred loan costs from our total consolidated loans of $5.22 billion.



			Statistics for consolidated loans with interest fixed under the terms of the loan or a swap

			Principal balance (in billions)			$3.83
			Weighted average remaining life (including extension options)			4.8 years
			Weighted average remaining fixed interest period			2.6 years
			Weighted average annual interest rate			2.65%

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Portfolio Data

Office Portfolio Summary

Total Office Portfolio as of March 31, 2023



Region	Number of Properties	Our Rentable Square Feet	Region Rentable Square Feet(1)	Our Average Market Share(2)

Los Angeles
Westside(3)	52	9,998,784	40,132,758	34.7	%
Valley	16	6,790,777	21,754,472	43.6
Honolulu(3)	2	1,190,835	5,473,876	21.8
Total / Average	70	17,980,396	67,361,106	37.2	%

_________________________________________________

(1) The rentable square feet in each region is based on the Rentable Square Feet as reported in the 2023 first quarter CBRE Marketview report for our submarkets in that region.

(2) Our market share is calculated by dividing our Rentable Square Feet by the applicable Region's Rentable Square Feet, weighted in the case of averages based on the square feet of exposure in our total portfolio to each submarket as follows:



Region	Submarket	Number of Properties	Our Rentable Square Feet	Our Market Share(2)

Westside	Brentwood	15	2,085,745	60.3	%
	Westwood	7	2,191,444	43.6
	Olympic Corridor	5	1,142,885	29.5
	Beverly Hills(3)	11	2,196,067	27.8
	Santa Monica	11	1,425,374	14.4
	Century City	3	957,269	8.9
Valley	Sherman Oaks/Encino	12	3,488,995	53.6
	Warner Center/Woodland Hills	3	2,845,577	37.5
	Burbank	1	456,205	6.0
Honolulu	Honolulu(3)	2	1,190,835	21.8
	Total / Weighted Average	70	17,980,396	37.2	%

_______________________________________________

(3) In calculating market share, we adjusted the rentable square footage by (i) removing 493,000 rentable square feet for an office building in Honolulu that we are converting to residential apartments from both our rentable square footage and that of the submarket and (ii) removing a 218,000 square foot property located just outside the Beverly Hills city limits from both the numerator and the denominator.

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Portfolio Data

Office Percentage Leased and In-Place Rents

Total Office Portfolio as of March 31, 2023



Region(1)	Percent Leased		Annualized Rent(2)		Annualized Rent Per Leased Square Foot(2)		Monthly Rent Per Leased Square Foot(2)

Los Angeles
Westside	85.3	%	$	460,541,581	$	56.45	$	4.70
Valley	85.2		204,852,484		36.31		3.03
Honolulu	88.8		35,044,214		34.47		2.87
Total / Weighted Average	85.5	%	$	700,438,279	$	47.27	$	3.94

_______________________________________________________________

(1)Regional data reflects the following underlying submarket data:



Region	Submarket	Percent Leased		Monthly Rent Per Leased Square Foot(2)

Westside	Beverly Hills	92.1	%	$	4.77
	Brentwood	81.4		3.94
	Century City	91.5		4.56
	Olympic Corridor	75.9		3.40
	Santa Monica	89.8		6.91
	Westwood	81.6		4.53
Valley	Burbank	100.0		4.83
	Sherman Oaks/Encino	87.6		3.08
	Warner Center/Woodland Hills	79.9		2.59
Honolulu	Honolulu	88.8		2.87
	Weighted Average	85.5	%	$	3.94

(2) Does not include signed leases not yet commenced, which are included in percent leased but excluded from annualized rent.



Recurring Office Capital Expenditures per Rentable Square Foot

Three months ended March 31, 2023	$	0.03

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Portfolio Data

Office Lease Diversification

Total Office Portfolio as of March 31, 2023

Portfolio Tenant Size

Median

Average

Square feet

2,500

5,500



	Office Leases			Rentable Square Feet			Annualized Rent
Square Feet Under Lease	Number	Percent		Amount	Percent		Amount		Percent

2,500 or less	1,349	49.7	%	1,947,973	13.1	%	$	85,387,904	12.2	%
2,501-10,000	1,035	38.2		5,061,644	34.2		232,642,010		33.2
10,001-20,000	207	7.6		2,862,330	19.3		134,231,668		19.2
20,001-40,000	89	3.3		2,424,879	16.4		115,011,428		16.4
40,001-100,000	29	1.1		1,706,409	11.5		88,623,738		12.6
Greater than 100,000	3	0.1		813,637	5.5		44,541,531		6.4
Total for all leases	2,712	100.0	%	14,816,872	100.0	%	$	700,438,279	100.0	%

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Portfolio Data

Largest Office Tenants

Total Office Portfolio as of March 31, 2023



Tenants paying 1% or more of our aggregate Annualized Rent:

Tenant	Number of Leases	Number of Properties	Lease Expiration(1)	Total Leased Square Feet	Percent of Rentable Square Feet		Annualized Rent		Percent of Annualized Rent

Warner Bros. Discovery(2)	3	2	2023-2024	480,926	2.7	%	$	27,368,209	3.9	%
UCLA(3)	22	10	2023-2027	266,009	1.5		14,689,807		2.1
William Morris Endeavor(4)	2	1	2027	219,294	1.2		13,944,164		2.0
Morgan Stanley(5)	5	5	2025-2028	143,342	0.8		10,620,022		1.5
Equinox Fitness(6)	6	5	2029-2038	185,236	1.0		10,142,330		1.4
Macerich(7)	2	1	2023-2028	82,368	0.5		7,501,247		1.1
Total	40	24		1,377,175	7.7	%	$	84,265,779	12.0	%

______________________________________________________

(1) Expiration dates are per lease (expiration dates do not reflect storage and similar leases).

(2) Square footage (rounded) expires as follows: 25,000 square feet in 2023; and 456,000 square feet in 2024.

(3) Square footage (rounded) expires as follows: 6 leases totaling 48,000 square feet in 2023; 2 leases totaling 11,000 square feet in 2024; 4 leases totaling 89,000 square feet in 2025; 5 leases totaling 32,000 square feet in 2026; 3 leases totaling 71,000 square feet in 2027, 1 lease totaling 8,000 square feet in 2028, and 1 lease totaling 8,000 square feet in 2033. Tenant has options to terminate 15,000 square feet in 2024; and 51,000 square feet in 2025.

(4) Square footage (rounded) expires as follows: 213,000 square feet in 2027.

(5) Square footage (rounded) expires as follows: 26,000 square feet in 2025; and 88,000 square feet in 2027; and 30,000 square feet in 2028. Tenant has options to terminate 32,000 square feet in 2024.

(6) Square footage (rounded) expires as follows: 34,000 square feet in 2029; 46,000 square feet in 2035, 31,000 square feet in 2037, and 74,000 square feet in 2038.

(7) Square footage (rounded) expires as follows: 27,000 square feet in 2023, and 55,000 square feet in 2028.

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Portfolio Data

Office Industry Diversification

Total Office Portfolio as of March 31, 2023

Percentage of Annualized Rent by Tenant Industry



Industry	Number of Leases	Annualized Rent as a Percent of Total

Legal	583	18.1	%
Financial Services	366	15.8
Entertainment	166	14.3
Real Estate	316	12.4
Accounting & Consulting	293	9.0
Health Services	382	8.6
Retail	157	4.9
Technology	93	4.4
Insurance	92	3.8
Educational Services	50	2.9
Public Administration	71	2.3
Other	54	1.3
Manufacturing & Distribution	49	1.1
Advertising	40	1.1
Total	2,712	100.0	%

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Portfolio Data

Office Lease Expirations

Total Office Portfolio as of March 31, 2023

(1) Average of the percentage of leases expiring at March 31, 2020, 2021, and 2022 with the same remaining duration as the leases for the labeled year had at March 31, 2023. Acquisitions are included in the comparable average commencing in the quarter after the acquisition.



Year of Lease Expiration	Number of Leases	Rentable Square Feet	Expiring Square Feet as a Percent of Total		Annualized Rent at March 31, 2023		Annualized Rent as a Percent of Total		Annualized Rent Per Leased Square Foot(1)		Annualized Rent Per Leased Square Foot at Expiration(2)

Short Term Leases	89	328,580	1.8	%	$	13,720,559	2.0	%	$	41.76	$	52.59
2023	441	1,761,741	9.8		77,189,715		11.0		43.81		45.61
2024	586	3,113,998	17.3		147,794,085		21.1		47.46		49.00
2025	510	2,321,135	12.9		106,664,045		15.2		45.95		49.38
2026	377	1,903,604	10.6		89,750,221		12.8		47.15		52.03
2027	270	1,898,462	10.6		95,064,047		13.6		50.07		57.12
2028	196	1,194,702	6.6		58,681,762		8.4		49.12		56.11
2029	74	485,640	2.7		24,177,424		3.4		49.78		60.31
2030	55	621,476	3.5		30,029,841		4.3		48.32		61.65
2031	42	336,280	1.9		17,407,810		2.5		51.77		65.80
2032	28	233,214	1.3		11,129,024		1.6		47.72		62.77
Thereafter	44	618,040	3.4		28,829,746		4.1		46.65		66.31
Subtotal/weighted average	2,712	14,816,872	82.4	%	$	700,438,279	100.0	%	$	47.27	$	52.96
Signed leases not commenced		362,665	2.0
Available		2,601,733	14.5
Building management use		106,521	0.6
BOMA adjustment(3)		92,605	0.5
Total/weighted average	2,712	17,980,396	100.0	%	$	700,438,279	100.0	%	$	47.27	$	52.96

___________________________________________________

(1)Represents annualized rent at March 31, 2023 divided by leased square feet.

(2)Represents annualized rent at expiration divided by leased square feet.

(3)Represents the square footage adjustments for leases that do not reflect BOMA remeasurement.

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Portfolio Data

Office Lease Expirations - Next Four Quarters

Total Office Portfolio as of March 31, 2023



	Q2 2023		Q3 2023		Q4 2023		Q1 2024

Los Angeles
Westside	281,845		391,467		292,807		371,658
Valley	71,792		400,385		240,841		303,822
Honolulu	27,724		19,744		35,136		29,058
Expiring Square Feet(1)	381,361		811,596		568,784		704,538

Percentage of Portfolio	2.1	%	4.5	%	3.2	%	3.9	%

Los Angeles
Westside	$60.57		$46.16		$60.20		$55.40
Valley	$33.19		$34.74		$36.51		$33.89
Honolulu	$26.68		$32.74		$31.64		$34.79
Expiring Rent per Square Foot(2)	$52.95		$40.20		$48.40		$45.27

________________________________________________________

(1)Includes leases with an expiration date in the applicable period where the space had not been re-leased as of March 31, 2023, other than 328,580 square feet of Short-Term Leases.

(2)Fluctuations in this number primarily reflect the mix of buildings/submarkets involved, as well as the varying terms and square footage of the individual leases expiring. As a result, the data in this table should only be extrapolated with caution. While the following table sets forth data for our underlying submarkets, that data is even more influenced by such issues:



		Next Four Quarters

Region	Submarket	Expiring SF	Expiring Rent per SF

Westside	Beverly Hills	325,558	$52.09
	Brentwood	335,385	$47.97
	Century City	91,349	$51.27
	Olympic Corridor	185,149	$36.42
	Santa Monica	185,043	$91.58
	Westwood	215,293	$55.44
Valley	Sherman Oaks/Encino	448,423	$38.89
	Warner Center/Woodland Hills	568,417	$31.56
Honolulu	Honolulu	111,662	$31.42

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Portfolio Data

Office Leasing Activity

Total Office Portfolio during the Three Months ended March 31, 2023



			Net Absorption During Quarter			(1.46)%



Office Leases Signed During Quarter	Number of Leases	Rentable Square Feet	Weighted Average Lease Term (months)1

New leases	78	168,335	41
Renewal leases	157	456,739	46
All leases	235	625,074	44



Change in Rental Rates for Office Leases Executed during the Quarter(1)

	Expiring Rate(1)	New/Renewal Rate(1)	Percentage Change

Cash Rent	$45.62	$42.59	(6.7)%
Straight-line Rent	$41.66	$44.14	6.0%



Average Office Lease Transaction Costs

	Lease Transaction Costs per SF	Lease Transaction Costs per Annum

New leases signed during the quarter	$23.28	$6.80
Renewal leases signed during the quarter	$13.84	$4.75
All leases signed during the quarter	$16.38	$5.37

________________________________________________________________

(1)Change in rental rate and average renewal lease term exclude leases with a term of twelve months or less. Change in rental rate represents the average annual initial stabilized cash and straight-line rents per square foot on new and renewed leases signed during the quarter compared to the prior leases for the same space. Change in rental rate metrics exclude leases where the prior lease was terminated more than a year before signing of the new lease, leases for tenants relocated at the landlord's request, leases in acquired buildings where we believe the information about the prior agreement is incomplete or where we believe the base rent reflects other off-market inducements to the tenant, and other non-comparable leases.

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Portfolio Data

Multifamily Portfolio Summary

as of March 31, 2023

Annualized Rent by Submarket



Submarket	Number of Properties		Number of Units		Units as a Percent of Total

Los Angeles
Santa Monica	3		940		19		%
West Los Angeles	7		1,676		33
Honolulu	4		2,416		48
Total	14		5,032		100		%

Submarket	Percent Leased(1)		Annualized Rent(2)		Monthly Rent Per Leased Unit

Los Angeles
Santa Monica	98.5	%	$	48,067,680	$	4,330
West Los Angeles(3)	99.5		63,675,756		3,688
Honolulu	99.5		63,066,552		2,191
Total / Weighted Average	99.3	%	$	174,809,988	$	3,058



Recurring Multifamily Capital Expenditures per Unit (2)


Three months ended March 31, 2023	$	171

________________________________________________________________

(1) For newly developed buildings going through initial lease up, units are included in both the numerator and denominator as they are leased.

(2) The multifamily portfolio also includes 97,324 square feet and annualized rent of $2,913,801 consisting of ancillary retail space at three properties and remaining office space at a building undergoing conversion from office to residential, which are not included in this table.

(3) Calculations exclude 117 units temporarily unoccupied as a result of a fire.

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Guidance

2023 Guidance(1)


Metric			Per Share
Net income per common share - diluted			$0.35 to $0.41
FFO per share - fully diluted			$1.87 to $1.93

Assumptions

Metric

Commentary

Assumption Range

Compared to Prior Assumption

Average Office Occupancy

Due to the decline in large tenant activity, we are reducing our gross leasing expectations.

81% to 83%

Revised

Residential Leased Rate

Essentially fully leased

Unchanged

Same Property Cash NOI Growth

-1.5% to -0.5%

Revised

Above/Below Market Net Revenue

$8 to $12 million

Unchanged

Straight-line Revenue

$1 to $3 million

Revised

G&A

$45 to $49 million

Unchanged

Interest Expense

Reflects rising interest rates, the expiration of swaps, and the full year impact of the 1221 Ocean acquisition loan.

$192 to $196 million

Unchanged

Weighted average fully diluted shares outstanding

204.5 million

Revised

________________________________________________________________

(1) All of our assumptions include 100% of our consolidated JVs share, not our pro rata share. Except as disclosed, our guidance does not include the impact of future property acquisitions or dispositions, common stock sales or repurchases, financings, property damage insurance recoveries, impairment charges or other possible capital markets activities.

The guidance and representative assumptions on this page are forward looking statements, subject to the safe harbor contained at the beginning of this Earnings Package, and reflect our views of current and future market conditions. Ranges represent a set of likely assumptions, but actual results could fall outside the ranges presented. Only a few of our assumptions underlying our guidance are disclosed above, and our actual results will be affected by known and unknown risks, trends, uncertainties and other factors, some of which are beyond our control or ability to predict. Although we believe that the assumptions underlying our guidance are reasonable, they are not guarantees of future performance and some of them will inevitably prove to be incorrect. As a result, our actual future results can be expected to differ from our expectations, and those differences could be material. See page 23 for a reconciliation of our Non-GAAP guidance.

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Guidance

Reconciliation of 2023 Non-GAAP Guidance(1)

(Unaudited; in millions, except per share amounts)

Reconciliation of our guided Net income per common share - diluted to FFO per share - fully diluted:


Reconciliation of net income attributable to common stockholders to FFO	Low		High

Net income attributable to common stockholders	$	60.3	$	70.6
Adjustments for depreciation and amortization of real estate assets	380.0		370.0
Adjustments for noncontrolling interests, consolidated JVs and unconsolidated Fund	(57.9)		(45.9)
FFO	$	382.4	$	394.7

Weighted average fully diluted shares outstanding	High		Low

Weighted average shares of common stock outstanding - diluted	171.4		171.4
Weighted average units in our operating partnership outstanding	33.1		33.1
Weighted average fully diluted shares outstanding	204.5		204.5

Per share	Low		High

Net income per common share - diluted	$	0.35	$	0.41
FFO per share - fully diluted	$	1.87	$	1.93

_____________________________________________

(1) Our guidance does not include the impact of future property acquisitions or dispositions, common stock sales or repurchases, financings, property damage insurance recoveries, if any, or other possible capital markets activities or impairment charges. The reconciliation should be used as an example only, with the numbers presented only as representative assumptions. Ranges represent a set of likely assumptions, but actual results could fall outside the ranges presented.

All assumptions are forward looking statements, subject to the safe harbor contained at the beginning of this Earnings Package, and reflect our views of current and future market conditions. Our actual results will be affected by known and unknown risks, trends, uncertainties and other factors, some of which are beyond our control or ability to predict. Although we believe that the assumptions underlying the guidance are reasonable, they are not guarantees of future performance and some of them will inevitably prove to be incorrect. As a result, our actual future results can be expected to differ from our expectations, and those differences could be material.

NOTE: See the "Definitions" section for definitions of certain terms used in this Earnings Package.

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						Definitions

Adjusted Funds From Operations (AFFO): We calculate AFFO from FFO by (i) eliminating the impact on FFO of straight-line rent; amortization/accretion of acquired above/below market leases; loan costs such as amortization/accretion of loan premiums/discounts; amortization and hedge ineffectiveness of interest rate contracts; amortization/expense of loan costs; non-cash compensation expense, and (ii) subtracting recurring capital expenditures, tenant improvements and capitalized leasing expenses (including adjusting for the effect of such items attributable to our consolidated JVs and our unconsolidated Fund, but not for noncontrolling interests included in our calculation of fully diluted equity). Recurring capital expenditures, tenant improvements and leasing expenses are those required to maintain current revenues once a property has been stabilized, generally excluding those for acquired buildings being stabilized, newly developed space and upgrades to improve revenues or operating expenses or significantly change the use of the space, as well as those resulting from casualty damage or bringing the property into compliance with governmental requirements. We report AFFO because it is a widely reported measure of the performance of equity Real Estate Investments Trusts (REITs), and is also used by some investors to compare our performance with other REITs. However, the National Association of Real Estate Investment Trusts (NAREIT) has not defined AFFO, and other REITs may use different methodologies for calculating AFFO, and accordingly, our AFFO may not be comparable to the AFFO of other REITs. AFFO is a non-GAAP financial measure for which we believe that net income (loss) is the most directly comparable GAAP financial measure. AFFO should be considered only as a supplement to net income (loss) as a measure of our performance and should not be used as a measure of our liquidity or cash flow, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends.

AFFO Payout Ratio: Represents dividends announced divided by the AFFO for that period. We report AFFO Payout Ratio because it is a widely reported measure of the performance of equity REITs, and is also used by some investors to compare our performance with other REITs.

Annualized Rent: Represents annualized cash base rent (i.e. excludes tenant reimbursements, parking and other revenue) before abatement under leases commenced as of the reporting date and expiring after the reporting date (does not include 362,665 square feet with respect to signed leases not yet commenced at March 31, 2023). For our triple net office properties (in Honolulu and one single tenant building in Los Angeles), annualized rent is calculated for triple net leases by adding expense reimbursements and estimates of normal building expenses paid by tenants to base rent. Annualized Rent does not include lost rent recovered from insurance and rent for building management use. Annualized Rent includes rent for our corporate headquarters in Santa Monica. We report Annualized Rent because it is a widely reported measure of the performance of equity REITs, and is used by some investors as a means to determine tenant demand and to compare our performance and value with other REITs. We use Annualized Rent to manage and monitor the performance of our office and multifamily portfolios.

Average Office Occupancy: Calculated by averaging the Occupancy Rates on the last day of the current and prior quarter and, for reporting periods longer than a quarter, by averaging the Occupancy Rates for all the quarters in the respective reported period.

Consolidated Portfolio: Includes all of the properties included in our consolidated results, including our consolidated JVs. At March 31, 2023, we own 100% of our consolidated portfolio, except for sixteen office properties totaling 4.2 million square feet and two residential properties with 470 apartments, which we own through four consolidated JVs and in which we own a weighted average interest of approximately 46% based on square footage.

Consolidated Net Debt: Represents our consolidated debt, net of cash and cash equivalents, and before adding unamortized loan premium and deducting unamortized deferred loan costs. Cash and cash equivalents are subtracted because they could be used to reduce the debt obligations and unamortized loan premium and deferred loan costs are not adjusted for because they do not require cash settlement. Consolidated Net Debt is a non-GAAP financial measure for which we believe that consolidated debt is the most directly comparable GAAP financial measure. We report Consolidated Net Debt because some investors use it to evaluate and compare our leverage and financial position with that of other REITs. A limitation associated with using Consolidated Net Debt is that it subtracts cash and cash equivalents and may therefore imply that there is less debt than the most comparable GAAP financial measure indicates.

Equity Capitalization: Represents our Fully Diluted Shares multiplied by the closing price of our common stock on the New York Stock Exchange as of March 31, 2023.

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						Definitions

Fully Diluted Shares: Calculated according to the treasury stock method, based on our diluted outstanding stock and units in our Operating Partnership.

Fund: At March 31, 2023, we owned an interest of approximately 34% in Douglas Emmett Partnership X, LP (Partnership X). The Fund owns two office properties totaling 0.4 million square feet.

Funds From Operations (FFO): We calculate FFO in accordance with the standards established by NAREIT by excluding gains (or losses) on sales of investments in real estate, gains (or losses) from changes in control of investments in real estate, real estate depreciation and amortization (other than amortization of right-of-use assets for which we are the lessee and amortization of deferred loan costs), and impairment write-downs of real estate from our net income (loss) (including adjusting for the effect of such items attributable to our consolidated JVs and our unconsolidated Fund, but not for noncontrolling interests included in our calculation of fully diluted equity). We report FFO because it is a widely reported measure of the performance of equity REITs, and is also used by some investors to identify the impact of trends in occupancy rates, rental rates and operating costs from year to year, excluding impacts from changes in the value of our real estate, and to compare our performance with other REITs. FFO is a non-GAAP financial measure for which we believe that net income (loss) is the most directly comparable GAAP financial measure. FFO has limitations as a measure of our performance because it excludes depreciation and amortization of real estate, and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures, tenant improvements and leasing expenses necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations. FFO should be considered only as a supplement to net income (loss) as a measure of our performance and should not be used as a measure of our liquidity or cash flow, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends. Other REITs may not calculate FFO in accordance with the NAREIT definition and, accordingly, our FFO may not be comparable to the FFO of other REITs.

GAAP: Refers to accounting principles generally accepted in the United States.

Joint Ventures (JVs): At March 31, 2023, we owned a weighted average interest of approximately 46% based on square footage in four consolidated JVs. The JVs owned sixteen office properties totaling 4.2 million square feet and two residential properties with 470 apartments. One of the JVs was created in the second quarter of 2022 to purchase a residential property on April 26, 2022. The results of the acquired property are included in our consolidated results from the acquisition date.

Lease Transaction Costs: Represents the weighted average of tenant improvements and leasing commissions for leases signed by us during the quarter, excluding leases substantially negotiated by the seller in the case of acquired properties and leases for tenants relocated from space being taken out of service. We report Lease Transaction Costs because it is a widely reported measure of the performance of equity REITs, and is used by some investors to determine our cash needs and to compare our performance with other REITs. We use Lease Transaction Costs to manage and monitor the performance of our office and multifamily portfolios.

Leased Rate: The percentage leased as of March 31, 2023. Management space is considered leased. Space taken out of service during a repositioning or which is vacant as a result of a fire or other damage is excluded from both the numerator and denominator for calculating percentage leased. We report Leased Rates because it is a widely reported measure of the performance of equity REITs, and is also used by some investors as a means to determine tenant demand and to compare our performance with other REITs. We use Leased Rate to manage and monitor the performance of our office and multifamily portfolios.

Net Absorption: Represents the change in percentage leased between the last day of the current and prior quarter, excluding a property undergoing conversion from office to residential use, as well as properties acquired or sold during the current quarter. The calculation also excludes the impact of building remeasurement. We report Net Absorption because it is a widely reported measure of the performance of equity REITs, and is used by some investors as a means to determine tenant demand and to compare our performance with other REITs. We use Net Absorption to manage and monitor the performance of our office portfolio.

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						Definitions

Net Income Per Common Share - Diluted: We calculate Net Income Per Common Share - Diluted in accordance with GAAP by dividing the net income attributable to common stockholders for the period by the weighted average number of common shares and dilutive instruments outstanding during the period using the treasury stock method. We account for unvested Long Term Incentive Plan Unit awards that contain non-forfeitable rights to dividends as participating securities and include these securities in the computation using the two-class method.

Net Operating Income (NOI): We calculate NOI as revenue less operating expenses attributable to the properties that we own and operate. We present two forms of NOI:

•NOI: is calculated by excluding the following from our net income (loss): general and administrative expenses, depreciation and amortization expense, other income, other expenses, income from unconsolidated Fund, interest expense, gains (losses) on sales of investments in real estate and net income attributable to noncontrolling interests.

•Cash NOI: is calculated by excluding from NOI our straight-line rent and the amortization/accretion of acquired above/below market leases.

We report NOI because it is a widely recognized measure of the performance of equity REITs, and is used by some investors to identify trends in occupancy rates, rental rates and operating costs and to compare our operating performance with that of other REITs. NOI is a non-GAAP financial measure for which we believe that net income (loss) is the most directly comparable GAAP financial measure. NOI has limitations as a measure of our performance because it excludes depreciation and amortization expense, and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures, tenant improvements and leasing expenses necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations. NOI should be considered only as a supplement to net income (loss) as a measure of our performance and should not be used as a measure of our liquidity or cash flow, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends. Other REITs may not calculate NOI in a similar manner and, accordingly, our NOI may not be comparable to the NOI of other REITs.

Occupancy Rate: We calculate Occupancy Rate by excluding signed leases not yet commenced from the Leased Rate. Management space is considered occupied. Space taken out of service during a repositioning or which is vacant as a result of a fire or other damage is excluded from both the numerator and denominator for calculating Occupancy Rate. We report Occupancy Rate because it is a widely reported measure of the performance of equity REITs, and is also used by some investors as a means to determine tenant demand and to compare our performance with other REITs. We use Occupancy Rate to manage and monitor the performance of our office and multifamily portfolios.

Operating Partnership: Douglas Emmett Properties, LP

Our Share of Net Debt: We calculate Our Share of Net Debt by multiplying the principal balance of our consolidated loans and our unconsolidated Fund's loan by our equity interest in the relevant borrower, and subtracting the product of cash and cash equivalents multiplied by our equity interest in the entity that owns the cash or cash equivalent. We subtract cash and cash equivalents because they could be used to reduce the debt obligations, and do not add unamortized loan premium or subtract unamortized deferred loan costs because they do not require cash settlement. Our Share of Net Debt is a non-GAAP financial measure for which we believe that consolidated debt is the most directly comparable GAAP financial measure. We report Our Share of Net Debt because some investors use it to evaluate and compare our leverage and financial position with that of other REITs.

Pro Forma Enterprise Value: We calculate Pro Forma Enterprise Value by adding Equity Capitalization to Our Share of Net Debt. Pro Forma Enterprise Value is a non-GAAP financial measure for which we believe that consolidated total equity and liabilities is the most directly comparable GAAP financial measure. We report Pro Forma Enterprise Value because some investors use it to evaluate and compare our financial position with that of other REITs.

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						Definitions

Recurring Capital Expenditures: Building improvements required to maintain revenues once a property has been stabilized, and excludes capital expenditures for (i) acquired buildings being stabilized, (ii) newly developed space, (iii) upgrades to improve revenues or operating expenses or significantly change the use of the space, (iv) casualty damage and (v) bringing the property into compliance with governmental or lender requirements. We report Recurring Capital Expenditures because it is a widely reported measure of the performance of equity REITs, and is used by some investors as a means to determine our cash flow requirements and to compare our performance with other REITs. We use Recurring Capital Expenditures to manage and monitor the performance of our office and multifamily portfolios.

Rental Rate: We report Rental Rate because it is a widely reported measure of the performance of equity REITs, and is used by some investors to compare our performance with other REITs. We use Rental Rate to manage and monitor the performance of our office and multifamily portfolios. We present two forms of Rental Rates:

•Cash Rental Rate: is calculated by dividing the rent paid by the Rentable Square Feet.

•Straight-Line Rental Rate: is calculated by dividing the average rent over the lease term by the Rentable Square Feet.

Rentable Square Feet: Based on the Building Owners and Managers Association (BOMA) measurement. At March 31, 2023, total consists of 15,179,537 leased square feet (including 362,665 square feet with respect to signed leases not commenced), 2,601,733 available square feet, 106,521 building management use square feet and 92,605 square feet of BOMA adjustment on leased space. We report Rentable Square Feet because it is a widely reported measure of the performance and value of equity REITs, and is also used by some investors to compare our performance and value with other REITs. We use Rentable Square Feet to manage and monitor the performance of our office portfolio.

Same Property NOI: To facilitate a comparison of NOI between reported periods, we report NOI for a subset of our properties referred to as our “same properties,” which are properties that have been owned and operated by us during both periods being compared. We exclude from our same property subset properties that during the comparable periods were: (i) acquired, (ii) sold, held for sale, contributed or otherwise removed from our consolidated financial statements, or (iii) that underwent a major repositioning project, were impacted by development activity, or suffered significant casualty loss that we believed significantly affected the properties' operating results. We also exclude rent received from ground leases. Our Same Property NOI is not adjusted for noncontrolling interests in properties which are not wholly owned.

Our same properties for 2023 include all of our Consolidated Portfolio properties, other than: (1) a 493,000 square foot office property in Honolulu affected by development activity, (2) a residential property with 712 apartments and approximately 34,000 square feet of retail space in Los Angeles partially affected by fire damage, (3) a new residential property with 376 apartments in West Los Angeles that we placed into service in 2022, and (4) a residential property with 120 units that we acquired in the second quarter of 2022.

We report Same Property NOI because it is a widely reported measure of the performance and value of equity REITs, and it is used by some investors to: (i) analyze our operating results excluding the impact of properties not being operated on a consistent basis, and (ii) to compare our performance and value with other REITs. We use Same Property NOI to manage and monitor the performance of our office portfolio.

Short Term Leases: Represents leases that expired on or before the reporting date or had a term of less than one year, including hold over tenancies, month to month leases and other short term occupancies.

Total Portfolio: At March 31, 2023, our Total Portfolio included our Consolidated Portfolio plus two office properties totaling 0.4 million square feet owned by one unconsolidated Fund in which we owned approximately 34%.

"We" and "our" refers to Douglas Emmett, Inc., our Operating Partnership and its subsidiaries, as well as our consolidated JVs and our unconsolidated Fund.

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