What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-02-14 compared with 2024-02-16 · 177 added, 157 removed, 1310 unchanged (20% of the section changed)

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Commitments, Contingencies and Guarantees

Subsequent Events

Schedule III - Consolidated Real Estate and Accumulated Depreciation

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10.8 Employment agreement dated January 1, 20 24 between Douglas Emmett, Inc., Douglas Emmett Properties, LP and Kenneth Panzer.

19.1 Insider Trading Compliance Policy and Procedures *

21.1 List of Subsidiaries of the Registrant.

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33-8212, these exhibits are being furnished, and are not being filed as part of this Report on Form 10-K or as a separate disclosure document, and are not being incorporated by reference into any Securities Act registration statement.

(13) Filed with Form 10-K on February 16, 2024 and incorporated herein by this reference.

(File number 001-33106)

Form 10-K Summary

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Dominguez Director

Feinberg Director

Leonard Director

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We have audited the accompanying consolidated balance sheets of Douglas Emmett, Inc.

(the Company) as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2023 and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

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(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Impairment of investment in real estate

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When indicators of impairment are present for a property, management calculates the future undiscounted cash flows expected to be generated by the property and compares it to the property’s carrying value to determine whether an impairment occurred.

Based on its assessment, management concluded that no impairments occurred for the year ended December 31, 2023.

The Company’s evaluation of impairment indicators was based on qualitative and quantitative factors including consideration of significant decreases in the market prices of long-lived assets and the impact of current economic trends.

Based on its assessment, management concluded that no impairment occurred for the year ended December 31, 2024.

The Company’s evaluation of impairment indicators was based on qualitative and quantitative factors including consideration of potential decreases in the market prices of long-lived assets and the impact of current economic trends.

When required, the estimation of undiscounted future cash flow includes management’s assumptions regarding future occupancy, rental revenues and operating costs.

Auditing the Company's impairment assessment for real estate assets was challenging because of the high degree of auditor judgment necessary to evaluate management’s identification of indicators of potential impairment.

When indicators of potential impairment were identified, auditing the Company’s evaluation of whether its real estate assets are recoverable was complex and involved a high degree of subjectivity in evaluating management’s assumptions in estimating the future cash flows based on assumptions about future market and economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s real estate asset impairment assessment process.

Our testing of the Company’s impairment assessment included, among other procedures, evaluating significant judgments applied in determining whether indicators of impairment existed for the Company’s real estate assets, and considering the potential impact of debt maturities and lease expirations on management's ability to hold the properties over the expected term.

Our procedures included obtaining evidence to corroborate such judgments and consideration of contrary evidence.

For example, we compared significant assumptions to historical operating results and market data, and considered the potential impact of debt maturities and lease expirations on management’s ability to hold the properties over the expected term.

For properties with identified indicators of potential impairment, we performed audit procedures over the Company’s estimation of the properties’ undiscounted future cash flows.

For example, we compared significant assumptions to historical operating results and market data.

We also tested the mathematical accuracy of management’s forecasted cash flows and, for certain assumptions, performed sensitivity analyses to evaluate the changes in the undiscounted cash flows that would result from changes in the assumptions.

/s/ Ernst & Young LLP

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Douglas Emmett, Inc.

as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2023 and the related notes and financial statement schedule listed in the Index at Item 15(a), and our report dated February 16, 2024 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a), and our report dated February 14, 2025 expressed an unqualified opinion thereon .

Basis for Opinion

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Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

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Acquired lease intangible liabilities, net 11,331 19,838

Interest rate contract liabilities — 1,790

Dividends payable 31,825 31,781

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Other expenses ( 398 ) ( 1,032 ) ( 714 )

(Loss) income from unconsolidated Fund ( 34,643 ) 1,224 946

Income (loss) from unconsolidated Fund 2,593 ( 34,643 ) 1,224

Interest expense ( 229,442 ) ( 209,468 ) ( 150,185 )

Net (loss) income ( 75,840 ) 96,540 56,131

Net income (loss) 7,588 ( 75,840 ) 96,540

Net loss attributable to noncontrolling interests 15,929 33,134 605

Net (loss) income attributable to common stockholders $ ( 42,706 ) $ 97,145 $ 65,267

Net (loss) income per common share – basic and diluted $ ( 0.26 ) $ 0.55 $ 0.37

Net income (loss) attributable to common stockholders $ 23,517 $ ( 42,706 ) $ 97,145

Net income (loss) per common share – basic and diluted $ 0.13 $ ( 0.26 ) $ 0.55

See accompanying notes to the consolidated financial statements.

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2024 2023 2022

Net (loss) income $ ( 75,840 ) $ 96,540 $ 56,131

Net income (loss) $ 7,588 $ ( 75,840 ) $ 96,540

Other comprehensive (loss) income:

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Accumulated Deficit Beginning balance $ ( 1,290,682 ) $ ( 1,119,714 ) $ ( 1,035,798 )

Net (loss) income attributable to common stockholders ( 42,706 ) 97,145 65,267

Net income (loss) attributable to common stockholders 23,517 ( 42,706 ) 97,145

Dividends ( 127,229 ) ( 128,262 ) ( 181,061 )

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Noncontrolling Interests Beginning balance $ 1,625,535 $ 1,713,369 $ 1,570,484

Net loss ( 33,134 ) ( 605 ) ( 9,136 )

Net loss attributable to noncontrolling interests ( 15,929 ) ( 33,134 ) ( 605 )

Cash flow hedge adjustments ( 29,965 ) ( 28,885 ) 99,711

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Total Equity Beginning balance $ 3,845,397 $ 4,275,783 $ 3,986,553

Net (loss) income ( 75,840 ) 96,540 56,131

Net income (loss) 7,588 ( 75,840 ) 96,540

Cash flow hedge adjustments ( 90,965 ) ( 100,031 ) 325,548

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Operating Activities

Net (loss) income $ ( 75,840 ) $ 96,540 $ 56,131

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Loss (income) from unconsolidated Fund 34,643 ( 1,224 ) ( 946 )

Net income (loss) $ 7,588 $ ( 75,840 ) $ 96,540

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

(Income) loss from unconsolidated Fund ( 2,593 ) 34,643 ( 1,224 )

Depreciation and amortization 384,048 459,949 372,798

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Capital expenditures for improvements to real estate ( 167,337 ) ( 189,157 ) ( 162,364 )

Capital expenditures for developments ( 41,480 ) ( 75,754 ) ( 184,592 )

Capital expenditures for developments and purchase of note receivable secured by real estate ( 72,052 ) ( 41,480 ) ( 75,754 )

Insurance recoveries for damage to real estate 3,573 2,181 5,716

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Repurchases of common stock — ( 109,233 ) —

Net cash provided by (used in) financing activities 60,871 ( 3,003 ) 5,246

Increase (decrease) in cash and cash equivalents and restricted cash 254,245 ( 67,068 ) 163,489

Net cash (used in) provided by financing activities ( 246,463 ) 60,871 ( 3,003 )

(Decrease) increase in cash and cash equivalents and restricted cash ( 78,531 ) 254,245 ( 67,068 )

Cash and cash equivalents and restricted cash - beginning balance 523,183 268,938 336,006

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Exchange of OP Units for common stock $ 3,503 $ 7,741 $ 4,600

Seller financing of note receivable purchase $ 61,750 $ — $ —

See accompanying notes to the consolidated financial statements.

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We consolidate our Operating Partnership through which we conduct substantially all of our business, and own, directly and through subsidiaries, substantially all of our assets, and are obligated to repay substantially all of our liabilities.

The consolidated debt, excluding our consolidated JVs, was $ 3.76 billion and $ 3.41 billion, as of December 31, 2023 and December 31, 2022, respectively.

We also consolidate four JVs through our Operating Partnership.

We consolidate our Operating Partnership and our four JVs because they are VIEs and we or our Operating Partnership are the primary beneficiary for each.

The consolidated debt, excluding our consolidated JVs, was $ 3.73 billion and $ 3.76 billion as of December 31, 2024 and December 31, 2023.

We also consolidate five JVs through our Operating Partnership.

We consolidate our Operating Partnership and our five JVs because they are VIEs and we or our Operating Partnership are the primary beneficiary for each.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (continued)

As of December 31, 2024, our consolidated VIE entities, excluding our Operating Partnership, had:

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An impairment charge would be recorded if events or changes in circumstances indicate that a decline in the fair value below the carrying value has occurred and the decline is other-than-temporary.

Based upon such periodic assessments, we recorded an impairment charge of $ 36.2 million during 2023, and no impairment charges occurred during 2022 or 2021.

Based upon such periodic assessments, we recorded an impairment charge of $ 36.2 million during 2023.

The impairment charge we recorded during 2023 is included in Income (loss) from unconsolidated Fund on our consolidated statement of operations.

We did not record any impairment charges during 2024 and 2022.

On January 1, 2025, we amended the Fund's operating agreement such that the Fund became a VIE, and as the primary beneficiary of the VIE we will commence consolidating the JV on January 1, 2025.

The results of the consolidated JV will be included in our operating results from January 1, 2025 and we will no longer account for this investment using the equity method.

Impairment of Long-Lived Assets

We periodically assess whether there has been any impairment in the carrying value of our properties and whenever events or changes in circumstances indicate that the carrying value of a property may not be recoverable.

An impairment charge would be recorded if events or changes in circumstances indicate that a decline in the fair value below the carrying value has occurred and the decline is not recoverable.

An impairment charge would be recorded if events or changes in circumstances indicate that a decline in the fair value below the carrying value has occurred and the carrying value is not recoverable.

Recoverability of the carrying value of our properties is measured by a comparison of the carrying value to the undiscounted future cash flows expected to be generated by the property.

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We consider short-term investments with maturities of three months or less when purchased to be cash equivalents.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

Revenue Recognition

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We account for our rental revenues, and variable lease payments such as tenant recoveries and parking revenues, in accordance with Topic 842.

We adopted a practical expedient which allows us to account for our rental revenues, tenant recoveries and parking revenues on a combined basis.

We adopted a practical expedient which allows us to account for our rental revenues, tenant recoveries and certain parking revenues on a combined basis.

Rental revenues and tenant recoveries from tenant leases are included in Rental revenues and tenant recoveries on our consolidated statements of operations.

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Rental revenue from month-to-month leases or leases with no scheduled rent increases or other adjustments is recognized on a monthly basis when earned.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

Estimated tenant recoveries for real estate taxes, common area maintenance and other recoverable operating expenses, which are included in Rental revenues and tenant recoveries on our consolidated statements of operations, are recognized as revenue on a gross basis in the period that the recoverable expenses are incurred.

Subsequent to year-end, in accordance with our policy, we perform reconciliations on a lease-by-lease basis and bill or credit each tenant for any differences between the estimated expenses we billed to the tenant and the actual expenses incurred.

The amounts billed to tenants during 2024, 2023 and 2022 were not material.

Tenant recoveries were $ 50.1 million, $ 61.6 million and $ 58.2 million in 2024, 2023 and 2022, respectively.

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Tenant Improvements

Tenant improvements constructed, and owned by us, and reimbursed by tenants are recorded as our assets, and the related revenue, which are included in Rental revenues and tenant recoveries on our consolidated statements of operations, is recognized over the related lease term.

Tenant improvements constructed, and owned by us, and reimbursed by tenants are recorded as our assets, and the related revenue, which is included in Rental revenues and tenant recoveries on our consolidated statements of operations, is recognized over the related lease term.

We recognized revenue for reimbursement of tenant improvements of $ 7.0 million, $ 5.8 million and $ 4.8 million during 2024, 2023 and 2022, respectively.

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If our conclusion of collectibility changes, we will record the difference between the lease income that would have been recognized on a straight-line basis and cash basis as a current-period adjustment to rental revenues and tenant recoveries.

Charges for uncollectible tenant receivables and deferred rent receivables reduced our office revenues by $ 0.8 million, $ 0.6 million, and $ 3.0 million in 2023, 2022, and 2021 respectively.

We restored accrual basis accounting for certain office tenants that were previously determined to be uncollectible and accounted for on a cash basis of accounting, which increased our office revenues by $ 4.4 million and $ 3.6 million in 2023 and 2022, respectively.

Douglas Emmett, Inc.

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We carry comprehensive liability and property insurance covering all of the properties in our portfolio under blanket insurance policies to cover these kinds of losses.

We recorded $ 1.3 million, $ 3.9 million, and $ 4.8 million of business interruption revenues during 2023, 2022 and 2021, respectively, which is included in Multifamily rental - Parking and other income on our consolidated statements of operations.

We recorded $ 1.3 million and $ 3.9 million of business interruption revenues during 2023 and 2022, respectively, which is included in Multifamily rental - Parking and other income on our consolidated statements of operations.

Interest Income

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See Note 12 for our EPS disclosures.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

Segment Information

Segment information is prepared on the same basis that our management reviews information for operational decision-making purposes.

Segment information is prepared on the same basis that our chief operating decision maker (CODM) reviews information to assess performance and make resource allocation decisions.

We operate two business segments:

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See Note 15 for our segment disclosures.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

We have elected to be taxed as a REIT under the Code, commencing with our initial taxable year ended December 31, 2006.

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We consider the applicability and impact of all ASUs.

Other than the ASU discussed below, the FASB has not issued any other ASUs that we expect to be applicable and have a material impact on our consolidated financial statements.

ASUs Not Yet Adopted

Adoption of ASU 2023-0 7 (Topic 280 - "Segment Reporting")

Other than the ASUs discussed below, the FASB has not issued any other ASUs that we expect to be applicable and have a material impact on our consolidated financial statements.

ASU 2023-0 7 "Improvements to Reportable Segment Disclosures" (Topic 280 - "Segment Reporting")

In November 2023, the FASB issued ASU No.

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The requirements in the ASU should be applied on a retrospective basis.

We expect to adopt the ASU for our fiscal year ending December 31, 2024, and we expect to provide additional segment disclosures in our reporting to meet the requirements of the ASU.

We adopted the ASU for our fiscal year ended December 31, 2024 and provided additional segment disclosures.

ASUs Not Yet Adopted

ASU 2024-03 "Disaggregation of Income Statement Expenses" (Subtopic 220-40 "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures)

In November 2024, the FASB issued ASU No.

2024-03, which provides guidance on disaggregation of income statement expenses.

The ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027.

The requirements in the ASU should be applied on a prospective or retrospective basis.

We expect to provide additional disclosures regarding our expenses in our future financial statement disclosures when we adopt the ASU.

Douglas Emmett, Inc.

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(In thousands) December 31, 2024 December 31, 2023

$ 1,185,977 $ 1,185,977

Land $ 1,185,977 $ 1,185,977

Buildings and improvements (1)

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__________________________________________________________________________________

(1) During 2023, Property under development balances transferred to Building and improvements for real estate placed into service were $ 51.6 million.

During 2022, Property under development balances transferred to Land and Building and improvements for real estate placed into service were $ 13.1 million and $ 360.4 million, respectively.

(1) Property under development balances transferred to Building and improvements for real estate placed into service were $ 13.3 million and $ 51.6 million during 2024 and 2023, respectively.

2022 Property Acquisition

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Net assets and liabilities acquired $ 330,470

Property to be Removed from Service

Barrington Plaza

During the second quarter of 2023, we removed our Barrington Plaza Apartments property in Los Angeles from the rental market.

In connection with the remova l of the property from the rental market, we accelerated and recorded additional depreciation expense of $ 82.1 million during 2023, which is included in Depreciation and amortization on our consolidated statements of operations.

In connection with the remova l of the aforementioned property from the rental market, we accelerated and recorded additional depreciation expense of $ 82.1 million during 2023, which is included in Depreciation and amortization on our consolidated statements of operations.

Douglas Emmett, Inc.

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The table below, which assumes that the ground rent payments will continue to be $ 733 thousand per year after February 28, 2029, presents the future minimum ground lease payments as of December 31, 2024:

Year ending December 31:

(In thousands)

Year ending December 31, (In thousands)

Thereafter 41,780

Total future minimum lease payments $ 46,178

Total future minimum ground lease payments $ 45,445

Douglas Emmett, Inc.

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The table below presents the future net accretion related to our above- and below-market leases at December 31, 2024.

Year ending December 31:

Net increase to revenues

Year ending December 31, Net increase (decrease) to revenues

(In thousands)

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Description of our Fund

As of December 31, 2023, we managed and owned an equity interest of 53.8 % in an unconsolidated Fund, Partnership X, through which we and other investors in the Fund owned two office properties totaling 0.4 million square feet.

During 2021, 2022 and 2023, we owned an interest of approximately 33.5 % in Partnership X.

On December 31, 2023, we purchased an additional 20.2 % equity interest in the Fund.

As of December 31, 2024, we managed and owned an equity interest of 74.0 % in an unconsolidated Fund, Partnership X, through which we and another investor in the Fund owned two office properties totaling 0.4 million square feet.

During 2022 and 2023, we owned an equity interest of 33.5 % in the Fund.

On December 31, 2023, we purchased an additional 20.2 % equity interest in the Fund which increased our equity interest in the Fund to 53.8 %.

On February 29, 2024, we purchased an additional 20.2 % equity interest in the Fund which increased our equity interest in the Fund to 74.0 %.

Partnership X pays us fees and reimburses us for certain expenses related to property management and other services we provide, which are included in Other income on our consolidated statements of operations.

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(In thousands) December 31, 2024 December 31, 2023

Restricted cash $ 101 $ 101

Prepaid expenses 20,594 19,871

Indefinite-lived intangibles 1,988 1,988

Prepaid expenses, note receivable and other (1)

$ 124,430 $ 26,818

Deposit with lender (2)

14,072 13,440

Furniture, fixtures and equipment, net 6,833 7,014

Other 6,123 4,837

Indefinite-lived intangibles 1,988 1,988

Total other assets $ 147,323 $ 49,260

_______________________________________________________________________

(1) In connection with the Barrington Plaza loan, Barrington Plaza Apartments have been removed from the rental market.

See Note 3, "Property to be removed from service".

The lender required a $ 13.3 million cash deposit, which we placed in an interest-bearing collateral account during the third quarter of 2023.

The lender will return the deposit at the earlier of August 2026 or when the loan is paid in full.

See Note 8 for our debt disclosures.

(1) Includes a note receivable that we purchased during December 2024 through a consolidated JV.

The note receivable is secured by a property.

In January 2025, the respective JV received the title to the property.

(2) In connection with the Barrington Plaza loan, we deposited cash into an interest-bearing collateral account with the lender.

See our debt disclosures in Note 8 (note 7 to the table) for more detail regarding the loan and the cash deposited.

Douglas Emmett, Inc.

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Secured Notes Payable, Net

Principal Balance as of December 31, 2023 Principal Balance as of December 31, 2022 Variable Interest Rate (2)

Fixed Interest

Principal Balance as of December 31, 2024 Principal Balance as of December 31, 2023 Variable Interest Rate Fixed Interest

Swap Maturity Date

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9/19/2026 366,000 400,000 SOFR + 1.25 %

2.44 % 9/1/2024

Term loan (3)(6)

9/26/2026 200,000 200,000 SOFR + 1.30 %

2.36 % 10/1/2024

Term loan (3)(6)

11/1/2026 400,000 400,000 SOFR + 1.25 %

2.31 % 10/1/2024

Fannie Mae loan (3)(7)

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Term Loan (10)

N/A — 400,000 N/A N/A N/A

Term loan (3)

5/15/2027 450,000 450,000 SOFR + 1.45 %

2.26 % 4/1/2025

Term loan (3)

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3.25 % 7/1/2027

Term loan (13)

1/9/2030 61,750 — N/A 6.00 % N/A

Total Consolidated Debt (14)

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Except as noted below, our loans:

(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 upon 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.

(i) are non-recourse, (ii) are secured by separate collateral pools consisting of one or more properties and other collateral, (iii) require interest-only monthly payments with the outstanding principal due upon 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 extend the loan maturity date.

(1) Maturity dates include extension options.

(2) LIBOR loans converted to SOFR during 2023 include a small SOFR adjustment to calculate the interest payable to the lender, which are included in the spreads.

The SOFR conversion did not change the swap-fixed interest rates for our swap-fixed loans.

(2) Effective rate as of December 31, 2024.

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See Note 10 for details of our interest rate swaps.

See further below for details of our loan costs and premiums.

See further below for details of our loan costs and loan premiums.

(3) The loan agreement includes a zero -percent SOFR floor.

If the loan is swap-fixed then the related swaps do not include such a floor.

(5) The swaps expired on March 1, 2023.

(4) We are currently in the process of negotiating an amendment and extension of this loan.

If the amendment is not finalized by the due date, the holding period and carrying value for the asset encumbered by the loan may be affected.

(5) During September 2024, we paid the loan principal down by $ 34.0 million in order to meet a minimum financial threshold to exercise an extension option.

The related swaps expired during September 2024.

(6) The swaps expired on October 1, 2024.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

(7) The loan is secured by four residential properties.

A portion of the loan totaling $ 472 million has a lender-required out-of-the-money interest rate cap at a weighted average of 8.99 % until July 2026 .

Barrington Plaza Apartments have been removed from the rental market.

S ee Note 3, "Property to be removed from service." For the portion of the loan relating to Barrington Plaza, t he lender is treating the debt as a construction loan.

They required a $ 13.3 million cash deposit, which we placed in an interest-bearing collateral account during the third quarter of 2023, and we signed a construction completion guarantee in January 2024.

For the portion of the loan relating to Barrington Plaza, in connection with the redevelopment of that property, t he lender is treating the debt as a construction loan and we signed a construction completion guarantee in January 2024.

See "Guarantees" in Note 17.

The lender also required a $ 13.3 million cash deposit, which we placed into an interest-bearing collateral account during 2023.

The lender will return the deposit at the earlier of August 2026 or when the loan is paid in full.

The deposit is included in Other assets in our balance sheet.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

(7) We closed the loan during the third quarter of 2023.

The deposit is included in Other assets in our consolidated balance sheets.

(8) The loan has a lender-required out-of-the-money interest rate cap at an interest rate of 7.84 % until August 2026.

We used part of the proceeds from the loan to pay off the balance on our revolving credit facility, which expired in August 2023.

There was no balance outstanding on the credit facility as of December 31, 2022.

(9) The loan requires monthly payments of principal and interest.

The principal amortization is based upon a 30 -year amortization schedule.

(9) The swaps expired on January 1, 2023.

(10) During the fourth quarter of 2023, we entered into a guarantee for this loan which guarantees the portion of the loan principal that would need to be paid down in order to meet the minimum debt yield in the loan agreement.

(11) The table does not include our unconsolidated Fund's loan - see Note 17.

See Note 14 for our fair value disclosures.

(10) We paid off the loan during the fourth quarter of 2024.

(11) We closed this loan during December 2024.

The interest rate is SOFR + 2.5 % and we used interest rate swaps to swap fix the rate at 6.36 %.

The swaps are effective on January 6, 2025.

The loan requires monthly payments of principal and interest for twelve months commencing on January 5, 2028 based upon a 25 -year principal amortization schedule.

(12) We guaranteed the portion of the loan principal that would need to be paid down in order to meet the minimum debt yield in the loan agreement.

See "Guarantees" in Note 17.

(13) We closed the loan during December 2024.

The interest rate is fixed at 6 % until July 8, 2027 and then increases to 6.25 % for the remaining loan term.

(14) The table does not include our unconsolidated Fund's loan - see "Guarantees" in Note 17.

See Note 14 for our debt fair value disclosures.

(15) Balances are net of accumulated amortization of $ 1.4 million and $ 4.1 million at December 31, 2024 and December 31, 2023, respectively.

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(In thousands) Principal Balance as of December 31, 2024 Principal Balance as of December 31, 2023

Aggregate swapped to fixed rate loans $ 3,805,000 $ 4,642,400

Aggregate swap-fixed rate loans $ 3,130,000 $ 3,805,000

Aggregate fixed rate loans 88,489 27,640

8 unchanged sentences

Weighted average annual interest rate 3.18 %

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

Future Principal Payments

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2027 1,001,033

2028 1,251,081

2029 1,016,131

Thereafter 433,314

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(1) Some of our loan agreements require that we meet certain minimum financial thresholds to be able to extend the loan maturity.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

Loan Premium and Loan Costs

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Total interest payable, accounts payable and deferred revenue $ 131,011 $ 131,237

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

Derivative Contracts

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Unconsolidated Fund's derivatives - swaps (2)(3)(4)

Derivatives Not Designated as Cash Flow Hedges:

Consolidated derivatives - caps (6)

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(1) The notional amount includes 100 %, not our pro-rata share, of our consolidated JVs' derivatives.

(1) The notional amount reflects 100 %, not our pro-rata share, of our consolidated JVs' derivatives.

See Note 8 for more information about our hedged consolidated debt.

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(3) See Note 14 for our derivative fair value disclosures.

(4) We purchased five interest rate caps with a notional amount of $ 822.0 million during the third quarter of 2023.

See Note 8 for more information about our hedged consolidated debt.

(4) The notional amount reflects 100 %, not our pro-rata share, of our unconsolidated Fund's derivatives.

See Note 6 for more information about our Fund, including our equity interest percentage.

(6) Five interest rate caps with a total aggregate notional amount of $ 1.10 billion expired on July 1, 2023.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

See "Guarantees" in Note 17 for more information about our Fund's hedged debt.

Counterparty Credit Risk

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___________________________________________________

(1) The amounts include 100 %, not our pro-rata share, of our consolidated JVs' derivatives.

(1) The amounts reflect 100 %, not our pro-rata share, of our consolidated JVs' derivatives.

(2) The amounts reflect 100 %, not our pro-rata share, of our unconsolidated Fund's derivatives.

For more information about our Fund, including our equity interest percentage, see Note 6.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

Impact of Hedges on AOCI and the Consolidated Statements of Operations

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$ 47,896 $ 45,364 $ 326,396

(Gains) losses reclassified from AOCI to Interest Expense (1)

Gains reclassified from AOCI to Interest expense (1)

$ ( 140,615 ) $ ( 144,318 ) $ ( 4,287 )

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$ 5,417 $ 585 $ 3,780

(Gains) losses reclassified from AOCI to Income (loss) from unconsolidated Fund (1)

Gains reclassified from AOCI to Income (loss) from unconsolidated Fund (1)

$ ( 3,663 ) $ ( 1,662 ) $ ( 341 )

(Loss) income from unconsolidated Fund presented on the consolidated statements of operations $ ( 34,643 ) $ 1,224 $ 946

Income (loss) from unconsolidated Fund presented on the consolidated statements of operations $ 2,593 $ ( 34,643 ) $ 1,224

Derivatives Not Designated as Cash Flow Hedges:

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The respective caps expired on July 1, 2023.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

Future Reclassifications from AOCI

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For more information about our Fund, including our equity interest percentage, see Note 6.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

• We entered into a new consolidated JV in December 2024 that we manage and in which we own a 30 % interest.

• We acquired 229 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units.

• We acquired 9 thousand OP Units for $ 138 thousand in cash.

• We repurchased 9.1 million shares of our common stock for $ 109.1 million in cash, excluding transaction costs, in open market transactions.

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We contributed $ 99.0 million to the JV and an outside investor contributed $ 81.0 million to the JV.

• We acquired 65 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units.

• We acquired 4 thousand OP Units for $ 122 thousand in cash.

Noncontrolling Interests

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Changes in our Ownership Interest in our Operating Partnership

The table below presents the effect on our equity from net (loss) income attributable to common stockholders and changes in our ownership interest in our Operating Partnership:

The table below presents the effect on our equity from net income (loss) attributable to common stockholders and changes in our ownership interest in our Operating Partnership:

Year Ended December 31,

(In thousands) 2024 2023 2022

Net (loss) income attributable to common stockholders $ ( 42,706 ) $ 97,145 $ 65,267

Net income (loss) attributable to common stockholders $ 23,517 $ ( 42,706 ) $ 97,145

Transfers from noncontrolling interests:

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Net transfers from noncontrolling interests 3,499 8,795 4,424

Change from net (loss) income attributable to common stockholders and transfers from noncontrolling interests $ ( 33,911 ) $ 101,569 $ 66,266

Change from net income (loss) attributable to common stockholders and transfers from noncontrolling interests $ 27,016 $ ( 33,911 ) $ 101,569

AOCI Reconciliation (1)

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Other comprehensive income before reclassifications 47,896 45,364 326,396

Reclassification of (gains) losses from AOCI to Interest Expense ( 144,318 ) ( 4,287 ) 75,358

Reclassification of gains from AOCI to Interest Expense ( 140,615 ) ( 144,318 ) ( 4,287 )

Unconsolidated Fund's derivatives (our share) (2) :

Other comprehensive income before reclassifications 5,417 585 3,780

Reclassification of (gains) losses from AOCI to Income (loss) from unconsolidated Fund ( 1,662 ) ( 341 ) 120

Reclassification of gains from AOCI to Income (loss) from unconsolidated Fund ( 3,663 ) ( 1,662 ) ( 341 )

Net current period OCI ( 90,965 ) ( 100,031 ) 325,548

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OCI attributable to common stockholders ( 61,000 ) ( 71,146 ) 225,837

Accumulated Other Comprehensive Income (Loss) - Ending balance $ 115,917 $ 187,063 $ ( 38,774 )

Accumulated Other Comprehensive Income - Ending balance $ 54,917 $ 115,917 $ 187,063

__________________________________________________

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Numerator (In thousands):

Net (loss) income attributable to common stockholders $ ( 42,706 ) $ 97,145 $ 65,267

Net income (loss) attributable to common stockholders $ 23,517 $ ( 42,706 ) $ 97,145

Allocation to participating securities:

Unvested LTIP Units ( 1,377 ) ( 1,191 ) ( 912 )

Net (loss) income attributable to common stockholders - basic and diluted $ ( 43,897 ) $ 96,233 $ 64,391

Net income (loss) attributable to common stockholders - basic and diluted $ 22,140 $ ( 43,897 ) $ 96,233

Denominator (In thousands):

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167,389 169,597 175,756

Net (loss) income per common share - basic and diluted $ ( 0.26 ) $ 0.55 $ 0.37

Net income (loss) per common share - basic and diluted $ 0.13 $ ( 0.26 ) $ 0.55

____________________________________________________

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We estimate the fair value of our derivative instruments by calculating the credit-adjusted present value of the expected future cash flows of each derivative.

The calculation incorporates the contractual terms of the derivatives, observable market interest rates which we consider to be Level 2 inputs, and credit risk adjustments to reflect the counterparty's as well as our own nonperformance risk.

Our derivatives are not subject to master netting arrangements.

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The table below presents the estimated fair value of our derivatives.

We did not have any consolidated or unconsolidated derivatives in a liability position for the periods presented.

(In thousands) December 31, 2024 December 31, 2023

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$ 6,459 $ 9,150

Derivative Liabilities:

Fair value - c onsolidated derivatives (1)

Fair value - unconsolidated Fund's derivatives (2)

___________________________________________________________________________________

(1) Consolidated derivatives, which include 100 %, not our pro-rata share, of our consolidated JVs' derivatives, are included in interest rate contracts on our consolidated balance sheets.

(1) Consolidated derivatives, which reflect 100 %, not our pro-rata share, of our consolidated JVs' derivatives, are included in interest rate contracts on our consolidated balance sheets.

The fair values exclude accrued interest which is included in interest payable on our consolidated balance sheets.

(2) The amounts reflect 100 %, not our pro-rata share, of our unconsolidated Fund's derivatives.

(2) Unconsolidated Fund's derivatives, which reflect 100 %, not our pro-rata share, of our unconsolidated Fund's derivatives.

Our pro-rata share of the amounts related to the unconsolidated Fund's derivatives is included in our Investment in unconsolidated Fund on our consolidated balance sheets.

Our unconsolidated Fund did not have any derivatives in a liability position for the periods presented.

See Note 6 for more information about our Fund, including our equity interest percentage, and see "Guarantees" in Note 17 regarding our Fund's derivatives.

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Our investment in our unconsolidated Fund is presented on the consolidated balance sheet at carrying value.

On December 31, 2023, we recorded an impairment charge of $ 36.2 million, which reduced the carrying value of our investment in our unconsolidated Fund to it's fair value of $ 10.8 million.

No impairment charges occurred during 2022 or 2021.

On December 31, 2023, we recorded an impairment charge of $ 36.2 million, which reduced the carrying value of our investment in our unconsolidated Fund to its fair value of $ 10.8 million.

The estimated fair value of our investment in the unconsolidated Fund, used to calculate the impairment charge, was calculated using level 3 inputs for the Fund's investment in real estate.

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As of December 31, 2023, the carrying value presented on our consolidated balance sheet of $ 16.0 million includes the acquisition of our additional interest.

No impairment charges occurred during 2024 or 2022.

Douglas Emmett, Inc.

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Segment Reporting

Segment information is prepared on the same basis that our management reviews information for operational decision-making purposes.

Segment information is prepared on the same basis that our chief operating decision maker (CODM) reviews information to assess performance and make resource allocation decisions.

Our CODM is our CEO.

We operate in two business segments:

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Total profit from all segments $ 636,220 $ 658,855 $ 659,831

The table below presents a reconciliation of the total profit from all segments to net (loss) income attributable to common stockholders:

The table below presents a reconciliation of the net income (loss) attributable to common stockholders to the total profit from all segments:

(In thousands) Year Ended December 31,

2024 2023 2022

Total profit from all segments $ 658,855 $ 659,831 $ 614,996

Net income (loss) attributable to common stockholders $ 23,517 $ ( 42,706 ) $ 97,145

Net loss attributable to noncontrolling interests ( 15,929 ) ( 33,134 ) ( 605 )

Net income (loss) 7,588 ( 75,840 ) 96,540

General and administrative expenses 45,356 49,236 45,405

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Other expenses 398 1,032 714

(Loss) Income from unconsolidated Fund ( 34,643 ) 1,224 946

(Income) loss from unconsolidated Fund ( 2,593 ) 34,643 ( 1,224 )

Interest expense 229,442 209,468 150,185

Net (loss) income ( 75,840 ) 96,540 56,131

Net loss attributable to noncontrolling interests 33,134 605 9,136

Net (loss) income attributable to common stockholders $ ( 42,706 ) $ 97,145 $ 65,267

Total profit from all segments $ 636,220 $ 658,855 $ 659,831

Douglas Emmett, Inc.

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The amounts assume that early termination options held by tenants will not be exercised.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

Commitments, Contingencies and Guarantees

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From time to time, we are party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business.

We are currently in litigation with the insurance providers in 2020 for Barrington Plaza to recover certain costs associated with reconstruction.

Excluding ordinary, routine litigation incidental to our business, we are not currently a party to any legal proceedings that we believe would reasonably be expected to have a materially adverse effect on our business, financial condition or results of operations.

Barrington Plaza

In May 2023, we used a state law, the Ellis Act, to begin moving tenants out of the buildings in order to complete fire and life safety retrofits.

We are appealing a recent ruling by a trial court in Santa Monica that the Ellis Act wasn’t the proper avenue for removing those tenants.

We do not expect the ruling to have a meaningful impact on the anticipated timing, cost, or ultimate plans for the Barrington Plaza property, and continue to coordinate with the City of Los Angeles to comply with its order to sprinkler the Barrington Plaza property and to complete other fire life safety work.

We are currently in litigation with the insurance providers in 2020 for Barrington Plaza to recover certain costs associated with reconstruction.

Concentration of Risk

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During 2024, 2023 and 2022, no tenant accounted for more than 10% of our total revenues.

See our "Rental Revenues and Tenant Recoveries" accounting policy in Note 2 for the charges to revenue for uncollectible amounts for tenant receivables and deferred rent receivables.

Geographic Risk

All of our properties, including our consolidated JVs and our unconsolidated Fund's properties, are located in Los Angeles County, California and Honolulu, Hawaii, and we are therefore susceptible to adverse economic and regulatory developments, as well as natural disasters, in those markets.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

Derivative Counterparty Credit Risk

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banking institution are insured by the FDIC up to $250 thousand.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

Asset Retirement Obligations

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Contractual Commitments

Development Projects

In downtown Honolulu, we are converting a 25 story, 493,000 square foot office tower into approximately 493 apartments in phases over a number of years as the office space is vacated.

As of December 31, 2023, we had an aggregate remaining contractual commitment for this development project and other development projects of approximately $ 17.9 million.

Other Contractual Commitments

As of December 31, 2023, we had an aggregate remaining contractual commitment for repositionings, capital expenditure projects and tenant improvements of approximately $ 12.7 million.

As of December 31, 2024, we had an aggregate remaining contractual commitment for development projects, repositioning projects, capital expenditure projects and tenant improvements of approximately $ 54.8 million.

Loan Guarantees

We signed a guarantee for the $ 175.0 million consolidated JV loan which guarantees the portion of the loan principal that would need to be paid down to meet the minimum debt yield in the loan agreement.

The loan matures in April 2029.

During 2023, we signed a guarantee for the $ 175.0 million consolidated JV loan which guarantees the portion of the loan principal that would need to be paid down to meet the minimum debt yield in the loan agreement.

The loan matures on April 26, 2029 .

The guarantee will remain in effect until either the guarantee obligation or the loan is paid in full.

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See Note 8 for more information regarding our debt.

During the second quarter of 2023, we removed our Barrington Plaza Apartments property in Los Angeles from the rental market.

See Note 3, "Property to be removed from service." The reconstruction of this property is expected to take a number of years at a cost of several hundred million dollars.

The lender is treating the $ 210.0 million Barrington Plaza loan, which matures in June 2027, as a construction loan, and we signed a construction completion guarantee in January 2024.

During 2023, we removed our Barrington Plaza Apartments property in Los Angeles from the rental market.

See Note 3, "Barrington Plaza." The reconstruction of this property is expected to take a number of years at a cost of several hundred million dollars.

The lender is treating the $ 210.0 million Barrington Plaza loan, which matures on June 1, 2027 , as a construction loan, and we signed a construction completion guarantee in January 2024.

The guarantee will remain in effect until either the construction is completed or the loan is paid in full.

As of December 31, 2024, we estimate the risk of loss for this guarantee to be low.

See Note 8 for more information regarding our debt.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (continued)

Unconsolidated Fund Guarantees

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The loan carries interest at SOFR + 1.46 % (with a zero -percent SOFR floor), which has been effectively fixed at 2.19 % until October 1, 2026 with interest rate swaps (which do not have zero -percent SOFR floors).

The loan and related swaps were converted to SOFR from LIBOR during the third quarter of 2023, resulting in a small SOFR adjustment to calculate the interest payable to the lender (which is included in the loan spread above).

The conversion to SOFR did not change the swap-fixed interest rate.

The loan is secured by two properties held by Partnership X and is non-recourse.

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See Note 6 for more information regarding Partnership X.

Subsequent Events

In January 2025, we acquired a 17-story, 247,000 square foot office building located at 10900 Wilshire Boulevard in Westwood, adjacent to several of our existing properties.

Title to the property was transferred following the purchase of a secured note by a consolidated JV that we manage and in which we own a 30 % interest.

Douglas Emmett, Inc.

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Studio Plaza (5)

— 9,347 73,358 115,143 15,015 182,833 197,848 89,426 1988/2004 1995

The Tower 67,064 9,643 160,602 7,835 9,643 168,437 178,080 41,430 1988/1998 2016

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Property Under Development

The Residences at Bishop Place $ — $ — $ — $ 3,037 $ — $ 3,037 $ 3,037 N/A N/A

Other Developments 53,402 53,402 53,402 N/A N/A

Total Property Under Development $ — $ — $ — $ 56,439 $ — $ 56,439 $ 56,439 $ —

Development Projects 86,400 86,400 86,400 N/A N/A

Total $ 5,460,138 $ 898,700 $ 6,922,385 $ 4,674,167 $ 1,185,977 $ 11,309,275 $ 12,495,252 $ 3,916,625

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(4) See our depreciation and amortization policy in Note 2 to our consolidated financial statements.

(5) During 2024, following the move-out of a long-term single tenant, we have begun extensive redevelopment of the property to convert it into a multi-tenant building.

(6) The property includes a parcel of land from which we receive rent under a ground lease.

(6) During the second quarter of 2023, we removed our Barrington Plaza Apartments property in Los Angeles from the rental market.

See Note 3, "Property to be removed from service", for more detail.

(7) During 2023, we removed our Barrington Plaza Apartments property in Los Angeles from the rental market.

See Note 3, "Barrington Plaza", for more detail.

The table below presents a reconciliation of our investment in real estate:

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures