Douglas Emmett : Q1-24 Earnings Package

Executive Summary

We own and operate 18.0 million square feet of Class A office properties and 4,528 apartment units (excluding our residential development pipeline and the vacated Barrington Plaza units) in the premier coastal submarkets of Los Angeles and Honolulu.

Quarterly Results: For the quarter ended March 31, 2024 compared to the quarter ended March 31, 2023:

• Our revenues decreased by 2.9% to $245.0 million, as increased revenue from new residential units, higher in-place office rents and increased parking revenue were more than offset by lower office occupancy, lower tenant recoveries, and the removal of Barrington Plaza apartments from the rental market.
• Our net income attributable to common stockholders decreased by 51.5% to net income of $8.9 million, or net income of $0.05 per diluted share, primarily due to higher interest expense and lower revenues, partially offset by lower operating expenses.
• Our FFO decreased by 8.7% to $90.1 million, or $0.45 per fully diluted share, primarily due to higher interest expense and lower revenues, partially offset by lower operating expenses.
• Our AFFO decreased by 8.2% to $74.7 million.
• Our same property Cash NOI increased by 0.7% to $146.1 million, reflecting lower expenses including some property tax refunds.

Leasing: During the first quarter, we signed 214 office leases covering 1.2 million square feet, including 202,000 square feet of new leases and 987,000 square feet of renewal leases. Renewals included a 250,000 square foot lease in Beverly Hills, extending the term for ten years through 2037. Comparing the office leases we signed during the first quarter to the expiring leases for the same space, straight-line rents increased by 23.8% and cash rents increased by 1.9%. Our multifamily portfolio remains essentially fully leased at 98.9%.

Balance sheet: At quarter end, we had cash and cash equivalents of $556.7 million. We have strong cash flow after dividends, no corporate level debt, and almost half of our office properties remain unencumbered.

Dividends: On April 16, 2024, we paid a quarterly cash dividend of $0.19 per common share, or $0.76 per common share on an annualized basis.

Guidance: First quarter FFO per share was above expectations due to lower operating expenses, and we expect straight-line revenue to be higher during the balance of the year. Nevertheless, we have left FFO guidance for the year unchanged, because we expect the operating expense savings and higher straight-line revenue to be offset by higher interest expense. As a result, we still expect Net Income Per Common Share - Diluted to be between $0.04 and $0.10, and our FFO per fully diluted share to be between $1.64 and $1.70. 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 8and 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

Property Map

Board of Directors and Executive Officers

FINANCIAL RESULTS

Consolidated Balance Sheets

Consolidated Operating Results

Funds from Operations & Adjusted Funds From Operations Same Property Statistics & Net Operating Income (NOI) Same Property NOI Reconciliation

Financial Data for JVs & Fund Loans

PORTFOLIO DATA

Office Portfolio Summary

Office Percentage Leased and In-Place Rents

Office Lease Diversification

Largest Office Tenants

Office Industry Diversification

Office Lease Expirations

Office Lease Expirations - Next Four Quarters

Office Leasing Activity

Multifamily Portfolio Summary

GUIDANCE

2024 Guidance

Reconciliation of 2024 Non-GAAP Guidance

DEFINITIONS

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Forward Looking Statements (FLS)

This First Quarter 2024 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, political or real estate developments affecting Southern California or Honolulu, Hawaii; competition from other real estate investors in our markets; decreased rental rates or increased tenant incentives and vacancy rates; 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, early terminations of, or non-renewal of leases by tenants; increases in interest rates and operating costs, including due to inflation; insufficient cash flows to service our debt or pay rent on ground leases; difficulties in raising capital; inability to liquidate real estate or other investments quickly; 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; natural disasters; fire and other property damage; insufficient insurance or increases in insurance costs; inability to successfully expand into new markets or submarkets; risks associated with property development; conflicts of interest with our officers; reliance on key personnel; changes in zoning and other land use laws; adverse changes to tax laws, including those related to property taxes; possible terrorist attacks or wars; and other risks and uncertainties detailed in our Annual Report on Form 10-K for 2023, 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.

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										Company Overview
				Corporate Data
				as of March 31, 2024
				Office Portfolio
						Consolidated			Total
			Properties			68				70
			Rentable square feet (in thousands)	17,595				17,981
			Leased rate			82.5 %			82.6 %
			Occupancy rate			80.8 %			80.9 %
				Multifamily Portfolio(1)
										Total
			Properties							14
			Units							4,528
			Leased rate							98.9 %
			Market Capitalization (in thousands, except price per share)
			Fully Diluted Shares outstanding as of March 31, 2024			201,874
			Common stock closing price per share (NYSE:DEI)		$	13.87
			Equity Capitalization						$	2,799,992
				Net Debt (in thousands)
						Consolidated		Our Share
			Debt principal(2)	$	5,569,819		$		4,641,149
			Less: cash and cash equivalents	(570,217)				(444,937)
			and loan collateral deposits(3)
			Net Debt	$	4,999,602		$		4,196,212
			Leverage Ratio (in thousands, except percentage)
			Pro Forma Enterprise Value				$	6,996,204
			Our Share of Net Debt to Pro Forma Enterprise Value			60 %
				AFFO Payout Ratio(4)
			Three months ended March 31, 2024					51.6 %

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1. Unit totals exclude units vacated as part of removing Barrington Plaza from the rental market. Leased rate excludes the impact of Barrington Plaza.
2. See page 12for a reconciliation of consolidated debt principal and our share of debt principal to consolidated debt on the balance sheet.
3. The consolidated balance of $570.2 million includes our consolidated cash and cash equivalents of $556.7 million and a loan collateral deposit of $13.5 million deposited with a lender. Our share is calculated by starting with the consolidated balance of $570.2 million, then deducting the other owners' share of our JVs' cash and cash equivalents of $140.9 million and then adding our share of our unconsolidated Fund's cash and cash equivalents of $15.6 million. See note 4 to the debt table on page 12regarding the loan collateral deposit.
4. Payout ratio based on $0.19 cent dividend payable to shareholders of record as of March 28, 2024.

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, 2024

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Company Overview

Board of Directors and Executive Officers

as of March 31, 2024

BOARD OF DIRECTORS

__________________________________________________________________________________________________________________________________

Dan A. Emmett	Our 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	Former CEO of The Macerich Company
William E. Simon, Jr.	Partner Emeritus, Simon Quick Advisors
Shirley Wang	Founder and CEO, Plastpro Inc.

EXECUTIVE OFFICERS

__________________________________________________________________________________________________________________________________

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
Michele L. Aronson	Executive Vice President, General Counsel and Secretary

CORPORATE OFFICE

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

Phone: [phone]

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

Stuart McElhinney, Vice President, Investor Relations

1. [e-mail]

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					Financial Results
Consolidated Balance Sheets
(Unaudited; In thousands)
		March 31, 2024		December 31, 2023
Assets
Investment in real estate, gross	$	12,432,301	$	12,405,814
Less: accumulated depreciation and amortization		(3,721,673)			(3,652,630)
Investment in real estate, net		8,710,628			8,753,184
Ground lease right-of-use asset		7,445			7,447
Cash and cash equivalents		556,677			523,082
Tenant receivables		5,783			6,096
Deferred rent receivables		115,120			115,321
Acquired lease intangible assets, net		2,848			2,971
Interest rate contract assets		170,607			170,880
Investment in unconsolidated Fund		24,996			15,977
Other assets		42,963			49,260
Total assets	$	9,637,067	$	9,644,218
Liabilities
Secured notes payable, net	$	5,544,517	$	5,543,171
Ground lease liability		10,832			10,836
Interest payable, accounts payable and deferred revenue		153,235			131,237
Security deposits		62,428			61,958
Acquired lease intangible liabilities, net		17,373			19,838
Dividends payable		31,812			31,781
Total liabilities		5,820,197			5,798,821
Equity
Douglas Emmett, Inc. stockholders' equity:
Common stock		1,674			1,672
Additional paid-in capital		3,395,499			3,392,955
Accumulated other comprehensive income		118,999			115,917
Accumulated deficit		(1,313,573)			(1,290,682)
Total Douglas Emmett, Inc. stockholders' equity		2,202,599			2,219,862
Noncontrolling interests		1,614,271			1,625,535
Total equity		3,816,870			3,845,397
Total liabilities and equity	$	9,637,067	$	9,644,218

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,
		2024			2023
Revenues
Office rental
Rental revenues and tenant recoveries(1)	$	169,726	$	176,345
Parking and other income		28,211			27,013
Total office revenues		197,937			203,358
Multifamily rental
Rental revenues		43,220			43,973
Parking and other income		3,812			5,062
Total multifamily revenues		47,032			49,035
Total revenues		244,969			252,393
Operating Expenses
Office expenses		67,220			72,768
Multifamily expenses		15,850			16,888
General and administrative expenses		11,571			10,940
Depreciation and amortization		95,769			93,176
Total operating expenses		190,410			193,772
Other income		7,044			3,283
Other expenses		(114)			(520)
(Loss) income from unconsolidated Fund		(26)			289
Interest expense		(55,332)			(45,511)
Net income		6,131			16,162
Net loss attributable to noncontrolling interests		2,778			2,211
Net income attributable to common stockholders	$	8,909		$	18,373
Net income per common share - basic and diluted	$	0.05	$	0.10
Dividends declared per common share	$	0.19	$	0.19
Weighted average shares of common stock outstanding - basic		167,326			175,765
and diluted

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1. Rental revenues and tenant recoveries include tenant recoveries of $9.1 million and $13.1 million for the three months ended March 31, 2024 and 2023, 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 Net income attributable to common stockholders to Funds from

Operations (FFO) and Adjusted Funds from Operations (AFFO):

	Three Months Ended March 31,
		2024			2023
Funds From Operations (FFO)
Net income attributable to common stockholders	$	8,909	$	18,373
Depreciation and amortization of real estate assets		95,769			93,176
Net loss attributable to noncontrolling interests		(2,778)			(2,211)
Adjustments attributable to unconsolidated Fund(2)		1,011			745
Adjustments attributable to consolidated JVs(2)		(12,855)			(11,471)
FFO	$	90,056	$	98,612
Adjusted Funds From Operations (AFFO)
FFO	$	90,056	$	98,612
Straight-line rent		202			126
Net accretion of acquired above- and below-market leases		(2,343)			(3,037)
Loan costs, loan premium amortization and swap amortization		2,286			2,034
Recurring capital expenditures, tenant improvements and capitalized		(23,657)			(27,249)
leasing expenses(3)
Non-cash compensation expense		5,427			5,473
Adjustments attributable to unconsolidated Fund(2)		175			(97)
Adjustments attributable to consolidated JVs(2)		2,570			5,540
AFFO	$	74,716	$	81,402
Weighted average shares of common stock outstanding - diluted		167,326			175,765
Weighted average units in our operating partnership outstanding		34,423			32,924
Weighted average fully diluted shares outstanding		201,749			208,689
Net income per common share - basic and diluted	$	0.05	$	0.10
FFO per share - fully diluted	$	0.45	$	0.47
Dividends paid per share(4)	$	0.19	$	0.19

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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,

20242023

Office Statistics

Number of properties

Rentable square feet (in thousands) Ending % leased

Ending % occupied

Quarterly average % occupied

Multifamily Statistics Number of properties

Number of units

Ending % leased

66	66
17,105	17,105
82.1 %	85.2 %
80.3 %	83.0 %
80.4 %	83.1 %
11	11
3,569	3,569
98.9 %	99.1 %

		Three Months Ended March 31,	% Favorable
		2024			2023	(Unfavorable)
Net Operating Income (NOI)
Office revenues	$	190,438	$	196,148	(2.9)%
Office expenses		(66,383)			(71,946)	7.7 %
Office NOI		124,055			124,202	(0.1)%
Multifamily revenues		35,672			35,672	- %
Multifamily expenses		(10,816)			(11,421)	5.3 %
Multifamily NOI		24,856			24,251	2.5 %
Total NOI	$	148,911	$	148,453	0.3 %
Cash Net Operating Income (NOI)
Office cash revenues	$	189,011	$	194,591	(2.9)%
Office cash expenses		(66,383)			(71,946)	7.7 %
Office cash NOI		122,628			122,645	- %
Multifamily cash revenues		34,278			33,858	1.2 %
Multifamily cash expenses		(10,816)			(11,421)	5.3 %
Multifamily cash NOI		23,462			22,437	4.6 %
Total Cash NOI	$	146,090	$	145,082	0.7 %

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

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

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