Douglas Emmett Inc
For the period ended Dec 31, 2025. Filed Feb 20, 2026.
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FY2025 · Filed Feb 20, 2026
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Derivative Contracts
- Derivative Contracts
Derivative Summary
The table below summarizes our derivative contracts as of December 31, 2025:
| Number of Interest Rate Swaps | Notional(In thousands) | |
|---|---|---|
| Derivatives Designated as Cash Flow Hedges: | ||
| Consolidated derivatives - swaps(1)(2)(3) | 21 | $2,520,000 |
| Derivatives Not Designated as Cash Flow Hedges: | ||
| Consolidated derivatives - caps(1)(2)(3) | 6 | $1,202,000 |
(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.
(2)Our derivative contracts do not provide for right of offset between derivative contracts.
(3)See Note 14 for our derivative fair value disclosures.
Counterparty Credit Risk
We are subject to credit risk from the counterparties on our interest rate swap and cap contract assets because we do not receive collateral. We seek to minimize that risk by entering into agreements with a variety of counterparties with investment grade ratings.
The fair value of our interest rate swap and cap contract assets, including accrued interest and excluding credit risk adjustments, was as follows:
| (In thousands) | December 31, 2025 | December 31, 2024 |
|---|---|---|
| Consolidated derivatives(1) | $25,187 | $85,420 |
| Unconsolidated Fund's derivatives(2) | $— | $6,839 |
(1)The amounts reflect 100%, not our pro-rata share, of our consolidated JVs' derivatives.
(2)We consolidated Partnership X commencing on January 1, 2025. See Note 3. The amount in the comparable period reflect 100%, not our pro-rata share, of Partnership X's derivatives. For more information about Partnership X, including our equity interest percentage, see Note 6.
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Credit-risk-related Contingent Features
Certain of our swaps include credit-risk related contingent features. For example, we have agreements with certain of our interest rate swap counterparties that contain a provision under which we could be declared in default on our derivative obligations if repayment of the underlying indebtedness that we are hedging is accelerated by the lender due to our default on the indebtedness. As of December 31, 2025, there have been no events of default with respect to our interest rate swaps or our consolidated JVs' interest rate swaps. We do not post collateral for our interest rate swap contract liabilities.
The fair value of our interest rate swap contract liabilities, including accrued interest and excluding credit risk adjustments, was as follows:
| (In thousands) | December 31, 2025 | December 31, 2024 |
|---|---|---|
| Consolidated derivatives(1)(2) | $6,338 | $— |
(1)The amounts include 100%, not our pro-rata share, of our consolidated JVs' derivatives.
(2)We did not have any consolidated swaps in a liability position as of December 31, 2024.
Impact of Hedges on AOCI and the Consolidated Statements of Operations
The table below presents the effect of our derivatives on our AOCI and the consolidated statements of operations:
| (In thousands) | Year Ended December 31, | ||
|---|---|---|---|
| 2025 | 2024 | 2023 | |
| Derivatives Designated as Cash Flow Hedges: | |||
| Consolidated derivatives: | |||
| (Loss) gains recorded in AOCI before reclassifications(1) | $(7,650) | $47,896 | $45,364 |
| Gains reclassified from AOCI to Interest expense(1) | $(56,321) | $(140,615) | $(144,318) |
| Interest expense presented on the consolidated statements of operations | $(266,675) | $(229,442) | $(209,468) |
| Unconsolidated Fund's derivatives (our share)(2)(3): | |||
| Gains recorded in AOCI before reclassifications(1) | $— | $5,417 | $585 |
| Gains reclassified from AOCI to Income (loss) from unconsolidated Fund(1) | $— | $(3,663) | $(1,662) |
| Income (loss) from unconsolidated Fund presented on the consolidated statements of operations | $— | $2,593 | $(34,643) |
| Gain reclassified from AOCI to Gain from consolidation of JV(3) | $(4,762) | $— | $— |
| Gain from consolidation of JV presented on the consolidated statements of operations(3) | $47,212 | $— | $— |
| Derivatives Not Designated as Cash Flow Hedges: | |||
| Consolidated derivatives: | |||
| Loss recorded as interest expense | $3 | $— | $— |
(1)See Note 11 for our AOCI reconciliation.
(2)We did not have any unconsolidated entities during the year ended December 31, 2025. For the comparable period, we calculate our share by multiplying the total amount for the Fund by our equity interest in the Fund. For more information about the Fund, including our equity interest percentage, see Note 6.
(3)We consolidated Partnership X commencing on January 1, 2025. See Note 3. Our share of the Partnership X's OCI on January 1, 2025 was reclassified to the gain from consolidation we recorded.
Future Reclassifications from AOCI
At December 31, 2025, we estimate that $15.3 million of gains in AOCI related to derivatives designated as cash flow hedges will be reclassified to interest expense during the next year.
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The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.