Douglas Emmett Inc

Previous wording

The following discussion should be read in conjunction with our Forward Looking Statements disclaimer, and our consolidated financial statements and related notes in Part I, Item 1 of this Report. During the three months ended March 31, 2026, our results of operations were impacted by: (i) various transactions - see "Acquisitions, Debt and Equity Transactions, and Development and Repositioning Projects" further below.

Current wording

The following discussion should be read in conjunction with our Forward Looking Statements disclaimer, and our consolidated financial statements and related notes in Part I, Item 1 of this Report. During the six months ended June 30, 2026, our results of operations were impacted by various transactions - see "Acquisitions, Debt and Equity Transactions, and Development and Repositioning Projects" further below.

Previous wording

For the purpose of reporting key operating metrics we are focused on the properties in our In-Service Portfolio. Our In-Service Portfolio consists of our Total Portfolio excluding our Development Portfolio. The Development Portfolio consists of two multifamily properties and one office property whose operations are significantly limited by the development activity and are excluded from our In-Service Portfolio statistics and operating metrics. Our portfolio statistics and operating metrics as of March 31, 2026 were as follows:

Current wording

For the purpose of reporting key operating metrics we are focused on the properties in our In-Service Portfolio. The In-Service Portfolio as of June 30, 2026 reflects the inclusion of our Burbank office property which had been under redevelopment into a multi-tenant office building following the move-out of a long-term single tenant, as well as the office properties in Beverly Hills which we acquired this quarter. Our In-Service Portfolio consists of our Total Portfolio excluding our Development Portfolio. The Development Portfolio consists of two multifamily properties whose operations are significantly limited by the development activity and are excluded from our In-Service Portfolio statistics and operating metrics. Our portfolio statistics and operating metrics as of June 30, 2026 were as follows:

Previous wording

During the three months ended March 31, 2026, revenues from our Total Portfolio were derived as follows:

Current wording

During the six months ended June 30, 2026, revenues from our Total Portfolio were derived as follows:

Previous wording

•In March 2026, we entered into a new consolidated JV for the purpose of acquiring medical office properties in Beverly Hills, CA. We will manage and own a 13% interest in the JV. See Note 16 to our consolidated financial statements in Item 1 of this Report for more information regarding this acquisition.

Current wording

•In March 2026, we entered into a new consolidated JV for the purpose of acquiring medical office properties in Beverly Hills, CA. See belowfor more information regarding this acquisition.

Previous wording

During the first quarter of 2025, a consolidated JV that we manage acquired an office property located at 10900 Wilshire. We are developing a mixed-used community featuring up to 323 apartment units. We will convert the existing 247,000 square foot office tower into a residential and office building with up to 200 units, integrating it with a new residential building that we are constructing on the property. The conversion of the office tower will occur in phases over a number of years as the office space in the building is vacated.

Current wording

During the first quarter of 2025, a consolidated JV that we manage acquired an office property located at 10900 Wilshire. We are developing a mixed-used community featuring up to 323 apartment units. We plan to convert the existing office tower to apartments in phases over a number of years as they become available. There is no predetermined residential to office ratio.

Previous wording

The rent on leases subject to rent change during the three months ended March 31, 2026 (new tenants and existing tenants undergoing annual rent review) was 2.7% higher on average than the prior rent for the same unit after adjusting for rent concessions. The rent change includes only our In-Service Portfolio.

Current wording

The rent on leases subject to rent change during the six months ended June 30, 2026 (new tenants and existing tenants undergoing annual rent review) was 3.3% higher on average than the prior rent for the same unit after adjusting for rent concessions. The rent change includes only our In-Service Portfolio.

Previous wording

(1)Excludes units vacated as part of removing The Landmark Residences (formerly Barrington Plaza) from the rental market until June of 2023 and excludes the impact of The Landmark Residences entirely starting in July 2023.

Current wording

(2)Excludes units vacated as part of removing The Landmark Residences (formerly Barrington Plaza) from the rental market until June of 2023 and excludes the impact of The Landmark Residences entirely starting in July 2023.

Previous wording

(2)Average occupancy rates are calculated by averaging the occupancy rates at the end of each of the quarters in the period and at the end of the quarter immediately prior to the start of the period.

Current wording

(3)Average occupancy rates are calculated by averaging the occupancy rates at the end of each of the quarters in the period and at the end of the quarter immediately prior to the start of the period.

Previous wording

For the three months ended March 31, 2026, FFO decreased by $5.1 million, or 6.2%, to $75.9 million, compared to $81.0 million for the three months ended March 31, 2025. The decrease was primarily due to: (i) higher interest expense, (ii) lower office occupancy, (iii) higher general and administrative expense, (iv) lower interest income and (v) higher office expenses, which was partly offset by higher multifamily rental revenues due to higher occupancy and higher rental rates.

Current wording

For the three months ended June 30, 2026, FFO increased by $1.8 million, or 2.4%, to $76.3 million, compared to $74.6 million for the three months ended June 30, 2025. The increase was primarily due to: (i) higher tenant recoveries, (ii) higher office parking and other income, and (iii) higher multifamily rental revenues due to higher occupancy and higher rental rates, which was partly offset by (iv) higher interest expense, (v) lower interest income, (vi) lower office occupancy, and (vii) higher office expenses from a collection of office properties we acquired in April 2026.

Previous wording

The table below presents a reconciliation of Net (loss) income attributable to common stockholders (the most directly comparable GAAP measure) to NOI and Same Property NOI:

Current wording

The table below presents a reconciliation of Net loss attributable to common stockholders (the most directly comparable GAAP measure) to NOI and Same Property NOI:

Previous wording

Our short-term liquidity needs consist primarily of funds necessary for our operating activities, development, repositioning projects, debt refinancings, dividends, distributions and discretionary share repurchases. During the three months ended March 31, 2026, we generated cash from operations of $116.9 million. As of March 31, 2026, we had $357.2 million of cash and cash equivalents. See Note 7 to our consolidated financial statements in Item 1 of this Report for more information regarding our debt maturities and interest rate swap expirations. Excluding acquisitions and debt refinancings, we expect to meet our short-term liquidity requirements through cash on hand and cash generated by operations. With respect to our short-term debt maturities, we expect to refinance them prior to maturity.

Current wording

Our short-term liquidity needs consist primarily of funds necessary for our operating activities, development, repositioning projects, debt refinancings, dividends, distributions and discretionary share repurchases. During the six months ended June 30, 2026, we generated cash from operations of $213.1 million. As of June 30, 2026, we had $355.0 million of cash and cash equivalents. See Note 7 to our consolidated financial statements in Item 1 of this Report for more information regarding our debt maturities and interest rate swap expirations. Excluding acquisitions and debt refinancings, we expect to meet our short-term liquidity requirements through cash on hand and cash generated by operations. With respect to our short-term debt maturities, we expect to refinance them prior to maturity.

Previous wording

We generally only use non-recourse debt secured by our properties. As of the date of this report, approximately 43% of our total office portfolio was unencumbered. To mitigate the impact of changing interest rates on our cash flows from operations, we generally enter into interest rate swap agreements with respect to our loans with floating interest rates. These swap agreements generally expire two years before the maturity date of the related loan, during which time we can refinance the loan without any interest penalty. We also enter into interest rate cap agreements from time to time to cap the interest rates on our floating rate loans. See Notes 7 and 9 to our consolidated financial statements in Item 1 of this Report for more information regarding our debt and derivative contracts, respectively. See Item 3 "Quantitative and Qualitative Disclosures about Market Risk" of this Report regarding the impact of interest rate increases on our future operating results and cash flows.

Current wording

We generally only use non-recourse debt secured by our properties. As of the date of this report, approximately 32% of our total office portfolio was unencumbered. To mitigate the impact of changing interest rates on our cash flows from operations, we generally enter into interest rate swap agreements with respect to our loans with floating interest rates. These swap agreements generally expire two years before the maturity date of the related loan, during which time we can refinance the loan without any interest penalty. We also enter into interest rate cap agreements from time to time to cap the interest rates on our floating rate loans. See Notes 7 and 9 to our consolidated financial statements in Item 1 of this Report for more information regarding our debt and derivative contracts, respectively. See Item 3 "Quantitative and Qualitative Disclosures about Market Risk" of this Report regarding the impact of interest rate increases on our future operating results and cash flows.

Previous wording

(1) Our cash flows from operating activities are primarily dependent upon the occupancy and rental rates of our portfolio, the collectibility of tenant receivables, the level of our operating and general and administrative expenses, and interest expense. The decrease in cash provided from operating activities of $15.7 millionwas primarilydue to: (i) higher interest expense, (ii) lower office occupancy, (iii) higher general and administrative expense, (iv) lower interest income and (v) higher office expenses, which was partly offset by higher multifamily rental revenues due to higher occupancy and higher rental rates.

Current wording

(1) Our cash flows from operating activities are primarily dependent upon the occupancy and rental rates of our portfolio, the collectibility of tenant receivables, the level of our operating and general and administrative expenses, and interest expense. The decrease in cash provided from operating activities of $0.8 million was primarily due to: (i) higher interest expense, (ii) lower office occupancy, (iii) lower interest income, (iv) higher office expenses and (v) higher general and administrative expense, which was partly offset by (vi) higher tenant recoveries, (vii) higher office parking and other income and (viii) higher multifamily rental revenues due to higher occupancy and higher rental rates.

Previous wording

(2) Our cash flows from investing activities is generally used to fund property acquisitions, developments and redevelopment projects, and Recurring and non-Recurring Capital Expenditures. The increase in cash used in investing activities of $40.9 million was primarily due to$25.6 million of cash and cash equivalents assumed from the consolidation of Partnership X on January 1, 2025, an increase in capital expenditures for improvements to real estate of $9.4 million, andan increase in capital expenditures for developments of$5.9 million.

Current wording

(2) Our cash flows from investing activities is generally used to fund property acquisitions, developments and redevelopment projects, and Recurring and non-Recurring Capital Expenditures. The increase in cash used in investing activities of $308.1 million was primarily due to (i) The Bedford Collection acquisition of $254.4 million, (ii) $25.6 million of cash and cash equivalents assumed from the consolidation of Partnership X on January 1, 2025, (iii) an increase in capital expenditures for improvements to real estate of $14.5 million, and (iv)an increase in capital expenditures for developments of$12.2 million.

Previous wording

(3) Our cash flows from financing activities are generally impacted by our borrowings and capital activities, as well as dividends and distributions paid to common stockholders and noncontrolling interests, respectively. The increase in cash used in financing activities of $8.0 million was primarily due to lower net borrowings and a decrease in loan cost payments of$2.9 million.

Current wording

(3) Our cash flows from financing activities are generally impacted by our borrowings and capital activities, as well as dividends and distributions paid to common stockholders and noncontrolling interests, respectively. The increase in cash provided by financing activities of $340.8 million was primarily due to higher net borrowings and an increase in contributions from noncontrolling interests in consolidated JVs of$124.6 million.