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 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.

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 nine months ended September 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. 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:

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 September 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 in the second quarter of 2026. 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 September 30, 2026 were as follows:

Previous wording

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

Current wording

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

Previous wording

See Notes 3,7,9, and 10 to our consolidated financial statements in Item 1 of this Report for more information regarding our acquisitions, debt, derivative contracts and equity, respectively.

Current wording

See Notes 3,7,9, and 10 to ourconsolidated financial statements in Item 1 of this Report for more information regarding our acquisitions, debt, derivative contracts and equity, respectively.

Previous wording

(4)Our office rental rates and lease transaction costs were impacted by a large tenant lease renewal during 2024. Our lease transaction costs in the first quarter of 2026 were impacted by a number of new leases to large tenants.

Current wording

(4)Our office rental rates and lease transaction costs were impacted by a large tenant lease renewal during 2024.

Previous 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.

Current wording

The rent on leases subject to rent change during the nine months ended September 30, 2026 (new tenants and existing tenants undergoing annual rent review) was 3.0% 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) Average of the percentage of leases at June 30, 2023, 2024, and 2025 with the same remaining duration as the leases for the labeled year had at June 30, 2026.

Current wording

(1) Average of the percentage of leases at September 30, 2023, 2024, and 2025 with the same remaining duration as the leases for the labeled year had at September 30, 2026. Acquisitions are included in the comparable average commencing in the quarter after the acquisition.

Previous 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.

Current wording

For the three months ended September 30, 2026, FFO increased by $1.1 million, or 1.6%, to $69.6 million, compared to $68.5 million for the three months ended September 30, 2025. The increase was primarily due to: (i) higher tenant recoveries, (ii) higher office parking and other income, (iii) higher office rental revenues due to a collection of office properties we acquired in April 2026, and (iv) higher multifamily rental revenues due to higher occupancy and higher rental rates, which was partly offset by (v) higher office expenses, (vi) lower office occupancy, and (vii) lower interest income.

Previous wording

For the six months ended June 30, 2026, FFO decreased by $3.3 million, or 2.1%, to $152.3 million, compared to $155.5 million for the six months ended June 30, 2025. The decrease was primarily due to: (i) higher interest expense, (ii) lower office occupancy, (iii) lower interest income, and (iv) higher office expenses from a collection of office properties we acquired in April 2026, which was partly offset by (v) higher tenant recoveries and (vi) higher office parking and other income.

Current wording

For the nine months ended September 30, 2026, FFO decreased by $2.2 million, or 1.0%, to $221.9 million, compared to $224.1 million for the nine months ended September 30, 2025. The decrease was primarily due to: (i) higher office expenses, (ii) higher interest expense, (iii) lower office occupancy, and (iv) lower interest income, which was partly offset by (v) higher tenant recoveries, (vi) higher office rental revenues due to a collection of office properties we acquired in April 2026, (vii) higher office parking and other income and (viii) higher multifamily rental revenues due to higher occupancy and higher rental rates.

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 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.

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 nine months ended September 30, 2026, we generated cash from operations of $303.9 million. As of September 30, 2026, we had $311.1 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 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.

Current wording

We generally only use non-recourse debt secured by our properties. As of the date of this report, approximately 28% 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 $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.

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 $19.8 million was primarily due to: (i) higher office expenses, (ii) higher interest expense, (iii) lower office occupancy, (iv) lower interest income, and (v) higher general and administrative expense, which was partly offset by (vi) higher tenant recoveries, (vii) higher office rental revenues due to a collection of office properties we acquired in April 2026, (viii) higher office parking and other income and (ix) 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 $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.

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 $320.0 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 $22.7 million, and (iv)an increase in capital expenditures for developments of$18.3 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 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.

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 $346.3 million was primarily due to higher net borrowings and an increase in contributions from noncontrolling interests in consolidated JVs of$124.6 million.