Douglas Emmett : Q2-20 Earnings Package

Executive Summary

We own and operate 18.3 million square feet of Class A office properties and 4,209 apartment units (excluding our residential development pipeline) in the premier coastal submarkets of Los Angeles and Honolulu.

COVID-19 Update: Our buildings have remained open and available to our tenants throughout the pandemic. Our rent collections continue to be negatively impacted by the pandemic and our markets' very tenant-oriented lease enforcement moratoriums, which are considerably out of sync with other gateway markets. However, our second quarter collections were somewhat better than the numbers we previously disclosed for April.

Financial Results: For the quarter ended June 30, 2020 compared to the quarter ended June 30, 2019:

• Our revenues decreased by 9.9% to $207.8 million.
• Our net income attributable to common stockholders decreased by 94.0% to $2.0 million.
• Our FFO decreased by 21.7% to $84.4 million, or $0.41 per fully diluted share. At the end of the second quarter we wrote off certain tenant receivables which reduced our second quarter FFO by about 4 cents per share, most of which related to the retail and hospitality tenants in our portfolio. We also wrote off all non-cash straight line balances related to those tenants, which further reduced FFO by 6 cents per share. Any collections of those receivables will be included in future quarters' FFO. The pandemic also reduced second quarter FFO parking income by about 5 cents per share.
• Our AFFO decreased by 15.7% to $80.6 million.
• Our same property Cash NOI decreased by 9.4% to $127.5 million. Same property office expense savings of 12.9% partly offset the cash write-offs and the decline in parking revenue.

Leasing: During the second quarter, we signed approximately 650,000 square feet of office leases. Comparing the office leases we signed during the second quarter to the expiring leases for the same space, we grew straight- line rents by 19.7% and cash rents by 6.7%. Our tenant retention was in-line with our pre-COVID expectations. Although the decline in our office occupancy during the quarter was expected, leasing volume would have to improve significantly to recover that occupancy this year. Our multifamily portfolio remains essentially fully leased at 99%.

Balance Sheet: We have no debt maturities before 2023, no financial covenants that could force us to issue equity at the wrong time, and 41% of our office portfolio is unencumbered. On May 15, 2020, we refinanced a loan for one of our consolidated joint ventures. The new secured, non-recourse $450.0 million interest-only loan will mature in May 2027 and bears interest at LIBOR + 1.35%. We entered into interest rate swaps that effectively fix the rate at 2.26% following the expiration of the current swaps, for an average fixed interest rate of 2.6% per annum through April 2025. We used part of the proceeds to pay off a $400.0 million loan, secured by the same properties, that was scheduled to mature in July 2024.

Development: Construction is continuing on our two large multifamily development projects. In Honolulu, where we are converting an office building into 500 new apartment units, we began delivery of newly converted units and had leased 48 units by quarter end. Our Brentwood apartment tower remains on pace to deliver units in 2022. For the moment, we have suspended work on new office repositioning projects.

Dividends: On July 15, 2020, we paid a quarterly cash dividend of $0.28 per common share, or $1.12 on an annualized basis.

Guidance: Given the continuing uncertainty around the pandemic and local government ordinances, we are not providing guidance this quarter.

NOTE: See the non-GAAP reconciliations for FFO & AFFO on page 8and same property NOI on page 10.

NOTE: 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	3
Property Map	4
Board of Directors and Executive Officers	5
FINANCIAL RESULTS
Consolidated Balance Sheets	6
Consolidated Operating Results	7
Funds from Operations & Adjusted Funds From Operations	8
Same Property Statistics & Net Operating Income	9
Reconciliation of Same Property NOI to Net (Loss) Income	10
Financial Data for JVs & Fund	11
Loans	12
PORTFOLIO DATA
Office Portfolio Summary	13
Office Percentage Leased and In-Place Rents	14
Office Lease Diversification	15
Largest Office Tenants	16
Office Industry Diversification	17
Office Lease Expirations	18
Office Lease Expirations - Next Four Quarters	19
Office Leasing Activity	20
Multifamily Portfolio Summary	21
Multifamily Development Projects	22
DEFINITIONS	23

Forward Looking Statements (FLS)

This Second Quarter 2020 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, including the statements in the "Guidance" sections of this EP. In some cases, these FLS can be identified by the use of words such as "expect," "potential," "continue," "may," "will," "should," "could," "seeks," "projects," "intends," "plans," "estimates," "anticipates," or the negative version of these words or other comparable words. 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 developments related to the Coronavirus (COVID-19) global pandemic; adverse economic and real estate developments in Southern California and Honolulu; a general downturn in the economy; decreased rental rates or increased tenant incentives and vacancy rates; defaults on, and early terminations and non-renewal of, leases by tenants; increased interest rates and operating costs; failure to generate sufficient cash flows to service our debt; difficulties in acquiring properties; failure to successfully operate properties; failure to maintain our status as a REIT; possible adverse changes in rent control laws and regulations; environmental uncertainties; risks related to natural disasters; lack of or insufficient insurance; inability to successfully expand into new markets or submarkets; risks associated with property development; conflicts of interest with our officers; changes in real estate and zoning laws and increases in real property tax rates; possible future terrorist attacks; and other risks and uncertainties detailed in our Annual Report on Form 10-K for 2019 and our Quarterly Report on Form 10-Q for the first quarter of 2020, and other documents filed with the SEC. Although we believe that our assumptions underlying our forward looking statements 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 may be material. Accordingly, please use caution in relying on any FLS in this EP or any previously reported FLS 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.

2

Company Overview

Corporate Data

as of June 30, 2020

Office Portfolio

	Consolidated	Total
Properties	70	72
Rentable square feet (in thousands)	17,939	18,324
Leased rate	91.0 %	90.9 %
Occupancy rate	89.3 %	89.3 %

				Multifamily Portfolio
										Total
			Properties							12
			Units							4,209
			Leased rate(1)							98.7 %
			Market Capitalization (in thousands, except price per share)
			Fully Diluted Shares outstanding as of June 30, 2020				204,914
			Common stock closing price per share (NYSE:DEI)			$	30.66
			Equity Capitalization						$	6,282,654
				Net Debt (in thousands)
						Consolidated			Our Share
			Debt principal(2)	$	4,702,892	$		3,836,283
			Less: cash and cash equivalents(3)		(176,393)				(102,913)
			Net Debt	$	4,526,499	$		3,733,370
			Leverage Ratio (in thousands, except percentage)
			Pro Forma Enterprise Value				$ 10,016,024
			Our Share of Net Debt to Pro Forma Enterprise Value				37 %
				AFFO Payout Ratio
			Three months ended June 30, 2020					71.4 %

_______________________________________________

1. Both the numerator and denominator used in calculating the percentage of units leased do not include 149 units at one property which are temporarily unoccupied as a result of a fire.
2. See page 12for a reconciliation of consolidated debt principal and our share of debt principal to consolidated debt on the balance sheet.
3. Our share of cash and cash equivalents is calculated starting with our consolidated cash and cash equivalents of $176.4 million, then deducting the other owners' share of our JVs' cash and cash equivalents of $75.8 million and then adding our share of our unconsolidated Fund's cash and cash equivalents of $2.4 million.

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 June 30, 2020

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Company Overview

Board of Directors and Executive Officers

as of June 30, 2020

BOARD OF DIRECTORS

______________________________________________________________________________________________________________

Dan A. Emmett	Our Executive Chairman of the Board
Jordan L. Kaplan	Our Chief Executive Officer and President
Kenneth M. Panzer	Our Chief Operating Officer
Christopher H. Anderson	Retired Real Estate Executive and Investor
Leslie E. Bider	Vice Chairman, PinnacleCare
Dr. David T. Feinberg	Vice President, Google Health
Virginia A. McFerran	Technology and Data Science Advisor
Thomas E. O'Hern	Chief Executive Officer, Macerich
William E. Simon, Jr.	Partner, Simon Quick Advisors
Johnese M. Spisso	President, UCLA Health; Chief Executive Officer, UCLA Hospital
System; Associate Vice Chancellor, UCLA Health Sciences

EXECUTIVE OFFICERS

______________________________________________________________________________________________________________

Dan A. Emmett	Chairman of the Board
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

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
(In thousands)
		June 30, 2020		December 31, 2019
		Unaudited
Assets
Investment in real estate:
Land	$	1,152,684	$	1,152,684
Buildings and improvements		9,329,652			9,308,481
Tenant improvements and lease intangibles		922,909			905,753
Property under development		158,949			111,715
Investment in real estate, gross		11,564,194			11,478,633
Less: accumulated depreciation and amortization		(2,679,255)			(2,518,415)
Investment in real estate, net		8,884,939			8,960,218
Ground lease right-of-use asset		7,475			7,479
Cash and cash equivalents		176,393			153,683
Tenant receivables		16,996			5,302
Deferred rent receivables		118,210			134,968
Acquired lease intangible assets, net		5,736			6,407
Interest rate contract assets		-			22,381
Investment in unconsolidated Fund		47,742			42,442
Other assets		13,886			16,421
Total assets	$	9,271,377	$	9,349,301
Liabilities
Secured notes payable and revolving credit facility, net	$	4,666,603	$	4,619,058
Ground lease liability		10,877			10,882
Interest payable, accounts payable and deferred revenue		139,607			131,410
Security deposits		58,419			60,923
Acquired lease intangible liabilities, net		43,126			52,367
Interest rate contract liabilities		259,293			54,616
Dividends payable		49,113			49,111
Total liabilities		5,227,038			4,978,367
Equity
Douglas Emmett, Inc. stockholders' equity:
Common stock		1,754			1,754
Additional paid-in capital		3,486,442			3,486,356
Accumulated other comprehensive loss		(179,471)			(17,462)
Accumulated deficit		(827,748)			(758,576)
Total Douglas Emmett, Inc. stockholders' equity		2,480,977			2,712,072
Noncontrolling interests		1,563,362			1,658,862
Total equity		4,044,339			4,370,934
Total liabilities and equity	$	9,271,377	$	9,349,301

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

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Financial Results

Consolidated Operating Results(1)

(Unaudited; in thousands, except per share data)

	Three Months Ended June 30,			Six Months Ended June 30,
		2020			2019			2020			2019
Revenues
Office rental
Rental revenues and tenant recoveries(2)	$	158,813	$	171,674	$	344,640	$	338,909
Parking and other income		18,176			30,515			52,238			60,570
Total office revenues		176,989			202,189			396,878			399,479
Multifamily rental
Rental revenues		25,872			26,308			54,958			51,201
Parking and other income		4,935			2,037			7,310			4,040
Total multifamily revenues		30,807			28,345			62,268			55,241
Total revenues		207,796			230,534			459,146			454,720
Operating Expenses
Office expenses		60,301			64,308			129,965			127,757
Multifamily expenses		8,856			7,712			18,212			15,267
General and administrative expenses		9,863			9,159			20,198			18,991
Depreciation and amortization		98,765			78,724			196,542			158,597
Total operating expenses		177,785			159,903			364,917			320,612
Operating income		30,011			70,631			94,229			134,108
Other income		325			2,892			2,314			5,790
Other expenses		(478)			(1,807)			(1,874)			(3,652)
(Loss) income from unconsolidated Funds		(140)			2,207			183			3,758
Interest expense		(35,190)			(34,063)			(70,610)			(67,356)
Net (loss) income		(5,472)			39,860			24,242			72,648
Less: Net loss (income) attributable to		7,502			(5,894)			4,711			(9,981)
noncontrolling interests
Net income attributable to common	$	2,030	$	33,966	$	28,953	$	62,667
stockholders
Net income per common share - basic and
$	0.01	$	0.20	$	0.16	$	0.36
diluted
Dividends declared per common share	$	0.28	$	0.26	$	0.56	$	0.52
Weighted average shares of common stock		175,375			172,498			175,374			171,366
outstanding - basic and diluted

_______________________________________________________________________

1. On November 21, 2019, we restructured one of our previously unconsolidated funds, after which it is treated as a consolidated JV. The results of the consolidated JV are included in our operating results from November 21, 2019. Before November 21, 2019, our share of the Fund's net income (loss) was included in the line item (Loss) income from unconsolidated Funds.
2. Rental revenues and tenant recoveries include tenant recoveries of $10.0 million and $16.2 million for the three months ended June 30, 2020 and 2019, and $24.6 million and $29.9 million for the six months ended June 30, 2020 and 2019, 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 Funds from Operations (FFO) and Adjusted Funds from Operations

(AFFO) to Net income attributable to common stockholders:

	Three Months Ended			Six Months Ended
		June 30,			June 30,
		2020			2019			2020			2019
Funds From Operations (FFO)
Net income attributable to common stockholders	$	2,030	$	33,966	$	28,953	$	62,667
Depreciation and amortization of real estate assets		98,765			78,724			196,542			158,597
Net (loss) income attributable to noncontrolling interests		(7,502)			5,894			(4,711)			9,981
Adjustments attributable to unconsolidated Funds(2)		696			4,336			1,350			8,850
Adjustments attributable to consolidated JVs(2)		(9,581)			(15,119)			(25,844)			(29,196)
FFO	$	84,408	$	107,801	$	196,290	$	210,899
Adjusted Funds From Operations (AFFO)
FFO	$	84,408	$	107,801	$	196,290	$	210,899
Straight-line rent		15,352			(2,315)			16,758			(6,684)
Net accretion of acquired above- and below-market leases		(4,315)			(4,396)			(8,571)			(8,516)
Loan costs, loan premium amortization and swap amortization		727			2,404			1,950			4,271
Recurring capital expenditures, tenant improvements and		(20,530)			(14,689)			(38,746)			(32,472)
capitalized leasing expenses(3)
Non-cash compensation expense		4,959			4,359			10,159			8,866
Adjustments attributable to unconsolidated Funds(2)		(134)			(1,619)			(198)			(3,613)
Adjustments attributable to consolidated JVs(2)		84			3,965			2,024			7,886
AFFO	$	80,551	$	95,510	$	179,666	$	180,637
Weighted average shares of common stock outstanding - diluted		175,375			172,498			175,374			171,366
Weighted average units in our operating partnership outstanding		29,475			28,687			29,488			28,670
Weighted average fully diluted shares outstanding		204,850			201,185			204,862			200,036
Net income per common share - basic and diluted	$	0.01	$	0.20	$	0.16	$	0.36
FFO per share - fully diluted	$	0.41	$	0.54	$	0.96	$	1.05
Dividends paid per share(4)	$	0.28	$	0.26	$	0.56	$	0.52

__________________________________________________________

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 Funds.
2. Adjusts for the portion of each other listed adjustment item on our share of the results of our unconsolidated Funds and for each other listed adjustment item that is attributed to the noncontrolling interests in our consolidated JVs. We restructured one of our unconsolidated Funds in November 2019 after which it is consolidated as a JV. The adjustments for the unconsolidated Funds and consolidated JVs are therefore not directly comparable to the prior period.
3. Under the 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)

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

As of June 30,

20202019

60	60
16,052	16,049
91.0 %	92.0 %
89.2 %	90.2 %
90.1 %	90.1 %
8	8
1,928	1,928
98.8 %	99.2 %

		Three Months Ended June 30,		% Favorable
		2020			2019		(Unfavorable)
Net Operating Income (NOI)
Office revenues	$	158,516	$	197,353	(19.7)%
Office expenses		(53,762)			(61,690)	12.9 %
Office NOI		104,754			135,663	(22.8)%
Multifamily revenues		14,597			15,674	(6.9)%
Multifamily expenses		(3,925)			(3,948)	0.6 %
Multifamily NOI		10,672			11,726	(9.0)%
Total NOI	$	115,426	$	147,389	(21.7)%
Cash Net Operating Income (NOI)
Office cash revenues	$	170,635	$	190,679	(10.5)%
Office cash expenses		(53,762)			(61,690)	12.9 %
Office cash NOI		116,873			128,989	(9.4)%
Multifamily cash revenues		14,596			15,669	(6.8)%
Multifamily cash expenses		(3,925)			(3,948)	0.6 %
Multifamily cash NOI		10,671			11,721	(9.0)%
Total Cash NOI	$	127,544	$	140,710	(9.4)%

_________________________________________________

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

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

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Financial Results

Reconciliation of Same Property NOI to Net (Loss) Income

(Unaudited and in thousands)

		Three Months Ended June 30,
		2020			2019
Same property office cash revenues	$	170,635	$	190,679
Non-cash adjustments per definition of NOI		(12,119)			6,674
Same property office revenues		158,516			197,353
Same property office expenses		(53,762)			(61,690)
Office NOI		104,754			135,663
Same property multifamily cash revenues		14,596			15,669
Non-cash adjustments per definition of NOI		1			5
Same property multifamily revenues		14,597			15,674
Same property multifamily expenses		(3,925)			(3,948)
Multifamily NOI		10,672			11,726
Same Property NOI		115,426			147,389
Non-comparable office revenues		18,473			4,836
Non-comparable office expenses		(6,539)			(2,618)
Non-comparable multifamily revenues		16,210			12,671
Non-comparable multifamily expenses		(4,931)			(3,764)
NOI		138,639			158,514
General and administrative expenses		(9,863)			(9,159)
Depreciation and amortization		(98,765)			(78,724)
Operating income		30,011			70,631
Other income		325			2,892
Other expenses		(478)			(1,807)
(Loss) income from unconsolidated Funds		(140)			2,207
Interest expense		(35,190)			(34,063)
Net (loss) income		(5,472)			39,860
Less: Net loss (income) attributable to noncontrolling interests		7,502			(5,894)
Net income attributable to common stockholders	$	2,030	$	33,966

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

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				Financial Results
Financial Data for JVs & Fund
(Unaudited, in thousands)
		Three Months Ended June 30, 2020
	Wholly-Owned		Consolidated	Unconsolidated
		Properties		JVs(1)(2)	Fund(1)(3)
Revenues	$	155,281	$	52,515	$	2,995
Office and multifamily operating expenses	$	50,409	$	18,748	$	1,281
Straight-line rent	$	(10,491)	$	(4,861)	$	(658)
Above/below-market lease revenue	$	796	$	3,519	$	-
Cash NOI attributable to outside interests(4)	$	-	$	18,350	$	1,329
Our share of cash NOI(5)	$	114,567	$	16,759	$	1,043
		Six Months Ended June 30, 2020
	Wholly-Owned		Consolidated	Unconsolidated
		Properties		JVs(1)	Fund(2)
Revenues	$	340,284	$	118,862	$	7,597
Office and multifamily operating expenses	$	108,264	$	39,913	$	2,793
Straight-line rent	$	(12,316)	$	(4,442)	$	(730)
Above/below-market lease revenue	$	1,654	$	6,917	$	(3)
Cash NOI attributable to outside interests(3)	$	-	$	39,831	$	3,280
Our share of cash NOI(4)	$	242,682	$	36,643	$	2,257

______________________________________________________

1. Represents stand-alone financial data (with property management fees excluded from operating expenses as a consolidating entry) for four consolidated JVs. We manage our JVs and own a weighted average interest of approximately 46% in them based on square footage. The JVs own a combined seventeen Class A office properties totaling 4.3 million square feet and one residential property with 350 apartments in our submarkets. We are entitled to
2. 1. distributions based on invested capital, (ii) fees for property management and other services, (iii) reimbursement of certain acquisition-related expenses and certain other costs and (iv) in most cases, additional distributions based on Cash NOI.
3. Represents stand-alone financial data (with property management fees excluded from operating expenses as a consolidating entry) for one unconsolidated Fund. We manage our Fund in which we own an interest of approximately 34%. The Fund owns two Class A office properties totaling 0.4 million square feet in our submarkets. We are entitled to
4. 1. priority distributions, (ii) distributions based on invested capital, (iii) a carried interest if the investors' distributions exceed a hurdle rate, (iv) fees for property management and other services and (v) reimbursement of certain costs.
5. Represents the share of Cash NOI allocable under the applicable agreements to interests other than our Fully Diluted Shares.
6. Represents the share of Cash NOI allocable to our Fully Diluted Shares.

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

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Financial Results

Loans

(As of June 30, 2020, unaudited)

				Principal			Our Share(2)	Effective	Swap
	Maturity Date(1)			Balance			Maturity
		(In Thousands)		(In Thousands)	Rate(3)	Date
	Consolidated Wholly-Owned Subsidiaries
	1/1/2024		$	300,000	$	300,000	3.46%	1/1/2022
	3/3/2025			335,000			335,000	3.84%	3/1/2023
	4/1/2025			102,400			102,400	2.76%	3/1/2023
	8/15/2026			415,000			415,000	3.07%	8/1/2025
	9/19/2026			400,000			400,000	2.44%	9/1/2024
	9/26/2026	(4)		200,000			200,000	2.77%	10/1/2024
	11/1/2026	(5)		400,000			400,000	2.18%	10/1/2024
	6/1/2027			550,000			550,000	3.16%	6/1/2022
	6/1/2029			255,000			255,000	3.26%	6/1/2027
	6/1/2029	(6)		125,000			125,000	2.55%	6/1/2027
	6/1/2038	(7)		30,492			30,492	4.55%	N/A
	8/21/2023	(8)		-			-	LIBOR + 1.15%	N/A
	Subtotal			3,112,892			3,112,892
	Consolidated JVs
	2/28/2023			580,000			174,000	2.37%	3/1/2021
	12/19/2024			400,000			80,000	3.47%	1/1/2023
	5/15/2027	(9)		450,000			400,500	3.04%	4/1/2025
	6/1/2029			160,000			32,000	3.25%	7/1/2027
	Total Consolidated Loans	(10)	$	4,702,892		$	3,799,392
	Unconsolidated Fund
	3/1/2023		$	110,000	$	36,891	2.30%	3/1/2021
	Total Loans
				$	3,836,283

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Except as noted below, our loans and revolving credit facility: (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. Certain loans with maturity date extensions require us to meet minimum financial thresholds in order to exercise those extensions.

1. Maturity dates include the effect of extension options.
2. "Our Share" is calculated by multiplying the principal balance by our share of the borrowing entity's equity, and is used to calculate the non-GAAP measure "Our Share of Net Debt" - see Corporate Data on page 3.
3. Effective rate as of June 30, 2020. Includes the effect of interest rate swaps and excludes the effect of prepaid loan costs.
4. Effective rate will decrease to 2.36% on July 1, 2020.
5. Effective rate will increase to 2.31% on July 1, 2021.
6. Effective rate will increase to 3.25% on December 1, 2020.
7. Requires monthly payments of principal and interest. Principal amortization is based upon a 30-year amortization schedule.
8. $400 million revolving credit facility. Unused commitment fees range from 0.10% to 0.15%.
9. Effective rate will decrease to 2.26% on July 1, 2022.
10. Our consolidated debt on the balance sheet of $4.67 billion is calculated by adding $4.7 million of unamortized loan premium and deducting $41.0 million of unamortized deferred loan costs from our total consolidated loans of $4.70 billion.

Statistics for consolidated loans with interest fixed under the terms of the loan or a swap

Principal balance (in billions)	$4.70
Weighted average remaining life (including extension options)	5.9 years
Weighted average remaining fixed interest period	3.6 years
Weighted average annual interest rate	3.02%

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

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Portfolio Data

Office Portfolio Summary

Total Office Portfolio as of June 30, 2020

	Region		Number of		Our Rentable		Region Rentable		Our Average
		Properties		Square Feet		Square Feet(1)		Market Share(2)
	Los Angeles
	Westside(3)	52	9,995,347	38,159,871	37.1 %
	Valley	16	6,790,777	21,161,280	43.7
	Honolulu(3)		4		1,537,968		4,979,755		30.9
	Total / Average	72	18,324,092	64,300,906	39.1 %

_________________________________________________

1. The rentable square feet in each region is based on the Rentable Square Feet as reported in the 2020 second quarter CBRE Marketview report for our submarkets in that region.
2. Our market share is calculated by dividing Rentable Square Feet by the applicable Rentable Square Feet, weighted in the case of averages based on the square feet of exposure in our total portfolio to each submarket as follows:

	Region		Submarket		Number of	Our Rentable		Our Market
			Properties	Square Feet		Share(2)
			Brentwood	15		2,085,745	60.5 %
			Westwood	7		2,188,007	50.5
	Westside		Olympic Corridor	5		1,142,885	36.7
		Beverly Hills(3)	11		2,196,067	27.7
			Santa Monica	11		1,425,374	14.7
			Century City		3		957,269		9.2
			Sherman Oaks/Encino	12		3,488,995	53.4
	Valley		Warner Center/Woodland Hills	3		2,845,577	37.6
			Burbank		1		456,205		6.5
	Honolulu		Honolulu(3)		4		1,537,968		30.9
			Total / Weighted Average	72		18,324,092	39.1 %

_______________________________________________

1. In calculating market share, we adjusted the rentable square footage by (i) removing approximately 226,000 rentable square feet of vacant space at an office building in Honolulu, which we are converting to residential apartments, from both our rentable square footage and that of the submarket (see page 22) and (ii) removing a 218,000 square foot property located just outside the Beverly Hills city limits from both the numerator and the denominator.

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

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Portfolio Data

Office Percentage Leased and In-Place Rents

Total Office Portfolio as of June 30, 2020

Annualized Rent by Region

		Honolulu					Westside
		6%					65%
				Valley
		29%
				Percent			Annualized		Annualized Rent		Monthly Rent
	Region(1)							Per Leased			Per Leased
			Leased			Rent(2)			Square Foot(2)		Square Foot(2)
	Los Angeles
	Westside	91.7 %	$	474,106,484	$	53.59	$	4.47
	Valley	89.1			209,805,680			36.04			3.00
	Honolulu	93.7			48,077,881			35.72			2.98
	Total / Weighted Average		90.9 %		$	731,990,045		$	45.71		$	3.81

_______________________________________________________________

(1) Regional data reflects the following underlying submarket data:

					Percent			Monthly Rent
	Region		Submarket				Per Leased
			Leased			Square Foot(2)
			Beverly Hills	94.6 %	$	4.44
			Brentwood	89.7			3.90
	Westside		Century City	93.4			4.31
		Olympic Corridor	92.1			3.46
			Santa Monica	89.9			6.47
			Westwood		90.8			4.32
			Burbank	100.0			4.37
	Valley		Sherman Oaks/Encino	90.2			3.17
			Warner Center/Woodland Hills		86.0			2.54
	Honolulu		Honolulu		93.7			2.98
			Weighted Average	90.9 %	$	3.81

1. Does not include signed leases not yet commenced, which are included in percent leased but excluded from annualized rent.

	Recurring Office Capital Expenditures per Rentable Square Foot	$	0.04
	Three months ended June 30, 2020
	Six months ended June 30, 2020	$	0.07

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

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Portfolio Data

Office Lease Diversification

Total Office Portfolio as of June 30, 2020

Portfolio Tenant Size

Median Average

Square feet

2,700

5,600

			Office Leases		Rentable Square Feet			Annualized Rent
	Square Feet Under Lease		Number		Percent		Amount		Percent			Amount		Percent
	2,500 or less	1,382	48.0 %	1,936,447	12.1 %	$	87,345,133	11.9 %
	2,501-10,000		1,133	39.3	5,554,171	34.7			249,128,367	34.0
	10,001-20,000		237	8.2	3,294,290	20.6			142,916,312	19.6
	20,001-40,000		95	3.3	2,637,903	16.5			120,777,196	16.5
	40,001-100,000		30	1.1	1,681,802	10.5			87,743,171	12.0
	Greater than 100,000	4	0.1	908,539	5.6			44,079,866	6.0
	Total for all leases
	2,881	100.0 %	16,013,152	100.0 %	$	731,990,045	100.0 %

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

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Portfolio Data

Largest Office Tenants

Total Office Portfolio as of June 30, 2020

Tenants paying 1% or more of our aggregate Annualized Rent:

		Number						Total		Percent of				Percent of
			Number of	Lease (1)		Leased		Rentable		Annualized
Tenant		of			Square		Square			Annualized
	Leases		Properties	Expiration		Feet		Feet		Rent		Rent
Time Warner(2)	3	3		2023 - 2024	468,819	2.5 %	$ 24,399,553	3.3 %
UCLA(3)	26	10		2020 - 2027	336,695	1.8	17,416,007	2.4
William Morris	3	1		2022 - 2027	213,539	1.2	12,418,766	1.7
Endeavor(4)
Morgan Stanley(5)	5	5		2022 - 2027	145,488	0.8	9,604,676	1.3
Equinox Fitness(6)		5		5		2024 - 2033		181,177		1.0		8,808,661		1.2
Total	42	24			1,345,718	7.3 %	$ 72,647,663	9.9 %

______________________________________________________

1. Expiration dates are per lease (expiration dates do not reflect storage and similar leases).
2. Square footage expires as follows: 13,000 square feet in 2023; and 456,000 square feet in 2024.
3. Square footage expires as follows: 1,000 square feet in 2020; 72,000 square feet in 2021; 55,000 square feet in 2022; 46,000 square feet in 2023; 11,000 square feet in 2024; 85,000 square feet in 2025; and 67,000 square feet in 2027. Tenant has options to terminate 16,000 square feet in 2023; and 51,000 square feet in 2025.
4. Square footage expires as follows: 1,000 square feet in 2022; and 207,000 square feet in 2027. Tenant has an option to terminate 214,000 square feet in 2022.
5. Square footage expires as follows: 16,000 square feet in 2022; 30,000 square feet in 2023; 26,000 square feet in 2025; and 74,000 square feet in 2027. Tenant has options to terminate 26,000 square feet in 2022; and 32,000square feet in 2024.
6. Square footage expires as follows: 34,000 square feet in 2024; 31,000 square feet in 2027; 44,000 square feet in 2028; 42,000 square feet in 2030; and 30,000 square feet in 2033.

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

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Portfolio Data

Office Industry Diversification

Total Office Portfolio as of June 30, 2020

Percentage of Annualized Rent by Tenant Industry

Financial Services 15.1%

		Entertainment
		13.2%
Legal
18.0%
		Real Estate
Other 1.2%		11.8%
Manufacturing & Distrib…
1.2%
Advertising 1.3%
Public Administration 2.5%
Educational Services 3.6%		Accounting & Consulting
	10.2%
Insurance 3.7%
Technology 4.8%		Health Services
	Retail	7.5%
	5.9%

	Industry		Number of		Annualized Rent as
		Leases		a Percent of Total
	Legal	573	18.0 %
	Financial Services	397	15.1
	Entertainment	212	13.2
	Real Estate	306	11.8
	Accounting & Consulting	336	10.2
	Health Services	366	7.5
	Retail	183	5.9
	Technology	106	4.8
	Insurance	100	3.7
	Educational Services	56	3.6
	Public Administration	94	2.5
	Advertising	53	1.3
	Manufacturing & Distribution	53	1.2
	Other	46	1.2
	Total		2,881		100.0 %

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

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Portfolio Data

Office Lease Expirations

Total Office Portfolio as of June 30, 2020

		June 30, 2020		Comparable curve based on
				average of prior three years (1)

	50.0%
feet	40.0%
Square	30.0%
Expiring	20.0%		15.3%	13.3%	13.6%	12.2%
			8.9%
10.0%	5.4%					5.5%	6.4%
					2.2%		2.6%
	1.3%									0.7%
	0.0%
	Short	2020	2021	2022	2023	2024	2025	2026	2027	2028	2029 Thereafter
	Term
	Leases

1. Average of the percentage of leases expiring at June 30, 2017, 2018, and 2019 with the same remaining duration as the leases for the labeled year had at June 30, 2020. Acquisitions are included in the comparable average commencing in the quarter after the acquisition.

							Expiring							Annualized		Annualized
											Annualized				Rent Per
			Number		Rentable		Square		Annualized				Rent Per			Leased
					Feet as a			Rent as a			Leased		Square Foot
	Year of Lease Expiration		of		Square		Percent		Rent at June		Percent of			Square			at
		Leases		Feet		of Total			30, 2020		Total			Foot(1)		Expiration(2)
	Short Term Leases	74	235,049	1.3 %	$	8,590,803	1.2 %	$	36.55	$	36.55
	2020	312	992,165	5.4			42,810,041	5.9			43.15			43.45
	2021	661	2,794,283	15.3			121,835,205	16.6			43.60			44.80
	2022	544	2,440,999	13.3			106,429,407	14.5			43.60			46.99
	2023	442	2,495,411	13.6			117,333,416	16.0			47.02			51.55
	2024	299	2,238,771	12.2			103,928,095	14.2			46.42			52.78
	2025	252	1,618,939	8.9			75,269,702	10.3			46.49			54.88
	2026	112	1,012,779	5.5			46,726,169	6.4			46.14			58.00
	2027	88	1,164,976	6.4			56,351,340	7.7			48.37			60.77
	2028	42	410,807	2.2			22,845,462	3.1			55.61			70.77
	2029	23	131,451	0.7			5,851,542	0.8			44.52			58.66
	Thereafter		32		477,522		2.6			24,018,863		3.3			50.30			72.98
	Subtotal/weighted average	2,881	16,013,152	87.4 %	$	731,990,045	100.0 %	$	45.71	$	51.73
	Signed leases not commenced	290,535	1.6
	Available			1,670,705	9.1
	Building management use			119,374	0.7
	BOMA adjustment(3)			230,326	1.2
	Total/weighted average		2,881		18,324,092		100.0 %		$	731,990,045		100.0 %		$	45.71		$	51.73

___________________________________________________

1. Represents annualized rent at June 30, 2020 divided by leased square feet.
2. Represents annualized rent at expiration divided by leased square feet.
3. Represents the square footage adjustments for leases that do not reflect BOMA remeasurement.

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

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Portfolio Data

Office Lease Expirations - Next Four Quarters

Total Office Portfolio as of June 30, 2020

	Q3 2020		Q4 2020		Q1 2021		Q2 2021
Los Angeles
Westside	158,889	373,925	356,048	454,906
Valley	132,475	217,403	281,802	260,068
Honolulu	59,497		49,976		73,663		40,547
Expiring Square Feet(1)	350,861		641,304		711,513		755,521
Percentage of Portfolio	1.9 %	3.5 %	3.9 %	4.1 %
Los Angeles
Westside	$49.89	$50.59	$53.45	$49.76
Valley	$34.87	$35.69	$34.28	$36.80
Honolulu	$35.99		$34.92		$37.86		$35.11
Expiring Rent per Square Foot(2)	$41.86	$44.32	$44.24	$44.51

________________________________________________________

1. Includes leases with an expiration date in the applicable period where the space had not been re-leased as of June 30, 2020, other than 235,049 square feet of Short-Term Leases.
2. Fluctuations in this number primarily reflect the mix of buildings/submarkets involved, as well as the varying terms and square footage of the individual leases expiring. As a result, the data in this table should only be extrapolated with caution. While the following table sets forth data for our underlying submarkets, that data is even more influenced by such issues:

					Next Four Quarters
	Region		Submarket		Expiring		Expiring Rent
		SF		per SF
			Beverly Hills	223,069	$51.03
			Brentwood	359,524	$46.62
	Westside		Century City	150,508	$51.54
		Olympic Corridor	198,284	$41.49
			Santa Monica	114,901	$75.96
			Westwood		297,482		$52.62
	Valley		Sherman Oaks/Encino	550,185	$37.79
		Warner Center/Woodland Hills		341,563		$31.67
	Honolulu		Honolulu	223,683	$36.21

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

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Portfolio Data

Office Leasing Activity

Total Office Portfolio during the Three Months ended June 30, 2020

		Net Absorption During Quarter	(1.36)%
	Office Leases Signed During Quarter	Number of	Rentable	Weighted Average
	Leases	Square Feet	Lease Term (months)
	New leases	42		151,104		63
	Renewal leases	83		500,434		50
	All leases	125		651,538		53

Change in Rental Rates for Office Leases Executed during the Quarter(1)

			Expiring			New/Renewal			Percentage
			Rate(1)			Rate(1)			Change
Cash Rent	$40.89	$43.62		6.7%
Straight-line Rent	$36.86	$44.13		19.7%
		Average Office Lease Transaction Costs
				Lease Transaction	Lease Transaction
					Costs per SF		Costs per Annum
	New leases signed during the quarter	$40.06		$7.60
	Renewal leases signed during the quarter	$20.90		$5.06
	All leases signed during the quarter	$25.32		$5.76

________________________________________________________________

1. Represents the average annual initial stabilized cash and straight-line rents per square foot on new and renewed leases signed during the quarter compared to the prior leases for the same space. Excludes Short Term Leases, leases where the prior lease was terminated more than a year before signing of the new lease, leases for tenants relocated at landlord's request, and leases in acquired buildings where we believe the information about the prior agreement is incomplete or where we believe base rent reflects other off-market inducements to the tenant.

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

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Portfolio Data

Multifamily Portfolio Summary

as of June 30, 2020

Annualized Rent by Submarket

West Los Angeles

Santa Monica 36% 25%

Honolulu 39%

	Submarket		Number of		Number of			Units as a
		Properties		Units		Percent of Total
	Los Angeles
	Santa Monica	2			820			19 %
	West Los Angeles	6			1,300			31
	Honolulu		4			2,089			50
	Total		12			4,209			100 %
	Submarket		Percent	Annualized			Monthly Rent
		Leased		Rent(2)		Per Leased Unit
	Los Angeles
	Santa Monica	98.5 %		$	29,698,692	$	3,067
	West Los Angeles(1)	99.6			43,632,396			3,178
	Honolulu		98.2			46,098,444			1,878
	Total / Weighted Average	98.7 %		$	119,429,532	$	2,490

	Recurring Multifamily Capital Expenditures per Unit
	Three months ended June 30, 2020	$	191
	Six months ended June 30, 2020	$	399

________________________________________________________________

1. 149 units at one property which are temporarily unoccupied as a result of a fire are omitted from the calculation of Percent Leased. These units, as well as insurance recovery for lost rent, are also omitted from the calculation of Annualized Rent.
2. The multifamily portfolio also includes 10,495 square feet of ancillary retail space generating annualized rent of $415,790, which is not included in multifamily annualized rent.

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

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Developments

Development Projects

1132 Bishop Street, Honolulu, Hawaii

In downtown Honolulu, we are converting a 25 story, 490,000 square foot office tower into approximately 500 rental apartments. This project will help address the severe shortage of rental housing in Honolulu, and revitalize the central business district, where we own a significant portion of the Class A office space.

The conversion is occurring in phases over a number of years as the office space is vacated. In select cases, we will relocate tenants to our other office buildings in Honolulu, although we do not have enough vacancy to accommodate all of them.

We began delivering the first units during the second quarter of 2020. We currently expect construction costs of $80 million to $100 million. The inherent uncertainties of development, however, are compounded by the multi-year and phased nature of the conversion and potential impacts from the pandemic.

Residential High Rise Tower, Brentwood, California

In Brentwood, we are building the first new residential high-rise development west of the 405 freeway in more than 40 years, offering stunning ocean views and luxury amenities. The 34 story, 376 unit tower is being built on a site that is directly adjacent to an office building and a 712 unit residential property that we own. The estimated budget is between $180 million and $200 million, not including the cost of the land which we have owned since 1997. As part of the project, we are investing additional capital to build a one acre park on Wilshire Boulevard that will be available to the public and provide a valuable amenity to our surrounding properties and community.

Construction continues on the project, although we may face some delays as a result of the impact of the pandemic on permitting and other logistics. We currently expect the first units to be delivered in 2022.

Rendering of our new residential tower in Brentwood (center), with a new park in the foreground, and our existing residential and office buildings (left and right, respectively).

_______________________________________________

All figures are estimates, as development in our markets is long and complex and subject to inherent uncertainties.

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

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Definitions

Adjusted Funds From Operations (AFFO): We calculate AFFO from FFO by (i) eliminating the impact on FFO of straight-line rent; amortization/accretion of acquired above/below market leases; loan costs such as amortization/ accretion of loan premiums/discounts; amortization and hedge ineffectiveness of interest rate contracts; amortization/expense of loan costs; non-cash compensation expense, and (ii) subtracting recurring capital expenditures, tenant improvements and capitalized leasing expenses (including adjusting for the effect of such items attributable to consolidated JVs and unconsolidated Funds, but not for noncontrolling interests included in our calculation of fully diluted equity). Recurring capital expenditures, tenant improvements and leasing expenses are those required to maintain current revenues once a property has been stabilized, generally excluding those for acquired buildings being stabilized, newly developed space and upgrades to improve revenues or operating expenses or significantly change the use of the space, as well as those resulting from casualty damage or bringing the property into compliance with governmental requirements. We report AFFO because it is a widely reported measure of the performance of equity Real Estate Investments Trusts (REITs), and is also used by some investors to compare our performance with other REITs. However, the National Association of Real Estate Investment Trusts (NAREIT) has not defined AFFO, and other REITs may use different methodologies for calculating AFFO, and accordingly, our AFFO may not be comparable to the AFFO of other REITs. AFFO is a non-GAAP financial measure for which we believe that net income (loss) is the most directly comparable GAAP financial measure. AFFO should be considered only as a supplement to net income (loss) as a measure of our performance and should not be used as a measure of our liquidity or cash flow, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends.

AFFO Payout Ratio: Represents dividends paid within each period divided by the AFFO for that period. We report AFFO Payout Ratio because it is a widely reported measure of the performance of equity REITs, and is also used by some investors to compare our performance with other REITs.

Annualized Rent: Represents annualized cash base rent (i.e. excludes tenant reimbursements, parking and other revenue) before abatements under leases commenced as of the reporting date and expiring after the reporting date (does not include 290,535 square feet with respect to signed leases not yet commenced at June 30, 2020). For our triple net office properties (in Honolulu and one single tenant building in Los Angeles), annualized rent is calculated for triple net leases by adding expense reimbursements and estimates of normal building expenses paid by tenants to base rent. Annualized Rent does not include lost rent recovered from insurance and rent for building management use. Annualized Rent includes rent for a health club that we own and operate in Honolulu and for our corporate headquarters in Santa Monica. We report Annualized Rent because it is a widely reported measure of the performance of equity REITs, and is used by some investors as a means to determine tenant demand and to compare our performance and value with other REITs. We use Annualized Rent to manage and monitor the performance of our office and multifamily portfolios.

Average Office Occupancy: Calculated by averaging the Occupancy Rates on the last day of the current and prior quarter and, for reporting periods longer than a quarter, by averaging the Occupancy Rates for all the quarters in the respective reported period.

Consolidated Portfolio: Includes all of the properties included in our consolidated results, including our consolidated JVs. At June 30, 2020, we own 100% of our consolidated portfolio, except for seventeen office properties totaling 4.3 million square feet and one residential property with 350 apartments, which we own through four consolidated JVs and in which we own a weighted average interest of approximately 46% based on square footage.

Consolidated Net Debt: Represents our consolidated debt, net of cash and cash equivalents, and before adding unamortized loan premium and deducting unamortized deferred loan costs. Cash and cash equivalents are subtracted because they could be used to reduce the debt obligations and unamortized loan premium and deferred loan costs are not adjusted for because they do not require cash settlement. Consolidated Net Debt is a non-GAAP financial measure for which we believe that consolidated debt is the most directly comparable GAAP financial measure. We report Consolidated Net Debt because some investors use it to evaluate and compare our leverage and financial position with that of other REITs. A limitation associated with using Consolidated Net Debt is that it subtracts cash and cash equivalents and may therefore imply that there is less debt than the most comparable GAAP financial measure indicates.

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Definitions

Equity Capitalization: Represents our Fully Diluted Shares multiplied by the closing price of our common stock on the New York Stock Exchange as of June 30, 2020.

Fully Diluted Shares: Calculated according to the treasury stock method, based on our diluted outstanding stock and units in our Operating Partnership.

Funds: At June 30, 2020, we owned an interest of approximately 34% in Douglas Emmett Partnership X, LP (Partnership X). The Fund owns two office properties totaling 0.4 million square feet. We held an ownership interest in an unconsolidated Fund that was restructured on November 21, 2019, after which it is treated as a consolidated JV in our financial statements.

Funds From Operations (FFO): We calculate FFO in accordance with the standards established by NAREIT by excluding gains (or losses) on sales of investments in real estate, gains (or losses) from changes in control of investments in real estate, real estate depreciation and amortization (other than amortization of right-of-use assets for which we are the lessee and amortization of deferred loan costs), and impairment write-downs of real estate from our net income (loss) (including adjusting for the effect of such items attributable to consolidated JVs and unconsolidated Funds, but not for noncontrolling interests included in our calculation of fully diluted equity). We report FFO because it is a widely reported measure of the performance of equity REITs, and is also used by some investors to identify the impact of trends in occupancy rates, rental rates and operating costs from year to year, excluding impacts from changes in the value of our real estate, and to compare our performance with other REITs. FFO is a non-GAAP financial measure for which we believe that net income (loss) is the most directly comparable GAAP financial measure. FFO has limitations as a measure of our performance because it excludes depreciation and amortization of real estate, and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures, tenant improvements and leasing expenses necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations. FFO should be considered only as a supplement to net income (loss) as a measure of our performance and should not be used as a measure of our liquidity or cash flow, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends. Other REITs may not calculate FFO in accordance with the NAREIT definition and, accordingly, our FFO may not be comparable to the FFO of other REITs.

GAAP: Refers to accounting principles generally accepted in the United States.

Joint Ventures (JVs): At June 30, 2020, we owned a weighted average interest of approximately 46% based on square footage in four consolidated JVs. The JVs owned seventeen office properties totaling 4.3 million square feet and one residential property with 350 apartments. We held an ownership interest in an unconsolidated Fund that was restructured on November 21, 2019, after which it is treated as a consolidated JV in our financial statements.

Lease Transaction Costs: Represents the weighted average of tenant improvements and leasing commissions for leases signed by us during the quarter, excluding leases substantially negotiated by the seller in the case of acquired properties and excluding leases for tenants relocated from space being taken out of service. We report Lease Transaction Costs because it is a widely reported measure of the performance of equity REITs, and is used by some investors to determine our cash needs and to compare our performance with other REITs. We use Lease Transaction Costs to manage and monitor the performance of our office and multifamily portfolios.

Leased Rate: The percentage leased as of June 30, 2020. Management space is considered leased. Space taken out of service during a repositioning or which is vacant as a result of a fire or other damage is excluded from both the numerator and denominator for calculating percentage leased. We report Leased Rates because it is a widely reported measure of the performance of equity REITs, and is also used by some investors as a means to determine tenant demand and to compare our performance with other REITs. We use Leased Rate to manage and monitor the performance of our office and multifamily portfolios.

Net Absorption: Represents the change in percentage leased between the last day of the current and prior quarter, excluding properties acquired or sold during the current quarter. We report Net Absorption because it is a widely reported measure of the performance of equity REITs, and is used by some investors as a means to determine tenant demand and to compare our performance with other REITs. We use Net Absorption to manage and monitor the performance of our office portfolio.

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Definitions

Net Income Per Common Share - Diluted: We calculate Net Income Per Common Share - Diluted in accordance with GAAP by dividing the net income attributable to common stockholders for the period by the weighted average number of common shares and dilutive instruments outstanding during the period using the treasury stock method. We account for unvested Long Term Incentive Plan Unit (LTIP Unit) awards that contain non-forfeitable rights to dividends as participating securities and include these securities in the computation using the two-class method.

Net Operating Income (NOI): We calculate NOI as revenue less operating expenses attributable to the properties that we own and operate. We present two forms of NOI:

• NOI: is calculated by excluding the following from our net income (loss): general and administrative expenses, depreciation and amortization expense, other income, other expenses, income from unconsolidated Funds, interest expense, gain from consolidation of JVs, gains (or losses) on sales of investments in real estate and net income attributable to noncontrolling interests.
• Cash NOI: is calculated by excluding from NOI our straight-line rent and the amortization/accretion of acquired above/below market leases.

We report NOI because it is a widely recognized measure of the performance of equity REITs, and is used by some investors to identify trends in occupancy rates, rental rates and operating costs and to compare our operating performance with that of other REITs. NOI is a non-GAAP financial measure for which we believe that net income (loss) is the most directly comparable GAAP financial measure. NOI has limitations as a measure of our performance because it excludes depreciation and amortization expense, and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures, tenant improvements and leasing expenses necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations. NOI should be considered only as a supplement to net income (loss) as a measure of our performance and should not be used as a measure of our liquidity or cash flow, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends. Other REITs may not calculate NOI in a similar manner and, accordingly, our NOI may not be comparable to the NOI of other REITs.

Occupancy Rate: We calculate the Occupancy Rate by excluding signed leases not yet commenced from the Leased Rate. Management space is considered occupied. Space taken out of service during a repositioning or which is vacant as a result of a fire or other damage is excluded from both the numerator and denominator for calculating the Occupancy Rate. We report Occupancy Rate because it is a widely reported measure of the performance of equity REITs, and is also used by some investors as a means to determine tenant demand and to compare our performance with other REITs. We use Occupancy Rate to manage and monitor the performance of our office and multifamily portfolios.

Operating Partnership: Douglas Emmett Properties, LP

Our Share of Net Debt: We calculate Our Share of Net Debt by multiplying the principal balance of our consolidated loans and our unconsolidated Fund's loan by our equity interest in the relevant borrower, and subtracting the product of cash and cash equivalents multiplied by our equity interest in the entity that owns the cash or cash equivalent. We subtract cash and cash equivalents because they could be used to reduce the debt obligations, and do not add unamortized loan premium or subtract unamortized deferred loan costs because they do not require cash settlement. Our Share of Net Debt is a non-GAAP financial measure for which we believe that consolidated debt is the most directly comparable GAAP financial measure. We report Our Share of Net Debt because some investors use it to evaluate and compare our leverage and financial position with that of other REITs.

Pro Forma Enterprise Value: We calculate Pro Forma Enterprise Value by adding Equity Capitalization to Our Share of Net Debt. Pro Forma Enterprise Value is a non-GAAP financial measure for which we believe that consolidated total equity and liabilities is the most directly comparable GAAP financial measure. We report Pro Forma Enterprise Value because some investors use it to evaluate and compare our financial position with that of other REITs.

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Definitions

Recurring Capital Expenditures: Building improvements required to maintain revenues once a property has been stabilized, and excludes capital expenditures for (i) acquired buildings being stabilized, (ii) newly developed space,

1. upgrades to improve revenues or operating expenses or significantly change the use of the space, (iv) casualty damage and (v) bringing the property into compliance with governmental or lender requirements. We report Recurring Capital Expenditures because it is a widely reported measure of the performance of equity REITs, and is used by some investors as a means to determine our cash flow requirements and to compare our performance with other REITs. We use Recurring Capital Expenditures to manage and monitor the performance of our office and multifamily portfolios.

Rental Rate: We report Rental Rate because it is a widely reported measure of the performance of equity REITs, and is used by some investors to compare our performance with other REITs. We use Rental Rate to manage and monitor the performance of our office and multifamily portfolios. We present two forms of Rental Rates:

• Cash Rental Rate: is calculated by dividing the rent paid by the Rentable Square Feet.
• Straight-LineRental Rate: is calculated by dividing the average rent over the lease term by the Rentable Square Feet.

Rentable Square Feet: Based on the Building Owners and Managers Association (BOMA) measurement. At June 30, 2020, total consists of 16,303,687 leased square feet (including 290,535 square feet with respect to signed leases not commenced), 1,670,705 available square feet, 119,374 building management use square feet and 230,326 square feet of BOMA adjustment on leased space. We report Rentable Square Feet because it is a widely reported measure of the performance and value of equity REITs, and is also used by some investors to compare our performance and value with other REITs. We use Rentable Square Feet to manage and monitor the performance of our office portfolio.

Same Property NOI: To facilitate a comparison of NOI between reported periods, we report NOI for a subset of our properties referred to as our "same properties," which are properties that have been owned and operated by us during both periods being compared. We exclude from our same property subset properties that during the comparable periods were: (i) acquired, (ii) sold, (iii) held for sale, contributed or otherwise removed from our consolidated financial statements, or (iv) that underwent a major repositioning project or were impacted by development activity that we believed significantly affected the properties' results. Our Same Property NOI is not adjusted for noncontrolling interests in properties which are not wholly owned. Our same properties for 2020 include all of our Consolidated Portfolio properties, other than (1) a 80,500 square foot property in Honolulu, where the largest tenant is a health club that we own and operate, (2) a 492,600 square foot office property in Honolulu and a multifamily property in Honolulu which are affected by development activities, (3) a residential community in Los Angeles that we acquired in June 2019 with 350 apartments and approximately 50,000 square feet of retail space, (4) a residential community with 712 apartments and approximately 34,000 square feet of retail space in Los Angeles partially affected by fire damage, and (5) a consolidated JV that was an unconsolidated Fund before November 21, 2019. We report Same Property NOI because it is a widely reported measure of the performance and value of equity REITs, and is used by some investors as a means to determine our financial results without noise from properties not being operated on a consistent basis and to compare our performance and value with other REITs. We use Same Property NOI to manage and monitor the performance of our office portfolio.

Short Term Leases: Represents leases that expired on or before the reporting date or had a term of less than one year, including hold over tenancies, month to month leases and other short term occupancies.

Total Portfolio: At June 30, 2020, our Total Portfolio included our Consolidated Portfolio plus two office properties totaling 0.4 million square feet owned by one unconsolidated Fund in which we owned approximately 34%.

"We" and "our" refers to Douglas Emmett, Inc., our Operating Partnership and its subsidiaries, as well as our consolidated JVs and our unconsolidated Fund.

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