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United States
Securities and Exchange Commission
Washington, D.C. 20549

FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number: 001-33106
deiblacklogoaa09.jpg

Douglas Emmett, Inc.
(Exact name of registrant as specified in its charter)
Maryland20-3073047
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1299 Ocean Avenue, Suite 1000, Santa Monica, California
90401
(Address of principal executive offices)(Zip Code)

(310) 255-7700
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, $0.01 par value per shareDEINew York Stock Exchange
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 
Class Outstanding atOctober 27, 2023
Common Stock, $0.01 par value per share 166,737,730shares
1


DOUGLAS EMMETT, INC.
FORM 10-Q
Table of Contents
Page
 
 
 
 
 
     Overview
     Other Assets
     Equity
     EPS
 

2
Abbreviations used in this Report:

AOCIAccumulated Other Comprehensive Income (Loss)
ASCAccounting Standards Codification
ASUAccounting Standards Update
BOMABuilding Owners and Managers Association
CEOChief Executive Officer
CFOChief Financial Officer
CodeInternal Revenue Code of 1986, as amended
COVID-19Coronavirus Disease 2019
DEIDouglas Emmett, Inc.
EPSEarnings Per Share
Exchange ActSecurities Exchange Act of 1934, as amended
FASBFinancial Accounting Standards Board
FCAFinancial Conduct Authority
FDICFederal Deposit Insurance Corporation
FFOFunds From Operations
FundUnconsolidated Institutional Real Estate Fund
GAAPGenerally Accepted Accounting Principles (United States)
JVJoint Venture
LIBORLondon Interbank Offered Rate
LTIP UnitsLong-Term Incentive Plan Units
NAREITNational Association of Real Estate Investment Trusts
OCIOther Comprehensive Income (Loss)
OP UnitsOperating Partnership Units
Operating PartnershipDouglas Emmett Properties, LP
Partnership XDouglas Emmett Partnership X, LP
PCAOBPublic Company Accounting Oversight Board (United States)
REITReal Estate Investment Trust
ReportQuarterly Report on Form 10-Q
SECSecurities and Exchange Commission
Securities ActSecurities Act of 1933, as amended
SOFRSecured Overnight Financing Rate
TRSTaxable REIT Subsidiary(ies)
USUnited States
USDUnited States Dollar
VIEVariable Interest Entity(ies)

3
Defined terms used in this Report:

Annualized RentAnnualized cash base rent (excludes tenant reimbursements, parking and other revenue) before abatements under leases commenced as of the reporting date and expiring after the reporting date. Annualized Rent for our triple net office properties (in Honolulu and one single tenant building in Los Angeles) is calculated 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 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.
Consolidated PortfolioIncludes all of the properties included in our consolidated results, including our consolidated JVs.
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 our consolidated JVs and our unconsolidated Fund, but not for noncontrolling interests included in our Operating Partnership). FFO is a non-GAAP supplemental financial measure that we report because we believe it is useful to our investors. See Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of this Report for a discussion of FFO.
Leased Rate
The percentage leased as of the reporting date. 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 the Leased Rate. For newly developed buildings going through initial lease up, units are included in both the numerator and denominator as they are leased. We report Leased 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 Leased Rate to manage and monitor the performance of our office and multifamily portfolios.
Net Operating Income (NOI)
We calculate NOI as revenue less operating expenses attributable to the properties that we own and operate. 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 Fund, interest expense, gains (or losses) on sales of investments in real estate and net income (loss) attributable to noncontrolling interests. NOI is a non-GAAP supplemental financial measure that we report because we believe it is useful to our investors. See Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of this Report for a discussion of our Same Property NOI.
Occupancy Rate
We calculate 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. For newly developed buildings going through initial lease up, units are included in both the numerator and denominator as they are occupied. 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.
Recurring Capital ExpendituresBuilding 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, (iii) 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.
4
Defined terms used in this Report (continued):
Rentable Square Feet
Based on the BOMA remeasurement and consists of leased square feet (including square feet with respect to signed leases not commenced as of the reporting date), available square feet, building management use square feet and square feet of the 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.
Rental RateWe present two forms of Rental Rates - Cash Rental Rates and Straight-Line Rental Rates. Cash Rental Rate is calculated by dividing the rent paid by the Rentable Square Feet. Straight-Line Rental Rate is calculated by dividing the average rent over the lease term by the Rentable Square Feet.
Same Properties
Our consolidated properties that have been owned and operated by us in a consistent manner, and reported in our consolidated results during the entire span of both periods being compared. We exclude from our same property subset any properties that during the comparable periods were: (i) acquired, (ii) sold, held for sale, contributed or otherwise removed from our consolidated financial statements, (iii) that underwent a major repositioning project or were impacted by development activity, or suffered significant casualty loss that we believed significantly affected the properties' operating results. We also exclude rent received from ground leases.
Short-Term LeasesRepresents 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 PortfolioIncludes our Consolidated Portfolio plus the properties owned by our Fund.
5
Forward Looking Statements

This Report contains forward-looking statements within the meaning of the Section 27A of the Securities Act and Section 21E of the Exchange Act. You can find many (but not all) of these statements by looking for words such as “believe”, “expect”, “anticipate”, “estimate”, “approximate”, “intend”, “plan”, “would”, “could”, “may”, “future” or other similar expressions in this Report. We claim the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995. We caution investors that any forward-looking statements used in this Report, or those that we make orally or in writing from time to time, are based on our beliefs and assumptions, as well as information currently available to us. Actual outcomes will be affected by known and unknown risks, trends, uncertainties and factors beyond our control or ability to predict. Although we believe that our assumptions are reasonable, they are not guarantees of future performance and some will inevitably prove to be incorrect. As a result, our future results can be expected to differ from our expectations, and those differences may be material. Accordingly, investors should use caution when relying on previously reported forward-looking statements, which were based on results and trends at the time they were made, to anticipate future results or trends. Some of the risks and uncertainties that could cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include the following:
•adverse economic or real estate developments affecting Southern California or Honolulu, Hawaii;
•competition from other real estate investors in our markets;
•decreasing rental rates or increasing tenant incentive and vacancy rates;
•reduced demand for office space, including as a result of remote work and flexible working arrangements that allow work from remote locations other than the employer’s office premises;
•defaults on, early terminations of, or non-renewal of leases by tenants;
•increases in interest rates;
•increases in operating costs, including due to inflation;
•insufficient cash flows to service our outstanding debt or pay rent on ground leases;
•difficulties in raising capital;
•inability to liquidate real estate or other investments quickly;
•adverse changes to rent control laws and regulations;
•environmental uncertainties;
•natural disasters;
•fire and other property damage;
•insufficient insurance, or increases in insurance costs;
•inability to successfully expand into new markets and submarkets;
•difficulties in identifying properties to acquire and failure to complete acquisitions successfully;
•failure to successfully operate acquired properties;
•risks associated with property development;
•risks associated with JVs;
•conflicts of interest with our officers and reliance on key personnel;    
•changes in zoning and other land use laws;
•adverse results of litigation or governmental proceedings;
•failure to comply with laws, regulations and covenants that are applicable to our business;
•possible terrorist attacks or wars;
•possible cyber attacks or intrusions;
•adverse changes to accounting rules;
•weaknesses in our internal controls over financial reporting;
•failure to maintain our REIT status under federal tax laws; and
•adverse changes to tax laws, including those related to property taxes.

For further discussion of these and other risk factors see Item 1A. "Risk Factors” in our 2022 Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and Item 1A. "Risk Factors" in this Report. This Report and all subsequent written and oral forward-looking statements 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 forward-looking statements to reflect events or circumstances after the date of this Report.
6
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Douglas Emmett, Inc.
Consolidated Balance Sheets
(Unaudited; In thousands, except share data)
 September 30, 2023December 31, 2022
Assets  
Investment in real estate, gross$12,385,477 $12,292,973 
Less: accumulated depreciation and amortization(3,558,336)(3,299,365)
Investment in real estate, net8,827,141 8,993,608 
Ground lease right-of-use asset7,449 7,455 
Cash and cash equivalents526,230 268,837 
Tenant receivables8,555 6,879 
Deferred rent receivables116,987 114,980 
Acquired lease intangible assets, net3,103 3,536 
Interest rate contract assets248,232 270,234 
Investment in unconsolidated Fund47,988 47,976 
Other assets60,394 33,941 
Total Assets$9,846,079 $9,747,446 
Liabilities  
Secured notes payable, net$5,541,846 $5,191,893 
Ground lease liability10,839 10,848 
Interest payable, accounts payable and deferred revenue169,069 140,925 
Security deposits62,403 61,429 
Acquired lease intangible liabilities, net22,775 31,364 
Interest rate contract liabilities— 1,790 
Dividends payable31,691 33,414 
Total Liabilities5,838,623 5,471,663 
Equity  
Douglas Emmett, Inc. stockholders' equity:  
Common Stock, $0.01 par value, 750,000,000 authorized, 166,737,730 and 175,809,682 outstanding at September 30, 2023 and December 31, 2022, respectively
1,667 1,758 
Additional paid-in capital3,384,285 3,493,307 
Accumulated other comprehensive income169,760 187,063 
Accumulated deficit(1,218,457)(1,119,714)
Total Douglas Emmett, Inc. stockholders' equity2,337,255 2,562,414 
Noncontrolling interests1,670,201 1,713,369 
Total Equity4,007,456 4,275,783 
Total Liabilities and Equity$9,846,079 $9,747,446 

See accompanying notes to the consolidated financial statements.
7
Douglas Emmett, Inc.
Consolidated Statements of Operations
(Unaudited; in thousands, except per share data)




 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Revenues   
Office rental    
Rental revenues and tenant recoveries$181,106 $182,011 $535,243 $542,535 
Parking and other income27,717 25,916 82,371 74,209 
Total office revenues208,823 207,927 617,614 616,744 
Multifamily rental    
Rental revenues42,864 41,057 131,126 110,235 
Parking and other income3,722 4,679 12,469 12,536 
Total multifamily revenues46,586 45,736 143,595 122,771 
Total revenues255,409 253,663 761,209 739,515 
Operating Expenses    
Office expenses74,631 74,653 220,261 212,006 
Multifamily expenses17,256 13,661 50,470 35,729 
General and administrative expenses12,826 11,272 34,698 34,173 
Depreciation and amortization122,022 96,276 336,771 279,588 
Total operating expenses226,735 195,862 642,200 561,496 
Other income6,229 1,649 12,561 2,490 
Other expenses(175)(199)(820)(561)
Income from unconsolidated Fund290 356 1,177 921 
Interest expense(56,043)(38,394)(151,859)(109,560)
Net (loss) income(21,025)21,213 (19,932)71,309 
Net loss attributable to noncontrolling interests7,663 1,742 17,681 1,534 
Net (loss) income attributable to common stockholders$(13,362)$22,955 $(2,251)$72,843 
Net (loss) income per common share – basic and diluted$(0.08)$0.13 $(0.02)$0.41 
 
See accompanying notes to the consolidated financial statements.
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Douglas Emmett, Inc.
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited and in thousands)



 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Net (loss) income$(21,025)$21,213 $(19,932)$71,309 
Other comprehensive (loss) income: cash flow hedges(7,045)108,352 (21,757)342,628 
Comprehensive (loss) income(28,070)129,565 (41,689)413,937 
Comprehensive loss (income) attributable to noncontrolling interests9,571 (31,731)22,135 (102,671)
Comprehensive (loss) income attributable to common stockholders$(18,499)$97,834 $(19,554)$311,266 
 
See accompanying notes to the consolidated financial statements.

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Douglas Emmett, Inc.
Consolidated Statements of Equity
(Unaudited; in thousands, except dividend per share data)

 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Shares of Common StockBeginning balance166,738 175,784 175,810 175,529 
Exchange of OP Units for common stock— 5 — 260 
Repurchases of common stock— — (9,072)— 
Ending balance166,738 175,789 166,738 175,789 
Common StockBeginning balance$1,667 $1,758 $1,758 $1,755 
Exchange of OP units for common stock— — — 3 
Repurchases of common stock— — (91)— 
Ending balance$1,667 $1,758 $1,667 $1,758 
Additional Paid-in CapitalBeginning balance$3,384,274 $3,492,864 $3,493,307 $3,488,886 
Exchange of OP Units for common stock— 80 — 4,233 
Repurchases of OP Units with cash11 (1)120 (176)
Repurchases of common stock— — (109,142)— 
Ending balance$3,384,285 $3,492,943 $3,384,285 $3,492,943 
Accumulated Other Comprehensive Income (Loss)Beginning balance$174,897 $124,770 $187,063 $(38,774)
Cash flow hedge adjustments(5,137)74,879 (17,303)238,423 
Ending balance$169,760 $199,649 $169,760 $199,649 
Accumulated DeficitBeginning balance$(1,173,415)$(1,084,346)$(1,119,714)$(1,035,798)
Net (loss) income attributable to common stockholders(13,362)22,955 (2,251)72,843 
Dividends(31,680)(49,220)(96,492)(147,656)
Ending balance$(1,218,457)$(1,110,611)$(1,218,457)$(1,110,611)
Noncontrolling InterestsBeginning balance1,686,895 1,693,905 $1,713,369 $1,570,484 
Net loss(7,663)(1,742)(17,681)(1,534)
Cash flow hedge adjustments(1,908)33,473 (4,454)104,205 
Contributions— — 125 81,000 
Distributions(10,145)(14,649)(30,433)(45,376)
Exchange of OP Units for common stock— (80)— (4,236)
Repurchases of OP Units with cash(57)(5)(487)(160)
Stock-based compensation3,079 3,092 9,762 9,611 
Ending balance$1,670,201 $1,713,994 $1,670,201 $1,713,994 
  
Statement continues on the next page.
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Douglas Emmett, Inc.
Consolidated Statements of Equity
(Unaudited; in thousands, except dividend per share data)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Total EquityBeginning balance$4,074,318 $4,228,951 $4,275,783 $3,986,553 
Net (loss) income(21,025)21,213 (19,932)71,309 
Cash flow hedge adjustments(7,045)108,352 (21,757)342,628 
Repurchases of OP Units with cash(46)(6)(367)(336)
Repurchases of common stock— — (109,233)— 
Contributions— — 125 81,000 
Dividends(31,680)(49,220)(96,492)(147,656)
Distributions(10,145)(14,649)(30,433)(45,376)
Stock-based compensation3,079 3,092 9,762 9,611 
Ending balance$4,007,456 $4,297,733 $4,007,456 $4,297,733 
Dividends declared per common share$0.19 $0.28 $0.57 $0.84 

See accompanying notes to the consolidated financial statements.
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Douglas Emmett, Inc.
Consolidated Statements of Cash Flows
(Unaudited and in thousands)

    
 Nine Months Ended September 30,
20232022
Operating Activities  
Net (loss) income$(19,932)$71,309 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:  
Income from unconsolidated Fund(1,177)(921)
Depreciation and amortization336,771 279,588 
Net accretion of acquired lease intangibles(8,156)(8,050)
Straight-line rent(2,007)(880)
Loan premium amortized and written off(344)(344)
Deferred loan costs amortized and written off6,623 5,908 
Amortization of stock-based compensation7,553 7,156 
Operating distributions from unconsolidated Fund957 921 
Purchase of interest rate caps(1,622)— 
Change in working capital components:  
Tenant receivables(1,676)4,156 
Interest payable, accounts payable and deferred revenue41,277 31,825 
Security deposits974 4,508 
Other assets(27,032)(13,507)
Net cash provided by operating activities332,209 381,669 
Investing Activities  
Capital expenditures for improvements to real estate(144,842)(111,495)
Capital expenditures for developments(37,297)(60,762)
Insurance recoveries for damage to real estate1,686 4,274 
Property acquisition— (330,470)
Capital distributions from unconsolidated Fund80 1,454 
Net cash used in investing activities(180,373)(496,999)
Financing Activities  
Proceeds from borrowings505,000 230,000 
Repayment of borrowings(155,642)(55,614)
Loan cost payments(5,678)(1,620)
Purchase of interest rate caps— (481)
Proceeds from sale of interest rate cap— 444 
Contributions from noncontrolling interests in consolidated JVs125 81,000 
Distributions paid to noncontrolling interests(30,433)(45,376)
Dividends paid to common stockholders(98,215)(147,584)
Repurchases of OP Units(367)(336)
Repurchases of common stock(109,233)— 
Net cash provided by financing activities105,557 60,433 
Increase (decrease) in cash and cash equivalents and restricted cash257,393 (54,897)
Cash and cash equivalents and restricted cash - beginning balance268,938 336,006 
Cash and cash equivalents and restricted cash - ending balance$526,331 $281,109 
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Douglas Emmett, Inc.
Consolidated Statements of Cash Flows
(Unaudited and in thousands)

Reconciliation of Ending Cash Balance
September 30, 2023September 30, 2022
Cash and cash equivalents$526,230 $281,008 
Restricted cash101 101 
Cash and cash equivalents and restricted cash$526,331 $281,109 


Supplemental Cash Flows Information

 Nine Months Ended September 30,
 20232022
Cash paid for interest, net of capitalized interest$141,081 $103,666 
Capitalized interest paid$1,296 $7,357 
Non-cash Investing Transactions
Accrual for real estate and development capital expenditures$19,261 $19,508 
Capitalized stock-based compensation for improvements to real estate and developments$2,209 $2,455 
Removal of fully depreciated and amortized buildings, building improvements, tenant improvements and lease intangibles$74,277 $57,177 
Removal of fully amortized acquired lease intangible assets$255 $1,221 
Removal of fully accreted acquired lease intangible liabilities$14,504 $9,831 
Non-cash Financing Transactions
Gain recorded in AOCI - consolidated derivatives$83,157 $318,408 
Gain recorded in AOCI - unconsolidated Fund's derivatives (our share)$1,185 $3,777 
Dividends declared$96,492 $147,656 
Exchange of OP Units for common stock$— $4,236 

See accompanying notes to the consolidated financial statements.

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Douglas Emmett, Inc.
Notes to Consolidated Financial Statements (unaudited)



1. Overview

Organization and Business Description

Douglas Emmett, Inc. is a fully integrated, self-administered and self-managed REIT. We are one of the largest owners and operators of high-quality office and multifamily properties in Los Angeles County, California and Honolulu, Hawaii. Through our interest in our Operating Partnership and its subsidiaries, consolidated JVs and unconsolidated Fund, we focus on owning, acquiring, developing and managing a substantial market share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities. The terms "us," "we" and "our" as used in the consolidated financial statements refer to Douglas Emmett, Inc. and its subsidiaries on a consolidated basis.
At September 30, 2023, our Consolidated Portfolio consisted of (i) a 17.6 million square foot office portfolio, (ii) 4,594 multifamily apartment units and (iii) fee interests in two parcels of land from which we receive rent under ground leases. We also manage and own an equity interest in an unconsolidated Fund which, at September 30, 2023, owned an additional 0.4 million square feet of office space. We manage our unconsolidated Fund alongside our Consolidated Portfolio, and we therefore present the statistics for our office portfolio on a Total Portfolio basis. As of September 30, 2023, our portfolio consisted of the following (including ancillary retail space and excluding two parcels of land from which we receive rent under ground leases):
 Consolidated PortfolioTotal
Portfolio
Office
Wholly-owned properties5252
Consolidated JV properties1616
Unconsolidated Fund properties—2
6870
Multifamily
Wholly-owned properties1212
Consolidated JV properties22
1414
Total8284

Basis of Presentation

The accompanying consolidated financial statements are the consolidated financial statements of Douglas Emmett, Inc. and its subsidiaries, including our Operating Partnership and our consolidated JVs.  All significant intercompany balances and transactions have been eliminated in our consolidated financial statements.

We consolidate entities in which we are considered to be the primary beneficiary of a VIE or have a majority of the voting interest of the entity. We are deemed to be the primary beneficiary of a VIE when we have (i) the power to direct the activities of that VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We do not consolidate entities in which the other parties have substantive kick-out rights to remove our power to direct the activities, most significantly impacting the economic performance, of that VIE. In determining whether we are the primary beneficiary, we consider factors such as ownership interest, management representation, authority to control decisions, and contractual and substantive participating rights of each party.

We consolidate our Operating Partnership through which we conduct substantially all of our business, and own, directly and through subsidiaries, substantially all of our assets, and are obligated to repay substantially all of our liabilities. The consolidated debt, excluding our consolidated JVs, was $3.76 billion as of September 30, 2023 and $3.41 billion as of December 31, 2022. See Note 8. We also consolidate four JVs through our Operating Partnership. We consolidate our Operating Partnership and our four JVs because they are VIEs and we or our Operating Partnership are the primary beneficiary for each.
14
Douglas Emmett, Inc.
Notes to Consolidated Financial Statements (unaudited) (continued)

As of September 30, 2023, our consolidated VIE entities, excluding our Operating Partnership, had:
•aggregate consolidated assets of $3.90 billion (of which $3.49 billion related to investment in real estate), and
•aggregate consolidated liabilities of $1.89 billion (of which $1.81 billion related to debt).

As of December 31, 2022, our consolidated VIE entities, excluding our Operating Partnership, had:
•aggregate consolidated assets of $3.94 billion (of which $3.54 billion related to investment in real estate), and
•aggregate consolidated liabilities of $1.89 billion (of which $1.81 billion related to debt).

The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC in conformity with US GAAP as established by the FASB in the ASC. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in conformity with US GAAP may have been condensed or omitted pursuant to SEC rules and regulations, although we believe that the disclosures are adequate to make their presentation not misleading. The accompanying unaudited interim consolidated financial statements include, in our opinion, all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial information set forth therein. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements in our 2022 Annual Report on Form 10-K and the notes thereto. Any references to the number or class of properties, square footage, per square footage amounts, apartment units and geography, are outside the scope of our independent registered public accounting firm’s review of our consolidated financial statements in accordance with the standards of the PCAOB.


2. Summary of Significant Accounting Policies

We have not made any changes to our significant accounting policies disclosed in our 2022 Annual Report on Form 10-K.

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make certain estimates that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Revenue Recognition

Rental revenues and tenant recoveries

We account for our rental revenues and tenant recoveries in accordance with Topic 842 "Leases". Rental revenues and tenant recoveries are included in: (i) Rental revenues and tenant recoveries under Office rental, and (ii) Rental revenues under Multifamily rental, on our consolidated statements of operations.

Collectibility

In accordance with Topic 842, we perform an assessment as to whether or not substantially all of the amounts due under a tenant’s lease agreement is deemed probable of collection. This assessment involves using a methodology that requires judgment and estimates about matters that are uncertain at the time the estimates are made, including tenant specific factors, specific industry conditions, and general economic trends and conditions. For leases where we have concluded it is probable that we will collect substantially all the lease payments due under those leases, we continue to record lease income on a straight-line basis over the lease term. For leases where we have concluded that it is not probable that we will collect substantially all the lease payments due under those leases, we limit the lease income to the lesser of the income recognized on a straight-line basis or cash basis. We write-off tenant receivables and deferred rent receivables as a charge against rental revenues and tenant recoveries in the period we conclude that substantially all of the lease payments are not probable of collection. If we subsequently collect amounts that were previously written off then the amounts collected are recorded as an increase to our rental revenues and tenant recoveries in the period they are collected. If our conclusion of collectibility changes, we will record the difference between the lease income that would have been recognized on a straight-line basis and cash basis as a current-period adjustment to rental revenues and tenant recoveries.
15
Douglas Emmett, Inc.
Notes to Consolidated Financial Statements (unaudited) (continued)

Charges for uncollectible office tenant receivables and deferred rent receivables, reduced our office revenues by:
•$0.2 million and $0.1 million for the three months ended September 30, 2023 and 2022, respectively, and
•$0.5 million and $0.3 million for the nine months ended September 30, 2023 and 2022, respectively.

We restored accrual basis accounting for certain office tenants that were previously determined to be uncollectible and accounted for on a cash basis of accounting, which increased our office revenues by:
•$2.3 million and $1.6 million for the three months ended September 30, 2023 and 2022, respectively, and
•$4.4 million and $3.3 million for the nine months ended September 30, 2023 and 2022, respectively.

Office parking revenues

We account for our office parking revenues in accordance with ASC 606 "Revenue from Contracts with Customers". Office parking revenues are included in Parking and other income under Office rental on our consolidated statements of operations. Our lease contracts generally make a specified number of parking spaces available to the tenant, and we bill and recognize parking revenues on a monthly basis in accordance with the lease agreements, generally using the monthly parking rates in effect at the time of billing.

Office parking revenues were:
•$23.4 million and $22.1 million for the three months ended September 30, 2023, and 2022, respectively, and
•$69.1 million and $62.6 million for the nine months ended September 30, 2023 and 2022, respectively.
Office parking receivables, which are included in Tenant receivables on our consolidated balance sheets, were
•$1.0 million as of September 30, 2023, and
•$0.9 million as of December 31, 2022.
Income Taxes

We have elected to be taxed as a REIT under the Code. Provided that we qualify for taxation as a REIT, we are generally not subject to corporate-level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities. We are subject to corporate-level tax on the earnings that we derive through our TRS.

New Accounting Pronouncements

Changes to US GAAP are implemented by the FASB in the form of ASUs.  We consider the applicability and impact of all ASUs. As of the date of this Report, the FASB has not issued any ASUs that we expect to be applicable and have a material impact on our consolidated financial statements.

















16
Douglas Emmett, Inc.
Notes to Consolidated Financial Statements (unaudited) (continued)
3. Investment in Real Estate

The table below summarizes our investment in real estate:

(In thousands)September 30, 2023December 31, 2022
Land$1,185,977$1,185,977
Buildings and improvements(1)
10,118,96510,055,499
Tenant improvements and lease intangibles1,011,310981,460
Property under development(1)
69,22570,037
Investment in real estate, gross$12,385,477$12,292,973
________________________________________________
(1)    During the nine months ended September 30, 2023, Property under development balances transferred to Building and improvements for real estate placed into service was $34.0 million.


2022 Property Acquisition

Acquisition of 1221 Ocean Avenue

On April 26, 2022, we paid $330.0 million, excluding acquisition costs, to acquire a luxury multifamily apartment building with 120 units, located at 1221 Ocean Avenue in Santa Monica. We acquired the property through a new consolidated JV that we manage and in which we own a 55% interest. We accounted for the acquisition as an asset acquisition and the acquired property's operating results are included in our consolidated operating results from the date of acquisition. The table below summarizes the purchase price allocation for the acquisition. The contract price and the purchase price allocation total in the table below differ due to acquisition costs, prorations and similar adjustments:

(In thousands)Purchase Price Allocation
Land$22,086 
Buildings and improvements319,666 
Tenant improvements and lease intangibles8,879 
Acquired below-market leases(18,542)
Other liabilities assumed(1,619)
Net assets and liabilities acquired$330,470 


Property to be Removed from Service

During the second quarter of 2023, we filed paperwork to remove our Barrington Plaza Apartments property in Los Angeles from the rental market because of city directives to install fire sprinklers and other life safety improvements. In connection with the removal of the aforementioned property from the rental market, we accelerated and recorded additional depreciation expense of $27.4 million for the three months ended September 30, 2023 and $54.8 million for the nine months ended September 30, 2023, which is included in Depreciation and amortization on our consolidated statements of operations.









17
Douglas Emmett, Inc.
Notes to Consolidated Financial Statements (unaudited) (continued)

4. Ground Lease

We pay rent under a ground lease located in Honolulu, Hawaii, which expires on December 31, 2086. The rent is fixed at $733 thousand per year until February 28, 2029, after which it will reset to the greater of the existing ground rent or the market rent at the time.

As of September 30, 2023, the ground lease right-of-use asset carrying value was $7.4 million and the ground lease liability was $10.8 million.

Ground rent expense, which is included in Office expenses on our consolidated statements of operations, was:
•$183 thousand for each of the three month periods ended September 30, 2023 and 2022, and
•$549 thousand for each of the nine month periods ended September 30, 2023 and 2022.

The table below, which assumes that the ground rent payments will continue to be $733 thousand per year after February 28, 2029, presents the future minimum ground lease payments as of September 30, 2023:
Twelve months ending September 30:(In thousands)
2024$733 
2025733 
2026733 
2027733 
2028733 
Thereafter42,696 
Total future minimum lease payments$46,361 
18
Douglas Emmett, Inc.
Notes to Consolidated Financial Statements (unaudited) (continued)
5. Acquired Lease Intangibles

Summary of our Acquired Lease Intangibles

 (In thousands)September 30, 2023December 31, 2022
Above-market tenant leases$4,712 $4,968 
Above-market tenant leases - accumulated amortization(2,474)(2,309)
Above-market ground lease where we are the lessor1,152 1,152 
Above-market ground lease - accumulated amortization(287)(275)
Acquired lease intangible assets, net$3,103 $3,536 
Below-market tenant leases$50,347 $64,851 
Below-market tenant leases - accumulated accretion(27,572)(33,487)
Acquired lease intangible liabilities, net$22,775 $31,364 


Impact on the Consolidated Statements of Operations

The table below summarizes the net amortization/accretion related to our above- and below-market leases:

 Three Months Ended September 30,Nine Months Ended September 30,
 (In thousands)2023202220232022
Net accretion of above- and below-market tenant lease assets and liabilities(1)
$2,466 $3,348 $8,169 $8,063 
Amortization of an above-market ground lease asset(2)
(5)(5)(13)(13)
Total$2,461 $3,343 $8,156 $8,050 
______________________________________________
(1)    Recorded as a net increase to office and multifamily rental revenues.
(2)    Recorded as a decrease to office parking and other income.


19
Douglas Emmett, Inc.
Notes to Consolidated Financial Statements (unaudited) (continued)
6. Investment in Unconsolidated Fund

Description of our Fund

As of September 30, 2023 and 2022, we managed and owned an equity interest of 33.5% in an unconsolidated Fund, Partnership X, through which we and other investors in the Fund owned two office properties totaling 0.4 million square feet.
Partnership X pays us fees and reimburses us for certain expenses related to property management and other services we provide, which are included in Other income on our consolidated statements of operations. We also receive distributions based on invested capital and on any profits that exceed certain specified cash returns to the investors. The table below presents the cash distributions we received from Partnership X:
Nine Months Ended September 30,
 (In thousands)20232022
Operating distributions received$957 $921 
Capital distributions received80 1,454 
Total distributions received$1,037 $2,375 


Summarized Financial Information for Partnership X

The tables below present selected financial information for Partnership X.  The amounts presented reflect 100% (not our pro-rata share) of the amounts related to the Fund, and are based upon historical book value:

 (In thousands)September 30, 2023December 31, 2022
Total assets$149,588 $147,853 
Total liabilities$118,942 $119,038 
Total equity$30,646 $28,815 

 Nine Months Ended September 30,
 (In thousands)20232022
Total revenues$14,929 $13,893 
Operating income$4,749 $4,361 
Net income$3,167 $2,387 


7. Other Assets
 (In thousands)September 30, 2023December 31, 2022
Restricted cash$101 $101 
Prepaid expenses30,811 19,871 
Indefinite-lived intangibles1,988 1,988 
Deposit with lender(1)
13,300 — 
Furniture, fixtures and equipment, net7,042 7,144 
Other7,152 4,837 
Total other assets$60,394 $33,941 
_______________________________________________________________________
(1) In connection with the Barrington Plaza loan, Barrington Plaza Apartments have been removed from the rental market. The lender is treating the debt as a construction loan. They have required a $13.3 million cash deposit, which we placed in a collateral account during the third quarter, and they are requiring a construction completion guarantee. See Note 8 for our debt disclosures.
20
Douglas Emmett, Inc.
Notes to Consolidated Financial Statements (unaudited) (continued)
8. Secured Notes Payable, Net
Description
Maturity
Date(1)
Principal Balance as of September 30, 2023Principal Balance as of December 31, 2022
Variable Interest Rate(2)
Fixed Interest
Rate(3)
Swap Maturity Date
(In thousands)
Consolidated Wholly Owned Subsidiaries
Term loan(4)(5)
3/3/2025$335,000 $335,000 
SOFR + 1.41%
N/AN/A
Fannie Mae loan(4)(5)
4/1/2025102,400 102,400 
SOFR + 1.36%
N/AN/A
Term loan(4)
8/15/2026415,000 415,000 
SOFR + 1.20%
3.07%8/1/2025
Term loan(4)
9/19/2026400,000 400,000 
SOFR + 1.25%
2.44%9/1/2024
Term loan(4)
9/26/2026200,000 200,000 
SOFR + 1.30%
2.36%10/1/2024
Term loan(4)
11/1/2026400,000 400,000 
SOFR + 1.25%
2.31%10/1/2024
Fannie Mae loan(4)(6)
6/1/2027550,000 550,000 
SOFR + 1.48%
N/AN/A
Term loan(4)
5/18/2028300,000 300,000 
SOFR + 1.51%
2.21%6/1/2026
Term loan(4)
1/1/2029300,000 300,000 
SOFR + 1.56%
2.66%1/1/2027
Fannie Mae loan(4)
6/1/2029255,000 255,000 
SOFR + 1.09%
3.26%6/1/2027
Fannie Mae loan(4)
6/1/2029125,000 125,000 
SOFR + 1.09%
3.25%6/1/2027
Fannie Mae loan(4)(7)
8/1/2033350,000 — 
SOFR + 1.37%
N/AN/A
Term loan(8)
6/1/203827,859 28,502 N/A4.55%N/A
Total Wholly-Owned Subsidiary Debt3,760,259 3,410,902 
Consolidated JVs
Term loan(4)(9)
12/19/2024400,000 400,000 
SOFR + 1.40%
N/AN/A
Term loan(4)
5/15/2027450,000 450,000 
SOFR + 1.45%
2.26%4/1/2025
Term loan(4)
8/19/2028625,000 625,000 
SOFR + 1.45%
2.12%6/1/2025
Term loan(4)
4/26/2029175,000 175,000 
SOFR + 1.25%
3.90%5/1/2026
Fannie Mae loan(4)
6/1/2029160,000 160,000 
SOFR + 1.09%
3.25%7/1/2027
Total Consolidated Debt(10)
5,570,259 5,220,902 
Unamortized loan premium, net(11)
3,203 3,547 
Unamortized deferred loan costs, net(12)
(31,616)(32,556)
Total Consolidated Debt, net$5,541,846 $5,191,893 
_______________________________________________________________________
Except as noted below, our loans: (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 extension options require us to meet minimum financial thresholds in order to extend the loan maturity date.
(1)Maturity dates include extension options.
(2)LIBOR loans converted to SOFR during the third quarter include a small SOFR adjustment to calculate the interest payable to the lender, which are included in the spreads. The SOFR conversion did not change the swap-fixed interest rates for our swap-fixed loans.
(3)Effective rate as of September 30, 2023. Includes the effect of interest rate swaps (if applicable) and excludes the effect of prepaid loan fees and loan premiums. See Note 10 for details of our interest rate swaps. See further below for details of our loan costs and loan premiums.
(4)The loan agreement includes a zero-percent SOFR floor. If the loan is swap-fixed then the related swaps do not include such a floor.
(5)The swaps expired on March 1, 2023.
(6)The loan is secured by four residential properties. A portion of the loan totaling $472 million has a lender-required out-of-the-money interest rate cap at a weighted average of 8.99% until July 2026. Barrington Plaza Apartments have been removed from the rental market. See Note 3. For the portion of the loan relating to Barrington Plaza, the lender is treating the debt as a construction loan. They have required a $13.3 million cash deposit, which we placed in a collateral account during the third quarter, and they are requiring a construction completion guarantee. The lender will return the deposit at the earlier of August 2026 or when the loan is paid in full. The deposit is included in Other assets in our balance sheet. See Note 7.
(7)We closed the loan during the third quarter of 2023. The loan has a lender-required out-of-the-money interest rate cap at an interest rate of 7.84% until August 2026. We used part of the proceeds from the loan to pay off the balance on our revolving credit facility, which expired in August 2023. There was no balance outstanding on the credit facility as of December 31, 2022.
(8)The loan requires monthly payments of principal and interest. The principal amortization is based upon a 30-year amortization schedule.
21
Douglas Emmett, Inc.
Notes to Consolidated Financial Statements (unaudited) (continued)
(9)The swaps expired on January 1, 2023.
(10)The table does not include our unconsolidated Fund's loan - see Note 16. See Note 13 for our fair value disclosures.
(11)Balances are net of accumulated amortization of $4.0 million and $3.7 million at September 30, 2023 and December 31, 2022, respectively.
(12)Balances are net of accumulated amortization of $54.2 million and $54.1 million at September 30, 2023 and December 31, 2022, respectively.


Debt Statistics

The table below summarizes our consolidated fixed and floating rate debt:
(In thousands)Principal Balance as of September 30, 2023Principal Balance as of December 31, 2022
Aggregate swapped to fixed rate loans$3,805,000 $4,642,400 
Aggregate fixed rate loans27,859 28,502 
Aggregate capped rate loans822,000 — 
Aggregate floating rate loans915,400 550,000 
Total Debt$5,570,259 $5,220,902 

The table below summarizes certain consolidated debt statistics as of September 30, 2023:
Statistics for consolidated loans with interest fixed under the terms of the loan or a swap
Principal balance (in billions)$3.83
Weighted average remaining life (including extension options)4.3 years
Weighted average remaining fixed interest period2.1 years
Weighted average annual interest rate2.65%


Future Principal Payments

At September 30, 2023, the minimum future principal payments due on our consolidated secured notes payable were as follows:
Twelve months ending September 30:
Including Maturity Extension Options(1)
(In thousands)
2024$891 
2025838,333 
20261,015,976 
20271,401,022 
2028926,069 
Thereafter1,387,968 
Total future principal payments$5,570,259 
________________________________________________
(1)     Some of our loan agreements require that we meet certain minimum financial thresholds to be able to extend the loan maturity.


22
Douglas Emmett, Inc.
Notes to Consolidated Financial Statements (unaudited) (continued)
Loan Premium and Loan Costs

The table below presents loan premium and loan costs, which are included in Interest expense on our consolidated statements of operations:
 Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)2023202220232022
Loan premium amortized and written off$(116)$(116)$(344)$(344)
Deferred loan costs amortized and written off2,261 2,030 6,623 5,908 
Loan costs expensed59 8 79 110 
Total$2,204 $1,922 $6,358 $5,674 


9. Interest Payable, Accounts Payable and Deferred Revenue

(In thousands)September 30, 2023December 31, 2022
Interest payable$18,028 $13,529 
Accounts payable and accrued liabilities99,805 80,244 
Deferred revenue51,236 47,152 
Total interest payable, accounts payable and deferred revenue$169,069 $140,925 

































23
Douglas Emmett, Inc.
Notes to Consolidated Financial Statements (unaudited) (continued)
10. Derivative Contracts

We make use of interest rate swap and cap contracts to manage the risk associated with changes in interest rates on our floating-rate debt and to satisfy certain lender requirements. When we enter into a floating-rate term loan, we generally enter into an interest rate swap agreement for the equivalent principal amount, for a period covering the majority of the loan term, which effectively converts our floating-rate debt to a fixed-rate basis during that time. We also enter into interest rate cap agreements from time to time to cap the interest rates on our floating rate loans. We may enter into derivative contracts that are intended to hedge certain economic risks, even though hedge accounting does not apply or we elect to not apply hedge accounting. We do not speculate in derivatives and we do not make use of any other derivative instruments. See Note 8 regarding our debt and our consolidated JVs' debt that is hedged.

Derivative Summary

The table below summarizes our derivative contracts as of September 30, 2023:
Number of Interest Rate ContractsNotional
(In thousands)
Derivatives Designated as Cash Flow Hedges:
Consolidated derivatives - swaps(1)(2)(3)
24$3,805,000 
Consolidated derivatives - caps(2)(3)(4)
5$822,000 
Unconsolidated Fund's derivatives - swaps(2)(3)(5)
2$115,000 
Derivatives Not Designated as Cash Flow Hedges:
Consolidated derivatives - caps(6)
—$— 
___________________________________________________
(1)The notional amount includes 100%, not our pro-rata share, of our consolidated JVs' derivatives. See Note 8 for more information about our hedged consolidated debt.
(2)Our derivative contracts do not provide for right of offset between derivative contracts.
(3)See Note 13 for our derivative fair value disclosures.
(4)We purchased five interest rate caps with a notional amount of $822.0 million during the third quarter of 2023. See Note 8 for more information about our hedged consolidated debt.
(5)The notional amount reflects 100%, not our pro-rata share, of our unconsolidated Fund's derivatives. See Note 6 for more information about our Fund, including our equity interest percentage.
(6)Five interest rate caps with a total aggregate notional amount of $1.10 billion expired on July 1, 2023.


Counterparty Credit Risk

We are subject to credit risk from the counterparties on our interest rate swap and cap contract assets because we do not receive collateral. We seek to minimize that risk by entering into agreements with a variety of counterparties with investment grade ratings. The fair value of our interest rate swap and cap contract assets, including accrued interest and excluding credit risk adjustments, was as follows:
(In thousands)September 30, 2023December 31, 2022
Consolidated derivatives(1)
$262,322 $281,982 
Unconsolidated Fund's derivatives(2)
$12,877 $12,863 
___________________________________________________
(1)The amounts include 100%, not our pro-rata share, of our consolidated JVs' derivatives.
(2)The amounts reflect 100%, not our pro-rata share, of our unconsolidated Fund's derivatives. For more information about our Fund, including our equity interest percentage, see Note 6.
24
Douglas Emmett, Inc.
Notes to Consolidated Financial Statements (unaudited) (continued)
Impact of Hedges on AOCI and the Consolidated Statements of Operations

The table below presents the effect of our derivatives on our AOCI and the consolidated statements of operations:

(In thousands)Nine Months Ended September 30,
 20232022
Derivatives Designated as Cash Flow Hedges:  
Consolidated derivatives:
Gains recorded in AOCI before reclassifications(1)
$83,157 $318,408 
(Gains) losses reclassified from AOCI to Interest Expense(1)
$(104,891)$20,505 
Interest expense presented on the consolidated statements of operations$(151,859)$(109,560)
Unconsolidated Fund's derivatives (our share)(2):
Gains recorded in AOCI before reclassifications(1)
$1,185 $3,777 
Gains reclassified from AOCI to Income from unconsolidated Fund(1)
$(1,208)$(62)
Income from unconsolidated Fund presented on the consolidated statements of operations$1,177 $921 
Derivatives Not Designated as Cash Flow Hedges:
Consolidated derivatives:
Loss recorded as interest expense(3)
$— $38 
___________________________________________________
(1)See Note 11 for our AOCI reconciliation.
(2)We calculate our share by multiplying the total amount for the Fund by our equity interest in the Fund. For more information about our Fund, including our equity interest percentage, see Note 6.
(3)Gains and losses from non-designated interest rate caps offset each other during the periods presented. The respective caps expired on July 1, 2023.


Future Reclassifications from AOCI

At September 30, 2023, our estimate of the AOCI related to derivatives designated as cash flow hedges that will be reclassified to earnings during the next twelve months is as follows:

(In thousands)
Consolidated derivatives:
Gains to be reclassified from AOCI to Interest Expense$150,054 
Unconsolidated Fund's derivatives (our share)(1):
Gains to be reclassified from AOCI to Income from unconsolidated Fund$