More annual reports from Douglas Emmett:
2023 ReportPeers and competitors of Douglas Emmett:
Washington Real Estate Investment TrustAnnual Report 2016 Dear Fellow Shareholders, (cid:44)(cid:81)(cid:3) (cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3) (cid:21)(cid:19)(cid:20)(cid:25)(cid:15)(cid:3) (cid:90)(cid:72)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:72)(cid:87)(cid:72)(cid:71)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:191)(cid:85)(cid:86)(cid:87)(cid:3) (cid:71)(cid:72)(cid:70)(cid:68)(cid:71)(cid:72)(cid:3) (cid:68)(cid:86)(cid:3) (cid:68)(cid:3) (cid:83)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:30)(cid:3) (cid:68)(cid:3) (cid:71)(cid:72)(cid:70)(cid:68)(cid:71)(cid:72)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:69)(cid:72)(cid:74)(cid:68)(cid:81)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:68)(cid:3) (cid:83)(cid:88)(cid:81)(cid:76)(cid:86)(cid:75)(cid:76)(cid:81)(cid:74)(cid:3) (cid:85)(cid:72)(cid:70)(cid:72)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:69)(cid:88)(cid:87)(cid:3)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:82)(cid:81)(cid:74)(cid:72)(cid:86)(cid:87)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:75)(cid:76)(cid:86)(cid:87)(cid:82)(cid:85)(cid:92)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:76)(cid:87)(cid:3)(cid:68)(cid:79)(cid:79)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:86)(cid:87)(cid:88)(cid:70)(cid:78)(cid:3)(cid:87)(cid:82)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:78)(cid:81)(cid:76)(cid:87)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:82)(cid:70)(cid:88)(cid:86)(cid:72)(cid:71)(cid:3) (cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:68)(cid:86)(cid:76)(cid:70)(cid:86)(cid:17)(cid:3)(cid:3)(cid:58)(cid:72)(cid:3)(cid:74)(cid:85)(cid:72)(cid:90)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:82)(cid:73)(cid:191)(cid:70)(cid:72)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)(cid:69)(cid:92)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:24)(cid:19)(cid:8)(cid:15)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:71)(cid:82)(cid:88)(cid:69)(cid:79)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:36)(cid:71)(cid:77)(cid:88)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:41)(cid:88)(cid:81)(cid:71)(cid:86)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:11)(cid:36)(cid:41)(cid:41)(cid:50)(cid:12)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:68)(cid:3)(cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:3)(cid:85)(cid:72)(cid:87)(cid:88)(cid:85)(cid:81)(cid:3)(cid:87)(cid:90)(cid:76)(cid:70)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:53)(cid:48)(cid:54)(cid:3)(cid:53)(cid:40)(cid:44)(cid:55)(cid:3)(cid:44)(cid:81)(cid:71)(cid:72)(cid:91)(cid:17)(cid:3)(cid:3) (cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:90)(cid:68)(cid:86)(cid:3)(cid:68)(cid:3)(cid:70)(cid:68)(cid:83)(cid:86)(cid:87)(cid:82)(cid:81)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:86)(cid:88)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:73)(cid:88)(cid:79)(cid:3)(cid:191)(cid:85)(cid:86)(cid:87)(cid:3)(cid:71)(cid:72)(cid:70)(cid:68)(cid:71)(cid:72)(cid:17)(cid:3)(cid:3)(cid:36)(cid:86)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:7)(cid:22)(cid:17)(cid:23)(cid:3)(cid:69)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:69)(cid:82)(cid:88)(cid:74)(cid:75)(cid:87)(cid:3)(cid:86)(cid:76)(cid:91)(cid:3)(cid:82)(cid:73)(cid:191)(cid:70)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:72)(cid:85)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:21)(cid:17)(cid:21)(cid:3)(cid:80)(cid:76)(cid:79)(cid:79)(cid:76)(cid:82)(cid:81)(cid:3)(cid:86)(cid:84)(cid:88)(cid:68)(cid:85)(cid:72)(cid:3)(cid:73)(cid:72)(cid:72)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:85)(cid:72)(cid:3)(cid:58)(cid:72)(cid:86)(cid:87)(cid:3)(cid:47)(cid:82)(cid:86)(cid:3)(cid:36)(cid:81)(cid:74)(cid:72)(cid:79)(cid:72)(cid:86)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:86)(cid:15)(cid:3)(cid:90)(cid:75)(cid:76)(cid:79)(cid:72)(cid:3) (cid:86)(cid:72)(cid:79)(cid:79)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:3)(cid:81)(cid:82)(cid:81)(cid:16)(cid:70)(cid:82)(cid:85)(cid:72)(cid:3)(cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:54)(cid:75)(cid:72)(cid:85)(cid:80)(cid:68)(cid:81)(cid:3)(cid:50)(cid:68)(cid:78)(cid:86)(cid:17)(cid:3)(cid:3)(cid:44)(cid:81)(cid:3)(cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:68)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:82)(cid:73)(cid:191)(cid:70)(cid:72)(cid:3) (cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)(cid:69)(cid:92)(cid:3)(cid:20)(cid:23)(cid:8)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:87)(cid:85)(cid:72)(cid:81)(cid:74)(cid:87)(cid:75)(cid:72)(cid:81)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:68)(cid:79)(cid:85)(cid:72)(cid:68)(cid:71)(cid:92)(cid:3)(cid:71)(cid:82)(cid:80)(cid:76)(cid:81)(cid:68)(cid:81)(cid:87)(cid:3)(cid:82)(cid:90)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:86)(cid:17)(cid:3)(cid:3)(cid:58)(cid:72)(cid:3)(cid:74)(cid:85)(cid:72)(cid:90)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:41)(cid:88)(cid:81)(cid:71)(cid:86)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:11)(cid:41)(cid:41)(cid:50)(cid:12)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:69)(cid:92)(cid:3)(cid:20)(cid:20)(cid:8)(cid:3) (cid:87)(cid:82)(cid:3)(cid:7)(cid:20)(cid:17)(cid:27)(cid:20)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:36)(cid:41)(cid:41)(cid:50)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:69)(cid:92)(cid:3)(cid:20)(cid:21)(cid:8)(cid:3)(cid:87)(cid:82)(cid:3)(cid:7)(cid:20)(cid:17)(cid:23)(cid:24)(cid:17)(cid:3)(cid:3) (cid:58)(cid:76)(cid:87)(cid:75)(cid:3) (cid:85)(cid:72)(cid:86)(cid:87)(cid:85)(cid:76)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3) (cid:93)(cid:82)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3) (cid:79)(cid:68)(cid:90)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:90)(cid:72)(cid:79)(cid:79)(cid:16)(cid:82)(cid:85)(cid:74)(cid:68)(cid:81)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3) (cid:70)(cid:82)(cid:80)(cid:80)(cid:88)(cid:81)(cid:76)(cid:87)(cid:92)(cid:3) (cid:74)(cid:85)(cid:82)(cid:88)(cid:83)(cid:86)(cid:3) (cid:69)(cid:68)(cid:85)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:191)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3)(cid:81)(cid:72)(cid:90)(cid:3)(cid:86)(cid:88)(cid:83)(cid:83)(cid:79)(cid:92)(cid:15)(cid:3)(cid:85)(cid:72)(cid:81)(cid:87)(cid:68)(cid:79)(cid:3)(cid:85)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3) (cid:86)(cid:88)(cid:69)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:86)(cid:17)(cid:3)(cid:36)(cid:79)(cid:87)(cid:75)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:80)(cid:68)(cid:81)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:72)(cid:85)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:75)(cid:68)(cid:71)(cid:3) (cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:191)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3) (cid:89)(cid:68)(cid:70)(cid:68)(cid:81)(cid:70)(cid:92)(cid:15)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:82)(cid:73)(cid:191)(cid:70)(cid:72)(cid:3) (cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3) (cid:90)(cid:72)(cid:85)(cid:72)(cid:3) (cid:86)(cid:87)(cid:76)(cid:79)(cid:79)(cid:3) (cid:82)(cid:89)(cid:72)(cid:85)(cid:3) (cid:28)(cid:21)(cid:8)(cid:3) (cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3) (cid:68)(cid:87)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:16)(cid:72)(cid:81)(cid:71)(cid:17)(cid:3)(cid:3) (cid:50)(cid:88)(cid:85)(cid:3) (cid:86)(cid:88)(cid:86)(cid:87)(cid:68)(cid:76)(cid:81)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3) (cid:76)(cid:81)(cid:76)(cid:87)(cid:76)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3) (cid:81)(cid:82)(cid:87)(cid:3) (cid:82)(cid:81)(cid:79)(cid:92)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3) (cid:87)(cid:82)(cid:3) (cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:72)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:70)(cid:68)(cid:85)(cid:69)(cid:82)(cid:81)(cid:3) (cid:73)(cid:82)(cid:82)(cid:87)(cid:83)(cid:85)(cid:76)(cid:81)(cid:87)(cid:15)(cid:3)(cid:69)(cid:88)(cid:87)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:80)(cid:68)(cid:77)(cid:82)(cid:85)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:3)(cid:86)(cid:68)(cid:89)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:17)(cid:3)(cid:3)(cid:40)(cid:89)(cid:72)(cid:81)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3) (cid:68)(cid:81)(cid:3) (cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3) (cid:76)(cid:81)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:68)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3) (cid:82)(cid:70)(cid:70)(cid:88)(cid:83)(cid:68)(cid:81)(cid:70)(cid:92)(cid:15)(cid:3) (cid:90)(cid:72)(cid:3) (cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:72)(cid:71)(cid:3) (cid:86)(cid:68)(cid:80)(cid:72)(cid:3) (cid:83)(cid:85)(cid:82)(cid:83)(cid:72)(cid:85)(cid:87)(cid:92)(cid:3) (cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:85)(cid:76)(cid:70)(cid:76)(cid:87)(cid:92)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:3)(cid:69)(cid:92)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:28)(cid:8)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:70)(cid:87)(cid:88)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:68)(cid:79)(cid:79)(cid:3)(cid:86)(cid:68)(cid:80)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:72)(cid:85)(cid:87)(cid:92)(cid:3) (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:86)(cid:3)(cid:69)(cid:92)(cid:3)(cid:20)(cid:8)(cid:17)(cid:3)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:40)(cid:51)(cid:36)(cid:3)(cid:70)(cid:72)(cid:85)(cid:87)(cid:76)(cid:191)(cid:72)(cid:71)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:28)(cid:19)(cid:8)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:72)(cid:79)(cid:76)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:82)(cid:73)(cid:191)(cid:70)(cid:72)(cid:3) (cid:86)(cid:83)(cid:68)(cid:70)(cid:72)(cid:3)(cid:68)(cid:86)(cid:3)(cid:40)(cid:49)(cid:40)(cid:53)(cid:42)(cid:60)(cid:3)(cid:54)(cid:55)(cid:36)(cid:53)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:76)(cid:68)(cid:81)(cid:87)(cid:15)(cid:3)(cid:83)(cid:79)(cid:68)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:79)(cid:80)(cid:82)(cid:86)(cid:87)(cid:3)(cid:68)(cid:79)(cid:79)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:69)(cid:88)(cid:76)(cid:79)(cid:71)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3) (cid:87)(cid:82)(cid:83)(cid:3)(cid:21)(cid:24)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:73)(cid:191)(cid:70)(cid:72)(cid:3)(cid:69)(cid:88)(cid:76)(cid:79)(cid:71)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:90)(cid:76)(cid:71)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:72)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3)(cid:72)(cid:73)(cid:191)(cid:70)(cid:76)(cid:72)(cid:81)(cid:70)(cid:92)(cid:17)(cid:3)(cid:3) (cid:50)(cid:88)(cid:85)(cid:3)(cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:86)(cid:75)(cid:72)(cid:72)(cid:87)(cid:3)(cid:76)(cid:86)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:15)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:79)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:68)(cid:87)(cid:3)(cid:82)(cid:81)(cid:79)(cid:92)(cid:3)(cid:22)(cid:27)(cid:8)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:81)(cid:82)(cid:3)(cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:71)(cid:72)(cid:69)(cid:87)(cid:3)(cid:80)(cid:68)(cid:87)(cid:88)(cid:85)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:88)(cid:81)(cid:87)(cid:76)(cid:79)(cid:3)(cid:36)(cid:88)(cid:74)(cid:88)(cid:86)(cid:87)(cid:3)(cid:21)(cid:19)(cid:20)(cid:27)(cid:17)(cid:3)(cid:3)(cid:58)(cid:72)(cid:3) (cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:21)(cid:19)(cid:20)(cid:26)(cid:3)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:68)(cid:81)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3)(cid:7)(cid:19)(cid:17)(cid:28)(cid:21)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:87)(cid:76)(cid:79)(cid:79)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:72)(cid:86)(cid:87)(cid:3)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:71)(cid:3)(cid:70)(cid:82)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:86)(cid:3) (cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:72)(cid:72)(cid:85)(cid:3)(cid:74)(cid:85)(cid:82)(cid:88)(cid:83)(cid:17)(cid:3)(cid:3) (cid:58)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:76)(cid:81)(cid:87)(cid:72)(cid:81)(cid:86)(cid:76)(cid:191)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:73)(cid:82)(cid:70)(cid:88)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:85)(cid:72)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:72)(cid:85)(cid:87)(cid:92)(cid:3)(cid:85)(cid:72)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:17)(cid:3)(cid:3)(cid:50)(cid:88)(cid:85)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:76)(cid:68)(cid:79)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:83)(cid:76)(cid:83)(cid:72)(cid:79)(cid:76)(cid:81)(cid:72)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:72)(cid:86)(cid:3) (cid:82)(cid:89)(cid:72)(cid:85)(cid:3) (cid:27)(cid:19)(cid:19)(cid:3) (cid:88)(cid:81)(cid:76)(cid:87)(cid:86)(cid:15)(cid:3) (cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:191)(cid:85)(cid:86)(cid:87)(cid:3) (cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:76)(cid:68)(cid:79)(cid:3) (cid:87)(cid:82)(cid:90)(cid:72)(cid:85)(cid:3) (cid:90)(cid:72)(cid:86)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:23)(cid:19)(cid:24)(cid:3) (cid:73)(cid:85)(cid:72)(cid:72)(cid:90)(cid:68)(cid:92)(cid:3) (cid:76)(cid:81)(cid:3) (cid:71)(cid:72)(cid:70)(cid:68)(cid:71)(cid:72)(cid:86)(cid:17)(cid:3) (cid:3) (cid:48)(cid:82)(cid:89)(cid:76)(cid:81)(cid:74)(cid:3) (cid:73)(cid:82)(cid:85)(cid:90)(cid:68)(cid:85)(cid:71)(cid:15)(cid:3) (cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3)(cid:88)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:91)(cid:83)(cid:79)(cid:82)(cid:76)(cid:87)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:76)(cid:68)(cid:79)(cid:3)(cid:79)(cid:68)(cid:81)(cid:71)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:86)(cid:70)(cid:68)(cid:87)(cid:87)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:82)(cid:88)(cid:87)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)(cid:76)(cid:81)(cid:3)(cid:86)(cid:82)(cid:80)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3) (cid:69)(cid:72)(cid:86)(cid:87)(cid:3)(cid:86)(cid:88)(cid:69)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:47)(cid:82)(cid:86)(cid:3)(cid:36)(cid:81)(cid:74)(cid:72)(cid:79)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:43)(cid:82)(cid:81)(cid:82)(cid:79)(cid:88)(cid:79)(cid:88)(cid:17)(cid:3)(cid:3)(cid:58)(cid:76)(cid:87)(cid:75)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:71)(cid:82)(cid:80)(cid:76)(cid:81)(cid:68)(cid:81)(cid:87)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:15)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:79)(cid:86)(cid:82)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:83)(cid:88)(cid:85)(cid:86)(cid:88)(cid:72)(cid:3)(cid:86)(cid:92)(cid:81)(cid:72)(cid:85)(cid:74)(cid:76)(cid:86)(cid:87)(cid:76)(cid:70)(cid:3) (cid:70)(cid:82)(cid:80)(cid:80)(cid:88)(cid:81)(cid:76)(cid:87)(cid:92)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:71)(cid:76)(cid:87)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:3)(cid:72)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:3)(cid:72)(cid:81)(cid:75)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:68)(cid:79)(cid:79)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:17)(cid:3)(cid:3) (cid:44)(cid:182)(cid:80)(cid:3)(cid:72)(cid:91)(cid:70)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:88)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:68)(cid:86)(cid:3)(cid:90)(cid:72)(cid:3)(cid:79)(cid:82)(cid:82)(cid:78)(cid:3)(cid:87)(cid:82)(cid:90)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:81)(cid:72)(cid:91)(cid:87)(cid:3)(cid:71)(cid:72)(cid:70)(cid:68)(cid:71)(cid:72)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:3)(cid:83)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:17)(cid:3)(cid:3)(cid:58)(cid:72)(cid:3)(cid:85)(cid:72)(cid:80)(cid:68)(cid:76)(cid:81)(cid:3)(cid:72)(cid:81)(cid:72)(cid:85)(cid:74)(cid:76)(cid:93)(cid:72)(cid:71)(cid:3)(cid:68)(cid:69)(cid:82)(cid:88)(cid:87)(cid:3) (cid:81)(cid:72)(cid:90)(cid:3) (cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:92)(cid:3) (cid:87)(cid:82)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3) (cid:69)(cid:88)(cid:76)(cid:79)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:69)(cid:72)(cid:86)(cid:87)(cid:3) (cid:85)(cid:72)(cid:68)(cid:79)(cid:3) (cid:72)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:3) (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:83)(cid:79)(cid:68)(cid:87)(cid:73)(cid:82)(cid:85)(cid:80)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:87)(cid:72)(cid:68)(cid:80)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:17)(cid:3)(cid:3)(cid:55)(cid:82)(cid:71)(cid:68)(cid:92)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:74)(cid:82)(cid:82)(cid:71)(cid:15)(cid:3)(cid:69)(cid:88)(cid:87)(cid:3)(cid:90)(cid:72)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:74)(cid:72)(cid:87)(cid:3)(cid:69)(cid:72)(cid:87)(cid:87)(cid:72)(cid:85)(cid:17) (cid:36)(cid:86)(cid:3)(cid:44)(cid:3)(cid:71)(cid:82)(cid:3)(cid:72)(cid:89)(cid:72)(cid:85)(cid:92)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:15)(cid:3)(cid:44)(cid:3)(cid:83)(cid:85)(cid:82)(cid:80)(cid:76)(cid:86)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:39)(cid:82)(cid:88)(cid:74)(cid:79)(cid:68)(cid:86)(cid:3)(cid:40)(cid:80)(cid:80)(cid:72)(cid:87)(cid:87)(cid:3)(cid:87)(cid:72)(cid:68)(cid:80)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:86)(cid:87)(cid:68)(cid:92)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:75)(cid:76)(cid:74)(cid:75)(cid:3)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3) (cid:69)(cid:72)(cid:72)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:75)(cid:68)(cid:79)(cid:79)(cid:80)(cid:68)(cid:85)(cid:78)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:23)(cid:24)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:17) (cid:54)(cid:76)(cid:81)(cid:70)(cid:72)(cid:85)(cid:72)(cid:79)(cid:92)(cid:15) (cid:45)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:3)(cid:47)(cid:17)(cid:3)(cid:46)(cid:68)(cid:83)(cid:79)(cid:68)(cid:81) (cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:9)(cid:3)(cid:38)(cid:40)(cid:50)(cid:3) DOUGLAS EMMETT, INC. ANNUAL REPORT Table of Contents Glossary Forward Looking Statements Business Description Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management’s Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Consolidated Financial Statements Page 2 4 5 6 8 9 21 22 1 Abbreviations used in this document: Glossary ASC ASU CEO CFO Code COO DEI EPS Accounting Standards Codification Accounting Standards Updates Chief Executive Officer Chief Financial Officer Internal Revenue Code of 1986, as amended Chief Operating Officer Douglas Emmett, Inc. Earnings Per Share Exchange Act Securities Exchange Act of 1934, as amended FASB FDIC FFO Fund X Funds GAAP JV LIBOR Financial Accounting Standards Board Federal Deposit Insurance Corporation Funds from Operations Douglas Emmett Fund X, LLC Unconsolidated institutional real estate funds (Fund X and Partnership X) Generally Accepted Accounting Principles (United States) Joint Venture London Interbank Offered Rate LTIP Units Long-Term Incentive Plan Units NAREIT NYSE OP Units National Association of Real Estate Investment Trusts New York Stock Exchange Operating Partnership Units Operating Partnership Douglas Emmett Properties, LP OFAC Office of Foreign Assets Control Partnership X Douglas Emmett Partnership X, LP PCAOB QRS REIT Report SEC Public Company Accounting Oversight Board (United States) Qualified REIT subsidiary(ies) Real Estate Investment Trust Annual Report Securities and Exchange Commission Securities Act Securities Act of 1933, as amended S&P 500 TRS US Standard & Poor's 500 Index Taxable REIT subsidiary(ies) United States 2 Defined terms used in is document: Annualized Rent Annualized cash base rent (excludes tenant reimbursements, parking income, lost rent recovered from insurance and other revenue) before abatements under leases commenced as of the reporting date. For our triple net Burbank and Honolulu office properties, annualized rent is calculated by adding expense reimbursements to base rent. Consolidated Portfolio Includes the properties in our consolidated results, which includes our consolidated JVs. Total Portfolio Includes our Consolidated Portfolio and the properties owned by our unconsolidated real estate Funds. 3 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 in Southern California and Honolulu, Hawaii; a general downturn in the economy, such as the global financial crisis that commenced in 2008; competition from other real estate investors in our markets decreased rental rates or increased tenant incentive and vacancy rates; defaults on, early termination of, or non-renewal of leases by tenants; increased interest rates and operating costs; failure to generate sufficient cash flows to service our outstanding debt; failure to generate sufficient cash flows to make payments on a ground lease for one of our properties; difficulties in raising capital; difficulties in identifying properties to acquire and failure to complete acquisitions successfully; failure to successfully operate acquired properties; real estate investments are generally illiquid and difficult to sell quickly possible adverse changes in rent control laws and regulations; environmental uncertainties; risks related to natural disasters; lack or insufficient amount of insurance, or increases in the cost of maintaining existing insurance coverage; inability to successfully expand into new markets and submarkets; risks associated with property development; risks associated with JVs; conflicts of interest with our officers and reliance on key personnel; changes in real estate zoning laws and increases in real property tax rates; adverse results of litigation or governmental proceedings; complying with laws, regulations and covenants that are applicable to our properties; difficulty in liquidating our short term investments; the consequences of any possible terrorist attacks or wars; the consequences of any possible cyber attacks or intrusions; adoption of new accounting pronouncements could adversely affect our operating results; • • • • • • • • • • • • • • • • • • • • • • • • • • • • weaknesses in our internal controls over financial reporting could result in restatements of our operating results; • • failure to maintain our REIT status under federal tax laws; and changes to tax laws that could adversely affect us. For further discussion of these and other risk factors see "Item 1A. Risk Factors” of our 2016 Annual Report on Form 10-K. 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. 4 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 located in premier coastal submarkets in Los Angeles and Honolulu. We focus on owning, acquiring, developing and managing a substantial 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. We intend to increase our market share in our existing submarkets of Los Angeles County and Honolulu, and may selectively enter into other submarkets with similar characteristics where we believe we can gain significant market share. Through our interest in our Operating Partnership and its subsidiaries, our consolidated JVs, and our investments in our unconsolidated Funds, we own or partially own, acquire, develop and manage real estate, consisting primarily of office and multifamily properties. At December 31, 2016, we owned a Consolidated Portfolio of (i) fifty-nine office properties (including ancillary retail space) totaling approximately 15.9 million rentable square feet, which included seven office properties owned by our consolidated JVs, (ii) ten multifamily properties containing 3,320 apartment units, and (iii) the fee interests in two parcels of land subject to ground leases from which we earn ground rent income. Alongside our Consolidated Portfolio, we also manage and own equity interests in our unconsolidated Funds which, at December 31, 2016, owned eight additional office properties totaling approximately 1.8 million square feet of space. We manage these eight properties alongside our Consolidated Portfolio, and we therefore present our office portfolio statistics on a Total Portfolio basis, with a combined sixty-seven Class A office properties totaling approximately 17.7 million square feet. Our properties are located in the Beverly Hills, Brentwood, Burbank, Century City, Olympic Corridor, Santa Monica, Sherman Oaks/Encino, Warner Center/Woodland Hills and Westwood submarkets of Los Angeles County, California, and in Honolulu, Hawaii. For more information, see "Item 2 Properties” of our 2016 Annual Report on Form 10-K. We employ a focused business strategy that we have developed and implemented over the last four decades: • Concentration of High Quality Office and Multifamily Properties in Premier Submarkets. First we select submarkets that are supply constrained, with high barriers to entry, key lifestyle amenities, proximity to high-end executive housing and a strong, diverse economic base. Virtually no entitled Class A office space is currently under construction in any of our targeted submarkets. Our submarkets are dominated by small, affluent tenants, whose rent is very small relative to their revenues and often not the paramount factor in their leasing decisions. At December 31, 2016, our office portfolio median size lease was approximately 2,600 square feet. Our office tenants operate in diverse industries, including among others legal, financial services, entertainment, real estate, accounting and consulting, health services, retail, technology and insurance, reducing our dependence on any one industry. In 2014, 2015 and 2016, no tenant accounted for more than 10% of our total revenues. • Disciplined Strategy of Acquiring Substantial Market Share. Once we select a submarket, we follow a disciplined strategy of gaining substantial market share to provide us with extensive local transactional market information, pricing power in lease and vendor negotiations and an enhanced ability to identify and negotiate investment opportunities. As a result, we average approximately a 27% share of the Class A office space in our submarkets. • Proactive Asset and Property Management. Our fully integrated and focused operating platform provides the unsurpassed tenant service demanded in our submarkets, with in-house leasing, proactive asset and property management and internal design and construction services, which we believe provides us with a competitive advantage in managing our property portfolio. Our in-house leasing agents and legal specialists allow us to lease a large property portfolio with a diverse group of smaller tenants, closing an average of approximately three office leases each business day, and our in-house construction company allows us to compress the time required for building out many smaller spaces, resulting in reduced vacancy periods. Our property management group oversees day-to-day property management of both our office and multifamily portfolios, allowing us to benefit from the operational efficiencies permitted by our submarket concentration. Available Information All reports that we will file with the SEC will be available on the SEC website at www.sec.gov. We make available on our website at www.douglasemmett.com, without charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments thereto, as soon as reasonably practicable after we file such reports with, or furnish them to, the SEC. None of the information on or hyperlinked from our website is incorporated into this Report. Our Annual Report on Form 10-K may also be obtained free of charge by written request to: Stuart McElhinney, Vice President, Investor Relations (310) 255-7751 smcelhinney@douglasemmett.com 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Common Stock; Dividends Our common stock is traded on the NYSE under the symbol “DEI”. On December 31, 2016, the reported closing price of our common stock was $36.56. The following table presents our dividends declared, and the high and low prices for our common stock for the past two years as reported by the NYSE: 2016 Dividend declared Common Stock Price High Low 2015 Dividend declared Common Stock Price High Low First Quarter Second Quarter Third Quarter Fourth Quarter $ $ $ $ $ $ 0.22 31.00 24.73 0.21 30.53 27.41 $ $ $ $ $ $ 0.22 35.53 29.82 0.21 30.92 26.67 $ $ $ $ $ $ 0.22 38.71 35.01 0.21 31.04 26.86 $ $ $ $ $ $ 0.23 39.25 33.78 0.22 32.32 28.31 Holders of Record We had 16 holders of record of our common stock on February 10, 2017. Certain of our shares are held in “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number. Dividend Policy We typically pay quarterly dividends to common stockholders at the discretion of the Board of Directors. Dividend amounts depend upon our available cash flows, financial condition and capital requirements, annual distribution requirements under the REIT provisions of the Code, and such other factors as the Board of Directors deems relevant. Sales of Unregistered Securities None. Repurchases of Equity Securities None. 6 Performance Graph The information below shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, other than as provided in Item 201 of Regulation S-K , or to the liabilities of Section 18 of the Exchange Act, except to the extent we specifically request that such information be treated as soliciting material or specifically incorporate it by reference into a filing under the Securities Act or the Exchange Act. The graph below compares the cumulative total return on our common stock from December 31, 2011 to December 31, 2016 with the cumulative total return of the S&P 500, NAREIT Equity and an appropriate “peer group” index (assuming a $100 investment in our common stock and in each of the indexes on December 31, 2011, and that all dividends were reinvested into additional shares of common stock at the frequency with which dividends are paid on the common stock during the applicable fiscal year). The total return performance presented in this graph is not necessarily indicative of, and is not intended to suggest, the total future return performance. Period Ending Index 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 DEI S&P 500 NAREIT Equity(1) Peer group(2) 100.00 100.00 100.00 100.00 131.33 116.00 118.06 112.10 135.34 153.57 120.97 122.75 169.96 174.60 157.43 166.55 192.14 177.01 162.46 163.00 231.23 198.18 176.30 172.24 (1) (2) FTSE NAREIT Equity REITs index. Consists of Boston Properties, Inc. (BXP), Kilroy Realty Corporation (KRC), SL Green Realty Corp. (SLG), Vornado Trust (VNO) and Hudson Pacific Properties, Inc (HPP). 7 Selected Financial Data The table below presents selected consolidated financial and operating data on a historical basis, and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements on pages 9 and 22 of this Report, respectively. Consolidated Statement of Operations Data (in thousands): 2016 Year Ended December 31, 2014 2013 2015 Total office revenues Total multifamily revenues Total revenues Operating income Net income attributable to common stockholders Per Share Data: Net income attributable to common stockholders per share - basic Net income attributable to common stockholders per share - diluted Weighted average common shares outstanding (in thousands): $ $ $ $ $ $ $ 645,633 96,918 742,551 220,817 85,397 0.569 0.554 $ $ $ $ $ $ $ 540,975 94,799 635,774 189,527 58,384 0.398 0.386 $ $ $ $ $ $ $ 519,405 80,117 599,522 167,854 44,621 0.309 0.300 $ $ $ $ $ $ $ 514,583 76,936 591,519 178,691 45,311 0.317 0.309 $ $ $ $ $ $ $ 2012 505,259 73,723 578,982 175,810 22,942 0.163 0.161 Basic Diluted 149,299 153,190 146,089 150,604 144,013 148,121 142,556 145,844 139,791 142,278 Dividends declared per common share $ 0.89 $ 0.85 $ 0.81 $ 0.74 $ 0.63 2016 2015 2014 2013 2012 As of December 31, Balance Sheet Data (in thousands): Total assets $ 7,613,705 $ 6,066,161 $ 5,938,973 $ 5,830,044 $ 6,084,445 Secured notes payable and revolving credit facility, net Property Data: Number of consolidated properties(1) $ 4,369,537 $ 3,611,276 $ 3,419,667 $ 3,223,395 $ 3,421,778 69 64 63 61 59 _________________________________________________________ (1) All properties are wholly-owned by our Operating Partnership, except for seven office properties owned by our consolidated JVs. These properties do not include the eight properties owned by our unconsolidated Funds. 8 Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our consolidated financial statements and related notes on page 22 of this Report. Our results of operations for the years ended December 31, 2016, 2015 and 2014 were affected by a number of property acquisitions and dispositions - see Note 3 to our consolidated financial statements included elsewhere in this Report for more information. 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 in Honolulu, Hawaii. We focus on owning, acquiring, developing and managing a substantial 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. As of December 31, 2016, our portfolio consisted of the following: Office Class A Properties(3) Rentable square feet (in thousands) Leased rate Occupied rate Properties Units Leased rate Occupied rate Multifamily Consolidated(1) Total Portfolio(2) 59 15,867 92.1% 90.1% 10 3,320 99.1% 97.9% 67 17,690 92.2% 90.4% 10 3,320 99.1% 97.9% __________________________________________________ (1) Our Consolidated Portfolio includes all of the properties included in our consolidated results. We own 100% of these properties except for seven office properties totaling approximately 2.3 million square feet, which we own through three consolidated JVs. Our Consolidated Portfolio also includes two parcels of land from which we earn ground rent income which are ground leased to the owners of a Class A office building and a hotel. (2) Our Total Portfolio includes our Consolidated Portfolio plus eight properties totaling approximately 1.8 million square feet owned by our unconsolidated Funds, in which we own a weighted average of approximately 60% based on square footage. See Note 5 to our consolidated financial statements included elsewhere in this Report for our unconsolidated Funds' disclosures. (3) Office portfolio includes ancillary retail space. Annualized rent Annualized rent from our Consolidated Portfolio was derived as follows as of December 31, 2016: ______ 9 Acquisitions and Dispositions, Financings, Developments and Repositionings Acquisitions and Dispositions • During the first quarter of 2016, a consolidated JV which we manage and and partly own acquired four Class A multi- tenant office properties located in Westwood, California (Westwood Portfolio) for a contract price of $1.34 billion. • During the second quarter of 2016, we sold a thirty-percent ownership interest in the consolidated JV that acquired the Westwood Portfolio to a third party investor for $241.1 million, which reduced our ownership interest in the JV from sixty-percent to thirty-percent. • During the third quarter of 2016, a consolidated JV which we manage and partly own acquired two Class A multi-tenant office properties located in Brentwood, California and Santa Monica, California for contract prices of $225.0 million and $139.5 million, respectively. • During the third quarter of 2016, we sold a thirty-five percent ownership interest in the consolidated JV that acquired the office properties in Brentwood and Santa Monica, California to a third party investor for $51.6 million, which reduced our ownership interest in the JV from fifty-five percent to twenty percent. • During the third quarter of 2016, we sold a 168,000 square foot Class A office property located in Sherman Oaks, California with a carrying value of $42.8 million for a contract price of $56.7 million, resulting in a net gain of $12.7 million after transaction costs of $1.2 million. See Note 3 to our consolidated financial statements included elsewhere in this Report for more detail regarding our acquisitions and dispositions. Financings • As part of the acquisition of the Westwood Portfolio during the first quarter of 2016, one of our consolidated JVs closed a seven-year, non-recourse $580.0 million interest-only term loan. The loan bears interest at LIBOR + 1.40%, and has been effectively fixed at 2.37% per annum until March 2021 through an interest rate swap. The loan is secured by the Westwood Portfolio. • During the first quarter of 2016, one of our unconsolidated Funds closed a seven-year, non-recourse $110.0 million interest-only term loan. The loan bears interest at LIBOR + 1.40%, and has been effectively fixed at 2.30% per annum until March 2021 through an interest rate swap. The loan is secured by two office properties owned by that Fund. • During the second quarter of 2016, we closed a seven year, non-recourse, $360.0 million interest-only loan, which bears interest at LIBOR + 1.55%, and has been effectively fixed at 2.57% per annum until July 2021 through an interest rate swap. We used the proceeds to pay off a $256.1 million loan that was scheduled to mature in April 2018. The loan is secured by five office properties. • As part of the acquisition of office properties in Brentwood and Santa Monica, California during the third quarter of 2016, one of our consolidated JVs borrowed a total of $146.0 million under a three year, interest only, non-recourse loan bearing interest at LIBOR + 1.55%. The loan is secured by those properties. • During the third quarter of 2016, we paid off a $20.0 million loan scheduled to mature in December 2016. • During the third quarter of 2016, we sold 1.4 million shares of our common stock in open market transactions under our ATM program for net proceeds of approximately $49.4 million after commissions and other expenses. • During the fourth quarter of 2016, we closed a seven-year, non-recourse, $220 million interest-only loan which bears interest at LIBOR + 1.70%, and has been effectively fixed at 3.62% per annum until December 2021 through an interest rate swap. The loan is secured by a pool of six office properties. We also closed a seven-year, non-recourse, $300 million interest-only loan which bears interest at LIBOR + 1.55%, and has been effectively fixed at 3.46% per annum until January 2022 through an interest rate swap. The loan is secured by a single office property and associated retail space. We used the proceeds of these loans and cash on hand to pay off a $530.0 million loan that was scheduled to mature in August 2018. • During the fourth quarter of 2016, we paid off a $15.7 million loan scheduled to mature in 2017. See Notes 7 and 10 to our consolidated financial statements included elsewhere in this Report for more detail regarding our debt and equity, respectively. 10 Developments We are developing two multifamily projects, one in our Brentwood submarket in Los Angeles, California, and one in Honolulu, Hawaii. Each development is on land which we already own: • We are building an additional 475 apartments (net of existing apartments removed) at our Moanalua Hillside Apartments in Honolulu, which we expect will cost approximately $120 million excluding the cost of the land which we already owned before beginning the project. We also plan to invest additional capital to upgrade the existing apartments, improve the parking and landscaping, build a new leasing and management office, and construct a new recreation and fitness facility with a new pool. • In West Los Angeles, we are seeking to build a high-rise apartment building with 376 apartments. Development in our markets, particularly West Los Angeles, remains a long and uncertain process. If the entitlement process is successful we do not expect to break ground in Los Angeles before late 2017. We expect the cost of the development to be approximately $120 million to $140 million, which does not include the cost of the land or the existing underground parking garage, both of which we owned before beginning the project. Repositionings We often strategically purchase properties with large vacancies or expected near-term lease roll-over and use our knowledge of the property and submarket to reposition the property for the optimal use and tenant mix. The work we undertake to reposition a building typically takes months or even years, and could involve a range of improvements from a complete structural renovation to a targeted remodeling of selected spaces. We generally select a property for repositioning at the time we purchase it, although repositioning efforts can also occur at properties that we already own. During the repositioning, the affected property may display depressed rental revenue and occupancy levels which impacts our results and, therefore, comparisons of our performance from period to period. In addition to our Moanalua Hillside Apartments in Honolulu, described above under "Developments", as of December 31, 2016, we were repositioning two properties: (i) a 661,000 square foot office property in Woodland Hills, California, which included a 35,000 square foot gym, and (ii) a 79,000 square foot office property in Honolulu, Hawaii, owned by a consolidated JV in which we own a two-thirds interest. Rental Rate Trends - Total Portfolio Office Rental Rates The table below presents the average annual rental rate per leased square foot and the annualized lease transaction costs per leased square foot for leases executed in our total office portfolio during each period: Historical straight-line rents:(1) Average rental rate(2) Annualized lease transaction costs(3) 2016 $43.21 $5.74 2015 $42.65 $4.77 2014 $35.93 $4.66 2013 $34.72 $4.16 2012 $32.86 $4.06 Year Ended December 31, ___________________________________________________ (1) Because straight-line rent takes into account the full economic value of each lease, including rent concessions and escalations, we believe that it may provide a better comparison than ending cash rents, which include the impact of the annual escalations over the entire term of the lease. However, care should be taken in any comparison, as the averages are often significantly affected from period to period by factors such as the buildings, submarkets, and types of space and terms involved in the leases executed during the respective reporting period. (2) Reflects the weighted average straight-line annualized base rent (i.e., excludes tenant reimbursements, parking and other revenue) per leased square foot. For our triple net leases, annualized rent is calculated by adding estimated expense reimbursements to base rent. (3) Reflects the weighted average leasing commissions and tenant improvement allowances divided by the weighted average number of years for the leases. 11 Office Rent Roll Up • Annual straight-line rent roll up. The average straight-line rent of $43.21 per square foot under new and renewed leases that we signed during 2016 was 27.4% greater than the average straight-line rent of $33.91 per square foot on the expiring leases for the same space. The rent roll up reflects continuing increases in average starting rental rates and more leases containing annual rent escalations in excess of 3% per annum. • Annual cash rent roll up. The average starting cash rental rate of $41.30 per square foot under new and renewed leases that we signed during 2016 was 25.3% greater than the average starting cash rental rate of $32.97 per square foot on the expiring leases for the same space, and 10.9% greater than the average ending cash rental rate of $37.25 per square foot on those expiring leases. Our office rent roll up can fluctuate from period to period as a result of changes in the submarkets, buildings and term of the expiring leases, making these metrics difficult to predict. Office Lease Expirations As of December 31, 2016, assuming non-exercise of renewal options and early termination rights, we expect to see expiring cash rents in our total office portfolio as presented in the graph below: ______________________________________________________ (1) Average of the percentage of leases at December 31, 2013, 2014, and 2015 with the same remaining duration as the leases for the labeled year had at December 31, 2016. Acquisitions are included in the prior year average commencing in the quarter after the acquisition. Multifamily Rental Rates The table below presents the average annual rental rate per leased unit for new tenants: Average annual rental rate - new tenants: 2016 Year Ended December 31, 2014 2013 2015 2012 Rental rate(1) $ 28,435 $ 27,936 $ 28,870 $ 27,392 $ 26,308 _____________________________________________________ (1) 2016 and 2015 include the impact of a property acquisition in Honolulu at the end of the 2014, so the numbers are not directly comparable with prior years. 12 Multifamily Rent Roll Up During 2016, average rent on leases to new tenants at our residential properties were 2.5% higher for the same unit at the time it became vacant. Occupancy Rates - Total Portfolio The tables below present the occupancy rates for our total office portfolio and multifamily portfolio: Occupancy Rates(1) as of: 2016 2015 2014 2013 2012 Office portfolio Multifamily portfolio 90.4% 97.9% 91.2% 98.0% 90.5% 98.2% 90.4% 98.7% 89.6% 98.7% December 31, Average Occupancy Rates(1)(2): 2016 Year Ended December 31, 2014 2013 2015 Office portfolio Multifamily portfolio 90.6% 97.6% 90.9% 98.2% 90.0% 98.5% 89.7% 98.6% 2012 88.3% 98.5% ___________________________________________________ (1) Occupancy rates include the impact of property acquisitions, most of whose occupancy rates at the time of acquisition were below that of our existing portfolio. (2) Average occupancy rates are calculated by averaging the occupancy rates at the end of each of the quarters in the period and at the end of the quarter immediately prior to the start of the period. 13 Comparison of 2016 to 2015 Revenues Office Rental Revenue: Office rental revenue increased by $85.8 million, or 20.8%, to $498.2 million for 2016, compared to $412.4 million for 2015. The increase was primarily due to rental revenues of $77.2 million from properties that we acquired in 2015 and 2016 and an increase in rental revenues of $9.4 million from the properties that we owned throughout both periods, partially offset by a decrease of $0.8 million in rental revenues from a property that we sold during 2016. The increase in rental revenue from the properties that we owned throughout both periods was primarily due to an increase in rental rates, which was partially offset by a decrease of $4.0 million in the accretion from below-market leases. See Note 3 to our consolidated financial statements included elsewhere in this Report for more information regarding our acquisitions. Office Tenant Recoveries: Office tenant recoveries increased by $3.7 million, or 8.6%, to $46.8 million for 2016, compared to $43.1 million for 2015. The increase was primarily due to tenant recoveries of $4.4 million from properties that we acquired in 2015 and 2016, partially offset by a decrease of $0.7 million in tenant recoveries for the properties that we owned throughout both periods. The decrease in tenant recoveries from the properties that we owned throughout both periods was primarily due to lower current period recoveries as a result of lower recoverable operating costs. Office Parking and Other Income: Office parking and other income increased by $15.2 million, or 17.8%, to $100.6 million for 2016, compared to $85.4 million for 2015. The increase was primarily due to parking and other income of $10.4 million from properties that we acquired in 2015 and 2016, and an increase of $4.9 million in parking and other income from properties that we owned throughout both periods, partially offset by a decrease in parking and other income of $0.2 million from a property that we sold during 2016. The increase in parking and other income from the properties that we owned throughout both periods primarily reflects increases in rates. Multifamily Revenue: Total multifamily revenue increased by $2.1 million, or 2.2%, to $96.9 million for 2016, compared to $94.8 million for 2015. The increase was primarily due to increases in rental rates. Operating Expenses Office Rental Expenses: Office rental expenses increased by $28.0 million, or 15.0%, to $214.5 million for 2016, compared to $186.6 million for 2015. The increase was due to rental expenses of $30.2 million from properties that we acquired in 2015 and 2016, partially offset by a decrease of $1.7 million from properties that we owned throughout both periods and a decrease of $0.5 million from a property that we sold during 2016. The decrease from properties that we owned throughout both periods was primarily due to a decrease in utilities expense. Multifamily Rental Expenses: Multifamily rental expenses decreased by $0.5 million, or 2.3%, to $23.3 million for 2016, compared to $23.9 million for 2015. The decrease was primarily due to excise tax refunds. General and Administrative Expenses: General and administrative expenses increased by $4.5 million, or 14.6%, to $35.0 million for 2016, compared to $30.5 million for 2015. The increase was primarily due to payroll taxes of $1.5 million related to the exercise of options as well as a $2.2 million increase in equity compensation expense. Depreciation and Amortization: Depreciation and amortization expense increased by $43.6 million, or 21.2%, to $248.9 million for 2016, compared to $205.3 million for 2015. The increase was primarily due to depreciation and amortization of $40.4 million from properties that we acquired in 2015 and 2016. Non-Operating Income and Expenses Other Income and Other Expenses: Other income decreased by $6.5 million, or 42.5%, to $8.8 million for 2016, compared to $15.2 million for 2015, and other expenses increased by $139 thousand, or 2.1% to $6.6 million for 2016 compared to $6.5 million for 2015. The decrease in other income was primarily due to $6.6 million of accelerated accretion that we recognized related to an above- market ground lease for which we acquired the underlying fee interest in the land in the first quarter of 2015. See Note 3 to our consolidated financial statements included elsewhere in this Report for more information regarding the acquisition of the fee interest. 14 Income, Including Depreciation, from Unconsolidated Real Estate Funds: Our share of the income, including depreciation, from our unconsolidated Funds increased by $0.1 million, or 1.5%, to $7.8 million for 2016 compared to $7.7 million for 2015. The increase was primarily due to an increase in rental revenues, which primarily reflects an increase in rental rates. See Note 5 to our consolidated financial statements included elsewhere in this Report for more information regarding our unconsolidated Funds. Interest Expense: Interest expense increased by $10.7 million, or 7.9%, to $146.1 million for 2016, compared to $135.5 million for 2015. The increase was due to interest expense of $14.2 million on our new debt related to our JV acquisitions in 2016, partially offset by a decrease in interest expense of $3.5 million on our remaining debt as a result of refinancing at lower interest rates in 2015 and 2016. See Notes 7 and 9 to our consolidated financial statements included elsewhere in this Report for more information regarding our debt and derivative contracts. Acquisition-related Expenses: Acquisition expenses include the costs of acquisitions that we close, as well as those that we do not close. Acquisition expenses increased by $1.1 million to $2.9 million for 2016 compared to $1.8 million for 2015. The increase reflects six office properties that our consolidated JVs acquired in 2016 compared to only one office property that we acquired in 2015. See Note 3 to our consolidated financial statements included elsewhere in this Report for more detail regarding our completed acquisitions. Gains on sales of investments in real estate: During 2016, we sold a thirty-percent ownership interest in one of our consolidated JVs to a third party investor and recognized a gain of $1.1 million, we sold a thirty-five percent ownership interest in one of our consolidated JVs to a third party investor and recognized a gain of $0.6 million, and we sold an office property and recognized a gain of $12.7 million. See Note 3 to our consolidated financial statements included elsewhere in this Report for more detail regarding our sales of ownership interests in our consolidated JVs to third party investors and property dispositions. Comparison of 2015 to 2014 Revenues Office Rental Revenue: Office rental revenue increased by $15.9 million, or 4.0%, to $412.4 million for 2015 compared to $396.5 million for 2014. The increase was primarily due to an increase in rental revenue of $11.7 million from properties that we acquired in 2014 and 2015, as well as an increase in rental revenues of $4.2 million for the properties that we owned throughout both periods. The increase in rental revenue from the properties that we owned throughout both periods was primarily due to an increase in occupancy and rental rates, which was partially offset by a decrease of $1.8 million in the accretion from below-market tenant leases and a decrease of $1.3 million in lease termination revenue. Office Tenant Recoveries: Office tenant recoveries decreased by $1.3 million, or 3.0%, to $43.1 million for 2015 compared to $44.5 million for 2014. The decrease was primarily due to a decrease of $2.4 million in tenant recoveries for the properties that we owned throughout both periods, partially offset by tenant recoveries of $1.1 million from properties that we acquired in 2014 and 2015. The decrease in tenant recoveries from the properties that we owned throughout both periods was primarily due to lower income from current period recoveries as a result of lower recoverable operating costs, and lower income from prior period reconciliations. Office Parking and Other Income: Office parking and other income increased by $7.0 million, or 8.9%, to $85.4 million for 2015 compared to $78.4 million for 2014. The increase was primarily due to an increase of $4.7 million in parking and other income from properties that we owned during both periods, as well as parking and other income of $2.2 million from properties that we acquired in 2014 and 2015. The increase in parking and other income from the properties that we owned throughout both periods primarily reflects increases in rates. Multifamily Revenue: Multifamily revenue increased by $14.7 million, or 18.3%, to $94.8 million for 2015 compared to $80.1 million for 2014. The increase was primarily due to revenues of $11.5 million from a property that we acquired in the fourth quarter of 2014 as well as an increase in revenues of $3.2 million for the properties that we owned throughout both periods. The increase in rental revenue from the properties that we owned throughout both periods was primarily due to increases in rental rates. Operating Expenses Office Expenses: Office rental expenses increased by $5.4 million, or 3.0%, to $186.6 million for 2015 compared to $181.2 million for 2014. The increase was primarily due to rental expenses of $5.2 million from properties that we acquired in 2014 and 2015. 15 Multifamily Expenses: Multifamily rental expenses increased by $3.2 million, or 15.5%, to $23.9 million for 2015 compared to $20.7 million for 2014. The increase was due to rental expenses of $3.3 million from a property that we acquired in the fourth quarter of 2014. General and Administrative Expenses: General and administrative expenses increased by $3.2 million, or 11.6%, to $30.5 million for 2015, compared to $27.3 million for 2014. The increase was primarily due to an increase in employee compensation. Depreciation and Amortization: Depreciation and amortization expense increased by $2.8 million, or 1.4%, to $205.3 million for 2015 compared to $202.5 million for 2014. The increase was primarily due to depreciation and amortization of $8.8 million from properties that we acquired in 2014 and 2015, partly offset by a decrease in depreciation and amortization of $5.9 million from properties that we owned throughout both periods. The decrease in depreciation and amortization for the properties that we owned throughout both periods primarily reflects depreciation in 2014 of a building in West Los Angeles on the site where we plan to build a new apartment building, which was fully depreciated at the end of 2014 when it was taken out of service. Non-Operating Income and Expenses Other Income and Other Expenses: Other income decreased by $2.4 million, or 13.8%, to $15.2 million for 2015 compared to $17.7 million for 2014, and other expenses decreased by $0.6 million, or 8.8%, to $6.5 million for 2015 compared to $7.1 million for 2014. In 2014, other income included $6.2 million of property insurance recoveries and $2.2 million of accelerated accretion related to an above-market ground lease, and in 2015, other income included $6.6 million of accelerated accretion related to the ground lease and only $0.1 million related to property insurance recoveries. See Note 3 to our consolidated financial statements included elsewhere in this Report for more information regarding the acquisition in 2015 of the land fee related to the ground lease. Income, including Depreciation, from Unconsolidated Real Estate Funds: Our share of the income, including depreciation, from our Funds increased by $4.0 million or 107.2%, to $7.7 million for 2015 compared to $3.7 million for 2014. The increase was primarily due to an increase in the revenues of our Funds due to increased occupancy and rental rates, as well as property tax refunds. See Note 5 to our consolidated financial statements included elsewhere in this Report for more information regarding our Funds. Interest Expense: Interest expense increased by $6.9 million, or 5.4%, to $135.5 million for 2015 compared to $128.5 million for 2014. The increase was primarily due to higher cash interest expense as result of higher debt balances, as well as an acceleration of deferred loan cost amortization as a result of refinancing certain debt. See Notes 7 and 9 to our consolidated financial statements included elsewhere in this Report for more information regarding our debt and derivative contracts. Acquisition-Related Expenses: Acquisition expenses, which include the costs of both the acquisitions that we close and those we do not close. Acquisition expense increased by $1.0 million, or 125%, to $1.8 million for 2015 compared to $0.8 million in 2014. The increase was primarily due to acquisitions costs related to the acquisition of the Westwood Portfolio. See Note 3 to our consolidated financial statements included elsewhere in this Report for information regarding our completed acquisitions. 16 Non-GAAP Supplemental Financial Measure: FFO Usefulness to Investors Many investors use FFO as one performance measure to compare the operating performance of REITs. FFO represents net income (loss), computed in accordance with GAAP, excluding (i) gains (or losses) from sales of depreciable operating property, (ii) impairments of depreciable operating property, (iii) real estate depreciation and amortization (other than amortization of deferred financing costs), and (iv) the same adjustments for unconsolidated funds and consolidated JVs. We calculate FFO in accordance with the standards established by NAREIT. Like any metric, FFO has limitations as a measure of our performance, because it excludes depreciation and amortization, and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our operating results. 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. Accordingly, FFO should be considered only as a supplement to net income as a measure of our performance. FFO should not be used as a measure of our liquidity, nor is it indicative of cash available to fund our cash needs, including our ability to pay dividends. FFO should not be used as a supplement or substitute measure for cash flow from operating activities computed in accordance with GAAP. Comparison of Results Our FFO increased by $35.8 million, or 12.4%, to $325.7 million for 2016 compared to $289.9 million for 2015. Excluding $6.6 million of accelerated non-cash accretion of an above-market ground lease from the acquisition of the Harbor Court Land in 2015, our FFO increased by $42.4 million or 15.0%, which was primarily due to (i) an increase in operating income from our office portfolio due to acquisitions and (ii) an increase in operating income from our multifamily portfolio due to higher rental rates, partially offset by increases in (a) general and administrative expenses due to an increase in equity compensation and payroll taxes related to stock option exercises, (b) interest expense due to new JV debt related to acquisitions and (c) acquisition-related expenses related to JV acquisitions. Our FFO increased by $18.9 million, or 7.0%, to $289.9 million for 2015 compared to $271.0 million for 2014. Excluding $6.6 million of accelerated non-cash accretion of an above-market ground lease from the acquisition of the Harbor Court Land in 2015, our FFO increased by $12.3 million or 4.5%, which was primarily due to (i) an increase in operating income from our office portfolio due to acquisitions and higher occupancy and rental rates for properties that we owned throughout both periods, (ii) an increase in operating income from our multifamily portfolio due to an acquisition and higher rental rates for properties that we owned throughout both periods and (iii) an increase in our share of the FFO of our unconsolidated funds, partially offset by (iv) an increase in general and administrative expenses due to increased employee compensation and (v) an increase in interest expense due to higher debt balances and loan costs. Reconciliation to GAAP The table below (in thousands) reconciles our FFO (which reflects the FFO attributable to our common stockholders and noncontrolling interests in our Operating Partnership, which includes our share of our consolidated JVs and our unconsolidated Funds) to net income attributable to common stockholders computed in accordance with GAAP: Year Ended December 31, 2015 2014 2016 Net income attributable to common stockholders Depreciation and amortization of real estate assets Net income attributable to noncontrolling interests Adjustments attributable to unconsolidated funds (1) Adjustments attributable to consolidated JVs (1) Gain on sale of investment in real estate FFO $ $ 85,397 248,914 10,693 16,016 (20,961) (14,327) 325,732 $ $ 58,384 205,333 10,371 15,919 (97) — 44,621 202,512 8,233 15,697 (27) — $ 289,910 $ 271,036 ___________________________________________________ (1) Adjusts for our share of our unconsolidated Funds depreciation and amortization of real estate assets, and for the net income and depreciation and amortization of real estate assets that is attributable to the noncontrolling interests in our consolidated JVs. 17 Liquidity and Capital Resources General We have typically financed our capital needs through lines of credit and long-term secured loans. To mitigate the impact of fluctuations in interest rates on our cash flows from operations, some of our long-term secured loans carry fixed interest rates, and we generally enter into interest rate swap agreements with respect to our loans with floating interest rates. These swap agreements generally expire between one to two years before the maturity date of the related loan, during which time we can refinance the loan without any interest penalty. See Notes 7 and 9 to our consolidated financial statements included elsewhere in this Report for more information regarding our debt and derivative contracts. Financing Activity in 2016 See "Acquisitions and Dispositions, Financings, Developments and Repositionings" above for a discussion of our financing activities during 2016. Short term liquidity Excluding potential acquisitions and debt refinancings, we expect to meet our short term liquidity requirements, which includes our development projects, repositioning of properties and non-recurring capital expenditures, through cash on hand, cash generated by operations, and as necessary, our revolving credit facility. See Note 7 to our consolidated financial statements included elsewhere in this Report for more information regarding our revolving credit facility. See "Acquisitions and Dispositions, Financings, Developments and Repositionings" for more information regarding our developments. Long term liquidity Our long-term liquidity needs consist primarily of funds necessary to pay for acquisitions and debt refinancings. We do not expect that we will have sufficient funds on hand to cover these long-term cash requirements due to the nature of our business and the requirement to distribute a substantial majority of our income on an annual basis imposed by REIT federal tax rules. We plan to meet our long-term liquidity needs through long-term secured indebtedness, the issuance of equity securities, including OP Units, property dispositions and JV transactions. We also have an ATM program which would allow us, subject to market conditions, to sell up to $350 million in common stock as of the date of this Report. Contractual obligations The table below presents (in thousands) our contractual obligations as of December 31, 2016: Payment due by period 2-3 years Less than 1 year 4-5 years Total Thereafter Term loan principal payments(1) Ground lease payments(2) Purchase commitments related to in progress capital expenditures and tenant improvements Total $ 4,408,083 $ 20,410 $ 1,402,192 $ 683,080 $ 2,302,401 51,309 733 1,466 1,466 47,644 3,565 $ 4,462,957 $ 3,565 24,708 — $ 1,403,658 $ — 684,546 — $ 2,350,045 ____________________________________________________ (1) Reflects the future principal payments due on our secured notes payable and revolving credit facility excluding any maturity extension options. For the interest rates that determine our periodic interest payments see Note 7 to our consolidated financial statements included elsewhere in this Report. (2) Reflects the future minimum ground lease payments. See Note 16 to our consolidated financial statements included elsewhere in this Report. 18 Cash Flows Comparison of 2016 to 2015 Cash flows from operating activities Our cash flows from operating activities are primarily dependent upon the occupancy and rental rates of our portfolio, the collectability of rent and recoveries from our tenants, and the level of our operating expenses and general and administrative costs. Net cash provided by operating activities increased by $68.0 million to $339.4 million for 2016 compared to $271.4 million for 2015. The increase was primarily due to (i) an increase in cash operating income from our office portfolio due to acquisitions, (ii) an increase in cash operating income from our multifamily portfolio due to higher rental rates, partially offset by (a) an increase in general and administrative expenses due to payroll taxes from the exercise of options, (b) an increase in cash interest expense due to new JV debt related to acquisitions, and (c) an increase in acquisition-related expenses due to new JV acquisitions. See Note 3 to our consolidated financial statements included elsewhere in this Report for information regarding our acquisitions. Cash flows from investing activities Our net cash used in investing activities is generally used to fund property acquisitions, developments and redevelopment projects, and recurring and non-recurring capital expenditures. Net cash used in investing activities increased by $1.13 billion to $1.37 billion for 2016 compared to $231.6 million for 2015. The increase primarily reflects the expenditure of $1.62 billion for acquisitions by our consolidated joint ventures, partially offset by proceeds of $348.2 million from the sales of investments in real estate. Cash flows from financing activities Our net cash related to financing activities is generally impacted by our borrowings and capital activities, as well as dividends and distributions paid to common stockholders and noncontrolling interests, respectively. Net cash provided by financing activities increased by $994.7 million to $1.04 billion for 2016 compared to $43.1 million for 2015, respectively. The increase primarily reflects an increase in net borrowings of $575.0 million, which was primarily due to new non-recourse borrowings for our consolidated JVs that acquired six properties in 2016, and equity contributed by noncontrolling interests to those consolidated JVs of $459.8 million. Off-Balance Sheet Arrangements Debt of our Unconsolidated Funds Our unconsolidated Funds have their own non-recourse debt, and we have made certain environmental and other limited indemnities and guarantees covering customary non-recourse carve-outs for loans related to both of our unconsolidated Funds. We have also guaranteed the related swaps. Our Funds have agreed to indemnify us for any amounts that we would be required to pay under these agreements. As of December 31, 2016, all of the obligations under these loans and swap agreements have been performed in accordance with the terms of those agreements. For information regarding our Funds and Funds' debt, see Notes 5 and 17, respectively, to our consolidated financial statements included elsewhere in this Report. Critical Accounting Policies Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP, and which requires us to make estimates of certain items which affect the reported amounts of our assets, liabilities, revenues and expenses. While we believe that our estimates are based upon reasonable assumptions and judgments at the time that they are made, some of our estimates could prove to be incorrect, and those differences could be material. Below is a list of our critical accounting policies, which are the policies that we believe require the most significant estimates. See Note 2 to our consolidated financial statements included elsewhere in this Report for the summary of our significant accounting policies. Investment in Real Estate We estimate the purchase price allocation of acquired properties, which is based upon our estimates of future cash flows and other valuation techniques, to allocate the purchase price among; (i) land, (ii) buildings and improvements, (iii) tenant improvements and identifiable intangible assets such as in-place at-market leases, and (iv) acquired above- and below-market ground and tenant leases. 19 We estimate the fair values of the tangible assets on an ‘‘as-if-vacant’’ basis. The estimated fair value of acquired in- place at-market leases are the estimated costs to lease the property to the occupancy level at the date of acquisition, including the fair value of leasing commissions and legal costs. We evaluate the time period over which we expect such occupancy level to be achieved and include an estimate of the net operating costs (primarily real estate taxes, insurance and utilities) incurred during the lease-up period. Above and below-market ground and tenant leases are recorded as an asset or liability based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be paid or received pursuant to the in-place ground or tenant leases, respectively, and our estimate of fair market rental rates for the corresponding in-place leases, over the remaining non-cancelable term of the lease. These estimates require significant judgment, involve complex calculations, and the allocations have a direct and material impact on our results of operations because, for example, (i) there would be less depreciation if we allocate more value to land (which is not depreciated), or (ii) if we allocate more value to buildings than to tenant improvements, the depreciation would be recognized over a much longer time period, because buildings are depreciated over a longer time period than tenant improvements. In accordance with GAAP, we may change our initial purchase price allocation up to 12 months from the acquisition date. See Note 3 to our consolidated financial statements included elsewhere in this Report for details regarding our acquisitions. We did not materially change any of our initial purchase price allocations for acquisitions during 2016, 2015 or 2014. Impairment of Long-Lived Assets We periodically assess whether there has been impairment in the value of our long-lived assets, which includes our investment in real estate and our investment in our Funds, whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. We record assets that we have determined to dispose of at the lower of carrying value or estimated fair value, less costs to sell. Recoverability of assets to be held and used is measured by a comparison of the carrying amount to the undiscounted future cash flows expected to be generated by the asset. We consider factors such as future operating income, trends and prospects, as well as the effects of leasing demand, competition and other factors. If our evaluation indicates that we may be unable to recover the carrying value of an investment in real estate or in one of our Funds, we record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the property or investment. These losses have a direct impact on our net income, because recording an impairment loss would reduce our net income, and these losses could be material. We may similarly recognize a material impairment loss for real estate held for sale, which is required to be recorded at the lower of carrying value or estimated fair value, less costs to sell. The determination of future cash flows and the applicable discount rates is highly subjective, and is based in part on assumptions regarding future occupancy, rental rates and operating costs, which could differ materially from actual results in future periods. Our evaluation of market conditions, with regards to assets we intend to dispose of, requires significant judgment, and our expectations could differ materially from actual results. We did not record any impairment charges with respect to our investment in real estate or our Funds during 2016, 2015 or 2014. Revenue Recognition Estimated tenant recoveries for recoverable operating expenses are recognized as revenue on a gross basis in the period that the recoverable expenses are incurred. Subsequent to year-end, we perform reconciliations on a lease-by-lease basis and bill or credit each tenant for any adjustments. These estimates require significant judgment, and involve complex calculations. If our estimates prove to be incorrect, then we could have adjustments to our tenant recoveries in future reporting periods when we perform our reconciliations, and these adjustments could be material to our revenues and net income. Calculating tenant reimbursement revenue requires an in-depth analysis of the complex terms of each underlying lease. Examples of judgments and estimates used when determining the amounts recoverable include: • • • • estimating the final expenses that are recoverable; estimating the fixed and variable components of operating expenses for each building; conforming recoverable expense pools to those used in establishing the base year for the applicable underlying lease; and concluding whether an expense or capital expenditure is recoverable pursuant to the terms of the underlying lease. 20 The impact of revising our tenant recoveries revenue estimate by 5% would result in a change to our tenant recoveries revenue of $158 thousand, $128 thousand and $63 thousand during 2016, 2015 and 2014, respectively. See Note 2 to our consolidated financial statements included elsewhere in this Report for more information regarding our revenues. Allowances for Tenant Receivables and Deferred Rent Receivables We make estimates when determining our allowances for uncollectible tenant receivables and deferred rent receivables. Our determination of the adequacy of these allowances requires significant judgment and estimates about matters that are uncertain at the time the estimates are made, including the creditworthiness of specific tenants and general economic trends and conditions. For most of our tenants, our only security are their security deposits or letters of credit, and in some cases we do not require any security deposit or letter of credit. If our allowances are not sufficient to cover the unsecured losses from our tenants who ultimately fail to make contractual payments, our results in future periods would be adversely affected, and that impact could be material to our revenues and operating results. As of December 31, 2016, 2015 and 2014, the total of our allowances for tenant receivables and deferred rent receivables was $7.8 million, $8.3 million and $7.8 million, respectively. The impact of revising the allowances by 5% would result in a change to our revenues of $390 thousand, $414 thousand and $391 thousand during 2016, 2015 and 2014, respectively. See Note 2 to our consolidated financial statements included elsewhere in this Report for our disclosures regarding these allowances. Stock-Based Compensation We have awarded stock-based compensation to certain employees and members of our board of directors in the form of LTIP Units. We recognize the estimated fair value of the awards over the requisite vesting period. For LTIP Units, the fair value is based upon the market value of our common stock on the date of grant and a discount for post-vesting restrictions. Our estimate of the discount for post-vesting restrictions requires significant judgment. If our estimate of the discount rate is too high or too low it would result in the estimated fair value of the awards that we make being too low or too high, respectively, which would result in an under- or over-expense of stock based compensation, respectively, and this under- or over-expensing of stock based compensation could be material to our operating results. Total net stock-based compensation expense for equity grants was $17.4 million, $15.2 million and $13.7 million during 2016, 2015 and 2014, respectively. The impact of revising the discount rate by 5% would result in a change to our total net stock- based compensation expense of approximately $872 thousand, $762 thousand and $686 thousand during 2016, 2015 and 2014, respectively. See Note 12 to our consolidated financial statements included elsewhere in this Report for our stock-based compensation disclosures. Quantitative and Qualitative Disclosures about Market Risk We use derivative instruments to hedge interest rate risk related to our floating rate borrowings. However, our use of these instruments does expose us to credit risk from the potential inability of our counterparties to perform under the terms of those agreements. We attempt to minimize this credit risk by contracting with a variety of high-quality financial counterparties. See Notes 7 and 9 to our consolidated financial statements included elsewhere in this Report for more information regarding our debt and derivatives. At December 31, 2016, 6.6% of our debt was unhedged floating rate debt. A fifty-basis point change in the one month USD LIBOR interest rate would result in an annual impact to our earnings (through interest expense) of approximately $1.5 million. We calculate interest sensitivity by multiplying the amount of unhedged floating rate debt by fifty-basis points. 21 Consolidated Financial Statements Report of Management on Internal Control over Financial Reporting The management of Douglas Emmett, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our system of internal control is designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of our financial statements for external reporting purposes in accordance with US GAAP. Our management, including the undersigned CEO and CFO, assessed the effectiveness of our internal control over financial reporting as of December 31, 2016. In conducting its assessment, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission on Internal Control—Integrated Framework (2013 Framework). Based on this assessment, management concluded that, as of December 31, 2016, our internal control over financial reporting was effective based on those criteria. Management, including our CEO and CFO, does not expect that our disclosure controls and procedures, or our internal controls will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. The effectiveness of our internal control over financial reporting as of December 31, 2016, has been audited by Ernst & Young LLP, the independent registered public accounting firm that audited the consolidated financial statements included in this annual report, as stated in their report appearing on page 24, which expresses an unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2016. /s/ JORDAN L. KAPLAN Jordan L. Kaplan President and CEO /s/ MONA M. GISLER Mona M. Gisler CFO February 17, 2017 22 Report of Independent Registered Public Accounting Firm The Board of Directors and Shareholders of Douglas Emmett, Inc. We have audited the accompanying consolidated balance sheets of Douglas Emmett, Inc. (the “Company”) as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2016. These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Douglas Emmett, Inc. at December 31, 2016 and 2015, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Douglas Emmett, Inc.’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework), and our report dated February 17, 2017 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Los Angeles, California February 17, 2017 23 Report of Independent Registered Public Accounting Firm The Board of Directors and Shareholders of Douglas Emmett, Inc. We have audited Douglas Emmett, Inc.’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Douglas Emmett, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, Douglas Emmett, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Douglas Emmett, Inc. as of December 31, 2016 and 2015 and the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2016, and our report dated February 17, 2017 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Los Angeles, California February 17, 2017 24 Douglas Emmett, Inc. Consolidated Balance Sheets (In thousands, except share data) December 31, 2016 December 31, 2015 Assets Investment in real estate: Land Buildings and improvements Tenant improvements and lease intangibles Property under development Investment in real estate, gross Less: accumulated depreciation and amortization Investment in real estate, net Real estate held for sale, net Cash and cash equivalents Tenant receivables, net Deferred rent receivables, net Acquired lease intangible assets, net Interest rate contract assets Investment in unconsolidated real estate funds Other assets Total assets Liabilities Secured notes payable and revolving credit facility, net Interest payable, accounts payable and deferred revenue Security deposits Acquired lease intangible liabilities, net Interest rate contract liabilities Dividends payable Total liabilities $ $ $ Douglas Emmett, Inc. stockholders' equity: Equity Common Stock, $0.01 par value, 750,000,000 authorized, 151,530,210 and 146,919,187 outstanding at December 31, 2016 and December 31, 2015, respectively Additional paid-in capital Accumulated other comprehensive income (loss) Accumulated deficit Total Douglas Emmett, Inc. stockholders' equity Noncontrolling interests Total equity Total liabilities and equity $ 1,022,340 7,221,124 696,197 58,459 8,998,120 (1,789,678) 7,208,442 — 112,927 2,165 93,165 5,147 35,656 144,289 11,914 7,613,705 4,369,537 75,229 45,990 67,191 6,830 34,857 4,599,634 1,515 2,725,157 15,156 (820,685) 1,921,143 1,092,928 3,014,071 7,613,705 $ $ $ $ 897,916 5,644,546 696,647 26,900 7,266,009 (1,687,998) 5,578,011 42,943 101,798 1,907 79,837 4,484 4,830 164,631 87,720 6,066,161 3,611,276 57,417 38,683 28,605 16,310 32,322 3,784,613 1,469 2,706,753 (9,285) (772,726) 1,926,211 355,337 2,281,548 6,066,161 See accompanying notes to the consolidated financial statements. 25 Douglas Emmett, Inc. Consolidated Statements of Operations (In thousands, except per share data) Year Ended December 31, 2016 2015 2014 $ 498,214 $ 412,448 $ 396,524 46,847 100,572 645,633 89,996 6,922 96,918 43,139 85,388 540,975 87,907 6,892 94,799 44,461 78,420 519,405 74,289 5,828 80,117 742,551 635,774 599,522 Revenues Office rental Rental revenues Tenant recoveries Parking and other income Total office revenues Multifamily rental Rental revenues Parking and other income Total multifamily revenues Total revenues Operating Expenses Office expenses Multifamily expenses General and administrative Depreciation and amortization Total operating expenses Operating income Other income Other expenses 214,546 23,317 34,957 248,914 521,734 220,817 8,759 (6,609) 7,812 (146,148) (2,868) 81,763 14,327 96,090 (10,693) 85,397 186,556 23,862 30,496 205,333 446,247 189,527 15,228 (6,470) 7,694 (135,453) (1,771) 68,755 — 68,755 (10,371) 58,384 0.398 0.386 181,160 20,664 27,332 202,512 431,668 167,854 17,675 (7,095) 3,713 (128,507) (786) 52,854 — 52,854 (8,233) 44,621 0.309 0.300 $ $ $ $ $ $ Income, including depreciation, from unconsolidated real estate funds Interest expense Acquisition-related expenses Income before gains Gains on sales of investments in real estate Net income Less: Net income attributable to noncontrolling interests Net income attributable to common stockholders $ $ Net income attributable to common stockholders per share – basic Net income attributable to common stockholders per share – diluted $ 0.569 0.554 See accompanying notes to the consolidated financial statements. 26 Douglas Emmett, Inc. Consolidated Statements of Comprehensive Income (In thousands) Year Ended December 31, 2016 2015 2014 Net income $ 96,090 $ 68,755 $ Other comprehensive income: cash flow hedges Comprehensive income Less: comprehensive income attributable to noncontrolling interests Comprehensive income attributable to common stockholders $ 40,474 136,564 (26,726) 109,838 $ 24,850 93,605 (14,417) 79,188 $ 52,854 25,045 77,899 (12,813) 65,086 See accompanying notes to the consolidated financial statements. 27 Douglas Emmett, Inc. Consolidated Statements of Equity (In thousands, except share data) Shares of Common Stock Balance at beginning of period Conversion of OP Units Issuance of common stock Exercise of stock options Balance at end of period Common Stock Balance at beginning of period Conversion of OP Units Issuance of common stock Exercise of stock options Balance at end of period Additional Paid-in Capital Balance at beginning of period Conversion of OP Units Repurchase of OP Units Repurchase of stock options Issuance of common stock Exercise of stock options Balance at end of period Accumulated Other Comprehensive Income (Loss) Balance at beginning of period Cash flow hedge adjustment Balance at end of period Accumulated Deficit Balance at beginning of period Net income attributable to common stockholders Dividends Balance at end of period Noncontrolling Interests Balance at beginning of period Net income attributable to noncontrolling interests Cash flow hedge fair value adjustment Contributions Sales of equity interests in consolidated JVs Distributions Issuance of OP Units for cash Conversion of OP Units Repurchase of OP Units Stock-based compensation Balance at end of period Total Equity Balance at beginning of period Net income Cash flow hedge fair value adjustment Issuance of common stock Issuance of OP Units for cash Repurchase of OP Units Repurchase of stock options Exercise of stock options Contributions Sales of equity interests in consolidated JVs Dividends Distributions Stock-based compensation Balance at end of period Dividends declared per common share 28 Year Ended December 31, 2015 2014 2016 146,919 1,753 1,400 1,458 151,530 1,469 17 14 15 1,515 2,706,753 23,043 (498) — 49,365 (53,506) 2,725,157 (9,285) 24,441 15,156 (772,726) 85,397 (133,356) (820,685) 355,337 10,693 16,033 459,752 291,028 (35,478) — (23,060) (328) 18,951 1,092,928 2,281,548 96,090 40,474 49,379 — (826) — (53,491) 459,752 291,028 (133,356) (35,478) 18,951 3,014,071 0.89 144,869 1,776 — 274 146,919 1,449 17 — 3 1,469 2,678,798 23,686 — — — 4,269 2,706,753 (30,089) 20,804 (9,285) (706,700) 58,384 (124,410) (772,726) 370,266 10,371 4,046 — — (23,265) 1,000 (23,703) — 16,622 355,337 2,313,724 68,755 24,850 — 1,000 — — 4,272 — — (124,410) (23,265) 16,622 2,281,548 0.85 142,605 2,224 — 40 144,869 1,426 22 — 1 1,449 2,653,905 30,013 (1,197) (4,524) — 601 2,678,798 (50,554) 20,465 (30,089) (634,380) 44,621 (116,941) (706,700) 396,811 8,233 4,580 290 — (22,813) — (30,035) (1,629) 14,829 370,266 2,367,208 52,854 25,045 — — (2,826) (4,524) 602 290 — (116,941) (22,813) 14,829 2,313,724 0.81 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Douglas Emmett, Inc. Consolidated Statements of Cash Flows (In thousands) Net income Adjustments to reconcile net income to net cash provided by operating activities: $ 96,090 $ 68,755 $ 52,854 Operating Activities Year Ended December 31, 2015 2014 2016 Income, including depreciation, from unconsolidated real estate funds Gain from insurance recoveries for damage to real estate Gains on sales of investments in real estate Depreciation and amortization Net accretion of acquired lease intangibles Straight-line rent Increase (decrease) in the allowance for doubtful accounts Deferred loan costs amortized and written off Non-cash market value adjustments on interest rate contracts Amortization of stock-based compensation Operating distributions from unconsolidated real estate funds Change in working capital components: Tenant receivables Interest payable, accounts payable and deferred revenue Security deposits Other assets Net cash provided by operating activities Investing Activities Capital expenditures for improvements to real estate Capital expenditures for developments Insurance recoveries for damage to real estate Property acquisitions Deposits for property acquisitions Proceeds from sale of investments in real estate, net Note receivable Proceeds from repayment of note receivable Loans to related parties Loan payments received from related parties Contributions to unconsolidated real estate funds Capital distributions from unconsolidated real estate funds Net cash used in investing activities Financing Activities Proceeds from borrowings Repayment of borrowings Loan cost payments Contributions from noncontrolling interests in consolidated JVs Distributions paid to noncontrolling interests Dividends paid to common stockholders Proceeds from exercise of stock options Taxes paid on exercise of stock options Repurchase of stock options Repurchase of OP Units Proceeds from issuance of common stock, net Net cash provided by financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at year end 29 (7,812) — (14,327) 248,914 (18,198) (13,599) 422 8,927 (196) 17,448 2,668 (680) 10,712 7,307 1,773 339,449 (91,826) (27,720) — (1,619,759) — 348,203 — — — 763 — 24,170 (1,366,169) 2,109,500 (1,335,580) (24,586) 459,752 (35,478) (130,821) — (53,491) — (826) 49,379 1,037,849 (7,694) (82) — 205,333 (19,100) (4,840) 223 6,969 (66) 15,234 1,068 13 4,557 1,233 (176) 271,427 (75,541) (3,720) 82 (89,906) (75,000) — — 1,000 (2,000) 2,719 (11) 10,788 (231,589) 1,614,400 (1,415,528) (14,232) — (23,265) (122,510) 4,272 — — — — 43,137 11,129 101,798 112,927 $ 82,975 18,823 101,798 $ $ (3,713) (6,621) — 202,512 (16,084) (5,335) (461) 4,097 50 13,722 909 78 2,668 1,980 59 246,715 (84,444) (4,259) 6,506 (220,469) (2,500) — (27,500) — — 1,187 — 11,514 (319,965) 551,000 (356,850) (1,974) 290 (22,813) (115,039) 603 — (4,524) (2,826) — 47,867 (25,383) 44,206 18,823 Douglas Emmett, Inc. Consolidated Statements of Cash Flows (In thousands) Year Ended December 31, 2015 2014 2016 SUPPLEMENTAL CASH FLOWS INFORMATION OPERATING ACTIVITIES Cash paid for interest, net of capitalized interest Capitalized interest paid NON CASH INVESTING TRANSACTIONS Accrual (increase)/decrease for capital expenditures for improvements to real estate and developments Capitalized stock-based compensation for improvements to real estate and developments Write-off of fully depreciated and amortized building and tenant improvements and lease intangibles Write-off of fully amortized acquired lease intangible assets Write-off of fully accreted acquired lease intangible liabilities Settlement of note receivable in exchange for land and building acquired Issuance of OP Units in exchange for land and building acquired Application of deposit to purchase price of property NON CASH FINANCING TRANSACTIONS Gain (loss) from market value adjustments - consolidated derivatives Gain (loss) from market value adjustments - unconsolidated Funds' derivatives Dividends declared Common stock issued in exchange for OP Units $ $ $ $ $ $ $ $ $ $ $ $ $ $ 137,884 1,193 $ $ 128,178 940 (7,182) $ 1,504 1,503 $ 1,358 146,739 1,306 56,278 $ $ $ — $ — $ $ 75,000 33,115 220 49,576 26,500 1,000 2,500 $ $ $ $ $ $ $ $ $ $ 123,967 294 952 1,086 167,174 32,230 137,313 — — — 14,192 8 133,356 23,060 $ $ $ $ (11,549) $ (1,922) $ $ $ 124,410 23,703 (11,116) (1,767) 116,941 30,035 See accompanying notes to the consolidated financial statements. 30 Douglas Emmett, Inc. Notes to Consolidated Financial Statements 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. We focus on owning, acquiring, developing and managing a substantial 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. Through our interest in our Operating Partnership and its subsidiaries, our consolidated JVs and our unconsolidated Funds, we own or partially own, acquire, develop and manage real estate, consisting primarily of office and multifamily properties in Los Angeles, California and Honolulu, Hawaii. As of December 31, 2016, we owned a Consolidated Portfolio of (i) fifty-nine office properties (including ancillary retail space), which included seven office properties owned by our consolidated JVs, (ii) ten multifamily properties and (iii) fee interests in two parcels of land subject to ground leases from which we earn ground rent income. Alongside our Consolidated Portfolio, we also manage and own equity interests in our unconsolidated Funds, which at December 31, 2016, owned eight additional office properties, for a combined sixty-seven office properties in our Total Portfolio. The terms "us," "we" and "our" as used in these financial statements refer to Douglas Emmett, Inc. and its subsidiaries on a consolidated basis. Basis of Presentation The accompanying 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. Our Operating Partnership and consolidated JVs are VIEs and we are the primary beneficiary. As of December 31, 2016, the total consolidated assets, liabilities and equity of the VIEs was $7.61 billion (of which $7.21 billion related to investment in real estate), $4.60 billion and $3.01 billion (of which $1.09 billion related to noncontrolling interest), respectively. During the third quarter of 2016, we sold a property which was classified as real estate held for sale in our consolidated balance sheets. The carrying value in the comparable period has been reclassified to conform to the current period presentation. See Note 3 for information regarding the property that we sold. The accompanying 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. The accompanying financial statements include, in our opinion, all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial information set forth therein. Any reference to the number of properties, square footage, per square footage amounts, apartment units and geography, are unaudited and outside the scope of our independent registered public accounting firm’s audit of our financial statements in accordance with the standards of the PCAOB. 31 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with 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. Investment in Real Estate We account for acquisitions of properties as business combinations using the purchase method, and include the results of operations of the acquired properties in our results of operations from their respective dates of acquisition. We expense transaction costs related to acquisitions when they are incurred. We estimate the purchase price allocation of acquired properties, which is based upon our estimates of future cash flows and other valuation techniques, to allocate the purchase price among: (i) land, (ii) buildings and improvements, (iii) tenant improvements and identifiable intangible assets such as in-place at-market leases, and (iv) acquired above- and below-market ground and tenant leases (including for renewal options). We estimate the fair values of the tangible assets on an ‘‘as-if-vacant’’ basis. The estimated fair value of acquired in- place at-market leases are the estimated costs to lease the property to the occupancy level at the date of acquisition, including the fair value of leasing commissions and legal costs. We evaluate the time period over which we expect such occupancy level to be achieved and include an estimate of the net operating costs (primarily real estate taxes, insurance and utilities) incurred during the lease-up period. Above- and below-market ground and tenant leases are recorded as an asset or liability based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be paid or received pursuant to the in-place ground or tenant leases, respectively, and our estimate of fair market rental rates for the corresponding in-place leases, over the remaining non-cancelable term of the lease. Our initial valuations and allocations are subject to change until the allocation is finalized within 12 months after the acquisition date. See Note 3 for our property acquisition disclosures. Buildings and improvements are depreciated on a straight-line basis using an estimated life of forty years for buildings and fifteen years for improvements, and are carried on our balance sheet, offset by the related accumulated depreciation and any impairment charges, until they are sold. Tenant improvements are depreciated on a straight-line basis over the life of the related lease, with any remaining balance depreciated in the period of any early termination of that lease. Acquired in-place leases are amortized on a straight line basis over the weighted average remaining term of the acquired in-place leases, and are carried on our balance sheet, offset by the related accumulated amortization, until the related building is either sold or impaired. Leasing intangibles are amortized on a straight-line basis over the related lease term, with any remaining balance amortized in the period of any early termination of that lease. Acquired above- and below-market tenant leases are amortized/accreted on a straight line basis over the life of the related lease and recorded as either an increase (for below-market leases) or a decrease (for above-market leases) to rental revenue. Acquired above- and below-market ground leases, from which we earn ground rent income, are amortized/accreted on a straight line basis over the life of the related lease and recorded either as an increase (for below-market leases) or a decrease (for above-market leases) to rental revenue. Acquired above- and below-market ground leases, for which we incur ground rent expense, are accreted/ amortized over the life of the related lease and recorded either as an increase (for below-market leases) or a decrease (for above-market leases) to expense. When assets are sold or retired, their cost and related accumulated depreciation or amortization are removed from our balance sheet with the resulting gains or losses, if any, reflected in our results of operations for the respective period. Repairs and maintenance are recorded as expense when incurred. Properties are classified as held for sale in the consolidated balance sheets when they meet certain requirements, including the approval of the sale of the property, the marketing of the property for sale, and our expectation that the sale will likely occur within the next 12 months. Properties classified as held for sale are carried at the lower of their carrying value or fair value less costs to sell, and we also cease to depreciate the property. 32 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) Costs incurred during the period of construction of real estate are capitalized. Cost capitalization of development and redevelopment activities begins during the predevelopment period, which we define as the activities that are necessary to begin the development of the property. We cease capitalization upon substantial completion of the project, but no later than one year from cessation of major construction activity. We also cease capitalization when activities necessary to prepare the property for its intended use have been suspended. Capitalized costs are included in Property under development in our Consolidated Balance Sheets. Once major construction activity has ceased and the development or redevelopment property is in the lease-up phase, the capitalized costs are transferred to (i) Land, (ii) Building and improvements and (iii) Tenant improvements and lease intangibles on our Consolidated Balance Sheets as the historical cost of the property. During 2016, 2015 and 2014, we capitalized $31.6 million, $3.7 million and $4.3 million of costs related to our developments, respectively, which included $1.2 million, $940 thousand and $294 thousand of capitalized interest, respectively. Investment in Unconsolidated Real Estate Funds We manage and hold equity interests in two Funds: Fund X and Partnership X. As of December 31, 2016, we held a 68.61% interest in Fund X and 24.25% interest in Partnership X. We account for our investments in the Funds using the equity method because we have significant influence but not control over the Funds, and our Funds do not qualify as VIEs. Our investment balance includes our share of the net assets of the combined Funds, acquisition basis difference, additional basis for capital raising costs, our share of our Funds' accumulated other comprehensive income (loss) related to our Funds' derivatives, and notes receivable from our Funds. As of December 31, 2016 and 2015, the total basis difference was $2.9 million. See Note 5 for our Fund disclosures. Impairment of Long-Lived Assets We periodically assess whether there has been any impairment in the carrying value of our properties whenever events or changes in circumstances indicate that the carrying value of a property may not be recoverable. An impairment charge is recorded when events or change in circumstances indicate that a decline in the fair value below the carrying value has occurred and such decline is other-than-temporary. Recoverability of the carrying value of our properties is measured by a comparison of the carrying value to the undiscounted future cash flows expected to be generated by the property. If the carrying value exceeds the estimated undiscounted future cash flows, an impairment loss is recorded equal to the difference between the properties carrying value and its fair value based on the estimated discounted future cash flows. We also perform a similar periodic assessment for our investments in our Funds. Based upon such periodic assessments, no impairments occurred during 2016, 2015 or 2014. Cash and Cash Equivalents We consider short-term investments with maturities of three months or less when purchased to be cash equivalents. Revenue and Gain Recognition We recognize revenue when four basic criteria are met: (i) persuasive evidence of an arrangement exists, (ii) services are rendered, (iii) the fee is fixed and determinable and (iv) collectibility is reasonably assured. All of our tenant leases are classified as operating leases. For all lease terms exceeding one year, rental income is recognized on a straight-line basis over the term of the lease. Deferred rent receivables represent rental revenue recognized on a straight-line basis in excess of billed rents. Rental revenue from month-to-month leases or leases with no scheduled rent increases or other adjustments are recognized on a monthly basis when earned. Lease termination fees, which are included in rental revenues in the consolidated statements of operations, are recognized when the related lease is canceled and we have no continuing obligation to provide services to the former tenant. We recognized lease termination revenue of $2.4 million, $2.2 million, $2.6 million during 2016, 2015 and 2014, respectively. Tenant improvements constructed by us and reimbursed by tenants are recorded as our assets, and the related revenue, which is included in rental revenues in the consolidated statements of operations, is recognized over the related lease term. We recognized revenue for leasehold improvements of $2.6 million, $1.9 million, $1.7 million during 2016, 2015 and 2014, respectively. Estimated tenant recoveries for real estate taxes, common area maintenance and other recoverable operating expenses are recognized as revenue on a gross basis in the period that the recoverable expenses are incurred. Subsequent to year-end, we perform reconciliations on a lease-by-lease basis and bill or credit each tenant for any cumulative annual adjustments. 33 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) Recognition of gains on sales of investments in real estate requires that we measure the timing of a sale against various criteria related to the terms of the transaction, as well as any continuing involvement in the form of management or financial assistance associated with the property. If the sales criteria are not met, we defer gain recognition and account for the continued operations of the property by applying the finance, profit-sharing or leasing method. If the sales criteria have been met, we further analyze whether profit recognition is appropriate using the full accrual method. If the criteria to recognize profit using the full accrual method have not been met, we defer the gain and recognize it when the criteria are met or use the installment or cost recovery method as appropriate under the circumstances. See Note 3 for information regarding a property that we sold during 2016. Allowances for Tenant Receivables and Deferred Rent Receivables We carry tenant receivables and deferred rent receivables net of allowances. Tenant receivables consist primarily of amounts due for contractual lease payments and reimbursements of common area maintenance expenses, property taxes, and other costs recoverable from tenants. Deferred rent receivables represent the amount by which the cumulative straight-line rental revenue recorded to date exceeds cash rents billed to date under the lease agreement. We consider many factors when evaluating the level of reserves necessary, including evaluations of individual tenant receivables, historical loss activity, current economic conditions and other relevant factors. As of December 31, 2016 and 2015, we had tenant receivable allowances of $2.7 million and $2.2 million, respectively, and deferred rent receivable allowances of $5.1 million and $6.0 million, respectively. We generally require letters of credit or cash security deposits from our tenants. As of December 31, 2016 and 2015, we held $25.5 million and $14.7 million of letters of credit, and $46.0 million and $38.7 million of cash security deposits, respectively, as security from our tenants. The net impact on our results of operations from changes in our tenant receivable allowance, net of charges and recoveries, was a decrease of $422 thousand, a decrease of $223 thousand and an increase of $461 thousand during 2016, 2015 and 2014, respectively. The net impact on our results of operations from changes in our deferred rent receivable allowance, net of charges and recoveries, was an increase of $898 thousand, a decrease of $242 thousand and an increase of $2.4 million during 2016, 2015 and 2014, respectively. Insurance Recoveries Insurance recoveries related to property damage are recorded as other income when payment is either received or receipt is determined to be probable. Interest Income Interest income on our notes receivable is recognized over the life of the respective notes using the effective interest method and recognized on the accrual basis. Interest income is included in other income in the consolidated statements of operations. See Note 5 for details regarding our notes receivable. Loan Costs Loan costs incurred directly with the issuance of secured notes payable and revolving credit facilities are deferred and amortized to interest expense over the respective loan or credit facility term. Any unamortized amounts are written off upon early repayment of the secured notes payable, and the related cost and accumulated amortization are removed from our balance sheet. To the extent that a refinancing is considered an exchange of debt with the same lender, we account for loan costs based upon whether the old debt is determined to be modified or extinguished for accounting purposes. If the old debt is determined to be modified then we (i) continue to defer and amortize any unamortized deferred loan costs associated with the old debt at the time of the modification over the new term of the modified debt, (ii) defer and amortize the lender costs incurred in connection with the modification over the new term of the modified debt, and (iii) expense all other costs associated with the modification. If the old debt is determined to be extinguished then we (i) write off any unamortized deferred loan costs associated with the extinguished debt at the time of the extinguishment and remove the related cost and accumulated amortization from our balance sheet, (ii) expense all lender costs associated with the extinguishment, and (iii) defer and amortize all other costs incurred directly in connection with the extinguishment over the term of the new debt. 34 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) In circumstances where we modify or exchange our revolving credit facility with the same lender, we account for the loan costs based upon whether the borrowing capacity (defined as the product of the remaining term and the maximum available credit) of the new arrangement is (a) greater than or equal to the borrowing capacity of the old arrangement, or (b) less than the borrowing capacity of the old arrangement. If the borrowing capacity of the new arrangement is greater than or equal to the borrowing capacity of the old arrangement, then we (i) continue to defer and amortize the unamortized deferred loan costs from the old arrangement over the term of the new arrangement and (ii) defer all lender and other costs incurred directly in connection with the new arrangement over the term of the new arrangement. If the borrowing capacity of the new arrangement is less than the borrowing capacity of the old arrangement, then we (i) amortize any unamortized deferred loan costs at the time of the change related to the old arrangement in proportion to the decrease in the borrowing capacity of the old arrangement and (ii) defer all lender and other costs incurred directly in connection with the new arrangement over the term of the new arrangement. Deferred loan costs are presented in the balance sheet as a direct deduction from the carrying amount of our secured notes payable and revolving credit facility. All loan costs expensed and deferred loan costs amortized are included in interest expense in our consolidated statements of operations. See Note 7 for our deferred loan cost disclosures. Derivative Contracts We make use of interest rate swap and interest rate cap contracts to manage the risk associated with changes in interest rates on our floating-rate debt. 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. In limited instances, we make use of interest rate caps to limit our exposure to interest rate increases on our floating-rate debt. We do not speculate in derivatives and we do not make use of any other derivative instruments. When we enter into derivative agreements, we generally elect to designate them as cash flow hedges for accounting purposes. Changes in fair value of hedging instruments designated as cash flow hedges are recorded in accumulated other comprehensive income (loss) (AOCI), which is a component of equity outside of earnings, and any hedge ineffectiveness is recorded as interest expense. For our Funds' hedging instruments designated as cash flow hedges, we record our share of the changes in fair value of the hedging instrument in AOCI and our share of any hedge ineffectiveness is recorded in income, including depreciation, from unconsolidated real estate funds in our consolidated statements of operations. Amounts recorded in AOCI related to our designated hedges are reclassified to interest expense as interest payments are made on the hedged floating rate debt. Amounts reported in AOCI related to our Funds' hedges are reclassified to income, including depreciation, from unconsolidated real estate funds, as interest payments are made by our Funds on their hedged floating rate debt. Changes in fair value of hedging instruments not designated as cash flow hedges are recorded as interest expense. We present our derivatives on the balance sheet at fair value on a gross basis. Our share of the fair value of our Funds' derivatives is included in our investment in unconsolidated real estate funds on our consolidated balance sheet. See Note 9 for our derivative disclosures. Stock-Based Compensation We account for stock-based compensation, including stock options and LTIP Units, using the fair value method of accounting. The estimated fair value of stock options and LTIP Units is amortized over any vesting period. See Note 12 for our stock-based compensation disclosures. EPS We calculate basic EPS by dividing the net income attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. We calculate diluted EPS 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. Unvested LTIP Units contain nonforfeitable rights to dividends and we account for them as participating securities and include them in the computation of basic and diluted EPS using the two-class method. See Note 11 for our EPS disclosures. 35 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) Segment Information Segment information is prepared on the same basis that our management reviews information for operational decision- making purposes. We operate two business segments: the acquisition, development, ownership and management of office real estate, and the acquisition, development, ownership and management of multifamily real estate. The services for our office segment include primarily rental of office space and other tenant services, including parking and storage space rental. The services for our multifamily segment include primarily rental of apartments and other tenant services, including parking and storage space rental. See Note 14 for our segment disclosures. Income Taxes We have elected to be taxed as a REIT under the Code, commencing with our initial taxable year ended December 31, 2006. To qualify as a REIT, we are required (among other things) to distribute at least 90% of our REIT taxable income to our stockholders and meet various other requirements imposed by the Code relating to matters such as operating results, asset holdings, distribution levels and diversity of stock ownership. 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. If we fail to qualify as a REIT in any taxable year, and are unable to avail ourselves of certain savings provisions set forth in the Code, all of our taxable income would be subject to federal income tax at regular corporate rates, including any applicable alternative minimum tax. We have elected to treat two of our subsidiaries as TRS, which generally may engage in any business, including the provision of customary or non-customary services to our tenants. A TRS is treated as a regular corporation and is subject to federal income tax and applicable state income and franchise taxes at regular corporate rates. Neither of our TRS had any significant tax provisions or deferred income tax items for 2016, 2015 or 2014. Our subsidiaries (other than our TRS), including our Operating Partnership, are partnerships, disregarded entities, QRS or REITs, as applicable, for federal income tax purposes. Under applicable federal and state income tax rules, the allocated share of net income or loss from disregarded entities or flow-through entities is reportable in the income tax returns of the respective owners. Accordingly, no income tax provision is included in our consolidated financial statements. New Accounting Pronouncements Changes to GAAP are established by the FASB in the form of ASUs. We consider the applicability and impact of all ASUs. Recently Issued and Adopted Accounting Pronouncements In January 2015, the FASB issued ASU No. 2015-01, "Income Statement—Extraordinary and Unusual Items (Subtopic 225-20)", which eliminates the concept of extraordinary items from GAAP. The FASB issued this ASU as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The objective of the Simplification Initiative is to identify, evaluate, and improve areas of GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to the users of financial statements. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, which for us was the first quarter of 2016. We adopted the ASU in the first quarter of 2016 and it did not have a material impact on our financial position, results of operations or disclosures. In February 2015, the FASB issued ASU No. 2015-02, "Amendments to the Consolidation Analysis (Consolidation - Topic 810)", which provides guidance regarding the consolidation of certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, which for us was the first quarter of 2016. We adopted the ASU in the first quarter of 2016 and it did not have a material impact on our financial position, results of operations or disclosures. 36 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) In September 2015, the FASB issued ASU No. 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments", which amends "Business Combinations" (Topic 805). The ASU requires that an acquirer (i) recognize adjustments to provisional amounts from business combinations that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, (ii) record, in the same period’s financial statements, the effect on earnings, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date and (iii) disclosure of the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, which for us was the first quarter of 2016. We adopted the ASU in the first quarter of 2016 and it did not have a material impact on our financial position, results of operations or disclosures. In March 2016, the FASB issued ASU No. 2016-05, "Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships", which amends "Derivatives and Hedging" (Topic 815). The ASU provides guidance on the effect of derivative contract novations on existing hedge accounting relationships. The ASU clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815, does not in and of itself require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, which for us would be the first quarter of 2017, and early adoption is permitted. We adopted the ASU in the first quarter of 2016 and it did not have a material impact on our financial position, results of operations or disclosures. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, "Leases" (Topic 842). The main difference between previous GAAP and Topic 842 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under prevailing GAAP. The accounting applied by a lessor is largely unchanged from that applied under prevailing GAAP. For example, the vast majority of operating leases will remain classified as operating leases, and lessors will continue to recognize lease income for those leases on a straight-line basis over the lease term. Topic 842 requires an entity to separate the lease components from the non-lease components (for example, maintenance services or other activities that transfer a good or service to the customer) in a contract. Only the lease components must be accounted for in accordance with Topic 842. The consideration in the contract is allocated to the lease and non-lease components on a relative standalone price basis (for lessees) or in accordance with the allocation guidance in Topic 606 (for lessors). Topic 842 defines capitalizable initial direct costs of a lease as costs that would not have been incurred had the lease not been obtained. Costs to negotiate or arrange a lease that would have been incurred regardless of whether the lease was obtained, such as fixed employee salaries, are not initial direct costs, and may not be capitalized. The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those years, which for us would be the first quarter of 2019, and early adoption is permitted. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" (Topic 606), which provides guidance for the accounting of revenue from contracts with customers. The guidance supersedes the revenue recognition requirements in Topic 605, "Revenue Recognition", and most industry-specific guidance throughout the Industry Topics of the Codification. In March 2016, the FASB issued ASU No. 2016-08, "Principal versus Agent Considerations (Reporting Revenue Gross versus Net)" which amends "Revenue from Contracts with Customers" (Topic 606). The ASU clarifies the guidance for principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, "Identifying Performance Obligations and Licensing" which amends "Revenue from Contracts with Customers" (Topic 606). The ASU provides guidance for identifying performance obligations and licensing. In May 2016, the FASB issued ASU No. 2016-12, "Narrow-Scope Improvements and Practical Expedients" which amends "Revenue from Contracts with Customers" (Topic 606). The ASU provides guidance for a variety of revenue recognition related topics. In August 2015, the FASB issued ASU No. 2015-14, which defers the effective date of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) by one year. As a result, the various ASUs listed above are now effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, which for us is the first quarter of 2018. Earlier application is permitted for fiscal years beginning after December 15, 2016, including interim reporting periods within those years, which for us is the first quarter of 2017. The amendments in this ASU should be applied retrospectively. We are not planning on early adopting the ASU and we expect to use the modified retrospective method of adoption. We are currently evaluating the potential impact to our accounting, particularly with respect to our tenant recovery revenues, and whether such changes will be material to our future results of operations and financial position. As noted above, ASU 2016-02 "Leases" requires that non-lease components such as tenant recovery revenues be accounted for in accordance with ASU 2014-09, which means that the classification and timing of our tenant recovery revenues could be impacted. 37 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments" which amends "Financial Instruments-Credit Losses" (Topic 326). The ASU provides guidance for measuring credit losses on financial instruments. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those years, which for us would be the first quarter of 2020, and early adoption is permitted commencing the first quarter of 2019. The amendments in this ASU should be applied retrospectively. We are currently evaluating the impact of this ASU. In August 2016, the FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments" which amends "Statement of Cash Flows" (Topic 230). The ASU provides guidance regarding the presentation of certain types of transactions in the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those years, which for us would be the first quarter of 2018, and early adoption is permitted. The amendments in this ASU should be applied retrospectively. We do not expect the ASU to have a material impact on our statement of cash flows. In October 2016, the FASB issued ASU No. 2016-17, "Interests Held Through Related Parties That Are Under Common Control". The ASU provides guidance regarding consolidation of VIE's. The ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those years, which for us would be the first quarter of 2017. The amendments in this ASU should be applied retrospectively. We do not expect the ASU to have a material impact on our financial position, results of operations or disclosures. In November 2016, the FASB issued ASU No. 2016-18, "Restricted Cash". The ASU provides guidance regarding the presentation of restricted cash in the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those years, which for us would be the first quarter of 2018. The amendments in this ASU should be applied retrospectively. We do not expect the ASU to have a material impact on our statement of cash flows. In January 2017, the FASB issued ASU No. 2017-01, "Clarifying the Definition of a Business". The ASU provides guidance regarding the definition of a business with the objective of providing guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those years, which for us would be the first quarter of 2018. The ASU should be applied prospectively and early adoption is permitted. The ASU will impact our future results of operations and cash flows because we expect that our property acquisitions will be accounted for as asset purchases, and the related acquisition expenses capitalized as part of the respective asset. We historically accounted for our property acquisitions as business acquisitions and expensed the related acquisition expenses as incurred. We are currently evaluating the impact of this ASU. The FASB has not issued any other ASUs during 2016 and 2017 that we expect to be applicable and have a material impact on our future financial position, results of operations, cash flows or disclosures. 38 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 3. Investment in Real Estate The results of operations from our acquisitions are included in our consolidated statements of operations after the respective acquisition dates. The purchase accounting is subject to adjustment within twelve months of the acquisition date. 2016 Acquisitions Westwood Portfolio Acquisition On February 29, 2016 (Acquisition Date), a consolidated JV which we manage and in which we own an equity interest acquired four Class A office properties located in Westwood, California (Westwood Portfolio) for a contract price of $1.34 billion. As of the Acquisition Date, we had contributed sixty-percent of the equity to the JV, which was subsequently reduced to thirty- percent on May 31, 2016 (Sell Down Date) when we sold half of our ownership interest to a third party investor. The table below (in thousands) summarizes our purchase accounting and funding sources for the acquisition: Sources and Uses of Funds Actual at Closing(1) Pro Forma Sell Down Adjustments (2) Pro Forma Building square footage 1,725 1,725 Uses of funds - Investment in real estate: Land Buildings and improvements Tenant improvements and lease intangibles Acquired above and below-market leases, net(3) Net assets and liabilities acquired(4) Source of funds: Cash on hand(5) Credit facility(6) Non-recourse term loan, net(7) Noncontrolling interests Total source of funds $ $ $ 94,996 1,236,786 50,439 (49,708) 1,332,513 $ $ 94,996 1,236,786 50,439 (49,708) 1,332,513 153,745 $ — $ 290,000 568,768 320,000 (240,000) — 240,000 153,745 50,000 568,768 560,000 $ 1,332,513 $ — $ 1,332,513 ________________________________________________ (1) Reflects the purchase of the Westwood Portfolio on the Acquisition Date when we contributed sixty-percent of the equity to the consolidated JV. (2) Reflects our sale of thirty-percent of the equity in the JV on the Sell Down Date, presented as of the Acquisition Date, treated as in-substance real estate, which reduced our ownership interest in the JV to thirty-percent. We sold the interest for the $240.0 million we contributed plus an additional $1.1 million to compensate us for our costs of holding the investment. We recognized a gain on the sale of $1.1 million, which is included in Gains on sales of investments in real estate in our consolidated statement of operations. We used the proceeds from the sale to pay down the balance owed on our revolving credit facility. (3) As of the Acquisition Date, the weighted average remaining life of the acquired above-and below-market leases was approximately 4.4 years. The difference between the contract and purchase price related to credits received for prorations and similar matters. (4) (5) Cash paid included a $75.0 million deposit paid before December 31, 2015, which is included in Other assets in the consolidated balance sheets as of December 31, 2015, $67.5 million paid at closing, and $11.2 million spent on loan costs in connection with securing the $580.0 million term loan. (6) Reflects borrowings using the Company's credit facility, which bears interest at LIBOR + 1.40%. (7) Reflects 100% (not the Company's pro rata share) of a $580.0 million interest-only non-recourse loan, net of deferred loan costs of $11.2 million incurred to secure the loan. The loan has a seven-year term and is secured by the Westwood Portfolio. Interest on the loan is floating at LIBOR + 1.40%, which has been effectively fixed at 2.37% per annum for five years through interest rate swaps. See Note 7 for information regarding our consolidated debt. 39 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) The table below (in thousands) presents the revenues and net income attributable to common stockholders from the Westwood Portfolio included in the consolidated statement of operations for the year ended December 31, 2016: Total office revenues Net income attributable to common stockholders(1) $ $ 80,464 2,998 ______________________________________________________ (1) Excluding transaction costs, net income attributable to common stockholders was $5.0 million. The table below (in thousands, except per share information) presents the historical results of Douglas Emmett, Inc. and the Westwood Portfolio on a combined basis as if the acquisition was completed on January 1, 2015, based on our thirty-percent ownership interest and includes adjustments that give effect to events that are (i) directly attributable to the acquisition, (ii) expected to have a continuing impact on the Company, and (iii) are factually supportable. The pro forma reflects the hypothetical impact of the acquisition on the Company and does not purport to represent what the Company’s results of operations would have been had the acquisition occurred on January 1, 2015, or project the results of operations for any future period. The information does not reflect cost savings or operating synergies that may result from the acquisition or the costs to achieve any such potential cost savings or operating synergies. Transaction costs related to the acquisition have been excluded. Pro forma revenues Pro forma net income attributable to common stockholders Pro forma net income attributable to common stockholders per share – basic Pro forma net income attributable to common stockholders per share – diluted Year Ended December 31, 2016 2015 $ $ $ $ 755,878 84,319 0.562 0.547 $ $ $ $ 724,596 59,374 0.404 0.392 Other 2016 Acquisitions During 2016, a consolidated JV which we manage and in which we own an equity interest acquired two properties: (i) on July 21, 2016, the JV acquired a Class A office property located in Brentwood, California (12100 Wilshire) for a contract price of $225.0 million, and (ii) on September 27, 2016 the JV acquired a Class A office property located in Santa Monica, California (233 Wilshire) for a contract price of $139.5 million. As of July 21, 2016, we had contributed fifty-five percent of the equity to the JV, which was reduced to twenty-percent when we sold thirty-five percent to a third party investor for $51.6 million, which included $194 thousand to compensate us for our costs of holding the investment. We recognized a gain of $587 thousand on the sale, which is included in Gains on sales of investments in real estate in our consolidated statements of operations. In addition to purchasing a thirty-five percent interest from us, investors contributed $139.8 million to the JV. As of December 31, 2016, including the effect of the sale of our interest, investors hold an aggregate of eighty-percent of the capital interests in the JV. As part of the acquisitions, the JV borrowed a total of $146.0 million under a three year, interest only, non-recourse loan bearing interest at LIBOR + 1.55%. The loan is secured by the acquired properties. See Note 7. The table below (in thousands) summarizes our purchase accounting for the acquisitions. The differences between the contracts and respective purchase prices relate to credits received for prorations and similar matters: Building square footage Investment in real estate: 233 Wilshire 12100 Wilshire 129 365 Land Buildings and improvements Tenant improvements and lease intangibles Acquired above and below-market leases, net Net assets and liabilities acquired $ $ 9,263 126,938 3,488 (1,838) 137,851 $ $ 20,164 199,698 9,057 (4,523) 224,396 40 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 2016 Disposition During 2016, we sold a 168,000 square foot Class A office property located in Sherman Oaks, California with a carrying value of $42.8 million for a contract price of $56.7 million, and we incurred transaction costs of $1.2 million resulting in a net gain of $12.7 million. The gain is included in Gains on sales of investments in real estate in our consolidated statements of operations. The property was classified as real estate held for sale in our consolidated balance sheets before it was sold. 2015 Acquisitions During 2015, we closed two acquisitions: (i) on February 12, 2015, we acquired the fee interest in the land (Harbor Court Land) under one of our office buildings for $27.5 million, and (ii) on March 5, 2015, we purchased a Class A office property (First Financial Plaza), located in Encino, California, for $92.4 million. We recognized $6.6 million of accretion of an above-market ground lease related to the purchase of the Harbor Court Land, which is included in Other income in the consolidated statement of operations. See Note 4. The table below (in thousands) summarizes our purchase accounting for the acquisitions: Harbor Court Land First Financial Plaza Building square footage (if applicable) N/A 227 Investment in real estate: Land Buildings and improvements Tenant improvements and lease intangibles Acquired above and below-market leases, net Net assets and liabilities acquired $ $ 12,060 $ 15,440 — — 27,500 $ 12,092 75,039 6,065 (790) 92,406 2014 Acquisitions During 2014, we closed two acquisitions: (i) on October 16, 2014, we purchased a Class A office property located adjacent to Beverly Hills (Carthay Campus) for $74.5 million, and (ii) on December 30, 2014, we purchased a multifamily property in Honolulu, Hawaii (Waena) for $146.0 million. The table below (in thousands, except apartment units) summarizes our purchase accounting for the acquisitions: Carthay Campus Waena Building square footage Apartment units Investment in real estate: Land Buildings and improvements Tenant improvements and lease intangibles Acquired above and below-market leases, net Net assets and liabilities acquired $ $ 216 N/A 6,595 64,511 5,943 (2,580) 74,469 $ $ N/A 468 26,864 117,541 1,732 (137) 146,000 41 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 4. Acquired Lease Intangibles Summary of our Acquired Lease Intangibles The table below (in thousands) summarizes our above/below-market leases: December 31, 2016 December 31, 2015 Above-market tenant leases Accumulated amortization - above-market tenant leases Below-market ground leases Accumulated amortization - below-market ground leases Acquired lease intangible assets, net Below-market tenant leases Accumulated accretion - below-market tenant leases Above-market ground leases Accumulated accretion - above-market ground leases Acquired lease intangible liabilities, net $ $ $ $ 5,110 (2,379) 3,198 (782) 5,147 104,925 (41,241) 16,200 (12,693) 67,191 $ $ $ $ 4,661 (2,670) 3,198 (705) 4,484 103,327 (78,280) 4,017 (459) 28,605 Impact on the Consolidated Statements of Operations The table below (in thousands) summarizes the net amortization/accretion related to our above/below-market leases: Net accretion of above/below-market tenant leases(1) Amortization of above-market ground leases(2) Accretion of above-market ground lease(3) Accretion of an above-market ground lease(4) Total Year Ended December 31, 2015 2014 2016 $ $ 18,165 $ 12,467 $ 13,752 (17) 50 — (17) 50 6,600 18,198 $ 19,100 $ (17) 50 2,299 16,084 _______________________________________________________________________________________ Recorded as a net increase to office and multifamily rental revenues. (1) (2) Ground leases from which we earn ground rent income. Recorded as a decrease to office parking and other income. (3) Ground lease from which we incur ground rent expense. Recorded as a decrease to office expense. (4) Ground lease from which we incurred ground rent expense. Recorded as an increase to other income. During 2015, we acquired the fee interest in the land (Harbor Court Land). See Note 3. The table below presents (in thousands) the estimated net accretion of above- and below-market tenant and ground leases at December 31, 2016: Year ending December 31: Net increase to revenues Decrease to expenses Total 2017 2018 2019 2020 2021 Thereafter Total $ $ $ $ 14,756 12,835 11,388 8,764 4,811 5,983 58,537 42 50 50 50 50 50 3,257 3,507 $ $ 14,806 12,885 11,438 8,814 4,861 9,240 62,044 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 5. Investments in Unconsolidated Real Estate Funds Description of our Funds We manage and own equity interest in two unconsolidated Funds, Fund X and Partnership X, through which we and investors own eight office properties totaling 1.8 million square feet. At December 31, 2016, we held equity interests of 68.61% of Fund X and 24.25% of Partnership X. Our Funds pay us fees and reimburse us for certain expenses related to property management and other services we provide. 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 (in thousands) cash distributions received from our Funds: Year Ended December 31, 2016 2015 2014 Operating distributions received Capital distributions received Total distributions received $ $ 2,668 24,170 26,838 $ $ 1,068 10,788 11,856 $ $ 909 11,514 12,423 Notes receivable In April 2013, we loaned $2.9 million to a related party investor in connection with a capital call made by Fund X, and in November 2015, we loaned $500 thousand to Partnership X to fund working capital. Both loans carried interest at LIBOR plus 2.5% per annum and were fully repaid by the first quarter of 2016. The outstanding balance of the Fund X and Partnership X loans at December 31, 2015 of $263 thousand and $500 thousand, respectively, were included in our investment in our unconsolidated Funds in our consolidated balance sheets. The interest income recognized on these notes receivable was included in other income in our consolidated statements of operations. See Note 13 for our fair value disclosures. Summarized Financial Information for our Funds The accounting policies of the Funds are consistent with ours. The tables below present (in thousands) selected financial information for the Funds on a combined basis. The amounts presented represent 100% (not our pro-rata share) of amounts related to the Funds, and are based upon historical acquired book value: Total assets Total liabilities Total equity December 31, 2016 December 31, 2015 $ $ $ 689,991 448,522 241,469 $ $ $ 691,543 389,372 302,171 Year Ended December 31, 2015 2014 2016 Total revenues Operating income Net income $ $ $ 73,171 19,542 8,278 $ $ $ 69,702 17,866 6,323 $ $ $ 66,234 11,737 254 43 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 6. Other Assets Other assets consisted of the following (in thousands) at December 31: December 31, 2016 December 31, 2015 Restricted cash Prepaid expenses Other indefinite-lived intangible Deposits in escrow(1) Furniture, fixtures and equipment, net Other Total other assets $ $ 121 $ 6,779 1,988 — 1,093 1,933 11,914 $ 194 6,720 1,988 75,000 1,448 2,370 87,720 ___________________________________________________ (1) At December 31, 2015, deposits in escrow included a $75.0 million deposit in connection with the purchase of the Westwood Portfolio. See Note 3. 44 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 7. Secured Notes Payable and Revolving Credit Facility, Net The following table summarizes (in thousands) our secured notes payable and revolving credit facility: Maturity Date (1) Principal Balance as of December 31, 2016 Principal Balance as of December 31, 2015 Variable Interest Rate Fixed Interest Rate (2) Swap Maturity Date Description Wholly Owned Subsidiaries Term Loan(3) Term Loan(3) Term Loan(3) Term Loan Term Loan (4) Term Loan (4) Term Loan (5) Fannie Mae Loan Term Loan (6) Fannie Mae Loans Term Loan(7) Term Loan(7) Term Loan(7) Term Loan(7) Term Loan(7) Term Loan(7) Fannie Mae Loan(7) Fannie Mae Loan(7) Revolving credit facility (8) Total Wholly Owned Debt Consolidated JVs Term Loan(3) Term Loan Term Loan(7) Total Consolidated Debt(9)(10) Deferred loan costs, net (11) Total Consolidated Debt, net 2/28/2018 8/5/2018 2/1/2019 6/5/2019 10/1/2019 3/1/2020 11/1/2020 4/15/2022 7/27/2022 11/1/2022 6/23/2023 12/23/2023 1/1/2024 4/1/2025 12/1/2025 8/21/2020 7/21/2019 2/28/2023 $ — $ 20,000 LIBOR + 1.45% — — 1,000 349,933 149,911 285,000 145,000 345,759 388,080 340,000 180,000 400,000 360,000 220,000 300,000 102,400 115,000 — 3,682,083 256,140 LIBOR + 2.00% 530,000 LIBOR + 1.70% — 355,000 152,733 N/A N/A N/A 285,000 145,000 LIBOR + 1.25% N/A 349,070 N/A 388,080 LIBOR + 1.65% 340,000 LIBOR + 1.40% 180,000 LIBOR + 1.45% 400,000 LIBOR + 1.35% — LIBOR + 1.55% — LIBOR + 1.70% — LIBOR + 1.55% 102,400 LIBOR + 1.25% 115,000 LIBOR + 1.25% — LIBOR + 1.40% 3,618,423 — 15,740 LIBOR + 1.60% 3.00% 4.14% 4.00% 3.85% N/A 4.46% 3.65% 2.77% 3.06% 2.64% 2.57% 3.62% 3.46% 2.84% 2.76% N/A -- -- -- -- -- -- 11/1/2017 4/1/2020 7/1/2020 11/1/2020 7/1/2021 12/23/2021 1/1/2022 3/1/2020 12/1/2020 -- 146,000 580,000 4,408,083 (38,546) 4,369,537 $ $ — LIBOR + 1.55% N/A -- — LIBOR + 1.40% 2.37% 3/1/2021 3,634,163 (22,887) 3,611,276 _________________________________________________________________________________ At December 31, 2016, the weighted average remaining life, including extension options, of our total consolidated term debt (excluding our revolving credit facility) was 4.9 years. For the $4.12 billion of term debt on which the interest rate was fixed under the terms of the loan or a swap, the weighted average (i) remaining life was 5.0 years, (ii) remaining period during which interest was fixed was 3.2 years, (iii) annual interest rate was 3.28% and (iv) effective interest rate was 3.43% (including the non-cash amortization of deferred loan costs). Except as otherwise noted below, each loan (including our revolving credit facility) is secured by one or more separate collateral pools consisting of one or more properties, requiring monthly payments of interest only, with the outstanding principal due upon maturity. The following table summarizes (in thousands) our fixed and floating rate debt: Description Aggregate swapped to fixed rate loans Aggregate fixed rate loans Aggregate floating rate loans Total Debt Principal Balance as of December 31, 2016 Principal Balance as of December 31, 2015 2,985,480 1,131,603 291,000 4,408,083 $ $ 2,492,360 1,141,803 — 3,634,163 $ $ 45 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) (1) Maturity dates include the effect of extension options. (2) Includes the effect of interest rate swaps and excludes the effect of prepaid loan fees. See Note 9 for details of our interest rate swaps. (3) At December 31, 2016, these loans have been paid off. (4) Requires monthly payments of principal and interest. Principal amortization is based upon a 30-year amortization schedule. (5) Interest only until February 2017, with principal amortization thereafter based upon a 30-year amortization schedule. (6) Interest is fixed until March 2018. Requires monthly payments of principal and interest. Principal amortization is based upon a 30- year amortization schedule. (7) Loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor. (8) $400.0 million revolving credit facility. Unused commitment fees range from 0.15% to 0.20%. (9) See Note 13 for our fair value disclosures. (10) As of December 31, 2016, the minimum future principal payments due on our secured notes payable and revolving credit facility, excluding any maturity extension options, were as follows (in thousands): Twelve months ending December 31: 2017 2018 2019 2020 2021 Thereafter Total future principal payments $ $ 20,410 691,873 710,319 683,080 — 2,302,401 4,408,083 (11) Deferred loan costs are net of accumulated amortization of $15.4 million and $15.2 million at December 31, 2016 and December 31, 2015, respectively. The table below (in thousands) sets forth loan costs that were expensed and deferred loan costs which were amortized, both of which are included in Interest Expense in our consolidated statement of operations. Year Ended December 31, 2015 2014 2016 Loan costs expensed Deferred loan cost amortization Total $ $ 1,441 7,608 9,049 $ $ 278 6,969 7,247 $ $ — 4,097 4,097 8. Interest Payable, Accounts Payable and Deferred Revenue Interest payable, accounts payable and deferred revenue consisted of the following (in thousands) as of December 31: Interest payable Accounts payable and accrued liabilities Deferred revenue $ Total interest payable, accounts payable and deferred revenue $ 9,561 36,880 28,788 75,229 $ $ 10,028 23,716 23,673 57,417 December 31, 2016 December 31, 2015 46 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 9. Derivative Contracts Derivative Summary As of December 31, 2016, all of our interest rate swaps, which include the interest rate swaps of our consolidated JVs and our unconsolidated Funds, were designated as cash flow hedges: Number of Interest Rate Swaps Notional (in thousands) Consolidated derivatives(1) Unconsolidated Funds' derivatives(2) 22 2 $ $ 2,985,480 435,000 ___________________________________________________ (1) (2) The notional amount includes 100%, not our pro-rata share, of our consolidated JVs derivatives. The notional amount includes 100%, not our pro-rata share, of our unconsolidated Funds derivatives. Credit-risk-related Contingent Features We have agreements with each of our interest rate swap counterparties that contain a provision under which we could also be declared in default on our derivative obligations if we default on the underlying indebtedness that we are hedging. As of December 31, 2016, there have been no events of default with respect to our interest rate swaps or our unconsolidated Funds' interest rate swaps. We do not post collateral for our swaps in a liability position. The fair value of our interest rate swaps in a liability position were as follows (in thousands): Fair value of derivatives in a liability position(1) December 31, 2016 December 31, 2015 Consolidated derivatives(2) Unconsolidated Funds' derivatives(3) $ $ 7,689 $ — $ 19,047 — __________________________________________________________________________________ (1) (2) Includes accrued interest and excludes adjustments for credit risk. Includes 100%, not our pro-rata share, of our consolidated JVs derivatives. (3) Our unconsolidated Funds did not have any derivatives in a liability position. Counterparty Credit Risk We are also subject to credit risk from the counterparties on our interest rate swap and interest rate cap contracts. We seek to minimize our credit risk by entering into agreements with a variety of high quality counterparties with investment grade ratings. We do not receive collateral for our swaps in an asset position. The fair value of our interest rate swaps in an asset position were as follows (in thousands): Fair value of derivatives in an asset position(1) December 31, 2016 December 31, 2015 Consolidated derivatives(2) Unconsolidated Funds' derivatives(3) $ $ 35,144 3,724 $ $ 4,220 737 ___________________________________________________ (1) (2) (3) Includes accrued interest and excludes adjustments for credit risk. Includes 100%, not our pro-rata share, of our consolidated JVs derivatives. Includes 100%, not our pro-rata share, of our unconsolidated Funds derivatives. 47 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) Impact of Hedges on AOCI and Consolidated Statements of Operations The table below presents (in thousands) the effect of derivative instruments on our AOCI and statements of operations: Derivatives Designated as Cash Flow Hedges: Year Ended December 31, 2016 2015 2014 Gain (loss) recorded in AOCI (effective portion) - Consolidated derivatives(1)(5) Gain (loss) recorded in AOCI (effective portion) - unconsolidated Funds' derivatives(2)(5) $ Loss reclassified from AOCI (effective portion) - Consolidated derivatives(3)(5) Loss reclassified from AOCI (effective portion) - unconsolidated Funds' derivatives(4)(5) Loss reclassified from AOCI (ineffective portion) - Consolidated derivatives(5) Gain recorded (ineffective portion) - Consolidated derivatives(6) $ 14,192 $ (11,549) $ (11,116) $ (1,922) $ (1,767) $ (25,917) $ (37,390) $ (36,873) (931) $ (1,005) $ (50) $ — (357) $ — $ — $ 196 66 $ $ 8 Derivatives Not Designated as Cash Flow Hedges: Gain (loss) recorded as interest expense(7) __________________________________________________ $ — $ — $ — (1) (2) (3) (4) (5) Represents the change in fair value of interest rate swaps which does not impact the statement of operations. Represents our share of the change in fair value of our unconsolidated Funds' interest rate swaps which does not impact the statement of operations. Reclassified from AOCI as an increase to Interest expense. Reclassified from AOCI as a decrease to Income, including depreciation, from unconsolidated real estate funds (our share). See the reconciliation of our AOCI in Note 10. (6) Gain is recorded as a reduction to interest expense. (7) We do not have any derivatives that are not designated as cash flow hedges. Future Reclassifications from AOCI At December 31, 2016, our estimate of the AOCI related to derivatives designated as cash flow hedges, that will be reclassified to earnings during the next twelve months as swap interest payments are made, is presented in the table below (in thousands): Consolidated derivatives(1) Unconsolidated Funds' derivatives(2) $ $ 13,694 (160) ________________________________________ (1) Reclassified as an increase to Interest expense. (2) Reclassified as an increase to Income, including depreciation, from unconsolidated real estate funds (our share). 48 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 10. Equity Equity Transactions During 2016, we (i) acquired 1.8 million OP Units in exchange for issuing an equal number of shares of our common stock to the holders of OP Units, (ii) acquired 25 thousand OP Units for $826 thousand in cash, at an average price of $33.05 per OP Unit, (iii) issued 1.5 million shares of our common stock for the exercise of 7.6 million stock options on a net settlement basis (net of the exercise price and related taxes), (iv) sold 1.4 million shares of our common stock in open market transactions under our ATM program for net proceeds of $49.4 million, after commissions and other expenses. We also created two JVs to acquire various properties: (i) in the JV which acquired the Westwood Portfolio, investors acquired an aggregate of seventy-percent of the capital interests, as a result of contributing $320.0 million directly to the JV for a forty-percent interest and acquiring a thirty-percent interest from us for $241.1 million, (resulting in a gain of $1.1 million), and (ii) in the JV which acquired properties during the third quarter, investors acquired an aggregate of eighty-percent of the capital interests, as a result of contributing $139.8 million directly to the JV and acquiring a thirty-five-percent interest from us for $51.6 million (resulting in a gain of $587 thousand). See Note 3 for more information regarding these JVs. During 2015, we (i) acquired 1.8 million OP Units in exchange for issuing to the holders of the OP Units an equal number of shares of our common stock, (ii) issued 274 thousand shares of our common stock for the excise of options for net proceeds of $4.3 million at an average price of $15.58 per share and (iii) issued 34 thousand OP Units valued at $1 million in connection with the acquisition of land (Harbor Court Land) under one of our office buildings. See Note 3. During 2014, we (i) acquired 2.2 million OP Units in exchange for issuing to the holders of the OP Units an equal number of shares of our common stock, (ii) acquired 120 thousand OP Units for cash for a total purchase price of $2.8 million at an average price of $23.56 per unit, (iii) cash-settled options covering 691 thousand shares of our common stock for a total cost of $4.5 million at an average price of $6.55 per option and (iv) issued 40 thousand shares of our common stock for the exercise of options for net proceeds of $603 thousand, for an average price of $15.05 per share. Noncontrolling Interests Our noncontrolling interests consist of interests in our Operating Partnership and consolidated JVs which are not owned by us. Noncontrolling interests in our Operating Partnership consist of OP Units and fully-vested LTIP Units, and represented approximately 14% of our Operating Partnership's total interests as of December 31, 2016 when we and our Operating Partnership had 151.5 million shares of common stock and 25.7 million OP Units and fully-vested LTIP Units outstanding. A share of our common stock, an OP Unit and an LTIP Unit (once vested and booked up) have essentially the same economic characteristics, sharing equally in the distributions from our Operating Partnership. Investors who own OP Units have the right to cause our Operating Partnership to redeem their OP Units for an amount of cash per unit equal to the market value of one share of our common stock at the date of redemption, or, at our election, exchange their OP Units for shares of our common stock on a one- for-one basis. LTIP Units have been granted to our key employees and non-employee directors as part of their compensation. These awards generally vest over the service period and once vested can generally be converted to OP Units. 49 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) Changes in our Ownership Interest in our Operating Partnership The table below presents (in thousands) the effect on our equity from net income attributable to common stockholders changes in our ownership interest in our Operating Partnership for the year ended December 31: 2016 2015 2014 Net income attributable to common stockholders $ 85,397 $ 58,384 $ 44,621 Transfers from noncontrolling interests: Exchange of OP Units with noncontrolling interests Repurchase of OP Units from noncontrolling interests Net transfers from noncontrolling interests 23,060 (498) 22,562 23,703 — 23,703 30,035 (1,197) 28,838 Change from net income attributable to common stockholders and transfers from noncontrolling interests $ 107,959 $ 82,087 $ 73,459 AOCI Reconciliation(1) The table below presents (in thousands) a reconciliation of our AOCI, which consists solely of adjustments related to derivatives designated as cash flow hedges for the year ended December 31: Beginning balance Other comprehensive income (loss) before reclassifications - our derivatives Other comprehensive income (loss) before reclassifications - our Fund's derivatives Reclassifications from AOCI - our derivatives(2) Reclassifications from AOCI - our Fund's derivatives(3) Net current period OCI Less: OCI attributable to noncontrolling interests OCI attributable to common stockholders Ending balance __________________________________________________ 2016 2015 2014 $ (9,285) $ (30,089) $ (50,554) 14,192 8 25,917 357 40,474 (16,033) 24,441 (11,549) (1,922) 37,390 931 24,850 (4,046) 20,804 (11,116) (1,767) 36,923 1,005 25,045 (4,580) 20,465 $ 15,156 $ (9,285) $ (30,089) (1) (2) (3) See Note 9 for the details of our derivatives and Note 13 for our derivative fair value disclosures. Reclassification as an increase to Interest expense. Reclassification as a decrease to Income, including depreciation, from unconsolidated real estate funds. Dividends (unaudited) Our common stock dividends paid during 2016 are classified for federal income tax purposes as follows: Record Date Paid Date Dividend Per Share Ordinary Income Capital Gain Return of Capital 12/30/2015 3/31/2016 6/30/2016 9/30/2016 1/15/2016 4/15/2016 7/15/2016 10/14/2016 Total $ $ 0.22 0.22 0.22 0.22 0.88 $ $ 0.0286 0.0286 0.0286 0.0286 0.1144 $ $ 0.0022 0.0022 0.0022 0.0022 0.0088 $ $ 0.1892 0.1892 0.1892 0.1892 0.7568 50 11. EPS Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) The table below presents the calculation of basic and diluted EPS: Numerator (in thousands): Net income attributable to common stockholders Allocation to participating securities: Unvested LTIP Units Numerator for basic and diluted net income attributable to common stockholders Denominator (in thousands): Weighted average shares of common stock outstanding - basic Effect of dilutive securities: Stock options(1) Weighted average shares of common stock and common stock equivalents outstanding - diluted Basic EPS: Net income attributable to common stockholders per share Diluted EPS: Net income attributable to common stockholders per share ____________________________________________________ Year Ended December 31, 2016 2015 2014 $ 85,397 (468) $ 58,384 (312) 44,621 (175) 84,929 $ 58,072 $ 44,446 149,299 3,891 146,089 4,515 144,013 4,108 153,190 150,604 148,121 0.569 $ 0.398 $ 0.309 0.554 $ 0.386 $ 0.300 $ $ $ $ (1) The following securities (in thousands) were excluded from the computation of the weighted average diluted shares because the effect of including them would be anti-dilutive to the calculation of diluted EPS: OP Units Vested LTIP Units Year Ended December 31, 2016 2015 2014 25,110 578 26,371 181 27,444 130 51 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 12. Stock-Based Compensation 2016 Omnibus Stock Incentive Plan The Douglas Emmett, Inc. 2016 Omnibus Stock Incentive Plan, our stock incentive plan (our "2016 Plan"), permits us to make grants of incentive stock options, non-qualified stock options, stock appreciation rights, deferred stock awards, restricted stock awards, dividend equivalent rights and other stock-based awards. We had an aggregate of 6.9 million shares available for grant as of December 31, 2016. Awards such as LTIP Units, deferred stock and restricted stock, which deliver the full value of the underlying shares are counted against the Plan limits as two shares. Awards such as stock options and stock appreciation rights are counted as one share. The number of shares reserved under our Plan is also subject to adjustment in the event of a stock split, stock dividend or other change in our capitalization. Shares of stock underlying any awards that are forfeited, canceled or otherwise terminated (other than by exercise) are added back to the shares of stock available for future issuance under the Plan. For options exercised, our policy is to issue common stock on a net settlement basis - net of the exercise price and related taxes. Until it expired in 2016, we made grants under our 2006 Omnibus Stock Incentive Plan (our "2006 Plan"), which was substantially similar to our 2016 Plan. No further awards may be granted under our 2006 Plan, although awards granted under the 2006 Plan in the past and which are still outstanding will continue to be governed by the terms of our 2006 Plan. Our 2016 and 2006 Plans (the "Plans") are administered by the compensation committee of our board of directors. The compensation committee may interpret our Plans and make all determinations necessary or desirable for the administration of our Plans. The committee has full power and authority to select the participants to whom awards will be granted, to make any combination of awards to participants, to accelerate the exercisability or vesting of any award and to determine the specific terms and conditions of each award, subject to the provisions of our 2016 Plan. All full-time and part-time officers, employees, directors and other key persons (including consultants and prospective employees) are eligible to participate in our 2016 Plan. We have made certain awards in the form of a separate series of units of limited partnership interests in our Operating Partnership called LTIP Units, which can be granted either as free-standing awards or in tandem with other awards under our stock incentive plan. Our LTIP Units are valued by reference to the value of our common stock at the time of grant, and are subject to such conditions and restrictions as the compensation committee may determine, including continued employment or service, and/ or achievement of pre-established performance goals, financial metrics and other objectives. Once vested, LTIP Units can generally be converted to OP Units on a one for one basis. Employee Awards We grant stock-based compensation in the form of LTIP Units as a part of our annual incentive compensation to various employees each year, a portion which vests at the date of grant, and the remainder which vests in three equal annual installments over the three calendar years following the grant date. Compensation expense for LTIP Units which are not vested at the grant date is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. We have also made long-term grants in the form of LTIP Units to certain employees. The grants generally vest in equal annual installments over four or five calendar years following the grant date, and some of these grants include a portion which vests at the date of grant. In aggregate, we granted 704 thousand, 887 thousand and 1.1 million LTIP Units to employees during 2016, 2015 and 2014, respectively. Non-Employee Director Awards We granted 35 thousand, 35 thousand and 15 thousand LTIP Units to our non-employee directors during 2016, 2015 and 2014, respectively, which vest ratably over the year of grant in lieu of cash retainers. In the past, we made long-term grants of LTIP Units to our non-employee directors which vested over the following three years, and during 2015 we made a proportional grant to a new director who joined our board of 1 thousand LTIP units, which vested during the remainder of 2015. Compensation Expense Total stock-based compensation expense, net of capitalized amounts, was $17.4 million, $15.2 million and $13.7 million during 2016, 2015 and 2014, respectively. Certain amounts of stock-based compensation expense are capitalized for employees who provide leasing and construction services. We capitalized $1.5 million, $1.4 million, and $1.1 million during 2016, 2015 and 2014, respectively. At December 31, 2016, the total unrecognized stock-based compensation expense for unvested LTIP Unit awards was $18.3 million, which will be recognized over a weighted-average term of two years. 52 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) Stock-Based Award Activity The table below presents the activity of our outstanding stock options: Fully Vested Stock Options: Outstanding at December 31, 2013 Exercised Outstanding at December 31, 2014 Exercised Outstanding at December 31, 2015 Exercised Outstanding at December 31, 2016 Number of Stock Options (thousands) Weighted Average Exercise Price Weighted Average Remaining Contract Life (months) Total Intrinsic Value (thousands) Intrinsic Value of Options Exercised (thousands) 12,540 $ (731) $ 11,809 $ (274) $ 11,535 $ (7,566) $ $ 3,969 18.10 20.03 17.98 15.58 18.04 20.98 12.43 47 36 23 27 27 $ $ $ 4,976 3,989 104,108 $ $ $ $ $ 65,051 123,017 151,569 95,770 95,770 Exercisable at December 31, 2016 3,969 $ 12.43 The table below presents the activity of our unvested LTIP Units: Unvested LTIP Units: Outstanding at December 31, 2013 Granted Vested Forfeited Outstanding at December 31, 2014 Granted Vested Forfeited Outstanding at December 31, 2015 Granted Vested Forfeited Outstanding at December 31, 2016 Number of Units (thousands) Weighted Average Grant Date Fair Value Grant Date Fair Value (thousands) 754 1,106 $ $ (854) $ (8) $ 998 922 $ $ (816) $ (8) $ $ 1,096 739 $ (778) $ (17) $ $ 1,040 15.63 19.31 17.44 22.48 18.48 20.26 18.59 24.86 19.85 27.62 22.23 27.77 23.46 $ $ $ $ $ $ $ $ $ 21,356 14,756 307 18,673 15,165 200 20,420 17,293 473 53 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 13. Fair Value of Financial Instruments Our estimates of the fair value of financial instruments were determined using available market information and widely used valuation methods. Considerable judgment is necessary to interpret market data and determine an estimated fair value. The use of different market assumptions or valuation methods may have a material effect on the estimated fair values. The FASB fair value framework hierarchy distinguishes between assumptions based on market data obtained from sources independent of the reporting entity, and the reporting entity’s own assumptions about market-based inputs. The hierarchy is as follows: Level 1 - inputs utilize unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 - inputs are observable either directly or indirectly for similar assets and liabilities in active markets. Level 3 - inputs are unobservable assumptions generated by the reporting entity As of December 31, 2016, we did not have any fair value estimates of financial instruments using Level 3 inputs. Financial instruments disclosed at fair value Short term financial instruments: The carrying amounts for cash and cash equivalents, tenant receivables, revolving credit line, interest payable, accounts payable, security deposits and dividends payable approximate fair value because of the short-term nature of these instruments. Secured notes payable: See Note 7 for the details of our secured notes payable. We estimate the fair value of our secured notes payable, which includes the secured notes payable of our consolidated JVs, by calculating the credit-adjusted present value of the principal and interest payments for each secured note payable. The calculation incorporates observable market interest rates which we consider to be Level 2 inputs, assumes that the loans will be outstanding through maturity, and excludes any maturity extension options. The table below presents (in thousands) the estimated fair value of our secured notes payable: Secured Notes Payable: December 31, 2016 December 31, 2015 Fair value Carrying value $ $ 4,429,224 4,408,083 $ $ 3,691,075 3,634,163 Financial instruments measured at fair value Derivative instruments: See Note 9 for the details of our derivatives. We present our derivatives on the balance sheet at fair value, on a gross basis, excluding accrued interest. We estimate the fair value of our derivative instruments by calculating the credit- adjusted present value of the expected future cash flows of each derivative. The calculation incorporates the contractual terms of the derivatives, observable market interest rates which we consider to be Level 2 inputs, and credit risk adjustments to reflect the counterparty's as well as our own nonperformance risk. Our derivatives are not subject to master netting arrangements. The table below presents (in thousands) the estimated fair value of our derivatives: December 31, 2016 December 31, 2015 Derivative Assets: Fair value - consolidated derivatives(1) Fair value - unconsolidated Funds' derivatives(2) Derivative Liabilities: Fair value - consolidated derivatives(1) Fair value - unconsolidated Funds' derivatives(2) $ $ $ $ 35,656 3,605 $ $ 6,830 $ — $ 4,830 837 16,310 — ___________________________________________________________________________________ (1) Consolidated derivatives, which include 100%, not our pro-rata share, of our consolidated JVs' derivatives, are included in interest rate contracts in our consolidated balance sheet. The fair value excludes accrued interest which is included in interest payable in the consolidated balance sheet. (2) Represents 100%, not our pro-rata share, of our unconsolidated Funds derivatives. Our pro-rata share of the amounts related to the unconsolidated Funds' derivatives is included in our Investment in unconsolidated real estate funds in our consolidated balance sheet. See Note 5 for more information regarding our unconsolidated Funds. 54 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 14. Segment Reporting Segment information is prepared on the same basis that our management reviews information for operational decision- making purposes. We operate in two business segments: (i) the acquisition, development, ownership and management of office real estate and (ii) the acquisition, development, ownership and management of multifamily real estate. The services for our office segment primarily include rental of office space and other tenant services, including parking and storage space rental. The services for our multifamily segment include rental of apartments and other tenant services, including parking and storage space rental. Asset information by segment is not reported because we do not use this measure to assess performance or make decisions to allocate resources. Therefore, depreciation and amortization expense is not allocated among segments. General and administrative expenses and interest expense are not included in segment profit as our internal reporting addresses these items on a corporate level. Segment profit is not a measure of operating income or cash flows from operating activities as measured by GAAP, it is not indicative of cash available to fund cash needs, and it should not be considered as an alternative to cash flows as a measure of liquidity. Not all companies may calculate segment profit in the same manner. We consider segment profit to be an appropriate supplemental measure to net income because it can assist both investors and management in understanding the core operations of our properties. The table below presents (in thousands) the operating activity of our reportable segments: Office Segment Total office revenues Office expenses Office Segment profit Multifamily Segment Total multifamily revenues Multifamily expenses Multifamily Segment profit Year Ended December 31, 2016 2015 2014 $ $ 645,633 (214,546) 431,087 $ 540,975 (186,556) 354,419 519,405 (181,160) 338,245 96,918 (23,317) 73,601 94,799 (23,862) 70,937 80,117 (20,664) 59,453 Total profit from all segments $ 504,688 $ 425,356 $ 397,698 The table below (in thousands) is a reconciliation of the total profit from all segments to net income attributable to common stockholders: Total profit from all segments General and administrative Depreciation and amortization Other income Other expenses Income, including depreciation, from unconsolidated real estate funds Interest expense Acquisition-related expenses Income before gains Gains on sales of investments in real estate Net income Less: Net income attributable to noncontrolling interests Net income attributable to common stockholders 55 Year Ended December 31, 2016 2015 2014 504,688 (34,957) (248,914) 8,759 (6,609) 7,812 (146,148) (2,868) 81,763 14,327 96,090 (10,693) 85,397 $ $ 425,356 (30,496) (205,333) 15,228 (6,470) 7,694 (135,453) (1,771) 68,755 — 68,755 (10,371) 58,384 $ $ 397,698 (27,332) (202,512) 17,675 (7,095) 3,713 (128,507) (786) 52,854 — 52,854 (8,233) 44,621 $ $ Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 15. Future Minimum Lease Rental Receipts We lease space to tenants primarily under non-cancelable operating leases that generally contain provisions for a base rent plus reimbursement of certain operating expenses, and we own fee interests in two parcels of land subject to ground leases from which we earn ground rent income. The table below presents (in thousands) the future minimum base rentals on our non- cancelable office tenant and ground leases at December 31, 2016: Year Ending December 31, 2017 2018 2019 2020 2021 Thereafter $ _____________________________________________________ Total future minimum base rentals(1) $ 487,764 420,983 359,650 298,096 220,484 595,806 2,382,783 (1) Does not include (i) residential leases, which typically have a term of one year or less, (ii) holdover rent, (ii) other types of rent such as storage rent and antenna rent, (iv) tenant reimbursements, (v) straight line rent, (vi) amortization/accretion of acquired above/below-market lease intangibles and (vii) percentage rents. The amounts assume that early termination options held by tenants are not exercised. 16. Future Minimum Lease Rental Payments We incurred ground lease expense of $733.0 thousand during 2016 and 2015, and $2.6 million during 2014. We had one ground lease as of December 31, 2016, for which the future minimum ground lease payments (in thousands) are presented below: Year Ending December 31, 2017 2018 2019 2020 2021 Thereafter $ ___________________________________________________ Total future minimum lease payments(1) $ 733 733 733 733 733 47,644 51,309 (1) Lease term ends on December 31, 2086. Ground rent is fixed at $733 thousand per year until February 28, 2019, and will then reset to the greater of the existing ground rent or market. The table above assumes that the rental payments will continue to be $733 thousand per year after February 28, 2019. 56 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 17. Commitments, Contingencies and Guarantees Legal Proceedings From time to time, we are party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. Excluding ordinary, routine litigation incidental to our business, we are not currently a party to any legal proceedings that we believe would reasonably be expected to have a materially adverse effect on our business, financial condition or results of operations. Concentration of Risk We are subject to credit risk with respect to our tenant receivables and deferred rent receivables related to our tenant leases. Our tenants' ability to honor the terms of their respective leases remains dependent upon the economic, regulatory and social factors. We seek to minimize our credit risk from our tenant leases by (i) targeting smaller, more affluent tenants, from a diverse mix of industries, (ii) performing credit evaluations of prospective tenants and (iii) obtaining security deposits or letters of credit from our tenants. In 2016, 2015 and 2014, no tenant accounted for more than 10% of our total revenues. See Note 2 for the details of our allowances for tenant receivables and deferred rent receivables. All of our properties, including our consolidated JVs and unconsolidated Funds properties, are located in Los Angeles County, California and Honolulu, Hawaii, and we are therefore susceptible to adverse economic and regulatory developments, as well as natural disasters, in those markets. We are also subject to credit risk with respect to our interest rate swap counterparties that we use to manage the risk associated with our floating rate debt. We do not post or receive collateral with respect to our swap transactions. See Note 9 for the details of our interest rate swaps. We seek to minimize our credit risk by entering into agreements with a variety of high quality counterparties with investment grade ratings. We have significant cash balances invested in a variety of short-term money market funds that are intended to preserve principal value and maintain a high degree of liquidity while providing current income. These investments are not insured against loss of principal and there is no guarantee that our investments in these funds will be redeemable at par value. We also have significant cash balances in bank accounts with high quality financial institutions with investment grade ratings. Interest bearing bank accounts at each U.S. banking institution are insured by the FDIC up to $250 thousand. Asset Retirement Obligations Conditional asset retirement obligations represent a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement is conditional on a future event that may or may not be within our control. A liability for a conditional asset retirement obligation must be recorded if the fair value of the obligation can be reasonably estimated. Environmental site assessments and investigations have identified twenty-five buildings in our Consolidated Portfolio, and four buildings owned by our unconsolidated Funds which contain asbestos, and would have to be removed in compliance with applicable environmental regulations if these properties are demolished or undergo major renovations. As of December 31, 2016, the obligations to remove the asbestos from these properties have indeterminable settlement dates, and we are unable to reasonably estimate the fair value of the associated conditional asset retirement obligation. Development Contracts During the first quarter of 2016, we commenced building an additional 475 apartments (net of existing apartments removed) at our Moanalua Hillside Apartments in Honolulu, Hawaii. The $120.0 million estimated cost of the new apartments does not include the cost of the land which we already owned before beginning the project. We also plan to invest additional capital to upgrade the existing apartments, improve the parking and landscaping, build a new leasing and management office, and construct a new recreation and fitness facility with a new pool. As of December 31, 2016, we had a remaining commitment for contracts related to the development of $107.0 million. Other Contracts As of December 31, 2016, we had a remaining commitment for capital expenditure projects and repositionings of approximately $3.6 million. 57 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) Guarantees We made certain environmental and other limited indemnities and guarantees covering customary non-recourse carve- outs for our unconsolidated Funds' debt. We also guaranteed the related swaps. Our Funds have agreed to indemnify us for any amounts that we would be required to pay under these agreements. As of December 31, 2016, all of the obligations under the related debt and swap agreements have been performed in accordance with the terms of those agreements. The table below summarizes our Funds' debt as of December 31, 2016, the amounts represent 100% (not our pro-rata share) of amounts related to our Funds: Fund(1) Fund X(2) Partnership X(3) Principal Balance (in millions) $ $ 325.0 110.0 435.0 Loan Maturity Date 5/1/2018 3/1/2023 Variable Interest Rate LIBOR + 1.75% LIBOR + 1.40% Swap Maturity Date 5/1/2017 3/1/2021 Swap Fixed Interest Rate 2.35% 2.30% ___________________________________________________ (1) See Note 5 for more information regarding our unconsolidated Funds. (2) Floating rate term loan, swapped to fixed, which is secured by six properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of December 31, 2016, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $0.7 million. (3) Floating rate term loan, swapped to fixed, which is secured by two properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of December 31, 2016, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $4.2 million. 58 Douglas Emmett, Inc. Notes to Consolidated Financial Statements (continued) 18. Quarterly Financial Information (unaudited) The tables below present (in thousands, except per share amounts) selected quarterly information for 2016 and 2015: Total revenue Net income before noncontrolling interests Net income attributable to common stockholders Net income per common share - basic Net income per common share - diluted Weighted average shares of common stock outstanding - basic Weighted average shares of common stock and common stock equivalents outstanding - diluted Total revenue Net income before noncontrolling interests Net income attributable to common stockholders Net income per common share - basic Net income per common share - diluted Weighted average shares of common stock outstanding - basic Weighted average shares of common stock and common stock equivalents outstanding - diluted 19. Subsequent events $ $ $ $ $ $ $ $ $ $ Three Months Ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 168,572 16,046 15,366 0.104 0.101 $ $ $ $ $ 187,215 21,780 18,482 0.124 0.120 $ $ $ $ $ 192,121 35,798 31,848 0.210 0.206 $ $ $ $ $ 194,643 22,466 19,701 0.129 0.127 147,236 147,722 150,753 151,446 151,451 152,805 153,419 154,052 Three Months Ended March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 154,809 22,096 18,699 0.128 0.124 $ $ $ $ $ 160,457 15,894 13,448 0.092 0.089 $ $ $ $ $ 160,077 14,159 12,070 0.082 0.080 $ $ $ $ $ 160,431 16,606 14,167 0.096 0.093 145,327 145,898 146,331 146,780 149,802 150,304 150,740 151,531 On February 8, we issued 1.3 million shares of our common stock for the exercise of 3.8 million stock options on a net settlement basis (net of the exercise price and related taxes). 59 OUR SENIOR MANAGEMENT OUR BOARD OF DIRECTORS STOCK EXCHANGE DAN A. EMMETT Executive Chairman DAN A. EMMETT Chairman of the Board (cid:55)(cid:75)(cid:72)(cid:3)(cid:49)(cid:72)(cid:90)(cid:3)(cid:60)(cid:82)(cid:85)(cid:78)(cid:3)(cid:54)(cid:87)(cid:82)(cid:70)(cid:78)(cid:3)(cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:177)(cid:3)(cid:49)(cid:60)(cid:54)(cid:40) (cid:55)(cid:76)(cid:70)(cid:78)(cid:72)(cid:85)(cid:3)(cid:54)(cid:92)(cid:80)(cid:69)(cid:82)(cid:79)(cid:3)(cid:177)(cid:3)(cid:39)(cid:40)(cid:44) JORDAN L. KAPLAN (cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:9)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) JORDAN L. KAPLAN (cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:9)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) KENNETH M. PANZER (cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) CHRISTOPHER H. ANDERSON Retired Real Estate Executive and Investor LESLIE E. BIDER (cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)(cid:3)(cid:16)(cid:3)(cid:51)(cid:76)(cid:81)(cid:81)(cid:68)(cid:70)(cid:79)(cid:72)(cid:38)(cid:68)(cid:85)(cid:72) DR. DAVID T. FEINBERG (cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:9)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)(cid:3)(cid:177)(cid:3) Geisinger Health System VIRGINIA A. MCFERRAN (cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:9)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)(cid:3)(cid:16) Optum Analytics THOMAS E. O’HERN Senior Executive Vice President, Chief (cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)(cid:3)(cid:9)(cid:3)(cid:55)(cid:85)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:85)(cid:3)(cid:177)(cid:3) Macerich Company WILLIAM E. SIMON, JR. (cid:38)(cid:82)(cid:16)(cid:70)(cid:75)(cid:68)(cid:76)(cid:85)(cid:80)(cid:68)(cid:81)(cid:15)(cid:3)(cid:58)(cid:76)(cid:79)(cid:79)(cid:76)(cid:68)(cid:80)(cid:3)(cid:40)(cid:17)(cid:3)(cid:54)(cid:76)(cid:80)(cid:82)(cid:81)(cid:3)(cid:9)(cid:3)(cid:54)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)(cid:47)(cid:47)(cid:38) KENNETH M. PANZER (cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) MONA M. GISLER (cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) KEVIN A. CRUMMY (cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:44)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) CORPORATE HEADQUARTERS (cid:27)(cid:19)(cid:27)(cid:3)(cid:58)(cid:76)(cid:79)(cid:86)(cid:75)(cid:76)(cid:85)(cid:72)(cid:3)(cid:37)(cid:82)(cid:88)(cid:79)(cid:72)(cid:89)(cid:68)(cid:85)(cid:71) 2nd Floor (cid:54)(cid:68)(cid:81)(cid:87)(cid:68)(cid:3)(cid:48)(cid:82)(cid:81)(cid:76)(cid:70)(cid:68)(cid:15)(cid:3)(cid:38)(cid:36)(cid:3)(cid:28)(cid:19)(cid:23)(cid:19)(cid:20) (cid:22)(cid:20)(cid:19)(cid:17)(cid:21)(cid:24)(cid:24)(cid:17)(cid:26)(cid:26)(cid:19)(cid:19) INVESTOR INFORMATION (cid:41)(cid:82)(cid:85)(cid:3)(cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:76)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:83)(cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3) contact: (cid:54)(cid:87)(cid:88)(cid:68)(cid:85)(cid:87)(cid:3)(cid:48)(cid:70)(cid:40)(cid:79)(cid:75)(cid:76)(cid:81)(cid:81)(cid:72)(cid:92) (cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:177)(cid:3)(cid:44)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:3)(cid:53)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86) (cid:86)(cid:80)(cid:70)(cid:72)(cid:79)(cid:75)(cid:76)(cid:81)(cid:81)(cid:72)(cid:92)(cid:35)(cid:71)(cid:82)(cid:88)(cid:74)(cid:79)(cid:68)(cid:86)(cid:72)(cid:80)(cid:80)(cid:72)(cid:87)(cid:87)(cid:17)(cid:70)(cid:82)(cid:80) (cid:22)(cid:20)(cid:19)(cid:17)(cid:21)(cid:24)(cid:24)(cid:17)(cid:26)(cid:26)(cid:24)(cid:20) (cid:50)(cid:88)(cid:85)(cid:3)(cid:54)(cid:40)(cid:38)(cid:3)(cid:41)(cid:76)(cid:79)(cid:76)(cid:81)(cid:74)(cid:86)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74) (cid:82)(cid:88)(cid:85)(cid:3)(cid:79)(cid:68)(cid:87)(cid:72)(cid:86)(cid:87)(cid:3)(cid:20)(cid:19)(cid:16)(cid:46)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:91)(cid:92)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3) (cid:68)(cid:89)(cid:68)(cid:76)(cid:79)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:90)(cid:72)(cid:69)(cid:86)(cid:76)(cid:87)(cid:72)(cid:3)(cid:68)(cid:87) www.douglasemmett.com LEGAL COUNSEL (cid:48)(cid:68)(cid:81)(cid:68)(cid:87)(cid:87)(cid:3)(cid:44)(cid:3)(cid:51)(cid:75)(cid:72)(cid:79)(cid:83)(cid:86)(cid:3)(cid:44)(cid:3)(cid:51)(cid:75)(cid:76)(cid:79)(cid:79)(cid:76)(cid:83)(cid:86)(cid:3)(cid:47)(cid:47)(cid:51) (cid:47)(cid:82)(cid:86)(cid:3)(cid:36)(cid:81)(cid:74)(cid:72)(cid:79)(cid:72)(cid:86)(cid:15)(cid:3)(cid:38)(cid:36) INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (cid:40)(cid:85)(cid:81)(cid:86)(cid:87)(cid:3)(cid:9)(cid:3)(cid:60)(cid:82)(cid:88)(cid:81)(cid:74)(cid:3)(cid:47)(cid:47)(cid:51) (cid:47)(cid:82)(cid:86)(cid:3)(cid:36)(cid:81)(cid:74)(cid:72)(cid:79)(cid:72)(cid:86)(cid:15)(cid:3)(cid:38)(cid:36) SHAREHOLDER ACCOUNT ASSISTANCE (cid:54)(cid:75)(cid:68)(cid:85)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:85)(cid:71)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:80)(cid:68)(cid:76)(cid:81)(cid:87)(cid:68)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3) (cid:39)(cid:82)(cid:88)(cid:74)(cid:79)(cid:68)(cid:86)(cid:3)(cid:40)(cid:80)(cid:80)(cid:72)(cid:87)(cid:87)(cid:182)(cid:86)(cid:3)(cid:55)(cid:85)(cid:68)(cid:81)(cid:86)(cid:73)(cid:72)(cid:85)(cid:3)(cid:36)(cid:74)(cid:72)(cid:81)(cid:87)(cid:29)(cid:3) (cid:38)(cid:82)(cid:80)(cid:83)(cid:88)(cid:87)(cid:72)(cid:85)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:44)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:82)(cid:85)(cid:3)(cid:54)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:86)(cid:15)(cid:3)(cid:47)(cid:47)(cid:38) (cid:22)(cid:20)(cid:21)(cid:17)(cid:24)(cid:27)(cid:27)(cid:17)(cid:23)(cid:28)(cid:28)(cid:19) ANNUAL MEETING (cid:27)(cid:19)(cid:27)(cid:3)(cid:58)(cid:76)(cid:79)(cid:86)(cid:75)(cid:76)(cid:85)(cid:72)(cid:3)(cid:37)(cid:82)(cid:88)(cid:79)(cid:72)(cid:89)(cid:68)(cid:85)(cid:71) 2nd Floor (cid:54)(cid:68)(cid:81)(cid:87)(cid:68)(cid:3)(cid:48)(cid:82)(cid:81)(cid:76)(cid:70)(cid:68)(cid:15)(cid:3)(cid:38)(cid:36)(cid:3)(cid:28)(cid:19)(cid:23)(cid:19)(cid:20) (cid:45)(cid:88)(cid:81)(cid:72)(cid:3)(cid:20)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:26)(cid:3)(cid:28)(cid:29)(cid:19)(cid:19)(cid:3)(cid:68)(cid:17)(cid:80)(cid:17)(cid:3)(cid:11)(cid:51)(cid:39)(cid:55)(cid:12) At Douglas Emmett concern for the environment is ingrained in our corporate culture.(cid:3)(cid:58)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:76)(cid:80)(cid:83)(cid:79)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:68)(cid:76)(cid:81)(cid:87)(cid:68)(cid:76)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:79)(cid:92)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:86)(cid:88)(cid:86)(cid:87)(cid:68)(cid:76)(cid:81)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:83)(cid:85)(cid:82)(cid:74)(cid:85)(cid:68)(cid:80)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:85)(cid:82)(cid:83)(cid:72)(cid:85)(cid:87)(cid:76)(cid:72)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:90)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:3)(cid:76)(cid:81)(cid:87)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:72)(cid:71)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:85)(cid:89)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:88)(cid:86)(cid:87)(cid:68)(cid:76)(cid:81)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:68)(cid:70)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:82)(cid:85)(cid:87)(cid:73)(cid:82)(cid:79)(cid:76)(cid:82)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:191)(cid:70)(cid:68)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:72)(cid:81)(cid:72)(cid:85)(cid:74)(cid:92)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:88)(cid:80)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3) (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:72)(cid:73)(cid:191)(cid:70)(cid:76)(cid:72)(cid:81)(cid:70)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:71)(cid:88)(cid:70)(cid:72)(cid:71)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:68)(cid:85)(cid:69)(cid:82)(cid:81)(cid:3)(cid:73)(cid:82)(cid:82)(cid:87)(cid:83)(cid:85)(cid:76)(cid:81)(cid:87)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:72)(cid:81)(cid:74)(cid:68)(cid:74)(cid:72)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3)(cid:86)(cid:88)(cid:83)(cid:83)(cid:79)(cid:76)(cid:72)(cid:85)(cid:86)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:72)(cid:81)(cid:68)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:77)(cid:82)(cid:76)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:80)(cid:76)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:82)(cid:85)(cid:78)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:80)(cid:3)(cid:87)(cid:82)(cid:3)(cid:83)(cid:88)(cid:85)(cid:86)(cid:88)(cid:72)(cid:3)(cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:90)(cid:75)(cid:72)(cid:85)(cid:72)(cid:3)(cid:70)(cid:82)(cid:86)(cid:87)(cid:3)(cid:86)(cid:68)(cid:89)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:82)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:80)(cid:72)(cid:85)(cid:74)(cid:72)(cid:17) (cid:36)(cid:87)(cid:3)(cid:39)(cid:82)(cid:88)(cid:74)(cid:79)(cid:68)(cid:86)(cid:3)(cid:40)(cid:80)(cid:80)(cid:72)(cid:87)(cid:87)(cid:3)(cid:90)(cid:72)(cid:3)(cid:78)(cid:81)(cid:82)(cid:90)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:86)(cid:88)(cid:86)(cid:87)(cid:68)(cid:76)(cid:81)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:3)(cid:92)(cid:68)(cid:85)(cid:71)(cid:3)(cid:86)(cid:87)(cid:76)(cid:70)(cid:78)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:69)(cid:82)(cid:87)(cid:75)(cid:3)(cid:86)(cid:82)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:191)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:17)(cid:3)(cid:54)(cid:76)(cid:80)(cid:83)(cid:79)(cid:92)(cid:3) put, thoughtful implementation of sustainable initiatives is good business. Map of Office and Residential Properties Los Angeles Submarkets Warner Center/Woodland Hills Santa Monica Westwood Brentwood Burbank Beverly Hills Century City Encino/Sherman Oaks Olympic Corridor Honolulu Submarket www.douglasemmett.com
Continue reading text version or see original annual report in PDF format above