Equity

3 Months Ended

Mar. 31, 2013

Stockholders' Equity Attributable to Parent [Abstract]

Equity

Equity

Noncontrolling Interests

Noncontrolling interests in our operating partnership relate to interests that are not owned by us.  Noncontrolling interests represented approximately 17% of our operating partnership at March 31, 2013. A unit in our operating partnership and a share of our common stock have essentially the same economic characteristics, as they share equally in the total net income or loss distributions of our operating partnership.  Investors who own units in our operating partnership have the right to cause our operating partnership to redeem any or all of their units in our operating partnership for an amount of cash per unit equal to the then current market value of one share of common stock, or, at our election, shares of our common stock on a one-for-one basis. Noncontrolling interests also includes the interest of a minority partner in a joint venture which owns an office building in Honolulu, Hawaii. The joint venture is two-thirds owned by our operating partnership and was consolidated in our financial statements as of March 31, 2013.

The tables below represent our condensed consolidated statements of equity (in thousands):

	Douglas Emmett, Inc. Stockholders' Equity			Noncontrolling Interests			Total Equity
Balance as of January 1, 2013	$	1,979,656		$	410,803		$	2,390,459
Net income	12,082			2,530			14,612
Cash flow hedge adjustment	5,093			1,942			7,035
Dividends and distributions	(25,662		)	(5,493		)	(31,155		)
Conversion of operating partnership units	18,192			(18,192		)	—
Stock compensation	—			1,663			1,663
Balance as of March 31, 2013	$	1,989,361		$	393,253		$	2,382,614

	Douglas Emmett, Inc. Stockholders' Equity			Noncontrolling Interests			Total Equity
Balance as of January 1, 2012	$	1,865,106		$	450,849		$	2,315,955
Net income	5,386			1,316			6,702
Cash flow hedge adjustment	6,437			3,625			10,062
Dividends and distributions	(20,945		)	(4,228		)	(25,173		)
Conversion of operating partnership units	22,548			(22,548		)	—
Stock compensation	174			4,432			4,606
Sale of common stock, net of offering costs	128,257			—			128,257
Other	—			(10		)	(10		)
Balance as of March 31, 2012	$	2,006,963		$	433,436		$	2,440,399

The tables below represent the changes in our accumulated other comprehensive income (loss) balances for the comparative year-to-date periods presented below (in thousands):

	Three Months Ended March 31,
	2013			2012
Balance at beginning of period	$	(82,991	)	$	(89,180	)
Other comprehensive income before reclassifications	(1,859		)	(5,854		)
Amounts reclassified from accumulated other comprehensive income (1)	8,894			15,916
Net current period other comprehensive income	7,035			10,062
Less other comprehensive income attributable to noncontrolling interests	(1,942		)	(3,625		)
Other comprehensive income attributable to common stockholders	5,093			6,437
Accumulated other comprehensive income at end of period	$	(77,898	)	$	(82,743	)

(1) Cash flow hedge adjustments

Equity Sales, Conversions and Repurchases

During the three months ended March 31, 2013, approximately 1.3 million units in our operating partnership were converted to shares of our common stock. We did not sell or repurchase shares or share equivalents during the three months ended March 31, 2013. During the three months ended March 31, 2012, we sold 6.9 million shares of our common stock in open market transactions under our "at the market" (ATM) stock offering program for net proceeds of approximately $128.3 million, and approximately 26 thousand units in our operating partnership were converted to shares of our common stock. We did not repurchase shares or share equivalents during the three months ended March 31, 2012. The table below represents the net income attributable to common stockholders and transfers (to) from the noncontrolling interests (in thousands):

	Three Months Ended March 31,
	2013		2012
Net income attributable to common stockholders	$	12,082	$	5,386
Transfers from the noncontrolling interests:
Increase in common stockholders paid-in capital for redemption of operating partnership units	18,178		22,532
Change from net income attributable to common stockholders and transfers from noncontrolling interest	$	30,260	$	27,918

Stock-Based Compensation

The Douglas Emmett, Inc. 2006 Omnibus Stock Incentive Plan is administered by the compensation committee of our board of directors.  All officers, employees, directors and consultants are eligible to participate in our stock incentive plan.  For more information on our stock incentive plan, please refer to the notes to the consolidated financial statements in our 2012 Annual Report on Form 10-K, which was filed with the SEC on February 27, 2013.

Total net equity compensation expense for equity grants was $1.6 million and $1.4 million for the three months ended March 31, 2013 and 2012, respectively. These amounts do not include (i) capitalized equity compensation totaling $101 thousand and $120 thousand for the three months ended March 31, 2013 and 2012, respectively, and (ii) $3.0 million in immediately vested equity grants issued during the three months ended March 31, 2012 to satisfy a portion of the annual bonuses that were accrued during the prior year. Compensation expense for our long term incentive plan units which are not immediately vested is recognized using the accelerated recognition method.  Compensation expense for options which are not immediately vested is recognized on a straight-line basis over the requisite service period which is equal to the vesting period.  Certain amounts of equity compensation expense are capitalized for employees who provide leasing and construction services.