Equity

9 Months Ended

Sep. 30, 2023

Stockholders' Equity Note [Abstract]

Equity

Equity

Transactions

During the Nine Months Ended September 30, 2023

•We repurchased 9.1 million shares of our common stock for $109.1 million in cash, excluding transaction costs, in open market transactions. The average purchase price was $12.03 per share.

•We acquired 29 thousand OP Units for $367 thousand in cash.

During the Nine Months Ended September 30, 2022

•We acquired 260 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units.

•We acquired 10 thousand OP Units for $336 thousand in cash.

•We acquired a multifamily apartment building through a new consolidated JV that we manage and in which we own a 55% interest. See Note 3 for more information regarding the property we purchased. We contributed $99.0 million to the JV and an outside investor contributed $81.0 million to the JV.

Noncontrolling Interests

Our noncontrolling interests consist of interests in our Operating Partnership and consolidated JVs which are not owned by us. As of September 30, 2023, noncontrolling interests in our Operating Partnership owned 32.5 million OP Units and fully-vested LTIP Units, which represented approximately 16.3% of our Operating Partnership's total outstanding interests, and we owned 166.7 million OP Units (to match our 166.7 million shares of outstanding common stock).

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 acquire 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 acquisition, 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 employees and non-employee directors as part of their compensation. These awards generally vest over a service period and once vested can generally be converted to OP Units provided our stock price increases by more than a specified hurdle.

Changes in our Ownership Interest in our Operating Partnership

The table below presents the effect on our equity from net (loss) income attributable to common stockholders and changes in our ownership interest in our Operating Partnership:

	Nine Months Ended September 30,
(In thousands)	2023		2022
Net (loss) income attributable to common stockholders	$	(2,251)	$	72,843
Transfers from noncontrolling interests:
Exchange of OP Units with noncontrolling interests	—		4,236
Repurchases of OP Units from noncontrolling interests	120		(176)
Net transfers from noncontrolling interests	120		4,060
Change from net (loss) income attributable to common stockholders and transfers from noncontrolling interests	$	(2,131)	$	76,903

AOCI Reconciliation(1)

The table below presents a reconciliation of our AOCI, which consists solely of adjustments related to derivatives designated as cash flow hedges:

	Nine Months Ended September 30,
(In thousands)	2023		2022
Accumulated Other Comprehensive Income (Loss) - Beginning balance	$	187,063	$	(38,774)
Consolidated derivatives:
Other comprehensive income before reclassifications	83,157		318,408
Reclassification of (gains) losses from AOCI to Interest Expense	(104,891)		20,505
Unconsolidated Fund's derivatives (our share)(2):
Other comprehensive income before reclassifications	1,185		3,777
Reclassification of gains from AOCI to Income from unconsolidated Fund	(1,208)		(62)
Net current period OCI	(21,757)		342,628
OCI attributable to noncontrolling interests	4,454		(104,205)
OCI attributable to common stockholders	(17,303)		238,423
Accumulated Other Comprehensive Income - Ending balance	$	169,760	$	199,649

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(1)See Note 10 for the details of our derivatives and Note 13 for our derivative fair value disclosures.

(2)We calculate our share by multiplying the total amount for our Fund by our equity interest in the Fund. For more information about our Fund, including our equity interest percentage, see Note 6.

Stock-Based Compensation

The Douglas Emmett, Inc. 2016 Omnibus Stock Incentive Plan, as amended (the "2016 Plan"), permits us to make grants of stock-based compensation awards to our directors, officers, employees and consultants. The plan is administered by the compensation committee of our board of directors.

On May 24, 2023, we held our 2023 annual meeting of stockholders. At the annual meeting, our stockholders approved an amendment to the 2016 Plan to, among other things, increase the number of shares of common stock available for future awards by 19 million. As of September 30, 2023, we had an aggregate of 21.3 million shares of common stock available for future awards.

The table below presents our stock-based compensation expense:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Stock-based compensation expense	$	2,327	$	2,266	$	7,553	$	7,156
Capitalized stock-based compensation	$	752	$	826	$	2,209	$	2,455