Core Viewpoint - Meta is making significant changes to its diversity, equity, and inclusion (DEI) policies, including the termination of various internal programs aimed at increasing diverse hiring, in response to a shifting legal and policy landscape in the United States [3][5][6]. Group 1: Changes to DEI Policies - Meta is ending the "Diverse Slate Approach," which considered candidates from underrepresented groups for open roles [3][8]. - The company is discontinuing its diversity supplier program and equity and inclusion training programs [3][8]. - The DEI team is being disbanded, with Chief Diversity Officer Maxine Williams transitioning to a new role focused on accessibility and engagement [3][5]. Group 2: Employee Reactions - Several employees expressed criticism of the new policy, with one comment gaining over 600 reactions, highlighting concerns about the company's commitment to its stated values [4]. Group 3: Context and Rationale - The changes are influenced by recent Supreme Court decisions signaling a shift in how DEI efforts are approached legally, with a focus on avoiding any perception of preferential treatment based on inherent characteristics [6][8]. - Meta emphasizes the importance of serving a diverse user base through cognitively diverse teams, which are believed to enhance innovation and problem-solving [7][10]. Group 4: Future Direction - While the company will continue to source candidates from diverse backgrounds, it aims to eliminate any impression that hiring decisions are based on race or gender [8]. - Meta plans to focus on supporting small and medium-sized businesses rather than specifically sourcing from diverse-owned businesses [9].

In Brief Axios reports that Meta is eliminating its biggest DEI efforts, effective immediately, including ones that focused on hiring a diverse workforce, training, and sourcing supplies from diverse-owned companies. Its DEI department will also be eliminated.  In a memo leaked to the outlet, Meta said it was making these changes because the “legal and policy landscape surrounding diversity, equity, and inclusion efforts in the United States is changing.”  Meta is not alone: Microsoft and Zoom have rolled ...

Meta is dropping many of its DEI initiatives, BI confirmed.The company sent a memo announcing the changes on Friday.Meta's VP of human resources said the legal and policy landscape in the US was changing.Meta is rolling back its DEI programs, Business Insider has learned.AD The company's vice president of human resources, Janelle Gale, announced the move on its internal communication platform, Workplace, on Friday, which was seen by BI."We will no longer have a team focused on DEI," Gale wrote in the memo. ...

A Costco board member has taken aim at companies rolling back diversity, equity and inclusion (DEI) policies, calling for businesses to “maximize” DEI instead as the wholesaler faces pressure to join the growing list of brands ditching the controversial practice.Jeff Raikes, co-founder of the Raikes Foundation and former CEO of the Bill & Melinda Gates Foundation, has served on Costco’s board of directors since 2008, according to Costco’s corporate website.Raikes and other board members have come under scru ...

Costco appears to be bucking the anti-DEI wave with its defense of its diversity initiatives.Data published last year suggests shareholders largely support diversity efforts.Costco's move challenges the perceived popularity of anti-DEI proposals.Costco's board didn't mince words when it came to supporting the company's stance on diversity, equity, and inclusion — a move that openly challenges the staying power of DEI critics ahead of a new presidential administration that has been critical of the measures.A ...

Core Viewpoint - Costco's board of directors is urging shareholders to vote against a proposal aimed at eliminating the company's diversity, equity, and inclusion (DEI) program, emphasizing that these efforts are integral to their success and ethical standards [1][3]. Summary by Sections Company Position on DEI - The board asserts that their DEI initiatives are essential for attracting and retaining employees, which is critical for the company's success, supported by a workforce of over 300,000 employees globally [1][3]. - Costco's DEI program has been rebranded to "People and Communities," but the board maintains that their commitment to diversity and inclusion remains strong despite external pressures [3][5]. Shareholder Proposal - The proposal from the National Center for Public Policy Research challenges the legality of Costco's DEI program, citing the Supreme Court's ruling in SFFA v. Harvard, which impacts corporate DEI initiatives [1][4]. - The foundation argues that Costco's DEI practices could lead to potential legal risks, claiming that a significant portion of its workforce could be victims of illegal discrimination based on race and sex [3][5]. Legal and Financial Implications - The board contends that the DEI practices are legally appropriate and that the proposal reflects a policy bias rather than a genuine concern for the company's risk management [3][5]. - The potential financial impact of lawsuits related to DEI practices could amount to tens of billions of dollars, according to the proposal, if even a fraction of affected employees were to file claims [3][5].

[Glossary](index=3&type=section&id=Glossary) This section provides a comprehensive list of abbreviations and definitions for key financial and operational terms used throughout the report - This section provides a comprehensive list of abbreviations and definitions for key terms used throughout the report, such as **FFO (Funds From Operations)**, **NOI (Net Operating Income)**, **Same Properties**, and **Leased Rate**, which are essential for understanding the company's financial and operational performance metrics[5](index=5&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) [Forward Looking Statements](index=7&type=section&id=Forward%20Looking%20Statements) This section outlines forward-looking statements, emphasizing that actual results may differ due to various economic and operational risks - The report contains forward-looking statements based on current beliefs and assumptions, which are subject to known and unknown risks and uncertainties. The company cautions investors that **actual results may differ materially from expectations**[10](index=10&type=chunk) - Key risk factors that could affect future results include **adverse economic conditions in Southern California or Honolulu**, **competition**, **decreasing rental rates**, **reduced demand for office space due to remote work**, **increases in interest rates and operating costs**, and **failure to maintain REIT status**[11](index=11&type=chunk) PART I. FINANCIAL INFORMATION [Financial Statements (unaudited)](index=8&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) This section presents the unaudited consolidated financial statements for the nine months ended September 30, 2024, showing a net income of $15.1 million and total assets of $9.45 billion Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$9,451,764** | **$9,644,218** | | Investment in real estate, net | $8,618,766 | $8,753,184 | | Cash and cash equivalents | $544,227 | $523,082 | | **Total Liabilities** | **$5,794,250** | **$5,798,821** | | Secured notes payable, net | $5,513,086 | $5,543,171 | | **Total Equity** | **$3,657,514** | **$3,845,397** | Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Total revenues | $741,499 | $761,209 | | Net income (loss) | $15,102 | $(19,932) | | Net income (loss) attributable to common stockholders | $24,405 | $(2,251) | | Net income (loss) per common share – basic and diluted | $0.14 | $(0.02) | Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $334,590 | $332,209 | | Net cash used in investing activities | $(156,570) | $(180,373) | | Net cash (used in) provided by financing activities | $(156,947) | $105,557 | - As of September 30, 2024, the company's consolidated portfolio consisted of **68 office properties** (**17.6 million sq. ft.**) and **14 multifamily properties** (**4,476 units**). The total portfolio, including an unconsolidated fund, comprised **70 office properties**[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance, noting adverse impacts from inflation and higher interest rates, with FFO decreasing 3.8% YoY and Same Property NOI declining 6.1% YoY Portfolio Occupancy and Leased Rates (Total Portfolio) | Portfolio | Metric | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | :--- | | **Office** | Leased Rate | 82.0% | - | | | Occupancy Rate | 79.4% | 81.0% | | **Multifamily** | Leased Rate | 99.1% | - | | | Occupancy Rate | 97.4% | 96.7% | Funds From Operations (FFO) (in thousands) | Period | FFO | Change YoY | | :--- | :--- | :--- | | Three Months Ended Sep 30, 2024 | $86,015 | -3.8% | | Nine Months Ended Sep 30, 2024 | $268,145 | -5.7% | Same Property NOI Change YoY (Q3 2024 vs Q3 2023) | Segment | NOI Change YoY | | :--- | :--- | | Office | (7.7)% | | Multifamily | 2.1% | | **Total** | **(6.1)%** | - The company is converting a **25-story office tower in Honolulu** into **493 rental apartments**. As of September 30, 2024, **91% of the planned units have been delivered** and **98% of those delivered are leased**[122](index=122&type=chunk) - The Barrington Plaza Apartments property was removed from the rental market in Q2 2023 for a multi-year reconstruction, which **negatively impacted revenues and FFO**. A **significant majority of tenants had vacated by September 30, 2024**[124](index=124&type=chunk) - The company expects to meet short-term liquidity needs through **cash on hand ($544.2 million)** and operating cash flow. A **$400.0 million JV loan maturing in December 2024 is currently being refinanced**[163](index=163&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's primary market risk from interest rate fluctuations on its debt, with 23% being unhedged floating-rate debt - As of September 30, 2024, **23% of the company's consolidated borrowings were unhedged floating-rate debt**[174](index=174&type=chunk) - A **100 basis point increase in the benchmark interest rate** would increase annual interest expense on unhedged floating-rate borrowings by **$13.0 million**[174](index=174&type=chunk) - The company utilizes interest rate swaps and caps to mitigate risk. **62% of debt is fixed or swap-fixed**, and **15% is capped**. The **maximum potential annual interest expense increase on capped-rate debt is $15.8 million**[173](index=173&type=chunk) [Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal controls - The CEO and CFO concluded that the company's **disclosure controls and procedures were effective as of September 30, 2024**[175](index=175&type=chunk) - **No changes in internal control over financial reporting occurred during the quarter** that have materially affected, or are reasonably likely to materially affect, internal controls[175](index=175&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material adverse legal proceedings, excluding ordinary routine litigation - The company is not currently a party to any legal proceedings that it believes would have a **materially adverse effect on its business**[177](index=177&type=chunk) [Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) The company states no material changes to the risk factors disclosed in its 2023 Annual Report on Form 10-K - There are **no material changes from the risk factors disclosed in the 2023 Annual Report on Form 10-K**[178](index=178&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds for the period - **None**[178](index=178&type=chunk) [Defaults Upon Senior Securities](index=58&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - **None**[178](index=178&type=chunk) [Mine Safety Disclosures](index=58&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not applicable**[178](index=178&type=chunk) [Other Information](index=58&type=section&id=Item%205.%20Other%20Information) The company reports no other material information and no director or officer trading arrangement adoptions or terminations in Q3 2024 - During Q3 2024, **no director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement**[178](index=178&type=chunk) [Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The exhibits include **CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act**, as well as **Inline XBRL data files**[180](index=180&type=chunk) [Signatures](index=60&type=section&id=SIGNATURES) The report was duly signed on November 8, 2024, by Jordan L. Kaplan, President and CEO, and Peter D. Seymour, CFO - The report was duly signed on **November 8, 2024**, by **Jordan L. Kaplan, President and CEO**, and **Peter D. Seymour, CFO**[183](index=183&type=chunk)

Financial Data and Key Metrics Changes - The company achieved FFO of $0.43 per share, a decrease of 3.8% compared to the previous year, primarily due to lower office NOI [16] - Revenue decreased by 1.8% year-over-year, primarily due to lower office occupancy [16] - AFFO increased slightly to $68.8 million, while same property cash NOI decreased by 5.7% [16] Business Line Data and Key Metrics Changes - The company leased over 1 million square feet of office space, including over 350,000 square feet of new leases, resulting in a portfolio leased rate increase of 50 basis points to 82% [6][14] - The overall value of new leases signed increased by 0.4%, with cash spreads down 11.2% due to better leasing to tenants over 10,000 square feet [15] - The residential portfolio remains essentially fully leased at 99.1%, with rents continuing to rise [15] Market Data and Key Metrics Changes - Tenant demand was strong across diverse industries in all three regions, with positive absorption of approximately 90,000 square feet [6] - Leasing activity was broad-based, with good performance noted in Honolulu and West LA, while the Valley remained flat [36][77] Company Strategy and Development Direction - The company is focused on leasing up its office portfolio and repositioning projects, including Studio Plaza and Barrington Plaza, while looking to acquire high-quality assets at attractive prices [7][8] - The company aims to take advantage of opportunities in the office market, particularly in multi-tenant buildings with vacancies [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in increased tenant activity and improved leasing conditions, despite anticipating a drop in occupancy due to Warner Brothers vacating [28][29] - The company is optimistic about the leasing pipeline and expects to see a return to more normalized lease terms and longer leases [29][42] Other Important Information - The company raised its full-year guidance for FFO by $0.04, now expecting between $1.69 and $1.73 per share [17] - Management noted that G&A remains low at only 4% of revenue relative to its benchmark group [16] Q&A Session Summary Question: Uses for large cash balance - Management indicated that the cash is for liquidity, potential debt uses, new acquisitions, and ongoing investments [20][22] Question: Tenant recoveries increase - Management clarified that the increase in tenant recoveries was mostly due to normal seasonality [23] Question: Warner Brothers occupancy drop and guidance raise - Management explained that they have been planning for the Warner Brothers move-out and are seeing improvements in leasing and expense controls [26][28] Question: Sustainability of leasing volume - Management expressed optimism about the current leasing pipeline but refrained from making predictions for future quarters [46][48] Question: Barrington Plaza redevelopment status - Management reported that they are nearing the start of construction for Barrington Plaza in 2025 and are working through legal and permitting processes [50][51] Question: Leasing from the entertainment industry - Management noted that leasing activity from the entertainment sector has normalized and is performing at typical levels [73] Question: Short-term lease bucket and occupancy - Management clarified that leases expiring on the last day of the quarter are included in occupancy numbers until the end of that quarter [66][67] Question: Thoughts on office to residential conversions - Management indicated that while there are opportunities for conversions, strong office market conditions make it difficult to justify such moves [81][82]

Core Insights - Douglas Emmett (DEI) reported revenue of $250.75 million for the quarter ended September 2024, reflecting a decrease of 1.8% year-over-year, but exceeding the Zacks Consensus Estimate by 2.44% [1] - The company's EPS for the quarter was $0.43, a significant improvement from -$0.08 in the same quarter last year, surpassing the consensus estimate of $0.41 by 4.88% [1] Revenue Performance - Multifamily rental revenues reached $44.09 million, exceeding the average estimate of $42.28 million by analysts, marking a year-over-year increase of 2.9% [3] - Total multifamily revenues were reported at $48.09 million, above the average estimate of $45.10 million, representing a 3.2% increase compared to the previous year [3] - Total office revenues amounted to $202.66 million, slightly above the estimated $202.49 million, but showing a decline of 3% year-over-year [3] Stock Performance - Over the past month, Douglas Emmett's shares have returned -2.3%, contrasting with the Zacks S&P 500 composite's increase of 0.4% [4] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [4]

Group 1: Financial Performance - Douglas Emmett (DEI) reported quarterly funds from operations (FFO) of $0.43 per share, exceeding the Zacks Consensus Estimate of $0.41 per share, but down from $0.45 per share a year ago, representing an FFO surprise of 4.88% [1] - The company posted revenues of $250.75 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.44%, although this is a decrease from year-ago revenues of $255.41 million [2] - Over the last four quarters, Douglas Emmett has surpassed consensus FFO estimates four times, while it has topped consensus revenue estimates just once [2] Group 2: Stock Performance and Outlook - Douglas Emmett shares have increased approximately 20.8% since the beginning of the year, compared to the S&P 500's gain of 20.1% [3] - The company's FFO outlook is crucial for investors, as it includes current consensus FFO expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus FFO estimate for the coming quarter is $0.37 on revenues of $241.12 million, and for the current fiscal year, it is $1.68 on revenues of $975.59 million [7] Group 3: Industry Context - The REIT and Equity Trust - Other industry, to which Douglas Emmett belongs, is currently ranked in the top 27% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in estimate revisions, suggesting that investors can benefit from tracking these revisions [5] - The estimate revisions trend for Douglas Emmett is currently favorable, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6]