Company: HPP
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001482512-25-000126
Chunk: 137

Company: Hudson Pacific Properties, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 137
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Implicit in historical cost accounting for real estate assets in accordance with GAAP is the assumption that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies using historical cost accounting alone to be insufficient. Because FFO excludes depreciation and amortization of real estate assets, we believe that FFO along with the required GAAP presentations provides a more complete measurement of our performance relative to our competitors and a more appropriate basis on which to make decisions involving operating, financing and investing activities than the required GAAP presentations alone would provide. We use FFO per share to calculate annual cash bonuses for certain employees.

However, FFO should not be viewed as an alternative measure of our operating performance because it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, which are significant economic costs and could materially impact our results from operations.

The following table presents a reconciliation of net loss to FFO (in thousands): 

Three Months Ended June 30,Six Months Ended June 30,2025202420252024Net loss$(87,760)$(47,557)$(168,038)$(100,912)Adjustments:Depreciation and amortization—consolidated94,751 86,798 187,836 178,652 Depreciation and amortization—non-real estate assets(8,785)(8,211)(18,434)(16,192)Depreciation and amortization—HPP’s share from unconsolidated real estate entities1,113 2,006 2,158 3,157 Loss (gain) on sale of real estate, net16 — (10,007)— Impairment loss—real estate assets— — 18,476 — Unrealized (gain) loss on non-real estate investments(212)1,045 237 1,943 FFO attributable to non-controlling interests(5,152)(5,576)(10,005)(10,996)FFO attributable to preferred shares and units(5,168)(5,200)(10,361)(10,400)FFO TO COMMON STOCKHOLDERS AND UNITHOLDERS$(11,197)$23,305 $(8,138)$45,252 

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ITEM 3.