DigitalBridge Group, Inc. [DBRG] Filings

10-Q 1 dbrg-20220331.htm 10-Q dbrg-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-37980

DigitalBridge Group, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Maryland

46-4591526

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

750 Park of Commerce Drive, Suite 210

Boca Raton, Florida 33487

(Address of Principal Executive Offices, Including Zip Code)

(561) 570-4644

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Class A Common Stock, $0.01 par value

DBRG

New York Stock Exchange

Preferred Stock, 7.125% Series H Cumulative Redeemable, $0.01 par value

DBRG.PRH

New York Stock Exchange

Preferred Stock, 7.15% Series I Cumulative Redeemable, $0.01 par value

DBRG.PRI

New York Stock Exchange

Preferred Stock, 7.125% Series J Cumulative Redeemable, $0.01 par value

DBRG.PRJ

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. Yes ☐ No ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 3, 2022, 597,067,803 shares of the Registrant's class A common stock and 665,978 shares of class B common stock were outstanding.

Table of Contents

DigitalBridge Group, Inc.

Form 10-Q

Table of Contents


	PART I. FINANCIAL INFORMATION	Page
Item 1.	Financial Statements	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Operations	5
	Consolidated Statements of Comprehensive Income (Loss)	6
	Consolidated Statements of Equity	7
	Consolidated Statements of Cash Flows	8
	Notes to Consolidated Financial Statements:	10
	1. Business and Organization	10
	2. Summary of Significant Accounting Policies	11
	3. Acquisitions	14
	4. Real Estate	16
	5. Equity Investments	16
	6. Goodwill, Deferred Leasing Costs and Other Intangibles	18
	7. Restricted Cash, Other Assets and Other Liabilities	19
	8. Debt	20
	9. Stockholders' Equity	24
	10. Noncontrolling Interests	26
	11. Assets and Related Liabilities Held for Disposition	28
	12. Discontinued Operations	30
	13. Fair Value	31
	14. Variable Interest Entities	35
	15. Earnings per Share	37
	16. Fee Income	37
	17. Equity-Based Compensation	38
	18. Transactions with Affiliates	40
	19. Segment Reporting	42
	20. Commitments and Contingencies	44
	21. Supplemental Disclosure of Cash Flow Information	44
	22. Subsequent Events	44
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	64
Item 4.	Controls and Procedures	66
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	67
Item 1A.	Risk Factors	67
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	69
Item 3.	Defaults Upon Senior Securities	69
Item 4.	Mine Safety Disclosures	69
Item 5.	Other Information	69
Item 6.	Exhibits	70
SIGNATURES		72

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

DigitalBridge Group, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)


	March 31, 2022 (Unaudited)		December 31, 2021
Assets
Cash and cash equivalents	$	1,117,688	$	1,602,102
Restricted cash	106,332		99,121
Real estate, net	5,628,072		4,972,284
Loans receivable (at fair value)	504,739		173,921
Equity investments ($242,915 and $201,912 at fair value)	940,601		935,153
Goodwill	761,368		761,368
Deferred leasing costs and intangible assets, net	1,225,487		1,187,627
Assets held for disposition	151,307		3,676,615
Other assets ($5,176 and $944 at fair value)	746,176		740,395
Due from affiliates	50,387		49,230
Total assets	$	11,232,157	$	14,197,816
Liabilities
Debt, net	$	5,123,246	$	4,860,402
Accrued and other liabilities ($4,943 and $0 at fair value)	896,253		928,042
Intangible liabilities, net	34,459		33,301
Liabilities related to assets held for disposition	758		3,088,699

Dividends and distributions payable	15,759		15,759

Total liabilities	6,070,475		8,926,203
Commitments and contingencies (Note 20)
Redeemable noncontrolling interests	1,038,739		359,223
Equity
Stockholders’ equity:
Preferred stock, $0.01 par value per share; $883,500 liquidation preference; 250,000 shares authorized; 35,340 shares issued and outstanding	854,232		854,232
Common stock, $0.01 par value per share
Class A, 949,000 shares authorized; 597,480 and 568,577 shares issued and outstanding	5,974		5,685
Class B, 1,000 shares authorized; 666 shares issued and outstanding	7		7
Additional paid-in capital	7,356,363		7,820,807
Accumulated deficit	(6,838,497)		(6,576,180)
Accumulated other comprehensive income	12,753		42,383
Total stockholders’ equity	1,390,832		2,146,934
Noncontrolling interests in investment entities	2,688,907		2,653,173
Noncontrolling interests in Operating Company	43,204		112,283
Total equity	4,122,943		4,912,390
Total liabilities, redeemable noncontrolling interests and equity	$	11,232,157	$	14,197,816

The accompanying notes are an integral part of the consolidated financial statements.

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DigitalBridge Group, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)


	Three Months Ended March 31,
	2022		2021
Revenues
Property operating income	$	202,511	$	189,002
Interest income	5,166		854
Fee income (from affiliates)	42,837		29,443
Other income ($3,379 and $519 from affiliates)	6,945		1,282
Total revenues	257,459		220,581
Expenses
Property operating expense	84,003		79,862
Interest expense	44,030		39,780
Investment expense	9,565		6,893
Transaction-related costs	165		1,618
Depreciation and amortization	128,567		139,425


Compensation expense—cash and equity-based	65,542		78,786
Compensation expense (reversal)—incentive fee and carried interest	(20,352)		(33)
Administrative expenses	27,885		17,796

Total expenses	339,405		364,127
Other income (loss)

Other loss, net	(149,881)		(9,350)
Equity method earnings (losses)	19,207		(16,417)
Equity method losses—carried interest	(31,079)		(222)
Loss from continuing operations before income taxes	(243,699)		(169,535)
Income tax benefit	7,413		23,196
Loss from continuing operations	(236,286)		(146,339)
Loss from discontinued operations	(107,398)		(481,260)
Net loss	(343,684)		(627,599)
Net income (loss) attributable to noncontrolling interests:
Redeemable noncontrolling interests	(11,220)		2,449
Investment entities	(63,045)		(355,862)
Operating Company	(22,862)		(27,896)
Net loss attributable to DigitalBridge Group, Inc.	(246,557)		(246,290)

Preferred stock dividends	15,759		18,516
Net loss attributable to common stockholders	$	(262,316)	$	(264,806)
Loss per share—basic
Loss from continuing operations per common share—basic	$	(0.30)	$	(0.22)
Net loss attributable to common stockholders per common share—basic	$	(0.46)	$	(0.56)
Loss per share—diluted
Loss from continuing operations per common share—diluted	$	(0.30)	$	(0.22)
Net loss attributable to common stockholders per common share—diluted	$	(0.46)	$	(0.56)
Weighted average number of shares
Basic	569,940		474,899
Diluted	569,940		474,899

The accompanying notes are an integral part of the consolidated financial statements.

Table of Contents

DigitalBridge Group, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2022		2021
Net loss	$	(343,684)	$	(627,599)
Changes in accumulated other comprehensive income (loss) related to:
Equity method investments	2		(2,708)
Available-for-sale debt securities	(6,373)		(3,309)
Cash flow hedges	—		1,285
Foreign currency translation	(37,941)		(59,618)
Net investment hedges	—		4,118
Other comprehensive income (loss)	(44,312)		(60,232)
Comprehensive loss	(387,996)		(687,831)
Comprehensive income (loss) attributable to noncontrolling interests:
Redeemable noncontrolling interests	(11,220)		2,449
Investment entities	(75,056)		(392,518)
Operating Company	(25,458)		(30,329)
Comprehensive loss attributable to stockholders	$	(276,262)	$	(267,433)

The accompanying notes are an integral part of the consolidated financial statements.

Table of Contents

DigitalBridge Group, Inc.

Consolidated Statements of Equity

(In thousands, except per share data)

(Unaudited)


	Preferred Stock		Common Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Stockholders’ Equity		Noncontrolling Interests in Investment Entities		Noncontrolling Interests in Operating Company		Total Equity























Balance at December 31, 2020	$	999,490	$	4,841	$	7,570,473	$	(6,195,456)	$	122,123	$	2,501,471	$	4,327,372	$	155,747	$	6,984,590

Net loss	—		—		—		(246,290)		—		(246,290)		(355,862)		(27,896)		(630,048)
Other comprehensive loss	—		—		—		—		(21,143)		(21,143)		(36,656)		(2,433)		(60,232)

Deconsolidation of investment entities (Note 21)	—		—		—		—		—		—		(22,413)		—		(22,413)
Redemption of OP Units for class A common stock	—		—		16		—		—		16		—		(16)		—
Equity awards issued, net of forfeitures	—		48		16,536		—		—		16,584		308		1,308		18,200
Shares canceled for tax withholdings on vested equity awards	—		(11)		(7,707)		—		—		(7,718)		—		—		(7,718)
Contributions from noncontrolling interests	—		—		—		—		—		—		113,213		—		113,213
Distributions to noncontrolling interests	—		—		—		—		—		—		(26,739)		—		(26,739)
Preferred stock dividends	—		—		—		(18,516)		—		(18,516)		—		—		(18,516)

Reallocation of equity (Notes 2 and 10)	—		—		(2,445)		—		76		(2,369)		4,682		(2,313)		—
Balance at March 31, 2021	$	999,490	$	4,878	$	7,576,873	$	(6,460,262)	$	101,056	$	2,222,035	$	4,003,905	$	124,397	$	6,350,337





Balance at December 31, 2021	$	854,232	$	5,692	$	7,820,807	$	(6,576,180)	$	42,383	$	2,146,934	$	2,653,173	$	112,283	$	4,912,390

Net loss	—		—		—		(246,557)		—		(246,557)		(63,045)		(22,862)		(332,464)
Other comprehensive loss	—		—		—		—		(29,705)		(29,705)		(12,011)		(2,596)		(44,312)
Exchange of notes for common stock (Note 8)	—		256		177,562		—		—		177,818		—		—		177,818
Adjustment to fair value of redeemable noncontrolling interests (Note 10)	—		—		(690,000)		—		—		(690,000)		—		—		(690,000)
Deconsolidation of investment entities (Note 21)	—		—		—		—		—		—		(176,856)		—		(176,856)


Redemption of OP Units for class A common stock	—		—		2		—		—		2		—		(2)		—
Equity awards issued, net of forfeitures	—		50		14,286		—		—		14,336		2,734		1,555		18,625
Shares canceled for tax withholdings on vested equity awards	—		(17)		(11,393)		—		—		(11,410)		—		—		(11,410)


Acquisition of noncontrolling interest (Note 10)	—		—		—		—		—		—		(32,076)		—		(32,076)
Contributions from noncontrolling interests	—		—		—		—		—		—		343,006		—		343,006
Distributions to noncontrolling interests	—		—		—		—		—		—		(26,018)		—		(26,018)
Preferred stock dividends	—		—		—		(15,760)		—		(15,760)		—		—		(15,760)

Reallocation of equity (Notes 2 and 10)	—		—		45,099		—		75		45,174		—		(45,174)		—
Balance at March 31, 2022	$	854,232	$	5,981	$	7,356,363	$	(6,838,497)	$	12,753	$	1,390,832	$	2,688,907	$	43,204	$	4,122,943

The accompanying notes are an integral part of the consolidated financial statements.

Table of Contents

DigitalBridge Group, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2022		2021
Cash Flows from Operating Activities
Net loss	$	(343,684)	$	(627,599)
Adjustments to reconcile net loss to net cash provided by operating activities:

Paid-in-kind interest added to loan principal, net of interest received	(1,144)		(4,267)
Straight-line rent income	(4,530)		18,800
Amortization of above- and below-market lease values, net	(132)		6,098
Amortization of deferred financing costs and debt discount and premium, net	96,279		43,729
Equity method (gains) losses	(116)		111,519
Distributions of income from equity method investments	—		520

Allowance for doubtful accounts	—		205
Impairment of real estate and related intangibles and right-of-use asset	23,802		123,760

Depreciation and amortization	130,906		190,305
Equity-based compensation	18,719		19,319

Gain on sales of real estate, net	—		(45,750)


Deferred income tax benefit	(9,040)		(34,480)
Loss on extinguishment of exchangeable notes	133,173		—
Other loss, net	17,332		213,661
(Increase) decrease in other assets and due from affiliates	(4,186)		(31,721)
Increase (decrease) in accrued and other liabilities and due to affiliates	(55,136)		(7,460)
Other adjustments, net	(986)		(576)
Net cash provided by (used in) operating activities	1,257		(23,937)
Cash Flows from Investing Activities
Contributions to and acquisition of equity investments	(215,040)		(117,776)
Return of capital from equity method investments	11,829		2,253
Acquisition of loans receivable and debt securities	(101,607)		(9,697)
Net disbursements on originated loans	(205,507)		(3,631)
Repayments of loans receivable	15,845		8,798
Proceeds from sales of loans receivable and debt securities	126,644		—

Acquisition of and additions to real estate, related intangibles and leasing commissions	(822,368)		(74,024)
Proceeds from sales of real estate	96,660		143,328
Cash and restricted cash assumed by buyer in sales of real estate investment holding entities	(189,453)		(78,520)

DigitalBridge Group, Inc. [DBRG] Filings
DigitalBridge Group, Inc. [DBRG-PH] Filings
DigitalBridge Group, Inc. [DBRG-PI] Filings
DigitalBridge Group, Inc. [DBRG-PJ] Filings
10-Q	[2022-05-09]
10-K	[2022-02-28]
10-Q	[2021-11-09]
10-Q	[2021-08-09]
10-Q	[2021-05-10]
10-K	[2021-03-01]
10-Q	[2020-11-09]
10-Q	[2020-08-10]
10-Q	[2020-05-11]
10-K	[2020-03-02]
10-Q	[2019-11-08]
10-Q	[2019-08-09]
10-Q	[2019-05-10]
10-K	[2019-03-01]
10-Q	[2018-11-09]
10-Q	[2018-08-09]
10-Q	[2018-05-10]
10-K	[2018-03-01]
10-Q	[2017-11-09]
10-Q	[2017-08-09]
10-Q	[2017-05-10]
10-K	[2017-02-28]

DigitalBridge Group, Inc. [DBRG] Filings

DigitalBridge Group, Inc. [DBRG-PH] Filings

DigitalBridge Group, Inc. [DBRG-PI] Filings

DigitalBridge Group, Inc. [DBRG-PJ] Filings