DigitalBridge Group, Inc. [DBRG] Filings

10-Q 1 dbrg-20240630.htm 10-Q dbrg-20240630

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 June 30, 2024


☐			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(b) 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 July 31, 2024, 173,698,729 shares of the Registrant's class A common stock and 166,494 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	9
	Notes to Consolidated Financial Statements:	12
	1. Business and Organization	12
	2. Summary of Significant Accounting Policies	12
	3. Business Combinations	16
	4. Investments	18
	5. Goodwill and Intangible Assets	20
	6. Restricted Cash, Other Assets and Other Liabilities	21
	7. Debt	22
	8. Stockholders' Equity	23
	9. Noncontrolling Interests	25
	10. Fair Value	25
	11. Earnings per Share	29
	12. Fee Revenue	29
	13. Equity-Based Compensation	30
	14. Variable Interest Entities	33
	15. Transactions with Affiliates	34
	16. Segment Reporting	36
	17. Commitments and Contingencies	37

	18. Subsequent Events	37
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	55
Item 4.	Controls and Procedures	56
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	57
Item 1A.	Risk Factors	57
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 3.	Defaults Upon Senior Securities	57
Item 4.	Mine Safety Disclosures	57
Item 5.	Other Information	57
Item 6.	Exhibits	58
SIGNATURES		59

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

DigitalBridge Group, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)


	June 30, 2024 (Unaudited)		December 31, 2023
Assets
Cash and cash equivalents	$	261,173	$	345,335
Restricted cash	4,743		4,915
Investments ($316,670 and $572,749 at fair value)	2,517,653		2,476,093
Goodwill	465,602		465,991
Intangible assets	87,711		103,750
Other assets	70,212		78,953
Due from affiliates	94,805		85,815
Assets of discontinued operations	521		1,698
Total assets	$	3,502,420	$	3,562,550
Liabilities
Debt	$	295,315	$	371,783
Other liabilities ($58,960 and $124,019 at fair value)	744,197		681,451

Liabilities of discontinued operations	158		153
Total liabilities	1,039,670		1,053,387
Commitments and contingencies (Note 17)
Redeemable noncontrolling interests	19,753		17,862
Equity
Stockholders’ equity:
Preferred stock, $0.01 par value per share; $821,899 liquidation preference; 250,000 shares authorized; 32,876 shares issued and outstanding	794,670		794,670
Common stock, $0.01 par value per share
Class A, 237,250 shares authorized; 173,600 and 163,209 shares issued and outstanding	1,736		1,632
Class B, 250 shares authorized; 166 shares issued and outstanding	2		2
Additional paid-in capital	7,988,729		7,855,842
Accumulated deficit	(6,813,427)		(6,842,502)
Accumulated other comprehensive income (loss)	755		1,411
Total stockholders’ equity	1,972,465		1,811,055
Noncontrolling interests in investment entities	389,329		605,311
Noncontrolling interests in Operating Company	81,203		74,935
Total equity	2,442,997		2,491,301
Total liabilities, redeemable noncontrolling interests and equity	$	3,502,420	$	3,562,550

The accompanying notes form 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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues
Fee revenue ($73,376, $63,227, $143,187 and $119,616 from affiliates)	$	78,605	$	65,742	$	151,560	$	124,868
Carried interest allocation (reversal)	288,244		79,254		279,766		24,498
Principal investment income	15,982		30,409		18,827		33,971
Other income ($3,316, $1,376, $5,835 and $2,629 from affiliates)	7,505		14,469		14,576		25,033
Total revenues	390,336		189,874		464,729		208,370
Expenses
Compensation expense—cash and equity-based	51,661		56,557		102,845		104,028
Compensation expense—incentive fee and carried interest allocation (reversal)	178,430		36,076		171,716		(755)
Administrative and other expenses	26,508		21,505		50,818		41,952
Interest expense	3,136		5,665		8,328		13,796
Transaction-related costs	671		1,113		1,431		9,640
Depreciation and amortization	8,097		11,353		17,264		18,228
Total expenses	268,503		132,269		352,402		186,889
Other income (loss)
Other gain (loss), net	8,810		(11,881)		2,916		(156,395)
Income (loss) from continuing operations before income taxes	130,643		45,724		115,243		(134,914)
Income tax benefit (expense)	7		(2,770)		(1,239)		(3,868)
Income (loss) from continuing operations	130,650		42,954		114,004		(138,782)
Income (loss) from discontinued operations	(722)		(95,470)		(14,842)		(206,078)
Net income (loss)	129,928		(52,516)		99,162		(344,860)
Net income (loss) attributable to noncontrolling interests:
Redeemable noncontrolling interests	158		(2,441)		891		4,502
Investment entities	32,921		(39,667)		34,388		(124,495)
Operating Company	5,426		(1,745)		2,088		(18,407)
Net income (loss) attributable to DigitalBridge Group, Inc.	91,423		(8,663)		61,795		(206,460)
Preferred stock dividends	14,660		14,675		29,320		29,351
Preferred stock repurchases	—		(927)		—		(927)
Net income (loss) attributable to common stockholders	$	76,763	$	(22,411)	$	32,475	$	(234,884)
Income (loss) per share—basic
Income (loss) from continuing operations per common share—basic	$	0.44	$	(0.06)	$	0.27	$	(1.25)
Net income (loss) attributable to common stockholders per common share—basic	$	0.44	$	(0.14)	$	0.19	$	(1.48)
Income (loss) per share—diluted
Income (Loss) from continuing operations per common share—diluted	$	0.44	$	(0.06)	$	0.27	$	(1.25)
Net income (loss) attributable to common stockholders per common share—diluted	$	0.44	$	(0.14)	$	0.19	$	(1.48)
Weighted average number of shares
Basic	170,358		158,089		165,748		159,113
Diluted	172,066		158,089		171,033		159,113
Dividends declared per common share	$	0.01	$	0.01	$	0.02	$	0.02

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

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DigitalBridge Group, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net income (loss)	$	129,928	$	(52,516)	$	99,162	$	(344,860)
Changes in accumulated other comprehensive income (loss) related to:
Equity method investments	—		—		—		318
Foreign currency translation	45		3,143		(709)		2,912
Other comprehensive income (loss)	45		3,143		(709)		3,230
Comprehensive income (loss)	129,973		(49,373)		98,453		(341,630)
Comprehensive income (loss) attributable to noncontrolling interests:
Redeemable noncontrolling interests	158		(2,441)		891		4,502
Investment entities	32,921		(39,307)		34,388		(124,100)
Operating Company	5,429		(1,544)		2,037		(18,187)
Comprehensive income (loss) attributable to stockholders	$	91,465	$	(6,081)	$	61,137	$	(203,845)

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

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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 (Loss)		Total Stockholders’ Equity		Noncontrolling Interests in Investment Entities		Noncontrolling Interests in Operating Company		Total Equity


Balance at December 31, 2022	$	800,355	$	6,397	$	7,818,068	$	(6,962,613)	$	(1,509)	$	1,660,698	$	2,743,896	$	64,895	$	4,469,489
Net income (loss)	—		—		—		(197,797)		—		(197,797)		(84,828)		(16,662)		(299,287)
Other comprehensive income (loss)	—		—		—		—		33		33		35		19		87




Stock repurchases	(52)		—		—		—		—		(52)		—		—		(52)

Equity-based compensation	—		99		10,930		—		—		11,029		5,542		41		16,612
Shares canceled for tax withholdings on vested equity awards	—		(16)		(4,847)		—		—		(4,863)		—		—		(4,863)


Contributions from noncontrolling interests	—		—		—		—		—		—		29,684		—		29,684
Distributions to noncontrolling interests	—		—		—		—		—		—		(43,436)		(126)		(43,562)
Preferred stock dividends	—		—		—		(14,676)		—		(14,676)		—		—		(14,676)
Common stock dividends declared ($0.01 per share)	—		—		—		(1,620)		—		(1,620)		—		—		(1,620)
Reallocation of equity (Notes 2 and 9)	—		—		(429)		—		(2)		(431)		—		431		—
Balance at March 31, 2023	$	800,303	$	6,480	$	7,823,722	$	(7,176,706)	$	(1,478)	$	1,452,321	$	2,650,893	$	48,598	$	4,151,812
Net income (loss)	—		—		—		(8,663)		—		(8,663)		(39,667)		(1,745)		(50,075)
Other comprehensive income (loss)	—		—		—		—		2,582		2,582		360		201		3,143
Change in common stock par value (Note 8)	—		(4,862)		4,862		—		—		—		—		—		—





Stock repurchases	(5,633)		—		927		—		—		(4,706)		—		—		(4,706)
Redemption of OP Units for class A common stock	—		3		981		—		—		984		—		(984)		—
Equity-based compensation	—		11		21,681		—		—		21,692		4,232		41		25,965
Shares canceled for tax withholdings on vested equity awards	—		(6)		(5,348)		—		—		(5,354)		—		—		(5,354)


Contributions from noncontrolling interests	—		—		—		—		—		—		38,240		—		38,240
Distributions to noncontrolling interests	—		—		—		—		—		—		(13,608)		(124)		(13,732)
Preferred stock dividends	—		—		—		(14,660)		—		(14,660)		—		—		(14,660)
Common stock dividends declared ($0.01 per share)	—		—		—		(1,622)		—		(1,622)		—		—		(1,622)
Reallocation of equity (Notes 2 and 9)	—		—		(385)		—		18		(367)		(844)		1,211		—
Balance at June 30, 2023	$	794,670	$	1,626	$	7,846,440	$	(7,201,651)	$	1,122	$	1,442,207	$	2,639,606	$	47,198	$	4,129,011

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

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DigitalBridge Group, Inc.

Consolidated Statements of Equity (Continued)

(In thousands, except per share data)

(Unaudited)


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


Balance at December 31, 2023	$	794,670	$	1,634	$	7,855,842	$	(6,842,502)	$	1,411	$	1,811,055	$	605,311	$	74,935	$	2,491,301
Net income (loss)	—		—		—		(29,628)		—		(29,628)		1,467		(3,338)		(31,499)
Other comprehensive income (loss)	—		—		—		—		(700)		(700)		—		(54)		(754)
Settlement of Wafra contingent consideration (Note 6)	—		10		17,490		—		—		17,500		—		—		17,500
Reclassification of warrants (Note 10)	—		—		33,000		—		—		33,000		—		—		33,000
Exchange of notes for common stock (Note 7)	—		7		5,934		—		—		5,941		—		—		5,941
Redemption of OP Units for class A common stock	—		1		514		—		—		515		—		(515)		—
Equity-based compensation	—		14		8,127		—		—		8,141		—		39		8,180
Shares canceled for tax withholdings on vested equity awards	—		(4)		(8,299)		—		—		(8,303)		—		—		(8,303)
Contributions from noncontrolling interests	—		—		—		—		—		—		8,609		—		8,609
Distributions to noncontrolling interests	—		—		—		—		—		—		(4,695)		(123)		(4,818)
Preferred stock dividends	—		—		—		(14,660)		—		(14,660)		—		—		(14,660)
Common stock dividends declared ($0.01 per share)	—		—		—		(1,662)		—		(1,662)		—		—		(1,662)
Reallocation of equity (Notes 2 and 9)	—		—		(2,743)		—		1		(2,742)		—		2,742		—
Balance at March 31, 2024	$	794,670	$	1,662	$	7,909,865	$	(6,888,452)	$	712	$	1,818,457	$	610,692	$	73,686	$	2,502,835
Net income (loss)	—		—		—		91,423		—		91,423		32,921		5,426		129,770
Other comprehensive income (loss)	—		—		—		—		42		42		—		3		45
Exchange of notes for common stock (Note 7)	—		76		66,700		—		—		66,776		—		—		66,776
Deconsolidation of sponsored funds (Note 10)	—		—		—		—		—		—		(262,970)		—		(262,970)

Equity-based compensation	—		—		14,549		—		—		14,549		—		40		14,589
Shares canceled for tax withholdings on vested equity awards	—		—		(213)		—		—		(213)		—		—		(213)
Contributions from noncontrolling interests	—		—		—		—		—		—		10,700				10,700
Distributions to noncontrolling interests	—		—		—		—		—		—		(2,014)		(123)		(2,137)
Preferred stock dividends	—		—				(14,660)				(14,660)		—		—		(14,660)
Common stock dividends declared ($0.01 per share)	—		—				(1,738)				(1,738)		—		—		(1,738)
Reallocation of equity (Notes 2 and 9)	—		—		(2,172)				1		(2,171)		—		2,171		—
Balance at June 30, 2024	$	794,670	$	1,738	$	7,988,729	$	(6,813,427)	$	755	$	1,972,465	$	389,329	$	81,203	$	2,442,997

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

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DigitalBridge Group, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Six Months Ended June 30,
	2024		2023
Cash Flows from Operating Activities
Net income (loss)	$	99,162	$	(344,860)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Amortization of deferred financing costs and debt discount and premium, net	1,248		17,719
Unrealized carried interest allocation	(279,648)		(24,498)
Unrealized principal investment income	(8,281)		(30,294)
Other equity method (earnings) losses	—		13,303


Depreciation and amortization	17,264		291,136
Equity-based compensation	26,030		42,577
Deferred income tax (benefit) expense	(609)		2,469

Other (gain) loss, net	12,091		152,625
Other adjustments, net	(197)		(2,616)
(Increase) decrease in other assets and due from affiliates	(4,513)		19,916
Increase (decrease) in other liabilities and due to affiliates	132,970		(45,627)
Net cash generated by (used in) operating activities	(4,483)		91,850
Cash Flows from Investing Activities
Contributions to and acquisition of equity investments	(74,847)		(405,703)
Return of capital from equity method investments	28,630		55,643
Proceeds from sale of equity investments	32,040		595,209



Repayments of loans receivable	1,000		6,804

Acquisition of and additions to real estate, related intangibles and leasing commissions	—		(510,973)

Investment deposits	—		(1,669)
Net receipt (payment) on settlement of derivatives	—		3,401
Acquisition of InfraBridge, net of cash acquired (Note 3)	—		(314,266)
Purchase of fixed assets	(3,305)		—
Cash derecognized in deconsolidation of sponsored funds	(745)		—


Net cash generated by (used in) investing activities	(17,227)		(571,554)

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

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DigitalBridge Group, Inc.

Consolidated Statements of Cash Flows (Continued)

(In thousands)

(Unaudited)


	Six Months Ended June 30,
	2024		2023
Cash Flows from Financing Activities


Dividends paid to preferred stockholders	$	(29,320)	$	(29,441)
Dividends paid to common stockholders	(3,296)		(3,214)



Repayment or redemption of senior notes	(5,000)		(200,000)
Borrowings from investment level debt	—		1,617,790
Repayments of investment level debt	—		(1,158,667)
Payment of deferred financing costs and prepayment penalties on investment level debt	—		(38,012)
Contributions from noncontrolling interests	20,309		68,224
Distributions to and redemptions of noncontrolling interests	(18,597)		(127,599)
Payment of contingent consideration to Wafra	(17,500)		(90,000)
Repurchases of preferred stock	—		(4,758)
Shares canceled for tax withholdings on vested equity awards	(8,516)		(10,217)



Net cash generated by (used in) financing activities	(61,920)		24,106
Effect of exchange rates on cash, cash equivalents and restricted cash	(704)		429
Net increase (decrease) in cash, cash equivalents and restricted cash	(84,334)		(455,169)
Cash, cash equivalents and restricted cash—beginning of period	350,250		1,036,739
Cash, cash equivalents and restricted cash—end of period	$	265,916	$	581,570

Reconciliation of cash, cash equivalents and restricted cash to consolidated balance sheets


	Six Months Ended June 30,
	2024		2023
Beginning of period
Cash and cash equivalents	$	345,335	$	855,564
Restricted cash	4,915		4,854
Assets of discontinued operations—cash and cash equivalents	—		62,690
Assets of discontinued operations—restricted cash	—		113,631
Total cash, cash equivalents and restricted cash—beginning of period	$	350,250	$	1,036,739

End of period
Cash and cash equivalents	$	261,173	$	359,393
Restricted cash	4,743		4,268
Assets of discontinued operations—cash and cash equivalents	—		67,490
Assets of discontinued operations—restricted cash	—		150,419
Total cash, cash equivalents and restricted cash—end of period	$	265,916	$	581,570

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

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Supplemental Disclosure of Cash Flow Information


	Six Months Ended June 30,
(In thousands)	2024		2023
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	9,209	$	106,269
Cash received (paid) for income taxes	5,342		123
Operating lease payments for corporate offices	4,603		4,414
Supplemental Disclosure of Cash Flows from Discontinued Operations
Net cash generated by (used in) operating activities of discontinued operations	$	(13,407)	$	149,727
Net cash generated by (used in) investing activities of discontinued operations	27		(252,354)
Supplemental Disclosure of Noncash Investing and Financing Activities
Dividends and distributions payable	$	16,698	$	16,492
Receivables from asset sales	—		2,143

Redemption of OP Units for common stock	515		984

Exchange of notes into shares of Class A common stock	72,717		—

Settlement of Wafra contingent consideration through issuance of Class A common stock	17,500		—



Operating lease ROU assets and lease liabilities established for corporate offices	—		15,293



Assets of sponsored funds deconsolidated (Note 10)	393,612		—
Liabilities of sponsored funds deconsolidated (Note 10)	(189)		—
Noncontrolling interests of sponsored funds deconsolidated (Note 10)	(262,970)		—

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

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DigitalBridge Group, Inc.

Notes to Consolidated Financial Statements

June 30, 2024

(Unaudited)

1. Business and Organization

DigitalBridge Group, Inc. ("DBRG," and together with its consolidated subsidiaries, the "Company") is a leading global digital infrastructure investment manager. The Company deploys and manages capital on behalf of its investors and shareholders across the digital infrastructure ecosystem, including data centers, cell towers, fiber networks, small cells, and edge infrastructure. The Company's investment management platform is anchored by its flagship value-add digital infrastructure equity offerings, and has expanded to include offerings in core equity, credit, liquid securities, and mid-market global infrastructure equity through InfraBridge (Note 3).

Organization

The Company operates as a taxable C Corporation and conducts all of its activities and holds substantially all of its assets and liabilities through its operating subsidiary, DigitalBridge Operating Company, LLC (the "Operating Company" or the "OP"). At June 30, 2024, the Company owned 93% of the OP, as its sole managing member. The remaining 7% is owned primarily by certain current and former employees of the Company as noncontrolling interests.

2. Summary of Significant Accounting Policies

The significant accounting policies of the Company are described below.

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. However, the results of operations for the interim period presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2024, or any other future period. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in, or presented as exhibits to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The accompanying consolidated financial statements include the accounts of the Company and its controlled subsidiaries. All significant intercompany accounts and transactions have been eliminated. The portions of equity, net income (loss) and other comprehensive income (loss) of consolidated subsidiaries that are not attributable to the parent are presented separately as amounts attributable to noncontrolling interests in the consolidated financial statements. Noncontrolling interests represent predominantly carried interest allocation to certain senior executives of the Company (Note 15), limited partners of consolidated funds, and membership interests in the OP primarily held by certain current and former employees of the Company.

To the extent the Company consolidates a subsidiary that is subject to industry-specific guidance, such as investment company accounting applied by the Company's consolidated sponsored funds, the Company retains the industry-specific guidance applied by that subsidiary in its consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and assumptions.

Principles of Consolidation

The Company consolidates entities in which it has a controlling financial interest by first considering if an entity meets the definition of a variable interest entity ("VIE") for which the Company is deemed to be the primary beneficiary, or if the Company has the power to control an entity through a majority of voting interest or through other arrangements.

Variable Interest Entities—A VIE is an entity that either (i) lacks sufficient equity to finance its activities without additional subordinated financial support from other parties; (ii) whose equity holders lack the characteristics of a controlling financial interest; and/or (iii) is established with non-substantive voting rights. A VIE is consolidated by its

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primary beneficiary, which is defined as the party who has a controlling financial interest in the VIE through (a) power to direct the activities of the VIE that most significantly affect the VIE’s economic performance, and (b) obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. This assessment may involve subjectivity in the determination of which activities most significantly affect the VIE’s performance, and estimates about current and future fair value of the assets held by the VIE and financial performance of the VIE. In assessing its interests in the VIE, the Company also considers interests held by its related parties, including de facto agents. Additionally, the Company assesses whether it is a member of a related party group that collectively meets the power and benefits criteria and, if so, whether the Company is most closely associated with the VIE. In performing the related party analysis, the Company considers both qualitative and quantitative factors, including, but not limited to: the characteristics and size of its investment relative to the related party; the Company’s and the related party's ability to control or significantly influence key decisions of the VIE including consideration of involvement by de facto agents; the obligation or likelihood for the Company or the related party to fund operating losses of the VIE; and the similarity and significance of the VIE’s business activities to those of the Company and the related party. The determination of whether an entity is a VIE, and whether the Company is the primary beneficiary, may involve significant judgment, and depends upon facts and circumstances specific to an entity at the time of the assessment.

Voting Interest Entities—Unlike VIEs, voting interest entities have sufficient equity to finance their activities and equity investors exhibit the characteristics of a controlling financial interest through their voting rights. The Company consolidates such entities when it has the power to control these entities through ownership of a majority of the entities' voting interests or through other arrangements.

At each reporting period, the Company reassesses whether changes in facts and circumstances cause a change in the status of an entity as a VIE or voting interest entity, and/or a change in the Company's consolidation assessment. Changes in consolidation status are applied prospectively. An entity may be consolidated as a result of this reassessment, in which case, the assets, liabilities and noncontrolling interests in the entity are recorded at fair value upon initial consolidation. Any existing equity interest held by the Company in the entity prior to the Company obtaining control will be remeasured at fair value, which may result in a gain or loss recognized upon initial consolidation. However, if the consolidation represents an asset acquisition of a voting interest entity, the Company's existing interest in the acquired assets, if any, is not remeasured to fair value but continues to be carried at historical cost. The Company may also deconsolidate a subsidiary as a result of this reassessment, which may result in a gain or loss recognized upon deconsolidation depending on the carrying values of deconsolidated assets and liabilities compared to the fair value of any interests retained.

Noncontrolling Interests

Redeemable Noncontrolling Interests—This represents noncontrolling interests in sponsored open-end funds in the liquid securities strategy that are consolidated by the Company. The limited partners of these funds have the ability to withdraw all or a portion of their interests from the funds in cash with advance notice.

Redeemable noncontrolling interests is presented outside of permanent equity. Allocation of net income or loss to redeemable noncontrolling interests is based upon their ownership percentage during the period. The carrying amount of redeemable noncontrolling interests is adjusted to its redemption value at the end of each reporting period to an amount not less than its initial carrying value, except for amounts contingently redeemable which will be adjusted to redemption value only when redemption is probable. Such adjustments will be recognized in additional paid-in capital.

Noncontrolling Interests in Investment Entities—This represents limited partners of consolidated closed-end funds, and carried interest allocation to certain senior executives of the Company (Note 15) and to a lesser extent, to a third party investor, Wafra. Excluding carried interests, allocation of net income or loss is generally based upon relative ownership interests.

Noncontrolling Interests in Operating Company—This represents membership interests in OP held primarily by certain current and former employees of the Company. Noncontrolling interests in OP are allocated a share of net income or loss in OP based upon their weighted average ownership interest in OP during the period. Noncontrolling interests in OP have the right to require OP to redeem part or all of such member’s membership units in OP ("OP Units") for cash based on the market value of an equivalent number of shares of class A common stock of the Company at the time of redemption, or at the Company's election as managing member of OP, through issuance of shares of class A common stock (registered or unregistered) on a one-for-one basis. At the end of each reporting period, noncontrolling interests in OP is adjusted to reflect their ownership percentage in OP at the end of the period, through a reallocation between controlling and noncontrolling interests in OP, as applicable.

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Business Combinations

Definition of a Business—The Company evaluates each purchase transaction to determine whether the acquired assets meet the definition of a business. If substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, then the set of transferred assets and activities is not a business. For an acquisition to be considered a business, it would have to include an input and a substantive process that together significantly contribute to the ability to create outputs (i.e., there is a continuation of revenue before and after the transaction). A substantive process is not ancillary or minor, cannot be replaced without significant costs, effort or delay or is otherwise considered unique or scarce. To qualify as a business without outputs, the acquired assets would require an organized workforce with the necessary skills, knowledge and experience to perform a substantive process.

Business Combinations—The Company accounts for acquisitions that qualify as business combinations by applying the acquisition method. Transaction costs related to acquisition of a business are expensed as incurred and excluded from the fair value of consideration transferred. The identifiable assets acquired, liabilities assumed and noncontrolling interests in an acquired entity are recognized and measured at their estimated fair values, except as discussed below. The excess of the consideration transferred over the value of identifiable assets acquired, liabilities assumed and noncontrolling interests in an acquired entity, net of fair value of any previously held interest in the acquired entity, is recorded as goodwill. Such valuations require management to make significant estimates and assumptions.

With respect to contract assets and contract liabilities acquired in a business combination, these are not accounted for under the fair value basis at the time of acquisition. Instead, the Company determines the value of these revenue contracts as if it had originated the acquired contracts by evaluating the associated performance obligations, transaction price and relative stand-alone selling price at the original contract inception date or subsequent modification dates.

The estimated fair values and allocation of consideration are subject to adjustments during the measurement period, not to exceed one year, based upon new information obtained about facts and circumstances that existed at time of acquisition.

Contingent Consideration—Contingent consideration is classified as a liability or equity, as applicable. Contingent consideration in connection with the acquisition of a business or a VIE is measured at fair value on acquisition date, and unless classified as equity, is remeasured at fair value each reporting period thereafter until the consideration is settled, with changes in fair value included in earnings.

Discontinued Operations

If the disposition of a component, being an operating or reportable segment, business unit, subsidiary or asset group, represents a strategic shift that has or will have a major effect on the Company’s operations and financial results, the operating profits or losses of the component when classified as held for sale, and the gain or loss upon disposition of the component, are presented as discontinued operations in the statements of operations.

A business or asset group acquired in connection with a business combination that meets the criteria to be accounted for as held for sale at the date of acquisition is reported as discontinued operations, regardless of whether it meets the strategic shift criterion.

The Company's discontinued operations in the periods presented herein represent the following:

•In 2024 and 2023, the Company's former real estate investments along with an adjacent investment management business, which have predominantly been disposed as part of the Company's transformation into an investment manager with a digital infrastructure focus.

•In 2023, the operations of digital infrastructure portfolio companies that represented the Company's former Operating segment prior to their full deconsolidation and qualification as discontinued operations on December 31, 2023. The Operating segment was previously composed of balance sheet equity interests in two digital infrastructure portfolio companies, Vantage SDC and DataBank, a stabilized hyperscale and an edge colocation data center business, respectively. These portfolio companies directly held and operated data centers, earning rental income from providing use of data center space and/or capacity through leases, services and other tenant arrangements. Prior to deconsolidation and reclassification as discontinued operations, a majority of the assets, liabilities and operating results of DataBank and Vantage SDC were attributed to third party investors, presented as noncontrolling interests in investment entities.

•In 2023, the Company's equity method investment in BrightSpire Capital, Inc. (NYSE: BRSP), which was sold in March 2023 for net proceeds totaling $201.6 million, with an impairment of $9.7 million recorded in 2023 prior to its disposition. The Company's investment in BRSP qualified as discontinued operations in March 2023.

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Income (loss) from discontinued operations is summarized as follows.


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023

Revenues	$	1,924	$	236,927	$	3,756	$	470,561



Expenses	(2,652)		(328,985)		(5,720)		(664,634)






Other gain (loss)	4		(2,926)		(12,957)		(11,573)


Income (Loss) from discontinued operations before income taxes	(724)		(94,984)		(14,921)		(205,646)
Income tax benefit (expense)	2		(486)		79		(432)
Income (Loss) from discontinued operations	(722)		(95,470)		(14,842)		(206,078)
Income (Loss) from discontinued operations attributable to noncontrolling interests:
Investment entities	—		(81,752)		—		(167,489)
Operating Company	(48)		(992)		(1,038)		(2,805)
Income (Loss) from discontinued operations attributable to DigitalBridge Group, Inc.	$	(674)	$	(12,726)	$	(13,804)	$	(35,784)

Assets and Liabilities of Discontinued Operations

The Company initially measures assets classified as held for disposition at the lower of their carrying amounts or fair value less disposal costs. For bulk sale transactions, the unit of account is the disposal group, with any excess of the aggregate carrying value over estimated fair value less costs to sell allocated to the individual assets within the group.

At June 30, 2024 and December 31, 2023, all assets and related liabilities held for disposition relate to discontinued operations and consisted of remaining equity investments excluded from the December 2021 bulk sale of the Company's real estate related investments.

Reclassifications

As discussed in "—Discontinued Operations," the Company's investment in the portfolio companies previously consolidated in the Company's former Operating segment qualified as discontinued operations in December 2023, and their results of operations have been reclassified to income (loss) from discontinued operations for the three months ended June 30, 2023.

Beginning 2024, investment-related expenses, which primarily include reimbursable costs from affiliates, have been recorded within administrative and other expenses on the consolidated statements of operations. Prior period amounts were immaterial and have been reclassified to conform to current period presentation.

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Recently Adopted Accounting Pronouncements

There were no recently adopted accounting pronouncements that had a material effect on the Company's consolidated financial statements.

Future Accounting Standards

Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures, which expands the breadth and frequency of segment disclosures to require all annual disclosures on an interim basis and provide for incremental disclosures, including the following:

•Category and amount of significant segment expenses that are regularly provided to (even if not regularly reviewed by) the chief operating decision maker ("CODM") and included in each reported segment profit (loss) measure, otherwise the nature of expense information (for example, consolidated, forecasted, budgeted) used by the CODM;

•An amount (without individual quantification) for other segment items (represents difference between segment revenue less segment expense disclosed and reported segment profit (loss) measure), including description of the composition, nature and type of the other segment items;

•Description of how CODM uses each reported segment profit (loss) measure to assess segment performance and determine resource allocation; and

•Title and position of individual or name of group or committee identified as CODM.

The ASU changes current guidance by permitting multiple measures of segment profit (loss) to be reported provided that the measure most consistent with GAAP is reported. The ASU also clarifies that a single reportable segment entity is subject to segment disclosures in its entirety, which would require reporting of segment profit (loss) measure that is not a consolidated GAAP measure and not clearly evident from existing disclosures. The ASU does not change existing guidance around identification of operating segments and determination of reportable segments. The requirements under this ASU are to be applied retrospectively to all prior periods presented unless impracticable.

The ASU is effective for fiscal years beginning January 1, 2024 (that is, Form 10-K as of and for the year ending December 31, 2024), and interim periods within fiscal years beginning January 1, 2025 (that is, Form 10-Q as of and for the three months ending March 31, 2025). Early adoption is permitted. The Company will adopt this ASU for its 2024 fiscal year with the filing of its Form 10-K as of and for the year ending December 31, 2024, and is currently evaluating the effects of this new guidance with respect to segment disclosures.

Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which enhances existing annual income tax disclosures, primarily disaggregation of: (i) effective tax rate reconciliation using both percentages and amounts into specific categories, with further disaggregation by nature and/or jurisdiction of certain categories that meet the threshold of 5% of expected tax; and (ii) income taxes paid (net of refunds received) between federal, state/local and foreign, with further disaggregation by jurisdiction if 5% or more of total income taxes paid (net of refunds received). The ASU also eliminates existing disclosures related to: (a) reasonably possible significant changes in total amount of unrecognized tax benefits within 12 months of reporting date; and (b) cumulative amount of each type of temporary difference for which deferred tax liability has not been recognized (due to exception to recognizing deferred taxes related to subsidiaries and corporate joint ventures).

This ASU is effective January 1, 2025, with early adoption permitted in the interim or annual periods. Transition is prospective with the option to apply retrospective application. The Company is currently evaluating the effects of this new guidance with respect to annual income tax disclosures.

3. Business Combinations

InfraBridge

In February 2023, the Company acquired the global infrastructure equity investment management business of AMP Capital Investors International Holdings Limited, which was rebranded as InfraBridge at closing. Consideration for the acquisition consisted of $314.3 million cash consideration (net of cash assumed), subject to customary post-closing working capital adjustments, plus a contingent amount based upon achievement of future fundraising targets for InfraBridge's new global infrastructure funds. The estimated fair value of the contingent consideration is subject to remeasurement each reporting period, as discussed in Note 10.

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The following table summarizes the total consideration and allocation to assets acquired and liabilities assumed. The initial cash consideration was determined, in part, based upon estimated net working capital of the acquired entities at closing. The Company finalized the purchase price allocation in the first quarter of 2024, as presented below.


(In thousands)	As Reported At December 31, 2023		Measurement Period Adjustments	Final
Consideration
Cash	$	365,440		$	365,440
Contingent consideration at fair value	10,874			10,874
	$	376,314		$	376,314
Assets acquired and liabilities assumed
Cash	51,174			51,174

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	[2024-08-08]
10-Q	[2024-05-03]
10-K	[2024-02-23]
10-Q	[2023-11-03]
10-Q	[2023-08-04]
10-Q	[2023-05-05]
10-K	[2023-02-27]
10-Q	[2022-11-07]
10-Q	[2022-08-08]
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