DigitalBridge Group, Inc. [DBRG] Filings

10-Q 1 dbrg-20220930.htm 10-Q dbrg-20220930

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 September 30, 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, $0.04 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

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 ☐

Table of Contents

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 October 31, 2022, 159,728,816 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	11
	Notes to Consolidated Financial Statements:	13
	1. Business and Organization	13
	2. Summary of Significant Accounting Policies	14
	3. Acquisitions	18
	4. Real Estate	20
	5. Equity and Debt Investments	21
	6. Goodwill, Deferred Leasing Costs and Other Intangibles	23
	7. Restricted Cash, Other Assets and Other Liabilities	25
	8. Debt	26
	9. Stockholders' Equity	30
	10. Noncontrolling Interests	33
	11. Assets and Related Liabilities Held for Disposition	35
	12. Discontinued Operations	37
	13. Fair Value	38
	14. Variable Interest Entities	43
	15. Earnings per Share	45
	16. Fee Income	46
	17. Equity-Based Compensation	46
	18. Transactions with Affiliates	49
	19. Segment Reporting	51
	20. Commitments and Contingencies	53
	21. Supplemental Disclosure of Cash Flow Information	54
	22. Subsequent Events	54
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	56
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	79
Item 4.	Controls and Procedures	81
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	82
Item 1A.	Risk Factors	82
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	83
Item 3.	Defaults Upon Senior Securities	84
Item 4.	Mine Safety Disclosures	84
Item 5.	Other Information	84
Item 6.	Exhibits	84
SIGNATURES		85

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

DigitalBridge Group, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)


	September 30, 2022 (Unaudited)		December 31, 2021
Assets
Cash and cash equivalents	$	636,366	$	1,602,102
Restricted cash	134,024		99,121
Real estate, net	6,141,415		4,972,284
Loans receivable (at fair value)	174,389		173,921
Equity and debt investments ($206,758 and $201,912 at fair value)	1,050,356		935,153
Goodwill	761,368		761,368
Deferred leasing costs and intangible assets, net	1,745,560		1,187,627
Assets held for disposition	72,593		3,676,615
Other assets ($30,820 and $944 at fair value)	964,647		740,395
Due from affiliates	60,111		49,230
Total assets	$	11,740,829	$	14,197,816
Liabilities
Debt, net	$	5,325,615	$	4,860,402
Accrued and other liabilities ($196,561 and $37,970 at fair value)	1,662,606		928,042
Intangible liabilities, net	31,304		33,301
Liabilities related to assets held for disposition	60		3,088,699

Dividends and distributions payable	16,527		15,759

Total liabilities	7,036,112		8,926,203
Commitments and contingencies (Note 20)
Redeemable noncontrolling interests	96,028		359,223
Equity
Stockholders’ equity:
Preferred stock, $0.01 par value per share; $827,779 and $883,500 liquidation preference; 250,000 shares authorized; 33,111 and 35,340 shares issued and outstanding	800,355		854,232
Common stock, $0.04 par value per share
Class A, 949,000 shares authorized; 162,975 and 142,144 shares issued and outstanding	6,519		5,685
Class B, 1,000 shares authorized; 166 shares issued and outstanding	7		7
Additional paid-in capital	7,793,492		7,820,807
Accumulated deficit	(6,941,658)		(6,576,180)
Accumulated other comprehensive income	(4,056)		42,383
Total stockholders’ equity	1,654,659		2,146,934
Noncontrolling interests in investment entities	2,890,162		2,653,173
Noncontrolling interests in Operating Company	63,868		112,283
Total equity	4,608,689		4,912,390
Total liabilities, redeemable noncontrolling interests and equity	$	11,740,829	$	14,197,816

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

Table of Contents

DigitalBridge Group, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues
Property operating income	$	244,336	$	194,854	$	681,098	$	572,841
Interest income	8,725		3,086		22,390		5,259
Fee income ($40,350, $49,934, $125,757 and $120,332 from affiliates)	41,263		50,226		128,418		124,826
Other income ($995, $3,124, $5,693 and $4,551 from affiliates)	2,299		4,008		11,585		7,016
Total revenues	296,623		252,174		843,491		709,942
Expenses
Property operating expense	105,987		80,226		287,280		237,228
Interest expense	53,032		39,895		143,450		117,613
Investment expense	9,510		7,263		26,262		20,027
Transaction-related costs	3,879		936		6,800		2,618
Depreciation and amortization	145,594		129,186		429,513		406,840


Compensation expense—cash and equity-based	65,544		55,933		183,878		182,918
Compensation expense—incentive fee and carried interest	80,831		31,736		109,548		39,969
Administrative expenses	29,909		28,933		84,147		75,234

Total expenses	494,286		374,108		1,270,878		1,082,447
Other income (loss)

Other gain (loss), net	25,908		4,657		(170,229)		(31,734)
Equity method earnings (losses)	(52,382)		6,987		(5,748)		42,051
Equity method earnings—carried interest	121,698		58,382		201,398		69,329
Loss from continuing operations before income taxes	(102,439)		(51,908)		(401,966)		(292,859)
Income tax benefit	7,841		10,973		17,772		109,408
Loss from continuing operations	(94,598)		(40,935)		(384,194)		(183,451)
Loss from discontinued operations	(26,389)		(10,429)		(148,558)		(590,595)
Net loss	(120,987)		(51,364)		(532,752)		(774,046)
Net income (loss) attributable to noncontrolling interests:
Redeemable noncontrolling interests	(6,442)		7,269		(31,989)		15,743
Investment entities	(60,623)		(124,301)		(152,770)		(443,547)
Operating Company	(4,834)		4,311		(30,786)		(38,565)
Net income (loss) attributable to DigitalBridge Group, Inc.	(49,088)		61,357		(317,207)		(307,677)
Preferred stock repurchases/redemptions (Note 9)	(1,098)		2,865		(1,098)		2,865
Preferred stock dividends	15,283		17,456		46,801		54,488
Net income (loss) attributable to common stockholders	$	(63,273)	$	41,036	$	(362,910)	$	(365,030)
Income (loss) per share—basic
Loss from continuing operations per common share—basic	$	(0.30)	$	(0.23)	$	(1.57)	$	(1.20)
Net income (loss) attributable to common stockholders per common share—basic	$	(0.39)	$	0.33	$	(2.37)	$	(3.04)
Income (loss) per share—diluted
Loss from continuing operations per common share—diluted	$	(0.30)	$	(0.23)	$	(1.57)	$	(1.20)
Net income (loss) attributable to common stockholders per common share—diluted	$	(0.39)	$	0.33	$	(2.37)	$	(3.04)
Weighted average number of shares
Basic	162,398		121,458		153,028		120,041
Diluted	162,398		121,458		153,028		120,041
Dividends declared per common share	$	0.01	$	—	$	0.01	$	—

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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net loss	$	(120,987)	$	(51,364)	$	(532,752)	$	(774,046)
Changes in accumulated other comprehensive income (loss) related to:
Equity method investments	(1,647)		(4,391)		(4,333)		(6,578)
Available-for-sale debt securities	—		1,615		(6,373)		(331)
Cash flow hedges	—		—		—		1,285
Foreign currency translation	(34,809)		(35,739)		(97,090)		(112,542)
Net investment hedges	10,932		—		17,916		(84)
Other comprehensive loss	(25,524)		(38,515)		(89,880)		(118,250)
Comprehensive loss	(146,511)		(89,879)		(622,632)		(892,296)
Comprehensive income (loss) attributable to noncontrolling interests:
Redeemable noncontrolling interests	(6,442)		7,269		(31,989)		15,743
Investment entities	(80,210)		(144,222)		(192,140)		(500,702)
Operating Company	(5,259)		2,539		(34,733)		(44,395)
Comprehensive income (loss) attributable to stockholders	$	(54,600)	$	44,535	$	(363,770)	$	(362,942)

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 (Loss)		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
Net loss	—		—		—		(122,744)		—		(122,744)		36,616		(14,980)		(101,108)
Other comprehensive income (loss)	—		—		—		—		(15,818)		(15,818)		7,805		(1,625)		(9,638)
Shares issued pursuant to settlement liability	—		60		46,982		—		—		47,042		—		—		47,042
Deconsolidation of investment entities (Note 21)	—		—		2,028		—		(

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	[2022-11-07]
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