DigitalBridge Group, Inc. [DBRG-PJ] Filings

10-Q 1 dbrg-20230331.htm 10-Q dbrg-20230331

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, 2023


☐			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 April 28, 2023, 161,884,572 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
	Supplemental Schedule to Consolidated Balance Sheets	5
	Consolidated Statements of Operations	6
	Supplemental Schedule to Consolidated Statements of Operations	7
	Consolidated Statements of Comprehensive Income (Loss)	8
	Consolidated Statements of Equity	9
	Consolidated Statements of Cash Flows	11
	Notes to Consolidated Financial Statements:	13
	1. Business and Organization	13
	2. Summary of Significant Accounting Policies	13
	3. Acquisitions	19
	4 . Investments	22
	5 . Real Estate	24
	6. Goodwill, Deferred Leasing Costs and Other Intangibles	25
	7. Restricted Cash, Other Assets and Other Liabilities	27
	8. Debt	29
	9. Stockholders' Equity	33
	10. Noncontrolling Interests	36
	1 1 . Fair Value	37
	1 2 . Variable Interest Entities	41
	1 3 . Earnings per Share	43
	1 4 . Fee Income	43
	1 5 . Equity-Based Compensation	44
	1 6 . Transactions with Affiliates	46
	17 . Commitments and Contingencies	48
	1 8 . Supplemental Disclosure of Cash Flow Information	48

	19. Subsequent Events	48
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	50
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65
Item 4.	Controls and Procedures	67
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	68
Item 1A.	Risk Factors	68
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 3.	Defaults Upon Senior Securities	68
Item 4.	Mine Safety Disclosures	68
Item 5.	Other Information	68
Item 6.	Exhibits	69
SIGNATURES		70

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

DigitalBridge Group, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)


	March 31, 2023 (unaudited)		December 31, 2022
Assets
Cash and cash equivalents	$	668,524	$	918,254
Restricted cash	155,690		118,485
Investments ($320,757 and $426,032 at fair value)	1,226,952		1,242,001
Real estate	5,964,807		5,921,298
Goodwill	907,937		761,368
Deferred leasing costs and intangible assets	1,098,520		1,092,167
Other assets ($0 and $11,793 at fair value)	642,451		654,050
Due from affiliates	67,285		45,360
Assets held for disposition	11,263		275,520
Total assets	$	10,743,429	$	11,028,503
Liabilities
Corporate debt	$	569,771	$	568,912
Non-recourse investment-level debt	4,752,050		4,587,228
Intangible liabilities	28,441		29,824
Other liabilities ($113,766 and $183,628 at fair value)	1,133,568		1,272,096

Liabilities related to assets held for disposition	374		380

Total liabilities	6,484,204		6,458,440
Commitments and contingencies (Note 17)
Redeemable noncontrolling interests	107,413		100,574
Equity
Stockholders’ equity:
Preferred stock, $0.01 par value per share; $827,711 and $827,779 liquidation preference; 250,000 shares authorized; 33,108 and 33,111 shares issued and outstanding	800,303		800,355
Common stock, $0.04 par value per share
Class A, 949,000 shares authorized; 161,834 and 159,763 shares issued and outstanding	6,473		6,390
Class B, 1,000 shares authorized; 166 shares issued and outstanding	7		7
Additional paid-in capital	7,823,722		7,818,068
Accumulated deficit	(7,176,706)		(6,962,613)
Accumulated other comprehensive income (loss)	(1,478)		(1,509)
Total stockholders’ equity	1,452,321		1,660,698
Noncontrolling interests in investment entities	2,650,893		2,743,896
Noncontrolling interests in Operating Company	48,598		64,895
Total equity	4,151,812		4,469,489
Total liabilities, redeemable noncontrolling interests and equity	$	10,743,429	$	11,028,503

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

Table of Contents

DigitalBridge Group, Inc.

Supplemental Schedule to Consolidated Balance Sheets

(In thousands)

(Unaudited)


	Investment Management				Operating				Corporate and Other
	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Assets (1)
Cash and cash equivalents	$	56,943	$	39,563	$	65,097	$	65,975	$	546,484	$	812,716
Restricted cash	2,324		2,298		152,262		114,442		1,104		1,745
Investments (Note 4)	345,826		395,327		6,804		4,638		874,322		842,036
Real estate (Note 5)	—		—		5,964,807		5,921,298		—		—
Goodwill (Note 6)	444,817		298,248		463,120		463,120		—		—
Deferred leasing costs and intangible assets (Note 6)	128,973		85,172		969,036		1,006,469		511		526
Other assets (Note 7)	15,966		13,356		581,848		573,229		44,637		67,465
Due from affiliates (Note 16)	61,455		41,458		—		—		5,830		3,902
	$	1,056,304	$	875,422	$	8,202,974	$	8,149,171	$	1,472,888	$	1,728,390

Liabilities (1)
Corporate debt (Note 8)	$	199,033	$	198,677	$	70,246	$	70,120	$	300,492	$	300,115
Non-recourse investment-level debt (Note 8)	—		—		4,751,701		4,586,765		349		463
Intangible liabilities (Note 6)	—		—		28,441		29,824		—		—
Other liabilities (Note 7)	218,712		342,696		721,319		725,236		193,537		204,164

	$	417,745	$	541,373	$	5,571,707	$	5,411,945	$	494,378	$	504,742

Redeemable noncontrolling interests (Note 10)	1,098		680		—		—		106,315		99,894

Noncontrolling interests in investment entities (1)	151,985		136,668		2,369,836		2,463,559		127,770		113,390

__________

(1) Exclude amounts related to assets held for disposition.

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 March 31,
	2023		2022
Revenues
Fee income ($56,389 and $42,004 from affiliates)	$	59,126	$	42,837
Carried interest allocation (reversal)	(54,756)		(31,079)
Principal investment income (loss)	3,562		6,454
Property operating income	230,927		202,511
Other income ($1,253 and $3,379 from affiliates)	11,301		12,111
Total revenues	250,160		232,834
Expenses
Property operating expense	97,126		84,003
Interest expense	67,196		44,030
Investment expense	5,751		9,565
Transaction-related costs	8,527		165
Depreciation and amortization	141,574		128,567


Compensation expense—cash and equity-based	74,650		65,542
Compensation expense (reversal)—incentive fee and carried interest	(36,831)		(20,352)
Administrative expenses	26,506		27,885
Total expenses	384,499		339,405



Other gain (loss), net	(142,745)		(149,881)
Income (Loss) from continuing operations before income taxes	(277,084)		(256,452)
Income tax benefit (expense)	(1,042)		7,413
Income (Loss) from continuing operations	(278,126)		(249,039)
Income (Loss) from discontinued operations	(14,218)		(94,645)
Net income (loss)	(292,344)		(343,684)
Net income (loss) attributable to noncontrolling interests:
Redeemable noncontrolling interests	6,943		(11,220)
Investment entities	(84,828)		(63,045)
Operating Company	(16,662)		(22,862)
Net income (loss) attributable to DigitalBridge Group, Inc.	(197,797)		(246,557)
Preferred stock dividends	14,676		15,759

Net income (loss) attributable to common stockholders	$	(212,473)	$	(262,316)
Income (Loss) per share—basic
Income (Loss) from continuing operations per common share—basic	$	(1.25)	$	(1.27)
Net income (loss) attributable to common stockholders per common share—basic	$	(1.34)	$	(1.84)
Income (Loss) per share—diluted
Income (Loss) from continuing operations per common share—diluted	$	(1.25)	$	(1.27)
Net income (loss) attributable to common stockholders per common share—diluted	$	(1.34)	$	(1.84)
Weighted average number of shares
Basic	158,446		142,485
Diluted	158,446		142,485
Dividends declared per common share	$	0.01	$	—

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

Table of Contents

DigitalBridge Group, Inc.

Supplemental Schedule to Consolidated Statements of Operations

(In thousands)

(Unaudited)


	Investment Management				Operating				Corporate and Other
	Three Months Ended March 31,				Three Months Ended March 31,				Three Months Ended March 31,
	2023		2022		2023		2022		2023		2022
Revenues
Fee income (Note 14)	$	60,098	$	43,637	$	—	$	—	$	(972)	$	(800)
Carried interest allocation (reversal)	(54,756)		(31,079)		—		—		—		—
Principal investment income (loss)	318		17		—		—		3,244		6,437
Property operating income (Note 5)	—		—		230,927		202,511		—		—
Other income	1,169		1,256		737		11		9,395		10,844
Total revenues	6,829		13,831		231,664		202,522		11,667		16,481
Expenses
Property operating expense	—		—		97,126		84,003		—		—
Interest expense	2,603		2,502		59,984		36,184		4,609		5,344
Investment expense	536		1,140		5,203		8,016		12		409
Transaction-related costs	5,192		—		—		—		3,335		165
Depreciation and amortization	6,409		5,276		134,699		122,891		466		400

Compensation expense—cash and equity-based	28,182		24,808		27,179		19,956		19,289		20,778
Compensation expense (reversal)—incentive fee and carried interest	(36,831)		(20,352)		—		—		—		—
Administrative expenses	6,407		4,171		7,240		6,899		12,859		16,815
Total expenses	12,498		17,545		331,431		277,949		40,570		43,911



Other gain (loss), net	3,082		(3,055)		1,769		956		(147,596)		(147,782)
Income (Loss) from continuing operations before income taxes	(2,587)		(6,769)		(97,998)		(74,471)		(176,499)		(175,212)
Income tax benefit (expense)	(217)		(2,374)		56		330		(881)		9,457
Income (Loss) from continuing operations	(2,804)		(9,143)		(97,942)		(74,141)		(177,380)		(165,755)
Income (loss) from continuing operations attributable to noncontrolling interests:
Redeemable noncontrolling interests	418		(3,266)		—		—		6,525		(7,954)
Investment entities	(857)		2,349		(86,254)		(60,196)		1,766		977
Operating Company	(167)		(624)		(899)		(1,121)		(14,522)		(14,007)
Income (Loss) from continuing operations attributable to DigitalBridge Group, Inc.	$	(2,198)	$	(7,602)	$	(10,789)	$	(12,824)	$	(171,149)	$	(144,771)

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,
	2023		2022
Net income (loss)	$	(292,344)	$	(343,684)
Changes in accumulated other comprehensive income (loss) related to:
Equity method investments	318		2
Available-for-sale debt securities	—		(6,373)

Foreign currency translation	(231)		(37,941)

Other comprehensive income (loss)	87		(44,312)
Comprehensive income (loss)	(292,257)		(387,996)
Comprehensive income (loss) attributable to noncontrolling interests:
Redeemable noncontrolling interests	6,943		(11,220)
Investment entities	(84,793)		(75,056)
Operating Company	(16,643)		(25,458)
Comprehensive income (loss) attributable to stockholders	$	(197,764)	$	(276,262)

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, 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 income (loss)	—		—		—		(246,557)		—		(246,557)		(63,045)		(22,862)		(332,464)
Other comprehensive income (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 of redeemable noncontrolling interest and warrants to fair value (Note 10)	—		—		(690,000)		—		—		(690,000)		—		—		(690,000)
Deconsolidation of investment entities	—		—		—		—		—		—		(176,856)		—		(176,856)


Redemption of OP Units for class A common stock	—		—		2		—		—		2		—		(2)		—
Equity based compensation	—		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	—		—		—		—		—		—		(32,076)		—		(32,076)
Contributions from noncontrolling interests	—		—		—		—		—		—

DigitalBridge Group, Inc. [DBRG-PJ] Filings
DigitalBridge Group, Inc. [DBRG] Filings
DigitalBridge Group, Inc. [DBRG-PI] Filings
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-PJ] Filings

DigitalBridge Group, Inc. [DBRG] Filings

DigitalBridge Group, Inc. [DBRG-PI] Filings