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~~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 ~~October 31, 2022, 159,728,816~~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	56
	Supplemental Schedule to Consolidated Statements of Operations	7
	Consolidated Statements of Comprehensive Income (Loss)	68
	Consolidated Statements of Equity	79
	Consolidated Statements of Cash Flows	11
	Notes to Consolidated Financial Statements:	13
	1. Business and Organization	13
	2. Summary of Significant Accounting Policies	1413
	3. Acquisitions	1819
	4.4 . Investments	22
	5 . Real Estate	20
	~~5. Equity~~ ~~and Debt~~ ~~Investments~~	2124
	6. Goodwill, Deferred Leasing Costs and Other Intangibles	2325
	7. Restricted Cash, Other Assets and Other Liabilities	2527
	8. Debt	2629
	9. Stockholders' Equity	3033
	10. Noncontrolling Interests	3336
	~~11. Assets and Related Liabilities Held for Disposition~~1	351
	~~12. Discontinued Operations~~. Fair Value	37
	~~13. Fair Value~~1 2 . Variable Interest Entities	3841
	~~14. Variable Interest Entities~~1 3 . Earnings per Share	43
	~~15. Earnings per Share~~1 4 . Fee Income	4543
	~~16. Fee Income~~1 5 . Equity-Based Compensation	44
	1 6 . Transactions with Affiliates	46
	~~17. Equity-Based Compensation~~17	46
	~~18. Transactions with Affiliates~~	49
	~~19. Segment Reporting~~	51
	~~20.~~. Commitments and Contingencies	5348
	~~21.~~1 8 . Supplemental Disclosure of Cash Flow Information	5448

	~~22.~~ 19. Subsequent Events	5448
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5650
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7965
Item 4.	Controls and Procedures	8167
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	8268
Item 1A.	Risk Factors	8268
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	8368
Item 3.	Defaults Upon Senior Securities	8468
Item 4.	Mine Safety Disclosures	8468
Item 5.	Other Information	8468
Item 6.	Exhibits	8469
SIGNATURES		8570

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			March 31, 2023 (unaudited)		December 31, 2022
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	636,366	$	1,602,102	Cash and cash equivalents	$	668,524	$	918,254
Restricted cash	Restricted cash	134,024		99,121		Restricted cash	155,690		118,485
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
Investments ($320,757 and $426,032 at fair value)						Investments ($320,757 and $426,032 at fair value)	1,226,952		1,242,001
Real estate						Real estate	5,964,807		5,921,298
Goodwill	Goodwill	761,368		761,368		Goodwill	907,937		761,368
Deferred leasing costs and intangible assets, net		1,745,560		1,187,627
Deferred leasing costs and intangible assets						Deferred leasing costs and intangible assets	1,098,520		1,092,167
Other assets ($0 and $11,793 at fair value)						Other assets ($0 and $11,793 at fair value)	642,451		654,050
Due from affiliates						Due from affiliates	67,285		45,360
Assets held for disposition	Assets held for disposition	72,593		3,676,615		Assets held for disposition	11,263		275,520
Other assets ($30,820 and $944 at fair value)		964,647		740,395
Due from affiliates		60,111		49,230
Total assets	Total assets	$	11,740,829	$	14,197,816	Total assets	$	10,743,429	$	11,028,503
Liabilities	Liabilities					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
Corporate debt						Corporate debt	$	569,771	$	568,912
Non-recourse investment-level debt						Non-recourse investment-level debt	4,752,050		4,587,228
Intangible liabilities						Intangible liabilities	28,441		29,824
Other liabilities ($113,766 and $183,628 at fair value)						Other liabilities ($113,766 and $183,628 at fair value)	1,133,568		1,272,096

Liabilities related to assets held for disposition	Liabilities related to assets held for disposition	60		3,088,699		Liabilities related to assets held for disposition	374		380

Dividends and distributions payable		16,527		15,759

Total liabilities	Total liabilities	7,036,112		8,926,203		Total liabilities	6,484,204		6,458,440
Commitments and contingencies (Note 20)
Commitments and contingencies (Note 17)						Commitments and contingencies (Note 17)
Redeemable noncontrolling interests	Redeemable noncontrolling interests	96,028		359,223		Redeemable noncontrolling interests	107,413		100,574
Equity	Equity					Equity
Stockholders’ equity:	Stockholders’ 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
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						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	Common stock, $0.04 par value per share					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 A, 949,000 shares authorized; 161,834 and 159,763 shares issued and outstanding						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	Class B, 1,000 shares authorized; 166 shares issued and outstanding	7		7		Class B, 1,000 shares authorized; 166 shares issued and outstanding	7		7
Additional paid-in capital	Additional paid-in capital	7,793,492		7,820,807		Additional paid-in capital	7,823,722		7,818,068
Accumulated deficit	Accumulated deficit	(6,941,658)		(6,576,180)		Accumulated deficit	(7,176,706)		(6,962,613)
Accumulated other comprehensive income		(4,056)		42,383
Accumulated other comprehensive income (loss)						Accumulated other comprehensive income (loss)	(1,478)		(1,509)
Total stockholders’ equity	Total stockholders’ equity	1,654,659		2,146,934		Total stockholders’ equity	1,452,321		1,660,698
Noncontrolling interests in investment entities	Noncontrolling interests in investment entities	2,890,162		2,653,173		Noncontrolling interests in investment entities	2,650,893		2,743,896
Noncontrolling interests in Operating Company	Noncontrolling interests in Operating Company	63,868		112,283		Noncontrolling interests in Operating Company	48,598		64,895
Total equity	Total equity	4,608,689		4,912,390		Total equity	4,151,812		4,469,489
Total liabilities, redeemable noncontrolling interests and equity	Total liabilities, redeemable noncontrolling interests and equity	$	11,740,829	$	14,197,816	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.

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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.

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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)


	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, 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 — (1,482) 546 (202,887) — (202,341)
Redemption of OP Units for class A common stock — — 1 — — 1 — (1) —
Equity awards issued, net of forfeitures — 2 10,194 — — 10,196 308 1,067 11,571
Shares canceled for tax withholdings on vested equity awards — (13) (9,166) — — (9,179) — — (9,179)
Contributions from noncontrolling interests — — — — — — 24,540 — 24,540
Distributions to noncontrolling interests — — — — — — (33,678) — (33,678)
Preferred stock dividends — — — (18,516) — (18,516) — — (18,516)
Reallocation of equity (Notes 2 and 10) — — (4,530) — (81) (4,611) — 4,611 —
Balance at June 30, 2021 $ 999,490 $ 4,927 $ 7,622,382 $ (6,601,522) $ 83,675 $ 2,108,952 $ 3,836,609 $ 113,469 $ 6,059,030

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

~~Table of Contents~~

~~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 Total Stockholders’ Equity Noncontrolling Interests in Investment Entities Noncontrolling Interests in Operating Company Total Equity

Balance at June 30, 2021 $ 999,490 $ 4,927 $ 7,622,382 $ (6,601,522) $ 83,675 $ 2,108,952 $ 3,836,609 $ 113,469 $ 6,059,030
Net income (loss) — — — 61,357 — 61,357 (124,301) 4,311 (58,633)
Other comprehensive loss — — — — (16,822) (16,822) (19,921) (1,772) (38,515)
Redemption of preferred stock (Note 9) (83,385) — (2,865) — — (86,250) — — (86,250)
Deconsolidation of investment entities (Note 21) — — — — — — (149,515) — (149,515)
Redemption of OP Units for class A common stock — 5 1,085 — — 1,090 — (1,090) —
Equity awards issued, net of forfeitures — 12 7,351 — — 7,363 308 903 8,574
Shares canceled for tax withholdings on vested stock awards — (3) (1,670) — — (1,673) — — (1,673)
Contributions from noncontrolling interests — — — — — — 24,292 — 24,292
Distributions to noncontrolling interests — — — — — — (51,584) — (51,584)
Preferred stock dividends — — — (17,456) — (17,456) — — (17,456)
Reallocation of equity (Notes 2 and 10) — — (731) — 27 (704) — 704 —
Balance at September 30, 2021 $ 916,105 $ 4,941 $ 7,625,552 $ (6,557,621) $ 66,880 $ 2,055,857 $ 3,515,888 $ 116,525 $ 5,688,270

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

~~Table of Contents~~

~~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, 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 of redeemable noncontrolling interest to fair value (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
Net loss — — — (21,562) — (21,562) (29,102) (3,090) (53,754)
Other comprehensive loss — — — — (11,346) (11,346) (7,772) (926) (20,044)
Adjustment of redeemable noncontrolling interest and warrants to fair value (Note 10) — — (35,026) — — (35,026) — — (35,026)
Shares issued for redemption of redeemable noncontrolling interest (Note 10) — 577 348,182 — — 348,759 — — 348,759
Transaction costs incurred in connection with redemption of redeemable noncontrolling interest — — (7,137) — — (7,137) — — (7,137)
Reclassification of carried interest allocated to redeemable noncontrolling interest to noncontrolling interests in investment entities (Note 10) — — — — — — 4,087 — 4,087
Deconsolidation of investment entities (Note 21) — — — — — — 11,047 — 11,047
Redemption of OP Units for class A common stock — 4 335 — — 339 (339) —
Equity awards issued, net of forfeitures — 9 7,508 — — 7,517 1,061 591 9,169
Shares canceled for tax withholdings on vested equity awards — (7) (5,060) — — (5,067) — — (5,067)
Contributions from noncontrolling interests — — — — — — 215,790 — 215,790
Distributions to noncontrolling interests — — — — — — (13,490) — (13,490)
Preferred stock dividends — — — (15,758) — (15,758) — — (15,758)
Reallocation of equity (Notes 2 and 10) — — (18,313) — 48 (18,265) — 18,265 —
Balance at June 30, 2022 $ 854,232 $ 6,564 $ 7,646,852 $ (6,875,817) $ 1,455 $ 1,633,286 $ 2,870,528 $ 57,705 $ 4,561,519

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


	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	—		—		—		—		—		—		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

Table of Contents

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, 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



Common 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 10)	—		—		(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

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)

Nine Months Ended September 30,
2022 2021
Cash Flows from Operating Activities
Net loss $ (532,752) $ (774,046)
Adjustments to reconcile net loss to net cash provided by operating activities:
Paid-in-kind interest added to loan principal, net of interest received (4,887) 8,492
Straight-line rent income (18,417) 4,854
Amortization of above- and below-market lease values, net (58) 5,151
Amortization of deferred financing costs and debt discount and premium, net 102,943 56,494
Equity method (earnings) losses (198,325) 78,444
Distributions of income from equity method investments 97,003 3,072
Allowance for doubtful accounts — 3,640
Impairment of real estate and related intangibles and right-of-use asset 35,985 359,996
Depreciation and amortization 431,852 498,513
Equity-based compensation 47,119 40,001
Gain on sales of real estate, net — (49,232)
Deferred income tax benefit (14,794) (99,268)
Loss on extinguishment of exchangeable notes 133,173 —
Other loss, net 29,287 102,908
(Increase) decrease in other assets and due from affiliates 9,579 (92,223)
Increase (decrease) in accrued and other liabilities and due to affiliates 77,559 39,511
Other adjustments, net (494) (4,895)
Net cash provided by operating activities 194,773 181,412
Cash Flows from Investing Activities
Contributions to and acquisition of equity investments (445,039) (411,593)
Return of capital from equity method investments 58,560 41,779
Acquisition of loans receivable and debt securities (164,815) (68,453)
Net disbursements on originated loans (215,918) (33,272)
Repayments of loans receivable 23,956 492,022
Proceeds from sales of loans receivable and debt securities, including transfers of warehoused loans 360,773 —
Acquisition of and additions to real estate, related intangibles and leasing commissions (1,901,931) (608,155)
Proceeds from sales of real estate 96,660 363,436
Cash and restricted cash assumed by buyer in sales of real estate investment holding entities (189,453) (35,098)
Proceeds from paydown and maturity of debt securities 566 544
Proceeds from sale of equity investments 483,833 313,595
Investment deposits (49,736) (343)
Proceeds from sale of corporate fixed assets — 14,946
Net receipts on settlement of derivatives 13,952 17,123
Other investing activities, net (769) (833)
Net cash (used in) provided by investing activities (1,929,361) 85,698


	Three Months Ended March 31,
	2023	2022
Cash Flows from Operating Activities


Net income (loss)	(292,344)	(343,684)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Paid-in-kind interest added to loan principal, net of interest received	(544)	(1,144)
Straight-line rent income	(1,944)	(6,701)
Amortization of above- and below-market lease values, net	245	(132)
Amortization of deferred financing costs and debt discount and premium, net	12,182	96,279
Carried interest (allocation) reversal	54,756	31,079
Principal investment (income) loss	(3,562)	(6,454)
Other equity method (earnings) losses	10,609	(24,741)
Distributions of income from equity method investments	557	—
Impairment of real estate and related intangibles and right-of-use asset	—	23,802



Depreciation and amortization	141,574	130,906
Equity-based compensation	16,612	18,719




Deferred income tax (benefit) expense	881	(9,040)
Loss on extinguishment of debt	—	133,173
Other gain (loss), net	142,644	17,332
Other adjustments, net	182	(986)
(Increase) decrease in other assets and due from affiliates	23,486	(4,186)
Increase (decrease) in accrued and other liabilities and due to affiliates	(85,149)	(52,965)
Net cash provided by (used in) operating activities	20,185	1,257
Cash Flows from Investing Activities
Contributions to and acquisition of equity investments	(140,998)	(215,040)
Return of capital from equity method investments	52,259	11,829
Proceeds from sale of equity investments	308,254	194,524
Acquisition of loans receivable and debt securities	—	(101,607)
Proceeds from paydown and maturity of debt securities	—	566
Net disbursements on originated loans	—	(205,507)
Repayments of loans receivable	—	15,845
Proceeds from sales of loans receivable and debt securities	—	126,644

Acquisition of and additions to real estate, related intangibles and leasing commissions	(162,918)	(836,061)
Proceeds from sales of real estate, net of property level cash transferred to buyer	—	96,660
Cash and restricted cash assumed by buyer in sales of real estate investment holding entities	—	(189,453)




Investment deposits	(5,704)	326
Net receipts on settlement of derivatives	3,401	—
Acquisition of InfraBridge, net of cash acquired (Note 3)	(313,164)	—


Other investing activities, net	—	(875)
Net cash provided by (used in) investing activities	(258,870)	(1,102,149)

Table of Contents

DigitalBridge Group, Inc.

Consolidated Statements of Cash Flows (Continued)

(In thousands)

(Unaudited)

Nine Months Ended September 30,
2022 2021
Cash Flows from Financing Activities
Dividends paid to preferred stockholders $ (47,629) $ (56,105)
Repurchases of common stock (8,008) —
Repayment or repurchase of senior notes (14,237) (31,502)
Borrowings from corporate credit facility and securitized financing facility — 345,000
Repayment of borrowings from corporate credit facility and securitized financing facility — (45,000)
Borrowings from secured debt 1,014,582 1,150,909
Repayment of secured debt (469,510) (1,103,172)
Payment of deferred financing costs (18,707) (30,358)
Contributions from noncontrolling interests 2,072,900 203,059
Distributions to and redemptions of noncontrolling interests (1,684,752) (129,790)
Redemptions/repurchases of preferred stock (52,779) (86,250)
Shares canceled for tax withholdings on vested equity awards (18,012) (18,570)
Acquisition of noncontrolling interest (32,076) —
Net cash provided by financing activities 741,772 198,221
Effect of exchange rates on cash, cash equivalents and restricted cash (3,039) 590
Net (decrease) increase in cash, cash equivalents and restricted cash (995,855) 465,921
Cash, cash equivalents and restricted cash, beginning of period 1,766,245 963,008
Cash, cash equivalents and restricted cash, end of period $ 770,390 $ 1,428,929


	Three Months Ended March 31,
	2023		2022
Cash Flows from Financing Activities


Dividends paid to preferred stockholders	$	(14,766)	$	(15,760)
Dividends paid to common stockholders	(1,599)		—



Repayments of corporate debt, including repurchase of senior notes	—		(14,237)
Borrowings from investment-level debt	1,241,890		326,500
Repayments of investment-level debt	(1,060,239)		(3,894)
Payment of deferred financing costs and prepayment penalties on investment level debt	(29,482)		(6,999)
Contributions from noncontrolling interests	29,684		353,156
Distributions to and redemptions of noncontrolling interests	(43,839)		(35,962)
Payment of contingent consideration to Wafra (Note 10)	(90,000)		—

Shares canceled for tax withholdings on vested equity awards	(4,863)		(11,410)
Acquisition of noncontrolling interest	—		(32,076)


Net cash provided by (used in) financing activities	26,786		559,318
Effect of exchange rates on cash, cash equivalents and restricted cash	(626)		(651)
Net increase (decrease) in cash, cash equivalents and restricted cash	(212,525)		(542,225)
Cash, cash equivalents and restricted cash—beginning of period	1,036,739		1,766,245
Cash, cash equivalents and restricted cash—end of period	$	824,214	$	1,224,020

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


		Nine Months Ended September 30,				Three Months Ended March 31,
		2022		2021				2023		2022
Beginning of the period	Beginning of the period						Beginning of the period
Cash and cash equivalents	Cash and cash equivalents	$	1,602,102	$	703,544		Cash and cash equivalents	$	918,254	$	1,602,102
Restricted cash	Restricted cash	99,121		67,772			Restricted cash	118,485		99,121
Restricted cash included in assets held for disposition	Restricted cash included in assets held for disposition	65,022		191,692			Restricted cash included in assets held for disposition	—		65,022
Total cash, cash equivalents and restricted cash, beginning of period	Total cash, cash equivalents and restricted cash, beginning of period	$	1,766,245	$	963,008		Total cash, cash equivalents and restricted cash, beginning of period	$	1,036,739	$	1,766,245

End of the period	End of the period						End of the period
Cash and cash equivalents	Cash and cash equivalents	$	636,366	$	1,277,733		Cash and cash equivalents	$	668,524	$	1,117,688
Restricted cash	Restricted cash	134,024		87,551			Restricted cash	155,690		106,332
Restricted cash included in assets held for disposition		—		63,645

Total cash, cash equivalents and restricted cash, end of period	Total cash, cash equivalents and restricted cash, end of period	$	770,390	$	1,428,929		Total cash, cash equivalents and restricted cash, end of period	$	824,214	$	1,224,020

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

Table of Contents

DigitalBridge Group, Inc.

Notes to Consolidated Financial Statements

~~September 30, 2022~~March 31, 2023

(Unaudited)

1. Business and Organization

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

In February 2023, the Company further expanded its ~~limited partners and shareholders.~~investment offerings to encompass InfraBridge, a newly-acquired mid-market global infrastructure equity platform (Note 3).

Organization

The Company operates as a taxable C Corporation commencing with the taxable year ended December 31, 2022, except for certain subsidiaries in the Operating segment that have elected to be taxed as real estate investment trusts for U.S. federal income tax purposes. The Company 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 ~~September 30, 2022,~~March 31, 2023, 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.

~~Transition to C-Corporation~~

Prior to January 1, 2022, the Company elected to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes, which generally provided that the Company was not subject to U.S. federal and state income taxes on its taxable income to the extent that it annually distributed such income to stockholders. The income earned through the Company’s underlying taxable REIT subsidiaries ("TRS"), primarily the investment management earnings, however, was subject to U.S. federal and state income tax.

In the first quarter of 2022, the Company completed the disposition of substantially all of its non-digital assets, as described below, and in connection with its digital transformation, has recorded significant growth in its Digital Investment Management ("Digital IM") business.

Due to the pace of growth of the Company's Digital IM business and other strategic transactions that the Company may pursue, the Company’s Board of Directors and management agreed to discontinue actions necessary to maintain qualification as a REIT for 2022. Commencing with the taxable year ending December 31, 2022, all of the Company’s taxable income, except for income generated by subsidiaries that have elected or anticipate electing REIT status, is subject to U.S. federal and state income tax at the applicable corporate tax rate. Any dividends paid to stockholders will no longer be tax deductible. The Company is also no longer subject to the REIT requirement for distributions to stockholders when the Company has taxable income.

The Company anticipates that operating as a C-Corporation will provide the Company with flexibility to execute various strategic initiatives without the constraints of complying with REIT requirements. This includes the intended deployment of capital to redeem third party interest in the Company’s Digital IM business, retaining and reinvesting earnings in other new initiatives in the Digital IM business, and warehousing digital infrastructure investments in the future that may be non-REIT qualified assets.

The Company’s transition to a C-Corporation is not expected to result in significant incremental current income tax expense in the near term due to the availability of significant capital loss and net operating loss (“NOL”) carryforwards. See Note 7 for additional information.

~~Digital Transformation~~

In February 2022, the Company completed its digital transformation that commenced in the second quarter of 2020. The Company's completed disposition of its hotel business (March 2021), Other Equity and Debt ("OED") investments and non-digital investment management ("Other IM") business (December 2021), and its Wellness Infrastructure business (February 2022) each represented a strategic shift in the Company's business that had a significant effect on the Company’s operations and financial results, and accordingly, had met the criteria as discontinued operations. For all current and prior periods presented, the related assets and liabilities, to the extent they have not been disposed at the respective balance sheet dates, are presented as assets and liabilities held for disposition on the consolidated balance sheets (Note 11) and the related operating results are presented as discontinued operations on the consolidated statements of operations (Note 12).

~~Table of Contents~~

~~Reverse Stock Split~~

~~In August 2022, the Company effectuated a one-for-four reverse stock split of its outstanding shares of class A and class B common stock.~~ The number of authorized shares of common stock was not adjusted in connection with the reverse stock split, however, the Company intends to seek stockholder approval to make a proportional change to the number of authorized shares of class A and class B common stock at its next annual meeting of stockholders. Par value of common stock was proportionately increased from $0.01 to $0.04 per share. Throughout this Quarterly Report on Form 10-Q, common stock share and per share information, including OP units and stock award units, as well as the Company's senior note conversion or exchange ratio in common stock shares have been revised for all periods presented to give effect to the reverse stock split.

2. Summary of Significant Accounting Policies

The significant accounting policies of the Company are described below. ~~The accounting policies of the Company's unconsolidated ventures are substantially similar to those of the Company.~~

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, ~~2022,~~2023, 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, ~~2021.~~2022.

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. ~~A substantial portion of noncontrolling~~Noncontrolling interests ~~represents interests~~represent predominantly the majority ownership held by ~~private investment funds or other investment vehicles managed by~~third party investors in the Company's Operating segment, carried interest allocation to certain senior executives of the Company ~~and which invest alongside the Company~~(Note 16), 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.

Supplemental Schedules to Consolidated Balance Sheets and Consolidated Statements of Operations

Beginning in 2023, the financial position and financial results of the Company's reportable segments of Investment Management and Operating, and its remaining investment activities and corporate level activities ("Corporate and Other") are presented in supplemental schedules to the consolidated balance sheets and consolidated statements of operations. The Company's reportable segments and Corporate and Other are described below under "—Segment Reporting."

The disaggregated presentation in the supplemental schedules enhances transparency and provides meaningful information to investors in understanding the Company's consolidated financial statements, specifically:

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•Segregation of the Investment Management segment allows for more clarity and visibility into the financial performance and financial position of the Company's core business; and

•The Operating segment represents the consolidation of two data center portfolio companies for which the Company has direct co-investments of 13% and 11%, respectively, at both March 31, 2023 and December 31, 2022. Although the Operating segment makes up a majority of the balances and activities on a consolidated basis, DBRG's exposure and entitlement are limited to its 13% and 11% interest in the two portfolio companies in the Operating segment. The liabilities of the Operating segment are obligations of the respective portfolio companies of the Operating segment and may only be settled using assets of these respective portfolio companies.

The supplemental schedule to the consolidated balance sheets excludes assets and liabilities held for disposition, stockholders' equity and noncontrolling interests in OP, which are not specifically attributable to reportable segments.

The supplemental schedule to the consolidated statements of operations present by reportable segment the results from continuing operations attributable to DBRG, excluding discontinued operations and results attributable to common stockholders. Additionally, fee income in the Investment Management segment is presented prior to elimination of fees earned from the Company's sponsored investment vehicles that are consolidated within the Operating segment and in Corporate and Other. The elimination of intercompany fees is presented in Corporate and Other.

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 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

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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

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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 ~~the Company's digital investment management business and in consolidated~~sponsored open-end funds ~~sponsored~~in the liquid securities strategy that are consolidated by the Company. The ~~noncontrolling interests either have redemption rights that will be triggered upon the occurrence~~limited partners of ~~certain events (Note 10) or~~these funds have the ability to withdraw all or a portion of their interests from the ~~consolidated open-end~~ 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.

The redeemable noncontrolling interests in the Company's investment management business were redeemed in May 2022 (Note 10).

Noncontrolling Interests in Investment Entities—This represents predominantly ~~interests in consolidated investment entities held by co-investors through investment vehicles managed by~~ the ~~Company or~~majority ownership held by third party ~~joint venture partners. Allocation~~investors in the Company's Operating segment and carried interest allocation to certain senior executives of the Company (Note 16). Excluding carried interests, allocation of net income or loss is generally based upon relative ownership interests held by equity owners in each investment entity, or based upon contractual arrangements that may provide for disproportionate allocation of economic returns among equity interests, including using a hypothetical liquidation at book value basis, where applicable and substantive.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 onupon 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 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.

Segment Reporting

The Company conducts its business through two reportable segments: (i) Investment Management; and (ii) Operating, the Company's direct co-investment in digital infrastructure assets held by its portfolio companies.

•Investment Management —This segment represents the Company's global investment management platform, deploying and managing capital on behalf of a diverse base of global institutional investors. The Company's investment management platform is composed of a growing number of long-duration, private investment funds designed to provide institutional investors access to investments across different segments of the digital infrastructure ecosystem. In addition to its flagship value-add digital infrastructure equity offerings, the Company's investment offerings have expanded to include core equity, credit and liquid securities. The Company earns management fees based upon the assets or capital managed in investment vehicles, and may earn incentive fees and carried interest based upon the performance of such investment vehicles, subject to achievement of minimum return hurdles. The amount of incentive fees and carried interest recognized, a portion of which is allocated to employees, may be highly variable from period to period. Earnings from the Investment Management segment were attributed 31.5% to Wafra prior to the Company's redemption of Wafra's interest in the investment management business at the end of May 2022 (as discussed further in Note 10).

•Operating—This segment is composed of balance sheet equity interests in digital infrastructure and real estate co-investment companies, which generally earn rental income from providing use of digital asset space and/or capacity through leases, services and other agreements. The Company currently owns interests in two companies: DataBank, an edge colocation data center business (DBRG ownership of 11% at March 31, 2023 and December 31, 2022); and Vantage SDC, a stabilized hyperscale data center business (DBRG ownership of 13% at March 31, 2023 and December 31, 2022). DataBank and Vantage SDC are portfolio companies managed by the Company under its Investment Management segment with respect to equity interests owned by third party capital.

The Company's remaining investment activities and corporate level activities are presented as Corporate and Other.

•Other investment activities are composed of the Company's equity interests in: (i) digital investment vehicles, the largest of which is in the DigitalBridge Partners ("DBP") flagship funds, and seed investments in liquid securities

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and other potential new strategies; and (ii) remaining non-digital investments. Outside of its general partner interests, which are presented in the Investment Management segment, the Company's other equity interests in its sponsored and/or managed digital investment vehicles are considered to be incidental to its investment management business. The primary economics to the Company are represented by fee income and carried interest allocation as general partner and/or manager, rather than economics from its equity interest in the investment vehicles as a limited partner or equivalent. With respect to seed investments, these are not intended to be a long-term deployment of capital by the Company and are expected to be warehoused temporarily on the Company's balance sheet until sufficient third party capital has been raised from sponsored funds. At this time, the remaining non-digital investments are not substantially available for immediate sale and are expected to be monetized over an extended period beyond the near term. These other investment activities generate largely principal investment income or losses and to a lesser extent, revenues in the form of interest income or dividend income from warehoused investments and consolidated investment vehicles.

The results of operations of the Company's reportable segments are presented in the supplemental schedule to the consolidated statements of operations and reconciled to the consolidated statements of operations as follows:


	Three Months Ended March 31, 2023								Three Months Ended March 31, 2022
(In thousands)	Investment Management		Operating		Corporate and Other		Total		Investment Management		Operating		Corporate and Other		Total
Income (Loss) from continuing operations attributable to DigitalBridge Group, Inc.	$	(2,198)	$	(10,789)	$	(171,149)	$	(184,136)	$	(7,602)	$	(12,824)	$	(144,771)	$	(165,197)
Income (Loss) from discontinued operations attributable to DigitalBridge Group, Inc.							(13,661)								(81,360)
Net income (loss) attributable to DigitalBridge Group, Inc.							$	(197,797)							$	(246,557)

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. If not, 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,

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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.

Asset Acquisitions—For acquisitions that are not deemed to be businesses, the assets acquired are recognized based on their cost to the Company as the acquirer and no gain or loss is recognized. The cost of assets acquired in a group is allocated to individual assets within the group based on their relative fair values and does not give rise to goodwill. Transaction costs related to acquisition of assets are included in the cost basis of the assets acquired.

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.~~values, except as discussed below. The excess of the ~~fair value of~~ consideration transferred over the ~~fair~~ values 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

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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.

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 ~~net income.~~earnings. Contingent consideration in connection with the acquisition of assets (and that is not a VIE) is generally recognized when the liability is considered both probable and reasonably estimable, as part of the basis of the acquired assets.

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 disposition of (i) NRF Holdco, LLC ("NRF Holdco"), a former subsidiary of~~In March 2023, the Company ~~that~~sold the entirety of its equity method investment in BrightSpire Capital, Inc. (NYSE: BRSP) of approximately 35.0 million shares for net proceeds totaling $201.6 million. The Company's investment in BRSP qualified as held the Wellness Infrastructure business, in February 2022, (ii) a substantial majority of the OED investments and Other IM business in December 2021, and (iii) the hotel business, composed of the Hospitality segment and the THL Hotel Portfoliofor sale in March ~~2021, all represent~~2023 and its disposition represents a strategic ~~shifts~~shift that ~~have or are expected to have~~has major effects on the Company’s operations and financial results, ~~and have met~~meeting the criteria as discontinued operations as of ~~June 2021,~~ March ~~2021, and September 2020, respectively.~~2023. Accordingly, for all prior periods presented, the ~~related assets and liabilities are~~equity method investment in BRSP is presented as assets ~~and liabilities~~ held for disposition on the consolidated balance sheets ~~(Note 11)~~ and ~~the related operating results are~~equity method earnings (loss) from BRSP is presented as ~~income (loss)~~loss from discontinued operations on the consolidated statements of ~~operations (Note 12).~~ operations.

Discontinued operations in 2023 primarily reflect a $9.7 million impairment of BRSP shares prior ~~periods include~~to its disposition, and activities associated with equity investments inexcluded from the ~~respective segments that have been disposed or otherwise resolved in those periods.~~December 2021 bulk sale of the Company's non-digital investment portfolio.

~~Accounting Standards Adopted~~In addition to the above equity investments, discontinued operations in 2022

~~Amendment~~ also included two months of operations of the Wellness Infrastructure business, along with other non-core assets held by a subsidiary, NRF Holdco, LLC ("NRF Holdco"), prior to ~~Lessor Accounting~~

~~In July 2021,~~ the ~~FASB issued ASU No. 2021-5,~~ ~~Lessors—Certain Leases with Variable Lease Payments~~,sale of all of the equity of NRF Holdco in February 2022. The sales price for 100% of the equity of NRF Holdco was $281 million, composed of $126 million cash and a $155 million unsecured promissory note. The promissory note, which amends existing lease classification guidance for lessors to better reflect the economics of certain lease arrangements. The ASU requires a lease with variable lease payments that are not based upon a rate or index to beis classified as ~~an operating lease if classification as a direct financing lease or sales-type lease would have~~held for investment and carried at fair value under the fair value option, matures five years from closing of the sale, accruing paid-in-kind ("PIK") interest at 5.35% per annum (Note 11). The disposition of NRF Holdco resulted in a write-off of unamortized deferred financing costs on the Wellness Infrastructure debt assumed by the buyer of $92.1 million and additional impairment loss to the lessor at lease commencement. A loss could have otherwise arisen even if the lease is expected to be profitable as the exclusion of these variable lease payments result in the recognition of a lower net investment in a lease relative to thebased upon final carrying value of the ~~underlying asset that~~Wellness Infrastructure net assets.

Loss from discontinued operations is ~~derecognized at the commencement of a direct financing or sales-type lease. Under the amended guidance, this uneconomic outcome is avoided because the classification~~summarized as an operating lease does not result in a derecognition of the underlying asset by the lessor, and the recognition of variable lease payments earned and depreciation expense on the underlying asset will partially offset in earnings over time. The Company adopted the ASU on its effective date of January 1, 2022. At the time of adoption, the Company, as lessor, did not have any leases that would have been subject to this amendment.follows.


	Three Months Ended March 31,
(In thousands)	2023		2022





Revenues	$	1,970	$	80,281
Expenses	(5,770)		(201,155)







Other gain (loss)	(10,416)		24,117




Income tax benefit (expense)	(2)		2,112
Income (Loss) from discontinued operations	(14,218)		(94,645)
Income (Loss) from discontinued operations attributable to noncontrolling interests:
Investment entities	517		(6,175)
Operating Company	(1,074)		(7,110)
Income (Loss) from discontinued operations attributable to DigitalBridge Group, Inc.	$	(13,661)	$	(81,360)

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~~Acquired Contracts with Customers~~

~~In October 2021, the FASB issued ASU No. 2021-8,~~ ~~Accounting for Contract~~ Assets and ~~Contract~~Related Liabilities ~~From Contracts With Customers, which applies~~Held for Disposition

At March 31, 2023 and December 31, 2022, all assets and related liabilities held for disposition relate to discontinued operations. The Company initially measures assets classified as held for disposition at the ~~principles~~lower of ~~ASC 606,~~ ~~Revenue from Contracts with Customers, rather than a~~their carrying amounts or fair value ~~basis under ASC 805,~~ ~~Business Combinations, in~~less disposal costs. For bulk sale transactions, the ~~recognition~~unit of ~~contract assets and contract liabilities acquired in a business combination. The ASU addresses~~account is the ~~following inconsistencies: (1) measurement~~disposal group, with any excess of ~~contract liability or deferred revenue at~~the aggregate carrying value over estimated fair value less costs to sell allocated to the individual assets within the group.

Assets held for disposition of $11.3 million at March 31, 2023 consisted primarily of miscellaneous equity investments excluded from the December 2021 bulk sale of the Company's non-digital investment portfolio. Assets held for disposition of $275.5 million at December 31, 2022 also included the Company's shares in BRSP of $218.0 million that ~~is typically lower than carrying value, reducing post-acquisition revenues;~~were sold in March 2023 and ~~(2) timing of contractual payments affecting~~an equity method investment carried under the fair value option of ~~deferred revenue~~$44.5 million prior to a sale of its underlying assets and ~~the amount~~a return of post-acquisition revenue in otherwise similar contracts. Under the new guidance, an acquirer records a contract asset or contract liability as if it had originated the acquired revenue contract, which requires the acquirer to evaluate performance obligations, transaction price and relative stand-alone selling price at the original contract inception date or subsequent modification dates. This will generally result in the recognition and measurement of a contract asset and contract liability that will likely be more comparablecapital to the ~~books~~Company in January 2023.

Reclassifications

Reclassifications have been made in connection with discontinued operations, as discussed in "—Discontinued Operations." Additionally, the Company determined that principal investment income (loss) from its equity interest as general partner and general partner affiliate in its sponsored investment vehicles, and its entitlement to carried interest allocation, represent a core component of ~~the acquiree at acquisition date. In circumstances where an acquirer is unable to assess or rely~~returns in its investment management business. Accordingly, beginning in 2023, principal investment income (loss) and carried interest allocation are presented within total revenues on the ~~acquiree's accounting under ASC 606, the ASU provides a practical expedient that allows an acquirer~~consolidated statements of operations. Prior periods have been reclassified to ~~determine the stand-alone selling price of each performance obligation~~conform to current presentation.

Accounting Standards Adopted in ~~the contract as of acquisition date, instead of contract inception date, for purposes of allocating the transaction price.~~2023

~~The amendments also apply to contract assets and contract liabilities from other contracts to which the provisions of ASC 606 apply, such as contracts within the scope of ASC 610-20,~~ ~~Other Income—Gains and Losses from Derecognition of Nonfinancial Assets,~~ but the amendments do not affect the accounting for other assets or liabilities that may arise from acquired customer contracts such as refund liabilities that do not meet the definition of contract liabilities and continue to be recorded at fair value.

The ASU is effective January 1, 2023 and is to be applied prospectively. Early adoption is permitted with retrospective application to all business combinations that occurred during the fiscal year of early adoption. The Company early adopted the ASU on January 1, 2022.

~~Future Accounting Standards~~

Contractual Sale Restriction on Equity Securities

In June 2022, the ~~FASB~~Financial Accounting Standards Board issued ~~ASU~~Accounting Standards Update ("ASU") 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which amends Accounting Standards Codification ("ASC") Topic 820, Fair ~~Value~~ Value Measurement, to clarify that a contractual sale restriction that is entity-specific is not part of the unit of account of an equity security and is therefore not considered in measuring the fair value of an equity security, in which case, a discount should not be applied. The amendment further prohibits recognizing the contractual sale restriction as a separate unit of account, that is, as a contra asset or liability. Sale restrictions that are characteristics of the holder of an equity security include, but are not limited to, lock-up agreements, market stand-off agreements, or specific provisions in agreements between shareholders. In contrast, a legal restriction preventing a security from being sold on a national securities exchange or an over-the-counter market is a security-specific characteristic as the restriction would similarly apply to a market participant buyer in an assumed sale of the security. This guidance also applies to issuers of equity securities that are subject to contractual sale restrictions, for example, equity securities issued as consideration in a business combination. The ASU requires additional disclosures related to equity securities that are subject to contractual sale restrictions, specifically (1) the fair value of such equity securities, (2) the nature and remaining duration of the restrictions, and (3) any circumstances that could cause a lapse in restrictions. The ASU is effective January 1, 2024, with early adoption permitted in the interim periods. Transition is prospective with any fair value adjustments resulting from adoption recognized in earnings and the amount adjusted disclosed in the period of adoption.

For subsidiaries of the Company that are investment companies as defined in ASC Topic 946,Financial Services—Investment Companies, the ASU is applied prospectively to equity securities with contractual sale restrictions entered into or modified on or after the adoption date. For equity securities with contractual sale restrictions entered into or modified before the adoption date, the existing accounting policy continues to be applied until the restrictions expire or are modified, and if the existing accounting policy differs from the amended guidance, the additional disclosure requirements under the ASU would be applicable.

The Company early adopted the ASU on January 1, 2023. At the time of adoption, the Company and its investment company subsidiaries do not ~~currently~~ have equity securities subject to contractual sale restrictions.

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3. Acquisitions

Business Combination in 2023

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 a $313.2 million upfront 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 11.

Asset Acquisitions in 2022

Vantage SDC Hyperscale Data Centers

In connection with the Company's acquisition of Vantage ~~Data Centers Holdings, LLC's ("Vantage") portfolio of stabilized hyperscale data centers (“Vantage SDC”)~~SDC in July 2020 ~~the Company had an option to purchase~~and an additional data center in ~~Santa Clara, California. In~~ September 2021, the Company exercised the option and purchased the data center for $404.5 million in cash, funded through borrowings by Vantage SDC, with a deferred amount of $56.9 million to be paid upon future lease-up, and additional consideration contingent on lease-up of the remaining capacity.

~~The Company~~ and its co-investors ~~also~~ committed to acquire the future build-out of expansion capacity, along with lease-up of the expanded capacity and existing inventory, the costs of which are borne by the previous owners of Vantage SDC. As of ~~September 30, 2022,~~March 31, 2023, the remaining consideration for the incremental lease-up acquisitions is estimated to be approximately ~~$204 million.~~$185 million, of which $122 million is due by September 2024. Most, if not all, of the cost of the expansion capacity has been or ~~will~~is expected to be funded by Vantage SDC from borrowings under its credit facilities and/or cash from operations. Pursuant to this arrangement, Vantage SDC had 1115 new tenant leases ~~that commenced in the nine months ended September 30, 2022, and 11 new tenant leases that commenced in 2021~~ related to a portion of the expansion capacity that commenced during 2022 for aggregate consideration of ~~$123.7 million and $100.8 million, respectively.~~

$161.3 million. All of these payments were made to the previous owners of Vantage SDC and are treated as asset acquisitions. There were no new tenant leases that commenced in the first quarter of 2023.

DataBank

Acquisitions by DataBank

in 2022 were as follows:

•~~In May 2022, the Company's edge colocation data center subsidiary, DataBank, acquired a data center in Atlanta, Georgia for $10.9 million.~~

•~~In March 2022, DataBank acquired four~~Four colocation data centers in Houston, Texas in March 2022 for ~~$670 million. The acquisition was~~$678 million, funded by a combination of $262.5 million of debt and ~~$407.5~~$415.5 million of equity, of which the Company's share was ~~$87.0~~$88.7 million.

•InA data center each in Atlanta, Georgia in May 2022 for $10.9 million, and in Denver, Colorado in February 2022 ~~DataBank acquired a data center in Denver~~ that was previously leased by its zColo subsidiary for $17.6 million.

~~2021~~

•~~In February 2021, DataBank acquired five data centers in its zColo portfolio in France for $33.0 million.~~

•~~In the third quarter of 2021, DataBank and its zColo subsidiary each acquired a building in the U.S. for a combined $38.5 million, to be redeveloped into data centers.~~

Tower Assets

In June 2022, the Company acquired the mobile telecommunications tower business (“TowerCo”) of Telenet Group Holding NV (Euronext Brussels: TNET) for €740.1 million or $791.3 million (including transaction costs). In December 2022, our interest in the temporarily warehoused TowerCo investment was transferred to the Company's new sponsored fund (Note 16) and TowerCo was deconsolidated. The TowerCo assets acquired had included owned tower sites, tower sites subject to third party leases ~~equipment, and customer relationships. The third party leases give~~that gave rise to right-of-use lease assets and corresponding lease ~~liabilities. The~~liabilities, equipment, as well as customer relationships ~~intangible~~related primarily ~~relates~~ to a master lease agreement with Telenet as lessee. The acquisition ~~was~~had been funded through $326.1 million of debt, $278.1 million of equity from the Company, and $213.8 million in third party equity. In addition to the purchase price, the funds ~~were~~had been used to finance transaction costs, debt issuance costs, working capital and as operating cash. ~~This investment is intended~~Prior to ~~be transferred to a new investment vehicle to be sponsored by the Company and is~~transfer, TowerCo was presented within Corporate and ~~Other in Note 19.~~Other.

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Allocation of Consideration Transferred

The following table summarizes the consideration and allocation to assets acquired, liabilities assumed and noncontrolling interests at acquisition. In an asset acquisition, the cost of assets acquired, which includes capitalized transaction costs, is allocated to individual assets within the group based on their relative fair values and does not give rise to goodwill.With respect to business combinations, the estimated fair values and allocation of the 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.


	Business Combination		Asset Acquisitions
	2023		2022
(In thousands)	InfraBridge		TowerCo		Acquisitions by DataBank		Vantage SDC Expansion Capacity
Consideration
Cash	$	364,338	$	791,254	$	706,514	$	161,302
Estimated fair value of contingent consideration	10,874		—		—		—
	375,212		791,254		706,514		161,302
Assets acquired and liabilities assumed
Cash	51,174		—		—		—
Principal investments	130,810		—		—		—
Real estate	—		363,121		627,474		140,140

Intangible assets	50,800		673,218		77,885		21,162
Lease right-of-use ("ROU") and other assets	27,682		234,462		3,994		—

Deferred tax liabilities	(10,198)		(243,223)		—		—
Intangible, lease and other liabilities	(21,625)		(236,324)		(2,839)		—
Fair value of net assets acquired	228,643		791,254		706,514		161,302

Goodwill	$	146,569	$	—	$	—	$	—

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•

Asset Acquisitions
2022 2021
(In thousands) TowerCo Acquisitions by DataBank / zColo US Vantage SDC Expansion Capacity Vantage SDC Expansion Capacity and Add-On Acquisition Acquisitions by DataBank / zColo US zColo France
Assets acquired and liabilities assumed
Real estate $ 363,121 $ 627,474 $ 105,691 $ 479,587 $ 38,500 $ 26,083
Intangible assets 673,218 77,885 18,028 82,603 — 8,702
ROU and other assets 234,462 3,994 — — — 9,536
Deferred tax liabilities (243,223) — — — — —
Intangible, lease and other liabilities (236,324) (2,839) — (56,889) — (11,303)
Fair value of net assets acquired $ 791,254 $ 706,514 $ 123,719 $ 505,301 $ 38,500 $ 33,018
Principal investments represent acquired interests in InfraBridge funds, valued at their most recent net asset value ("NAV").

•Real estate was valued based upon (i) current replacement cost for buildings in an as-vacant state and improvements, estimated using construction cost guidelines; (ii) current replacement cost for data center infrastructure by applying an estimated cost per kilowatt based upon current capacity of each location and also considering the associated indirect costs such as design, engineering, construction and installation; (iii) current replacement cost for towers in consideration of their remaining economic life; and (iv) recent comparable sales or current listings for land. Useful lives of real estate acquired range from 35 to 50 years for buildings and improvements, 155 to 2015 years for site improvements, 11 to 71 years for towers and related equipment, and 11 to 20 years for data center infrastructure.

•The investment management intangible assets of InfraBridge were composed of the following:

•Management contracts are valued based upon estimated net cash flows expected to be generated from the contracts, with remaining term of the contracts ranging between 1 and 4 years, discounted at 8.0%.

•Investor relationships represent the fair value of potential investment management fees, net of operating costs, to be generated from repeat InfraBridge investors in future sponsored vehicles, with a weighted average estimated useful life of 12 years, discounted at 14.0%.

•Lease-related intangibles for real estate acquisitions were composed of the following:

•In-place leases reflect the value of rental income forgone if the properties had been acquired vacant, and the leasing commissions, legal and marketing costs that would have been incurred to lease up the properties, discounted at rates between 4.75% and 6.8%, with remaining lease terms ranging between 1 and 15 years.

•Above- and below-market leases represent the rent differential for the remaining lease term between contractual rents of acquired leases and market rents at the time of acquisition, discounted at rates between 6.0% and 11.25% with remaining lease terms ranging between 1 and 4 years.

•Tenant relationships represent the estimated net cash flows attributable to the likelihood of lease renewal by an existing tenant relative to the cost of obtaining a new lease, taking into consideration the estimated time it would require to execute a new lease or backfill a vacant space, discounted at rates between 4.75% and ~~11.5%~~11.25%, with estimated useful lives between 5 and 15 years.

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•Customer service contracts were valued based upon estimated net cash flows generated from the zColo customer service contracts that would have been forgone if such contracts were not in place, taking into consideration the time it would require to execute a new contract, with remaining term of the contracts ranging between 1 and 156 years.

•Customer ~~relationship intangible assets~~relationships for towers were valued as the estimated future cash flows to be generated over the life of the tenant relationships based upon rental rates, operating costs, expected renewal terms and attrition, discounted at 6.8%, with estimated useful lives between 19 and 45 years.

•Deferred tax liabilities were recognized for the book-to-tax basis ~~difference~~differences associated with the acquisitions of InfraBridge and TowerCo, ~~acquisition.~~net of deferred tax assets assumed where applicable.

•Other assets acquired and liabilities assumed include primarily lease ROU assets associated with leasehold ~~data centers and~~ ground space hosting tower communication sites, along with corresponding lease liabilities. Lease liabilities were measured based upon the present value of future lease payments over the lease term, discounted at the incremental borrowing rate of the respective acquiree entities. ~~Other liabilities~~Included in ~~2021~~the InfraBridge acquisition were also ~~included a deferred purchase consideration~~management fee receivable and compensation payable associated with the ~~Vantage SDC add-on acquisition.~~pre-acquisition period.

•Goodwill is the value of the business acquired that is not already captured in identifiable assets, largely represented by the synergies from combining the capital raising resources of DBRG and the mid-market infrastructure specialization of the InfraBridge team.

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~~Purchase Commitment~~

~~Infrastructure Investment Management Platform~~

In April 2022, the Company entered into a definitive agreement to acquire the global infrastructure equity investment management business of AMP Capital Investors International Holdings Limited ("AMP Capital"). Consideration for the acquisition consists of: (i) an upfront amount of A$458 million ($314 million at September 30, 2022 spot rate), subject to certain customary adjustments; and (ii) a contingent amount of up to A$180 million ($125 million at September 30, 2022 spot rate), primarily based upon future fundraising for AMP Capital's global infrastructure funds. The transaction is expected to close in the fourth quarter of 2022, subject to customary closing conditions, including regulatory approvals. There is no assurance that the acquisition will close in the timeframe contemplated or on the terms anticipated, if at all.

~~4. Real Estate~~

~~The following table summarizes the Company's real estate held for investment.~~

(In thousands) September 30, 2022 December 31, 2021
Land $ 257,499 $ 206,588
Buildings and improvements 1,555,396 1,295,204
Data center infrastructure 4,302,733 3,785,561
Towers and equipment 332,797 —
Construction in progress 341,760 77,014
6,790,185 5,364,367
Less: Accumulated depreciation (648,770) (392,083)
Real estate assets, net $ 6,141,415 $ 4,972,284

~~Real Estate Depreciation~~

Depreciation of real estate held for investment was $91.3 million and $69.7 million for the three months ended September 30, 2022 and 2021, respectively, and $257.7 million and $211.3 million for the nine months ended September 30, 2022 and 2021, respectively.

~~Property Operating Income~~

~~Components of property operating income are as follows.~~

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2022 2021 2022 2021
Lease income:
Fixed lease income $ 195,701 $ 153,173 $ 537,213 $ 454,560
Variable lease income 29,453 22,065 86,668 68,152
225,154 175,238 623,881 522,712
Data center service revenue 19,182 19,616 57,217 50,129
$ 244,336 $ 194,854 $ 681,098 $ 572,841

For the nine months ended September 30, 2022 and 2021, property operating income from a single customer accounted for approximately 18% and 16%, respectively, of the Company's total revenues from continuing operations, or approximately 8% for both periods, of the Company's share of total revenues from continuing operations, net of amounts attributable to noncontrolling interests in investment entities.

2021

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~~5. Equity and Debt~~4. Investments

The Company's equity and debt investments ~~excluding investments held for disposition (Note 11),~~ are represented by the following:

(In thousands) September 30, 2022 December 31, 2021
Equity investments
Equity method investments
BrightSpire Capital, Inc. (BRSP) (1)
$ 220,793 $ 284,985
Company-sponsored private funds—equity investment in funds 305,833 270,737
Company-sponsored private funds—carried interest 193,758 111,957
Other 4,458 5,417
724,842 673,096
Other equity investments
Marketable securities (Note 13) 150,028 201,912
Private funds and non-traded REIT 47,289 49,575
Other 77,270 10,570
Total equity investments 999,429 935,153
Debt securities
CLO subordinated notes 50,927 —
Equity and debt investments $ 1,050,356 $ 935,153


(In thousands)	March 31, 2023		December 31, 2022
Investment Management
Equity method investments
Principal investments	$	54,626	$	51,665
Carried interest allocation	286,517		341,749
	341,143		393,414
Other equity investment	4,683		1,913
Total Investment Management	345,826		395,327

Operating
Debt investments—loan receivable	6,804		4,638

Corporate and Other
Equity method investments—Principal investments	512,649		358,846
Equity investments of consolidated funds	211,758		185,845
Other equity investments	98,988		113,111
Debt investments
CLO subordinated notes	50,927		50,927
Loan receivable	—		133,307
Total Corporate and Other	874,322		842,036

Total Investments	$	1,226,952	$	1,242,001

~~__________~~Equity Method Investments

~~(1)~~ AtPrincipal Investments

Principal investments totaling $567.3 million at March 31, 2023 and $410.5 million at December 31, ~~2021, excluded approximately 461,000 shares and 3.1 million units in BRSP held by NRF Holdco that were included in assets held for disposition (Note 11). NRF Holdco was sold in February 2022.~~

~~Equity Investments~~

~~The Company's equity~~2022 represent investments ~~represent noncontrolling equity interests in various entities, primarily BRSP, interests~~ in the Company's sponsored ~~digital~~ investment vehicles, ~~and marketable securities held largely by private open-end liquid funds sponsored and consolidated by the Company.~~

~~For~~accounted for as equity method investments the liabilities of the investment entities may only be settled using the assets of these entities and there is no recourse to the general credit of the Company for the obligations of these entities. The Company is not required to provide financial or other support in excess of its capital commitments, where applicable, and its exposure is limited to its investment balance.

The Company evaluates its equity method investments for other-than-temporary impairment ("OTTI") at each reporting period. In 2021, OTTI was recorded only on equity method investments held for disposition, as discussed in Note 11.

~~BrightSpire Capital, Inc. (NYSE: BRSP)~~

~~At September 30, 2022, the Company owned approximately 35.0 million shares in BRSP for~~a 27.1% interest in BRSP (29.0% at December 31, 2021, including BRSP shares and units held by NRF Holdco that were disposed in February 2022), accounted for under the equity method as it exercises significant influence over BRSP's operating and financial policies through its substantial ownership interest. In connection with the internalization of BRSP in April 2021, the Company had entered into a stockholders agreement with BRSP, pursuant to which the Company agreed, for so long as the Company owns at least 10% of BRSP's outstanding common shares, to vote in BRSP director elections as recommended by BRSP’s board of directors at any stockholders' meeting that occurs prior to BRSP's 2023 annual stockholders' meeting. In addition, the Company is subject to customary standstill restrictions, including an obligation not to initiate or make stockholder proposals, nominate directors or participate in proxy solicitations, until the beginning of the advance notice window for BRSP's 2023 annual meeting. Except as aforementioned, the Company may vote its sharesexerts significant influence in its ~~sole discretion in any votes of BRSP’s stockholders and is prohibited from acquiring additional BRSP shares.~~

~~Disposition~~—In August 2021, the Company sold 9,487,500 BRSP shares through a secondary offering by BRSP for net proceeds of approximately $81.8 million, after underwriting discounts. A net gain was recognized in equity method earnings within continuing operations of $7.6 million (including a proportion of basis difference associated with the BRSP shares disposed,role as ~~discussed below).~~

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~~OTTI—In the third quarter of 2022, the Company determined that its investment in BRSP was other-than-temporarily~~

~~impaired and recorded an impairment charge, included in equity method losses, of $59.6 million.~~general partner. The Company ~~determined that given~~typically has a small percentage interest in its sponsored funds as general partner (presented in the ~~continued market volatility in 2022, its anticipated hold period for its~~Investment Management segment). The Company also has additional investment ~~in BRSP may not be sufficient to allow for a recovery of BRSP's stock price relative~~as general partner affiliate alongside the funds' limited partners, primarily with respect to the Company's ~~carrying value~~flagship value-add funds, DigitalBridge Partners, LP ("DBP I") and DigitalBridge Partners II, LP ("DBP II"), and the InfraBridge funds (presented within Corporate and Other).

The Company's proportionate share of net income (loss) from investments in its sponsored investment vehicles, which includes unrealized gain (loss) from changes in BRSP. The OTTI charge was measured as the excess of carrying value over market value of the Company's investment in BRSP based upon BRSP's closing stock price on September 30, 2022, the last trading day of the quarter, of $6.31 per share. Throughout 2021, the fair value of the ~~Company's~~underlying fund investments, is recorded in principal investment ~~in BRSP was in excess~~income (loss) on the consolidated statements of ~~its carrying value.~~

As a result of the impairment charge, the carrying value of the Company's investment in BRSP as of September 30, 2022 represents a non-recurring fair value that was measured under the Level 1 fair value hierarchy.

~~Basis Difference~~—The Company recorded impairment charges on its investment in BRSP in 2022, 2020 and 2019. This resulted in a basis difference between the Company's carrying value of its investment in BRSP (based upon BRSP's share price at the time of impairment) and the Company's proportionate share of BRSP's book value of equity at the time of impairment. The impairment charges were applied to the Company's investment in BRSP as a whole and were not determined based upon an impairment assessment of individual assets held by BRSP. Therefore, the impairment charges were generally allocated on a relative fair value basis across BRSP's various investments. Accordingly, for any subsequent resolutions or write-downs taken by BRSP on these investments, the Company's share thereof is not recorded as an equity method loss but is applied to reduce the basis difference until such time the basis difference in connection with the respective investments has been fully eliminated. Upon resolution of these investments by BRSP or upon the Company's disposition of its shares in BRSP, the basis difference related to resolved investments or the proportion of basis difference associated with the BRSP shares disposed is applied to calculate the Company's share of net gain or loss resulting from such resolution or disposition. The Company increased its share of net earnings from BRSP by $1.2 million and $41.4 million for the three months ended September 30, 2022 and 2021, respectively, and $17.0 million and $100.5 million for the nine months ended September 30, 2022 and 2021, respectively, representing the basis difference allocated to investments that were resolved or impaired by BRSP during these periods. The basis difference balance at September 30, 2022 was $209.8 million.operations.

Carried Interest Allocation

Carried interest allocation represents a disproportionate allocation of returns to the Company, as general partner, based upon the extent to which cumulative performance of a sponsored fund exceeds minimum return hurdles. Carried interest allocation generally arises when appreciation in value of the underlying investments of the fund exceeds the minimum return hurdles, after factoring in a return of invested capital and a return of certain costs of the fund pursuant to terms of the governing documents of the fund. The amount of carried interest allocation recognized is based upon the cumulative performance of the fund if it were liquidated as of the reporting date. Unrealized carried interest allocation is driven primarily by changes in fair value of the underlying investments of the fund, which may be affected by various factors, including but not limited to: the financial performance of the portfolio company, economic conditions, foreign exchange rates, comparable transactions in the market, and equity prices for publicly traded securities. For funds that have exceeded the minimum return hurdle but have not returned all capital to the limited partners, unrealized carried interest allocation may be subject to reversal ~~until such~~over time ~~it is realized.~~as preferred returns continue to accrue on unreturned capital. Realization of carried interest allocation occurs upon disposition of all underlying investments of the fund, or in part with each disposition.

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Generally, carried interest allocation is distributed upon profitable disposition of an investment if at the time of distribution, cumulative returns of the fund exceed minimum return hurdles. Depending on the final realized value of all investments at the end of the life of a fund (and, with respect to certain funds, periodically during the life of the fund), if it is determined that cumulative carried interest ~~distributions have~~allocation distributed has exceeded the final carried interest allocation amount earned (or amount earned as of the calculation date), the Company is obligated to return the excess carried interest allocation received. Therefore, carried interest ~~distributions~~allocation distributed may be subject to clawback if decline in investment values results in cumulative performance of the fund falling below minimum return hurdles in the interim period. If it is determined that the Company has a clawback obligation, a liability would be established based upon a hypothetical liquidation of the net assets of the fund at reporting date. The actual determination and required payment of any clawback obligation would generally occur after final disposition of the investments of the fund or otherwise as set forth in the governing documents of the fund. ~~At September 30, 2022,~~

Carried interest allocation on the ~~Company does not have a liability for clawback obligations on distributed carried interest.~~

~~With respect to funds that have distributed~~balance sheet date represents unrealized carried interest in the event all of their investments are deemed to have no value, the likelihood of which is remote, carried interest distributions subject to clawback as of September 30, 2022 would amount to $51.2 million, of which $45.9 million would be the responsibility of the employee and former employee recipients. For this purpose, a portion of the carried interest allocated is generally held back from these recipients at the time of distribution (Note 7).

~~The carried interest balances at September 30, 2022 and December 31, 2021 represent unrealized carried interest~~allocation in connection with sponsored funds that are currently in the early stage of their lifecycle. Carried interest allocation is presented gross of accrued carried interest compensation (Note 7).

Carried Interest Allocation Distributed

There was immaterial carried interest allocation distributed and recognized in revenues in the first quarter of 2023. No carried interest allocation was distributed in the first quarter of 2022.

Clawback Obligation

The Company did not have a liability for clawback obligations on carried interest allocation distributed as of March 31, 2023 and December 31, 2022.

With respect to funds that have distributed carried interest allocation, if in the event all of their investments are deemed to have no value, the likelihood of which is remote, carried interest allocation distributed of $75.6 million would be subject to clawback as of March 31, 2023, of which $58.9 million would be the responsibility of the employee and former employee recipients. For this purpose, a portion of the carried interest allocation is generally held back from these recipients at the time of distribution. The amount withheld resides in entities outside of the Company.

Equity Investments of Consolidated Funds

The Company consolidates sponsored funds in which it has more than an insignificant equity interest in the fund as general partner, as discussed in Note 12. Equity investments of consolidated funds are composed of predominantly marketable equity securities held by funds in the liquid securities strategy, and an equity interest held by a credit fund in a pooling entity that invests in loan assets. Equity investments of consolidated funds are carried at fair value with changes in fair value recorded in other gain (loss) on the consolidated statements of operations.

Other Equity Investments

Other equity investments totaling $103.7 million at March 31, 2023 and $115.0 million at December 31, 2022 include investments warehoused potentially for future sponsored funds, a marketable equity security and investment in a non-traded REIT (Note 11) (presented within Corporate and Other), as well as an investment in a managed account (presented in the Investment Management segment). These investments are generally carried at fair value or under the measurement alternative which is at cost, adjusted for impairment and observable price changes. Dividends or other distributions from these investments are recorded in other income while changes in the value of these investments are recorded in other gain (loss) on the consolidated statements of operations.

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~~Carried~~Debt Investments

Debt investments are composed of subordinated notes in a third party collateralized loan obligation ("CLO") and loans receivable. Interest ~~Distributed~~income from debt investments are recorded in other income.

CLO Subordinated Notes

In the third quarter of 2022, ~~$123.5~~bank syndicated loans that the Company previously warehoused were transferred into a third party warehouse entity at their acquisition price totaling $232.7 million, and securitized through the issuance of ~~carried interest~~CLO securities. The corresponding warehouse facility of $172.5 million was ~~distributed, including $51.2 million that had been previously accrued, recognized in equity method earnings. $103.2 million~~concurrently repaid. The CLO is sponsored and managed by the third party. The Company acquired all of the ~~distributed carried interest was allocated to current and former employees and to Wafra (Note 10),~~subordinated notes of the CLO, which ~~$45.9 million had been previously accrued, recorded~~are classified as ~~carried interest compensation and amounts attributable to noncontrolling interests (Note 18).~~available-for-sale ("AFS") debt securities. The CLO has a stated legal final maturity of 2035.

~~Investment and Lending Commitments~~The balance of the CLO subordinated notes is summarized as follows:

~~Sponsored Funds~~


	Amortized Cost without Allowance for Credit Loss		Allowance for Credit Loss		Gross Cumulative Unrealized
(in thousands)					Gains		Losses		Fair Value
At March 31, 2023 and December 31, 2022	$	50,927	$	—	$	—	$	—	$	50,927

~~At September 30, 2022,~~In estimating fair value of the CLO subordinated notes, the Company ~~had unfunded commitments~~used a benchmarking approach by looking to ~~its sponsored funds.of $141.7 million.~~the implied credit spreads derived from observed prices on comparable CLO issuances in the first quarter of 2023, and also considering the current size and diversification of the CLO collateral pool and projected return on the subordinated notes. Based upon these data points, the Company determined that the issued price of the subordinated notes in September 2022 was a reasonable representation of their fair value at March 31, 2023 and December 31, 2022, classified as Level 3 of the fair value hierarchy.

Loans Receivable

The Company elected fair value option for its loans receivable, which consisted of two unsecured promissory notes, one in connection with the sale of NRF Holdco (Note 2) and one held by DataBank at March 31, 2023 and December 31, 2022. The DataBank loan receivable was fully repaid in April 2023. Changes in fair value and valuation methodology is discussed further in Note 11.

Investment Commitments

Sponsored Funds—At ~~September 30, 2022,~~March 31, 2023, the ~~Company's DataBank subsidiary~~Company had unfunded ~~lending~~commitments to its sponsored funds as general partner and general partner affiliate totaling $126.5 million, including commitments to a ~~borrower~~consolidated fund. Generally, the timing for funding of ~~$24.2~~these commitments is not known and the commitments are callable on demand at any time prior to their respective expirations.

5. Real Estate

The following table summarizes the Company's real estate which is held by subsidiaries in the Operating segment.


(In thousands)	March 31, 2023		December 31, 2022
Land	$	257,588	$	257,588
Buildings and improvements	1,738,190		1,573,605

Data center infrastructure	4,510,678		4,427,150


Construction in progress	283,146		395,393
	6,789,602		6,653,736
Less: Accumulated depreciation	(824,795)		(732,438)
Real estate assets, net	$	5,964,807	$	5,921,298

Real Estate Depreciation

Depreciation of real estate held for investment was $92.4 million and $79.1 million for the three months ended March 31, 2023 and 2022, respectively.

Table of ~~which~~Contents

Property Operating Income

Components of property operating income are as follows.


	Three Months Ended March 31,
(In thousands)	2023		2022
Lease income:
Fixed lease income	$	177,420	$	160,324
Variable lease income	32,982		23,847
	210,402		184,171
Data center service revenue	20,525		18,340
	$	230,927	$	202,511

For the three months ended March 31, 2023 and 2022, property operating income from a single customer accounted for approximately 21% and 20%, respectively, of the Company's total revenues from continuing operations, or approximately 15% for both periods of the Company's share ~~was $3.3 million,~~of total revenues from continuing operations, net of amounts attributable to noncontrolling interests in investment entities.

~~Debt Securities~~Commitment for Tenant Allowance

In connection with DataBank’s acquisition of a data center portfolio in March 2022 (Note 3), DataBank and the ~~third quarter of 2022, bank syndicated loans~~seller concurrently entered into a master lease agreement which provides that the ~~Company previously warehoused were transferred into~~seller leases from DataBank land acquired in the transaction. If the seller does not exercise its rights to early terminate the lease, the seller is obligated to develop a ~~third party warehouse entity at their acquisition price totaling $232.7 million, and securitized through the issuance of collateralized loan obligation securities ("CLO"). The corresponding warehouse~~data center facility ~~of $172.5 million was repaid by the Company. The CLO is sponsored and managed by the third party. The Company acquired all~~on a portion of the ~~subordinated notes~~acquired land and DataBank is committed to provide the seller a tenant allowance of up to $37.5 million to finance the construction. In December 2022, the seller waived its right to terminate the lease with respect to the portion of the ~~CLO, which are classified as available-for-sale ("AFS")~~land subject to development. The seller will be responsible for undertaking the construction and any resulting overages. Title to the to-be constructed building, improvements and fixtures will be vested in the seller for the duration of the lease and transfers to DataBank thereafter. The timing of funding of DataBank’s commitment to the seller will be based on agreed upon milestones, with construction to be completed no later than January 1, 2026. DataBank expects to fund its commitment through future debt ~~securities. The CLO has a stated legal final maturity of 2035.~~

~~At September 30, 2022, the CLO subordinated notes were carried at their recently issued price, which represents their current estimated fair value.~~

Amortized Cost without Allowance for Credit Loss Allowance for Credit Loss Gross Cumulative Unrealized
(in thousands) Gains Losses Fair Value
September 30, 2022 $ 50,927 $ — $ — $ — $ 50,927
drawdowns. No amounts have been funded by DataBank to-date.

6. Goodwill, Deferred Leasing Costs and Other Intangibles

Goodwill

~~Goodwill balance~~The following table presents changes in goodwill by reportable ~~segment at both September 30, 2022 and December 31, 2021 is as follows.~~segment.

~~(In thousands)~~

~~Digital Investment Management~~ ~~(1)~~

~~298,248~~

~~Digital Operating~~

~~463,120~~

~~Total goodwill~~

~~761,368~~


	Three Months Ended March 31,
	2023						2022
(In thousands)	Investment Management (1)		Operating		Total		Investment Management (1)		Operating		Total
Beginning balance	$	298,248	$	463,120	$	761,368	$	298,248	$	463,120	$	761,368
Business combination (Note 3)	146,569		—		146,569		—		—		—



Ending balance	$	444,817	$	463,120	$	907,937	$	298,248	$	463,120	$	761,368

__________

(1) Remaining goodwill deductible for income tax purposes was ~~$125.0~~$119.7 million at ~~September 30, 2022~~March 31, 2023 and ~~$133.0~~$122.4 million at December 31, ~~2021.~~2022.

2325

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Deferred Leasing Costs, Other Intangible Assets and Intangible Liabilities

Deferred leasing costs and identifiable intangible assets and liabilities ~~excluding those related to assets held for disposition,~~ are as follows.

September 30, 2022 December 31, 2021
(In thousands)
Carrying Amount (Net of Impairment)(1)
Accumulated Amortization(1)
Net Carrying Amount(1)
Carrying Amount (Net of Impairment)(1)
Accumulated Amortization(1)
Net Carrying Amount(1)
Deferred Leasing Costs and Intangible Assets
Deferred leasing costs and lease-related intangible assets (2)
$ 1,294,228 $ (362,943) $ 931,285 $ 1,148,441 $ (256,987) $ 891,454
Investment management intangibles (3)
164,189 (76,609) 87,580 164,189 (61,435) 102,754
Customer relationships and service contracts (4)
774,422 (62,846) 711,576 218,064 (44,496) 173,568
Trade names 26,400 (14,559) 11,841 26,400 (11,266) 15,134
Other (5)
6,818 (3,540) 3,278 6,818 (2,101) 4,717
Total deferred leasing costs and intangible assets $ 2,266,057 $ (520,497) $ 1,745,560 $ 1,563,912 $ (376,285) $ 1,187,627
Intangible Liabilities
Lease intangible liabilities (2)
$ 46,630 $ (15,326) $ 31,304 $ 44,076 $ (10,775) $ 33,301


	March 31, 2023						December 31, 2022
(In thousands)	Carrying Amount (1)(2)		Accumulated Amortization(1)(2)		Net Carrying Amount(1)		Carrying Amount (1)		Accumulated Amortization(1)		Net Carrying Amount(1)
Deferred Leasing Costs and Intangible Assets
Investment management intangibles (3)	$	208,917	$	(83,228)	$	125,689	$	164,189	$	(82,432)	$	81,757
Deferred leasing costs and lease-related intangible assets (4)	1,242,281		(432,532)		809,749		1,239,477		(397,975)		841,502
Customer relationships and service contracts (5)	218,154		(67,037)		151,117		218,154		(62,788)		155,366
Trade names	24,100		(14,454)		9,646		26,400		(15,656)		10,744
Other (6)	6,818		(4,499)		2,319		6,818		(4,020)		2,798
Total deferred leasing costs and intangible assets	$	1,700,270	$	(601,750)	$	1,098,520	$	1,655,038	$	(562,871)	$	1,092,167
Intangible Liabilities
Lease intangible liabilities (4)	$	46,636	$	(18,195)	$	28,441	$	46,636	$	(16,812)	$	29,824

__________

(1) Amounts are presented net of impairments and ~~write-offs.~~write-offs, if any.

(2)Current period amounts exclude intangible assets and liabilities that were fully amortized in the preceding year.

(3) Composed of investment management contracts and investor relationships.

(4) Lease intangible assets are composed of in-place leases, above-market leases and tenant relationships. Lease-intangible liabilities are composed of below-market leases.

~~(3)~~ ~~Composed of investment management contracts and investor relationships.~~

~~(4)~~(5) In connection with ~~tower assets and~~ data center services provided in the colocation data center business.

~~(5)~~(6) Represents primarily the value of an acquired domain name and assembled workforce in an asset acquisition.

Amortization of Intangible Assets and Liabilities

The following table summarizes amortization of deferred leasing costs and finite-lived intangible assets and intangible liabilities:


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(In thousands)	(In thousands)	2022		2021		2022		2021			(In thousands)	2023		2022

Net increase (decrease) to rental income (1)	Net increase (decrease) to rental income (1)	$	(3)	$	(726)	$	172	$	(2,169)		Net increase (decrease) to rental income (1)	$	209	$	(131)

Amortization expense	Amortization expense										Amortization expense
Investment management intangibles											Investment management intangibles	$	6,090	$	5,055
Deferred leasing costs and lease-related intangibles	Deferred leasing costs and lease-related intangibles	$	34,834	$	40,251	$	118,941	$	126,418		Deferred leasing costs and lease-related intangibles	32,843		33,707
Investment management intangibles		5,066		8,056		15,176		20,284
Customer relationships and service contracts	Customer relationships and service contracts	7,754		7,671		18,554		23,421			Customer relationships and service contracts	4,249		4,914
Trade name	Trade name	1,098		1,645		3,294		20,408			Trade name	1,098		1,098
Other	Other	477		477		1,431		1,405			Other	480		477
		$	49,229	$	58,100	$	157,396	$	191,936			$	44,760	$	45,251

__________

(1) Represents the net effect of amortizing above- and below-market leases.

The following table presents the future amortization of deferred leasing costs and finite-lived intangible assets and intangible liabilities, excluding those related to assets and liabilities held for disposition.


		Year Ending December 31,															Year Ending December 31,
(In thousands)	(In thousands)	Remaining 2022		2023		2024		2025		2026		2027 and thereafter		Total		(In thousands)	Remaining 2023		2024		2025		2026		2027		2028 and thereafter		Total

Net increase (decrease) to rental income	Net increase (decrease) to rental income	$	(303)	$	(979)	$	(1,700)	$	(1,603)	$	(1,623)	$	238	$	(5,970)	Net increase (decrease) to rental income	$	(869)	$	(1,838)	$	(1,740)	$	(1,691)	$	(1,016)	$	1,267	$	(5,887)

Amortization expense	Amortization expense	49,687		170,345		139,506		127,447		121,125		1,100,176		1,708,286		Amortization expense	123,110		137,433		120,610		107,698		95,914		479,427		1,064,192

2426

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7. Restricted Cash, Other Assets and Other Liabilities

Restricted Cash

Restricted cash represents principally cash reserves that are maintained pursuant to the governing agreements of the various securitized debt of the Company and ~~its subsidiaries.~~subsidiaries in the Operating segment.

Other Assets

The following table summarizes the Company's other assets:


(In thousands)	(In thousands)	September 30, 2022		December 31, 2021		(In thousands)	March 31, 2023		December 31, 2022
Straight-line rents	Straight-line rents	$	42,484	$	25,516	Straight-line rents	$	46,295	$	42,721
Investment deposits and pending deal costs	Investment deposits and pending deal costs	38,471		22,238		Investment deposits and pending deal costs	15,192		1,377
Prefunded capital expenditures for Vantage SDC		3,117		24,293

Derivative assets	Derivative assets	30,820		944		Derivative assets	—		11,793
Prepaid taxes and deferred tax assets, net	Prepaid taxes and deferred tax assets, net	35,091		29,347		Prepaid taxes and deferred tax assets, net	13,440		8,709
Receivables from resolution of investment	Receivables from resolution of investment	10,633		10,463		Receivables from resolution of investment	350		14,923
Operating lease right-of-use asset, net		536,337		349,509
Finance lease right-of-use asset, net		123,173		131,909
Operating lease right-of-use asset—corporate offices						Operating lease right-of-use asset—corporate offices	23,141		23,689
Operating lease right-of-use asset—investment properties						Operating lease right-of-use asset—investment properties	307,304		305,760
Finance lease right-of-use asset—investment properties						Finance lease right-of-use asset—investment properties	117,349		120,261
Accounts receivable, net (1)	Accounts receivable, net (1)	88,126		83,878		Accounts receivable, net (1)	59,366		66,059
Prepaid expenses	Prepaid expenses	22,865		20,303		Prepaid expenses	27,260		28,760
Other assets	Other assets	18,992		24,835		Other assets	19,466		15,798
Fixed assets, net (2)	Fixed assets, net (2)	14,538		17,160		Fixed assets, net (2)	13,288		14,200
Total other assets	Total other assets	$	964,647	$	740,395	Total other assets	$	642,451	$	654,050

__________

(1) Includes primarily receivables from ~~tenants.~~tenants in the Operating segment.

(2) Net of accumulated depreciation of ~~$23.9~~$15.1 million ~~as of~~at ~~September 30, 2022~~March 31, 2023 and ~~$19.2~~$17.9 million ~~as of~~at December 31, ~~2021~~2022.

~~Accrued and~~

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Other Liabilities

The following table summarizes the Company's ~~accrued and~~ other liabilities:


(In thousands)	(In thousands)	September 30, 2022		December 31, 2021		(In thousands)	March 31, 2023		December 31, 2022
Deferred income (1)		$	57,308	$	37,143
Interest payable		14,682		14,870
Derivative liabilities		12,493		—
Stock repurchase payable		5,604		—
Deferred investment management fees (1)						Deferred investment management fees (1)	$	7,555	$	6,264
Other deferred income (2)						Other deferred income (2)	65,782		55,188
Interest payable—corporate debt						Interest payable—corporate debt	5,807		4,431
Interest payable—investment level debt						Interest payable—investment level debt	5,889		5,624
Dividends payable						Dividends payable	16,444		16,491

Securities sold short—consolidated funds	Securities sold short—consolidated funds	35,068		37,970		Securities sold short—consolidated funds	45,628		40,928
Due to custodians—consolidated funds						Due to custodians—consolidated funds	29,129		35,458
Current and deferred income tax liability	Current and deferred income tax liability	223,988		2,016		Current and deferred income tax liability	9,396		98
Contingent consideration payable (Note 10)		125,000		—
Contingent consideration payable—InfraBridge (Note 10)						Contingent consideration payable—InfraBridge (Note 10)	10,938		—
Contingent consideration payable—Wafra (Note 10)						Contingent consideration payable—Wafra (Note 10)	35,000		125,000
Warrants issued to Wafra (Note 10)	Warrants issued to Wafra (Note 10)	24,000		—		Warrants issued to Wafra (Note 10)	22,200		17,700
Operating lease liability		513,200		342,510
Finance lease liability		137,458		142,777
Operating lease liability—corporate offices						Operating lease liability—corporate offices	39,535		40,497
Operating lease liability—investment properties						Operating lease liability—investment properties	287,150		282,433
Finance lease liability—investment properties						Finance lease liability—investment properties	133,723		135,624
Accrued compensation	Accrued compensation	46,213		64,100		Accrued compensation	41,086		52,031
Accrued incentive fee and carried interest compensation	Accrued incentive fee and carried interest compensation	90,888		67,258		Accrued incentive fee and carried interest compensation	134,078		171,086
Accrued real estate and other taxes	Accrued real estate and other taxes	27,261		10,523		Accrued real estate and other taxes	15,886		21,580
Payable for Vantage SDC expansion capacity (Note 3)		99,917		55,896
Payable for Vantage SDC expansion capacity (3)						Payable for Vantage SDC expansion capacity (3)	6,889		56,889
Accounts payable and accrued expenses	Accounts payable and accrued expenses	188,658		121,931		Accounts payable and accrued expenses	219,414		185,900

Due to affiliates (Note 16)						Due to affiliates (Note 16)	860		12,451
Other liabilities	Other liabilities	60,868		31,048		Other liabilities	1,179		6,423
Accrued and other liabilities		$	1,662,606	$	928,042
Other liabilities						Other liabilities	$	1,133,568	$	1,272,096

__________

(1) ~~Represents primarily prepaid rental income, upfront payment received for data center installation services, and deferred investment management fees.~~ Deferred investment management fees ~~of $5.6 million at September 30, 2022 and $6.0 million at December 31, 2021~~ are expected to be recognized as fee income over a weighted average period of ~~3.3~~3.8 years as of at March 31, 2023 and ~~3.2~~2.9 years ~~respectively.~~as of December 31, 2022. Deferred investment management fees recognized as income of ~~$0.6~~$1.4 million and ~~$0.1~~$2.4 million in the three months ended ~~September 30, 2022~~ March 31, 2023 and ~~2021, respectively, and $3.1 million and $0.3 million in the~~ ~~nine months ended September 30,~~ 2022 ~~and 2021,~~, respectively, pertain to the deferred management fee balance at the beginning of each respective period.

(2) Represents primarily prepaid rental income and upfront payment received for data center installation services in the Operating segment.

(3) Represents deferred purchase consideration associated with a Vantage SDC add-on acquisition in 2021 that is to be paid upon future lease-up.

Deferred Income Taxes

The Company has significant deferred tax assets, related principally to capital loss carryforwards, outside basis difference in DBRG's interest in the OP, outside basis difference in investment in partnerships and net operating losses generated by a taxable U.S. subsidiary. As of March 31, 2023 and December 31, 2022, a full valuation allowance has been established asthe realizability of these deferred tax assets did not meet the more-likely-than-not threshold. As a result, income tax expense for the three months ended March 31, 2023, generally reflects the income tax effect of foreign subsidiaries.

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8. Debt

Corporate debt—This is composed of a securitized financing facility and senior notes issued by DigitalBridge Group, Inc. or its OP subsidiary and are recourse to the Company, as discussed further below. Corporate debt is presented within Corporate and Other, except that a portion of the securitized financing facility is allocated to the Investment Management and Operating segments consistent with the cash flows that service the debt and the underlying collateral that resides across the Company's various lines of business.


	March 31, 2023								December 31, 2022
(In thousands)	Investment Management		Operating		Corporate and Other		Total		Investment Management		Operating		Corporate and Other		Total
Corporate debt
Securitized financing facility	$	199,033	$	70,246	$	23,416	$	292,695	$	198,677	$	70,120	$	23,374	$	292,171
Convertible and exchangeable senior notes	—		—		277,076		277,076		—		—		276,741		276,741
	$	199,033	$	70,246	$	300,492	$	569,771	$	198,677	$	70,120	$	300,115	$	568,912

Investment-level debt—This represents non-recourse debt, including: (i) investment level financing in the Operating segment, and (ii) debt within consolidated funds and debt on warehoused investments, if any, in Corporate and Other.

The components that make up the carrying value of corporate and investment-level debt are as follows.


	Corporate Debt
(In thousands)	Securitized Financing Facility		Convertible and Exchangeable Senior Notes		Total		Non-Recourse Investment-Level Debt
March 31, 2023
Debt at amortized cost
Principal	$	300,000	$	278,422	$	578,422	$	4,871,528
Premium (discount), net	—		(1,175)		(1,175)		(47,922)
Deferred financing costs	(7,305)		(171)		(7,476)		(71,556)
	$	292,695	$	277,076	$	569,771	$	4,752,050
December 31, 2022
Debt at amortized cost
Principal	$	300,000	$	278,422	$	578,422	$	4,634,235
Premium (discount), net	—		(1,293)		(1,293)		10,713
Deferred financing costs	(7,829)		(388)		(8,217)		(57,720)
	$	292,171	$	276,741	$	568,912	$	4,587,228

The following table summarizes certain key terms of corporate and investment-level debt.


	Fixed Rate					Variable Rate					Total
($ in thousands)	Outstanding Principal		Weighted Average Interest Rate (Per Annum)(1)		Weighted Average Years Remaining to Maturity(2)	Outstanding Principal		Weighted Average Interest Rate (Per Annum)(1)		Weighted Average Years Remaining to Maturity(2)	Outstanding Principal		Weighted Average Interest Rate (Per Annum)(1)		Weighted Average Years Remaining to Maturity(2)
March 31, 2023
Corporate debt
Recourse
Securitized financing facility(3)	$	300,000	3.93	%	3.5	$	—	NA		3.5	$	300,000	3.93	%	3.5
Convertible and exchangeable senior notes	278,422		5.21	%	0.7	—		NA		NA	278,422		5.21	%	0.7
	$	578,422				$	—				$	578,422

Investment-Level Secured Debt
Non-recourse
Operating segment	$	4,508,428	3.09	%	3.4	$	362,500	8.68	%	0.8	$	4,870,928	3.51	%	3.3
Corporate and Other—Consolidated fund	—		NA		NA	600		6.40	%	1.4	600		6.40	%	1.4
	$	4,508,428				$	363,100				$	4,871,528

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~~Deferred Income Tax~~

As a result of the Company’s transition to a C-Corporation (as discussed in Note 1), a deferred tax asset was recognized as of January 1, 2022 related to the outside basis difference in the Company's investment in certain partnerships, and capital loss and NOL carryforwards. Concurrently, a full valuation allowance was established on this deferred tax asset due to uncertainties in future realization of the tax benefits in consideration of the Company’s history of cumulative operating losses. The Company will continue to assess the realizability of this deferred tax asset at each reporting period and as circumstances change. As of September 30, 2022, there was no change in the expected realizability of the net deferred tax asset, which remains subject to a full valuation allowance.

~~For the nine months ended September 30, 2022, net income tax benefit of $17.8 million reflects the tax effect of activities in the Company's previously designated TRS in the normal course of business.~~

~~Accrued Incentive Fee and Carried Interest Compensation~~

Incentive fee and carried interest compensation represent a portion of incentive fees and carried interest allocated to certain employees. Incentive fee and carried interest compensation are accrued as the related incentive fees and carried interest are recognized in earnings. Carried interest compensation may be reversed if there is a decline in the cumulative carried interest amounts previously recognized by the Company. Incentive fee and carried interest compensation are generally not paid to employees until the related incentive fees and carried interest amounts are distributed by the funds to the Company. If the related carried interest distributions received by the Company are subject to clawback, the previously distributed carried interest compensation would be similarly subject to clawback from employees. The Company generally withholds a portion of the distribution of carried interest compensation to employees to satisfy their potential clawback obligation. The amount withheld resides in entities outside of the Company.

~~8. Debt~~

The Company's debt balance is composed of the following components, excluding debt related to assets held for disposition that is expected to be assumed by the counterparty upon disposition, which is included in liabilities related to assets held for disposition (Note 11).

(In thousands) Securitized Financing Facility Convertible and Exchangeable Senior Notes Investment-Level Secured Debt Total Debt
September 30, 2022
Debt at amortized cost
Principal $ 300,000 $ 278,422 $ 4,815,712 $ 5,394,134
Premium (discount), net — (1,409) 12,443 11,034
Deferred financing costs (8,352) (602) (70,599) (79,553)
$ 291,648 $ 276,411 $ 4,757,556 $ 5,325,615
December 31, 2021
Debt at amortized cost
Principal $ 300,000 $ 338,739 $ 4,283,983 $ 4,922,722
Premium (discount), net — (3,091) 17,629 14,538
Deferred financing costs (8,606) (1,384) (66,868) (76,858)
$ 291,394 $ 334,264 $ 4,234,744 $ 4,860,402

~~Table of Contents~~

~~The following table summarizes certain key terms of the Company's debt.~~

Fixed Rate Variable Rate Total
($ in thousands) Outstanding Principal
Weighted Average Interest Rate (Per Annum)(1)
Weighted Average Years Remaining to Maturity(2)
Outstanding Principal
Weighted Average Interest Rate (Per Annum)(1)
Weighted Average Years Remaining to Maturity(2)
Outstanding Principal
Weighted Average Interest Rate (Per Annum)(1)
Weighted Average Years Remaining to Maturity(2)
September 30, 2022
Recourse
Secured Fund Fee Revenue Notes (3)
$ 300,000 3.93 % 4.0 $ — N/A 4.0 $ 300,000 3.93 % 4.0
Convertible and exchangeable senior notes 278,422 5.21 % 1.2 — N/A N/A 278,422 5.21 % 1.2
578,422 — 578,422
Non-recourse
Investment-Level Secured Debt
Digital Operating 3,641,793 2.43 % 3.3 863,767 7.35 % 2.8 4,505,560 3.38 % 3.2
Other 88,186 6.47 % 6.7 221,966 4.18 % 6.4 310,152 4.83 % 6.5
3,729,979 1,085,733 4,815,712
$ 4,308,401 $ 1,085,733 $ 5,394,134
December 31, 2021
Recourse
Secured Fund Fee Revenue Notes (3)
$ 300,000 3.93 % 4.7 $ — N/A 4.7 $ 300,000 3.93 % 4.7
Convertible and exchangeable senior notes (4)
338,739 5.31 % 2.2 — N/A N/A 338,739 5.31 % 2.2
638,739 — 638,739
Non-recourse
Investment-Level Secured Debt
Digital Operating 3,646,466 2.44 % 4.1 571,017 5.74 % 4.0 4,217,483 2.88 % 4.1
Other — N/A N/A 66,500 1.31 % 1.6 66,500 1.31 % 1.6
3,646,466 637,517 4,283,983
$ 4,285,205 $ 637,517 $ 4,922,722


	Fixed Rate					Variable Rate					Total
($ in thousands)	Outstanding Principal		Weighted Average Interest Rate (Per Annum)(1)		Weighted Average Years Remaining to Maturity(2)	Outstanding Principal		Weighted Average Interest Rate (Per Annum)(1)		Weighted Average Years Remaining to Maturity(2)	Outstanding Principal		Weighted Average Interest Rate (Per Annum)(1)		Weighted Average Years Remaining to Maturity(2)
December 31, 2022
Corporate debt
Recourse
Securitized financing facility(3)	$	300,000	3.93	%	3.7	$	—	NA		3.7	$	300,000	3.93	%	3.7
Convertible and exchangeable senior notes	278,422		5.21	%	0.9	—		NA		NA	278,422		5.21	%	0.9
	$	578,422				$	—				$	578,422

Investment-Level Secured Debt
Non-recourse
Operating segment	$	3,640,235	2.43	%	3.1	$	993,500	8.41	%	2.6	$	4,633,735	3.71	%	3.0
Corporate and Other—Consolidated fund	—		NA		NA	500		5.96	%	1.6	500		5.96	%	1.6
	$	3,640,235				$	994,000				$	4,634,235

__________

(1) Calculated based upon outstanding debt principal at balance sheet date. For variable rate debt, weighted average interest rate is calculated based upon the applicable index plus spread at balance sheet date.

(2) Calculated based upon anticipated repayment dates for notes issued under securitization financing; otherwise based upon initial maturity dates, or extended maturity dates if extension criteria are met for extensions that are at the Company's option.

(3) Represent obligations of special-purpose subsidiaries of the OP as co-issuers and certain other special-purpose subsidiaries of DBRG, and secured by assets of these special-purpose subsidiaries, as further described below. DBRG and the OP are not guarantors to the debt.

~~(4)~~ Corporate Debt~~Excludes the 5.375% exchangeable senior notes issued by NRF Holdco that were classified as held for disposition (Note 11) and subsequently assumed by the acquirer in February 2022.~~—

Securitized Financing Facility

In July 2021, special-purpose subsidiaries of the OP (the "Co-Issuers") issued Series 2021-1 Secured Fund Fee Revenue Notes, composed of: (i) $300 million aggregate principal amount of 3.933% Secured Fund Fee Revenue Notes, Series 2021-1, Class A-2 (the “Class A-2 Notes”); and (ii) up to $300 million (following a $100 million increase in April 2022) Secured Fund Fee Revenue Variable Funding Notes, Series 2021-1, Class A-1 (the “VFN” and, together with the Class A-2 Notes, the “Series 2021-1 Notes”). The VFN allow the Co-Issuers to borrow on a revolving basis. The Series 2021-1 Notes were issued under an Indenture dated July 2021, as amended in April 2022, that allows the Co-Issuers to issue additional series of notes in the future, subject to certain conditions. The Series 2021-1 Notes ~~had~~ replaced the Company's previous corporate credit facility.

The Series 2021-1 Notes represent obligations of the Co-Issuers and certain other special-purpose subsidiaries of DBRG, and neither DBRG, the OP nor any of its other subsidiaries are liable for the obligations of the Co-Issuers. The Series 2021-1 Notes are secured by net investment management fees earned by subsidiaries of DBRG, equity interests in ~~certain digital~~ portfolio companies in the Operating segment and limited partnership interests in certain ~~digital~~sponsored funds ~~managed~~held by subsidiaries of DBRG, as collateral.

~~Table of Contents~~

The Class A-2 Notes bear interest at a rate of 3.933% per annum, payable quarterly. The VFN bear interest generally based upon 1-month Adjusted Term Secured Overnight Financing Rate or SOFR (prior to April 2022, 3-month LIBOR) or an alternate benchmark as set forth in the purchase agreement of the VFN plus 3%. Unused ~~amounts~~capacity under the VFN facility is subject to a commitment fee of 0.5% per annum. The final maturity date of the Class A-2 Notes is in September 2051, with an anticipated repayment date in September 2026. The anticipated repayment date of the VFN is in September 2024, subject to two one-year extensions at the option of the Co-Issuers. If the Series 2021-1 Notes are not repaid or refinanced prior to their anticipated repayment date, or such date is not extended for the VFN, interest will accrue at a higher rate and the Series 2021-1 Notes will begin to amortize quarterly.

The Series 2021-1 Notes may be optionally prepaid, in whole or in part, prior to their anticipated repayment dates. There is no prepayment penalty on the VFN. However, prepayment of the Class A-2 Notes will be subject to additional consideration based upon the difference between the present value of future payments of principal and interest and the outstanding principal of such Class A-2 Note that is being prepaid; or 1% of the outstanding principal of such Class A-2 Note that is being prepaid in connection with a disposition of collateral.

Table of Contents

The Indenture of the Series 2021-1 Notes contains various covenants, including financial covenants that require the maintenance of minimum thresholds for debt service coverage ratio and maximum loan-to-value ratio, as defined. As of the date of this filing, the Co-Issuers are in compliance with all of the financial covenants, and the full $300 million under the VFN is available to be drawn.

Corporate Debt—Convertible and Exchangeable Senior Notes

Convertible and exchangeable senior notes (collectively, the senior notes) are composed of the following, each representing senior unsecured obligations of DigitalBridge Group, Inc. or a subsidiary as the respective issuers of the senior notes:


Description	Description	Issuance Date		Due Date		Interest Rate (per annum)			Conversion or Exchange Price (per share of common stock)		Conversion or Exchange Ratio (in shares)(1)			Conversion or Exchange Shares (in thousands)			Earliest Redemption Date		Outstanding Principal					Description			Issuance Date				Due Date			Interest Rate (per annum)			Conversion or Exchange Price (per share of common stock)		Conversion or Exchange Ratio (in shares)(1)				Conversion or Exchange Shares (in thousands)			Earliest Redemption Date		Outstanding Principal
										September 30, 2022						December 31, 2021																	March 31, 2023					December 31, 2022

Issued by DigitalBridge Group, Inc.	Issued by DigitalBridge Group, Inc.																																							Issued by DigitalBridge Group, Inc.
5.00% Convertible Senior Notes(2)	5.00% Convertible Senior Notes(2)		April 2013				April 15, 2023				5.00	%		$	63.02		15.8675		3,174			April 22, 2020			$	200,000			$	200,000		5.00% Convertible Senior Notes(2)		April 2013			April 15, 2023		5.00		%		$	63.02		15.8675		3,174			April 22, 2020			$	200,000	$	200,000
Issued by DigitalBridge Operating Company, LLC	Issued by DigitalBridge Operating Company, LLC																							Issued by DigitalBridge Operating Company, LLC
5.75% Exchangeable Senior Notes	5.75% Exchangeable Senior Notes		July 2020		July 15, 2025		5.750	%		9.20			108.6956			8,524		July 21, 2023			78,422			138,739	5.75% Exchangeable Senior Notes			July 2020					July 15, 2025		5.75	%		9.20				108.6956			8,524		July 21, 2023			78,422			78,422
																			$	278,422		$	338,739																									$	278,422		$	278,422

__________

(1) The conversion or exchange rate for the senior notes is subject to periodic adjustments to reflect certain carried-forward adjustments relating to common stock splits, reverse stock splits, common stock adjustments in connection with spin-offs and cumulative cash dividends paid on the Company's common stock since the issuances of the respective senior notes. The conversion or exchange ratios are presented in shares of common stock per $1,000 principal of each senior note.

(2) Fully repaid in April 2023.

The senior notes mature on their respective due dates, unless earlier redeemed, repurchased, converted or exchanged, as applicable. The outstanding senior notes are convertible or exchangeable at any time by holders of such notes into shares of the Company’s common stock at the applicable conversion or exchange rate, which is subject to adjustment upon occurrence of certain events.

To the extent certain trading conditions of the Company’s common stock are met, the senior notes are redeemable by the applicable issuer thereof in whole or in part for cash at any time on or after their respective earliest redemption dates at a redemption price equal to 100% of the principal amount of such senior notes being redeemed, plus accrued and unpaid interest (if any) up to, but excluding, the redemption date.

In the event of certain change in control transactions, holders of the senior notes have the right to require the applicable issuer to purchase all or part of such holder's senior notes for cash in accordance with terms of the governing documents of the respective senior notes.

~~Table of Contents~~

Exchange of Senior Notes For Common Stock and Cash

There were no exchange transactions in the three months ended March 31, 2023.

In March 2022, DBRG and the OP completed separate privately negotiated exchange transactions with certain noteholders of the 5.75% exchangeable notes. The Company exchanged in aggregate $60.3 million of outstanding principal of the 5.75% exchangeable notes ~~as follows:~~

Principal of 5.75% Exchangeable Notes Exchanged Consideration for Exchange
(In thousands) Class A Common Stock Issued Cash Paid
March 2022 $ 60,317 6,389 $ 13,887
October and November 2021 161,261 18,341 —
$ 221,578 24,730 $ 13,887

into 6,389,366 shares of the Company's class A common stock and paid $13.9 million of cash. The ~~March 2022~~ exchanges resulted in a debt extinguishment loss of $133.2 million, calculated as the excess of consideration paid over the carrying value of the notes exchanged, and recorded in other loss on the consolidated statement of operations. Consideration was measured at fair value based upon the closing price of the Company's class A

common stock on the date of the respective exchanges, and cash paid, net of transaction costs. ~~Unlike the exchange transactions in 2021, the March 2022~~The exchanges did not qualify ~~for~~as debt conversion ~~accounting~~ and were treated as a debt extinguishment as the Company issued less than the number of shares issuable under the stated exchange ratio of 108.696 shares per $1,000 of note principal exchanged.

The exchange transactions in the fourth quarter of 2021 were treated as debt conversions that resulted in a debt conversion expense of $25.1 million, recorded as interest expense, as the original exchange ratio was adjusted to account for savings on avoided future interest payments otherwise due to the noteholders. The debt conversion expense represents the shares of the Company's class A common stock issued in excess of such shares issuable pursuant to the original exchange ratio, and measured at fair value based upon the closing price of the Company's class A common stock on the date of the respective exchanges.

Non-Recourse Investment-Level Secured Debt

These are investment level financing that are non-recourse to ~~the Company~~DBRG and are primarily secured by data center ~~and tower~~ portfolios held by subsidiaries in the ~~Company's~~Operating segment. At March 31, 2023, the subsidiaries ~~and at December 31, 2021, also~~in the Operating segment were in compliance with the financial covenants underlying their respective investment-level secured ~~by previously warehoused loans receivable.~~debt.

In 2023, subsidiaries in the Operating segment refinanced or raised additional debt through new securitization transactions, as follows. There were no securitization activities in 2022.

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~~Digital Operating~~
—

In ~~March 2021 and October 2021,~~February 2023, DataBank ~~raised $657.9 million and $332~~issued $715 million of ~~5-year~~ securitized notes at ~~blended~~ fixed ~~rates~~rate coupon of ~~2.32% and 2.43%~~5.12% per annum ~~respectively.~~(7.07% per annum effective rate as the notes were issued at a discount) with a 5-year anticipated repayment date. In April 2023, DataBank secured an additional $350 million credit facility. Proceeds ~~from the March securitization~~ were applied principally to refinance ~~$514 million~~the data center assets of ~~outstanding debt, which meaningfully reduced DataBank's overall cost of debt~~its zColo subsidiary and ~~extended its debt maturities, while the October proceeds were used~~ to repay ~~borrowings~~the outstanding balance on its ~~credit facility and to finance future acquisitions.~~variable funding notes.

In ~~November 2021,~~March 2023, Vantage SDC issued ~~$530~~$370 million of ~~5-year~~ securitized notes at a ~~blended~~ fixed rate coupon of ~~2.17%~~6.32% per ~~annum.~~annum with a 5-year anticipated repayment date. Proceeds were applied principally to ~~replace~~repay previously issued securitized notes which had an anticipated repayment date in November 2023 and the outstanding balance on its ~~current bridge~~variable funding notes.

These refinancing transactions resulted in a net loss from debt extinguishment totaling $9.4 million, representing prepayment penalty and accelerated amortization of deferred financing costs, debt discount and ~~fund capital expenditures on~~premium, recorded in interest expense.

Future Minimum Principal Payments

The following table summarizes future scheduled minimum principal payments of debt at March 31, 2023. Future debt principal payments are presented based upon anticipated repayment dates for notes issued under securitization financing, or based upon initial maturity dates or extended maturity dates if extension criteria are met at March 31, 2023 for extensions that are at the ~~September 2021 add-on acquisition as well as to fund payments for future build-out and lease-up~~option of ~~expansion capacity.~~the respective borrower entities.

The $200 million outstanding principal of the 5% convertible senior notes that was due in April 2023 was fully repaid at maturity.


(In thousands)	Remaining 2023		2024		2025		2026		2027		2028 and thereafter		Total
Corporate debt
Securitized financing facility	$	—	$	—	$	—	$	300,000	$	—	$	—	$	300,000
Convertible and exchangeable senior notes	200,000		—		78,422		—		—		—		278,422
	$	200,000	$	—	$	78,422	$	300,000	$	—	$	—	$	578,422

Non-recourse investment-level secured debt
Operating segment	$	102,985	$	863,253	$	700,000	$	1,519,690	$	600,000	$	1,085,000	$	4,870,928
Corporate and Other—Consolidated fund	—		600		—		—		—		—		600
	$	102,985	$	863,853	$	700,000	$	1,519,690	$	600,000	$	1,085,000	$	4,871,528

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9. Stockholders' Equity

The table below summarizes the share activities of the Company's preferred stock and common stock.

Number of Shares
(In thousands) Preferred Stock
Class A
Common Stock
Class B
Common Stock
Shares outstanding at December 31, 2020 41,350 120,851 183
Redemption of preferred stock (3,450) — —
Shares issued upon redemption of OP Units — 126 —
Conversion of class B to class A common stock — 17 (17)
Shares issued pursuant to settlement liability (1)
— 1,488 —
Equity awards issued, net of forfeitures — 1,550 —
Shares canceled for tax withholding on vested equity awards — (669) —
Shares outstanding at September 30, 2021 37,900 123,363 166
Shares outstanding at December 31, 2021 35,340 142,144 166
Stock repurchase (2,229) (945) —
Exchange of notes for class A common stock — 6,389 —
Shares issued upon redemption of OP Units — 100 —
Shares issued for redemption of redeemable noncontrolling interest (Note 10) — 14,435 —
Equity awards issued, net of forfeitures — 1,533 —
Shares canceled for tax withholding on vested equity awards — (681) —
Shares outstanding at September 30, 2022 33,111 162,975 166

~~(1)~~ In 2021, the settlement liability was settled through the reissuance of some of the shares previously repurchased and held in a subsidiary (Note 13). Shares of class A common stock repurchased and not reissued in the settlement of the liability were subsequently cancelled.


	Number of Shares
(In thousands)	Preferred Stock	Class A Common Stock	Class B Common Stock








Shares outstanding at December 31, 2021	35,340	142,144	166


Exchange of notes for class A common stock	—	6,389	—




Equity awards issued, net of forfeitures	—	1,248	—
Shares canceled for tax withholding on vested equity awards	—	(411)	—
Shares outstanding at March 31, 2022	35,340	149,370	166

Shares outstanding at December 31, 2022	33,111	159,763	166



Stock repurchases	(3)	—	—




Equity awards issued, net of forfeitures	—	2,486	—
Shares canceled for tax withholding on vested equity awards	—	(415)	—
Shares outstanding at March 31, 2023	33,108	161,834	166

Preferred Stock

In the event of a liquidation or dissolution of the Company, preferred stockholders have priority over common stockholders for payment of dividends and distribution of net assets.

The table below summarizes the preferred stock issued and outstanding at ~~September 30, 2022:~~March 31, 2023:


Description	Description	Dividend Rate Per Annum		Initial Issuance Date	Shares Outstanding (in thousands)	Par Value (in thousands)		Liquidation Preference (in thousands)		Earliest Redemption Date	Description	Dividend Rate Per Annum		Initial Issuance Date	Shares Outstanding (in thousands)	Par Value (in thousands)		Liquidation Preference (in thousands)		Earliest Redemption Date
Series H	Series H	7.125	%	April 2015	8,430	$	84	$	210,756	Currently redeemable	Series H	7.125	%	April 2015	8,429	$	84	$	210,731	Currently redeemable
Series I	Series I	7.15	%	June 2017	12,989	130		324,728		Currently redeemable	Series I	7.15	%	June 2017	12,988	130		324,710		Currently redeemable
Series J	Series J	7.125	%	September 2017	11,692	117		292,295		Currently redeemable	Series J	7.125	%	September 2017	11,691	117		292,270		Currently redeemable
					33,111	$	331	$	827,779						33,108	$	331	$	827,711

All series of preferred stock are at parity with respect to dividends and distributions, including distributions upon liquidation, dissolution or winding up of the Company. Dividends on Series H, I and J of preferred stock are payable quarterly in arrears in January, April, July and October.

Each series of preferred stock is redeemable on or after the earliest redemption date for that series at $25.00 per share plus accrued and unpaid dividends (whether or not declared) prorated to their redemption dates, exclusively at the Company’s option. The redemption period for each series of preferred stock is subject to the Company’s right under limited circumstances to redeem the preferred stock upon the occurrence of a change of control (as defined in the articles supplementary relating to each series of preferred stock).

Preferred stock generally does not have any voting rights, except if the Company fails to pay the preferred dividends for six or more quarterly periods (whether or not consecutive). Under such circumstances, the preferred stock will be entitled to vote, together as a single class with any other series of parity stock upon which like voting rights have been conferred and are exercisable, to elect two additional directors to the Company’s board of directors, until all unpaid dividends have been paid or declared and set aside for payment. In addition, certain changes to the terms of any series of preferred stock cannot be made without the affirmative vote of holders of at least two-thirds of the outstanding shares of each such series of preferred stock voting separately as a class for each series of preferred stock.

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Common Stock

Except with respect to voting rights, class A common stock and class B common stock have the same rights and privileges and rank equally, share ratably in dividends and distributions, and are identical in all respects as to all matters. Class A common stock has one vote per share and class B common stock has thirty-six and one-half votes per share. This gives the holders of class B common stock a right to vote that reflects the aggregate outstanding non-voting economic interest in the Company (in the form of OP Units) attributable to class B common stock holders and therefore, does not provide any disproportionate voting rights. Class B common stock was issued as consideration in the Company's acquisition in April 2015 of the investment management business and operations of its former manager, which was previously controlled by the Company's former Executive Chairman. Each share of class B common stock shall convert automatically into one share of class A common stock if the former Executive Chairman or his beneficiaries directly or

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indirectly transfer beneficial ownership of class B common stock or OP Units held by them, other than to certain qualified transferees, which generally includes affiliates and employees. In addition, each holder of class B common stock has the right, at the holder’s option, to convert all or a portion of such holder’s class B common stock into an equal number of shares of class A common stock.

The Company reinstated quarterly common stock dividends at $0.01 per share beginning the third quarter of 2022, ~~with the declaration of a dividend of $0.01 per share of~~having previously suspended common stock ~~that was paid in October~~dividends from the second quarter of 2020 through the second quarter of 2022.

Dividend Reinvestment and Direct Stock Purchase Plan

The Company's Dividend Reinvestment and Direct Stock Purchase Plan (the “DRIP Plan”) provides existing common stockholders and other investors the opportunity to purchase shares (or additional shares, as applicable) of the Company's class A common stock by reinvesting some or all of the cash dividends received on their shares of the Company's class A common stock or making optional cash purchases within specified parameters. The DRIP Plan involves the acquisition of the Company's class A common stock either in the open market, directly from the Company as newly issued common stock, or in privately negotiated transactions with third parties. To date, no shares of class A common stock have been acquired under the DRIP Plan in the form of new issuances in the last three years.

Reverse Stock Split

~~As discussed in Note 1, in~~In August 2022, the Company effectuated a one-for-four reverse stock split of its outstanding shares of class A and class B common stock. The number of authorized shares of common stock was not adjusted in connection with the reverse stock split, however, the Company intends to seek stockholder approval to make a proportional change to the number of authorized shares of class A and class B common stock at its next annual meeting of stockholders. Par value of common stock was proportionately increased from $0.01 to $0.04 per share. Common stock share and per share information, including OP Units and stock award units as well as the Company's senior note conversion or exchange ratio in common stock shares, have been revised for all periods presented in this Quarterly Report on Form 10-Q to give effect to the reverse stock split.

Stock Repurchases ~~and Redemptions~~

~~All preferred and common stock repurchases were made pursuant~~Pursuant to a $200 million stock repurchase program ~~which expires on June 30,~~announced in July 2022, during the three months ended March 31, 2023, the Company repurchased 2,738 shares in aggregate across Series H, I and ~~may be extended, modified, or discontinued at any time by the Company's Board of Directors.~~

~~For~~J preferred stock ~~the excess~~for approximately $52,000, or ~~deficit~~a weighted average price of ~~the repurchase or redemption price over the carrying value~~$18.89 per share. In April 2023, an additional 232,485 shares of ~~the~~ preferred stock ~~results in~~were repurchased for $4.7 million, or a ~~decrease or increase to net income attributable to common stockholders, respectively.~~

~~Stock Repurchases~~

~~During the third quarter~~weighted average price of $20.20 per share. In 2022, the Company repurchased (i) 2,228,805 shares in aggregate across Series H, I and J preferred stock at a discount for $52.6 million, or a weighted average price of $23.62 per share; and (ii) ~~944,570~~4,195,020 shares of class A common stock for ~~$13.6~~$54.9 million, or a weighted average price of ~~$14.39~~$13.09 per share. The stock repurchase program expires on June 30, 2023 and may be extended, modified, or discontinued at any time by the Company's Board of Directors.

~~In October 2022, an additional 3,250,450 shares~~The excess or deficit of ~~class A common stock were repurchased for $41.3 million, or a weighted average~~the repurchase price over the carrying value of ~~$12.71 per share.~~

~~Preferred Stock Redemption~~

~~In 2021,~~ the ~~Company redeemed all of its outstanding 7.5% Series G~~ preferred stock results in ~~August for $86.8 million using proceeds from its securitized financing facility and 2,560,000 shares~~a decrease or increase to net income attributable to common stockholders, respectively.

Table of ~~its 7.125% Series H preferred stock in November for approximately $64.4 million. All redemptions were made at the liquidation preference of $25.00 per share.~~Contents

Accumulated Other Comprehensive Income (Loss)

The following tables present the changes in each component of AOCI attributable to stockholders and noncontrolling interests in investment entities, net of immaterial tax effect. AOCI attributable to noncontrolling interests in Operating Company is immaterial.

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Changes in Components of AOCI—Stockholders


(In thousands)	(In thousands)	Company's Share in AOCI of Equity Method Investments		Unrealized Gain (Loss) on AFS Debt Securities		Unrealized Gain (Loss) on Cash Flow Hedges		Foreign Currency Translation Gain (Loss)		Unrealized Gain (Loss) on Net Investment Hedges		Total		(In thousands)	Company's Share in AOCI of Equity Method Investments		Unrealized Gain (Loss) on AFS Debt Securities		Foreign Currency Translation Gain (Loss)		Unrealized Gain (Loss) on Net Investment Hedges		Total

AOCI at December 31, 2020		$	17,718	$	6,072	$	(233)	$	52,832	$	45,734	$	122,123
Other comprehensive income (loss) before reclassifications		(2,948)		(297)		—		(28,950)		1,313		(30,882)
Amounts reclassified from AOCI		(2,998)		—		233		(20,221)		(1,375)		(24,361)
AOCI at September 30, 2021		$	11,772	$	5,775	$	—	$	3,661	$	45,672	$	66,880

AOCI at December 31, 2021	AOCI at December 31, 2021	$	2,334	$	5,861	$	—	$	26,502	$	7,686	$	42,383	AOCI at December 31, 2021	$	2,334	$	5,861	$	26,502	$	7,686	$	42,383
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(3,790)		—		—		(36,281)		24,477		(15,594)		Other comprehensive income (loss) before reclassifications	217		—		(3,131)		25		(2,889)
Amounts reclassified from AOCI	Amounts reclassified from AOCI	(200)		(5,861)		—		(17,016)		(7,768)		(30,845)		Amounts reclassified from AOCI	(200)		(5,861)		(20,680)		—		(26,741)

AOCI at September 30, 2022		$	(1,656)	$	—	$	—	$	(26,795)	$	24,395	$	(4,056)
AOCI at March 31, 2022														AOCI at March 31, 2022	$	2,351	$	—	$	2,691	$	7,711	$	12,753

AOCI at December 31, 2022														AOCI at December 31, 2022	$	(295)	$	—	$	(1,214)	$	—	$	(1,509)
Other comprehensive income (loss) before reclassifications														Other comprehensive income (loss) before reclassifications	(1)		—		787		—		786
Amounts reclassified from AOCI														Amounts reclassified from AOCI	296		—		(1,051)		—		(755)

AOCI at March 31, 2023														AOCI at March 31, 2023	$	—	$	—	$	(1,478)	$	—	$	(1,478)

Changes in Components of AOCI—Noncontrolling Interests in Investment Entities

(In thousands) Unrealized Gain (Loss) on Cash Flow Hedges Foreign Currency Translation Gain (Loss) Unrealized Gain (Loss) on Net Investment Hedges Total
AOCI at December 31, 2020 $ (1,030) $ 83,845 $ 15,099 $ 97,914
Other comprehensive loss before reclassifications — (58,995) — (58,995)
Amounts reclassified from AOCI 1,030 810 — 1,840
AOCI at September 30, 2021 $ — $ 25,660 $ 15,099 $ 40,759
AOCI at December 31, 2021 $ — $ 11,057 $ — $ 11,057
Other comprehensive loss before reclassifications — (29,551) — (29,551)
Amounts reclassified from AOCI — (9,819) — (9,819)
AOCI at September 30, 2022 $ — $ (28,313) $ — $ (28,313)


(In thousands)	Foreign Currency Translation Gain (Loss)



AOCI at December 31, 2021	$	11,057
Other comprehensive loss before reclassifications	(2,184)
Amounts reclassified from AOCI	(9,827)

AOCI at March 31, 2022	$	(954)

AOCI at December 31, 2022	$	(3,015)
Other comprehensive loss before reclassifications	503
Amounts reclassified from AOCI	(468)

AOCI at March 31, 2023	$	(2,980)

Reclassifications out of AOCI—Stockholders

Information about amounts reclassified out of AOCI attributable to stockholders by component is presented below. Such amounts are included in other gain (loss) in both continuing and discontinued operations on the statements of operations, as applicable, except for amounts related to equity method investments, which are included in equity method losses in discontinued operations.


(In thousands)	(In thousands)	Three Months Ended September 30,				Nine Months Ended September 30,				(In thousands)	Three Months Ended March 31,
Component of AOCI reclassified into earnings	Component of AOCI reclassified into earnings	2022		2021		2022		2021					2023			2022

Relief of basis of AFS debt securities	Relief of basis of AFS debt securities	$	—	$	—	$	5,861	$	—				Relief of basis of AFS debt securities		$	—		$	5,861
Release of foreign currency cumulative translation adjustments	Release of foreign currency cumulative translation adjustments	(3,664)		—		17,016		20,221				Release of foreign currency cumulative translation adjustments		1,051			20,680

Realized gain on net investment hedges		7,768		—		7,768		1,375
Realized loss on cash flow hedges		—		—		—		(233)

Release of equity in AOCI of equity method investments		—		2,998		200		2,998

Release of AOCI of equity method investments												Release of AOCI of equity method investments		(296)			200

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10. Noncontrolling Interests

Redeemable Noncontrolling Interests

The following table presents the ~~activity~~activities in redeemable noncontrolling interests in the Company's ~~digital~~ investment management business ~~through~~prior to its redemption in May 2022 as discussed below, and in open-end funds sponsored and consolidated by the Company.


		Nine Months Ended September 30,				Three Months Ended March 31,
(In thousands)	(In thousands)	2022		2021			(In thousands)	2023		2022
Redeemable noncontrolling interests	Redeemable noncontrolling interests						Redeemable noncontrolling interests
Beginning balance		$	359,223	$	305,278
Balance at January 1							Balance at January 1	$	100,574	$	359,223
Contributions	Contributions	11,650		41,014			Contributions	—		10,150
Distributions paid and payable, including redemptions by limited partners in consolidated funds	Distributions paid and payable, including redemptions by limited partners in consolidated funds	(20,119)		(13,865)			Distributions paid and payable, including redemptions by limited partners in consolidated funds	(104)		(9,414)
Net income (loss)	Net income (loss)	(31,989)		15,743			Net income (loss)	6,943		(11,220)
Adjustment of Wafra's interest to redemption value and warrants held by Wafra to fair value	Adjustment of Wafra's interest to redemption value and warrants held by Wafra to fair value	725,026		—			Adjustment of Wafra's interest to redemption value and warrants held by Wafra to fair value	—		690,000
Redemption of Wafra's interest		(862,276)		—
Reclassification of warrants held by Wafra to liability in May 2022 (Note 7)		(81,400)		—
Reclassification of Wafra's carried interest allocation to noncontrolling interests in investment entities in May 2022		(4,087)		—

Ending balance		$	96,028	$	348,170

Balance at March 31							Balance at March 31	$	107,413	$	1,038,739

Redeemable Noncontrolling Interest in ~~the Company's Digital~~ Investment Management ~~Business~~

~~Strategic Investment in 2020~~

~~In July 2020,~~On May 23, 2022, the Company ~~formed a strategic partnership with~~redeemed the 31.5% noncontrolling interest in its investment management business held by affiliates of Wafra, Inc. (collectively, "Wafra"), a private investment firm, pursuant to a purchase and ~~a global partner for alternative asset managers,~~sale agreement ("PSA") entered into in ~~which Wafra made a minority~~April 2022.

In connection with Wafra's initial investment in ~~substantially all of~~ the Company's ~~Digital IM business. The~~ investment ~~entitled~~management business in July 2020, Wafra ~~to participate in approximately 31.5% of the net management fees and carried interest generated by the Digital IM business.~~

~~Pursuant to this strategic partnership, Wafra~~had assumed directly and also indirectly through a participation interest $124.9 million of the Company's commitments to DBP I, and has a $125.0 million commitment to DBP II that has been partially funded to-date. These are the Company's flagship value-add equity infrastructure funds. Wafra had also agreed to make commitments to the Company's future ~~digital~~ funds and investment vehicles on a pro rata basis with the Company based on Wafra's percentage interest in the ~~Digital IM~~investment management business, subject to certain caps.

In addition, the Company issued Wafra five warrants to purchase up to an aggregate of 5% of the Company’s class A common stock (5% at the time of the transaction, on a fully-diluted, post-transaction basis). Each warrant entitles Wafra to purchase up to 1,338,000 shares of the Company's class A common stock at staggered strike prices between $9.72 and $24.00 each, exercisable through July 17, 2026. No warrants have been exercised to-date.

Wafra paid cash consideration of $253.6 million at closing in exchange for its investment in the Digital IM business and for the warrants. As previously agreed, Wafra paid additional consideration of $29.9 million in April 2021 based upon the Digital IM business having achieved a minimum run-rate of earnings before interest, tax, depreciation and amortization (as defined for the purpose of this computation) of $72.0 million as of December 31, 2020. The Compensation Committee of the Board of Directors had approved an allocation of 50% of the contingent consideration received from Wafra as additional bonus compensation to management, to be paid on behalf of certain employees to fund a portion of their share of capital contributionsPursuant to the DBP funds as capital calls are made for these funds. Compensation expense is recognized over time based upon an estimated timeline for deployment of capital by the funds, which will correspond to the timing of capital calls to be funded by the Company on behalf of management.

Wafra had customary minority rights and certain other structural protections designed to protect its interests, including redemption rights with respect to its investment in the Digital IM business and its funded commitments in certain digital funds. Wafra's redemption rights were subject to triggering events, including key person or cause events under the governing documents of certain digital funds.

~~Redemption of Strategic Investment in 2022~~

~~On May 23, 2022, pursuant to a purchase and sale agreement ("PSA") entered into with Wafra in April 2022: (a) the Company acquired Wafra's 31.5% interest in the Digital IM business; (b)~~PSA, Wafra’s entitlement to carried interest in DBP II was reduced from 12.6% to 7%;, and ~~(c)~~ with certain limited exceptions, Wafra sold or gave up its right to invest in, or

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receive carried interest from, future investment management products, but except as otherwise provided, retained its investment in and its allocation of carried interest from existing investment management products.

Consideration for the redemption of Wafra's interest consisted of: (i) an upfront payment of $388.5 million in cash ~~(after certain net cash adjustments)~~ and 14,435,399 shares of the Company's Class A common stock valued at $348.8 million based upon the closing price of the Company's class A common stock on May 23, 2022; and (ii) ~~the~~Wafra's right to earn a contingent amount ~~between $90 million and~~up to $125 million if the Company raises fee earning equity under management (as defined in the PSA) ~~between $4 billion and~~up to $6 billion during the period from December 31, 2021 to December 31, 2023, payable in March 2023 ~~and/or~~for portion earned in 2022 and March 2024 for any remaining portion earned in 2023, with up to 50% payable in shares of the Company's Class A common stock at the Company's election. The Company paid Wafra in cash $90 million of the contingent amount in March 2023.

The carrying value of Wafra's redeemable noncontrolling interest was adjusted to fair value prior to redemption, initially based upon an estimate of consideration payable at March 31, 2022 when redemption was deemed to be probable, including the maximum potential contingent amount of $125 million. This adjustment resulted in an allocation from additional paid-in capital to redeemable noncontrolling interests on the consolidated balance sheet.

~~Additionally, the~~The unrealized carried interest earnings allocated to Wafra that was retained and no longer subject to redemption was reclassified in May 2022 to permanent equity, included in noncontrolling interests in investment entities.

Additionally, in July 2020, the Company had also issued Wafra five warrants to purchase up to an aggregate of 5% of the Company’s class A common stock (5% at the time of the transaction, on a fully-diluted, post-transaction basis), as described further in Note 11. In connection with the redemption, the terms of the warrants ~~previously issued to Wafra~~ were amended, among other things, to provide for net cash settlement upon exercise of the warrants, at election of either the Company or Wafra, if such exercise would result in Wafra beneficially owning in excess of 9.8% of the issued and outstanding shares of the Company's class A common stock. Inclusion of the cash settlement feature changed the classification of the warrants from equity to liability. The warrants were remeasured to fair value prior to reclassification in May 2022, with the increase in value recorded in equity to reduce additional paid-in capital. Subsequent changes in fair value of the warrant liability is recorded in ~~earnings (Note 13).~~earnings.

~~Following~~

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The Company's redemption of Wafra's interest in May 2022 also resulted in the ~~redemption, the Chief Investment Officer~~assumption of ~~Wafra, Adel Alderbas, will serve as a senior advisor~~$5.2 million of deferred tax asset that now accrues to the ~~Company for a period of three years.~~Company.

Noncontrolling Interests in Investment Entities

DataBank Additional Investment in 2022

In January 2022, a shareholder of DataBank sold its equity interest to the Company and an existing investor, resulting in an additional $32.0 million investment by the Company in DataBank. Following this transaction and additional equity funded by the shareholders of DataBank in connection with its data center acquisition in March 2022 (Note 3), the Company's interest in DataBank increased from 20% to 21.8% (prior to recapitalization as discussed below).

DataBank Recapitalization in 2022

~~The first stage~~DataBank was partially recapitalized in the second half of ~~the recapitalization~~2022 through multiple sales of ~~DataBank closed in August 2022, with a sale of the~~ equity interest ~~in DataBank~~ to new investors ~~for $1.5~~totaling $2.0 billion in cash. The Company's ownership interest in DataBank decreased from 21.8% (as noted above) to ~~13.5%~~11.0%. The ~~Company's~~Company received its share of proceeds from the sale ~~was $317.8~~of $425.5 million in the third and fourth quarters of 2022, including its share of carried interest, net of allocation to employees.

As the transaction involved a change in ownership of a consolidated subsidiary, it was accounted for as an equity transaction. ~~After the August 2022 closing, the~~The difference between the book value of the Company's interest and its ownership based upon the current value of DataBank resulted in a reallocation from noncontrolling interests in investment entities to additional paid-in capital totaling $230.2 million in the third and fourth quarters of ~~$170.8 million.~~

In October 2022, there was a second closing of the recapitalization, with additional equity interests sold to new investors for $220.2 million. The Company's share of proceeds was $47.8 million, including its share of carried interest net of allocation to employees. The Company's ownership interest in DataBank further decreased to 12.4%.2022.

The recapitalization transaction triggered an accelerated vesting of certain profits interest units that had been issued by DataBank to its employees. As a result of the accelerated vesting, $10 million of additional equity based compensation was recorded in the third quarter of 2022 based upon DataBank's original grant date fair value of these awards, of which $7.8 million was ~~attributed~~attributable to noncontrolling interests in investment entities.

Noncontrolling Interests in Operating Company

Certain current and former employees of the Company directly or indirectly own interests in OP, presented as noncontrolling interests in the Operating Company. Noncontrolling interests in OP have the right to require OP to redeem part or all of such member’s OP Units for cash based on the market value of an equivalent number of shares of class A

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common stock 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 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.

Redemption of OP Units—No OP Units were redeemed in the three months ended March 31, 2023. The Company redeemed 100,220 OP Units during the ~~nine months ended September 30, 2022 and 501,341 during the~~ year ended December 31, ~~2021~~2022 through the issuance of an equal number of shares of class A common stock on a one-for-one basis.

11. ~~Assets and Related Liabilities Held for Disposition~~

Total assets and related liabilities held for disposition are summarized below, all of which relate to discontinued operations (Note 12). At September 30, 2022, these were composed predominantly of three remaining equity investments excluded from the December 2021 OED sale. At December 31, 2021, also included are assets and liabilities held by NRF Holdco, related primarily to the Wellness Infrastructure business prior to its sale in February 2022.

(In thousands) September 30, 2022 December 31, 2021
Assets
Restricted cash $ — $ 65,022
Real estate, net — 3,079,416
Loans receivable — 55,878
Equity and debt investments 72,466 250,246
Deferred leasing costs and other intangible assets, net — 118,300
Other assets 127 100,720
Due from affiliates — 7,033
Total assets held for disposition $ 72,593 $ 3,676,615
Liabilities
Debt, net (1)
$ — $ 2,869,360
Lease intangibles and other liabilities 60 219,339
Total liabilities related to assets held for disposition $ 60 $ 3,088,699

~~__________~~

~~(1)~~ ~~Represents debt related to assets held for disposition that was assumed by the acquirer upon sale of the assets. At December 31, 2021~~, ~~included the 5.375% exchangeable senior notes and junior subordinated debt (as described in Note 14) which were obligations of NRF Holdco as the issuer.~~

~~Nonrecurring Fair Value of Assets Classified as Held for Disposition and Discontinued Operations~~

~~The Company measures fair value of certain assets on a nonrecurring basis when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable.~~

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.

~~2022~~

~~At September 30, 2022, there were no assets held for sale that were measured at fair value on a nonrecurring basis.~~

Impairment loss of $36.0 million was recorded in 2022 primarily based upon the final carrying value of net assets of the Wellness Infrastructure business upon closing of the disposition of NRF Holdco in February 2022.

~~2021~~

At December 31, 2021, only real estate held for disposition that pertained to the Wellness Infrastructure business was carried at nonrecurring fair value, having been impaired $313.4 million during the year ended December 31, 2021 based upon the sales price for NRF Holdco.

~~Other assets that had been impaired during 2021 pertained to real estate, equity investments and intangible assets of the OED and Other IM portfolio that were disposed in December 2021.~~

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~~Recurring Fair Value of Assets Classified as Held for Disposition and Discontinued Operations~~

~~Equity Investments Carried at Net Asset Value ("NAV")~~—These include equity interest in a private fund and prior to its disposition as part of NRF Holdco in February 2022, investment in a Company-sponsored non-traded REIT, amounting to $2.8 million at September 30, 2022 and $31.2 million at December 31, 2021.

~~Equity Method Investments under Fair Value Option~~—Equity method investments under the fair value option of $59.6 million at September 30, 2022 and $79.3 million at December 31, 2021 were measured based upon indicative sales price, classified as Level 3 fair value.

~~Loans Receivable under Fair Value Option~~—There were no loans held for disposition at September 30, 2022. At December 31, 2021, the loan held for disposition represents a component of the overall sales price for NRF Holdco, which was disposed in February 2022.

~~Debt Securities~~—Prior to the sale of NRF Holdco in February 2022, the Company had investments in debt securities, composed of AFS N-Star CDO bonds, which were subordinate bonds retained by NRF Holdco in its sponsored collateralized debt obligations ("CDOs"). The CDO bonds were collateralized primarily by commercial real estate debt and securities.

~~The balance of N-Star CDO bonds at December 31, 2021, classified as Level 3 fair value, is summarized as follows.~~

Amortized Cost without Allowance for Credit Loss Allowance for Credit Loss Gross Cumulative Unrealized
(in thousands) Gains Losses Fair Value
December 31, 2021 $ 55,041 $ (24,882) $ 6,372 $ — $ 36,531

~~Prior to its sale, the fair value of N-Star CDO bonds represents a component of the overall sales price for the disposition of NRF Holdco.~~

There was no provision for credit loss in 2022 prior to disposition but $0.2 million was recognized in 2021. Credit losses were determined based upon an analysis of the present value of contractual cash flows expected to be collected from the underlying collateral as compared to the amortized cost basis of the security.

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~~Level 3 Recurring Fair Values~~

The following table presents changes in recurring Level 3 fair value assets held for disposition. Realized and unrealized gains (losses) are included in AOCI for AFS debt securities, other gain (loss) for loans receivable and equity method losses for equity method investments, all of which are presented in discontinued operations (Note 12).

Fair Value Option
(In thousands) AFS Debt Securities Held for Disposition Loans Held for Disposition Equity Method Investments Held for Disposition
Fair value at December 31, 2020 $ 28,576 $ 1,258,539 $ 153,259
Purchases, drawdowns, contributions and accretion 11,120 19,070 8
Paydowns, distributions and sales (2,063) (436,424) (8,954)
Change in accrued interest and capitalization of paid-in-kind interest — 10,506 —
Allowance for credit losses (194) — —
Realized and unrealized losses in earnings, net — (91,324) (22,106)
Deconsolidation of investment entities (Note 21) — (330,394) —
Other — (7,088) —
Other comprehensive income (loss) (1)
(331) (35,222) (6,454)
Fair value at September 30, 2021 $ 37,108 $ 387,663 $ 115,753
Net unrealized gains (losses) on instruments held at September 30, 2021
In earnings $ — $ (91,849) $ (23,031)
In other comprehensive loss $ (331) N/A N/A

Fair value at December 31, 2021 $ 36,531 $ 55,878 $ 79,309
Purchases, drawdowns, contributions and accretion 195 — —
Paydowns, distributions and sales (36,726) (54,490) (903)
Change in accrued interest and capitalization of paid-in-kind interest — (1,013) —
Realized and unrealized losses in earnings, net — (375) (7,155)
Other comprehensive loss (1)
— — (11,646)
Fair value at September 30, 2022 $ — $ — $ 59,605
Net unrealized gains (losses) on instruments held at September 30, 2022
In earnings $ — $ — $ (7,155)
In other comprehensive loss $ — N/A N/A
~~__________~~

~~(1)~~ Amounts recorded in OCI for loans receivable and equity method investments represent foreign currency translation of the Company's foreign subsidiaries that hold the respective foreign currency denominated investments.

~~12. Discontinued Operations~~

~~Discontinued operations represent the following:~~

•~~Wellness Infrastructure~~—operations of the Wellness Infrastructure business, along with other non-core assets held by NRF Holdco prior to the sale of 100% of the equity of NRF Holdco in February 2022. The non-core assets held by NRF Holdco were composed primarily of: (i) the Company's equity interest in and management of NorthStar Healthcare Income, Inc., debt securities collateralized largely by certain debt and preferred equity within the capital structure of the Wellness Infrastructure portfolio, limited partner interests in private equity real estate funds; as well as (ii) the 5.375% exchangeable senior notes, trust preferred securities and corresponding junior subordinated debt, all of which were issued by NRF Holdco who acts as guarantor.

The sales price for 100% of the equity of NRF Holdco was $281 million, composed of $126 million cash and a $155 million unsecured promissory note (the "Seller Note"). In addition, NRF Holdco distributed approximately $35 million of cash to the Company prior to closing. The Seller Note, which is classified as held for investment and carried at fair value under the fair value option, matures five years from closing of the sale, accruing paid-in-kind interest at 5.35% per annum. The sale included the acquirer's assumption of $2.57 billion of consolidated investment level debt on various healthcare portfolios in which the Company owned between 69.6% and 81.3%, and $293.7 million of debt at NRF Holdco.

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•~~Other~~—operations of substantially all of the Company's OED investments and Other IM business that were previously in the Other segment prior to sale of the Company's equity interests and subsequent deconsolidation of these subsidiaries in December 2021, for which the Company received cash consideration of $443.4 million, net of closing adjustments of $31.2 million. The OED investments and Other IM business are composed of various non-digital real estate, real estate-related equity and debt investments, general partner interests and management rights with respect to these assets, and underlying compensation and administrative costs for managing these assets. Also included in discontinued operations are the economics related to the management of BRSP prior to termination of its management contract, which had resulted in a one-time termination payment of $102.3 million in April 2021.

•~~Hotel~~—operations of the Company's Hospitality segment and the THL Hotel Portfolio that was previously in the Other segment. In March 2021, the Company sold 100% of the equity in its hotel subsidiaries holding five of the six portfolios in the Hospitality segment, and the Company's 55.6% interest in the THL Hotel Portfolio which was deconsolidated upon sale. The remaining hotel portfolio that was in receivership was sold by the lender in September 2021.

~~Income (loss) from discontinued operations is presented below.~~

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2022 2021 2022 2021
Revenues
Property operating income $ — $ 196,302 $ 69,202 $ 607,172
Interest income 8 4,469 1,073 17,703
Fee income 2,073 12,248 8,280 46,348
Other income 4,294 5,437 10,103 23,963
Revenues from discontinued operations 6,375 218,456 88,658 695,186
Expenses
Property operating expense — 114,593 36,669 391,418
Interest expense — 50,376 112,947 216,812
Transaction-related costs and investment expense 4,479 11,800 19,682 29,856
Depreciation and amortization — 8,909 2,339 91,673
Impairment loss — (8,210) 35,985 358,137
Compensation and administrative expense 3,122 21,901 37,614 74,617
Expenses from discontinued operations 7,601 199,369 245,236 1,162,513
Other income (loss)
Gain on sale of real estate — 514 — 49,232
Other gain, net 7,379 98,286 7,769 40,262
Equity method earnings (losses) (24,010) (125,565) 2,675 (189,824)
Loss from discontinued operations before income taxes (17,857) (7,678) (146,134) (567,657)
Income tax expense (8,532) (2,751) (2,424) (22,938)
Loss from discontinued operations (26,389) (10,429) (148,558) (590,595)
Income (loss) from discontinued operations attributable to:
Noncontrolling interests in investment entities (10,227) (85,741) (16,016) (346,205)
Noncontrolling interests in Operating Company (1,156) 7,177 (10,433) (23,354)
Income (loss) from discontinued operations attributable to DigitalBridge Group, Inc. $ (15,006) $ 68,135 $ (122,109) $ (221,036)

~~13.~~ Fair Value

Recurring Fair Values

Financial assets and financial liabilities carried at fair value on a recurring basis include financial instruments for which the fair value option was elected, but exclude financial assets under the NAV practical expedient. Fair value is categorized into a three tier hierarchy that is prioritized based upon the level of transparency in inputs used in the valuation techniques, as follows.

Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities.

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Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in non-active markets, or valuation techniques utilizing inputs that are derived principally from or corroborated by observable data directly or indirectly for substantially the full term of the financial instrument.

Level 3—At least one assumption or input is unobservable and it is significant to the fair value measurement, requiring significant management judgment or estimate.

Marketable Equity Securities

Marketable equity securities with long positions of ~~$150.0~~$166.0 million at ~~September 30, 2022~~March 31, 2023 and ~~$201.9~~$155.9 million at December 31, ~~2021~~2022, included within equity investments of Corporate and Other (Note 5)4), and short positions of ~~$35.1~~$45.6 million at ~~September 30, 2022~~March 31, 2023 and ~~$38.0~~$40.9 million at December 31, ~~2021,~~2022, included in other liabilities (Note 7), consist of

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publicly traded equity securities held ~~largely~~predominantly by ~~private open-end~~sponsored liquid strategy funds ~~sponsored and~~ consolidated by the Company. The equity securities of the consolidated funds comprise listed stocks primarily in the U.S. and to a lesser extent, in Europe, and ~~predominantly~~primarily in the technology, media and telecommunications sectors. These marketable equity securities are valued based upon listed prices in active markets and classified as Level 1 of the fair value hierarchy.

~~Debt Securities~~

~~At September 30, 2022, the CLO subordinated notes were carried at their recently issued price of $50.9 million (Note 5), classified as Level 3 of the fair value hierarchy.~~

Equity Investment of Consolidated Fund

A consolidated credit fund ~~investing~~has equity interest in a pooling entity, invested alongside other affiliated managed funds, that holds ~~an indirect investment in~~ a portfolio of loans. The ~~investment has~~fund's equity interest in the pooling entity had a fair value of ~~$11.2~~$62.5 million at ~~September 30,~~March 31, 2023 and $46.8 million at December 31, 2022, classified as Level 3 of the fair value hierarchy. Fair value of the fund's equity interest in the pooling entity is based upon its share of expected cash flows from the loan assets held by the pooling entity. In estimating the fair value of its underlying loans, the pooling entity considered the prevailing market yields at which a third party might expect to receive on equivalent loans with similar credit risk. Based upon the comparison to market yields, it was determined ~~based upon discounted cash flow projections of distributions of principal~~that the transacted price on the loans held by the pooling entity approximate their fair value at March 31, 2023 and interest expected to be collected from the underlying loans, which include, but are not limited to, consideration of the financial standing and operating results of the borrowers, and applying a discount rate of 11.1%at December 31, 2022.

Derivatives

The Company's derivative instruments generally consist of: (i) foreign currency put options, forward contracts and costless collars to hedge the foreign currency exposure of certain foreign-denominated investments or investments in foreign subsidiaries (in GBP and EUR), with notional amounts and termination dates based upon the anticipated return of capital from these investments; and (ii) interest rate caps and swaps to limit the exposure to changes in interest rates on various floating rate debt obligations (indexed to LIBOR or Euribor). These derivative contracts may be designated as qualifying hedge accounting relationships, specifically as net investment hedges and cash flow hedges, respectively.

Fair values were $30.8 million at September 30, 2022 and $0.9 million at December 31, 2021 for derivative assets, included in other assets, and $12.5 million at September 30, 2022 for derivative liabilities (Note 18), included in other liabilities. The Company did not have any derivatives in a liability position at December 31, 2021. At September 30, 2022, $12.7 million of the derivative asset represents a net investment hedge, while all other derivative positions in both periods were non-designated hedges. Derivative notional amounts aggregated to the equivalent of $588.0 million at September 30, 2022 and $182.3 million at December 31, 2021 for foreign exchange contracts, and $210.7 million at September 30, 2022 and $2.0 billion at December 31, 2021 for interest rate contracts.

The derivative instruments are subject to master netting arrangements with counterparties that allow the Company to offset the settlement of derivative assets and liabilities in the same currency by instrument type or, in the event of default by the counterparty, to offset all derivative assets and liabilities with the same counterparty. Notwithstanding the conditions for right of offset may have been met, the Company presents derivative assets and liabilities with the same counterparty on a gross basis on the consolidated balance sheets.

~~Table~~The Company had no outstanding derivatives at March 31, 2023. At December 31, 2022, the fair value of ~~Contents~~

derivative assets was $11.8 million, included in other assets, and there were no derivatives in a liability position. All derivative positions were non-designated hedges. Derivative notional amounts for foreign exchange contracts aggregated to the equivalent of $321.1 million at December 31, 2022, and there were no outstanding interest rate contracts.

Realized and unrealized gains and losses on derivative instruments are recorded in other gain (loss) on the consolidated statement of operations ~~other than interest expense,~~ as follows:

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2022 2021 2022 2021
Foreign currency contracts:
Designated contracts
Realized gain transferred from AOCI to earnings $ 8,367 $ — $ 8,367 $ 1,520
Non-designated contracts
Realized and unrealized gain (loss) in earnings (1)
(8,689) 1,457 (3,619) 1,129
Interest rate contracts:
Designated contracts
Interest expense (2)
— — — 20
Realized loss transferred from AOCI to earnings — — — (1,328)
Non-designated contracts
Realized and unrealized gain (loss) in earnings 10,258 (13) 11,284 (248)


	Three Months Ended March 31,
(In thousands)	2023		2022
Foreign currency contracts:




Realized and unrealized gain in earnings on non-designated contracts (1)	$	4,053	$	1,510
Interest rate contracts:




Realized and unrealized gain in earnings on non-designated contracts	—		61

__________

(1) ~~In 2022, includes unrealized loss on~~Amount in 2023 relates to foreign currency contract entered into on behalf of a sponsored fund, which has no net impact to the Company's earnings, as discussed in Note ~~18.~~16.

~~(2)~~ ~~Represents amortization of the cost of designated interest rate caps to interest expense based upon expected hedged interest payments on variable~~

~~rate debt.~~

The Company's foreign currency and interest rate contracts are generally traded over-the-counter, and are valued using a third-party service provider. Quotations on over-the-counter derivatives are not adjusted and are generally valued using observable inputs such as contractual cash flows, yield curve, foreign currency rates and credit spreads, and are classified as Level 2 of the fair value hierarchy. Although credit valuation adjustments, such as the risk of default, rely on Level 3 inputs, these inputs are not significant to the overall valuation of the derivatives. As a result, derivative valuations in their entirety are classified as Level 2 of the fair value hierarchy.

Warrants

As discussed in Note 10, the Company had issued five warrants to ~~Wafra.~~Wafra in July 2020. Each warrant entitles Wafra to purchase up to 1,338,000 shares of the Company's class A common stock at staggered strike prices between $9.72 and $24.00 each, exercisable through July 17, 2026. No warrants have been exercised to-date.

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The warrants are carried at fair value effective May 2022 when they were reclassified from equity to liability, with subsequent changes in fair value recorded in ~~earnings. At September 30, 2022,~~other gain (loss) on the consolidated statements of operations. The warrants ~~classified as Level 3 fair value,~~ were valued at ~~$24.0~~$22.2 million at March 31, 2023 and $17.7 million at December 31, 2022 using a Black-Scholes option pricing model, applying the following inputs: (a) estimated volatility for DBRG's class A common stock of ~~39.4%~~44.4% (40.8% at December 31, 2022); (b) closing stock price of DBRG's class A common stock ~~at September 30, 2022~~on the last trading day of ~~$12.51 per share;~~the quarter; (c) the strike price for each warrant; (d) remaining term to expiration of the warrants; and (e) risk free rate of ~~4.16%~~3.78% per annum (4.16% per annum at December 31, 2022), derived from the daily U.S. Treasury yield curve rates to correspond to the remaining term to expiration of the warrants. Fair value of the ~~warrants decreased $57.4~~warrant liability, classified as Level 3 fair value, increased $4.5 million ~~from its initial remeasurement~~during the three months ended March 31, 2023.

Contingent Consideration

In connection with the acquisition of InfraBridge, contingent consideration is payable if prescribed fundraising targets for InfraBridge's new global infrastructure funds are met. In measuring the contingent consideration, the Company applied a probability-weighted approach to the likelihood of meeting various fundraising targets and discounted the estimated future contingent consideration payment at 4.9% to derive a present value amount. The contingent consideration of $10.9 million at March 31, 2023 is classified as Level 3 of the fair value hierarchy, with changes in ~~May 2022,~~fair value recorded in other gain ~~on the consolidated statement of operations.~~(loss).

~~Settlement Liability~~

In March 2020, the Company entered into a cooperation agreement with Blackwells Capital LLC ("Blackwells"), a stockholder of the Company. Pursuant to the cooperation agreement, Blackwells agreed to a standstill in its proxy contest with the Company, and to abide by certain voting commitments, including a standstill with respect to the Company until the expiration of the agreement in March 2030 and voting in favor of the Board of Directors' recommendations until the third anniversary of the agreement.

Contemporaneously, the Company and Blackwells entered into a joint venture arrangement for the purpose of acquiring, holding and disposing of the Company's class A common stock. Pursuant to the arrangement, the Company contributed its class A common stock, valued at $14.7 million by the venture, and Blackwells contributed $1.47 million of cash that was then distributed to the Company, resulting in a net capital contribution of $13.23 million by the Company in the venture. All of the class A common stock held in the venture was repurchased by the Company in March 2020 (Note 9). Distributions from the joint venture arrangement upon dissolution effectively represent a settlement of the proxy contest with Blackwells. The initial fair value of the arrangement was recorded as a settlement loss on the statement of operations in March 2020, with a corresponding liability on the balance sheet, subject to remeasurement at each period end. The settlement liability represents the fair value of the disproportionate allocation of profits distribution to Blackwells

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pursuant to the joint venture arrangement. The profits are derived from dividend payments and appreciation in value of the Company's class A common stock, allocated between the Company and Blackwells based upon specified return hurdles.

In June 2021, Blackwells terminated the arrangement and the joint venture was dissolved. The profits distribution allocated to Blackwells was valued at $47.0 million and paid in the form of 1.49 million shares of the Company's class A common stock, with $22.8 million recognized in 2021 through termination as other loss on the consolidated statement of operations.

Fair Value Option

~~The following discussion excludes loans receivable and equity method investments held for disposition which are addressed in Note 11.~~

Loans Receivable

Loans receivable ~~held for investment~~ are carried at fair value under the fair value ~~option. At September 30,~~option, which consisted of two unsecured promissory notes, one in connection with the 2022 sale of the Company's Wellness Infrastructure business (Note 2) and one held by DataBank, presented within Corporate and Other and in the Operating segment, respectively. Both loans receivable have a bullet repayment of principal and accrue PIK interest. Accrued interest forms part of the fair value of loans ~~held for investment totaled $174.4~~receivable and is recorded in other income. Changes in fair value of loans receivable are recorded in other gain (loss).

At March 31, 2023, fair value of loans receivable was $6.8 million ($137.9 million at December 31, 2022), with unpaid principal balance, inclusive of ~~$198.6~~PIK interest, of $168.8 million ($167.8 million at December 31, 2022), classified as Level 3 ~~(at December 31, 2021, $173.9 million of loans at fair value, with unpaid principal balance of $172.4 million, of which $91.0 million was classified as Level 2 and $82.9 million as Level 3 of~~in the fair value ~~hierarchy).~~

~~Fair value~~hierarchy. At March 31, 2023, the Wellness Infrastructure note was fully written down, taking into consideration an impending foreclosure of ~~Level 3 loans held for investment~~certain assets within the Wellness Infrastructure portfolio by its mezzanine lender. The DataBank note was carried at par plus accrued PIK interest as it was fully repaid in April 2023. At December 31, 2022, loan fair values were ~~determined~~ based upon a discounted cash flow ~~projections~~projection of principal and interest expected to be collected, ~~which include, but are not limited to, consideration of the financial standing and operating results of the borrower, and~~ applying discount rates ~~ranging between~~of 10.0% ~~to 10.9% at September 30, 2022~~ and 8.9% to 10.0% at December 31, 2021. Level 2 loans held for investment at December 31, 2021 represent bank syndicated loans for which fair value was obtained from a reputable pricing service and was based upon quotations from dealers who act as market makers for these loans. The Level 2 loans have been securitized into a third party sponsored CLO in the third quarter of 2022 (Note 5)10.5%.

There were no loans that were 90 days or more past due as to principal or interest at September 30, 2022 and December 31, 2021. As of September 30, 2022, one loan with fair value of $5.1 million and unpaid principal balance of $5.8 million has been placed on nonaccrual.

~~Equity Method Investments~~

At September 30, 2022 and December 31, 2021, there were no equity method investments under the fair value option other than investments held for disposition (Note 11). One equity method investment that was under the fair value option is accounted for as a marketable equity security beginning May 2021 following a merger of the investee into a special purpose acquisition company.

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Changes in Level 3 Fair Value

The following table presents changes in recurring Level 3 fair value assets held for investment. Realized and unrealized gains (losses) are included in other gain (loss) ~~for loans receivable and~~ .


	Fair Value Option		Equity Investment of Consolidated Fund
(In thousands)	Loans Receivable









Fair value at December 31, 2021	$	82,930		$	—
Originations and drawdowns	360,990			—
Paydowns	(112,500)			—
Change in accrued interest and capitalization of paid-in-kind interest	(650)			—
Unrealized gain (loss) in earnings, net	(2,815)			—
Fair value at March 31, 2022	$	327,955		$	—

Net unrealized gain (loss) in earnings on instruments held at March 31, 2022	$	(2,815)		$	—

Fair value at December 31, 2022	$	137,945		$	46,770
Contributions	—			9,627
Change in consolidated fund's share of equity investment (1)	—			6,125
Paydowns of underlying loan assets held by equity investment of consolidated fund	—			(25)
Change in accrued interest and capitalization of paid-in-kind interest	545			—
Unrealized gain (loss) in earnings, net (2)	(131,686)			11
Fair value at March 31, 2023	$	6,804		$	62,508

Net unrealized gain (loss) in earnings on instruments held at March 31, 2023	$	(131,686)		$	11

__________

(1) Represents reallocation of investment value when relative ownership of the pooling entity across its fund owners change following additional capital contributions.

(2) With respect toequity ~~method earnings (losses) for equity method investments.~~investment of the consolidated fund, represents remeasurement of a foreign currency denominated loan asset held by the pooling entity of the consolidated fund.
Fair Value Option Equity Investment of Consolidated Fund
(In thousands) AFS Debt Securities Loans Held for Investment Equity Method Investments
Fair value at December 31, 2020 $ — $ 36,798 $ 28,540 $ —
Purchases, originations, drawdowns and contributions — 61,026 — —
Paydowns, distributions and sales — (78) (9,174) —
Change in accounting method for equity interest — — (27,626) —
Change in accrued interest and capitalization of paid-in-kind interest — 1,053 — —
Realized and unrealized gain (loss) in earnings, net — (436) 8,260 —
Fair value at September 30, 2021 $ — $ 98,363 $ — $ —
Net unrealized gain in earnings on instruments held at September 30, 2021 $ — $ 18 $ — $ —

Fair value at December 31, 2021 $ — $ 82,930 $ — $ —
Purchases, originations, drawdowns and contributions 50,927 371,415 — —
Paydowns, distributions and sales — (159,501) — —
Transfer of warehoused loans to sponsored fund — (83,083) — —
Consolidation of sponsored fund — — — 10,536
Change in accrued interest and capitalization of paid-in-kind interest — 4,491 — —
Realized and unrealized gain (loss) in earnings, net — (41,863) — 673
Fair value at September 30, 2022 $ 50,927 $ 174,389 $ — $ 11,209
Net unrealized gain (loss) in earnings on instruments held at September 30, 2022 $ — $ (38,649) $ — $ 673

Investment Carried at Fair Value Using Net Asset Value

The Company ~~has~~holds an investment in a non-traded healthcare REIT, ~~of $45.5~~valued at $34.5 million at ~~September 30, 2022~~March 31, 2023 and ~~$44.6 million~~ at December 31, ~~2021, with~~2022, presented within Corporate and Other in Note 4. The Company has no commitment for any further investment in the non-traded REIT in the future. The investment is valued based upon NAV beginning October 2021 when the investee, a healthcare real estate investor/manager, was acquired in conjunction with a merger of its co-sponsored non-traded REITs. The transaction diluted the Company's equity interest in the investee, which was previously accounted for as an equity method investment. Redemption of the Company's partnership interest in the non-traded healthcare REIT is restricted until the earliest of (1) the second anniversary of the issuance to the Company of such partnership units, (2) change in control of the general partner, and (3) initial public offering of the equity of the non-traded healthcare REIT, which may be subject to further restriction on redemption by the underwriters.

Nonrecurring Fair Values

The Company measures fair value of certain assets on a nonrecurring ~~basis~~basis: (i) on the acquisition date for business combinations; and (ii) when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Adjustments to fair value generally result from the application of lower of amortized cost or fair value accounting for assets held for disposition or otherwise, write-down of asset values due to impairment. ~~Impairment is~~

Other than the assets and liabilities acquired in the InfraBridge business combination discussed in Note ~~5 for equity investments and Note 11 for~~3, there were no assets held for ~~disposition.~~investment carried at nonrecurring fair value at March 31, 2023 and December 31, 2022.

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Fair Value of Financial Instruments Reported at Cost

Fair value of financial instruments reported at amortized cost, excluding those held for disposition, are presented below.

Fair Value Measurements Carrying Value
(In thousands) Level 1 Level 2 Level 3 Total
September 30, 2022
Liabilities
Debt at amortized cost
Secured fund fee revenue notes $ — $ 250,547 $ — $ 250,547 $ 291,648
Convertible and exchangeable senior notes 388,750 — — 388,750 276,411
Investment-level secured debt — 3,204,921 1,133,868 4,338,789 4,757,556
December 31, 2021
Liabilities
Debt at amortized cost
Secured fund fee revenue notes $ — $ — $ 291,394 $ 291,394 $ 291,394
Convertible and exchangeable senior notes 716,970 — — 716,970 334,264
Investment-level secured debt — 3,598,655 655,270 4,253,925 4,234,744


	Fair Value Measurements								Carrying Value
(In thousands)	Level 1		Level 2		Level 3		Total
March 31, 2023
Liabilities
Corporate debt
Secured fund fee revenue notes	$	—	$	250,547	$	—	$	250,547	$	292,695
Convertible and exchangeable senior notes	325,098		—		—		325,098		277,076
Non-recourse investment-level debt	—		4,134,916		363,488		4,498,404		4,752,050


December 31, 2022
Liabilities
Corporate debt
Secured fund fee revenue notes	$	—	$	250,547	$	—	$	250,547	$	292,171
Convertible and exchangeable senior notes	304,513		—		—		304,513		276,741
Non-recourse investment-level debt	—		3,268,508		944,984		4,213,492		4,587,228

Debt—Senior notes and secured fund fee revenue notes were valued using their last traded price. Fair value of investment-level debt were estimated by either discounting expected future cash outlays at interest rates available to the respective borrower subsidiaries for similar instruments or for securitized debt, based upon indicative bond prices quoted by brokers in the secondary market.

Other—The carrying values of cash and cash equivalents, accounts receivable, due from and to affiliates, interest payable and accounts payable generally approximate fair value due to their short term nature, and credit risk, if any, is negligible.

~~14.~~12. Variable Interest Entities

A VIE is an entity that lacks sufficient equity to finance its activities without additional subordinated financial support from other parties, or whose equity holders lack the characteristics of a controlling financial interest. The following discusses the Company's involvement with VIEs where the Company is the primary beneficiary and consolidates the VIEs or where the Company is not the primary beneficiary and does not consolidate the VIEs.

Operating Subsidiary

The Company's operating subsidiary, OP, is a limited liability company that has governing provisions that are the functional equivalent of a limited partnership. The Company holds the majority of membership interest in OP, acts as the managing member of OP and exercises full responsibility, discretion and control over the day-to-day management of OP. The noncontrolling interests in OP do not have substantive liquidation rights, substantive kick-out rights without cause, or substantive participating rights that could be exercised by a simple majority of noncontrolling interest members (including by such a member unilaterally). The absence of such rights, which represent voting rights in a limited partnership equivalent structure, would render OP to be a VIE. The Company, as managing member, has the power to direct the core activities of OP that most significantly affect OP's performance, and through its majority interest in OP, has both the right to receive benefits from and the obligation to absorb losses of OP. Accordingly, the Company is the primary beneficiary of OP and consolidates OP. As the Company conducts its business and holds its assets and liabilities through OP, the total assets and liabilities, earnings (losses), and cash flows of OP represent substantially all of the total consolidated assets and liabilities, earnings (losses), and cash flows of the Company.

Company-Sponsored Private Funds

The Company sponsors private funds and other investment vehicles as general partner for the purpose of providing investment management services in exchange for management fees and carried interest. These private funds are established as limited partnerships or equivalent structures. Limited partners of the private funds do not have either substantive liquidation rights, or substantive kick-out rights without cause, or substantive participating rights that could be exercised by a simple majority of limited partners or by a single limited partner. Accordingly, the absence of such rights, which represent voting rights in a limited partnership, results in the private funds being considered VIEs. The nature of the Company's involvement with its sponsored funds comprise fee arrangements and general partner and limited partner

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equity interests. The fee arrangements are commensurate with the level of management services provided by the Company, and contain terms and conditions that are customary to similar at-market fee arrangements.

~~Table of Contents~~

Consolidated Company-Sponsored Private Funds—The Company currently consolidates sponsored private funds in which it has more than an insignificant equity interest in the fund as general partner. As a result, the Company is considered to be acting in the capacity of a principal of the sponsored private fund and is therefore the primary beneficiary of the fund. The Company’s exposure is limited to the value of its outstanding investment in the consolidated private funds of ~~$46.5~~$112.6 million at ~~September 30, 2022~~March 31, 2023 and ~~$53.1~~$94.7 million at December 31, ~~2021.~~2022. The liabilities of the consolidated funds

may only be settled using assets of the consolidated funds, and the Company, as general partner, is not obligated to provide any financial support to the consolidated private funds. ~~At September 30, 2022~~

The following table presents the assets and ~~December 31, 2021,~~liabilities of the consolidated ~~private~~ funds, ~~had total assets of $228.8 million~~which are presented within Corporate and $230.6 million, respectively, and total liabilities of $87.0 million and $63.0 million, respectively, made up primarily of cash, marketable equity securities, unsettled trades, other equity investment and debt.Other in the supplemental schedule to the consolidated balance sheets.


(In thousands)	March 31, 2023		December 31, 2022
Assets
Cash and cash equivalents	$	82,906	$	86,433
Investments—marketable equity securities and equity interest in credit pooling entity (Note 11)	211,758		185,845
Other assets	414		1,895
	$	295,078	$	274,173
Liabilities
Debt	$	350	$	465
Other liabilities
Securities sold short	45,629		40,928
Due to custodian	29,130		35,457
Other	1,059		2,734
	$	76,168	$	79,584

Unconsolidated Company-Sponsored Private Funds—The Company does not consolidate its sponsored private funds where it has insignificant direct equity interests or capital commitments to these funds as general partner. The Company may invest alongside certain of its sponsored private funds through joint ventures between the Company and these funds, or the Company may have capital commitments to its sponsored private funds that are satisfied directly through the co-investment joint ventures as an affiliate of the general partner. In these instances, the co-investment joint ventures are consolidated by the Company. As the Company's direct equity interests in its sponsored private funds as general partner absorb insignificant variability, the Company is considered to be acting in the capacity of an agent of these funds and is therefore not the primary beneficiary of these funds. The Company accounts for its equity interests in unconsolidated sponsored private funds under the equity method. The Company's maximum exposure to loss is limited to the carrying value of its investment in the unconsolidated sponsored private funds, totaling ~~$499.6~~$853.8 million at ~~September 30, 2022~~March 31, 2023 and ~~$382.7~~$752.3 million at December 31, ~~2021,~~2022, included in equity investments, and ~~$1.1~~$0.8 million at ~~September 30, 2022~~March 31, 2023 and ~~$45.4~~$1.0 million at December 31, ~~2021,~~2022, included within assets held for disposition.

~~Securitizations~~

The Company previously securitized loans receivable and CRE debt securities using VIEs. Upon securitization, the Company had retained beneficial interests in the securitization vehicles, usually in the form of equity tranches or subordinate securities. The securitization vehicles were structured as pass-through entities that receive principal and interest on the underlying loans or debt securities and distribute those payments to the holders of the notes, certificates or bonds issued by the securitization vehicles. The loans and debt securities were transferred into securitization vehicles such that these assets were restricted and legally isolated from the creditors of the Company, and therefore were not available to satisfy the Company's obligations but only the obligations of the securitization vehicles. The obligations of the securitization vehicles did not have any recourse to the general credit of the Company and its other subsidiaries.

~~The Company also acquired securities issued by securitization trusts that are VIEs.~~

~~Unconsolidated Securitizations~~—The Company does not consolidate the assets and liabilities of CLOs or CDOs in which the Company has an interest but does not retain the collateral management function. The Company’s exposure to loss is limited to its investment in these CLOs of $50.9 million at September 30, 2022, or CDOs of $30.2 million at December 31, 2021, previously presented as debt securities within assets held for disposition prior to disposition of the CDOs in February 2022 (Note 11).

~~Trusts~~

Prior to the sale of NRF Holdco in February 2022, wholly-owned subsidiaries of NRF Holdco that were formed as statutory trusts, NorthStar Realty Finance Trust I through VIII (the “Trusts”), previously issued trust preferred securities ("TruPS") in private placement offerings and used the proceeds to purchase junior subordinated notes to evidence loans made to NRF Holdco. The sole assets of the Trusts consisted of a like amount of junior subordinated notes issued by the Issuer at the time of the offerings (the "Junior Notes"). Neither the Company nor the OP was an obligor or guarantor on the Junior Notes or the TruPS.

The Company had owned all of the common stock of the Trusts but did not consolidate the Trusts as the holders of the preferred securities issued by the Trusts were the primary beneficiaries of the Trusts. The Company had accounted for its interest in the Trusts under the equity method and its maximum exposure to loss was limited to its investment carrying value of $3.7 million at December 31, 2021. The Trusts were recorded as equity investments and the junior subordinated notes as debt, both previously classified as held for disposition (Note 11).

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~~15.~~13. Earnings per Share

The following table provides the basic and diluted earnings per common share computations.


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(In thousands, except per share data)	(In thousands, except per share data)	2022		2021		2022		2021			(In thousands, except per share data)	2023		2022
Net income (loss) allocated to common stockholders	Net income (loss) allocated to common stockholders										Net income (loss) allocated to common stockholders
Loss from continuing operations		$	(94,598)	$	(40,935)	$	(384,194)	$	(183,451)
Loss from continuing operations attributable to noncontrolling interests		60,516		34,157		189,096		96,810
Loss from continuing operations attributable to DigitalBridge Group, Inc.		(34,082)		(6,778)		(195,098)		(86,641)
Income (loss) from discontinued operations attributable to DigitalBridge Group, Inc.		(15,006)		68,135		(122,109)		(221,036)

Preferred stock repurchases/redemptions (Note 9)		1,098		(2,865)		1,098		(2,865)

Income (Loss) from continuing operations attributable to DigitalBridge Group, Inc.											Income (Loss) from continuing operations attributable to DigitalBridge Group, Inc.	$	(184,136)	$	(165,197)
Income (Loss) from discontinued operations attributable to DigitalBridge Group, Inc.											Income (Loss) from discontinued operations attributable to DigitalBridge Group, Inc.	(13,661)		(81,360)
Net income (loss) attributable to DigitalBridge Group, Inc.											Net income (loss) attributable to DigitalBridge Group, Inc.	(197,797)		(246,557)

Preferred dividends	Preferred dividends	(15,283)		(17,456)		(46,801)		(54,488)			Preferred dividends	(14,676)		(15,759)
Net income (loss) attributable to common stockholders	Net income (loss) attributable to common stockholders	(63,273)		41,036		(362,910)		(365,030)			Net income (loss) attributable to common stockholders	(212,473)		(262,316)
Net income allocated to participating securities		(17)		(736)		(17)		—
Net income (loss) allocated to participating securities											Net income (loss) allocated to participating securities	(31)		—
Net income (loss) allocated to common stockholders—basic	Net income (loss) allocated to common stockholders—basic	(63,290)		40,300		(362,927)		(365,030)			Net income (loss) allocated to common stockholders—basic	(212,504)		(262,316)
Interest expense attributable to convertible and exchangeable notes (1)	Interest expense attributable to convertible and exchangeable notes (1)	—		—		—		—			Interest expense attributable to convertible and exchangeable notes (1)	—		—
Net income (loss) allocated to common stockholders—diluted	Net income (loss) allocated to common stockholders—diluted	$	(63,290)	$	40,300	$	(362,927)	$	(365,030)		Net income (loss) allocated to common stockholders—diluted	$	(212,504)	$	(262,316)
Weighted average common shares outstanding	Weighted average common shares outstanding										Weighted average common shares outstanding
Weighted average number of common shares outstanding—basic	Weighted average number of common shares outstanding—basic	162,398		121,458		153,028		120,041			Weighted average number of common shares outstanding—basic	158,446		142,485
Weighted average effect of dilutive shares (1)(2)(3)	Weighted average effect of dilutive shares (1)(2)(3)	—		—		—		—			Weighted average effect of dilutive shares (1)(2)(3)	—		—
Weighted average number of common shares outstanding—diluted	Weighted average number of common shares outstanding—diluted	162,398		121,458		153,028		120,041			Weighted average number of common shares outstanding—diluted	158,446		142,485
Income (loss) per share—basic	Income (loss) per share—basic										Income (loss) per share—basic
Loss from continuing operations		$	(0.30)	$	(0.23)	$	(1.57)	$	(1.20)
Income (loss) from discontinued operations		(0.09)		0.56		(0.80)		(1.84)
Income (Loss) from continuing operations											Income (Loss) from continuing operations	$	(1.25)	$	(1.27)
(Income (Loss) from discontinued operations											(Income (Loss) from discontinued operations	(0.09)		(0.57)
Net income (loss) attributable to common stockholders per common share—basic	Net income (loss) attributable to common stockholders per common share—basic	$	(0.39)	$	0.33	$	(2.37)	$	(3.04)		Net income (loss) attributable to common stockholders per common share—basic	$	(1.34)	$	(1.84)
Income (loss) per share—diluted	Income (loss) per share—diluted										Income (loss) per share—diluted
Loss from continuing operations		$	(0.30)	$	(0.23)	$	(1.57)	$	(1.20)
Income (loss) from discontinued operations		(0.09)		0.56		(0.80)		(1.84)
Income (Loss) from continuing operations											Income (Loss) from continuing operations	$	(1.25)	$	(1.27)
(Income (Loss) from discontinued operations											(Income (Loss) from discontinued operations	(0.09)		(0.57)
Net income (loss) attributable to common stockholders per common share—diluted	Net income (loss) attributable to common stockholders per common share—diluted	$	(0.39)	$	0.33	$	(2.37)	$	(3.04)		Net income (loss) attributable to common stockholders per common share—diluted	$	(1.34)	$	(1.84)

__________

(1) With respect to the assumed conversion or exchange of the Company's outstanding senior notes, the following are excluded from the calculation of diluted earnings per share as their inclusion would be antidilutive: (a) for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the effect of adding back interest expense of $4.0 million and ~~$7.6~~$4.8 million, ~~of interest expense,~~ respectively, and ~~11,698,000~~11,697,600 and ~~36,064,800~~16,580,800 of weighted average dilutive common share equivalents, ~~respectively; and (b) for~~respectively. Also excluded from the ~~nine months ended September 30, 2022 and 2021, the effect~~calculation of ~~adding back~~diluted earnings per share was $133.2 million of debt extinguishment loss (Note 8) ~~and $12.7 million of interest expense, and $23.3 million of interest expense, respectively, and 13,307,000 and 36,090,900 of weighted average dilutive common share equivalents, respectively.~~for the three months ended March 31, 2022.

(2) The calculation of diluted earnings per share excludes the effect of the following as their inclusion would be antidilutive: (a) class A common shares that are contingently issuable in relation to performance stock units (Note ~~17)~~15) with weighted average shares of ~~1,076,000~~32,400 and ~~2,472,800~~2,164,300 for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and 1,727,000 and 2,792,700 for the nine months ended September 30, 2022 and 2021,~~ respectively; and (b) class A common shares that are issuable to net settle the exercise of warrants (Note 10) with weighted average shares of ~~1,393,000~~362,800 and ~~2,725,900~~2,937,600 for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and 2,174,000 and 2,527,800 for the nine months ended September 30, 2022 and 2021,~~ respectively.

(3) OP Units may be redeemed for registered or unregistered class A common stock on a one-for-one basis and are not dilutive. At ~~September 30,~~March 31, 2023 and 2022, 12,628,900 and ~~2021, 12,629,000 and 12,988,800~~12,728,900 of OP Units, respectively, were not included in the computation of diluted earnings per share in the respective periods presented.

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~~16.~~14. Fee Income

The Company's digital investment management platform manages capital on behalf of a diverse, global investor base, including but not limited to, sovereign wealth funds, public and private pensions, asset managers, insurance companies, and endowments, for which the Company earns fee income.

The following table presents the Company's fee income by ~~type, excluding amounts classified as discontinued operations (Note 12).~~

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2022 2021 2022 2021
Management fees $ 40,697 $ 47,719 $ 126,447 $ 115,185
Incentive fees — 1,313 2 6,396
Other fees 566 1,194 1,969 3,245
Total fee income $ 41,263 $ 50,226 $ 128,418 $ 124,826
type.


	Three Months Ended March 31,
(In thousands)		2023		2022
Management fees		$	57,158	$	42,191
Incentive fees		869		—
Other fees		1,099		646
Total fee income		$	59,126	$	42,837

Management Fees—The Company earns management fees for providing investment management services to its sponsored private funds and other investment vehicles, portfolio companies and managed accounts. Management fees are calculated generally at ~~annual~~contractual rates ranging from 0.2% per annum to 1.5% per annum of investors' committed capital during the commitment period of the vehicle, and thereafter, contributed or invested capital; or net asset value for vehicles in the liquid securities strategy.

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Incentive Fees—The Company is entitled to incentive fees from sub-advisory accounts in its liquid securities strategy. Incentive fees are determined based upon the performance of the respective accounts, subject to the achievement of specified return thresholds in accordance with the terms set out in their respective governing agreements. A portion of the incentive fees earned by the Company is allocable to senior management, investment professionals, and certain other employees of the Company, included in carried interest and incentive fee compensation expense.

Other Fee Income—Other fees include primarily service fees for information technology, facilities and operational support provided to portfolio ~~companies.~~companies, and on a non-recurring basis, loan origination fees.

~~17.~~15. Equity-Based Compensation

The DigitalBridge Group, Inc. 2014 Omnibus Stock Incentive Plan (the "Equity Incentive Plan") provides for the grant of restricted stock, performance stock units ("PSUs"), Long Term Incentive Plan ("LTIP") units, restricted stock units ("RSUs"), deferred stock units ("DSUs"), options, warrants or rights to purchase shares of the Company's common stock, cash incentives and other equity-based awards to the Company's officers, directors (including non-employee directors), employees, co-employees, consultants or advisors of the Company or of any parent or subsidiary who provides services to the ~~Company.~~Company, but excluding employees of portfolio companies. Shares reserved for the issuance of awards under the Equity Incentive Plan are subject to equitable adjustment upon the occurrence of certain corporate events, provided that this number automatically increases each January 1st by 2% of the outstanding number of shares of the Company’s class A common stock on the immediately preceding December 31st. At ~~September 30, 2022,~~March 31, 2023, an aggregate ~~21.3~~24.5 million shares of the Company's class A common stock were reserved for the issuance of awards under the Equity Incentive Plan.

Restricted Stock—Restricted stock awards in the Company's class A common stock are granted to senior executives, directors and certain employees, generally subject to a service condition only, with annual time-based vesting in equal tranches over a three-year period. Restricted stock is entitled to dividends declared and paid on the Company's class A common stock and such dividends are not forfeitable prior to vesting of the award. Restricted stock awards are valued based on the Company's class A common stock price on grant date and equity-based compensation expense is recognized on a straight-line basis over the requisite service period.

Restricted Stock Units—RSUs in the Company's class A common stock are subject to a performance condition. Vesting of performance-based RSUs occur upon achievement of certain Company-specific metrics over a performance measurement ~~period.~~period that coincides with the recipients' term of service. Only vested RSUs are entitled to accrued dividends declared and paid on the Company's class A common stock during the time period the RSUs are outstanding. Fair value of RSUs are based on the Company's class A common stock price on grant date. Equity-based compensation expense is recognized when it becomes probable that the performance condition will be met.

Performance Stock Units—PSUs are granted to senior executives and certain employees, and are subject to both a service condition and a market condition. Following the end of the measurement period, the recipients of PSUs who remain employed will vest in, and be issued a number of shares of the Company's class A common stock, generally

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ranging from 0% to 200% of the number of PSUs granted and determined based upon the performance of the Company's class A common stock relative to that of a specified peer group over a three-year measurement period (such measurement metric the "total shareholder return"). In addition, recipients of PSUs whose employment is terminated after the first anniversary of their PSU grant are eligible to vest in a portion of the PSU award following the end of the measurement period based upon achievement of the total shareholder return metric applicable to the award. PSUs also contain dividend equivalent rights which entitle the recipients to a payment equal to the amount of dividends that would have been paid on the shares that are ultimately issued at the end of the measurement period.

Fair value of PSUs, including dividend equivalent rights, was determined using a Monte Carlo simulation under a risk-neutral premise, with the following assumptions:


		2022 PSU Grants	2021 PSU Grants	2020 PSU Grants		2023 PSU Grants	2022 PSU Grants	2021 PSU Grants
Expected volatility of the Company's class A common stock (1)	Expected volatility of the Company's class A common stock (1)	32.4%	35.4%	34.1%	Expected volatility of the Company's class A common stock (1)	41.3%	32.4%	35.4%
Expected annual dividend yield (2)	Expected annual dividend yield (2)	0.0%	0.0%	9.3%	Expected annual dividend yield (2)	0.3%	—%	—%
Risk-free rate (per annum) (3)	Risk-free rate (per annum) (3)	2.0%	0.3%	0.4%	Risk-free rate (per annum) (3)	3.8%	2.0%	0.3%

__________

(1) Based upon the historical volatility of the Company's stock and those of a specified peer group.

(2)Based upon the Company's expected annualized dividends. Expected dividend yield iswas zero for the March 2022 and 2021 PSU awards as common dividends were suspended beginning the second quarter of 2020 ~~through~~and reinstated in the ~~second~~third quarter of 2022.

(3) Based upon the continuously compounded zero-coupon U.S. Treasury yield for the term coinciding with the ~~remaining~~ measurement period of the award as of valuation date.

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Fair value of PSU awards, excluding dividend equivalent rights, is recognized on a straight-line basis over their measurement period as compensation expense, and is not subject to reversal even if the market condition is not achieved. The dividend equivalent right is accounted for as a liability-classified award. The fair value of the dividend equivalent right is recognized as compensation expense on a straight-line basis over the measurement period, and is subject to adjustment to fair value at each reporting period.

LTIP Units—LTIP units are units in the Operating Company that are designated as profits interests for federal income tax purposes. Unvested LTIP units that are subject to market conditions do not accrue distributions. Each vested LTIP unit is convertible, at the election of the holder (subject to capital account limitation), into one common OP Unit and upon conversion, subject to the redemption terms of OP Units (Note 9).

LTIP units issued have either (1) a service condition only, valued based upon the Company's class A common stock price on grant date; or (2) both a service condition and a market condition based upon the Company's class A common stock achieving a target price over a predetermined measurement period, subject to continuous employment to the time of vesting, and valued using a Monte Carlo simulation.

The following assumptions were applied in the Monte Carlo model under a risk-neutral premise:


	2022 LTIP Grant	2019 LTIP Grant (1)
Expected volatility of the Company's class A common stock (2)	34.0%	28.3%
Expected dividend yield (3)	0.0%	8.1%
Risk-free rate (per annum) (4)	3.6%	1.8%

__________

(1) Represents 2.5 million LTIP units granted to the Company's Chief Executive Officer, Marc Ganzi, in connection with the Company's acquisition of Digital Bridge Holdings, LLC in July 2019, with vesting based upon achievement of the Company's class A common stock price closing at or above $40 over any 90 consecutive trading days prior to the fifth anniversary of the grant date.

(2) Based upon historical volatility of the Company's stock and those of a specified peer group.

(3) Based upon the Company's most recently issued dividend prior to grant date and closing price of the Company's class A common stock on grant date. Expected dividend yield iswas zero for the June 2022 award as common dividends were suspended beginning the second quarter of 2020 ~~through~~and reinstated in the ~~second~~third quarter of 2022.

(4) Based upon the continuously compounded zero-coupon US Treasury yield for the term coinciding with the measurement period of the award as of valuation date.

Equity-based compensation cost on LTIP units is recognized on a straight-line basis either over (1) the service period for awards with a service condition only; or (2) the derived service period for awards with both a service condition and a market condition, irrespective of whether the market condition is satisfied. The derived service period is a service period that is inferred from the application of the simulation technique used in the valuation of the award, and represents the median of the terms in the simulation in which the market condition is satisfied.

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Deferred Stock Units—Certain non-employee directors may elect to defer the receipt of annual base fees and/or restricted stock awards, and in lieu, receive awards of DSUs. DSUs awarded in lieu of annual base fees are fully vested on their grant date, while DSUs awarded in lieu of restricted stock awards vest one year from their grant date. DSUs are entitled to a dividend equivalent, in the form of additional DSUs based on dividends declared and paid on the Company's class A common stock, subject to the same restrictions and vesting conditions, where applicable. Upon separation of service from the Company, vested DSUs will be settled in shares of the Company’s class A common stock. Fair value of DSUs are determined based on the price of the Company's class A common stock on grant date and recognized immediately if fully vested upon grant, or on a straight-line basis over the vesting period as equity based compensation expense and equity.

Equity-based compensation ~~expense, excluding amounts related~~cost pursuant to ~~businesses presented as discontinued operations (Note 12),~~DBRG's Equity Incentive Plan is ~~as follows. Separately, additional compensation expense was also recorded in connection with the DataBank recapitalization transaction, as described in Note 10.~~

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2022 2021 2022 2021
Compensation expense (including $16, $50, $229 and $1,164 related to dividend equivalent rights) $ 8,576 $ 6,914 $ 27,226 $ 30,593

~~Changes~~included in the ~~Company’s~~following line items on the consolidated statement of operations.


	Three Months Ended March 31,
(In thousands)	2023		2022

Compensation expense (including $0 and $37 expense related to dividend equivalent rights)	$	10,770	$	8,979


Administrative expense	228		88
	$	10,998	$	9,067

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Changes in unvested equity awards pursuant to DBRG's Equity Incentive Plan are summarized ~~below, after giving effect to the Company's one-for-four reverse stock split in August 2022.~~

Weighted Average
Grant Date Fair Value
Restricted Stock
LTIP Units (1)
DSUs
RSUs (2)
PSUs (3)
Total PSUs All Other Awards
Unvested shares and units at December 31, 2021 2,047,566 2,615,314 25,437 2,397,391 2,621,850 9,707,558 $ 14.74 $ 10.05
Granted 1,098,185 125,000 54,217 — 185,674 1,463,076 30.48 25.05
Vested (1,428,765) (115,314) (59,616) — (382,589) (1,986,284) 17.48 18.04
Forfeited (29,418) — — — (535,348) (564,766) 7.31 26.02
Unvested shares and units at September 30, 2022 1,687,568 2,625,000 20,038 2,397,391 1,889,587 8,619,584 17.84 10.92
below.


							Weighted Average Grant Date Fair Value
	Restricted Stock	LTIP Units (1)	DSUs	RSUs (2)	PSUs (3)	Total	PSUs		All Other Awards
Unvested shares and units at December 31, 2022	1,706,674	2,625,000	20,058	2,397,391	1,889,587	8,638,710	$	17.84	$	10.84
Granted	1,865,483	—	6,457	—	397,262	2,269,202	13.36		11.75
Vested	(532,399)	—	(6,439)	(599,348)	(635,926)	(1,774,112)	29.84		15.72
Forfeited	(822)	—	—	—	(424,065)	(424,887)	29.84		27.29
Unvested shares and units at March 31, 2023	3,038,936	2,625,000	20,076	1,798,043	1,226,858	8,708,913	6.02		10.33

__________

(1) Represents the number of LTIP units granted subject to vesting upon achievement of market condition. LTIP units that do not meet the market condition within the measurement period will be forfeited.

(2) Represents the number of RSUs granted subject to vesting upon achievement of performance condition. RSUs that do not meet the performance condition at the end of the measurement period will be forfeited.

(3) Number of PSUs granted does not reflect potential increases or decreases that could result from the final outcome of the total shareholder return measured at the end of the performance period. PSUs for which the total shareholder return was not met at the end of the performance period are forfeited.

Fair value of equity awards that vested, as shown above, determined based upon their respective fair values at vesting date, was ~~$4.2~~$20.9 million and ~~$7.5~~$33.4 million for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $53.3 million and $61.1 million for the nine months ended September 30, 2022 and 2021,~~ respectively.

At ~~September 30, 2022,~~March 31, 2023, aggregate unrecognized compensation cost for all unvested equity awards pursuant to DBRG's Equity Incentive Plan was ~~$41.8~~$55.5 million, which is expected to be recognized over a weighted average period of ~~2.1~~2.2 years. This excludes ~~$25.1~~$18.8 million of unvested RSUs that are not currently probable of achieving their performance conditions and have a remaining performance measurement period of ~~1.6~~1.1 years.

~~Awards Granted by Managed Companies~~

Prior to the termination of the Company’s management agreement with BRSP on April 30, 2021, BRSP granted equity awards to the Company and certain of the Company's employees ("managed company awards") that typically vest over a three-year period, subject to service conditions. Generally, the Company granted the managed company awards that it received in its capacity as manager to its employees with substantially the same terms and service requirements. Such grants were made at the discretion of the Company, and the Company may consult with the board of directors or compensation committee of BRSP as to final allocation of awards to its employees.

Managed company awards granted to the Company, pending grant by the Company to its employees, are recognized based upon their fair value at grant date as other asset and other liability on the consolidated balance sheet. The deferred revenue liability is amortized into other income as the awards vest to the Company.

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Managed company awards granted to employees, either directly or through the Company, are recorded as other asset and other liability, and amortized on a straight-line basis as equity-based compensation expense and as other income, respectively, as the awards vest to the employees. The other asset and other liability associated with managed company awards granted to employees are subject to adjustment to fair value at each reporting period, with changes reflected in equity-based compensation and other income, respectively.

The BRSP equity awards granted by the Company to its employees fully vested and accelerated upon termination of the management contract in April 2021. Equity-based compensation expense related to managed company awards was $5.3 million in 2021, with a corresponding amount recognized in other income, all of which were reflected in discontinued operations (Note 12).

~~18.~~16. Transactions with Affiliates

Affiliates include (i) private funds and other investment vehicles that the Company manages or sponsors, and in which the Company may have an equity interest or co-invests with; (ii) the Company's investments in unconsolidated ventures; and (iii) directors, senior executives and employees of the Company (collectively, "employees").

Amounts due from and due to affiliates consist of the ~~following, excluding amounts related to discontinued operations that are presented as assets held for disposition (Note 11):~~following:


(In thousands)	(In thousands)	September 30, 2022		December 31, 2021		(In thousands)	March 31, 2023		December 31, 2022
Due from Affiliates	Due from Affiliates					Due from Affiliates
Investment vehicles, portfolio companies and unconsolidated ventures	Investment vehicles, portfolio companies and unconsolidated ventures					Investment vehicles, portfolio companies and unconsolidated ventures
Fee income	Fee income	$	34,751	$	41,859	Fee income	$	58,076	$	35,010
Cost reimbursements and recoverable expenses	Cost reimbursements and recoverable expenses	10,866		7,317		Cost reimbursements and recoverable expenses	7,111		7,031
Derivative obligation		12,493		—

Other						Other	964		—
Employees and other affiliates	Employees and other affiliates	2,001		54		Employees and other affiliates	1,134		3,319
		$	60,111	$	49,230		$	67,285	$	45,360
Due to Affiliates (Note 7)						Due to Affiliates (Note 7)
Investment vehicles—Derivative obligation						Investment vehicles—Derivative obligation	$	—	$	11,793
Investment vehicles, employees and other affiliates						Investment vehicles, employees and other affiliates	860		658
							$	860	$	12,451

Significant transactions with affiliates include the following:

Fee Income—Fee income earned from investment vehicles that the Company manages and/or sponsors, and may have an equity interest or co-investment, are presented in Note ~~16, except for amounts included within discontinued operations (Note 12) and assets held for disposition (Note 11).~~14. Substantially all fee income are from affiliates, ~~other than~~except for management fees and incentive fee from sub-advisory ~~accounts.~~accounts and generally, other fee income.

Cost ~~Reimbursements—~~Reimbursements and Recoverable Expenses—The Company receives reimbursements and recovers certain costs paid on behalf of investment vehicles sponsored by the Company, which include: (i) organization and offering costs related ~~largely~~ to the formation and capital raising of the investment vehicles up to specified thresholds; (ii) costs incurred in performing investment due ~~diligence for funds~~diligence; and ~~other investment vehicles managed by the Company.~~

Such cost reimbursements, included in other income, totaled $1.0 million and $3.1 million for the three months ended September 30, 2022 and 2021, respectively, and $5.7 million and $4.6 million for the nine months ended September 30, 2022 and 2021, respectively.

~~Separately, reimbursements of~~(iii) direct and indirect operating costs for managing the operations of ~~BRSP prior to termination~~certain investment vehicles.

Table of ~~the BRSP management agreement in April 2021 are reflected~~Contents

Such cost reimbursements and recoverable expenses, included in other income, ~~within discontinued operations (Note 12)~~totaled $1.3 million and ~~related receivable is reflected as amounts due from affiliates within assets held~~$3.4 million for ~~disposition (Note 11).~~

~~Recoverable Expenses—The Company pays organization~~the three months ended March 31, 2023 and offering costs associated with the formation and capital raising of investment vehicles sponsored by the Company, for which the Company recovers from these investment vehicles up to specified thresholds, as applicable.2022, respectively.

Warehoused Investments—The Company may acquire and temporarily warehouse investments on behalf of prospective sponsored investment vehicles that are actively fundraising. The warehoused investments are transferred to the investment vehicle when sufficient third party capital, including debt, is raised. The Company is generally paid a fee by the investment vehicle, akin to an interest charge, typically calculated as a percentage of the acquisition price of the investment, to compensate the Company for its cost of holding the investment during the warehouse period. The terms of such arrangements may differ for each sponsored investment vehicle or by investment.

During the third quarter of 2022, the Company transferred three warehoused loans to its sponsored digital credit fund, with the transfer of one remaining loan expected to be completed in the fourth quarter of 2022. The Company's cost basis for the transferred loans totaled $83.7 million.

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Derivative Obligations of Sponsored Fund—In the third quarter of 2022, the Company, in its capacity as general partner and for the benefit of its sponsored fund, entered into foreign currency forward contracts to economically hedge the foreign currency exposure of an investment commitment of its sponsored fund (Note ~~13)~~11). The investment committee of the sponsored fund has ratified the fund's responsibility and obligation to assume all resulting liabilities and benefits from the foreign currency contracts effective from trade date through the ~~date~~novation of the contracts ~~are novated~~ to the fund. ~~At September 30, 2022, the foreign currency contracts were in an unrealized loss position.~~ The Company recorded a ~~$12.5 million receivable~~payable in due ~~from~~to affiliates to reflect the fund's obligation to assume the resulting ~~liability~~asset from the foreign currency ~~contracts, with a corresponding gain recorded in the consolidated income statement. Accordingly,~~contracts; accordingly, there iswas no net effect to the Company's earnings resulting from these foreign currency contracts. Upon the novation of the contracts to the fund in January 2023, the Company de-recognized the derivative asset and the corresponding payable in due to affiliate.

Digital Real Estate Acquisitions—Marc Ganzi, Chief Executive Officer of the Company, and Ben Jenkins, President and Chief Investment Officer of the Company, were former owners of Digital Bridge Holdings, LLC ("DBH") prior to its merger into the Company in July 2019. Messrs. Ganzi and Jenkins had retained their equity investments and general partner interests in the portfolio companies of DBH, which include DataBank and Vantage.

As a result of the personal investments made by Messrs. Ganzi and Jenkins in DataBank and Vantage SDC prior to the Company’s acquisition of DBH, additional investments made by the Company in DataBank and Vantage SDC subsequent to their initial acquisitions may trigger future carried interest payments to Messrs. Ganzi and Jenkins upon the occurrence of future realization events. Such investments made by the Company include ongoing payments for the build-out of expansion capacity, including lease-up of the expanded capacity and existing inventory, in Vantage SDC (Note 3) and the acquisition of additional interest in DataBank from an existing investor in January 2022 (Note 10).

Carried Interest Allocation from Sponsored Investment Vehicles—With respect to investment vehicles sponsored by the Company for which Messrs. Ganzi and Jenkins are invested in their capacity as former owners of DBH, and not in their capacity as employees of the Company, any carried interest entitlement attributed to such investments by Messrs. Ganzi and Jenkins as general partner are not subject to continuing vesting provisions and do not represent compensatory arrangements to the Company. Such carried interest allocation to Messrs. Ganzi and Jenkins that are unrealized or realized but unpaid are included in noncontrolling interests on the balance sheet, in the amount of ~~$48.8~~$71.8 million at ~~September 30, 2022~~March 31, 2023 and ~~$20.8~~$70.4 million at December 31, ~~2021.~~2022. Carried interest allocated is recorded as net income attributable to noncontrolling interests totaling ~~$13.8~~$2.2 million and ~~$18.3~~$0.8 million for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $43.5 million and $19.0 million for the nine months ended September 30, 2022 and 2021,~~ respectively. Additionally, in connection with the DataBank recapitalization (Note 10), in the second half of 2022, Messrs. Ganzi and Jenkins received realized carried interest in the form of equity interest in vehicles that invest in DataBank, of which $86.1 million in aggregate is not deemed a compensatory arrangement. Such equity interest represent noncontrolling interests in DataBank. A portion of such equity interest was sold by Messrs. Ganzi and Jenkins in connection with the recapitalization transaction.

Investment in Managed Investment Vehicles—Subject to the Company's related party policies and procedures, senior management, investment professionals and certain other employees may invest on a discretionary basis in investment vehicles sponsored by the Company, either directly in the vehicle or indirectly through the general partner entity. These investments are generally not subject to management fees, but otherwise bear their proportionate share of other operating expenses of the investment vehicles. ~~At September 30, 2022 and December 31, 2021, such~~Such investments in consolidated investment vehicles and general partner entities totaled ~~$15.7~~$18.3 million at March 31, 2023 and ~~$19.5~~$17.7 million ~~respectively,~~at December 31, 2022, reflected in redeemable noncontrolling interests and noncontrolling interests on the balance sheet. Their share of net income (loss) was ~~$0.4 million and~~ $0.6 million for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021, respectively, and $0.1 million and $1.1 million~~immaterial for the ~~nine~~three months ended ~~September 30, 2022 and 2021, respectively. These~~March 31, 2022. Such amounts are reflected in net income (loss) attributable to noncontrolling interests and exclude their share of carried interest allocation, which is reflected in compensation expense (reversal)—carried interest.

Aircraft—Pursuant to Mr. Ganzi’s employment agreement, as amended, the Company has agreed to reimburse Mr. Ganzi for certain variable operational costs of business travel on a chartered or private jet (including any aircraft that Mr. Ganzi may partially or fully own), provided that the Company will not reimburse the allocable share (based on the number of passengers) of variable operational costs for any passenger on such flight who is not traveling on Company business. Additionally, the Company has also agreed to reimburse Mr. Ganzi for certain defined fixed costs of any aircraft owned by

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Mr. Ganzi. The fixed cost reimbursements will be made based on an allocable portion of an aircraft’s annual budgeted fixed cash operating costs, based on the number of hours the aircraft will be used for business purposes. At least once a year, the Company will reconcile the budgeted fixed operating costs with the actual fixed operating costs of the aircraft, and the Company or Mr. Ganzi, as applicable, will make a payment for any difference. The Company reimbursed Mr. Ganzi ~~$0.7~~$1.8 million and ~~$0.5~~$0.2 million for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $1.8 million and$2.6 million for the nine months ended September 30, 2022 and 2021,~~ respectively.

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Advancement of Expenses—Effective April 1, 2021, Thomas J. Barrack stepped down as Executive Chairman of the Company and in July 2021, resigned as a member of the Company's Board of Directors. In October 2021, the Company entered into an Agreement Regarding Advancement of Certain Expenses ("Advancement Agreement") with Mr. Barrack, which is generally consistent with the Company’s obligations and Mr. Barrack’s rights regarding advancement of expenses under the terms of a January 2017 Indemnification Agreement between the Company and Mr. Barrack, and under the Company’s Bylaws. The Advancement Agreement (a) memorializes the parties’ disagreement as to the Company’s obligations and Mr. Barrack’s rights under the earlier Indemnification Agreement and the Company's Bylaws, and (b) obligates Mr. Barrack to reimburse the Company for such advanced expenses under certain circumstances. Pursuant to the Advancement Agreement, the Company expensed ~~$7.5~~$0.3 million and ~~$17.2~~ $5.6 million in the ~~three and~~ ~~nine months ended September 30, 2022, respectively~~.

~~19. Segment Reporting~~

~~The Company conducts its business through two reportable segments as follows:~~

•~~Digital Investment Management ("Digital IM")—~~This business represents a leading global digital infrastructure investment platform, managing capital on behalf of a diverse base of global investors. The Company's flagship opportunistic strategy is conducted through its DigitalBridge Partners platform ("DBP") and separately capitalized vehicles, while other strategies, including digital credit, ventures and public equities, are conducted through other investment vehicles. The Company earns management fees, generally based on the amount of assets or capital managed in investment vehicles, and has the potential to earn incentive fees and carried interest based upon the performance of such investment vehicles, subject to achievement of minimum return hurdles. Earnings from our Digital IM segment were attributed 31.5% to Wafra through the end of May 2022 when Wafra's investment in the Digital IM business was redeemed by the Company (as discussed further in Note 10).

•~~Digital Operating—~~This business is composed of balance sheet equity interests in digital infrastructure and real estate operating companies, which generally earn rental income from providing use of digital asset space and/or capacity through leases, services and other agreements. The Company currently owns interests in two companies: DataBank, including zColo, an edge colocation data center business (DBRG ownership at 13.5% as of September 30, 2022, 20% as of December 31, 2021); and Vantage SDC, a stabilized hyperscale data center business (DBRG ownership at 13%). Both DataBank and Vantage are also portfolio companies managed under Digital IM for the equity interests owned by third party capital.

~~The Company's remaining investment activities and corporate level activities are presented as Corporate and Other.~~

•Other investment activities are composed of the Company's equity interests in: (i) digital investment vehicles, the largest of which is in the DBP flagship funds, and seed investments in various strategies such as digital liquid and digital credit; and (ii) remaining non-digital investments, primarily in BRSP. Outside of its general partner interests, the Company's other equity interests in its sponsored and/or managed digital investment vehicles are considered to be incidental to its digital investment management business. The primary economics to the Company are represented by fee income and carried interest as general partner and/or manager, rather than economics from its equity interest in the investment vehicles as a limited partner or equivalent. With respect to seed investments, these are not intended to be a long-term deployment of capital by the Company and are expected to be warehoused temporarily on the Company's balance sheet until sufficient third party capital has been raised. At this time, the remaining non-digital investments are not substantially available for immediate sale and are expected to be monetized over an extended period beyond the near term. These other investment activities generate largely equity method earnings or losses and to a lesser extent, revenues in the form of interest income or dividend income from warehoused investments and consolidated investment vehicles. Effective the third quarter of 2021, these activities are no longer presented separately as the Digital Other and Other segments, which is consistent with and reflects management's focus on its core digital operations and overall simplification of the Company's business. This change in segment presentation is reflected retrospectively.

•Corporate activities include corporate level cash and corresponding interest income, corporate level financing and related interest expense, corporate level transaction costs, costs in connection with unconsummated investments, income and expense related to cost reimbursement arrangements with affiliates, fixed assets for administrative use, compensation expense not directly attributable to reportable segments, corporate level administrative and overhead costs, and adjustments to eliminate intercompany fees. Costs which are directly attributable, or otherwise can be subjected to a reasonable and systematic allocation, have been allocated to each of the reportable segments. As segment results are presented before elimination of intercompany fees, elimination adjustment pertains to fee income earned by the Digital IM segment from third party capital in investment vehicles managed by the Company and consolidated within the Digital Operating segment and in Corporate and Other. Such adjustments amounted to $0.8 million and $1.6 million for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and~~

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~~2021,~~ respectively, and ~~$2.4~~$33.5 million ~~and $4.9 million for the nine months ended September 30, 2022 and 2021, respectively.~~

~~Segment Results of Operations~~

~~The following table summarizes results of operations~~since inception of the ~~Company's reportable segments, including selected income and expense items, reconciled to the consolidated statement of operations.~~arrangement in 2021.

(In thousands) Digital Investment Management Digital Operating Corporate and Other Total
Three Months Ended September 30, 2022
Total revenues $ 43,953 $ 225,387 $ 27,283 $ 296,623
Property operating expense — 100,051 5,936 105,987
Interest expense 2,953 40,770 9,309 53,032
Depreciation and amortization 5,369 130,663 9,562 145,594
Equity method earnings (losses), including carried interest 122,714 — (53,398) 69,316
Income tax benefit (expense) (1,263) 5 9,099 7,841
Income (loss) from continuing operations 46,065 (93,772) (46,891) (94,598)
Net income (loss) from continuing operations attributable to DigitalBridge Group, Inc. 24,233 (15,881) (42,434) (34,082)
Net loss from discontinued operations attributable to DigitalBridge Group, Inc. (15,006)
Net loss attributable to DigitalBridge Group, Inc. $ (49,088)
Three Months Ended September 30, 2021
Total revenues $ 53,796 $ 194,966 $ 3,412 $ 252,174
Property operating expense — 80,226 — 80,226
Interest expense 2,250 29,839 7,806 39,895
Depreciation and amortization 8,242 120,458 486 129,186
Equity method earnings, including carried interest 59,196 — 6,173 65,369
Income tax benefit (expense) (3,089) (1,922) 15,984 10,973
Income (loss) from continuing operations 39,272 (71,822) (8,385) (40,935)
Net income (loss) from continuing operations attributable to DigitalBridge Group, Inc. 16,870 (12,142) (11,506) (6,778)
Net income from discontinued operations attributable to DigitalBridge Group, Inc. 68,135
Net income attributable to DigitalBridge Group, Inc. $ 61,357

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(In thousands) Digital Investment Management Digital Operating Corporate and Other Total
Nine Months Ended September 30, 2022
Total revenues $ 134,961 $ 655,596 $ 52,934 $ 843,491
Property operating expense — 278,798 8,482 287,280
Interest expense 8,240 114,187 21,023 143,450
Depreciation and amortization 16,020 399,371 14,122 429,513
Equity method earnings (losses), including carried interest 203,447 — (7,797) 195,650
Income tax benefit (expense) (5,643) 174 23,241 17,772
Income (loss) from continuing operations 104,917 (253,341) (235,770) (384,194)
Net income (loss) from continuing operations attributable to DigitalBridge Group, Inc. 37,900 (43,512) (189,486) (195,098)
Net loss from discontinued operations attributable to DigitalBridge Group, Inc. (122,109)
Net loss attributable to DigitalBridge Group, Inc. $ (317,207)
Nine Months Ended September 30, 2021
Total revenues $ 131,789 $ 573,261 $ 4,892 $ 709,942
Property operating expense — 237,228 — 237,228
Interest expense 2,250 90,243 25,120 117,613
Depreciation and amortization 20,808 368,906 17,126 406,840
Equity method earnings, including carried interest 70,203 — 41,177 111,380
Income tax benefit (expense) (7,970) 77,134 40,244 109,408
Income (loss) from continuing operations 62,721 (146,932) (99,240) (183,451)
Net income (loss) from continuing operations attributable to DigitalBridge Group, Inc. 35,849 (22,592) (99,898) (86,641)
Net loss from discontinued operations attributable to DigitalBridge Group, Inc. (221,036)
Net loss attributable to DigitalBridge Group, Inc. $ (307,677)

~~Total assets and equity method investments of reportable segments are summarized as follows:~~

September 30, 2022 December 31, 2021
(In thousands) Total Assets Equity Method Investments Total Assets Equity Method Investments
Digital Investment Management $ 707,915 $ 222,140 $ 655,152 $ 140,027
Digital Operating 8,150,083 — 7,608,451 —
Other 2,810,238 502,702 2,257,598 533,069
11,668,236 724,842 10,521,201 673,096
Assets held for disposition related to discontinued operations 72,593 69,716 3,676,615 182,552
$ 11,740,829 $ 794,558 $ 14,197,816 $ 855,648

~~20.~~17. Commitments and Contingencies

Litigation

The Company may be involved in litigation in the ordinary course of business. As of ~~September 30, 2022,~~March 31, 2023, the Company was not involved in any legal proceedings that are expected to have a material adverse effect on the Company’s results of operations, financial position or liquidity.

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~~21.~~18. Supplemental Disclosure of Cash Flow Information


		Nine Months Ended September 30,				Three Months Ended March 31,
(In thousands)	(In thousands)	2022		2021			(In thousands)	2023		2022
Supplemental Disclosure of Cash Flow Information	Supplemental Disclosure of Cash Flow Information						Supplemental Disclosure of Cash Flow Information
Cash paid for interest, net of amounts capitalized of $1,674 and $1,025		$	163,646	$	332,703
Cash received for income tax refunds, net		5,782		7,913
Cash paid for interest, net of amounts capitalized of $595 and $78							Cash paid for interest, net of amounts capitalized of $595 and $78	$	53,375	$	70,065
Cash received (paid) for income taxes							Cash received (paid) for income taxes	1,463		(328)
Operating lease payments	Operating lease payments	50,584		51,088			Operating lease payments	15,246		15,650
Finance lease payments	Finance lease payments	11,750		11,481			Finance lease payments	3,961		3,916
Supplemental Disclosure of Cash Flows from Discontinued Operations	Supplemental Disclosure of Cash Flows from Discontinued Operations						Supplemental Disclosure of Cash Flows from Discontinued Operations
Net cash provided by (used in) operating activities of discontinued operations	Net cash provided by (used in) operating activities of discontinued operations	$	(16,038)	$	165,178		Net cash provided by (used in) operating activities of discontinued operations	$	95	$	(5,488)
Net cash provided by (used in) investing activities of discontinued operations	Net cash provided by (used in) investing activities of discontinued operations	(32,815)		676,579			Net cash provided by (used in) investing activities of discontinued operations	253,875		(86,387)
Net cash used in financing activities of discontinued operations		(12,503)		(528,035)
Net cash provided by (used in) financing activities of discontinued operations							Net cash provided by (used in) financing activities of discontinued operations	(28,956)		(12,653)
Supplemental Disclosure of Noncash Investing and Financing Activities	Supplemental Disclosure of Noncash Investing and Financing Activities						Supplemental Disclosure of Noncash Investing and Financing Activities
Dividends and distributions payable	Dividends and distributions payable	$	16,527	$	16,899		Dividends and distributions payable	$	16,444	$	15,759
Improvements in operating real estate in accrued and other liabilities		65,405		29,324
Receivable from loan repayments and asset sales		12,373		53,948
Improvements in operating real estate included in other liabilities							Improvements in operating real estate included in other liabilities	39,351		9,910
Receivables from asset sales							Receivables from asset sales	2,282		14,009
Operating lease right-of-use assets and lease liabilities established	Operating lease right-of-use assets and lease liabilities established	16,840		23,366			Operating lease right-of-use assets and lease liabilities established	11,693		1,498

Finance lease payments accrued		—		5,401
Redemption of OP Units for common stock		341		1,107
Redemption of redeemable noncontrolling interest for common stock		348,759		—

Contingent consideration for acquisition of InfraBridge							Contingent consideration for acquisition of InfraBridge	10,874		—

Preferred stock repurchase payable							Preferred stock repurchase payable	52		—
Exchange of notes into shares of Class A common stock	Exchange of notes into shares of Class A common stock	60,317		—			Exchange of notes into shares of Class A common stock	—		60,317

Debt assumed by buyer in sale of real estate		—		44,148
Seller Note received in sale of NRF Holdco equity							Seller Note received in sale of NRF Holdco equity	—		154,992

Redemption of OP Units for common stock							Redemption of OP Units for common stock	—		2

Assets disposed in sale of equity of investment entities							Assets disposed in sale of equity of investment entities	—		3,420,783
Liabilities disposed in sale of equity of investment entities							Liabilities disposed in sale of equity of investment entities	—		3,144,700

Seller Note received in sale of NRF Holdco equity		154,992		—
Loan receivable relieved in exchange for equity investment acquired		20,676		—

Assets disposed in sale of equity of investment entities or sale by receiver (Note 12)		3,420,783		3,572,825
Liabilities disposed in sale of equity of investment entities or sale by receiver (Note 12)		3,144,700		3,644,226
Assets of investment entities deconsolidated (1)		—		351,022

Noncontrolling interests of investment entities deconsolidated (1)		204,730		374,815
Noncontrolling interests of investment entities sold or deconsolidated (1)							Noncontrolling interests of investment entities sold or deconsolidated (1)	—		215,777

__________

(1) Represents deconsolidation of noncontrolling interests upon sale of the Company's equity interests in investment entities (Note ~~12)~~2).

~~22.~~19. Subsequent Events

Other than as disclosed elsewhere, no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the accompanying notes.

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FORWARD-LOOKING STATEMENTS

Some of the statements contained in this Quarterly Report on Form 10-Q (this "Quarterly Report") constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we intend such statements to be covered by the safe harbor provisions contained therein. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

The forward-looking statements contained in this Quarterly Report reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

•our ability to grow our business by raising capital for our funds and the duration and severity of the current novel coronavirus (COVID-19) pandemic, driven by, among other factors, the treatment developments and public adoption rates and effectiveness of COVID-19 vaccines against emerging variants of COVID-19;

•~~the impact of the COVID-19 pandemic on the global market, economic and environmental conditions generally and in the digital and communications technology and investment management sectors;~~

•the effect of COVID-19 on the Company's operating cash flows, debt service obligations and covenants, liquidity position and valuations of its real estate investments, as well as the increased risk of claims, litigation and regulatory proceedings and uncertaintycompanies that ~~may adversely affect the Company;~~we manage;

•our ~~status~~position as an ~~owner, operator~~investor and investment manager of digital infrastructure ~~and real estate~~ and our ability to manage any related conflicts of interest;

•adverse changes in general economic and political conditions, including those resulting from supply chain difficulties, inflation, interest rate increases, a potential economic slowdown or a recession;

•our exposure to business risks in Europe, Asia and other foreign markets;

•our ability to obtain and maintain financing arrangements, including securitizations, on favorable or comparable terms or at all;

•the ~~impact~~ability of ~~initiatives related~~our managed companies to ~~our digital transformation, including the strategic investment by Wafra~~attract and ~~the formation of certain other investment management platforms, on our growth~~retain key customers and ~~earnings profile;~~to provide reliable services without disruption;

•~~whether~~ the ~~transaction with AMP Capital will be completed within the time frame~~reliance of our managed companies on third-party suppliers for power, network connectivity and ~~on the terms anticipated or at all,~~certain other services;

•our ability to increase assets under management ("AUM") and ~~whether we will realize any of the anticipated benefits from the transaction;~~expand our existing and new investment strategies;

•our ability to integrate and maintain consistent standards and controls, including our ability to manage our acquisitions in the digital ~~industry~~infrastructure and investment management industries effectively;

•~~the impact to our business operations and financial condition of realized or anticipated compensation and administrative savings through cost reduction programs;~~

•our business and investment strategy, including the ability of the businesses in which we have a significant ~~investment (such as BRSP)~~investments to execute their business strategies;

•BRSP's trading price and its impact on the carrying value of the Company's investment in BRSP, including whether the Company will recognize further other-than-temporary impairment on its investment in BRSP;

•performance of our investments relative to our expectations and the impact on our actual return on invested equity, as well as the cash provided by these investments and available for distribution;

•our ability to ~~raise new investment funds and vehicles and transfer warehoused investments;~~

•~~our ability to grow our business by raising capital for the companies that we manage;~~

•~~our ability to~~ deploy capital into new investments consistent with our ~~digital business strategies, including the earnings profile of such new investments;~~investment management strategies;

•the availability of, and competition for, attractive investment ~~opportunities;~~

~~Table~~opportunities and the earnings profile of ~~Contents~~such new investments;

•our ability to achieve any of the anticipated benefits of certain joint ventures, including any ability for such ventures to create and/or distribute new investment products;

•~~our ability to satisfy and manage our capital requirements;~~

•our expected hold period for our assets and the impact of any changes in our expectations on the carrying value of such assets;

•the general volatility of the securities markets in which we participate;

•~~changes in interest rates and~~ the market value of our assets;

•interest rate mismatches between our assets and any borrowings used to fund such assets;

•effects of hedging instruments on our assets;

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•the impact of economic conditions on third parties on which we rely;

•the impact of any security incident or deficiency affecting our systems or network or the system and network of any of our managed companies or service providers;

•any litigation and contractual claims against us and our affiliates, including potential settlement and litigation of such claims;

•our levels of leverage;

•~~adverse domestic or international macroeconomic factors, including those resulting from the COVID-19 pandemic, supply chain difficulties, inflation, a potential economic slowdown or a recession;~~

•the impact of legislative, regulatory and competitive ~~changes;~~changes, including those related to privacy and data protection;

•the impact of our transition from a ~~REIT~~real estate investment trust ("REIT") to a ~~C-corporation~~taxable C corporation for tax purposes, and the related liability for corporate and other taxes;

•whether we will be able to utilize existing tax attributes to offset taxable income to the extent contemplated;

•our ability to maintain our exemption from registration as an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”);

•changes in our board of directors or management team, and availability of qualified personnel;

•our ability to make or maintain distributions to our stockholders; and

•our understanding of and ability to successfully navigate the competitive landscape in which we and our ~~competition.~~managed companies operate.

While forward-looking statements reflect our good faith beliefs, assumptions and expectations, they are not guarantees of future performance. Furthermore, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Moreover, because we operate in a very competitive and rapidly changing environment, new risk factors are likely to emerge from time to time. We caution investors not to place undue reliance on these forward-looking statements and urge you to carefully review the disclosures we make concerning risks in Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021, our Quarterly Report on Form 10-Q for the quarter ended March 31,~~ 2022 and in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report. Readers of this Quarterly Report should also read our other periodic filings made with the Securities and Exchange Commission (the "SEC") and other publicly filed documents for further discussion regarding such factors.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our unaudited consolidated financial statements and accompanying notes thereto, which are included in Item 1 of this Quarterly Report, as well as information contained in our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, which is accessible on the SEC's website at www.sec.gov.

In this Quarterly Report, unless specifically stated otherwise or the context indicates otherwise, the terms " the "Company," "DBRG," "we," "our" and "us" refer to DigitalBridge Group, Inc. and its consolidated subsidiaries. References to the “Operating Partnership,” our “Operating Company” and the “OP” refer to DigitalBridge Operating Company, LLC, a

Delaware limited liability company and the operating company of the Company, and its consolidated subsidiaries.

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Our Organization

We are a leading ~~global-scale~~global digital infrastructure ~~firm that invests, directly~~investment manager, deploying and ~~through our portfolio companies,~~managing capital across the digital ecosystem, including data centers, cell towers, fiber networks, small cells, and edge infrastructure. Our diverse global investor base includes public and private pensions, sovereign wealth funds, asset managers, insurance companies, and endowments. At ~~September 30, 2022,~~March 31, 2023, we ~~have $50~~had $69 billion of ~~assets under management, comprising digital infrastructure~~AUM, composed of assets managed on behalf of our limited partners and our shareholders.

We are headquartered in Boca Raton, Florida, with key offices in New York, Los Angeles, London, Luxembourg and Singapore, and have approximately ~~240~~300 employees.

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We operate as a taxable C Corporation, except for certain subsidiaries in the Operating segment that have elected to be taxed as real estate investment trusts. We conduct substantially all of our activities and hold substantially all of our assets and liabilities through ~~the OP,~~ our ~~operating subsidiary.~~Operating Company. At ~~September 30, 2022,~~March 31, 2023, we owned 93% of the ~~OP,~~Operating Company as its sole managing member.

~~We operate our business in a manner that will permit us to maintain our exemption from registration as an investment company under the 1940 Act.~~

~~Transition to C-Corporation~~

Our Business

~~At September 30, 2022, the Company has $50 billion of assets under management ("AUM"), including both third party capital and the Company's balance sheet.~~

The Company conducts its business through two reportable ~~segments, as follows:~~segments: (i) Investment Management; and (ii) Operating, the Company's direct co-investment in digital infrastructure assets held by its portfolio companies.

•~~Digital~~ Investment ~~Management ("Digital IM")—~~Management—This ~~business~~segment represents ~~a leading~~the Company's global ~~digital infrastructure~~ investment management platform, deploying and managing capital on behalf of a diverse base of global institutional investors. The Company's investment management platform is composed of a growing number of long-duration, private investment funds designed to provide institutional investors access to investments across different segments of the digital infrastructure ecosystem. In addition to its flagship ~~opportunistic strategy is conducted through its DigitalBridge Partners platform ("DBP")~~value-add digital infrastructure equity offerings, the Company's investment offerings have expanded to include core equity, credit and ~~separately capitalized vehicles, while other strategies, including digital credit, ventures and public equities, are conducted through other investment vehicles.~~liquid securities. The Company earns management fees ~~generally~~ based onupon the ~~amount of~~ assets or capital managed in investment vehicles, and ~~has the potential to~~may earn incentive fees and carried interest based upon the performance of such investment vehicles, subject to achievement of minimum return hurdles. Earnings from our Digital IM segment were attributed 31.5% to Wafra through the end of May 2022 when Wafra's investment in the Digital IM business was redeemed by the Company (as discussed further in Note 10 to the consolidated financial statements).

•~~Digital~~ Operating—This ~~business~~segment is composed of balance sheet equity interests in digital infrastructure and real estate ~~operating~~co-investment companies, which generally earn rental income from providing use of digital asset space and/or capacity through leases, services and other agreements. The Company currently owns interests in two

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companies: DataBank, ~~including zColo,~~ an edge colocation data center business (DBRG ownership of 11% at ~~13.5% as of September 30, 2022, 20% as of~~March 31, 2023 and December 31, ~~2021)~~2022); and Vantage SDC, a stabilized hyperscale data center business (DBRG ownership of 13% at ~~13%)~~March 31, 2023 and December 31, 2022). ~~Both~~ DataBank and Vantage SDC are ~~also~~ portfolio companies managed by the Company under ~~Digital IM for the~~its Investment Management segment with respect to equity interests owned by third party capital.

~~Digital Transformation~~Our Investment Management Platform

Our investment management platform is anchored by our value-add funds within the DigitalBridge Partners ("DBP") infrastructure equity offerings. In ~~February 2022,~~providing institutional investors access to investments across different segments of the ~~Company completed its~~ digital ~~transformation~~infrastructure ecosystem, our investment offerings have expanded to include core equity, credit and liquid securities.

•Our DBP series of funds focus on value-add digital infrastructure, investing in and building businesses across the digital infrastructure sector.

•Core Equity invests in digital infrastructure businesses and assets with long-duration cash flow profiles, primarily in more developed geographies.

•DigitalBridge Credit is our private credit strategy that ~~commenced~~delivers credit solutions to corporate borrowers in the digital infrastructure sector globally through credit financing products such as first and second ~~quarter~~lien term loans, mezzanine debt, preferred equity and construction/delay-draw loans, among other products.

•Our Liquid Strategies are fundamental long-only and long-short public equities strategies with well-defined mandates, leveraging the network and intellectual capital of ~~2020. The Company's completed disposition~~our platform to build liquid portfolios of ~~its hotel business (March 2021), Other Equity~~high quality, undervalued businesses across digital infrastructure, real estate, and ~~Debt ("OED")~~technology, media, and telecom.

•InfraBridge is focused on mid-market investments ~~and non-digital investment management ("Other IM") business (December 2021), and its Wellness Infrastructure business (February 2022) each represented a strategic shift~~ in the ~~Company's business that had a significant effect on the Company’s operations~~digital infrastructure and ~~financial results,~~related sectors of transportation and ~~accordingly, had met the criteria as discontinued operations. For all current~~logistics, and prior periods presented, the related assets and liabilities, to the extent they have not been disposed at the respective balance sheet dates, are presented as assets and liabilities held for disposition on the consolidated balance sheets, and the related operating results are presented as discontinued operations on the consolidated statements of operations (refer to Item 1. "Financial Statements" of this Quarterly Report).energy transition.

Significant Developments

The following summarizes significant developments that affected our business and results of operations in ~~2022~~the first quarter of 2023 and through the date of this filing.

~~Transition To C-Corporation~~

•We have discontinued actions necessary to maintain qualification as a REIT for 2022, and will be taxed as a C-Corporation. Without the constraints of maintaining REIT status, we have more flexibility to execute various strategic initiatives, including the Wafra transaction, as discussed below. Incremental tax burden is not expected to be significant in the near term given the availability of significant capital loss and NOL carryforwards and that our Digital IM business, prior to the transition, was already taxable under a TRS.

~~Capitalization and~~ Financing

•~~We continue to reduce higher cost corporate indebtedness through (i) early exchange of an additional $60~~$200 million of convertible senior notes was repaid upon maturity in ~~March 2022 for shares of~~April 2023 with cash on hand, which reduces our ~~class A common stock~~leverage and ~~cash, resulting in 74% of the original issuance exchanged to-date; and (ii) repurchase of $52.6 million of preferred stock at a discount~~outstanding corporate debt to ~~par or a weighted average price of $23.62 per share, generating future savings in interest and preferred dividends.~~

•Pursuant to a $200 million stock repurchase program, in addition to preferred stock repurchases, we have also repurchased $55 million of class A common stock at a weighted average price of $13.09 per share through October 2022.

•~~A one-for-four reverse stock split of our common stock was effectuated in August 2022.~~

•~~We have reinstated quarterly common stock dividends beginning the third quarter of 2022, with the declaration of a dividend of $0.01 per share of common stock that was paid in October 2022.~~

•~~Effective April 2022, the availability under our VFN was increased by $100 million to $300~~$378 million.

~~Digital Business~~

~~Digital IM~~

•Through October 2022, included in earnings is our share of realized carried interest of $22.5 million (net of allocation to employees) in connection with the DataBank recapitalization and the first liquidation of investment by DBP I.

•In May 2022, we redeemed Wafra's 31.5% interest in our Digital IM business and Wafra sold or gave up its carried interest entitlement from future (not existing) investment management products. Consideration for the redemption was valued at $862.3 million at closing, consisting of: (i) net cash paid of $388.5 million; (ii) 14.4 million shares (after giving effect to the Company's one-for-four reverse stock split on August 22, 2022) of our class A common stock valued at $348.8 million at closing; and (iii) the ability to earn a contingent amount up to $125 million payable in March 2023 and/or March 2024, with up to 50% payable in common stock at our election.

Following the redemption, all net cash flows from our fee business accrue to us at 100%, and we are entitled to 100% of carried interest net of management allocations from future investment products. The transaction is described further in Note 10 to the consolidated financial statements.

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Investment Management Segment

•In ~~April 2022,~~February 2023, we ~~agreed to acquire AMP Capital's global infrastructure equity investment management business, composed~~completed our previously announced acquisition of ~~its management platform, fund sponsor investments, and retained performance fees. Consideration~~InfraBridge for ~~the acquisition consists of: (i) an~~$313.2 million upfront ~~amount~~cash consideration (net of ~~A$458 million (approximately $314 million, based upon the September 30, 2022 spot rate)~~cash assumed), subject to ~~certain~~ customary ~~adjustments; and (ii) a~~post-closing working capital adjustments, plus potential contingent ~~amount of up to A$180 million (approximately $125 million, based upon September 30, 2022 spot rate), primarily~~payments based upon future fundraising for ~~the~~InfraBridge's third and fourth flagship funds under the Global Infrastructure Fund ("GIF") series. ~~Closing is expected in the fourth quarter of 2022.~~The acquisition comprises InfraBridge's investment management platform and fund sponsor investments.

The acquisition ~~of AMP Capital will~~ further ~~scale~~scales our ~~Digital IM~~investment management business. ~~AMP Capital’s~~InfraBridge’s global infrastructure equity platform will be a strategic fit alongside our value-add equity franchise, enhancing our capabilities in the mid-market segment. The acquisition ~~will add $5.5~~added $5.1 billion in fee earning ~~assets~~equity under management ("FEEUM"), comprising ~~$3.4 billion~~primarily GIF II and ~~$1.4 billion~~ GIF I investment ~~funds, as well as co-investment vehicles, and is expected to be immediately accretive to our fee related earnings.~~

~~Digital Operating~~

~~DataBank Investments~~

•In March 2022, DataBank acquired four colocation data centers in Houston, Texas for $670 million, funded by a combination of $262.5 million of debt and $407.5 million of equity, of which the Company's share was $87.0 million.

The new facilities added approximately 308,000 built square feet and 42.5 MW of installed critical IT load, and a roster of blue-chip customers. One of the facilities is the region’s primary interconnection point that is strategically positioned with access to significant and redundant utility power feeds and access to fast and reliable telecommunications networks.

•~~In January 2022, we acquired additional interest in DataBank from a selling investor for $32 million~~

•~~Immediately following the above transactions, our ownership in DataBank had increased from 20% to 21.8%.~~

~~DataBank Recapitalization~~

•The first closing in August 2022 of the recapitalization of DataBank, together with the second closing in October 2022, collectively resulted in the sale of a portion of our equity interest to new investors for $1.7 billion in cash. Our ownership interest in DataBank decreased from 21.8% to 12.4% following the second closing. Our share of proceeds from the sale totaled $366 million, including our share of carried interest net of allocation to employees. The recapitalization implies a pre-transaction net equity value of our ownership in DataBank of $905 million, reflecting a 2.0x multiple of invested capital since our initial investment in DataBank in December 2019.

As the transaction involved a change in ownership of a consolidated subsidiary, it was accounted for as an equity transaction. After the August closing for $1.5 billion, the difference between the book value of our interest and our ownership based upon the current value of DataBank resulted in an increase to equity of $171 million.

•~~We anticipate the completion of a third closing of the recapitalization prior to the end of 2022, which will further dilute our interest in DataBank.~~funds.

Other

•~~The~~Our investment in BrightSpire Capital, Inc. (NYSE: BRSP), which was our largest remaining non-digital investment,was fully disposed in the first ~~liquidation in September 2022~~quarter of ~~a DBP I investment, Wildstone, resulted in a receipt of $16.6~~2023 for approximately $202 million in ~~distributions (excluding carried interest). As of September 30, 2022, we have $148.5 million invested in DBP I as general partner and limited partner.~~net proceeds.

•In June 2022, we acquired the mobile telecommunications tower business (“TowerCo”) of Telenet Group Holding NV (Euronext Brussels: TNET, "Telenet") for €740 million or $791 million (including transaction costs). The acquisition was funded through $326 million of debt, $278 million of equity from the Company, and $214 million of third party equity, including funding for transaction costs, debt issuance costs and working capital. The TowerCo investment is intended to be transferred to a new sponsored investment vehicle as we continue to develop new investment strategies in our Digital IM business.

Telenet’s tower business is a high-quality digital infrastructure asset with stable, predictable cash flows, high cash conversion, and long-term contracts. We acquired full ownership of Telenet’s passive infrastructure and tower assets, including TowerCo’s nationwide footprint of approximately 3,300 sites in Belgium, of which approximately 2,200 sites are owned and the remaining sites are leased from third parties. Telenet entered into a long-term Master Lease Agreement (“MLA”) with TowerCo, which includes an initial period of 15 years and two renewal periods of 10 years each. The MLA also includes a build-to-suit commitment to deploy a minimum of 475 additional new sites, with Telenet acting as subcontractor to TowerCo, and provides for payment for such services to Telenet over time.

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~~Non-Digital Business~~

•A ~~$59.6~~non-cash charge of $133 million ~~impairment~~in fair value write-down was recorded in 2023 on ~~our investment in BRSP in~~an unsecured promissory note from the ~~third quarter of 2022. Given the continued market volatility in~~ 2022 ~~our anticipated hold period may not be sufficient to allow for a recovery of BRSP's stock price relative to the carrying value~~sale of our ~~investment in BRSP.~~Wellness Infrastructure business. This resulted from an impending foreclosure of certain assets within the Wellness Infrastructure portfolio by its mezzanine lender.

Assets Under Management and Fee Earning Equity Under Management ~~("FEEUM")~~

Below is a summary of our AUM and FEEUM.

AUM (1)(3) (In billions)
FEEUM (2)(3) (In billions)
Type Products Description September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021
Third Party Managed Capital
Institutional Funds DigitalBridge Partners opportunistic strategy Earns management fees and potential for carried interest or incentive fees $ 16.5 $ 16.6 $ 10.8 $ 11.2
Liquid securities strategy 1.0 0.8 1.0 0.8
Other Investment Vehicles Digital co-invest vehicles Earns management fees, business service fees from portfolio companies, and potential for carried interest 23.1 19.3 6.3 4.2
Digital real estate and infrastructure held by portfolio companies 7.7 6.9 2.4 2.1
48.3 43.6 20.5 18.3
Balance Sheet Capital (3)
Digital Operating 1.1 1.2 NA NA
Other 0.9 0.5 NA NA
$ 50.3 $ 45.3 $ 20.5 $ 18.3



Type	Products	Description	March 31, 2023		December 31, 2022
Assets under Management (1)			$	69.3	$	52.8

Fee Earning Equity under Management (2)

Institutional Funds	DBP infrastructure equity	Earns management fees and potential for carried interest or incentive fees	$	11.2	$	11.2
	InfraBridge Global Infrastructure Funds		4.4		—



	Core Equity, DigitalBridge Credit and Liquid Strategies		2.2		2.0
Other Investment Vehicles	DigitalBridge co-invest vehicles	Earns management fees, business service fees from portfolio companies, and potential for carried interest	7.0		6.5
	InfraBridge co-invest vehicles		0.7		—
	Digital infrastructure held by portfolio companies		2.2		2.5
			$	27.7	$	22.2

__________

(1) AUM is composed of (a) third party managed capital for which the Company and its affiliates provide investment management services, including assets for which the Company may or may not charge management fees and/or performance allocations; and (b) assets invested using the Company's own balance sheet capital and managed on behalf of the Company's shareholders. Third party AUM is based upon the cost basis of managed investments as reported by each underlying vehicle as of the reporting date and may include uncalled capital commitments. Balance sheet AUM is based upon the undepreciated carrying value of the Company's balance sheet investments as of the reporting date. The Company's calculation of AUM may differ from other ~~asset~~investment managers, and as a result, may not be comparable to similar measures presented by other ~~asset~~investment managers.

(2) FEEUM is equity for which the Company and its affiliates provide investment management services and derive management fees and/or incentives. FEEUM generally represents the basis used to derive fees, which may be based upon invested equity, stockholders’ equity, or fair value, pursuant to the terms of each underlying investment management agreement. The Company's calculation of FEEUM may differ from other ~~asset~~investment managers, and as a result, may not be comparable to similar measures presented by other ~~asset~~investment managers.

~~(3)~~ Balance sheet capital represents the Company's investment interests on its balance sheet, excluding the portion held by noncontrolling interests in investment entities, that is managed by the Company on behalf of its stockholders, therefore is not fee-bearing. Balance sheet AUM generally reflects the OP's share of net book value of balance sheet assets, determined based upon undepreciated carrying value of assets, and where applicable, after impairment charges that create a new basis for the affected assets, in all instances, net of liabilities.

•FEEUM increased by ~~$2.2~~$5.5 billion or ~~12% year-to-date 2022~~25% to ~~$20.5~~$27.7 billion at ~~September 30, 2022. The increase was primarily~~March 31, 2023, reflecting the addition of $5.1 billion of InfraBridge FEEUM ~~from~~and new capital raised in co-investment ~~vehicles, largely resulting from the DataBank recapitalization. Within institutional funds, there was a decrease in FEEUM following DBP I's liquidation of Wildstone.~~structures.

•~~Our acquisition of AMP Capital's global infrastructure equity platform is expected to add $5.5 billion of FEEUM when the transaction closes in the fourth quarter of 2022.~~

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Results of Operations

The following table summarizes our consolidated results from continuing operations by reportable ~~segments.~~segment.

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2022 2021 Change 2022 2021 Change
Continuing Operations
Total revenues
Digital Investment Management $ 43,953 $ 53,796 $ (9,843) $ 134,961 $ 131,789 $ 3,172
Digital Operating 225,387 194,966 30,421 655,596 573,261 82,335
Corporate and Other (1)
27,283 3,412 23,871 52,934 4,892 48,042
$ 296,623 $ 252,174 44,449 $ 843,491 $ 709,942 133,549
Income (Loss) from continuing operations
Digital Investment Management $ 46,065 $ 39,272 $ 6,793 $ 104,917 $ 62,721 $ 42,196
Digital Operating (93,772) (71,822) (21,950) (253,341) (146,932) (106,409)
Corporate and Other (46,891) (8,385) (38,506) (235,770) (99,240) (136,530)
$ (94,598) $ (40,935) (53,663) $ (384,194) $ (183,451) (200,743)
Net income (loss) from continuing operations attributable to DigitalBridge Group, Inc.
Digital Investment Management $ 24,233 $ 16,870 $ 7,363 $ 37,900 $ 35,849 $ 2,051
Digital Operating (15,881) (12,142) (3,739) (43,512) (22,592) (20,920)
Corporate and Other (42,434) (11,506) (30,928) (189,486) (99,898) (89,588)
$ (34,082) $ (6,778) (27,304) $ (195,098) $ (86,641) (108,457)

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	Three Months Ended March 31,
(In thousands)	2023		2022		Change
Total revenues
Investment Management	$	6,829	$	13,831	$	(7,002)
Operating	231,664		202,522		29,142
Corporate and Other	11,667		16,481		(4,814)
	$	250,160	$	232,834	17,326


Income (Loss) from continuing operations
Investment Management	$	(2,804)	$	(9,143)	$	6,339
Operating	(97,942)		(74,141)		(23,801)
Corporate and Other	(177,380)		(165,755)		(11,625)
	$	(278,126)	$	(249,039)	(29,087)
Income (Loss) from continuing operations attributable to DigitalBridge Group, Inc.
Investment Management	$	(2,198)	$	(7,602)	$	5,404
Operating	(10,789)		(12,824)		2,035
Corporate and Other	(171,149)		(144,771)		(26,378)
	$	(184,136)	$	(165,197)	(18,939)

~~(1)~~ Revenues~~Includes elimination of fee income earned by Digital Investment Management from managed investment vehicles consolidated within Digital Operating and Corporate and Other.~~

~~Revenues~~

Total revenues increased ~~$44.4 million, or 18%, in the quarter-to-date comparison and $133.5 million, or 19%, in the year-to-date comparison.~~7% to $250.2 million.

•~~Digital~~ Investment Management—Revenues ~~decreased 18%~~were 51% lower at $6.8 million due to significant variability from unrealized carried interest. 2023 had a larger net reversal of unrealized carried interest (2023: $55.2 million and 2022: $31.1 million before management allocation), driven by DBP II. As DBP II is still in the ~~quarter-to-date comparison and increased 2%~~early stage of its lifecycle, the carried interest reversal is a function of continuing accrual of preferred returns over time at a higher rate than fair value increases on its underlying investments in the ~~year-to-date comparison. Overall,~~first quarters of 2023 and 2022. Excluding gross unrealized carried interest, revenues would have been $62.1 million in 2023 and $44.9 million in 2022 or a 38% increase. Fee income was $16.3 million or 38% higher, attributable largely to two months of management fees ~~were higher in 2022, attributed to additional DBP II commitments that closed in the fourth quarter of 2021, the DataBank recapitalization in August 2022,~~from InfraBridge funds, and additional capital calls by portfolio companies as well as new co-invest vehicles and sub-advisory accounts. However, 2021 benefited from incentive fees from our digital liquid strategy and in the third quarter of 2021, a catch-up of inception-to-date fees for DigitalBridge Partners II, LP ("DBP II") following the closing of significant new commitments, which resulted in a decrease in revenues in the quarter-to-date comparison.raises during 2022.

Supplemental performance measures of the ~~Digital IM~~Investment Management segment are presented under "—"—Non-GAAP ~~Measures.~~Measures."

•~~Digital~~ Operating—~~2022 includes revenue~~Revenues were higher in 2023, resulting from ~~additional~~data center acquisitions ~~namely DataBank's four new data centers in March 2022 and within the Vantage SDC portfolio, an add-on acquisition in October 2021~~ and additional lease-up of expanded capacity ~~and existing inventory throughout 2021 and 2022. Additionally, 2022 included a one-time fee from a lease termination at~~in Vantage SDC ~~recognized in the second quarter.~~during 2022.

•Corporate and Other—Revenues represent largely our share of earnings from our general partner affiliate investments in ~~2022 reflect primarily lease~~the DBP and InfraBridge funds and income from ~~the~~ warehoused ~~tower business acquired~~investments, if any. Revenues were lower in ~~June 2022, and interest income from credit investments acquired or originated over time. Our ownership of these~~2023 as our warehoused credit investments ~~have largely been relinquished in~~were transferred to our new credit fund during the ~~third quarter~~second half of 2022.

Income ~~(loss)~~(Loss) from continuing operations attributable to DigitalBridge Group, Inc.

Income (Loss) from continuing operations attributable to DBRG was $184.1 million, a 11% increase in net loss.

•~~Digital~~ Investment Management—Net ~~income reflects the effect~~loss attributable to DBRG was $2.2 million, a 71% decrease in net loss. The net loss in both periods resulted from a reversal of unrealized carried interest as noted above. Excluding DBRG's share of unrealized carried interest net of allocation to management ~~allocations. 2022 included significant realized carried interest~~ and ~~allocations~~Wafra, there would have been positive net income attributable to DBRG of $14.4 million in ~~connection with the DataBank recapitalization~~2023 and ~~the first liquidation of investment by DBP I, along with additional unrealized carried interest and allocations for in DBP I. On a year-to-date basis~~$2.1 million in 2022, a $12.3 million increase. This increase is contributed largely by two months of net income from InfraBridge and full attribution of net income to DBRG following the ~~carried~~redemption of Wafra's 31.5% interest ~~accrual and allocations were partially offset by a reversal~~ in ~~the first quarter. We have also continued to ramp up resources and invest~~Investment Management in ~~our growing Digital IM business over time.~~May 2022.

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•~~Digital~~ Operating—~~Our Digital~~The Operating segment generally records a net loss, ~~reflecting~~taking into account the effects of real estate depreciation and intangible asset amortization. ~~Net~~Our share of net loss ~~was lower year-to-date~~reflects a 13% ownership in ~~2021~~Vantage SDC and our interest in DataBank, which decreased from 22% as ~~there was a large deferred tax benefit resulting from a write-off~~ of ~~deferred tax liabilities at DataBank~~March 2022 to 11% as ~~it was then determined that DataBank would elect REIT status beginning with the 2021 taxable year.~~of March 2023.

•Corporate and Other—~~The net~~Net loss generally reflects corporate level costs that have not been allocated to our reportable segments, primarily interest expense on ~~corporate debt~~senior notes and compensation and administrative expenses. Also included are the effects of fair value changes on ~~marketable equity securities held by our consolidated liquid strategy funds, previously warehoused~~ investments ~~and underlying portfolio companies of our digital funds which affect~~carried at fair value, including our share of

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earnings from ~~these funds.~~our fund investments. The ~~larger~~significant net loss in both periods, however, reflect large non-cash charges: (i) a $133 million fair value write-down in 2023 on an unsecured promissory note from the 2022 ~~was driven by~~sale of our Wellness Infrastructure business; and (ii) a ~~$133.2~~$133 million ~~non-cash~~debt extinguishment loss ~~recognized~~ in connection with an early exchange of our 5.75% exchangeable notes in ~~March~~ 2022 (refer to Note 8 to the consolidated financial statements),.

A more detailed discussion of key components of revenue and ~~impairment loss of $59.6 million on our investment in BRSP in the third quarter of 2022. This was partially offset by a significant decrease in fair value of the warrants issued to Wafra~~income (loss) from ~~its initial remeasurement in May 2022.~~continuing operations follows.


	Three Months Ended March 31,
(In thousands)	2023		2022		Change
Revenues
Fee income	$	59,126	$	42,837	$	16,289
Carried interest allocation (reversal)	(54,756)		(31,079)		(23,677)
Principal investment income (loss)	3,562		6,454		(2,892)
Property operating income	230,927		202,511		28,416
Other income	11,301		12,111		(810)
Total revenues	250,160		232,834		17,326
Expenses
Property operating expense	97,126		84,003		13,123
Interest expense	67,196		44,030		23,166
Investment expense	5,751		9,565		(3,814)
Transaction-related costs	8,527		165		8,362
Depreciation and amortization	141,574		128,567		13,007

Compensation expense—cash and equity-based	74,650		65,542		9,108
Compensation expense (reversal)—incentive fee and carried interest	(36,831)		(20,352)		(16,479)
Administrative expenses	26,506		27,885		(1,379)
Total expenses	384,499		339,405		45,094


Other gain (loss), net	(142,745)		(149,881)		7,136
Income (Loss) before income taxes	(277,084)		(256,452)		(20,632)
Income tax benefit (expense)	(1,042)		7,413		(8,455)
Income (Loss) from continuing operations	(278,126)		(249,039)		(29,087)
Income (Loss) from discontinued operations	(14,218)		(94,645)		80,427
Net income (loss)	(292,344)		(343,684)		51,340
Net income (loss) attributable to noncontrolling interests:
Redeemable noncontrolling interests	6,943		(11,220)		18,163
Investment entities	(84,828)		(63,045)		(21,783)
Operating Company	(16,662)		(22,862)		6,200
Net income (loss) attributable to DigitalBridge Group, Inc.	(197,797)		(246,557)		48,760

Preferred stock dividends	14,676		15,759		(1,083)
Net income (loss) attributable to common stockholders	$	(212,473)	$	(262,316)	49,843

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~~Key components of revenue and income (loss) from continuing operations are discussed in more detail below.~~

~~Comparison of Three and Nine Months September 30, 2022 to Three and Nine Months September 30, 2021~~

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2022 2021 Change 2022 2021 Change
Revenues
Property operating income $ 244,336 $ 194,854 $ 49,482 $ 681,098 $ 572,841 $ 108,257
Interest income 8,725 3,086 5,639 22,390 5,259 17,131
Fee income 41,263 50,226 (8,963) 128,418 124,826 3,592
Other income 2,299 4,008 (1,709) 11,585 7,016 4,569
Total revenues 296,623 252,174 44,449 843,491 709,942 133,549
Expenses
Property operating expense 105,987 80,226 25,761 287,280 237,228 50,052
Interest expense 53,032 39,895 13,137 143,450 117,613 25,837
Investment expense 9,510 7,263 2,247 26,262 20,027 6,235
Transaction-related costs 3,879 936 2,943 6,800 2,618 4,182
Depreciation and amortization 145,594 129,186 16,408 429,513 406,840 22,673
Compensation expense, including incentive fee and carried interest allocation 146,375 87,669 58,706 293,426 222,887 70,539
Administrative expenses 29,909 28,933 976 84,147 75,234 8,913
Total expenses 494,286 374,108 120,178 1,270,878 1,082,447 188,431
Other income (loss)
Other gain (loss), net 25,908 4,657 21,251 (170,229) (31,734) (138,495)
Equity method earnings, including carried interest 69,316 65,369 3,947 195,650 111,380 84,270
Loss before income taxes (102,439) (51,908) (50,531) (401,966) (292,859) (109,107)
Income tax benefit 7,841 10,973 (3,132) 17,772 109,408 (91,636)
Loss from continuing operations (94,598) (40,935) (53,663) (384,194) (183,451) (200,743)
Loss from discontinued operations (26,389) (10,429) (15,960) (148,558) (590,595) 442,037
Net loss (120,987) (51,364) (69,623) (532,752) (774,046) 241,294
Net income (loss) attributable to noncontrolling interests:
Redeemable noncontrolling interests (6,442) 7,269 (13,711) (31,989) 15,743 (47,732)
Investment entities (60,623) (124,301) 63,678 (152,770) (443,547) 290,777
Operating Company (4,834) 4,311 (9,145) (30,786) (38,565) 7,779
Net income (loss) attributable to DigitalBridge Group, Inc. (49,088) 61,357 (110,445) (317,207) (307,677) (9,530)
Preferred stock repurchases/redemptions (1,098) 2,865 (3,963) (1,098) 2,865 (3,963)
Preferred stock dividends 15,283 17,456 (2,173) 46,801 54,488 (7,687)
Net income (loss) attributable to common stockholders $ (63,273) $ 41,036 (104,309) $ (362,910) $ (365,030) 2,120

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~~Property Operating Income and Expense~~

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2022 2021 Change 2022 2021 Change
Property operating income
Digital Operating
Lease income $ 206,141 $ 175,238 $ 30,903 $ 598,263 $ 522,712 $ 75,551
Data center service revenue 19,182 19,616 (434) 57,217 50,129 7,088
225,323 194,854 30,469 655,480 572,841 82,639
Other
Lease income 19,013 — 19,013 25,618 — 25,618
$ 244,336 $ 194,854 49,482 $ 681,098 $ 572,841 108,257
Property operating expense
Digital Operating $ 100,051 $ 80,226 $ 19,825 $ 278,798 $ 237,228 $ 41,570
Other 5,936 — 5,936 8,482 — 8,482
$ 105,987 $ 80,226 25,761 $ 287,280 $ 237,228 50,052

~~Digital Operating~~

Property operating income and expense are higher in 2022, which includes operating results from additional acquisitions. These include DataBank's acquisition of four data centers in March 2022, and within the Vantage SDC portfolio, an add-on acquisition in October 2021 and additional lease-up of expanded capacity and existing inventory throughout 2021 and 2022. Additionally, the second quarter of 2022 also included a $5.8 million fee received from a lease termination in the Vantage SDC portfolio.

Total real estate carrying value in our Digital Operating segment increased to $5.81 billion at September 30, 2022 compared to $4.97 billion at December 31, 2021 following the DataBank March 2022 acquisition.

~~At September 30, 2022, our portfolio includes 73 data centers in the U.S., three in Canada, one in the U.K., and five in France.~~

September 30, 2022 December 31, 2021
Digital Operating
Number of data centers (1)
Owned 33 28
Leasehold 49 50
82 78
(In thousands, except %)
Max Critical I.T. Square Feet or Total Rentable Square Feet (2)
2,350 1,949
Leased Square Feet (2)
1,852 1,553
% Utilization Rate (% Leased) (2)
79% 80%

~~__________~~

~~(1)~~ ~~Converted a leased data center to owned in the first quarter of 2022.~~

~~(2)~~ ~~Excludes data centers that were not held for the entire period; in this case, four data centers that were acquired in March 2022.~~

On a same store basis, property operating income and expense also increased in 2022, driven by the Vantage SDC portfolio, attributable to a lease termination fee and increase in leased square footage from lease-up of expanded capacity and existing inventory.

~~Other~~

~~This represents property operating income and expense from the tower business acquired in June 2022.~~

~~Interest Income~~

Interest income was $5.6 million higher in the quarter-to-date comparison and $17.1 million higher in the year-to-date comparison. In 2022, there was additional interest income from new loans originated or acquired beginning the third quarter of 2021. All of these new loans have been transferred either to a third party sponsored CLO or to our sponsored fund in the third quarter of 2022, except for one loan for which the transfer is pending. Additionally, we also

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~~recognized paid-in-kind interest on an unsecured promissory note in connection with the sale of our Wellness Infrastructure business in February 2022.~~

Fee Income


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
(In thousands)	(In thousands)	2022		2021		Change		2022		2021		Change		(In thousands)	2023		2022		Change
Digital Investment Management
Management fees	Management fees	$	40,697	$	47,719	$	(7,022)	$	126,447	$	115,185	$	11,262	Management fees	$	57,158	$	42,191	$	14,967
Incentive fees	Incentive fees	—		1,313		(1,313)		2		6,396		(6,394)		Incentive fees	869		—		869
Other fee income	Other fee income	566		1,194		(628)		1,969		3,245		(1,276)		Other fee income	1,099		646		453
		$	41,263	$	50,226	(8,963)		$	128,418	$	124,826	3,592			$	59,126	$	42,837	16,289

Fee income ~~decreased $9.0~~was $16.3 million or 38% higher in ~~the quarter-to-date comparison but increased $3.6 million in the year-to-date comparison. There was an overall increase in~~2023, primarily driven by two months of management fees infrom InfraBridge and management fees from capital raised during 2022, ~~attributed to additional DBP II commitments that closed in the fourth quarter of 2021,~~including the DataBank recapitalization ~~in August 2022, additional capital calls by portfolio companies as well as~~and our new co-invest vehicles and sub-advisory accounts. However, management fees decreased in the quarter-to-date comparison as the third quarter of 2021 benefited from a catch-up of inception-to-date fees for DBP II following the closing of significant new commitments during that period.core equity fund. Additionally, there were no incentive fees earned in 2023 from a sub-advisory account in Liquid Strategies.

Carried Interest Allocation (Reversal)


	Three Months Ended March 31,
(In thousands)	2023		2022		Change
Carried interest allocation (reversal)
Realized	$	476	$	—	$	476
Unrealized	(55,232)		(31,079)		(24,153)
	$	(54,756)	$	(31,079)	(23,677)

Carried interest allocation (reversal) represents gross carried interest from our ~~digital liquid strategy~~general partner interests in sponsored investment vehicles prior to allocations to management and Wafra. There was a higher net reversal of unrealized carried interest in 2023 compared to 2022, ~~in comparison to 2021, which further contributed to the overall decrease in fee income~~driven by DBP II. As DBP II is still in the ~~quarter-to-date period and partially offset~~early stage of its lifecycle, the carried interest reversal is a function of continuing accrual of preferred returns over time at a higher ~~management fees in the year-to-date period.~~

~~Other Income~~

Other income decreased $1.7 million in the quarter-to-date comparison but increased $4.6 million in the year-to-date comparison. The decrease in the quarter-to-date comparison can be attributed to lower professional service fees incurredrate than fair value increases on behalf of and reimbursable by our managed investment vehicles. The increase in the year-to-date comparison is due primarily to dividend income received from our equity interest in a third party non-traded REIT and loan origination fee earnedits underlying investments in the first quarter of ~~2022~~2023 and 2022. Unrealized carried interest is subject to adjustments each period, including reversals, based upon the cumulative performance of the underlying investments of these vehicles that are measured at fair value, until such time as the carried interest is realized.

Our share of net carried interest reversal after allocations to management and Wafra was $16.6 million in ~~connection with a loan syndication.~~

~~Interest Expense~~

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2022 2021 Change 2022 2021 Change
Digital Investment Management $ 2,953 $ 2,250 $ 703 $ 8,240 $ 2,250 $ 5,990
Digital Operating 40,770 29,839 10,931 114,187 90,243 23,944
Other investment-level debt 5,356 268 5,088 8,495 268 8,227
Corporate-level debt 3,953 7,538 (3,585) 12,528 24,852 (12,324)
$ 53,032 $ 39,895 13,137 $ 143,450 $ 117,613 25,837
2023 and $9.7 million in 2022.

~~Digital~~Principal Investment ~~Management—~~Income (Loss)

Principal investment income decreased $2.9 million to $3.6 million in 2023. This ~~represents interest expense~~was driven by lower earnings from our ~~securitized financing facility beginning~~equity interests in ~~July 2021, which is attributed largely to~~DBP I and DBP II, with the ~~Digital IM segment. Interest~~earnings representing unrealized fair value increases on the investments of these funds.

Property Operating Income and Expense


	Three Months Ended March 31,
(In thousands)	2023		2022		Change
Property operating income
Operating segment
Lease income	$	210,402	$	184,171	$	26,231
Data center service revenue	20,525		18,340		2,185




	230,927		202,511		28,416
Property operating expense
Operating segment	$	97,126	$	84,003	$	13,123

Operating Segment

Property operating income and expense isare higher in ~~2022,~~2023, reflecting ~~a full year-to-date period, and additionally,~~operating results from ~~drawdowns on the VFN during the year.~~

~~Digital Operating—The increase of $10.9 million in the quarter-to-date comparison and $23.9 million in the year-to-date comparison is attributed to interest expense from the following: (i)~~ additional ~~debt raised through securitization transactions by DataBank and Vantage SDC during 2021; (ii) new financing for~~acquisitions throughout 2022. These include DataBank's acquisition of four data centers in March ~~2022;~~2022, and ~~(iii) securitized financing facility beginning July 2021 which is partially allocated to~~within the ~~Digital Operating segment.~~

~~At September 30, 2022, our data center~~Vantage SDC portfolio, ~~was financed by an aggregate $4.51 billion~~additional lease-up of outstanding debt principal ($4.22 billion at December 31, 2021), primarily fixed rate securitized debt, bearing a combined weighted average interest rate of 3.38% per annum (2.88% per annum at December 31, 2021).

~~Other Investment-level Debt—~~This represents interest expense from: (i) debt to partially fund the acquisition of the tower assets in June 2022; (ii) our securitized financing facility beginning in July 2021 that is partially allocated to our digital creditexpanded capacity and digital liquid investments on the balance sheet; and (iii) credit facilities previously financing warehoused loans which were repaid following a transfer of the loans to a third party sponsored CLO in the third quarter ofexisting inventory throughout 2022.

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At March 31, 2023, the Operating segment portfolio includes 74 data centers in the U.S., three in Canada, one in the U.K., and five in France.


	March 31, 2023	December 31, 2022
Operating segment
Number of data centers
Owned	35	35
Leasehold (1)	48	49
	83	84
(In thousands, except %)
Max Critical I.T. Square Feet or Total Rentable Square Feet	2,405	2,405
Leased Square Feet	1,913	1,888
% Utilization Rate (% Leased)	80%	78%

__________

~~Corporate-level~~(1) Lease expired and not renewed in the first quarter of 2023.

On a same store basis, property operating income and expense also increased in 2023, driven by the Vantage SDC portfolio, attributable to increase in leased square footage from lease-up of expanded capacity and existing inventory.

Other Income

Other income was $0.8 million lower at $11.3 million in 2023. 2022 had included interest income from warehoused credit investments that were transferred to our new credit fund during the second half of 2022, while there was higher dividend income and interest income from money market deposits in 2023.

Interest Expense


	Three Months Ended March 31,
(In thousands)	2023		2022		Change
Interest expense
Corporate debt	$	7,790	$	8,306	(516)
Non-recourse investment-level debt	59,406		35,724		23,682
	$	67,196	$	44,030	23,166

Corporate Debt—Interest expense decreased ~~$3.6~~$0.5 million in 2023, driven by the ~~quarter-to-date comparison and $12.3 million in the year-to-date comparison as we have extinguished $221 million of higher cost corporate debt through~~ early ~~exchanges~~exchange of our 5.75% exchangeable notes ~~totaling $161 million in the fourth quarter of 2021 and an additional $60 million~~ in March 2022 ~~(refer~~which resulted in the extinguishment of higher cost corporate debt.

Non-Recourse Investment-Level Debt—The increase of $23.7 million was driven primarily by: (i) write-off of unamortized deferred financing costs on DataBank's refinanced debt; (ii) higher outstanding debt balance attributed to ~~Note 8 to the consolidated financial statements). 2021 also included interest expense~~financing for new acquisitions in 2022; (iii) higher rates in 2023 on ~~our corporate credit facility that was terminated in July 2021.~~Vantage SDC's new securitization and on DataBank's variable rate debt.

Investment Expense

Investment expense ~~increased $2.2~~decreased $3.8 million to $5.8 million in ~~the quarter-to-date comparison and $6.2 million in the year-to-date comparison.~~2023. The ~~increase~~decrease is attributable largely to higher compensatory expense recognized in the first quarter of 2022 in connection with ~~equity awards granted to~~ the management team of Vantage Data Centers Holdings, LLC ("Vantage") who performs the day-to-day operations of Vantage SDC ~~higher management fees paid to Vantage as a result of the add-on acquisition in October 2021,~~ and ~~professional service fees incurred in the tower business in 2022. These increases were partially offset by lower~~higher costs in ~~the third quarter of~~ 2022 in connection with transition services for ~~DataBank.~~DataBank's acquisition of zColo.

Transaction-Related Costs

Transaction-related costs ~~increased $2.9~~was $8.5 million in ~~the quarter-to-date comparison~~2023 and ~~$4.2~~$0.2 million in 2022, with the ~~year-to-date comparison, attributed to~~increase driven by the ~~pending~~ acquisition of ~~AMP Capital and unconsummated investments.~~InfraBridge.

Depreciation and Amortization

Increase in depreciation and amortization can be attributed to ~~real estate and~~ intangible assets acquired through the ~~Vantage SDC add-on~~InfraBridge acquisition in ~~October 2021,~~February 2023 and DataBank's four new data centers acquired in March ~~2022, and tower assets in June~~ 2022. 2022 also included accelerated amortization of lease intangibles in connection with an early lease termination in the Vantage SDC portfolio. The increase was partially offset by (i) accelerated amortization recognized in the first quarter of 2021 on a trade name intangible in anticipation of the Company's name change in June 2021; and (ii) a decrease in amortization expense on lease intangibles following the term expiration on short term leases in our colocation data center business in 2022.

~~Compensation Expense~~

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2022 2021 Change 2022 2021 Change
Cash compensation and benefits $ 46,868 $ 49,019 $ (2,151) $ 146,552 $ 152,325 $ (5,773)
Equity-based compensation 8,576 6,914 1,662 27,226 30,593 (3,367)
Incentive and carried interest compensation 80,831 31,736 49,095 109,548 39,969 69,579
136,275 87,669 48,606 283,326 222,887 60,439
Equity-based compensation—Databank Recapitalization
10,100 — 10,100 10,100 — 10,100
$ 146,375 $ 87,669 58,706 $ 293,426 $ 222,887 70,539

Compensation expense increased $48.6 million in the quarter-to-date comparison and $60.4 million in the year-to-date comparison, excluding accelerated equity awards resulting from the DataBank recapitalization as discussed below. In this case, the increase in both periods under comparison is driven by carried interest compensation in 2022, representing a portion of realized and unrealized carried interest from our sponsored investment vehicles that are shared with certain employees. Unrealized carried interest and corresponding compensation amounts are subject to adjustments each period, including reversals, until such time they are realized, based upon the cumulative performance of the underlying investments of the respective vehicles that are carried at fair value.

The increase above was partially offset by: (i) a decrease in cash and equity-based compensation as there was higher severance payments, including acceleration of equity-based compensation, in the first quarter of 2021, and lower bonus accrual in 2022; as well as (ii) a reversal of carried interest compensation in the first quarter of 2022.

Separately, the DataBank recapitalization transaction triggered an accelerated vesting of certain profits interest units that had been issued by DataBank to its employees. As a result, $10.1 million of additional equity based compensation was recorded for the Digital Operating segment in the third quarter of 2022, of which $7.8 million was attributed to noncontrolling interests in investment entities.

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Compensation Expense


	Three Months Ended March 31,
(In thousands)	2023		2022		Change
Cash and equity-based compensation
Cash compensation and benefits	$	36,701	$	36,607	$	94
Equity-based compensation	10,770		8,979		1,791
	47,471		45,586		1,885
Operating segment
Cash and equity-based compensation	27,179		19,956		7,223

	$	74,650	$	65,542	9,108

Incentive and carried interest compensation (reversal)	$	(36,831)	$	(20,352)	$	(16,479)

Cash and equity-based compensation—Compensation expense, excluding the Operating segment, increased $1.9 million to $47.5 million in 2023. Equity-based compensation expense was higher in 2023, attributed to shortened vesting periods for previously modified awards and a performance-based award that met its target in 2023. These increases were partially offset by profits interests that fully vested in 2022. In terms of cash compensation, the additional expense attributed to InfraBridge was mostly offset by lower severance costs and bonus accrual in 2023.

Higher compensation expense in the Operating segment is attributed to new stock awards and higher headcount at DataBank.

Incentive and carried interest compensation (reversal)—Consistent with the reversal in carried interest (as discussed in "—Carried Interest Allocation (Reversal)" above), there was also a larger reversal in the associated compensation expense, driven by DBP II.

Administrative Expenses


	Three Months Ended March 31,
(In thousands)	2023		2022		Change
Administrative expenses	$	19,266	$	20,986	$	(1,720)
Administrative expenses—Operating segment	7,240		6,899		341
	$	26,506	$	27,885	(1,379)

Excluding the Operating segment, administrative expenses decreased $1.7 million to $19.3 million in 2023, driven by lower legal costs. Administrative expenses ~~increased $1.0 million~~ in the quarter-to-date comparison and $8.9 million in the year-to-date comparison. The increase is due to higher legal costs in 2022, which more than offset the placement fees incurred in fundraising for DBP II in the second and third quarters of 2021.Operating segment were largely consistent year-over-year.

Other Gain (Loss), Net

Other ~~gain increased $21.3 million from $4.7 million to $25.9~~loss was $142.7 million in ~~the quarter-to-date comparison, and other loss increased $138.5 million from $31.7 million~~2023 compared to ~~$170.2~~$149.9 million in ~~the year-to-date comparison.~~2022.

~~Quarter-to-date~~

~~On a quarter-to-date basis, the gain~~Other loss in ~~2022~~2023 was driven by ~~a decrease~~decreases in ~~the liability fair value of the warrants issued to Wafra (refer to Note 13 to the consolidated financial statements) and~~investment values, primarily $133.3 million on an unrealized gain on a non-designated interest rate contract that economically hedges a floating rate debt. These gains were partially offset by fair value decreases on marketable equity securities held largely by our consolidated liquid securities funds, net of offsetting fair value changes on their short positions.

~~In 2021, in contrast, gains were recorded on increases in fair value of marketable equity securities.~~

~~Year-to-date~~

~~Losses in~~unsecured promissory note from the 2022 ~~year-to-date period~~sale of our Wellness Infrastructure business, taking into consideration an impending foreclosure of certain assets within the Wellness Infrastructure portfolio by its mezzanine lender.

In 2022, the losses were driven by ~~fair value decreases in relation to: (i)~~ a non-cash debt extinguishment loss of $133.2 million ~~in the first quarter of 2022, recognized~~ in connection with an early exchange of our 5.75% exchangeable notes (refer to Note 8 to the consolidated financial statements)~~; (ii)~~, and fair value decrease in previously warehoused loans and in marketable equity securities held ~~largely~~ by our consolidated liquid ~~securities~~ funds, net of offsetting fair value changes on short ~~positions; and (iii) loans receivable given the rising interest rate environment (prior to transfer~~positions.

Income Tax Benefit (Expense)

There was an income tax expense of ~~warehoused loans to a third party sponsored CLO and to our sponsored fund~~$1.0 million in ~~the third quarter of 2022). These losses were partially offset by similar gains as recorded in the quarter-to-date period.~~

~~In the 2021 year-to-date period, the losses were driven by a write-off of an equity investment that was determined to be unrecoverable in June 2021~~2023 and an ~~increase~~income tax benefit of $7.4 million in ~~value~~2022.

Income tax expense in 2023 generally reflects the income tax effect of ~~the Blackwells settlement liability prior to~~foreign subsidiaries. The Company has established a full valuation allowance on deferred tax assets of its ~~settlement~~taxable U.S. entities, resulting in ~~June 2021 (refer to Note 13 to the consolidated financial statements). These losses were partially offset by fair value increases on marketable equity securities.~~no U.S. income tax provision in 2023.

~~Equity Method Earnings~~

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2022 2021 Change 2022 2021 Change
Digital Investment Management $ 122,714 $ 59,196 $ 63,518 $ 203,447 $ 70,203 $ 133,244
Other (53,398) 6,173 (59,571) (7,797) 41,177 (48,974)
$ 69,316 $ 65,369 3,947 $ 195,650 $ 111,380 84,270

~~Digital Investment Management—~~These amounts represent predominantly carried interest from our general partner interests in sponsored investment vehicles. In 2022, there was significant carried interest realized in connection with the DataBank recapitalization and the first liquidation of investment by DBP I, along with additional unrealized carried interest recognized for DBP I. On a year-to-date basisIncome tax benefit in 2022 this increase was partially offset by a reversal of carried interest in the first quarter. Carried interest is subject to adjustments each period, including reversals, based upon the cumulative performance of the underlying investments of these vehicles that are measured at fair value, until such time the carried interest is realized. In this case, the carried interest reversal is a function of continuing accrual of preferred returns over time while fair value of underlying investments remain largely consistent.

~~Other—~~The equity method loss in 2022 was driven by $59.6 million of impairment charge in the third quarter on our equity investment in BRSP. This was partially offset by our share of net income from BRSP and earnings from our limited partnership interests in funds in the DigitalBridge Partners opportunistic strategy, representing unrealized fair value increases on the underlying investments of these funds.

~~In 2021, the equity method gain~~ can be attributed primarily to ~~earnings from our limited partner interests~~deferred tax benefit on net operating losses of a subsidiary. A valuation allowance was subsequently established against this deferred tax asset in the DigitalBridge Partner funds, driven by unrealized fair value changes on their underlying investments. Also, year-to-date included fair value increases on an equity method investment that had been accounted for under the fair value option. Beginning May 2021, the equity investment is accounted for as a marketable equity security following a merger of the investee into a special purpose acquisition company. A gain was also recorded in the thirdfourth quarter of ~~2021 from partial sale of our BRSP shares. These gains were partially offset, year-to-date, by our share of net losses from BRSP, attributed largely to~~2022.

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~~investment write-downs and BRSP's restructuring costs in the first quarter of 2021, including the BRSP management contract termination fee that was paid to us.~~

Income ~~Tax Benefit~~

~~Income tax benefit decreased~~(Loss) from ~~$11.0 million to $7.8 million in the quarter-to-date comparison and from $109.4 million to $17.8 million in the year-to-date comparison.~~

The higher deferred tax benefit in 2021 was driven, year-to-date, by a write-off of deferred tax liabilities at DataBank when it was determined in the second quarter of 2021 that DataBank would elect REIT status beginning with the 2021 taxable year. 2021 also included higher deferred tax benefit recognized in connection with significant severance costs.

The net income tax benefit recorded in 2022 reflects the tax effect of activities in the Company's previously designated TRS in the normal course of business, which continues to be driven primarily by deferred tax benefit on equity-based compensation.Discontinued Operations


	Three Months Ended March 31,
(In thousands)	2023		2022		Change




















Income (Loss) from discontinued operations	$	(14,218)	$	(94,645)	$	80,427
Income (Loss) from discontinued operations attributable to noncontrolling interests:
Investment entities	517		(6,175)		6,692
Operating Company	(1,074)		(7,110)		6,036
Income (Loss) from discontinued operations attributable to DigitalBridge Group, Inc.	$	(13,661)	$	(81,360)	67,699

Loss from ~~Discontinued Operations~~

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2022 2021 Change 2022 2021 Change
Revenues
Revenues $ 6,375 $ 218,456 $ (212,081) $ 88,658 $ 695,186 $ (606,528)
Expenses (7,601) (199,369) 191,768 (245,236) (1,162,513) 917,277
Other gain (loss) (16,631) (26,765) 10,134 10,444 (100,330) 110,774
Income tax benefit (expense) (8,532) (2,751) (5,781) (2,424) (22,938) 20,514
Loss from discontinued operations (26,389) (10,429) (15,960) (148,558) (590,595) 442,037
Income (Loss) from discontinued operations attributable to noncontrolling interests:
Investment entities (10,227) (85,741) 75,514 (16,016) (346,205) 330,189
Operating Company (1,156) 7,177 (8,333) (10,433) (23,354) 12,921
Income (Loss) from discontinued operations attributable to DigitalBridge Group, Inc. $ (15,006) $ 68,135 (83,141) $ (122,109) $ (221,036) 98,927

~~Discontinued~~discontinued operations ~~represent primarily~~in 2023 reflect largely the ~~operations~~$9.7 million impairment of the following businesses: (1) Wellness Infrastructure prior to its disposition in February 2022; (2) opportunistic investments in our OED portfolio and credit investment management business in Other IMBRSP shares prior to disposition ~~of our equity interest and deconsolidation in December 2021; and (3) the Company's hotel business prior to its disposition~~ in March ~~2021, with the remaining hotel portfolio that was in receivership sold by the lender in September 2021.~~2023.

~~The net loss year-to-date~~Loss from discontinued operations in 2022 ~~is attributed to~~was driven by the disposition of ~~NRF Holdco~~the Wellness Infrastructure business in February 2022, specifically, a $92.1 million write-off of unamortized deferred financing costs on the Wellness Infrastructure debt assumed by the buyer, ~~and~~ impairment loss ~~recognized~~ based upon ~~the~~ final carrying value of ~~net assets of~~ the Wellness Infrastructure ~~business~~net assets upon disposition. ~~In the quarter-to-date period in 2022, losses were incurred in connection with investment dispositions and fair value decreases.~~

The net loss in 2021 was driven by significant impairment expense and decreases in asset fair values based upon the selling price of our Wellness Infrastructure and OED portfolios. Impairment of our investment assets in the third quarter of 2021 were largely offset by various gains recognized during the period, including a gain on extinguishment of debt on our hotel portfolio that was sold in September 2021. Such gains were attributed predominantly to DBRG while impairment loss was largely attributable to noncontrolling interests in investment entities, resulting in a net income attributed to DBRG in the third quarter of 2021.

~~A detailed income statement on discontinued operations is included in Note 12 to the consolidated financial statements.~~

~~Preferred Stock Repurchases/Redemptions~~

~~In the third quarter of 2022, net loss attributable to common stockholders was reduced by $1.1 million, reflecting the discount on the repurchases of preferred stock.~~

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In connection with the redemption of Series G preferred stock in August 2021, net income attributable to common stockholders was reduced by $2.9 million, representing the excess of the $25.00 per share redemption price over the carrying value of the preferred stock which is net of issuance cost.

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Non-GAAP Supplemental Financial Measures

~~Following our decision not to maintain qualification as a REIT for 2022, we no longer present Funds From Operations, a supplemental non-GAAP measure commonly used by equity REITs.~~

~~Resulting from the significant growth in our digital investment management business, effective the second quarter of 2022, we~~We report Distributable Earnings, ~~("DE"),~~ Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) and, specific to our ~~Digital IM~~Investment Management segment, Fee Related Earnings (“FRE”) as non-GAAP financial measures attributable to the Operating ~~Company, which more closely align the key performance metrics of our core business to the alternative investment management industry.~~Company.

We use these non-GAAP financial measures in evaluating the Company’s business performance and in making operating decisions. As we evaluate profitability based upon continuing operations, these non-GAAP measures exclude results from discontinued operations.

These non-GAAP financial measures should not be considered alternatives to GAAP net income or loss as indicators of operating performance, or to cash flows from operating activities as measures of liquidity, nor as indicators of the availability of funds for our cash needs, including funds available to make distributions. Our calculation of these non-GAAP measures may differ from methodologies utilized by other companies for similarly titled performance measures and, as a result, may not be directly comparable to those calculated by other companies in similar lines of business.

Results of our non-GAAP measures attributable to the Operating Company were as follows:

~~(In thousands)~~

~~Three Months Ended September 30, 2022~~

~~Attributable to Operating Company:~~

~~Distributable Earnings~~

~~39,317~~

~~Adjusted EBITDA~~

~~29,097~~

~~Digital IM FRE~~

~~21,498~~


	Three Months Ended March 31,
(In thousands)	2023		2022
Attributable to Operating Company:
Distributable Earnings	$	(3,365)	$	(5,064)
Adjusted EBITDA	25,626		20,494
Investment Management FRE	34,512		16,989

Distributable Earnings

Distributable Earnings is an after-tax measure that differs from GAAP net income or loss from continuing operations as a result of the following adjustments, including adjustment for our share of similar items recognized by our equity method ~~investments:~~investments, where applicable: transaction-related costs; restructuring charges (primarily severance and retention costs); realized and unrealized gains ~~and~~or losses, except realized gains ~~and~~or losses related to digital assets, including fund investments, in Corporate and Other; depreciation, amortization and impairment charges; interest expense on finance leases; debt prepayment penalties and amortization of deferred financing costs, debt premiums and ~~debt~~ discounts; our share of unrealized carried interest allocation, net of associated compensation expense; equity-based compensation ~~expense; equity method earnings to reflect only cash dividends declared by BRSP;~~costs; effect of straight-line lease income and expense; impairment of equity investments directly attributable to decrease in value of depreciable real estate held by the investee; non-revenue enhancing capital expenditures necessary to maintain operating real estate; and income tax effect on certain of the foregoing adjustments. Income taxes included in DE reflect the benefit of deductions arising from certain expenses that are excluded from the calculation of DE, such as equity-based compensation, as these deductions do decrease actual income tax paid or payable by the Company in any one period.

We believe that DE is a meaningful supplemental measure as it reflects the ongoing operating performance of our core business by generally excluding items that are non-core in nature, and allows for ~~better comparability of~~our operating results to be more comparable period-over-period and relative to other companies in similar lines of business.

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Adjusted EBITDA

Adjusted EBITDA represents DE adjusted to ~~exclude:~~exclude the following items attributable to the Operating Company: interest expense as included in DE, income tax ~~expense~~benefit or ~~benefit~~expense as included in DE, preferred stock dividends, ~~equity method earnings~~principal investment income or loss as included in DE, placement fee expense, our share of incentive fees and realized carried interest ~~and incentive fees~~allocation or reversal net of associated compensation expense or reversal, certain investment costs for capital raising that are not reimbursable by our sponsored funds, and capital expenditures as deducted in DE.

We believe that Adjusted EBITDA is a meaningful supplemental measure of performance because it presents the Company’s operating performance independent of its capital structure, leverage and non-cash items, which allows for better comparability against entities with different capital structures and income tax rates. However, because Adjusted EBITDA is calculated ~~before~~without the effects of certain recurring cash charges, including interest expense, ~~and~~ taxes, ~~and does not deduct~~ capital expenditures or other recurring cash requirements, its usefulness as a performance measure may be limited.

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Distributable Earnings and Adjusted EBITDA ~~reconciliation~~Reconciliation

~~(In thousands)~~

~~Three Months Ended September 30, 2022~~

~~Net loss attributable to common stockholders~~

~~(63,273)~~

~~Net loss attributable to noncontrolling interests in Operating Company~~

~~(4,834)~~

~~Net loss attributable to Operating Company~~

~~(68,107)~~

~~Transaction-related and restructuring charges~~

~~23,249~~

~~Other (gains) losses, excluding realized gains or losses related to digital assets in Corporate and Other~~

~~51,162~~

~~Unrealized carried interest, net of associated compensation expense~~

~~(1,228)~~

~~Equity-based compensation expense~~

~~18,619~~

~~Depreciation and amortization~~

~~149,131~~

~~Straight-line rent (revenue) and expense, net~~

~~(8,895)~~

~~Amortization of acquired above- and below-market lease values, net~~

~~Non-revenue enhancing capital expenditures~~

~~(10,992)~~

~~Debt prepayment penalties and amortization of deferred financing costs, debt premiums and debt discounts~~

~~5,627~~

~~Adjustment to equity method earnings to reflect BRSP cash dividend declared~~

~~10,201~~

~~Adjustments attributable to noncontrolling interests in investment entities~~ ~~(1)~~

~~(136,338)~~

~~DE of discontinued operations~~

~~6,808~~

~~Distributable Earnings (after tax)—attributable to Operating Company~~

~~39,317~~

~~Adjustments attributable to Operating Company~~:

~~Interest expense included in DE~~

~~16,348~~

~~Income tax benefit included in DE~~

~~(7,839)~~

~~Preferred stock dividends~~

~~15,283~~

~~Equity method earnings included in DE~~

~~(16,285)~~

~~Realized carried interest, net of associated compensation expense~~

~~(20,258)~~

~~Non-revenue enhancing capital expenditures deducted from DE~~

~~2,531~~

~~Adjusted EBITDA—attributable to Operating Company~~

~~29,097~~


	Three Months Ended March 31,
(In thousands)	2023		2022
Net income (loss) attributable to common stockholders	$	(212,473)	$	(262,316)
Net income (loss) attributable to noncontrolling interests in Operating Company	(16,662)		(22,862)
Net income (loss) attributable to Operating Company	(229,135)		(285,178)
Transaction-related and restructuring charges	18,391		24,668
Other (gain) loss, net (excluding realized gain or loss related to digital assets and fund investments in Corporate and Other)	141,229		130,224
Unrealized carried interest (allocation) reversal, net of associated compensation (expense) reversal	18,240		13,078
Equity-based compensation expense	16,339		18,720
Depreciation and amortization	141,220		130,597
Straight-line rent (revenue) and expense, net	(1,727)		(2,548)
Amortization of acquired above-market and (below-market) leases, net	26		(248)
Impairment loss	—		23,802

Non-revenue enhancing capital expenditures	(8,564)		(1,372)
Finance lease interest expense, debt prepayment penalties and amortization of deferred financing costs, debt premiums and discounts	15,523		98,465

Income tax effect on certain of the foregoing adjustments	—		(589)
Adjustments attributable to noncontrolling interests in investment entities (1)	(118,563)		(132,237)
DE of discontinued operations (2)	3,656		(22,446)
Distributable Earnings, after tax—attributable to Operating Company	(3,365)		(5,064)
Adjustments attributable to Operating Company:
Interest expense included in DE	12,549		13,280
Income tax (benefit) expense included in DE	1,092		(6,849)
Preferred stock dividends	14,676		15,759
Principal investment (income) loss included in DE	(277)		(58)

Realized carried interest (allocation) reversal, net of associated compensation (expense) reversal	(243)		1,172
Non-revenue enhancing capital expenditures deducted from DE	1,194		2,023
Non pro-rata allocation of (income) loss to noncontrolling interests	—		231
Adjusted EBITDA—attributable to Operating Company	$	25,626	$	20,494

__________

(1) Noncontrolling interests' share of adjustments pertain largely to depreciation and amortization; interest expense on finance leases, debt prepayment penalties and amortization of deferred financing costs, debt premiums and discounts; unrealized carried interest (allocation) reversal, net of associated compensation ~~expense.~~(expense) reversal; and non-revenue enhancing capital expenditures.

~~Digital IM~~(2) Equity method earnings (loss) from BRSP, which qualified as discontinued operations in March 2023, is included in DE of discontinued operations for all periods presented.

Investment Management FRE

~~Digital IM~~Investment Management FRE is calculated as recurring fee income and other income inclusive of cost reimbursements associated with administrative expenses, and net of compensation expense (excluding equity-based compensation, and incentive and carried interest ~~and incentive compensation)~~compensation expense or reversal) and administrative expense (excluding placement fees and straight-line rent expense). ~~Digital IM~~Investment Management FRE is used to assess the extent to

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which direct base compensation and operating expenses are covered by recurring fee revenues in the ~~digital~~ investment management business. We believe that ~~Digital IM~~Investment Management FRE is a useful supplemental performance measure because it may provide additional insight into the profitability of the overall ~~digital~~ investment management business.

~~Digital IM~~Investment Management FRE is measured as Adjusted EBITDA for the ~~Digital IM~~Investment Management segment, adjusted to reflect the Company’s ~~Digital IM~~Investment Management segment as a stabilized business by excluding FRE associated with new investment strategies that have 1) not yet held a first close raising FEEUM; or 2) not yet achieved break-even Adjusted EBITDA only for investment products that may be terminated solely at the Company’s discretion, collectively referred to as “Start-up FRE.” The Company evaluates new investment strategies on a regular basis and excludes Start-Up FRE from ~~Digital IM~~Investment Management FRE until such time a new strategy is determined to form part of the Company’s core investment management business.

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	Three Months Ended March 31,
(In thousands)	2023		2022
Net income (loss)—Investment Management	$	(2,804)	$	(9,143)
Interest expense, net of interest income	2,411		2,500
Investment expense, net of reimbursement	51		138
Depreciation and amortization	6,409		5,276
Equity-based compensation	3,898		3,191
Incentive fee and carried interest (allocation) reversal, net of associated compensation (expense) reversal	17,056		10,767
Straight-line rent expense	77		159

Transaction-related and restructuring charges	9,682		3,942
Principal investment (income) loss	(318)		(17)
Other (gain) loss, net	(3,082)		3,055
Income tax (benefit) expense	217		2,374
Investment Management Adjusted EBITDA	33,597		22,242
Start-up FRE	915		2,362
Investment Management FRE	34,512		24,604
Attributable to redeemable noncontrolling interests (1)	—		(7,615)
Investment Management FRE—attributable to Operating Company	$	34,512	$	16,989

__________

(1)

~~Digital IM FRE reconciliation~~

~~(In thousands)~~Wafra's interest in the investment management business was redeemed in May 2022.

~~Three Months Ended September 30, 2022~~

~~Digital Investment Management~~

~~Net income~~

~~46,065~~

~~Interest expense, net of interest income~~

~~2,906~~

~~Investment expense and reimbursement (income), net~~

~~230~~

~~Depreciation and amortization~~

~~5,369~~

~~Equity-based compensation~~

~~2,654~~

~~Incentive fee and carried interest compensation expense~~

~~80,831~~

~~Straight-line rent expense~~

~~Transaction-related and restructuring charges~~

~~2,317~~

~~Incentive fee and carried interest~~

~~(121,698)~~

~~Equity method earnings~~

~~(1,016)~~

~~Other loss, net~~

~~110~~

~~Income tax expense~~

~~1,263~~

~~Digital IM Adjusted EBITDA~~

~~19,099~~

~~Start-up FRE~~

~~2,399~~

~~Digital IM FRE—attributable to Operating Company~~

~~21,498~~

Liquidity and Capital Resources

~~Overview~~

~~We believe we have sufficient cash on hand, and anticipated cash generated from operating activities and external financing sources, to meet our short term and long term capital requirements.~~

In addition to corporate-level cash at September 30, 2022, our liquidity position is approximately $718 million, including the full $300 million availability under our VFN and the subsequent release of $22 million of distributions received from DBP II out of restricted cash. In the normal course of business, we continue to seek and capitalize on opportunities to syndicate our investments to third party co-investors. We also have access to the capital markets to raise additional funds, namely through issuance of additional series of notes under our securitized financing facility.

We regularly evaluate our liquidity position, debt obligations, and anticipated cash needs to fund our ~~operating~~business and ~~investing activities,~~operations based upon our projected financial ~~and operating performance, and investment opportunities.~~performance. Our evaluation of future liquidity requirements is regularly reviewed and updated for changes in internal projections, economic conditions, competitive landscape and other factors. At this time, while we have sufficient liquidity to meet our operational needs, we continue to evaluate alternatives to manage our capital structure and market opportunities to strengthen our liquidity and provide further operational and strategic flexibility.factors as applicable.

~~Significant Liquidity and Capital Activities in 2022~~

•~~Through October 2022, we received total proceeds of $366 million, including our share of carried interest net of allocation to employees, from partially monetizing our interest in DataBank.~~

•We continue to reduce higher cost corporate indebtedness through early exchange of an additional $60 million of senior notes in March 2022, and repurchase of $52.6 million of preferred stock at a discount to par, which will generate future savings in interest and preferred dividends.

•~~Effective April 2022, the availability under our VFN was increased by $100 million to $300 million.~~

•~~We monetized our Wellness Infrastructure business in February 2022 for $161 million in cash, including cash distributions received from NRF Holdco prior to closing of the sale.~~

Liquidity Needs and Sources of Liquidity

Our primary liquidity needs are to fund:

•acquisitions of target ~~digital assets for our balance sheet and related ongoing commitments;~~investment management businesses;

•our general partner and co-investment commitments to our investment vehicles;

•warehouse investments pending the raising of third party capital for future investment vehicles;

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•principal and interest payments on our debt;

•our operations, including compensation, administrative and overhead costs;

•obligation for lease payments, principally leasehold data centers and corporate offices;

•our liability for corporate and other taxes;

•development, construction and capital expenditures on our operating real estate; and

•~~distributions~~dividends to our preferred and common ~~and preferred stockholders (to the extent distributions have not been suspended).~~stockholders.

Our primary sources of liquidity are:

•cash on hand;

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•fees received from our investment management business, including the Company's share of realized net incentive fees or carried ~~interest, if any;~~interest;

•cash flow generated from our investments, both from operations and return of capital;

•availability under our ~~VFN;~~Variable Funding Notes ("VFN");

•issuance of additional term notes under our corporate securitization;

•third party co-investors in our consolidated investments and/or businesses;

•proceeds from full or partial realization of investments;

•investment-level financing; and

•proceeds from public or private equity and debt offerings.

Overview

At March 31, 2023, our liquidity position was approximately $749 million, composed of corporate unrestricted cash and including the full $300 million availability under our VFN. In April 2023, our liquidity position decreased by $200 million following the repayment of our convertible notes upon maturity, which further deleveraged our balance sheet.

We believe we have sufficient cash on hand, and anticipated cash generated from operating activities and external financing sources, to meet our short term and long term capital requirements.

While we have sufficient liquidity to meet our operational needs, we continue to evaluate alternatives to manage our capital structure and market opportunities to strengthen our liquidity and to provide further operational and strategic flexibility.

Significant Liquidity and Capital Activities in 2023

Sources of Funds

•$202 million in net proceeds from full disposition of our BRSP shares in the first quarter of 2023.

Uses of Funds

•Acquisition of InfraBridge in February 2023 for $313 million, net of cash assumed

•$200 million repayment of our convertible senior notes upon maturity in April 2023

•$90 million contingent earnout payment to Wafra in March 2023.

Liquidity Needs and Capital Activities

Stock Repurchases

In July 2022, our Board of Directors authorized a $200 million stock repurchase program which expires in June 2023, but may be extended, modified, or discontinued at any time by our Board of Directors. In 2023 through April, $4.7 million of preferred stock was repurchased. $87.7 million repurchase capacity remains available under the program.

Dividends

Common Stock—The payment of common stock dividends and determination of the amount thereof is at the discretion of our Board of Directors. The Company reinstated quarterly common stock dividends at $0.01 per share beginning the third quarter of 2022, having previously suspended common stock dividends from the second quarter of 2020 through the second quarter of 2022. A dividend of $0.01 per share of common stock was declared in February 2023 and paid in April 2023.

Preferred Stock—Following additional preferred stock repurchases in April 2023, we have outstanding preferred stock totaling $822 million, bearing a weighted average dividend rate of 7.135% per annum, with aggregate dividend payments of $14.7 million per quarter.

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Contractual Obligations, Commitments and Contingencies

Debt Obligation

As of the date of this filing, our corporate debt is composed of a securitized financing facility and exchangeable senior notes issued by the OP, all of which are recourse to the Company, as described in Note 8 to the consolidated financial statements. $200 million of convertible senior notes were fully repaid upon maturity in April 2023.


($ in thousands)	Outstanding Principal		Interest Rate (Per Annum)		Maturity or Anticipated Repayment Date
Corporate debt:
Securitized financing facility—fixed rate	$	300,000	3.93	%	September 2026
Exchangeable senior notes—fixed rate	78,422		5.75	%	July 2025
	$	378,422

Investment-level secured debt is non-recourse to DBRG and serviced through operating and/or investing cash generated by the respective borrower subsidiaries in the Operating segment and by our consolidated fund. Corporate-level cash is not applied to service investment-level debt.

Investment Commitments

Fund Commitments—As general partner, we typically have minimum capital commitments to our sponsored funds. With respect to our flagship value-add funds, DBP I and DBP II, and InfraBridge GIF I and GIF II funds, we have made additional capital commitments as a general partner affiliate alongside our limited partner investors. Our fund capital investments further align our interests to our investors. As of ~~September 30, 2022,~~March 31, 2023, we have unfunded commitments ~~of $142~~totaling $126 million to ~~its~~our sponsored funds. Generally, the timing for funding of these commitments is not known and the commitments are callable on demand at any time prior to their respective expirations.

Contingent Consideration

Wafra Redemption—In connection with the May 2022 redemption of Wafra's interest in our ~~Digital IM~~investment management business, additional contingent consideration ~~of up to $125 million may be~~is payable ~~in March 2023 and/or March 2024,~~based upon future capital raise thresholds, with up to 50% payable in shares of our class A common stock at our election. Depending upon cumulative capital raised through 2023, up to $35 million of the remaining contingent consideration may become payable in March 2024.

InfraBridge Acquisition ~~of Infrastructure Investment Management Platform~~—~~We have committed to acquire AMP Capital's global infrastructure equity investment management platform for $314 million~~In connection with the InfraBridge acquisition in ~~cash. The acquisition is expected to close in the fourth quarter of 2022. Additional~~February 2023, additional contingent consideration of up to ~~$125~~$129 million may become payable based upon achievement of future fundraising ~~targets.~~

~~Lease Obligations~~

~~At September 30, 2022, we have $137.5 million~~targets for InfraBridge's third and $477 million of finance and operating lease obligations, respectively, that were assumed through acquisitions, principally in connection with leasehold data centers and ground space hosting tower communication sites, and $36 million of operating lease obligations on our corporate offices. These amounts represent fixed lease payments, excluding any contingent or other variable lease payments, and factor in lease renewal or termination options only if it is reasonably certain that such options would be exercised. These lease obligations will be funded through operating cash generated by the investment properties and corporate operating cash, respectively.

~~Dividends~~

~~Common Stock~~fourth flagship funds.~~—The Company reinstated quarterly common stock dividends beginning the third quarter of 2022, with the declaration of a dividend of $0.01 per share of common stock that was paid in October 2022.~~

~~Preferred Stock—~~At September 30, 2022, we have outstanding preferred stock totaling $828 million, bearing a weighted average dividend rate of 7.135% per annum, with aggregate dividend payments of $14.8 million per quarter.

~~Stock Repurchase~~

Through October 2022, we have repurchased $107.6 million in aggregate of preferred and common stock pursuant to a stock repurchase program. Approximately $92 million remains available out of the $200 million repurchase program, which may be extended, modified, or discontinued at any time by our Board of Directors.

~~Cash From Operations~~

Our investments generate cash, either from operations or as a return of our invested capital. We primarily generate revenue from net operating income of our digital infrastructure business, which is partially offset by interest expense

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~~associated with non-recourse borrowings on our digital portfolio. We also receive periodic distributions from our equity investments, including our GP co-investments.~~

Additionally, we generate fee related earnings from our digital investment management business. Following the redemption of Wafra's 31.5% interest in our Digital IM business in May 2022, 100% of fee related earnings are attributable to us. Management fee income is generally a predictable and stable revenue stream, while carried interest and incentive fees are by nature less predictable in amount and timing. Our ability to establish new investment vehicles and raise investor capital depends on general market conditions and availability of attractive investment opportunities as well as availability of debt capital.

~~Carried Interest Distributed~~

Through October 2022, we received our share of realized carried interest of $22.5 million (net of allocation to employees) in connection with the DataBank recapitalization and DBP I's liquidation of Wildstone.

Warehoused Investments

We temporarily warehouse investments on behalf of prospective sponsored investment vehicles that are actively fundraising. The warehoused investments are transferred to the investment vehicle when sufficient third party capital, including debt, is raised. Generally, the timing of future warehousing activities is not known. Nevertheless, investment warehousing is undertaken only if we determine that there will be sufficient liquidity through the anticipated warehousing period.

InAt March 31, 2023, we had $38 million of warehoused equity investments.

Carried Interest Clawback

Depending on the ~~third quarter~~final realized value of all investments at the end of the life of a fund (and, with respect to certain funds, periodically during the life of the fund), if it is determined that cumulative carried interest distributions have exceeded the final carried interest amount earned (or amount earned as of the calculation date), we are obligated to return the excess carried interest received. Therefore, carried interest distributions may be subject to clawback if decline in investment values results in cumulative performance of the fund falling below minimum return hurdles in the interim period. If it is determined that the Company has a clawback obligation, a liability would be established based upon a hypothetical liquidation of the net assets of the fund at reporting date. The actual determination and required payment of any clawback obligation would generally occur after final disposition of the investments of the fund or otherwise as set forth in the governing documents of the fund.

If the related carried interest distributions received by the Company are subject to clawback, the previously distributed carried interest would be similarly subject to clawback from employees. The Company generally withholds a portion of the distribution of carried interest to employees to satisfy their potential clawback obligation.

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At March 31, 2023, the Company has no liability for clawback obligations on distributed carried interest.

Lease Obligations

At March 31, 2023, we had $39.5 million of operating lease obligations on our corporate offices, which are funded through corporate operating cash. The lease obligation amount represents fixed lease payments, excluding any contingent or other variable lease payments, and factor in lease renewal or termination options only if it is reasonably certain that such options would be exercised.

Separately, finance and operating lease obligations on leasehold data centers in the Operating segment are satisfied through operating cash generated by the respective investment properties.

Sources of Liquidity

Debt Funding

As of the date of this filing, we have $378 million of outstanding principal on our corporate debt, as discussed under "—Debt Obligation."

Our securitized financing facility is subject to various covenants, including financial covenants that require the maintenance of minimum thresholds for debt service coverage ratio and maximum loan-to-value ratio, as defined. As of the date of this filing, we are in compliance with all of the financial covenants, and the full $300 million is available to be drawn on our VFN.

Our securitized financing facility allows for the issuance of additional term notes in the future to supplement our liquidity. The decision to enter into a particular financing arrangement is made after consideration of various factors including future cash needs, current sources of liquidity, demand for the Company’s debt or equity, and prevailing interest rates.

Cash From Operations

Fee-Related Earnings—We generate FRE from our Investment Management segment, generally encompassing recurring fee income net of associated compensation and administrative expenses. Following the redemption of Wafra's 31.5% interest in our investment management business in May 2022, we100% of Investment Management FRE is attributable to us. Management fee income is generally a predictable and stable revenue stream. Our ability to generate new management fee streams through establishing new investment vehicles and raising investor capital depends on general market conditions and availability of attractive investment opportunities as well as availability of debt capital.

Incentive Fees—Incentive fees, net of employee allocations, are earned based upon the financial performance of a vehicle above a specified return threshold, which is largely driven by appreciation in value of underlying investments. Incentive fees are recognized as fee income when they are no longer probable of significant reversal. As investment fair values and changes thereof could be affected by various factors, including market and economic conditions, incentive fees are by nature less predictable in amount and timing.

Carried Interest Distributions—Carried interest is distributed generally upon profitable disposition of an investment if at the time of distribution, cumulative returns of the fund exceed minimum return hurdles. Carried interest distributions are recognized in earnings net of clawback obligations, if any. The amount and timing of carried interest distributions received amay vary substantially from period to period depending upon the occurrence and size of investments realized by our sponsored funds.

Investments—Our investments generate cash through income distributions and return of ~~$98 million in total capital from the transfer of warehoused loans to~~ our ~~newly launched digital credit fund and to a third party sponsored CLO, along with repayment of the corresponding debt.~~

At September 30, 2022, our largest warehoused investment is TowerCo that was acquired in June 2022, for which we funded $278 million at acquisition. Other warehoused investments include $55 million of equity investments and one remaining loan of $38 million for which the transfer to our digital credit fund is expected to be completed in the fourth quarter of 2022.invested capital.

Asset Monetization

We periodically monetize our investments through opportunistic asset sales or to recycle capital from non-core assets.

~~DataBank—Through October 2022, we have partially monetized~~ In the first quarter of 2023, our ~~interest in DataBank and received total~~BRSP shares were fully disposed for net proceeds of ~~$366 million, including our share of carried interest net of allocation to employees.~~ $202 million.

We ~~anticipate the completion of another closing of the recapitalization of DataBank prior to the end of 2022, which will result in further monetization of our interest in DataBank.~~

~~Wellness Infrastructure—~~In completing our digital transformation, we monetized our Wellness Infrastructure assets in February 2022 for $161 million in cash, including cash distributions received from NRF Holdco prior to closing of the sale, and $155 million in note receivable.

~~Debt~~

~~Description of our debt obligations is included in Note 8 to the consolidated financial statements. Our indebtedness at September 30, 2022 is summarized as follows:~~

($ in thousands) Outstanding Principal
Weighted Average Interest Rate (1)
(Per Annum)
Weighted Average Years Remaining to Maturity (2)
Corporate-level debt:
Secured fund fee revenue notes $ 300,000 3.93 % 4.0
Convertible and exchangeable senior notes 278,422 5.21 % 1.2
Non-recourse investment level secured debt:
Fixed rate 3,729,979 2.53 %
Variable rate 1,085,733 6.70 %
4,815,712 3.47 % 3.4
Total debt $ 5,394,134

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~~(1)~~ Calculated based upon outstanding debt principal at balance sheet date. For variable rate debt, weighted average interest rate is calculated based upon the applicable index plus spread at balance sheet date.

~~(2)~~ Calculated based upon anticipated repayment dates for notes issued under securitization financing; otherwise based upon initial maturity dates, or extended maturity dates if extension criteria are met for extensionshave other marketable equity securities that are available for future monetization, valued at ~~the Company's option.~~

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~~Scheduled principal payments on our debt obligations~~approximately $17 million at ~~September 30, 2022 were as follows.~~
(In thousands) Remaining 2022 2023 2024 2025 2026 2027 and thereafter Total
Secured fund fee revenue notes $ — $ — $ — $ — $ 300,000 $ — $ 300,000
Convertible and exchangeable senior notes — 200,000 — 78,422 — — 278,422
Investment-level secured debt
Digital Operating 1,558 228,792 879,003 1,146,517 1,649,690 600,000 4,505,560
Other — — 11,300 — — 298,852 310,152
Total $ 1,558 $ 428,792 $ 890,303 $ 1,224,939 $ 1,949,690 $ 898,852 $ 5,394,134
March 31, 2023.

Debt maturities and future debt principal payments are presented based upon anticipated repayment dates for notes issued under securitization financing, otherwise based upon initial maturity dates or extended maturity dates if extension criteria are met at September 30, 2022 for extensions that are at the Company's option.

~~Securitized Financing Facility~~

~~As of the date of this filing, we are in compliance with all of the financial covenants under the securitized financing facility.~~

~~As noted above, our VFN availability was increased $100 million to $300 million in April 2022, with the full amount available to be drawn as of September 30, 2022.~~

~~Non-Recourse Investment-Level Secured Debt~~

~~Investment level financing is non-recourse to us and secured by the respective underlying real estate or loans receivable.~~

~~Significant Developments in 2022~~

•~~Dispositions—~~Investment-level debt of $2.86 billion held by NRF Holdco (previously classified as held for disposition) was assumed by the acquirer upon sale of NRF Holdco in February 2022. In August 2022, $173 million of debt previously financing warehoused loans was repaid following a transfer of the loans into a third party sponsored CLO. These transactions resulted in further deleveraging of our balance sheet.

•~~Acquisition—Additional~~$313 million of debt was undertaken to partially fund the acquisition of TowerCo in June 2022. The debt is expected to be assumed by our new sponsored investment vehicle, along with the TowerCo assets, when sufficient third party capital has been raised.

Public Offerings

We may offer and sell various types of securities ~~under our shelf registration statement. These securities may be issued~~ from time to time at our discretion based onupon our needs and depending upon market conditions and available pricing.

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Consolidated Cash Flows

The following table summarizes the activities from our consolidated statements of cash ~~flows.~~flows, including discontinued operations.


		Nine Months Ended September 30,				Three Months Ended March 31,
(In thousands)	(In thousands)	2022		2021			(In thousands)	2023		2022
Cash, cash equivalents and restricted cash—beginning of period							Cash, cash equivalents and restricted cash—beginning of period	$	1,036,739	$	1,766,245
Net cash provided by (used in):	Net cash provided by (used in):						Net cash provided by (used in):
Operating activities	Operating activities	$	194,773	$	181,412		Operating activities	20,185		1,257
Investing activities	Investing activities	(1,929,361)		85,698			Investing activities	(258,870)		(1,102,149)
Financing activities	Financing activities	741,772		198,221			Financing activities	26,786		559,318
Effect of exchange rates on cash, cash equivalents and restricted cash							Effect of exchange rates on cash, cash equivalents and restricted cash	(626)		(651)
Cash, cash equivalents and restricted cash—end of period							Cash, cash equivalents and restricted cash—end of period	$	824,214	$	1,224,020

Operating Activities

Cash inflows from operating activities are generated primarily through fee income, including incentive fees, and distributions of our share of net carried interest from our investment management business, property operating income from our real estate investments, interest received from ~~our warehoused~~ loans receivable during the warehousing period, and distributions of earnings received from equity investments. This is partially offset by payment of operating expenses, including property management and operations, investment transaction-related costs, as well as compensation and general administrative costs.

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Our operating activities generated net cash inflows of ~~$194.8~~$20.2 million in ~~2022~~2023 and ~~$181.4~~$1.3 million in ~~2021.~~2022.

Investing Activities

Investing activities include primarily cash outlays for business combination, acquisition of real estate, origination or acquisition of warehoused loans and disbursement on subsequent drawdowns, and new equity investments and subsequent contributions. These are partially offset by repayments, sales and transfers of warehoused loans receivable, distributions of capital received from equity investments, and proceeds from sale of real estate and equity investments.

Our investing activities generated net cash outflows of ~~$1.9~~$258.9 million in 2023, attributed primarily to a business combination, partially offset by the sale of equity investments, and $1.1 billion in 2022, ~~and~~driven by real estate acquisitions in the Operating segment.

•Business combination—In 2023, we paid $313.2 million (net of cash assumed) for the acquisition of InfraBridge.

•Equity investments—Our equity investments generated net cash inflows in both years.

In 2023, our equity investments recorded net cash inflows of ~~$85.7~~$219.5 million, attributed primarily to $201.6 million from the sale of our BRSP shares. Other activities pertain to the acquisitions and dispositions of marketable equity securities by our consolidated liquid funds, and return of capital from a non-digital equity investment following a final sale of its underlying assets.

2022 saw net cash inflows of $8.7 million, largely representing the trading activities in ~~2021.~~marketable equity securities by our consolidated liquid funds.

•Real estate investments—Real estate investing activities generated net cash outflows in both years.

~~Outflows were significantly higher~~Net cash outflows in 2023 was $162.9 million, attributed to capital expenditures in our data center portfolio, including payments for build-out of expansion capacity and lease-up within the Vantage SDC portfolio.

2022 ~~totaling $1.8 billion,~~saw net cash outflows of $739.4 million, attributed ~~primarily~~ to the acquisition of ~~TowerCo, and to a lesser extent,~~ DataBank's acquisition of five data centers, ~~capital expenditures in our~~ data center ~~portfolio~~capital expenditures, and payments for build-out of expansion capacity and lease-up within the Vantage SDC portfolio. ~~Also contributing to the cash outflows was cash assumed by the buyer in the sale of real estate investment holding entities in our Wellness Infrastructure business.~~ All of these outflows were partially offset by proceeds received from our Wellness Infrastructure sale.

2021 saw net cash outflows of $244.7 million as add-on acquisitions in the Vantage SDC portfolio and capital expenditures were partially offset by proceeds from sales of various properties in Europe, in our Wellness Infrastructure segment and our hotel business.

•Debt investments—Our debt investments generated net cash ~~inflows in both years.~~

~~Net cash inflows~~outflows in 2022, ~~was relatively immaterial at $4.6~~while there were no cash activities in 2023.

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In 2022, net cash outflows of $164.1 million ~~as we have largely transferred our acquired or originated~~were driven by origination and acquisition of loans that were warehoused for future investment vehicles, partially offset by a loan syndication. These warehoused loans were subsequently transferred to aour sponsored credit fund and to a third party sponsored ~~CLO.~~

~~In 2021, net cash inflows of $390.8 million can be attributed to~~collateralized loan repayments, in particular a $305.0 million repayment received on two loans in our Irish loan portfolio, partially offset by acquisition or origination of warehoused loans, and acquisition of additional N-Star CDOs at a discount by our Wellness Infrastructure segment.

•~~Equity investments—Our equity investments generated net cash inflows in 2022 and net cash outflows in 2021.~~

In 2022, our equity investments recorded net cash inflows of $97.4 million, largely representing the trading activities in marketable equity securities by our consolidated liquid funds, and a return of capital from the first sale of investment by DBP I, partially offset by additional contributions to our digital funds.

2021 saw net cash outflows of $56.2 million in connection with our equity investments. This can be attributed largely to funding of our digital fund commitments and draws on acquisition, development and constructionobligation ("~~ADC"~~CLO") loans that were accounted for as equity method investments, partially offset by net proceeds of approximately $81.8 million from sales of 9.5 million BRSP shares, as well as trading activities in marketable equity securities by our consolidated funds in the ~~digital liquid strategy.~~second half of 2022.

Financing Activities

We ~~finance our investing activities largely through investment-level secured debt and capital from co-investors. We also~~may draw upon our securitized financing facility to finance our ~~investing and~~ operating activities, as well as have the ability to raise capital in the public markets through issuances of preferred stock, common stock and private placement notes. Accordingly, we incur cash outlays primarily for payments on our ~~investment-level and~~ corporate debt, and dividends to our preferred stockholders and common stockholders (common dividends were reinstated beginning the third quarter of 2022)~~, as well as~~. Separately, subsidiaries in the Operating segment finance their investing activities largely through investment-level secured debt and incur cash outlays for debt servicing and distributions to their third party investors who represent noncontrolling ~~interests in our various investments.~~interests.

Financing activities generated net cash inflows ~~of $741.8 million~~ in ~~2022 and $198.2 million in 2021.~~both years.

•In ~~2022,~~2023, the ~~large~~ net cash ~~inflow~~inflows of ~~$741.8~~$26.8 million ~~was driven~~represent largely additional investment-level debt raised by ~~financing for~~subsidiaries in the ~~acquisitions of TowerCo and the DataBank data center acquisition~~Operating segment through term loans and capital contributions from noncontrolling interests totaling $1.1 billion. Additionally, cash inflows included our share of proceeds recorded in equity of $302.8 million from sale of a portion of our interest in our DataBank subsidiary in connection with the DataBank recapitalization in August 2022 that was treated as an equity transaction (Note 10). These inflows weretheir refinancing activities, partially offset by ~~$388.5~~a $90.0 million ~~of cash paid~~contingent consideration payment to redeem Wafra's interest in our digital investment management business in May 2022. Financing cash outflows also included repayment of our warehouse credit facility of $172.5 million with proceeds from a transfer ofWafra.

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the warehoused loans to a third party CLO, and paydowns on amortizing debt in our Digital Operating business. Other notable cash outflows included preferred and common stock repurchases totaling $60.8 million and distributions to various noncontrolling interests. Dividend payments were $47.6 million in 2022, which is lower than 2021 following preferred stock redemptions during 2021 and repurchases during 2022.

•The financing net cash inflows of ~~$198.2~~$559.3 million in ~~2021~~2022 were driven by ~~$285.9 million~~financing for the acquisition of ~~borrowings exceeding debt repayments. Investment-level financing activities included primarily borrowings by Vantage SDC to finance an add-on~~the DataBank data center acquisition through a term loan and expansion capacity, issuance of securitized notes by DataBank that was largely used to refinance its existing debt, and repayment of debt financing real estate in Europe that were sold during the year. We replaced our corporate credit facility with a securitized financing facility, from which we received $285.1 million of net proceeds in July through issuance of Class A-2 Notes, some of which were applied to redeem preferred stock in August for $86.8 million. Additionally, there was $73.3 million of netcapital contributions from noncontrolling interests. ~~Such contributions~~Other investment-level financing included amounts drawn on warehouse facilities to finance acquisition of loans that were ~~composed largely~~intended to be securitized. In the third quarter of 2022, these loans were transferred into a ~~syndication of our interest to a new~~ third party investor in our zColo investment vehicle, assumption of a portion of our commitments to DCP I by Wafra, and additional consideration paid by Wafra for its investment in our digital investment management business. Dividend payments were $56.1 million in 2021.

~~Risk Management~~

Risk management is a significant component of our strategy to deliver consistent risk-adjusted returns to our stockholders. The audit committee of our board of directors, in consultation with our chief risk officer, internal auditor and management, maintains oversight of risk management matters, and periodically reviews our policies with respect to risk assessment and risk management, including key risks to which we are subject, including credit risk, liquidity risk, financing risk, foreign currency risk and market risk,CLO and the ~~steps that management has taken to monitor~~corresponding warehouse facilities were repaid.

Guarantees and ~~control such risks.~~Off-Balance Sheet Arrangements

~~Underwriting and Investment Process~~

~~In connection with executing any new investment in digital assets for our balance~~We have no guarantees or off-balance sheet ~~or a managed investment vehicle, our underwriting team undertakes a comprehensive due diligence process to ensure~~arrangements that we ~~understand all of the~~believe are reasonable likely to have a material risks involved with making such investment, in addition to related accounting, legal, financial and business issues. If the risks can be sufficiently mitigated in relation to the potential return, we will pursue the investment on behalf of our balance sheet and/or investment vehicles, subject to approval from the applicable investment committee, composed of senior executives of the Company.

Specifically, as part of our underwriting process, we evaluate and review the following data, including, but not limited to: financial data including historical and budgeted financial statements, tenant or customer quality, lease terms and structure, renewal probability, capital expenditure plans, sales pipeline, technical/energy requirements and supply, local and macroeconomic market conditions, leverage and comparable transactions, environmental, social and governance considerations, as applicable. For debt investments, we also analyze metrics such as loan-to-collateral value ratios, debt service coverage ratios, debt yields, sponsor credit ratings and performance history.

In addition to evaluating the merits of any particular proposed investment, we evaluate the diversification of our or a particular managed investment vehicle’s portfolio of assets, as the case may be. Prior to making a final investment decision, we determine whether a target asset will cause the portfolio of assets to be too heavily concentrated with, or cause too much risk exposure to, any one digital real estate sector, geographic region, source of cash flow such as tenants or borrowers, or other geopolitical issues. If we determine that a proposed investment presents excessive concentration risk, we may decide not to pursue an otherwise attractive investment.

~~Allocation Procedures~~

We currently manage, and may in the future manage, private funds, REITs and other entities that have investment and/or rate of return objectives similar to our own or to other investment vehicles that we manage. In order to address the risk of potential conflicts of interest among us and our managed investment vehicles, we have implemented an investment allocation policy consistent with our duty as a registered investment adviser to treat our managed investment vehicles fairly and equitably over time. Pursuant to this policy, and subject to certain priority rights in our DBP funds, investment allocation decisions are based on a suitability assessment involving a review of numerous factors, including the particular source of capital’s investment objectives, available cash, diversification/concentration, leverage policy, the size of the investment, tax, anticipated pipeline of suitable investments and fund life.

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~~Portfolio Management~~

The comprehensive portfolio management process generally includes day-to-day oversight by the Company's portfolio management team, regular management meetings and quarterly asset review process. These processes are designed to enable management to evaluate and proactively identify investment-specific issues and trends on a portfolio-wide basis for both assetseffect on our balance sheet and assets of the companies within our investment management business. Nevertheless, we cannot be certain that such review will identify all issues within our portfolio due to, among other things, adverse economic conditions or events adversely affecting specific assets; therefore, potential future losses may also stem from investments that are not identified during these reviews.

We use many methods to actively manage our risk to preserve our income and capital, including, but not limited to, maintaining dialogue with tenants, operators, partners and/or borrowers and performing regular inspections of our collateral and owned properties. With respect to our wellness infrastructure properties, we consider the impact of regulatory changes on operator performance and property values. During a quarterly review, or more frequently as necessary, investments are monitored and identified for possible asset impairment or loan loss reserves, as applicable, based upon several factors, including missed or late contractual payments, significant declines in property operating performance and other data which may indicate a potential issue in our ability to recover our invested capital from an investment. In addition, we may utilize services of certain strategic partnerships and joint ventures with third parties with relevant expertise to assist our portfolio management.

In order to maintain our exemption from registration under the 1940 Act, and maximize returns and manage portfolio risk, we may dispose of an asset earlier than anticipated or hold an asset longer than anticipated if we determine it to be appropriate depending upon prevailing market conditions or factors regarding a particular asset. We can provide no assurances, however, that we will be successful in identifying or managing all of the risks associated with acquiring, holding or disposing of a particular asset or that we will not realize losses on certain assets.

~~Interest Rate and Foreign Currency Hedging~~

Subject to maintaining our exemption from registration under the 1940 Act, we may mitigate the risk of interest rate volatility through the use of hedging instruments, such as interest rate swap agreements and interest rate cap agreements. The goal of our interest rate management strategy is to minimize or eliminate the effects of interest rate changes on the value of our assets, to improve risk-adjusted returns and, where possible, to lock in, on a long-term basis, a favorable spread between the yield on our assets and the cost of financing such assets. In addition, because we are exposed to foreign currency exchange rate fluctuations, we employ foreign currency risk management strategies, including the use of, among others, currency hedges, and matched currency financing. We can provide no assurances, however, that our efforts to manage interest rate and foreign currency exchange rate volatility will successfully mitigate the risks of such volatility on our portfolio.financial condition.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with GAAP, which requires the use of estimates and

assumptions that involve the exercise of judgment and that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our critical accounting policies and estimates are integral to understanding and evaluating our reported financial results as they require subjective or complex management judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain and unpredictable.

There have been no changes to our critical accounting policies or those of our unconsolidated joint ventures since the filing of our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

With respect to all critical estimates, we have established policies and control procedures which seek to ensure that estimates and assumptions are appropriately governed and applied consistently from period to period. We believe that all of the decisions and assessments applied were reasonable at the time made, based upon information available to us at that time. Due to the inherently judgmental nature of the various projections and assumptions used, and unpredictability of economic and market conditions, actual results may differ from estimates, and changes in estimates and assumptions could have a material effect on our financial statements in the future.

Recent Accounting Updates

The effects of accounting standards adopted in ~~2022~~2023 and the potential effects of accounting standards to be adopted in the future are described in Note 2 to our consolidated financial statements in Item 1 of this Quarterly Report.

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Item 3. Quantitative and Qualitative Disclosures About Market ~~Risk.~~Risk

Market risk represents the risk of financial loss from adverse movement in market prices. The primary sources of market risk are interest rates, foreign currency ~~exchange~~ rates, ~~commodity~~equity prices and ~~equity~~commodity prices.

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Our business is exposed primarily to ~~interest rate risk on variable rate interest bearing instruments, foreign exchange risk on non U.S. digital operating business and foreign denominated investments,~~ the effect of market risk on our fee income and net carried interest allocation, foreign currency risk on non-U.S. investment management business and foreign denominated warehoused investments (if any), interest rate risk on our VFN and other variable rate debt financing warehoused investments (if any), and, equity price risk on marketable equity securities ~~and commodity price risk in connection with our digital operating business.~~of consolidated funds.

~~The following discussion excludes~~Separately, the ~~effect of market risk on assets and corresponding liabilities that were held for disposition at September 30, 2022.~~

~~Interest Rate Risk~~

~~Instruments bearing variable interest rates include our debt obligations and loans receivable warehoused on the balance sheet for future sponsored investment vehicles, all of which are subject~~Operating segment is exposed to interest rate ~~fluctuations that will affect future cash flows, specifically interest expense and interest income, respectively.~~

~~Variable Rate Debt~~—Our corporate debt exposure to variable interest rates is limited to our VFN revolver, which was fully repaid as of September 30, 2022. In terms of investment level financing which totals $4.8 billion, this consists primarily of fixed rate securitized notes issued by our digital operating subsidiaries, Vantage SDC and DataBank, and fixed rate term debt financing TowerCo. Of this amount, $1.09 billion or 23% is composed ofrisk on variable rate debt, at September 30, 2022. Our variable rate debt is indexed largely to either 1-month or 3-month LIBOR, or 6-month Euribor. At September 30, 2022, our exposure to interest rate on the TowerCo variable rate debt is economically hedged with interest rate swaps. As our digital operating subsidiaries are substantially owned by third party investors, the resulting increase in interest expense from higher interest rates will be attributed predominantly to noncontrolling interests, with a minimal share of that effect attributed to DBRG. Based upon the outstanding principal on our variable rate debt at September 30, 2022, a hypothetical 100 basis point increase in interest rates would increase annualized interest expense, net of the effect of interest rate hedges, by $8.8 million on a consolidated basis or $1.2 million after attribution to noncontrolling interests.

~~Variable Rate Loans Receivable~~—We hold one warehoused variable rate loan receivable of $38 million at September 30, 2022, for which the transfer to our newly launched digital credit fund is expected to be completed in the fourth quarter of 2022. The risk of a decrease in interest rates that would reduce our interest income from the loan is low given the current increasing interest rate environment and the temporary nature of our holding.

~~Foreign Currency Risk~~

As of September 30, 2022, we have limited direct foreign currency exposure from our foreign operations in the digital operating business and foreign currency denominated investments warehoused on the balance sheet for future sponsored vehicles. Changes in foreign currency rates can adversely affect earnings and the value of our foreign currency denominated investments, including investments in our foreign subsidiaries.

We have exposure to foreign currency risk from the operations of our foreign subsidiaries to the extent these subsidiaries do not transact in U.S. dollars. This applies to our foreign subsidiaries that operate six colocation data centers in the U.K. and France, and TowerCo assets in Belgium. For the substantial majority of our subsidiaries in Canada that operate our hyperscale data centers, the U.S dollar is used as the transactional currency, in which case, there is no foreign currency exposure. The remaining foreign subsidiaries in our colocation data center business that do not transact in U.S. dollars make up only a small percentage of our overall digital operating business, which in turn is substantially owned by third party investors. As it relates to our EUR denominated equity investment in TowerCo, we have entered into foreign exchange contracts as a net investment hedge. Accordingly, our exposure to foreign currency risk from the operations of our foreign subsidiaries is limited as of September 30, 2022.

~~Our foreign currency denominated investments, which are temporarily warehoused on the balance sheet, are held by our U.S. subsidiaries. We generally mitigate~~ foreign currency risk on ~~our foreign currency denominated investments by utilizing currency instruments as economic hedges, such as foreign currency put options, forward contracts~~its non-U.S. business and costless collars. The maturity dates of these instruments approximate the projected dates of related cash flows from the respective investments. At September 30, 2022 , our foreign currency exposure consisted of a GBP loan receivable (£35 million) and an AUD equity investment (A$35 million). As of September 30, 2022, we have entered into foreign exchange forward contracts to mitigate our GBP exposure.

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In connection with our commitment to acquire AMP Capital, our consideration payable in U.S. dollar equivalent is largely fixed based upon the foreign exchange rate as of the date of the purchase agreement. The consideration is payable in U.S. dollars at the spot foreign exchange rate on the closing date of the acquisition, provided that such rate is not A$0.02 higher or lower than the rate on the date of the purchase agreement.commodity price risk.

Market Risk Effect on Fee Income and Net Carried Interest Allocation

Management Fees—To the extent management fees are based upon fair value of the underlying investments of our managed investment vehicles, an increase or decrease in fair value will directly affect our management fee income. Generally, our management fee income is calculated based upon investors' committed capital during the commitment period of the vehicle, and thereafter, contributed or invested capital during the investing and liquidating periods. To a lesser extent, management fees are based upon the net asset value of vehicles in our ~~digital liquid securities strategy,~~Liquid Strategies, measured at fair value. At ~~September 30, 2022,~~March 31, 2023, our ~~digital liquid securities strategy~~Liquid Strategies make up ~~4.9%~~4% of our ~~$21~~$28 billion FEEUM. Accordingly, most of our management fee income will not be directly affected by changes in investment fair values.

Incentive Fees and Carried Interest—Incentive fees and carried interest, net of management allocations, are earned based upon the financial performance of a vehicle above a specified return threshold, which is largely driven by appreciation in value of underlying investments. Carried interest is subject to reversal until such time it is realized, which generally occurs upon disposition of all underlying investments of an investment vehicle, or in part with each disposition. The extent of the effect of fair value changes to the amount of incentive fees and carried interest earned will depend upon the cumulative performance of an investment vehicle relative to its return threshold, the performance measurement period used to calculate incentives and carried interest, and the stage of the vehicle's lifecycle. Investment fair values in turn could be affected by various factors, including but not limited to, the financial performance of the portfolio company, economic conditions, foreign exchange rates, comparable transactions in the market, and equity prices for publicly traded securities. Therefore, fair value changes are unpredictable and the effect on incentive fee and carried interest varies across different investment vehicles.

Foreign Currency Risk

As of March 31, 2023, we have limited direct foreign currency exposure from our foreign operations and foreign currency denominated investments warehoused on the balance sheet for future sponsored vehicles. Changes in foreign currency rates can adversely affect earnings and the value of our foreign currency denominated investments, including investments in our foreign subsidiaries.

We have exposure to foreign currency risk from the operations of our foreign subsidiaries to the extent these subsidiaries do not transact in U.S. dollars. Generally, this is limited to our recently acquired InfraBridge advisor subsidiary which receives fee income predominantly in U.S. dollars but incur operating costs in Pound Sterling ("GBP").

Our foreign currency denominated investments, which are temporarily warehoused on the balance sheet, are held by our U.S. subsidiaries. At March 31, 2023 , our foreign currency exposure is limited to only one AUD equity investment (A$35 million).

Operating segment—For the substantial majority of subsidiaries in Canada that operate hyperscale data centers, the U.S. dollar is largely used as the transactional currency, in which case, there is generally very limited foreign currency exposure. Foreign subsidiaries that operate six colocation data centers in the U.K. and France do not transact in U.S. dollars but make up only a small percentage of the overall Operating segment, which in turn is substantially owned by third party investors. Accordingly, our exposure to foreign currency risk from the operations of foreign subsidiaries in the Operating segment is limited as of March 31, 2023.

Interest Rate Risk

Instruments bearing variable interest rates include debt obligations, which are subject to interest rate fluctuations that will affect future cash flows, specifically interest expense.

Corporate debt—Our corporate debt exposure to variable interest rates is limited to our VFN revolver, which had no outstanding amounts as of March 31, 2023.

Investment-level debt—Investment level financing, which totals $4.9 billion, consists primarily of fixed rate securitized notes issued by subsidiaries in the Operating segment, Vantage SDC and DataBank. Of this amount, $0.4 billion or 7% is composed of variable rate debt at March 31, 2023. Investment level variable rate debt is indexed to either 1-month LIBOR or Term SOFR. As subsidiaries in the Operating segment are substantially owned by third party investors, the resulting

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increase in interest expense from higher interest rates will be attributed predominantly to noncontrolling interests, with a minimal share of that effect attributed to DBRG. Based upon the outstanding principal on investment level variable rate debt at March 31, 2023, a hypothetical 100 basis point increase in interest rates would increase annualized interest expense by $3.6 million on a consolidated basis or $0.4 million after attribution to noncontrolling interests.

Equity Price Risk

At ~~September 30, 2022,~~March 31, 2023, we had ~~$150.0~~$166 million of long positions and ~~$35.1~~$46 million of short positions in marketable equity securities, held predominantly by our consolidated sponsored liquid funds. Realized and unrealized gains and losses from marketable equity securities are recorded in other gain (loss) on the consolidated statement of operations. Market prices for publicly traded equity securities may fluctuate due to a myriad of factors, including but not limited to, financial performance of the investee, industry conditions, economic and political environment, trade volume, and general sentiments in the equity markets. Therefore the level of volatility and price fluctuations are unpredictable. Our funds constantly rebalance their investment portfolio to take advantage of market opportunities and to manage risk. Additionally, one of our funds employs a long/short equity strategy, taking long positions that serve as collateral for short positions, which in combination, reduces its market risk exposure. The effect of equity price decreases to earnings attributable to our shareholders is further reduced as our consolidated liquid funds are substantially owned by third party capital, which represent noncontrolling interests.

Commodity Price Risk

Operating segment—Certain operating costs in ~~our~~the data center portfolio in the Operating segment are subject to price fluctuations caused by volatility of underlying commodity prices, primarily electricity used in our data center operations. ~~We closely monitor the~~The cost of electricity is closely monitored at all ~~of our~~ locations and ~~may enter into~~ power utility contracts may be entered into to purchase electricity at fixed prices in certain locations in the U.S., with such contracts generally representing less than ~~our~~ forecasted usage. ~~Our~~The building of new data centers and expansion of existing data centers will also subject usthe Operating segment to commodity price risk with respect to building materials such as steel and copper. Additionally, the lead time to procure data center equipment is substantial and procurement delays could increase construction cost and delay revenue generation.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) that are designed to ensure that information required to be disclosed in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures. Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at ~~September 30, 2022.~~March 31, 2023.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended ~~September 30, 2022~~March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

8167

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The Company may be involved in litigation and claims in the ordinary course of business. As of ~~September 30, 2022,~~March 31, 2023, the Company was not involved in any material legal proceedings.

Item 1A. Risk Factors.

~~Other than as noted below, there~~There have been no material changes from the risk factors previously disclosed in response to "Part I—Item 1A. Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, ~~2021 and "Part II—Item 1A. Risk Factors" of our Quarterly Report on Form 10-Q for the quarter ended March 31,~~ 2022, which ~~are~~is available on the SEC’s website at www.sec.gov.

Extensive regulation in the United States and abroad affects our activities, increases the cost of doing business and creates the potential for significant liabilities that could adversely affect our business and results of operations.

Our business is subject to extensive regulation, including periodic examinations by governmental agencies and self-regulatory organizations in the jurisdictions in which we operate around the world. Many of these regulators, including U.S. and foreign government agencies and self-regulatory organizations and state securities commissions in the United States, are empowered to grant, and in specific circumstances to cancel, permissions to carry on particular activities, and to conduct investigations and administrative proceedings that can result in fines, suspensions of personnel or other sanctions, including censure, the issuance of cease-and-desist orders or the suspension or expulsion of applicable licenses and memberships.

In recent years, the SEC and its staff have focused on issues relevant to global investment firms and have formed specialized units devoted to examining such firms and, in certain cases, bringing enforcement actions against the firms, their principals and their employees. Such actions and settlements involving U.S.-based private fund advisers generally have involved a number of issues, including the undisclosed allocation of the fees, costs and expenses related to unconsummated co-investment transactions (i.e., the allocation of broken deal expenses), undisclosed legal fee arrangements affording the adviser greater discounts than those afforded to funds advised by such adviser and the undisclosed acceleration of certain special fees. Recent SEC focus areas have also included, among other things, the misuse of material non-public information, material impacts on portfolio companies owned by private funds (e.g., real estate related investments) due to recent economic conditions, and compliance with practices described in fund disclosures regarding the use of limited partner advisory committees, including whether advisory committee approvals were properly obtained in accordance with fund disclosures.

The SEC’s oversight, inspections and examinations of global investment firms, including our firm, have continued to focus on transparency, investor disclosure practices, fees and expenses, valuation and conflicts of interest and whether firms have adequate policies and procedures to ensure compliance with federal securities laws in connection with these and other areas of focus. For example, our managed companies routinely engage our affiliated entities to provide asset level services, in accordance with the relevant fund legal documents. While we believe we have procedures in place reasonably designed to monitor and make appropriate and timely disclosures regarding the engagement and compensation of our affiliated services providers and other matters of current regulatory focus, the SEC’s inspections of our firm have raised concerns about these and other areas of our operations. In September 2022, Colony Capital Investment Advisors, LLC (CCIA), the investment adviser to certain legacy funds and vehicles holding legacy assets, received an information request from the SEC’s Division of Enforcement related principally to certain alleged deficiencies identified in a recent examination of CCIA relating to CCIA’s compliance with its fiduciary duty, duty of care and disclosure of affiliate transactions involving certain legacy businesses and operations. We expect to cooperate with the SEC staff in this investigation. Although we believe that CCIA acted in accordance with applicable legal requirements and always conducted its business in the best interests of its clients, we have taken a number of steps to improve our investor disclosures and compliance processes in response to the CCIA examination. In addition, almost all of the relevant CCIA-managed investment vehicles and Colony legal entities have either been sold or wound down, and CCIA has not sponsored a new client investment vehicle in over two years and has no plans to do so. Nevertheless, at this time, we cannot predict the outcome of the SEC investigation, which could have a material adverse effect on our business, results of operations or financial condition.

In addition, in recent years the SEC and several states have initiated investigations alleging that certain private equity firms and hedge funds, or agents acting on their behalf, have paid money to current or former government officials or their associates in exchange for improperly soliciting contracts with the state pension funds (i.e., “ pay to play”

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practices). Such “pay to play” practices are subject to extensive federal and state regulation, and any failure on our part to comply with rules surrounding “pay to play” practices could expose us to significant penalties and reputational damage.

Further, we expect a greater level of SEC enforcement activity under the Biden administration, and it is possible this enforcement activity will target practices that we believe are compliant and that were not targeted by prior administrations. We regularly are subject to requests for information and informal or formal investigations by the SEC and other regulatory authorities, with which we routinely cooperate and, in the current environment, even historical practices that have been previously examined are being revisited. Even if an investigation or proceeding does not result in a sanction or the sanction imposed against us or our personnel by a regulator were small in monetary amount, the costs incurred in responding to such matters could be material and the adverse publicity relating to the investigation, proceeding or imposition of these sanctions could harm our reputation and cause us to lose existing investors or fail to gain new investors or discourage others from doing business with us.

In addition, we regularly rely on exemptions from various requirements of the Securities Act, the Exchange Act, the 1940 Act, the Commodity Exchange Act and ERISA in conducting our investment activities in the United States. Similarly, in conducting our investment activities outside the United States, we rely on available exemptions from the regulatory regimes of various foreign jurisdictions. These exemptions from regulation within the United States and abroad are sometimes highly complex and may, in certain circumstances, depend on compliance by third parties whom we do not control. If for any reason these exemptions were to become unavailable to us, we could become subject to regulatory action or third party claims and our business could be materially and adversely affected. Moreover, the requirements imposed by our regulators are designed primarily to ensure the integrity of the financial markets and to protect investors in our funds and are not designed to protect our stockholders. Consequently, these regulations often serve to limit our activities and impose burdensome compliance requirements.

It is difficult to determine the full extent of the impact on us of any new laws, regulations or initiatives that may be proposed or whether any of the proposals will become law. Any changes in the regulatory framework applicable to our business, including the changes as a result of, among others, the Dodd-Frank Wall Street Reform and Consumer Protection Act, may impose additional costs on us, require the attention of our senior management or result in limitations on the manner in which we conduct our business. It is expected that the Biden administration will increase the number of financial regulations and regulators. Furthermore, we may become subject to additional regulatory and compliance burdens as we expand our product offerings and investment platform, including raising additional funds. Moreover, as calls for additional regulation have increased as a result of heightened regulatory focus in the financial industry, there may be a related increase in regulatory investigations of the trading and other investment activities of alternative asset management funds, including our managed companies. Compliance with any new laws or regulations could make compliance more difficult and expensive, affect the manner in which we conduct our business and adversely affect our profitability.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Purchases of Equity Securities by Issuer and Affiliated Purchasers

Pursuant to a stock repurchase program authorized by our board of directors and announced in July 2022, the Company may repurchase up to $200 million of its outstanding shares of class A common stock and/or preferred stock through various methods, including open market repurchases, negotiated block transactions, accelerated share repurchases, open market solicitations and Rule 10b5-1 plans. The stock repurchase program expires on June 30, 2023 and may be extended, modified, or discontinued at any time.

The following table presents information related to purchases of the Company's Series H, I and J preferred stock ~~and class A common stock~~ during the quarter ended ~~September 30, 2022:~~March 31, 2023:

Period Total Number of Shares Purchased Weighted Average Price Paid Per Share Total Number of Shares
Purchased as Part of
Publicly Announced
Program Maximum Approximate
Dollar Value that May
Yet Be Purchased
Under the Program
($ in thousands)
Preferred Stock Common Stock Preferred Stock Common Stock Preferred Stock Common Stock
July 1 through July 31, 2022 575,913 — $ 22.59 $ — 575,913 — $ 186,991
August 1 through August 31, 2022 1,652,892 — 23.98 — 1,652,892 — 147,352
September 1 through September 30, 2022 — 944,570 — 14.39 — 944,570 133,759
Total 2,228,805 944,570 $ 23.62 $ 14.39 2,228,805 944,570 $ 133,759


Period	Total Number of Shares Purchased	Weighted Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Approximate Dollar Value that May Yet Be Purchased Under the Program ($ in thousands)

January 1 through January 31, 2023	—	$	—	—	$	92,430
February 1 through February 28, 2023	—	—		—	92,430
March 1 through March 31, 2023	2,738	18.89		2,738	92,378
Total (1)	2,738	$	18.89	2,738	$	92,378

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(1) Represent stock purchases pursuant to the repurchase program described above.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.

Exhibit Number

Description

3.1*3.1

Restated Charter of DigitalBridge Group, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed on February 27, 2023 )

3.2

Amended and Restated Bylaws of DigitalBridge Group, Inc. (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed on June 23, 2021)

~~10.1†~~

~~Amended and Restated DigitalBridge Group, Inc. 2014 Omnibus Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on August 22, 2022)~~

~~10.2†~~

Second Amended and Restated Employment Agreement, dated as of September 27, 2022, between DigitalBridge Group, Inc. and Jacky Wu (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on October 3, 2022)

31.1*

Certification of Marc C. Ganzi, Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*

Certification of Jacky Wu, Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Certification of Marc C. Ganzi, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*

Certification of Jacky Wu, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS**

XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase

104**

Cover Page Interactive Data File

__________

~~† Denotes a management contract or compensatory plan contract or arrangement.~~

* Filed herewith.

** The document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: ~~November 7, 2022~~May 5, 2023


DigitalBridge Group, Inc.

By:						/s/ Marc C. Ganzi
						Marc C. Ganzi
						Chief Executive Officer (Principal Executive Officer)

By:						/s/ Jacky Wu
						Jacky Wu
						Chief Financial Officer (Principal Financial Officer)

By:						/s/ Sonia Kim
						Sonia Kim
						Chief Accounting Officer (Principal Accounting Officer)


	Principal of 5.75% Exchangeable Notes Exchanged		Consideration for Exchange
(In thousands)			Class A Common Stock Issued	Cash Paid
March 2022	$	60,317	6,389	$	13,887
October and November 2021	161,261		18,341	—
	$	221,578	24,730	$	13,887


			Fair Value Option
(In thousands)	AFS Debt Securities Held for Disposition		Loans Held for Disposition		Equity Method Investments Held for Disposition









Fair value at December 31, 2020	$	28,576	$	1,258,539	$	153,259
Purchases, drawdowns, contributions and accretion	11,120		19,070		8
Paydowns, distributions and sales	(2,063)		(436,424)		(8,954)
Change in accrued interest and capitalization of paid-in-kind interest	—		10,506		—
Allowance for credit losses	(194)		—		—
Realized and unrealized losses in earnings, net	—		(91,324)		(22,106)
Deconsolidation of investment entities (Note 21)	—		(330,394)		—
Other	—		(7,088)		—
Other comprehensive income (loss) (1)	(331)		(35,222)		(6,454)
Fair value at September 30, 2021	$	37,108	$	387,663	$	115,753

Net unrealized gains (losses) on instruments held at September 30, 2021
In earnings	$	—	$	(91,849)	$	(23,031)
In other comprehensive loss	$	(331)	N/A		N/A

Fair value at December 31, 2021	$	36,531	$	55,878	$	79,309
Purchases, drawdowns, contributions and accretion	195		—		—
Paydowns, distributions and sales	(36,726)		(54,490)		(903)
Change in accrued interest and capitalization of paid-in-kind interest	—		(1,013)		—

Realized and unrealized losses in earnings, net	—		(375)		(7,155)

Other comprehensive loss (1)	—		—		(11,646)
Fair value at September 30, 2022	$	—	$	—	$	59,605

Net unrealized gains (losses) on instruments held at September 30, 2022
In earnings	$	—	$	—	$	(7,155)
In other comprehensive loss	$	—	N/A		N/A


(In thousands)	Digital Investment Management		Digital Operating		Corporate and Other		Total
Three Months Ended September 30, 2022



Total revenues	$	43,953	$	225,387	$	27,283	$	296,623
Property operating expense	—		100,051		5,936		105,987
Interest expense	2,953		40,770		9,309		53,032
Depreciation and amortization	5,369		130,663		9,562		145,594


Equity method earnings (losses), including carried interest	122,714		—		(53,398)		69,316
Income tax benefit (expense)	(1,263)		5		9,099		7,841

Income (loss) from continuing operations	46,065		(93,772)		(46,891)		(94,598)

Net income (loss) from continuing operations attributable to DigitalBridge Group, Inc.	24,233		(15,881)		(42,434)		(34,082)
Net loss from discontinued operations attributable to DigitalBridge Group, Inc.							(15,006)
Net loss attributable to DigitalBridge Group, Inc.							$	(49,088)

Three Months Ended September 30, 2021



Total revenues	$	53,796	$	194,966	$	3,412	$	252,174
Property operating expense	—		80,226		—		80,226
Interest expense	2,250		29,839		7,806		39,895
Depreciation and amortization	8,242		120,458		486		129,186


Equity method earnings, including carried interest	59,196		—		6,173		65,369
Income tax benefit (expense)	(3,089)		(1,922)		15,984		10,973

Income (loss) from continuing operations	39,272		(71,822)		(8,385)		(40,935)

Net income (loss) from continuing operations attributable to DigitalBridge Group, Inc.	16,870		(12,142)		(11,506)		(6,778)
Net income from discontinued operations attributable to DigitalBridge Group, Inc.							68,135
Net income attributable to DigitalBridge Group, Inc.							$	61,357


			AUM (1)(3) (In billions)				FEEUM (2)(3) (In billions)
Type	Products	Description	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Third Party Managed Capital
Institutional Funds	DigitalBridge Partners opportunistic strategy	Earns management fees and potential for carried interest or incentive fees	$	16.5	$	16.6	$	10.8	$	11.2
	Liquid securities strategy		1.0		0.8		1.0		0.8
Other Investment Vehicles	Digital co-invest vehicles	Earns management fees, business service fees from portfolio companies, and potential for carried interest	23.1		19.3		6.3		4.2
	Digital real estate and infrastructure held by portfolio companies		7.7		6.9		2.4		2.1
			48.3		43.6		20.5		18.3
Balance Sheet Capital (3)
Digital Operating			1.1		1.2		NA		NA
Other			0.9		0.5		NA		NA
			$	50.3	$	45.3	$	20.5	$	18.3


($ in thousands)	Outstanding Principal		Weighted Average Interest Rate (1) (Per Annum)		Weighted Average Years Remaining to Maturity (2)
Corporate-level debt:
Secured fund fee revenue notes	$	300,000	3.93	%	4.0
Convertible and exchangeable senior notes	278,422		5.21	%	1.2
Non-recourse investment level secured debt:
Fixed rate	3,729,979		2.53	%
Variable rate	1,085,733		6.70	%
	4,815,712		3.47	%	3.4
Total debt	$	5,394,134