DigitalBridge Announces Second Quarter 2021 Financial Results
DigitalBridge Group, Inc. (NYSE: DBRG) announced its Q2 2021 financial results, reporting total revenues of $237 million and a GAAP net loss of $(141) million, or $(0.29) per share. Core FFO was $(4.8) million. The company highlighted its rebranding and transformation to a digital infrastructure-focused business, achieving $6.6 billion in commitments for its new flagship equity fund, DCP II. Digital AUM reached $36 billion, a significant 65% year-over-year increase. The company also plans to redeem $86.3 million of Series G preferred stock, reducing overall corporate liquidity costs.
- Total revenues increased to $237 million from $68 million YoY.
- $6.6 billion commitments for new flagship fund DCP II, exceeding its target.
- Digital AUM increased to $36 billion, up 11% from the prior quarter and 65% YoY.
- Core Digital Adjusted EBITDA surged 146% to $31 million from the previous year.
- GAAP net loss attributable to common stockholders of $(141) million, compared to $(2,043) million the previous year.
- Core FFO remained negative at $(4.8) million.
DigitalBridge Group, Inc. (NYSE: DBRG) and subsidiaries (collectively, “DigitalBridge,” or the “Company”) today announced financial results for the second quarter ended June 30, 2021. The Company reported second quarter 2021 total revenues of
“This past quarter marked an exciting milestone for the Company, with our business transformation from ‘diversified to digital’ nearly complete we unveiled a new name and logo, DigitalBridge, highlighting our team’s deep heritage investing in digital infrastructure and introducing investors to what we believe is the fastest-growing digital infrastructure REIT globally,” said Marc Ganzi, President and CEO of DigitalBridge. "Our new flagship equity fund, DCP II, now has commitments of over
Q2 2021 HIGHLIGHTS
Executing on the Next Chapter as DigitalBridge
- Completed rebranding to DigitalBridge, reflecting the Company’s singular focus on owning, building and operating digital infrastructure businesses on a global basis.
- Unveiled our strategic priorities and introduced investors to the broadest, deepest team in digital infrastructure during our inaugural Investor Day in June.
- Updated and increased 2021 and 2023 financial guidance for our two primary Digital businesses and introduced longer-term 2025 financial targets.
-
Increased Digital AUM to
$36 billion as of August 5, 2021, representing an increase of11% from the prior quarter and65% year-over-year (YoY), driven by strong capital formation at our second flagship fund, which now stands at$6.6 billion inclusive of the Company’s commitment. -
In July, issued
$500 million of notes securitized by investment management fee earnings with a BBB investment grade rating in a first-of-its-kind transaction.
Focus on Digital Earnings
- The majority of legacy assets are now classified as discontinued operations and are no longer contributing to Core FFO, including Wellness Infrastructure which was transitioned to discontinued operations this quarter.
- The streamlined organization and reporting highlight a digital business with a strong growth trajectory and attractive returns on capital.
- Core FFO is now substantially comprised of Digital earnings, for which we have updated and increased guidance, and corporate overhead, which will continue to be rationalized.
-
Existing liquidity and anticipated legacy monetizations represent over
$2 billion of untapped earnings power. -
Core Digital Adjusted EBITDA increased by
146% to$31 million from$13 million in the prior year due to significant FEEUM growth and substantial investments in high-quality Digital Operating assets, namely Vantage SDC and DataBank's acquisition of zColo.
Financial Summary |
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($ in millions, except per share data and where noted) |
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Q2 2021 |
Q2 2020 |
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Corporate: |
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Property operating income |
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Fee income |
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Total revenues |
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Net loss to common stockholders |
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Net loss to common stockholders per share |
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Adjusted EBITDA |
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Core FFO |
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Core FFO per share |
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Liquidity (cash & undrawn VFN/RCF)(1) |
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Core Digital (Investment Management & Operating): |
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Net income to common stockholders |
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Adjusted EBITDA |
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Core FFO |
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Digital AUM(2) (in billions) |
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________________________________________________ |
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Note: Revenues and Net Income are consolidated while Adjusted EBITDA, Core FFO, Liquidity and AUM are DBRG OP share. |
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(1) |
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Amounts as of June 30, 2021 and June 30, 2020, respectively. Corporate revolving credit facility (RCF) maximum availability was |
(2) |
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Includes Digital Investment Management, Digital Operating and Digital Other. |
Accelerating Monetization of Legacy Businesses and Reduction of High-Cost Securities
-
On April 30, 2021, the Company and BrightSpire Capital, Inc. (NYSE: BRSP) (formerly Colony Credit Real Estate, Inc.) terminated the BRSP management agreement for a one-time payment of
$102.3 million in cash, which resulted in the internalization of BRSP's management and operating functions, with 44 employees previously dedicated wholly or substantially to BRSP becoming employees of BRSP. -
In June 2021, we entered into a definitive agreement to sell a substantial majority of our OED investments and Other IM business, including our general partner interests and management rights with respect to these OED assets, to an affiliate of Fortress Investment Group. The aggregate sales price is approximately
$535 million , subject to customary adjustments. Digital AUM will represent85% of total AUM upon the closing of this transaction, which is expected during the fourth quarter of 2021. -
During the second quarter of 2021, the Company initiated a process to dispose of its Wellness Infrastructure business along with assets and liabilities of NRF Holdco, LLC, a wholly-owned subsidiary of the Company, and includes: (i) the Company's equity interest in and management of its sponsored non-traded REIT, 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; and (ii) the
5.375% exchangeable senior notes, trust preferred securities and corresponding junior subordinated debt, all of which were issued by NRF Holdco, LLC, who acts as guarantor. This process resulted in the re-classification of the Wellness Infrastructure business into discontinued operations. -
On August 16, 2021, the Company will redeem all of its
$86.3 million 7.5% Series G preferred stock, lowering its cost of corporate securities by 350 basis points when compared with the recently issued securitization notes and VFN. Dividends on the Series G preferred shares will cease to accrue on this redemption date.
Corporate Rebranding
- On June 22, 2021 the Company effectuated a corporate rebrand, changing its name to DigitalBridge Group, Inc., and began trading under a new NYSE ticker symbol, DBRG, and held its inaugural Virtual Investor Day, during which we highlighted key steps in our transformation into a leading global digital infrastructure REIT.
- In July 2021, the Company published its 2020 Environmental, Social and Governance (ESG) Report, “Accelerating Our Impact,” which details DigitalBridge’s approach to responsible investment, and includes its expectations for and actions to help portfolio companies advance their ESG initiatives. The report also highlights the Company’s 2020 achievements and commitments for 2021 and beyond.
Common Stock and Operating Company Units
As of August 2, 2021, the Company had 493.1 million shares of Class A and B common stock outstanding and the Company’s operating partnership had 52.0 million operating company units outstanding and held by members other than the Company.
Preferred Dividends
On May 4, 2021, the Company’s Board declared cash dividends with respect to each series of the Company’s cumulative redeemable perpetual preferred stock in accordance with the terms of such series, as follows: with respect to each of the Series G preferred stock:
On August 4, 2021, the Company’s Board declared cash dividends with respect to each series of the Company’s cumulative redeemable perpetual preferred stock in accordance with the terms of such series, as follows: Series H preferred stock:
In July 2021, the Company announced it will be redeeming all of its outstanding shares of
Second Quarter 2021 Conference Call
The Company will conduct an earnings presentation and conference call to discuss the financial results on Thursday, August 5, 2021 at 10:00 a.m. ET. The earnings presentation will be broadcast live over the Internet and can be accessed on the Shareholders section of the Company’s website at ir.digitalbridge.com/events. A webcast of the presentation and conference call will be available on the Company’s website. To participate in the event by telephone, please dial (855) 327-6837 ten minutes prior to the start time (to allow time for registration). International callers should dial (631) 891-4304.
For those unable to participate during the live call, a replay will be available starting August 5, 2021, at 1:00 p.m. ET. To access the replay, dial (844) 512-2921 (U.S.), and use passcode 10015663. International callers should dial (412) 317-6671 and enter the same conference ID number.
Earnings Presentation and Supplemental Financial Report
A Second Quarter 2021 Earnings Presentation and Supplemental Financial Report is available in the Events & Presentations and Financial Information sections, respectively, of the Shareholders tab on the Company’s website at www.digitalbridge.com. This information has also been furnished to the U.S. Securities and Exchange Commission in a Current Report on Form 8-K.
About DigitalBridge Group, Inc.
DigitalBridge (NYSE: DBRG) is a leading global digital infrastructure REIT. With a heritage of over 25 years investing in and operating businesses across the digital ecosystem including towers, data centers, fiber, small cells, and edge infrastructure, the DigitalBridge team manages a
Cautionary Statement Regarding Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the federal securities laws, including statements related to our digital transformation. 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.
Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company’s control, and may cause the Company’s actual results to differ significantly from those expressed in any forward-looking statement. Factors that might cause such a difference include, without limitation, the duration and severity of the current novel coronavirus (COVID-19) pandemic, and its impact on the global market, economic and environmental conditions generally and in the digital and communications technology, wellness infrastructure and hospitality real estate, other commercial real estate equity and debt, 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; whether we will successfully execute our strategic transformation to become a digital infrastructure and real estate focused company within the timeframe contemplated or at all, and the impact of such transformation on the Company's legacy portfolios and assets, including whether such transformation will be consistent with the Company’s REIT status; our ability to obtain and maintain financing arrangements, including securitizations, on favorable or comparable terms or at all; the Company's ability to complete anticipated monetizations of non-core assets within the timeframe and on the terms contemplated, if at all; the impact of the completion of the sale of the Company's hospitality portfolios and whether we will realize the anticipated benefits of our exit from our hospitality business; the impact of completed or anticipated initiatives related to our digital transformation, including the strategic investment by Wafra and the formation of certain other investment management platforms, on our company's growth and earnings profile; whether we will realize any of the anticipated benefits of our strategic partnership with Wafra, including whether Wafra will make additional investments in our Digital Other and Digital Operating segments; our ability to integrate and maintain consistent standards and controls, including our ability to manage our acquisitions in the digital industry effectively; the ability to realize anticipated strategic and financial benefits from terminating the management agreement with Brightspire Capital, Inc. (NYSE:BRSP; formerly, Colony Credit Real Estate, Inc. or CLNC); the impact to our business operations and financial condition of realized or anticipated compensation and administrative savings through cost reduction programs; our ability to redeploy any proceeds received from the sale of our non-digital or other legacy assets within the timeframe and manner contemplated or at all; our business and investment strategy, including the ability of the businesses in which we have a significant investment (such as BRSP) to execute their business strategies; BRSP's trading price and its impact on the carrying value of the Company's investment in BRSP; performance of our investments relative to our expectations and the impact on our actual return on invested equity; 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; the impact of adverse conditions affecting a specific asset class in which we have investments; the availability of, and competition for, attractive investment opportunities; 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; stability of the capital structure of our wellness infrastructure portfolio and remaining hospitality portfolio; 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; the impact of economic conditions on third parties on which we rely; 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 economic conditions, including those resulting from the COVID-19 pandemic, and the impact on the commercial real estate or real-estate related sectors; the impact of legislative, regulatory and competitive changes; actions, initiatives and policies of the U.S. and non-U.S. governments and changes to U.S. or non-U.S. government policies and the execution and impact of these actions, initiatives and policies; whether we will maintain our qualification as a real estate investment trust for U.S. federal income tax purposes and our ability to do so; our ability to maintain our exemption from registration as an investment company under the Investment Company Act of 1940, as amended; changes in our board of directors or management team, and availability of qualified personnel; our ability to make or maintain distributions to our stockholders; our understanding of our competition, and other risks and uncertainties, including those detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, each under the heading “Risk Factors,” as such factors may be updated from time to time in the Company’s subsequent periodic filings with the U.S. Securities and Exchange Commission (“SEC”). All forward-looking statements reflect the Company’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Additional information about these and other factors can be found in the Company’s reports filed from time to time with the SEC.
The Company cautions investors not to unduly rely on any forward-looking statements. The forward-looking statements speak only as of the date of this press release. The Company is under no duty to update any of these forward-looking statements after the date of this press release, nor to conform prior statements to actual results or revised expectations, and the Company does not intend to do so.
Non-GAAP Financial Measures and Definitions
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization
The Company calculates Adjusted EBITDA by adjusting Core FFO to exclude cash interest expense, preferred dividends, tax expense or benefit, earnings from equity method investments, placement fees, realized carried interest and incentive fees, and revenues and corresponding costs related to installation services. The Company uses Adjusted EBITDA as a supplemental measure of our performance because they eliminate depreciation, amortization, and the impact of the capital structure from its operating results. However, because Adjusted EBITDA is calculated before recurring cash charges including interest expense and taxes and are not adjusted for capital expenditures or other recurring cash requirements, their utilization as a cash flow measurement is limited.
Assets Under Management (AUM)
Assets owned by the Company’s balance sheet and assets 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. Balance sheet AUM is based on the undepreciated carrying value of digital investments and the impaired carrying value of non digital investments as of the reporting date. Investment management AUM is based on the cost basis of managed investments as reported by each underlying vehicle as of the reporting date. AUM further includes uncalled capital commitments, but excludes DBRG OP’s share of non wholly-owned real estate investment management platform’s AUM. The Company's calculations of AUM may differ from the calculations of other asset managers, and as a result, this measure may not be comparable to similar measures presented by other asset managers.
DigitalBridge Operating Company, LLC (DBRG OP)
DBRG OP is the operating partnership through which the Company conducts all of its activities and holds substantially all of its assets and liabilities. The Company is the sole managing member of, and directly owns approximately
Digital Operating Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre) and Adjusted EBITDA
The Company calculates EBITDAre in accordance with the standards established by the National Association of Real Estate Investment Trusts, which defines EBITDAre as net income or loss calculated in accordance with GAAP, excluding interest, taxes, depreciation and amortization, gains or losses from the sale of depreciated property, and impairment of depreciated property. The Company calculates Adjusted EBITDA by adjusting EBITDAre for the effects of straight-line rental income/expense adjustments and amortization of acquired above- and below-market lease adjustments to rental income, revenues and corresponding costs related to the delivery of installation services, equity-based compensation expense, restructuring and transaction related costs, the impact of other impairment charges, gains or losses from sales of undepreciated land, gains or losses from foreign currency remeasurements, and gains or losses on early extinguishment of debt and hedging instruments. The Company uses EBITDAre and Adjusted EBITDA as supplemental measures of our performance because they eliminate depreciation, amortization, and the impact of the capital structure from its operating results. EBITDAre represents a widely known supplemental measure of performance, EBITDA, but for real estate entities, which we believe is particularly helpful for generalist investors in REITs. EBITDAre depicts the operating performance of a real estate business independent of its capital structure, leverage and noncash items, which allows for comparability across real estate entities with different capital structure, tax rates and depreciation or amortization policies. Additionally, exclusion of gains on disposition and impairment of depreciated real estate, similar to FFO, also provides a reflection of ongoing operating performance and allows for period-over-period comparability. However, because EBITDAre and Adjusted EBITDA are calculated before recurring cash charges including interest expense and taxes and are not adjusted for capital expenditures or other recurring cash requirements, their utilization as a cash flow measurement is limited.
Fee-Earning Equity Under Management (FEEUM)
Equity for which the Company and its affiliates provides investment management services and derives management fees and/or performance allocations. FEEUM generally represents the basis used to derive fees, which may be based on invested equity, stockholders’ equity, or fair value pursuant to the terms of each underlying investment management agreement. The Company's calculations of FEEUM may differ materially from the calculations of other asset managers, and as a result, this measure may not be comparable to similar measures presented by other asset managers.
Fee Related Earnings (FRE)
The Company calculates FRE for its investment management business within the digital segment as base management fees, other service fee income, and other income inclusive of cost reimbursements, less compensation expense (excluding equity-based compensation), administrative expenses (excluding fund raising placement agent fee expenses), and other operating expenses related to the investment management business. The Company uses FRE as a supplemental performance measure as it may provide additional insight into the profitability of the overall digital investment management business. FRE is presented prior to the deduction for Wafra's
Funds From Operations (FFO) and Core Funds From Operations (Core FFO)
The Company calculates funds from operations (FFO) in accordance with standards established by the National Association of Real Estate Investment Trusts, which defines FFO as net income or loss calculated in accordance with GAAP, excluding (i) extraordinary items, as defined by GAAP; (ii) gains and losses from sales of depreciable real estate; (iii) impairment write-downs associated with depreciable real estate; (iv) gains and losses from a change in control in connection with interests in depreciable real estate or in-substance real estate, plus (v) real estate-related depreciation and amortization; and (vi) including similar adjustments for equity method investments. Included in FFO are gains and losses from sales of assets which are not depreciable real estate such as loans receivable, equity method investments, as well as equity and debt securities, as applicable.
The Company computes core funds from operations (Core FFO) by adjusting FFO for the following items, including the Company’s share of these items recognized by its unconsolidated partnerships and joint ventures: (i) equity-based compensation expense; (ii) effects of straight-line rent revenue and expense; (iii) amortization of acquired above- and below-market lease values; (iv) debt prepayment penalties and amortization of deferred financing costs and debt premiums and discounts; (v) non-real estate depreciation, amortization and impairment; (vi) restructuring and transaction-related charges; (vii) non-real estate loss (gain), fair value loss (gain) on interest rate and foreign currency hedges, and foreign currency remeasurements except realized gain and loss from the Digital Other segment; (viii) net unrealized carried interest; and (ix) tax effect on certain of the foregoing adjustments. The Company’s Core FFO from its interest in BrightSpire Capital (NYSE: BRSP) represented the cash dividends declared in the reported period. The Company excluded results from discontinued operations in its calculation of Core FFO and applied this exclusion to prior periods. Beginning with the first quarter 2021, the Company revised the computation of Core FFO and applied this revised computation methodology to prior periods presented.
FFO and Core FFO should not be considered alternatives to GAAP net income as indications of operating performance, or to cash flows from operating activities as measures of liquidity, nor as indications of the availability of funds for our cash needs, including funds available to make distributions. FFO and Core FFO should not be used as supplements to or substitutes for cash flow from operating activities computed in accordance with GAAP.
The Company uses FFO and Core FFO as supplemental performance measures because, in excluding real estate depreciation and amortization and gains and losses, it provides a performance measure that captures trends in occupancy rates, rental rates, and operating costs, and such a measure is useful to investors as it excludes periodic gains and losses from sales of investments that are not representative of its ongoing operations. The Company also believes that, as widely recognized measures of the performance of REITs, FFO and Core FFO will be used by investors as a basis to compare its operating performance with that of other REITs. However, because FFO and Core FFO exclude depreciation and amortization and capture neither the changes in the value of the Company’s properties that resulted from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of its properties, all of which have real economic effect and could materially impact the Company’s results from operations, the utility of FFO and Core FFO as measures of the Company’s performance is limited. FFO and Core FFO should be considered only as supplements to GAAP net income as a measure of the Company’s performance. Additionally, Core FFO excludes the impact of certain fair value fluctuations, which, if they were to be realized, could have a material impact on the Company’s operating performance.
CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) |
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June 30, 2021 |
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December 31, 2020 |
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(unaudited) |
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Assets |
|
|
|
|
||||||
Cash and cash equivalents |
|
$ |
1,006,195 |
|
|
|
$ |
703,544 |
|
|
Restricted cash |
|
91,144 |
|
|
|
67,772 |
|
|
||
Real estate, net |
|
4,491,287 |
|
|
|
4,451,864 |
|
|
||
Loans receivable |
|
52,791 |
|
|
|
36,798 |
|
|
||
Equity and debt investments |
|
820,307 |
|
|
|
792,996 |
|
|
||
Goodwill |
|
761,368 |
|
|
|
761,368 |
|
|
||
Deferred leasing costs and intangible assets, net |
|
1,230,625 |
|
|
|
1,340,760 |
|
|
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Assets held for disposition |
|
6,691,392 |
|
|
|
11,237,319 |
|
|
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Other assets |
|
736,624 |
|
|
|
784,912 |
|
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Due from affiliates |
|
39,613 |
|
|
|
23,227 |
|
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Total assets |
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$ |
15,921,346 |
|
|
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$ |
20,200,560 |
|
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Liabilities |
|
|
|
|
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Debt, net |
|
$ |
3,877,664 |
|
|
|
$ |
3,930,989 |
|
|
Accrued and other liabilities |
|
854,339 |
|
|
|
1,034,282 |
|
|
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Intangible liabilities, net |
|
36,325 |
|
|
|
39,788 |
|
|
||
Liabilities related to assets held for disposition |
|
4,728,558 |
|
|
|
7,886,516 |
|
|
||
Due to affiliates |
|
403 |
|
|
|
601 |
|
|
||
Dividends and distributions payable |
|
18,516 |
|
|
|
18,516 |
|
|
||
Total liabilities |
|
9,515,805 |
|
|
|
12,910,692 |
|
|
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Commitments and contingencies |
|
|
|
|
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Redeemable noncontrolling interests |
|
346,511 |
|
|
|
305,278 |
|
|
||
Equity |
|
|
|
|
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Stockholders’ equity: |
|
|
|
|
||||||
Preferred stock, |
|
999,490 |
|
|
|
999,490 |
|
|
||
Common stock, |
|
|
|
|
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Class A, 949,000 shares authorized; 491,922 and 483,406 shares issued and outstanding, respectively |
|
4,920 |
|
|
|
4,834 |
|
|
||
Class B, 1,000 shares authorized; 734 shares issued and outstanding |
|
7 |
|
|
|
7 |
|
|
||
Additional paid-in capital |
|
7,622,382 |
|
|
|
7,570,473 |
|
|
||
Accumulated deficit |
|
(6,601,522 |
) |
|
|
(6,195,456 |
) |
|
||
Accumulated other comprehensive income |
|
83,675 |
|
|
|
122,123 |
|
|
||
Total stockholders’ equity |
|
2,108,952 |
|
|
|
2,501,471 |
|
|
||
Noncontrolling interests in investment entities |
|
3,836,609 |
|
|
|
4,327,372 |
|
|
||
Noncontrolling interests in Operating Company |
|
113,469 |
|
|
|
155,747 |
|
|
||
Total equity |
|
6,059,030 |
|
|
|
6,984,590 |
|
|
||
Total liabilities, redeemable noncontrolling interests and equity |
|
$ |
15,921,346 |
|
|
|
$ |
20,200,560 |
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) |
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Three Months Ended June 30, |
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|
|
2021 |
|
|
2020 |
|
|
||||
|
|
(unaudited) |
|
(unaudited) |
|
||||||
Revenues |
|
|
|
|
|
||||||
Property operating income |
|
$ |
188,985 |
|
|
|
$ |
42,017 |
|
|
|
Interest income |
|
1,319 |
|
|
|
2,102 |
|
|
|
||
Fee income |
|
45,157 |
|
|
|
20,173 |
|
|
|
||
Other income |
|
1,726 |
|
|
|
3,581 |
|
|
|
||
Total revenues |
|
237,187 |
|
|
|
67,873 |
|
|
|
||
Expenses |
|
|
|
|
|
||||||
Property operating expense |
|
77,140 |
|
|
|
18,055 |
|
|
|
||
Interest expense |
|
37,938 |
|
|
|
20,852 |
|
|
|
||
Investment and servicing expense |
|
5,871 |
|
|
|
2,010 |
|
|
|
||
Transaction costs |
|
64 |
|
|
|
89 |
|
|
|
||
Depreciation and amortization |
|
138,229 |
|
|
|
36,680 |
|
|
|
||
Impairment loss |
|
— |
|
|
|
12,297 |
|
|
|
||
Compensation expense |
|
|
|
|
|
||||||
Cash and equity-based compensation |
|
48,199 |
|
|
|
44,628 |
|
|
|
||
Carried interest and incentive fee compensation |
|
8,266 |
|
|
|
— |
|
|
|
||
Administrative expenses |
|
28,505 |
|
|
|
12,847 |
|
|
|
||
Total expenses |
|
344,212 |
|
|
|
147,458 |
|
|
|
||
Other income (loss) |
|
|
|
|
|
||||||
Other gain (loss), net |
|
(27,041 |
) |
|
|
1,254 |
|
|
|
||
Equity method earnings (losses) |
|
51,481 |
|
|
|
(316,516 |
) |
|
|
||
Equity method earnings (losses) - carried interest |
|
11,169 |
|
|
|
— |
|
|
|
||
Income (loss) before income taxes |
|
(71,416 |
) |
|
|
(394,847 |
) |
|
|
||
Income tax benefit (expense) |
|
75,239 |
|
|
|
1,650 |
|
|
|
||
Income (loss) from continuing operations |
|
3,823 |
|
|
|
(393,197 |
) |
|
|
||
Income (loss) from discontinued operations |
|
(98,906 |
) |
|
|
(2,325,796 |
) |
|
|
||
Net income (loss) |
|
(95,083 |
) |
|
|
(2,718,993 |
) |
|
|
||
Net income (loss) attributable to noncontrolling interests: |
|
|
|
|
|
||||||
Redeemable noncontrolling interests |
|
6,025 |
|
|
|
390 |
|
|
|
||
Investment entities |
|
36,616 |
|
|
|
(470,052 |
) |
|
|
||
Operating Company |
|
(14,980 |
) |
|
|
(225,057 |
) |
|
|
||
Net income (loss) attributable to DigitalBridge Group, Inc. |
|
(122,744 |
) |
|
|
(2,024,274 |
) |
|
|
||
Preferred stock dividends |
|
18,516 |
|
|
|
18,516 |
|
|
|
||
Net income (loss) attributable to common stockholders |
|
$ |
(141,260 |
) |
|
|
$ |
(2,042,790 |
) |
|
|
Loss per share—basic |
|
|
|
|
|
||||||
Loss from continuing operations per share—basic |
|
$ |
(0.02 |
) |
|
|
$ |
(0.75 |
) |
|
|
Net loss attributable to common stockholders per share—basic |
|
$ |
(0.29 |
) |
|
|
$ |
(4.33 |
) |
|
|
Loss per share—diluted |
|
|
|
|
|
||||||
Loss from continuing operations per share—diluted |
|
$ |
(0.02 |
) |
|
|
$ |
(0.75 |
) |
|
|
Net loss attributable to common stockholders per share—diluted |
|
$ |
(0.29 |
) |
|
|
$ |
(4.33 |
) |
|
|
Weighted average number of shares |
|
|
|
|
|
||||||
Basic |
|
479,643 |
|
|
|
471,253 |
|
|
|
||
Diluted |
|
479,643 |
|
|
|
471,253 |
|
|
|
||
FUNDS FROM OPERATIONS AND CORE FUNDS FROM OPERATIONS (In thousands, except per share data, unaudited) |
||||||||||
|
Three Months Ended |
|
||||||||
|
June 30, 2021 |
|
June 30, 2020 |
|
||||||
Net loss attributable to common stockholders |
$ |
(141,260 |
) |
|
|
$ |
(2,042,790 |
) |
|
|
Adjustments for FFO attributable to common interests in Operating Company and common stockholders: |
|
|
|
|
||||||
Net loss attributable to noncontrolling common interests in Operating Company |
(14,980 |
) |
|
|
(225,057 |
) |
|
|
||
Real estate depreciation and amortization |
150,458 |
|
|
|
131,722 |
|
|
|
||
Impairment of real estate |
242,903 |
|
|
|
1,474,262 |
|
|
|
||
Loss (gain) from sales of real estate |
(2,969 |
) |
|
|
4,919 |
|
|
|
||
Less: Adjustments attributable to noncontrolling interests in investment entities |
(162,021 |
) |
|
|
(329,601 |
) |
|
|
||
FFO attributable to common interests in Operating Company and common stockholders |
72,131 |
|
|
|
(986,545 |
) |
|
|
||
|
|
|
|
|
||||||
Additional adjustments for Core FFO attributable to common interests in Operating Company and common stockholders: |
|
|
|
|
||||||
Adjustment to BRSP cash dividend |
(40,165 |
) |
|
|
328,222 |
|
|
|
||
Equity-based compensation expense |
11,642 |
|
|
|
10,152 |
|
|
|
||
Straight-line rent revenue and expense |
(2,309 |
) |
|
|
(5,240 |
) |
|
|
||
Amortization of acquired above- and below-market lease values, net |
(1,498 |
) |
|
|
(531 |
) |
|
|
||
Debt prepayment penalties and amortization of deferred financing costs and debt premiums and discounts |
10,196 |
|
|
|
10,080 |
|
|
|
||
Non-real estate fixed asset depreciation, amortization and impairment |
19,996 |
|
|
|
13,390 |
|
|
|
||
Restructuring and transaction-related charges(1) |
5,174 |
|
|
|
8,864 |
|
|
|
||
Non-real estate (gains) losses, excluding realized gains or losses within the Digital Other segment |
(151,773 |
) |
|
|
740,038 |
|
|
|
||
Net unrealized carried interest |
(6,485 |
) |
|
|
801 |
|
|
|
||
Deferred taxes and tax effect on certain of the foregoing adjustments |
(42,536 |
) |
|
|
(3,092 |
) |
|
|
||
Less: Adjustments attributable to noncontrolling interests in investment entities |
146,687 |
|
|
|
(182,607 |
) |
|
|
||
Less: Core FFO from discontinued operations |
(25,874 |
) |
|
|
29,242 |
|
|
|
||
Core FFO attributable to common interests in Operating Company and common stockholders |
$ |
(4,814 |
) |
|
|
$ |
(37,226 |
) |
|
|
|
|
|
|
|
||||||
Core FFO per common share / common OP unit(2) |
$ |
(0.01 |
) |
|
|
$ |
(0.07 |
) |
|
|
Core FFO per common share / common OP unit—diluted(2)(3)(4) |
$ |
(0.01 |
) |
|
|
$ |
(0.07 |
) |
|
|
Weighted average number of common OP units outstanding used for Core FFO per common share and OP unit(2) |
539,287 |
|
|
|
535,938 |
|
|
|
||
Weighted average number of common OP units outstanding used for Core FFO per common share and OP unit—diluted (2)(3) |
539,287 |
|
|
|
535,938 |
|
|
|
||
__________ |
||
(1) |
|
Transaction-related costs primarily represent costs and charges incurred as a result of corporate restructuring and reorganization to implement the digital evolution. These costs and charges include severance, retention, relocation, transition, shareholder settlement and other related restructuring costs, which are not reflective of the Company’s core operating performance. |
(2) |
|
Calculated based on weighted average shares outstanding including participating securities and assuming the exchange of all common OP units outstanding for common shares. |
(3) |
|
For the three months ended June 30, 2021 and June 30, 2020, excluded from the calculations of diluted Core FFO per share are Class A common stock or OP units issuable in connection with performance stock units, performance based restricted stock units and Wafra’s warrants, of which the issuance and/or vesting are subject to the performance of the Company's stock price or the achievement of certain Company specific metrics, and the effect of adding back interest expense associated with convertible senior notes and weighted average dilutive common share equivalents for the assumed conversion of the convertible senior notes as the effect of including such interest expense and common share equivalents would be antidilutive. |
ADJUSTED EBITDA (In thousands, unaudited) |
|||
|
Three Months Ended June 30, 2021 |
||
Core FFO attributable to common interests in Operating Company and common stockholders |
$ |
(4,814) |
|
Adjustments: |
|
||
Less: Earnings of equity method investments |
(6,216) |
|
|
Plus: Preferred dividends |
18,516 |
|
|
Plus: Core interest expense |
11,834 |
|
|
Plus: Core tax expense |
(8,224) |
|
|
Plus: Non pro-rata allocation of income (loss) to NCI |
223 |
|
|
Plus: Placement fees |
4,767 |
|
|
Less: Realized carried interest/incentive fees |
(1,565) |
|
|
Plus: Installation services |
692 |
|
|
Adjusted EBITDA (DBRG OP Share) |
$ |
15,213 |
|
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BY SEGMENT |
|||||
(In thousands) |
|
|
Three Months Ended
|
||
Digital Investment Management |
|
|
$ |
15,786 |
|
Digital Operating |
|
|
(10,850) |
|
|
Digital Other |
|
|
13,280 |
|
|
Other |
|
|
45,983 |
|
|
Amounts Not Allocated to Segments |
|
|
(60,376) |
|
|
Total Consolidated |
|
|
$ |
3,823 |
|
RECONCILIATION OF DIGITAL OPERATING NET INCOME (LOSS) TO ADJUSTED EBITDA |
||||
(In thousands) |
Three Months Ended June 30, 2021 |
|
||
Digital Operating Net income (loss) from continuing operations |
$ |
(10,850) |
|
|
Adjustments: |
|
|
||
Interest expense |
29,272 |
|
|
|
Income tax (benefit) expense |
(66,788) |
|
|
|
Depreciation and amortization |
126,227 |
|
|
|
Digital Operating EBITDAre |
77,861 |
|
|
|
|
|
|
||
Straight-line rent expenses and amortization of above- and below-market lease intangibles |
(98) |
|
|
|
Compensation expense—equity-based |
308 |
|
|
|
Installation services |
576 |
|
|
|
Transaction, restructuring & integration costs |
2,999 |
|
|
|
Other gain/loss, net |
349 |
|
|
|
Digital Operating Adjusted EBITDA |
$ |
81,995 |
|
|
|
|
|
||
DBRG OP Share of Digital Operating Adjusted EBITDA |
$ |
13,612 |
|
(1) |
__________ |
||
(1) |
Represents the Company |
|
RECONCILIATION OF DIGITAL INVESTMENT MANAGEMENT NET INCOME (LOSS) TO FRE / ADJUSTED EBITDA |
|||
(In thousands) |
Three Months Ended June 30, 2021 |
||
Digital Investment Management net income (loss) |
15,786 |
|
|
Adjustments: |
|
||
Depreciation and amortization |
6,298 |
|
|
Compensation expense—equity-based |
1,837 |
|
|
Compensation expense—carried interest and incentive |
8,266 |
|
|
Administrative expenses—straight-line rent |
50 |
|
|
Administrative expenses—placement agent fee |
6,959 |
|
|
Incentive/performance fee income |
(4,489) |
|
|
Equity method (earnings) losses |
(11,203) |
|
|
Other (gain) loss, net |
(119) |
|
|
Income tax (benefit) expense |
2,236 |
|
|
Digital Investment Management FRE / Adjusted EBITDA |
$ |
25,621 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210805005391/en/
FAQ
What were DigitalBridge's Q2 2021 earnings results?
What is DigitalBridge's current Digital AUM?
What is the status of DigitalBridge's new equity fund DCP II?
What steps is DigitalBridge taking regarding its Series G preferred stock?
