What changed in this filing

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Item 1. Financial Statements

2021-05-10 compared with 2020-11-09 · 684 added, 1373 removed, 1113 unchanged (65% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

September 30, 2020 (Unaudited)

March 31, 2021 (Unaudited)

December 31, 2020

5 unchanged sentences

7,702,711 7,809,964

Loans receivable (at fair value at September 30, 2020)

1,325,144 1,566,328

Loans receivable (at fair value) 85,272 84,030

Equity and debt investments ($ 225,845 and $ 298,568 at fair value, respectively)

19 unchanged sentences

18,516 18,516

Preferred stock redemptions payable

Total liabilities

33 unchanged sentences

(In thousands, except per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Three Months Ended March 31,

Property operating income $ 275,216 $ 183,953

Interest income

14,816 40,237 70,060 121,356

Fee income ($ 33,679 and $ 25,128 from affiliates, respectively)

1 unchanged sentence

Other income ($ 1,490 and $ 4,182 from affiliates, respectively)

11,820 38,051 30,069 64,061

Total revenues

5 unchanged sentences

Investment and servicing expense

30,532 8,605 47,897 39,215

Transaction costs

3,310 100 3,806 2,922

Transaction-related costs 2,685 596

Depreciation and amortization

170,967 76,236

Provision for loan loss

— 17,233 — 35,847

Impairment loss

3 unchanged sentences

Compensation expense—carried interest and incentive fee

912 10,846 ( 9,431 ) 13,264

Administrative expenses

3 unchanged sentences

504,084 355,399

Other income (loss)

Gain on sale of real estate

13,258 8,221 24,058 42,841

Other loss, net ( 8,714 ) ( 9,703 )

( 12,979 ) ( 44,940 ) ( 199,320 ) ( 182,560 )

Equity method earnings (losses) ( 62,998 ) 46,777 ( 319,831 ) ( 178,448 )

Equity method earnings (losses)—carried interest 6,082 ( 474 ) ( 14,653 ) 6,258

Equity method losses ( 18,686 ) ( 11,879 )

Equity method losses—carried interest ( 222 ) —

Loss from continuing operations before income taxes

( 216,002 ) ( 159,768 )

Income tax benefit (expense) 9,922 ( 10,096 ) ( 3,246 ) ( 11,723 )

Income tax benefit 25,825 5,569

Loss from continuing operations

( 190,177 ) ( 154,199 )

Income (loss) from discontinued operations

( 177,014 ) 25,654 ( 1,307,225 ) 11,043

Loss from discontinued operations ( 437,422 ) ( 249,858 )

Net loss ( 627,599 ) ( 404,057 )

12 unchanged sentences

$ ( 264,806 ) $ ( 361,633 )

Basic loss per share

Loss from continuing operations per basic common share

$ ( 0.22 ) $ ( 1.16 ) $ ( 3.35 ) $ ( 2.30 )

Net loss per basic common share

$ ( 0.44 ) $ ( 1.16 ) $ ( 5.51 ) $ ( 2.35 )

Diluted loss per share

Loss from continuing operations per diluted common share

$ ( 0.22 ) $ ( 1.16 ) $ ( 3.35 ) $ ( 2.30 )

Net loss per diluted common share

$ ( 0.44 ) $ ( 1.16 ) $ ( 5.51 ) $ ( 2.35 )

Loss per share—basic

Loss from continuing operations per common share—basic $ ( 0.30 ) $ ( 0.28 )

Net loss attributable to common stockholders per common share—basic $ ( 0.56 ) $ ( 0.76 )

Loss per share—diluted

Loss from continuing operations per common share—diluted $ ( 0.30 ) $ ( 0.28 )

Net loss attributable to common stockholders per common share—diluted $ ( 0.56 ) $ ( 0.76 )

Weighted average number of shares

2 unchanged sentences

Dividends declared per common share

$ — $ 0.11 $ 0.11 $ 0.33

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

2 unchanged sentences

(In thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Three Months Ended March 31,

Net loss $ ( 627,599 ) $ ( 404,057 )

Changes in accumulated other comprehensive income (loss) related to:

Investments in unconsolidated ventures, net

4,385 ( 2,721 ) 3,397 6,598

Equity method investments ( 2,708 ) ( 26,477 )

Available-for-sale debt securities

4 unchanged sentences

Net investment hedges

( 414 ) 27,004 21,001 43,474

Other comprehensive income (loss) 90,541 ( 51,681 ) 79,669 ( 52,116 )

Other comprehensive loss ( 60,232 ) ( 63,713 )

Comprehensive loss ( 687,831 ) ( 467,770 )

10 unchanged sentences

Balance at December 31, 2019 $ 999,490 $ 4,878 $ 7,553,599 $ ( 3,389,592 ) $ 47,668 $ 5,216,043 $ 3,254,188 $ 456,184 $ 8,926,415

Cumulative effect of adoption of new accounting pronouncement

— — — ( 2,905 ) — ( 2,905 ) ( 1,378 ) ( 185 ) ( 4,468 )

Net income (loss)

— — — ( 74,976 ) — ( 74,976 ) 49,988 ( 6,611 ) ( 31,599 )

Other comprehensive income (loss)

Cumulative effect of adoption of new accounting pronouncement (Note 2)

— — — ( 3,187 ) — ( 3,187 ) ( 1,577 ) ( 349 ) ( 5,113 )

Net loss — — — ( 342,159 ) — ( 342,159 ) ( 21,749 ) ( 39,601 ) ( 403,509 )

Other comprehensive loss — — — — ( 31,414 ) ( 31,414 ) ( 28,859 ) ( 3,440 ) ( 63,713 )

Common stock repurchases

— ( 127 ) ( 24,622 ) — — ( 24,749 ) — — ( 24,749 )

Redemption of OP Units for class A common stock

— — 33 — — 33 — ( 33 ) —

Equity-based compensation

13 unchanged sentences

Balance at March 31, 2020 $ 999,490 $ 4,809 $ 7,532,213 $ ( 3,806,308 ) $ 16,222 $ 4,746,426 $ 3,233,910 $ 411,380 $ 8,391,716

— — — ( 441,752 ) — ( 441,752 ) ( 13,414 ) ( 29,989 ) ( 485,155 )

Other comprehensive income

— — — — 4,819 4,819 3,508 309 8,636

Redemption of OP Units for class A common stock

— 2 2,061 — — 2,063 — ( 2,063 ) —

Equity-based compensation

— 20 7,720 — — 7,740 197 — 7,937

Contributions from noncontrolling interests

— — — — — — 87,304 — 87,304

Distributions to noncontrolling interests

— — — — — — ( 212,842 ) ( 3,429 ) ( 216,271 )

Preferred stock dividends

— — — ( 27,138 ) — ( 27,138 ) — — ( 27,138 )

Common stock dividends declared ($ 0.11 per share)

— — — ( 53,656 ) — ( 53,656 ) — — ( 53,656 )

Reallocation of equity (Notes 2 and 15)

— — 927 — 10 937 88 ( 1,025 ) —

Balance at June 30, 2019 1,407,495 4,877 7,621,655 ( 2,699,276 ) 26,967 6,361,718 3,861,047 314,333 10,537,098

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

3 unchanged sentences

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 June 30, 2019 $ 1,407,495 $ 4,877 $ 7,621,655 $ ( 2,699,276 ) $ 26,967 $ 6,361,718 $ 3,861,047 $ 314,333 $ 10,537,098

Net income (loss) — — — ( 527,816 ) — ( 527,816 ) 15,170 ( 53,560 ) ( 566,206 )

Other comprehensive loss — — — — ( 5,057 ) ( 5,057 ) ( 46,136 ) ( 488 ) ( 51,681 )

Redemption of OP Units for class A common stock — — 8 — — 8 — ( 8 ) —

Equity-based compensation — 2 9,569 — — 9,571 191 — 9,762

Shares canceled for tax withholdings on vested stock awards — ( 1 ) ( 393 ) — — ( 394 ) — — ( 394 )

OP Unit issuance — — — — — — — 111,903 111,903

Contributions from noncontrolling interests — — — — — — 109,604 — 109,604

Distributions to noncontrolling interests — — — — — — ( 88,052 ) ( 5,791 ) ( 93,843 )

Preferred stock dividends — — — ( 27,137 ) — ( 27,137 ) — — ( 27,137 )

Common stock dividends declared ($ 0.11 per share)

— — — ( 53,657 ) — ( 53,657 ) — — ( 53,657 )

Reallocation of equity (Notes 2 and 15)

— — ( 92,483 ) — ( 1,022 ) ( 93,505 ) 3,510 89,995 —

Balance at September 30, 2019 $ 1,407,495 $ 4,878 $ 7,538,356 $ ( 3,307,886 ) $ 20,888 $ 5,663,731 $ 3,855,334 $ 456,384 $ 9,975,449

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

COLONY CAPITAL, INC.

CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(In thousands, except per share data)

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

Cumulative effect of adoption of new accounting pronouncement (Note 2)

— — — ( 3,187 ) — ( 3,187 ) ( 1,577 ) ( 349 ) ( 5,113 )

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 )

Common stock repurchases — ( 127 ) ( 24,622 ) — — ( 24,749 ) — — ( 24,749 )

Equity-based compensation — 76 12,114 — — 12,190 — 584 12,774

Shares canceled for tax withholdings on vested stock awards

— ( 18 ) ( 5,051 ) — — ( 5,069 ) — — ( 5,069 )

Contributions from noncontrolling interests — — — — — — 87,736 — 87,736

Distributions to noncontrolling interests — — — — — — ( 55,829 ) ( 5,857 ) ( 61,686 )

Preferred stock dividends — — — ( 18,516 ) — ( 18,516 ) — — ( 18,516 )

Common stock dividends declared ($ 0.11 per share)

— — — ( 52,854 ) — ( 52,854 ) — — ( 52,854 )

Reallocation of equity (Note 2)

Deconsolidation of investment entities (Note 14)

— — — — — — ( 22,413 ) — ( 22,413 )

Balance at March 31, 2020 999,490 4,809 7,532,213 ( 3,806,308 ) 16,222 4,746,426 3,233,910 411,380 8,391,716

Net loss — — — ( 2,024,274 ) — ( 2,024,274 ) ( 470,052 ) ( 225,057 ) ( 2,719,383 )

Other comprehensive income — — — — 28,133 28,133 21,609 3,099 52,841

Redemption of OP Units for class A common stock — — 16 — — 16 — ( 16 ) —

— 2 1,421 — — 1,423 — ( 1,423 ) —

Equity-based compensation — 48 16,536 — — 16,584 308 1,308 18,200

4 unchanged sentences

Preferred stock dividends — — — ( 18,516 ) — ( 18,516 ) — — ( 18,516 )

Reallocation of equity (Note 2)

— — ( 1,232 ) — 12 ( 1,220 ) 1,615 ( 395 ) —

Balance at June 30, 2020 999,490 4,821 7,540,197 ( 5,849,098 ) 44,367 2,739,777 2,776,604 188,188 5,704,569

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

COLONY CAPITAL, INC.

CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(In thousands, except per share data)

Balance at June 30, 2020 $ 999,490 $ 4,821 $ 7,540,197 $ ( 5,849,098 ) $ 44,367 $ 2,739,777 $ 2,776,604 $ 188,188 $ 5,704,569

Net loss — — — ( 187,267 ) — ( 187,267 ) ( 149,154 ) ( 22,651 ) ( 359,072 )

Other comprehensive income — — — — 32,239 32,239 54,753 3,549 90,541

Fair value of noncontrolling interest assumed in asset acquisition — — — — — — 366,136 — 366,136

Equity-based compensation — 5 6,566 — — 6,571 148 668 7,387

Shares canceled for tax withholdings on vested stock awards

— ( 2 ) ( 510 ) — — ( 512 ) — — ( 512 )

Warrant issuance (Note 15)

— — 20,240 — — 20,240 — — 20,240

Costs of noncontrolling interests — — ( 6,287 ) — — ( 6,287 ) — — ( 6,287 )

Contributions from noncontrolling interests — — — — — — 1,101,099 — 1,101,099

Distributions to noncontrolling interests — — — — — — ( 63,511 ) — ( 63,511 )

Preferred stock dividends — — — ( 18,516 ) — ( 18,516 ) — — ( 18,516 )

Reallocation of equity (Note 2)

Reallocation of equity (Notes 2 and 13)

— — ( 2,445 ) — 76 ( 2,369 ) 4,682 ( 2,313 ) —

Balance at September 30, 2020 $ 999,490 $ 4,824 $ 7,559,551 $ ( 6,054,881 ) $ 76,610 $ 2,585,594 $ 4,085,739 $ 170,741 $ 6,842,074

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

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

2 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash Flows from Operating Activities

2 unchanged sentences

Amortization of discount and net origination fees on loans receivable and debt securities — ( 594 )

( 5,090 ) ( 15,215 )

Paid-in-kind interest added to loan principal, net of interest received

( 4,267 ) ( 21,218 )

Straight-line rents ( 13,916 ) ( 13,263 )

Straight-line rent income 18,800 ( 2,069 )

Amortization of above- and below-market lease values, net 6,098 ( 3,506 )

Amortization of deferred financing costs and debt discount and premium

31,061 61,779

Equity method losses

334,648 137,069

Amortization of deferred financing costs and debt discount and premium, net 43,729 15,260

Equity method losses (gains) 111,519 ( 97,291 )

Distributions of income from equity method investments

92,445 78,219

Provision for loan losses — 35,847

Allowance for doubtful accounts 205 404

4 unchanged sentences

Equity-based compensation

26,415 25,051

Unrealized settlement loss — 3,890

Gain on sales of real estate, net ( 45,750 ) ( 7,932 )

Payment of cash collateral on derivative ( 771 ) ( 223,886 )

Deferred income tax expense ( 10,602 ) ( 1,778 )

Settlement of forward starting interest rate swap — ( 6,641 )

Deferred income tax benefit ( 34,480 ) ( 9,138 )

Other loss, net 213,661 9,279

4 unchanged sentences

( 576 ) ( 1,747 )

Net cash provided by operating activities 89,886 234,590

Net cash provided by (used in) operating activities ( 23,937 ) ( 59,669 )

Cash Flows from Investing Activities

2 unchanged sentences

Return of capital from equity method investments

123,952 176,508

Acquisition of loans receivable and debt securities

2 unchanged sentences

Repayments of loans receivable

131,368 228,480

Proceeds from sales of loans receivable and debt securities

Cash receipts in excess of accretion on purchased credit-impaired loans — 18,886

Acquisition of and additions to real estate, related intangibles and leasing commissions ( 74,024 ) ( 78,283 )

( 1,278,957 ) ( 1,798,039 )

Proceeds from sales of real estate 64,808 126,741

2 unchanged sentences

Investment deposits

( 8,150 ) ( 13,210 )

Proceeds from sale of non-real estate fixed assets 14,946 —

Net receipts on settlement of derivatives 15,913 3,227

Acquisition of DBH, net of cash acquired, and payment of deferred purchase price (Note 3) ( 32,500 ) ( 181,167 )

Other investing activities, net

Net cash used in investing activities ( 981,923 ) ( 937,667 )

Net cash (used in) provided by investing activities ( 7,901 ) 166,921

COLONY CAPITAL, INC.

1 unchanged sentence

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash Flows from Financing Activities

2 unchanged sentences

Repurchase of common stock — ( 24,749 )

Payment of offering costs ( 2,962 ) —

Proceeds from issuance of exchangeable senior notes 291,000 —

Repurchase of convertible senior notes ( 370,998 ) —

Repayment of convertible senior notes ( 31,502 ) —

Borrowings from corporate credit facility — 600,000

Repayment of borrowings from corporate credit facility ( 600,000 ) ( 556,000 )

Borrowings from secured debt 684,537 8,052

3 unchanged sentences

Distributions to and redemptions of noncontrolling interests ( 32,857 ) ( 68,320 )

Contribution from Wafra (Note 15) 253,575 —

Redemption of preferred stock — ( 402,855 )

Shares canceled for tax withholdings on vested stock awards ( 7,718 ) ( 5,069 )

Other financing activities, net — ( 1,504 )

Net cash (used in) provided by financing activities 363,225 605,873

Net cash provided by financing activities 99,171 4,882

Effect of exchange rates on cash, cash equivalents and restricted cash 4,050 ( 3,650 )

Net decrease in cash, cash equivalents and restricted cash ( 525,312 ) ( 103,653 )

Net increase in cash, cash equivalents and restricted cash 71,383 108,484

Cash, cash equivalents and restricted cash, beginning of period 963,008 1,424,698

1 unchanged sentence

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

Nine Months Ended September 30,

Three Months Ended March 31,

Beginning of the period

11 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

March 31, 2021

Colony Capital, Inc.

(together with its consolidated subsidiaries, the "Company") is a leading global investment firm with a focus on identifying and capitalizing on key secular trends in digital real estate.

Following the acquisition in July 2019 of Digital Bridge Holdings, LLC (“DBH”), an investment manager dedicated to digital real estate and infrastructure, the Company is currently the only global real estate investment trust ("REIT") that owns, manages, and/or operates across all major infrastructure components of the digital ecosystem including data centers, cell towers, fiber networks and small cells .

As previously disclosed, Marc C.

Ganzi, who co-founded DBH, became the Chief Executive Officer ("CEO") of the Company effective July 1, 2020.

In connection with Mr.

Ganzi’s appointment as the Company’s CEO, on June 30, 2020, the Board of Directors of the Company (the "Board") appointed Mr.

Ganzi to the Board and to serve as President of the Company (in addition to his role as CEO), also effective as of July 1, 2020.

Barrack, Jr., who, prior to July 1, 2020, served as the Company’s CEO and President, continues to serve in his role as Executive Chairman of the Company and the Board.

In addition, Jacky Wu was appointed as the Company’s Chief Financial Officer and Treasurer, effective July 1, 2020.

At September 30, 2020, the Company has $46.8 billion of assets under management, of which $23.3 billion is dedicated to digital real estate and infrastructure, managed on behalf of third party investors, and the Company's own balance sheet on behalf of its stockholders.

The Company was organized in May 2016 as a Maryland corporation and was formed through a tri-party merger (the "Merger") among Colony Capital, Inc.

("Colony"), NorthStar Asset Management Group Inc.

("NSAM") and NorthStar Realty Finance Corp.

The Company elected to be taxed as a REIT under the Internal Revenue Code for U.S.

federal income tax purposes commencing with its initial taxable year ended December 31, 2017.

The Company is currently the only global real estate investment trust ("REIT") that owns, manages, and/or operates across all major infrastructure components of the digital ecosystem including data centers, cell towers, fiber networks and small cells .

At March 31, 2021, the Company has $ 46 billion of total assets under management, including both third party capital and the Company's balance sheet, and $ 18 billion of fee earning equity under management.

The Company conducts all of its activities and holds substantially all of its assets and liabilities through its operating subsidiary, Colony Capital Operating Company, LLC (the "Operating Company" or the "OP") .

At September 30, 2020, the Company owned 90 % of the OP , as its sole managing member.

At March 31, 2021, the Company owned 90 % of the OP , as its sole managing member.

The remaining 10 % is owned primarily by certain current and former employees of the Company as noncontrolling interests.

Acceleration of Digital Transformation and COVID-19 Considerations

The world continues to face significant healthcare and economic challenges arising from the coronavirus disease 2019, or COVID-19, global pandemic.

Efforts to address the pandemic, such as social distancing, closures or reduced capacity of retail and service outlets, hotels, factories and public venues, often mandated by governments, are having a significant impact on the global economy and financial markets across major industries, including many sectors of real estate.

In particular, the Company's real estate investments in the hospitality, wellness infrastructure and retail sectors have experienced a myriad of challenges, including, but not limited to:

significant declines in operating cash flows at the Company's hotel and wellness infrastructure properties, which in turn, affect their ability to meet debt service and covenant requirements on investment-level debt (non-recourse to the Company) and ability to refinance or extend upcoming maturities (Note 10);

flexible lease payment terms sought by tenants;

incremental property operating costs such as labor and supplies in response to COVID-19;

potential payment defaults on the Company's loans receivable;

and a distressed market affecting real estate values in general.

Such adverse impact may continue well beyond the containment of the COVID-19 pandemic.

Furthermore, the COVID-19 crisis may also lead to heightened risk of litigation at the investment and corporate level, with an ensuing increase in litigation and related costs.

The sharp decline and volatility in equity and debt markets, and the economic recession due to COVID-19 have adversely affected the valuation of certain of the Company's financial assets carried at fair value, and also resulted in impairment on certain non-financial assets.

Such effects include the determination that the Company's equity method investment in CLNC was other-than-temporarily impaired at June 30, 2020 (Note 6), decreases in fair value of debt securities (Note 6) and loans receivable (Note 12), and impairment of non-digital real estate assets (Note 4).

Additionally, the COVID-19 crisis has reinforced the critical role and the resilience of the digital real estate and infrastructure sector in a global economy that is increasingly reliant on digital infrastructure.

Accordingly, in the second quarter of 2020, the Company determined that it would accelerate its shift to a digitally-focused strategy in order to better position the Company for growth.

This digital transformation requires a rotation of the Company's non-digital assets into

digital-focused investments.

As a result, the Company shortened its assumptions of holding periods on its non-digital assets, in particular its hotel and wellness infrastructure assets, which significantly reduced the undiscounted future net cash flows to be generated by these assets below their carrying values at June 30, 2020.

The shortfall in estimated future net cash flows from these assets was further exacerbated by the negative effects of COVID-19 on property operations and market values, as noted above.

As a result, significant impairment was recognized in the second quarter of 2020 on the Company's hotel and wellness infrastructure assets.

In the third quarter of 2020, as the Company looks to exit its hospitality business through a sale of its hotel assets (as discussed further below), additional write-downs were recorded to align the hotel carrying values to the agreed upon selling price.

The acceleration of the Company's digital transformation and the overall reduction in value of the Company's non-digital balance sheet also caused a shortfall in the fair value of the Company's other investment management reporting unit over its carrying value, resulting in significant impairment to the other investment management goodwill in the second quarter of 2020 (Note 7).

The various impairment and fair value decreases as a result of the acceleration of the Company's digital transformation collectively accounted for $3.2 billion of charges in the nine months ended September 30, 2020, of which $2.5 billion was attributable to the OP.

These amounts are reflected within impairment loss, other loss, equity method losses and within impairment loss in discontinued operations on the statement of operations.

The Company believes that it has materially addressed overall recoverability in value across all of its non-digital assets as of September 30, 2020, applying the Company's best estimates and assumptions at this time based upon external factors known to date and the Company's expected digital transformation timeline.

If the extent and duration of the economic effects of COVID-19 negatively affect the Company's financial condition and results of operations beyond the Company's current projections, the estimates and assumptions currently applied by the Company may change, which may lead to further impairment and fair value decreases in its non-digital assets that could be material in the future.

Exit of the Hospitality Business

In September 2020, the Company entered into a definitive agreement with a third party to sell five of the six hotel portfolios in its Hospitality segment (the remaining portfolio is in receivership) and its 55.6% interest in the THL Hotel Portfolio in the Other segment (the remaining interests will continue to be held by investment vehicles managed by the Company), composed of 197 hotel properties in aggregate.

Two of the hotel portfolios that are being sold in the Hospitality segment are held through joint ventures in which the Company holds a 90% and a 97.5% interest, respectively.

The aggregate gross proceeds of $67.5 million, subject to certain adjustments as provided in the sale agreement, as amended, represents a transaction value of approximately $2.8 billion, with the acquirer's assumption of $2.7 billion of investment-level debt.

Consummation of the sale is subject to customary closing conditions, including but not limited to, acquirer’s assumption of the outstanding mortgage notes encumbering the hotel properties and third party approvals.

In October 2020, the parties amended the sale agreement to address certain payments made by the Company to lenders in order to cure certain defaults on the debt associated with a hotel portfolio, and, subject to the satisfaction of certain conditions, to provide the Company with a purchase price credit for a portion of such funded amount.The sale agreement provides that the closing will occur no earlier than January 15, 2021, which may be extended or accelerated by mutual agreement of the Company and the acquirer, provided that, if certain third party approvals have not been obtained by February 15, 2021, each of the Company and the acquirer has the right to extend the closing date until March 15, 2021.

There can be no assurance that the sale will close in the timeframe contemplated or on the terms anticipated, if at all.

The Company’s exit from the hospitality business represents a key milestone in its digital transformation.

Accordingly, the sale of these hotel portfolios is a strategic shift that will have a significant effect on the Company’s operations and financial results, and has met the criteria as held for sale and discontinued operations.

For all current and prior periods presented, the related assets and liabilities are presented as assets and liabilities held for disposition on the consolidated balance sheets (Note 8) and the related operating results are presented as loss from discontinued operations on the consolidated statements of operations (Note 16).

Cooperation Agreement with Blackwells Capital

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 Director’s 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 CLNY common stock.

Distributions to be made through the joint venture arrangement effectively represent a settlement of the proxy contest with Blackwells.

At the inception of the arrangement, the fair value of future distributions to Blackwells was estimated at $3.9 million, included in other liabilities on the consolidated balance

sheet, and as a settlement loss on the consolidated statement of operations, along with $1.2 million reimbursement of legal costs to Blackwells in March 2020.

The settlement liability is remeasured at fair value each quarter until such time final distributions are made to Blackwells.

Refer to Note 12 for further description of the settlement liability.

The Company elected to be taxed as a REIT under the Internal Revenue Code for U.S.

federal income tax purposes.

Digital Transformation

Significant healthcare and economic challenges arising from the coronavirus disease 2019, or COVID-19 pandemic, reinforced the critical role and the resilience of the digital real estate and infrastructure sector in a global economy that is increasingly reliant on telecommunications and data transmission.

Accordingly, in the second quarter of 2020, the Company determined to accelerate its previously announced shift to a digitally-focused strategy in order to better position the Company for growth, which requires a rotation of the Company's traditional non-digital assets into digital-focused investments.

During the first quarter of 2021, the Company successfully exited its hotel business, and continues its process of actively monetizing a substantial majority of its other equity and debt ("OED") investments and its non-digital investment management ("Other IM") business, both of which reside in the Other segment.

The disposition of the Company’s hotel business and the continued efforts to monetize the Company’s OED investments and Other IM business represent strategic shifts in the Company's business that are expected to have a significant effect on the Company’s operations and financial results, and accordingly, have 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 7) and the related operating results are presented as loss from discontinued operations on the consolidated statements of operations (Note 14).

Accelerating the Monetization of OED and Other IM

Having successfully exited its hotel business in the first quarter of 2021, the Company is continuing its efforts to accelerate the monetization of a substantial majority of its OED investments and Other IM business.

These assets consist of non-digital real estate, real estate-related equity and debt investments, and management of the Company's private real estate credit funds and Colony Credit Real Estate, Inc.

In consideration of a potential monetization and consequently, classification of the assets as held for disposition, the Company reassessed the carrying value of these assets based upon estimated recoverable values.

As a result, the Company recognized an aggregate write-down in asset values of $ 420.3 million, of which $ 121.2 million was attributable to the OP, recorded within impairment loss, equity method loss and other loss in discontinued operations (Note 7).

In April 2021, the Company and CLNC agreed to terminate the management agreement for a one-time termination fee of $102.3 million in cash.

The transaction closed on April 30, 2021, resulting in the internalization of CLNC's management and operating functions (the "CLNC Internalization"), with certain employees previously dedicated wholly or substantially to CLNC becoming employees of CLNC.

In connection with the CLNC Internalization, CLNC's board of directors ceased to include Company-affiliated directors on CLNC's board of directors upon expiration of their terms in May 2021.

The Company also entered into a new stockholders agreement, pursuant to which the Company agreed, for so long as the Company owns at least 10% of CLNC's outstanding common shares, to vote in CLNC director elections as recommended by CLNC’s board of directors at any stockholders' meeting that occurs prior to CLNC'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 CLNC's 2023 annual meeting.

The Company currently holds a 36.1% equity ownership in CLNC and is prohibited from acquiring additional CLNC shares.

Exit of the Hotel Business

In March 2021, the Company completed the previously announced exit of its hotel business, which represents a key milestone in the Company’s digital transformation.

Pursuant to an agreement entered into with a third party in September 2020 (as amended in October 2020, February 2021 and March 2021), the Company sold five of the six hotel portfolios in its Hospitality segment and its 55.6% interest in a portfolio of limited service hotels that was acquired through a consensual foreclosure in July 2017 (the "THL Hotel Portfolio") in its Other segment, composed of 197 hotel properties in aggregate.

The remaining portfolio in the Hospitality segment is in receivership and the remaining interests in the THL Hotel Portfolio will continue to be held by investment vehicles currently managed by the Company.

Two of the hotel portfolios that were sold in the Hospitality segment were held through joint ventures in which the Company held a 90% and a 97.5% interest, respectively.

The aggregate selling price of $67.5 million, represented a transaction value of approximately $2.8 billion, with the acquirer's assumption of $2.7 billion of investment-level debt.

Summary of Significant Accounting Policies

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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.

The Company also considers interests held by its related parties, including de facto agents.

The Company also considers interests held by its

related parties, including de facto agents.

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.

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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.

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.

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.

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Such adjustments will be recognized in additional paid-in capital.

Noncontrolling Interests in Investment Entities —This represents predominantly interests in consolidated investment entities held by private investment funds or retail companies managed by the Company or held by third party joint venture partners.

Noncontrolling Interests in Investment Entities —This represents predominantly interests in consolidated investment entities held by private investment funds managed by the Company or held by third party joint venture partners.

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.

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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).

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Contingent Consideration —Contingent consideration is classified as a liability or equity, as applicable.

Contingent consideration in connection with the acquisition of a business 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.

Contingent consideration in connection with the acquisition of assets is generally recognized only when the contingency is resolved, as part of the basis of the acquired assets.

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.

Contingent consideration in connection with the acquisition of assets (and that is not a VIE) is generally recognized only when the contingency is resolved, as part of the basis of the acquired assets.

Discontinued Operations

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A business or asset group acquired in connection with a purchase 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 criteria.

The pending disposition of the hotel business, composed of the Hospitality segment and the THL Hotel Portfolio in the Other segment, and the disposition of the industrial business in December 2019, including its related management platform, represent strategic shifts that have major effects on the Company’s operations and financial results, and have met the criteria as held for sale and discontinued operations in September 2020 and June 2019, respectively.

Accordingly, for all prior periods presented, the related assets and liabilities are presented as assets and liabilities held for disposition on the consolidated balance sheets (Note 8) and the related operating results are presented as income from discontinued operations on the consolidated statements of operations (Note 16).

The accelerated monetization of a substantial majority of the Company’s OED investments and Other IM business in the Other segment that is in progress as of March 2021;

the disposition of the hotel business, composed of the Hospitality segment and the THL Hotel Portfolio in the Other segment in March 2021;

and the disposition of the bulk industrial portfolio in December 2020, all represent strategic shifts that have or will have major effects on the Company’s operations and financial results, and have met the criteria as discontinued operations as of March 2021, September 2020, and June 2019, respectively.

Accordingly, for all prior periods presented, the related assets and liabilities are presented as assets and liabilities held for disposition on the consolidated balance sheets (Note 7) and the related operating results are presented as income (loss) from discontinued operations on the consolidated statements of operations (Note 14).

Discontinued operations in prior periods include investments in the Other segment that were disposed or otherwise resolved in those periods.

Reclassifications

Reclassifications were made related to discontinued operations as discussed above and to prior period segment reporting presentation as discussed in Note 22.

Additionally, interest receivable, which was included in other assets as of December 31, 2019, has been reclassified to be presented as part of loans receivable to conform to current period presentation.

These reclassification did not affect the Company's financial position, results of operations or cash flows.

Reclassifications were made related to discontinued operations as discussed in "—Discontinued Operations" above and to prior period segment reporting presentation as discussed in Note 20.

Additionally, costs related to unconsummated transactions that were previously included within investment and servicing expense in prior periods have been reclassified into transaction-related costs on the consolidated statement of operations to conform to current period presentation.

These reclassifications did not affect the Company's financial position, results of operations or cash flows.

Adjustment to Accumulated Deficit

On January 1, 2020, upon adoption of Accounting Standards Update ("ASU") No.

2016-13, Financial Instruments—

Credit Losses , the Company recorded a $ 5.1 million increase to accumulated deficit, composed of:

(i) an $ 8.4 million increase to accumulated deficit, representing the Company's share of the cumulative effect adjustment of adopting the lifetime current expected credit loss model by its equity method investee, CLNC;

partially offset by (ii) a $ 3.3 million

decrease to accumulated deficit, reflecting the cumulative effect adjustment of the Company's election of the fair value option for all of its then outstanding loans receivable.

Accounting Standards Adopted in 2021

Credit Losses

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2016-13, Financial Instruments — Credit Losses , followed by subsequent amendments, which modifies the credit impairment model for financial instruments, and codified as Accounting Standards Codification ("ASC") Topic 326.

The multiple existing incurred loss models are replaced with a lifetime current expected credit loss ("CECL") model for off-balance sheet credit exposures that are not unconditionally cancellable by the lender and financial instruments carried at amortized cost, such as loans, loan commitments, held-to-maturity ("HTM") debt securities, financial guarantees, net investment in sales-type and direct financing leases, reinsurance and trade receivables.

Targeted changes are also made to the impairment model of available-for-sale ("AFS") debt securities which are not within the scope of CECL.

The CECL model, in estimating expected credit losses over the life of a financial instrument at the time of origination or acquisition, considers historical loss experience, current conditions and the effects of a reasonable and supportable expectation of changes in future macroeconomic conditions.

Recognition of allowance for credit losses under the CECL model will generally be accelerated as it encompasses credit losses over the full remaining expected life of the affected financial instruments.

For collateralized financial assets, measurement of credit losses under CECL is based on fair value of the collateral if foreclosure is probable or if the collateral-dependent practical expedient is elected for financial assets expected to be repaid substantially through operation or sale of the collateral when the borrower is experiencing financial difficulty.

The accounting model for purchased credit-impaired loans and debt securities will be simplified to be consistent with the CECL model for originated and purchased non-credit-impaired assets.

For AFS debt securities, unrealized credit

losses will be recognized as allowances rather than reductions in amortized cost basis and elimination of the other-than-temporary impairment ("OTTI") concept will result in more frequent estimation of credit losses.

ASC 326 also requires expanded disclosures on credit risk, including credit quality indicators by vintage of financing receivables.

Transitional relief is provided through the ability, upon adoption of the new standard, to elect the fair value option for eligible financial instruments within the scope of the new standard, except for HTM and AFS debt securities.

Transition will generally be on a modified retrospective basis, including the election of the fair value option, with a cumulative effect adjustment to beginning retained earnings, except for prospective application of the CECL model for other than temporarily impaired debt securities and purchased credit-impaired assets.

The Company adopted the new standard on January 1, 2020.

The Company elected the fair value option for all of its outstanding loans receivable, with a cumulative effect adjustment to increase beginning retained earnings by $ 3.3 million.

Under the fair value option, the loans receivable are measured at each reporting period based upon their exit values in an orderly transaction and unrealized gains or losses from changes in fair value are recorded in other gain (loss) on the consolidated statement of operations.

The loans are no longer subject to evaluation for impairment through an allowance for loan loss as such losses are captured through fair value changes.

Additionally, there is no longer an amortization of loan origination fees or discounts on purchased loans as additional interest income.

The Company had no debt securities with unrealized loss in accumulated other comprehensive income ("AOCI") at December 31, 2019 and accordingly, there was no impact upon adoption of the new standard.

As it relates to the Company's other accounts receivable that are subject to CECL, the effect of adoption was immaterial.

The Company reflected the effect of adoption of CECL by its equity method investee, CLNC, through an adjustment to decrease beginning retained earnings by approximately $ 8.5 million on January 1, 2020, representing the Company's share of CLNC's cumulative effect adjustment.

Fair Value Disclosures

In August 2018, the FASB issued ASU No.

2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurements .

The ASU requires new disclosures of changes in unrealized gains and losses in other comprehensive income for recurring Level 3 fair value measurements of instruments held at balance sheet date, as well as the range and weighted average or other quantitative information, if more relevant, of significant unobservable inputs for recurring and nonrecurring Level 3 fair values.

Certain previously required disclosures are eliminated, specifically around the valuation process required for Level 3 fair values, policy for timing of transfers between levels of the fair value hierarchy, as well as amounts and reason for transfers between Levels 1 and 2.

Additionally, the new guidance clarifies or modifies certain existing disclosures, including clarifying that information about measurement uncertainty of Level 3 fair values should be as of reporting date and requiring disclosures of the timing of liquidity events for investments measured under the net asset value ("NAV") practical expedient, but only if the investee has communicated this information or has announced it publicly.

The provisions on new disclosures and modification to disclosure of Level 3 measurement uncertainty are to be applied prospectively, while all other provisions are to be applied retrospectively.

The Company adopted ASU No.

2018-13 on January 1, 2020.

Related Party Guidance for VIEs

In November 2018, the FASB issued ASU No.

2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities .

The ASU amends the VIE guidance to align, throughout the VIE model, the evaluation of a decision maker's or service provider's fee held by a related party, whether or not they are under common control, in both the assessment of whether a fee qualifies as a variable interest and the determination of a primary beneficiary.

Specifically, a decision maker or service provider considers interests in a VIE held by a related party under common control only if it has a direct interest in that related party under common control and considers such indirect interest in the VIE held by the related party under common control on a proportionate basis, rather than in its entirety.

Transition is generally on a modified retrospective basis, with the cumulative effect adjusted to retained earnings at the beginning of the earliest period presented.

The Company adopted ASU No.

2018-17 on January 1, 2020, with no transitional impact upon adoption.

Reference Rate Reform

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

The guidance in Topic 848 is optional, the election of which provides temporary relief for the accounting effects on contracts, hedging relationships and other transactions affected by the transition from interbank offered rates (such as the London Interbank Offered Rate ("LIBOR")) that are expected to be discontinued by the end of 2021 to alternative reference rates (such as the Secured Overnight Financing Rate ("SOFR")).

Modification of contractual terms to effect the reference rate reform transition on debt, leases, derivatives and other contracts is eligible for relief from modification accounting and accounted for as a continuation of the existing contract.

Topic 848 is effective upon issuance through December 31, 2022, and may be applied retrospectively to January 1, 2020.

The Company has elected to apply the hedge accounting expedients related to probability and assessment of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives, which preserves existing derivative treatment and presentation.

The Company may elect other practical expedients or exceptions as applicable over time as reference rate reform activities occur.

Future Application of Accounting Standards

Income Tax Accounting

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Transition is generally prospective, other than the provision related to outside basis difference which is on a modified retrospective basis with cumulative effect adjusted to retained earnings at the beginning of the period adopted, and franchise tax provision which is on either full or modified retrospective.

2019-12 is effective January 1, 2021, with early adoption permitted in an interim period, to be applied to all provisions.

The Company is currently evaluating the impact of this new guidance.

The Company adopted ASU No.

2019-12 on January 1, 2021, with no resulting effect upon adoption.

Accounting for Certain Equity Investments

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The ASU also clarifies that certain forward contracts or purchased options to acquire equity securities that are not deemed to be derivatives or in-substance common stock will generally be measured using the fair value principles of ASC 321 before settlement or exercise, and that an entity should not be considering how it will account for the resulting investments upon eventual settlement or exercise.

2020-01 is to be applied prospectively, effective January 1, 2021, with early adoption permitted in an interim period.

The Company is currently evaluating the impact of this new guidance.

2020-01 is to be applied prospectively.

The Company adopted the new guidance on January 1, 2021, with no resulting effect upon adoption.

Accounting for Convertible Instruments and Contracts on Entity's Own Equity

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• The guidance eliminates the requirement to separate embedded conversion features in convertible instruments, except for (1) a convertible instrument that contains features requiring bifurcation as a derivative under ASC 815 or (2) a convertible debt instrument that was issued at a substantial premium.

Separate accounting for embedded conversion features as an equity component under the cash conversion and beneficial conversion models has been eliminated.

• Under the new guidance, certain conditions under Subtopic ASC 815-40 that may result in contracts being settled in cash rather than shares and therefore preclude (1) equity classification for contracts on an entity’s own equity;

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Adoption of the new standard may be made either on a full retrospective approach or a modified retrospective approach, with cumulative effect adjustment recorded to beginning retained earnings.

2020-06 is effective January 1, 2022, with early adoption permitted on January 1, 2021.

The Company is currently evaluating the effects of this new guidance.

Business Combinations

On July 25, 2019, the Company acquired DBH in a combination of:

(a) cash, a portion of which was deferred until the expiration of certain customary seller indemnification obligations and was paid in full in May 2020 (Note 20);

and (b) issuance of 21,478,515 OP Units, which were measured based upon the closing price of the Company's class A common stock on July 24, 2019 of $ 5.21 per share.

The Company acquired the fee streams but not the equity interests related to the six portfolio companies managed by DBH.

The principals of DBH retained their equity investments, including general partner interests in existing DBH investment vehicles and in Digital Colony Partners fund (“DCP”), which was previously co-sponsored by the Company and DBH.

The acquisition is a strategic transaction that is expected to generate meaningful accretion in value to the Company through expansion of the digital real estate management platform by combining the industry sector knowledge, experience and relationships from the DBH team with the capital raising resources of the Company, as represented by the goodwill value.

The Company's acquisition of DBH included the remaining 50 % equity interest held by DBH in Digital Colony Management, LLC ("DCM"), previously an equity method joint venture with DBH, which manages DCP.

Upon closing of the acquisition, the Company obtained a controlling interest in DCM and remeasured its existing 50 % interest at a fair value of $ 51.4 million.

The full amount, representing the excess of fair value over carrying value of the Company's investment in DCM, was recognized in other gain on the Company's statement of operations, as the Company's carrying value of its investment in DCM prior to the business combination was nil.

The fair value was based upon the value of 50 % of estimated future net cash flows from the DCP fund management contract, discounted at 8 %.

On December 20, 2019, the Company acquired from third party investors a 20 % interest in DataBank, a portfolio company managed by DBH and invested in by the principals and senior professionals of DBH.

The Company is deemed to have a controlling interest in DataBank as control over the operations of DataBank resides substantially with the Company.

Consideration included the payment of cash to third parties for the Company’s interests in DataBank and the issuance of 612,072 OP Units to the DBH principals, Marc Ganzi and Ben Jenkins, now the chief investment officer of the Company’s digital real estate platform, for incentive units owned by the DBH principals and allocable to the Company’s acquired interests, measured based upon the closing price of the Company's class A common stock on December 20, 2019 of $ 4.84 per share.

The OP Units were issued to the DBH principals who had previously received incentive units from DataBank, in exchange for certain of their incentive units such that the Company will not be subject to future carried interest payments to the DBH principals with respect to the Company's investment in DataBank (Note 20).

The DBH principals otherwise retained their equity interests in DataBank.

The Company early adopted the new standard on January 1, 2021 using a modified retrospective approach, with no resulting effect upon adoption.

Asset Acquisitions

Vantage SDC Hyperscale Data Centers

In July 2020 and following an additional investment in October 2020, the Company, alongside fee bearing third party capital, invested $ 1.36 billion for an approximately 90 % equity interest in entities that hold Vantage Data Centers Holdings, LLC's ("Vantage") portfolio of 12 stabilized hyperscale data centers in North America and $ 2.0 billion of secured indebtedness (“Vantage SDC”).

The remaining equity interest in Vantage SDC is held by the existing investors of Vantage, and together with the third party capital raised by the Company, represent noncontrolling interests.

The Company's balance sheet investment is approximately $ 200 million or a 13 % equity interest in Vantage SDC.

Vantage SDC is a carve-out from Vantage's data center business.

The acquisition excluded Vantage's remaining portfolio of development-stage data centers and its employees, all of whom were retained by Vantage.

The day-to-day operations of Vantage SDC continue to be managed by Vantage's existing management company in exchange for management fees, and subject to certain approval rights held by the Company and the co-investors in connection with material actions.

Additionally, the Company and its co-investors have committed to acquire the future build-out of expansion capacity within the Vantage SDC portfolio, including lease up of the expanded capacity and existing inventory, the costs of which will be borne by the previous owners of Vantage SDC, for estimated payments of approximately $ 240 million.

It is anticipated that all, if not most, of the payments will be funded by Vantage SDC from borrowings under its credit facilities and/or cash from operations.

Pursuant to this arrangement, Vantage SDC entered into a lease with a tenant related to a portion of the expansion capacity in the first quarter of 2021, which triggered a payment of $ 14.8 million to the previous owners of Vantage SDC.

The payment was treated as an asset acquisition, which consideration was allocated to data center infrastructure and in-place lease acquired, and as additional consideration for land and building on a relative fair value basis based upon the valuation of the initial acquisition.

zColo Colocation Data Centers

In December 2020, the Company's DataBank subsidiary acquired zColo, the colocation business of Zayo Group Holdings, Inc.

("Zayo"), composed of 39 data centers in the U.S.

and U.K., for approximately $ 1.2 billion through a combination of debt and equity financing, including $ 0.5 billion of third party co-invest capital raised by the Company.

The Company's balance sheet investment is $ 145 million ($ 188 million at the time of closing), which maintained the Company's 20 % equity interest in DataBank.

Acquisition of zColo's remaining five data centers in France for $ 33.0 million closed in February 2021.

Zayo is an anchor tenant within the zColo facilities and is a significant customer of DataBank.

Allocation of Consideration Transferred

The following table summarizes the consideration and allocation to assets acquired, liabilities assumed and noncontrolling interests at acquisition.

The estimated fair values and allocation of consideration are preliminary, based upon information available at the time of closing as the Company continues to evaluate underlying inputs and assumptions.

Accordingly, these provisional values may be subject to adjustments during the measurement period, not to exceed one year, based upon new information obtained about facts and circumstances that existed at the time of closing.

(In thousands) Final As Reported

June 30, 2020

Consideration

Cash $ 181,167 $ 182,731

Deferred consideration 35,500 —

OP Units issued 111,903 2,962

Total consideration for equity interest acquired 328,570 185,693

Fair value of equity interest in Digital Colony Manager 51,400 —

$ 379,970 $ 185,693

Assets acquired, liabilities assumed and noncontrolling interests

Consideration for asset acquisitions incorporates capitalized transaction costs, which includes incentive payments to employees for successful closing of the acquisitions.

Asset Acquisitions

(In thousands) zColo France Vantage SDC zColo US and UK

Assets acquired and liabilities assumed

Cash $ — $ — $ 266

Real estate 26,083 2,720,870 882,327

Assets held for disposition — 29,266

Intangible assets 8,702 765,137 303,119

Other assets 13,008 108,896

Lease right-of-use ("ROU") and other assets 9,536 181,260 415,038

Debt — ( 2,060,307 ) —

Tax liabilities ( 17,392 ) ( 109,587 )

Intangible and other liabilities ( 16,194 ) ( 120,178 )

Fair value of net assets acquired 132,722 438,312

Noncontrolling interests in investment entities — ( 724,567 )

Goodwill $ 247,248 $ 471,948

• Intangible assets acquired included primarily management contracts, investor relationships and trade name.

• The fair value of management contracts, including the Company's 50 % interest in Digital Colony Manager, was estimated based upon estimated net cash flows generated from those contracts, discounted at 8 %, with remaining lives estimated between 3 and 10 years.

• Investor relationships represent the fair value of potential fees, net of operating costs, to be generated from repeat DBH investors in future sponsored funds, discounted at 11.5 %, and potential carried interest discounted at 25 %.

• The Digital Bridge trade name was valued using a relief-from-royalty method, based upon estimated savings from avoided royalty at a rate of 1 % on expected net income, discounted at 11.5 %, with an estimated useful life of 10 years.

• Other liabilities assumed were primarily deferred revenues and deferred tax liabilities recognized upon acquisition, representing the tax effect on the book-to-tax basis difference associated with management contract intangibles.

• Real estate was valued based upon (i) current replacement cost for buildings, improvements and data center infrastructure assets;

(ii) recent comparable sales or current listings for land;

and (iii) contracted price net of selling cost for real estate held for sale.

• Lease related intangibles include in-place leases, leasing commissions and tenant relationships which reflect the value of income foregone or cost incurred if the properties were otherwise vacant and the likelihood of lease renewal by existing tenants, as well as above- and below-market leases which represent the differential between market and contractual rents.

• The remaining intangible assets acquired are data center service contracts, customer relationships and trade name.

• The value of data center service contracts was estimated based upon net income generated from these services that would otherwise have been foregone if such customer contracts were not in place.

• Customer relationships were valued as the incremental net income attributable to these relationships considering the projected net cash flows of the business with and without the customer relationships in place, discounted at 9.5 %.

• The trade name of DataBank was valued based upon estimated savings from avoided royalty at a royalty rate of 2 %, discounted at 9.5 %, with a 5 year useful life.

• Other assets acquired and liabilities assumed include primarily right-of-use ("ROU") lease assets associated with leasehold data centers and corresponding lease liabilities.

Deferred tax liabilities represent the tax effect on book-to-tax basis difference, primarily on real estate assets.

• All assumed debt bears variable rates, with carrying values approximating fair values based upon market rates and spreads that prevailed at the time of acquisition.

• Noncontrolling interests in investment entities were valued based upon their proportionate share of net assets of DataBank at fair value.

The excess of the fair value of consideration transferred over the fair values of identifiable assets acquired, liabilities assumed and noncontrolling interests was recorded as goodwill assigned to the DataBank reporting unit within the digital segment.

Goodwill represents the value of the business acquired not already captured in identifiable assets, such as the potential for future customers, synergies, revenue and profit growth, as well as industry knowledge, experience and relationships that the DataBank management team brings.

Intangible, lease and other liabilities ( 11,303 ) ( 82,350 ) ( 419,262 )

Fair value of net assets acquired for cash consideration $ 33,018 $ 1,524,610 $ 1,181,488

• 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) recent comparable sales or current listings for land;

and (iv) contracted price net of estimated selling costs for real estate held for sale.

Useful lives of real estate acquired ranges from 30 to 50 years for buildings and improvements, 7 to 21 years for site improvements, 12 to 19 years for data center infrastructure, and 1 to 5 years for furniture, fixtures and equipment.

• 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 were acquired vacant, and the leasing commissions, legal and marketing costs that would have been incurred to lease up the properties, with remaining lease terms ranging between 3 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 % and 8 %, with remaining lease terms ranging between 2 and 15 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 6 % and 11.5 %, with estimated useful lives between 5 and 15 years.

• Other intangible assets acquired were as follows:

• 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 3 and 15 years.

• Customer relationships were valued as the incremental net cash flows to the zColo business attributable to the in-place customer relationships, discounted at 10 %, with estimated useful life of 12 years.

• Trade name of zColo was valued based upon estimated savings from avoided royalty at a rate of 1 %, discounted at 11.5 %, with useful life of 1 year.

• Assembled workforce was valued based upon the estimated cost of recruiting and training new data center employees for zColo, with a 3 year useful life.

• Other assets acquired and liabilities assumed include primarily lease ROU assets associated with leasehold data centers and 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 acquirees.

• Assumed debt was valued based upon market rates and spreads that prevailed at the time of acquisition for debt with similar terms and remaining maturities.

Other Real Estate Asset Acquisitions

The following table summarizes the Company's other real estate asset acquisitions in 2020 in addition to those discussed above:

($ in thousands) Purchase Price Allocation (1)

Acquisition Date Property Type and Location Number of Properties Purchase

Land Buildings and Improvements Lease-Related Intangible Assets Lease ROU and Other Assets Debt Intangible, Lease and Other Liabilities

Various Hotel—France (2)

9 $ 37,916 $ 5,243 $ 34,038 $ — $ 43,503 $ ( 2,245 ) $ ( 42,623 )

Various Easements—Various in U.S.

— 2,586 2,586 — — — — —

October Office—U.K.

and Ireland (4)

5 32,975 57,222 67,113 5,383 33,054 ( 124,981 ) ( 4,816 )

December Land—U.S — 5,116 5,116 — — — — —

$ 78,593 $ 70,167 $ 101,151 $ 5,383 $ 76,557 $ ( 127,226 ) $ ( 47,439 )

(1) Purchase price includes capitalized transaction costs.

Dollar amounts of purchase price and allocation to assets acquired and liabilities assumed are translated using foreign exchange rates as of the respective dates of acquisition, where applicable.

(2) Bids for hotels under receivership were accepted by the French courts in prior years, with the transactions closing in 2020.

Amounts include acquisition of hotel operations pursuant to operating leases on real estate owned by third parties.

(3) Transferred to the Company's new sponsored fund, Digital Colony Partners II, LP, or DCP II, in December 2020.

(4) The Company acquired a controlling equity interest in a borrower upon default of an acquisition, development and construction ("ADC") loan, which was previously accounted for as an equity method investment.

This resulted in the acquisition of the borrower's real estate assets and assumption of its underlying mortgage debt, some of which is in default.

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

Real estate held for disposition is presented in Note 7.

(In thousands) September 30, 2020 December 31, 2019

(In thousands) March 31, 2021 December 31, 2020

Land $ 511,243 $ 516,085

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Real estate assets, net $ 7,702,711 $ 7,809,964

$ 7,860,474 $ 6,218,196

(1) For real estate acquired in a business combination, the purchase price allocation may be subject to adjustments during the measurement period, not to exceed 12 months from date of acquisition, based upon new information obtained about facts and circumstances that existed at time of acquisition (Note 3).

Real Estate Sales

Results from sales of real estate, including discontinued operations (Note 14), are as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2021 2020

1 unchanged sentence

Gain on sale of real estate 45,750 7,932

Real Estate Acquisitions

The following table summarizes the Company's real estate acquisitions, excluding real estate acquired in business combinations discussed in Note 3.

($ in thousands) Purchase Price Allocation (1)

Acquisition Date Property Type and Location Number of Buildings Purchase

Land Buildings, Improvements and Infrastructure Lease-Related Intangible Assets ROU Lease and Other Assets Lease Intangible Liabilities Debt, Lease and Other Liabilities

Nine Months Ended September 30, 2020

Asset Acquisitions (2)

Various Hotel—France (3)

6 $ 21,231 $ 2,955 $ 18,436 $ — $ 10,563 $ — $ ( 10,723 )

July Hyperscale data centers—U.S.

and Canada 12 1,524,610 103,036 2,606,305 776,666 181,260 ( 26,723 ) ( 2,115,934 )

Various Easements—Various in U.S.

— 2,586 2,586 — — — — —

$ 1,548,427 $ 108,577 $ 2,624,741 $ 776,666 $ 191,823 $ ( 26,723 ) $ ( 2,126,657 )

Year Ended December 31, 2019

Asset Acquisitions

February Bulk industrial—Various in U.S.

6 $ 373,182 $ 49,446 $ 296,348 $ 27,553 $ — $ ( 165 ) $ —

October Wellness infrastructure—United Kingdom (5)

1 12,376 3,478 9,986 732 — ( 1,820 ) —

Various Light industrial—Various in U.S.

84 1,158,423 264,816 850,550 47,945 — ( 4,888 ) —

$ 1,543,981 $ 317,740 $ 1,156,884 $ 76,230 $ — $ ( 6,873 ) $ —

(1) Dollar amounts of purchase price and allocation to assets acquired and liabilities assumed are translated using foreign exchange rates as of the respective dates of acquisition, where applicable.

(2) Useful life of real estate acquired ranges from 40 to 50 years for buildings, 12 to 21 years for site improvements, 12 to 19 years for data center infrastructure, 1 to 7 years for furniture, fixtures, and equipment, 2 to 15 years for lease intangibles, and 5 to 6 years for ROU lease assets.

(3) Bids for hotels under receivership were accepted by the French courts in prior years, with the transactions closing in 2020.

Amounts include acquisition of hotel operations pursuant to operating leases on real estate owned by third parties.

(4) The bulk industrial portfolio was classified as held for sale in June 2019.

(5) Properties acquired pursuant to purchase option under the Company's development facility to a healthcare operator at purchase price equivalent to outstanding loan balance.

(6) The entire light industrial portfolio was sold in December 2019.

Investment in Hyperscale Data Centers

In July 2020 and following an additional investment in October 2020, the Company, alongside fee bearing third party capital, invested $ 1.36 billion for approximately 90 % equity interest ($ 1.2 billion or approximately 80 % at September 30, 2020) in entities that hold Vantage Data Centers' ("Vantage") portfolio of 12 stabilized hyperscale data centers in North America and $ 2.0 billion of secured indebtedness (“Vantage SDC”).

The Company's balance sheet investment is approximately $ 200 million, representing approximately 13 % equity interest (approximately 12 % at September 30, 2020).

Vantage SDC is a carve-out from Vantage's data center business, with the acquisition excluding Vantage's remaining portfolio of development-stage data centers and its employees, all of whom were retained by Vantage.

The day-to-day operations of Vantage SDC will continue to be managed by Vantage's existing management company in exchange for management fees, and subject to certain approval rights held by the Company and the co-investors in connection with material actions.

Additional purchase price of up to an estimated $ 240 million may be payable if Vantage SDC enters into additional leases for vacant inventory and expansion capacity.

It is anticipated that all, if not most, of the additional purchase price will be funded by Vantage SDC from borrowings under its credit facilities and/or cash from operations.

Depreciation and Impairment

The following table summarizes real estate depreciation and impairment.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2021 2020

1 unchanged sentence

Impairment of real estate and related asset group (1)

Continuing operations

Held for disposition 14,466 204

Held for investment 766 48,328

9,345 127,044 1,764,235 168,531

(1) Includes impairment of real estate intangibles of $ 9.3 million in the nine months ended September 30, 2020 and ROU on ground leases of $ 1.4 million and $ 15.1 million in the three and nine months ended September 30, 2020, respectively.

For both the three and nine months ended September 30, 2019, amounts include impairment of real estate intangibles of $ 0.9 million.

(2) Includes impairment of hotel properties prior to their reclassification as held for sale and discontinued operations.

Discontinued operations

Held for disposition 104,528 7,372

Held for investment (2)

(1) Includes impairment of real estate intangibles of $ 63,000 and $ 7.0 million in the three months ended March 31, 2021 and 2020, respectively, and impairment of ground lease ROU of $ 6.1 million and $ 13.0 million in the three months ended March 31, 2021 and 2020, respectively.

(2) Represents impairment recorded in 2020 on properties in the Hospitality and Other segments prior to their reclassification as held for disposition and discontinued operations.

Impairment of Real Estate Held for Disposition

Real estate held for disposition is carried at the lower of amortized cost or fair value.

Real estate carried at fair value totaled $ 1.1 billion at September 30, 2020 and $ 253.4 million at December 31, 2019 based upon impairments recorded during the nine months ended September 30, 2020 and year ended December 31, 2019, respectively, generally representing Level 3 fair values.

Real estate held for disposition that was written down was generally valued using either broker opinions of value, or a combination of market information, including third-party appraisals and indicative sale prices, adjusted as deemed appropriate by management to account for the inherent risk associated with specific properties.

In all cases, fair value of real estate held for disposition is reduced for estimated selling costs ranging from 1 % to 16 %.

In 2020, the Company also considered the impact of a global economic downturn as a result of COVID-19, specifically as it affects real estate values, and where appropriate, factored in a reduction in potential sales prices, which resulted in additional impairment on real estate held for disposition in 2020.

Real estate held for disposition is carried at the lower of amortized cost or fair value less estimated selling costs.

Real estate held for disposition that has been written down and carried at fair value totaled $ 82.7 million and $ 897.9 million relating to continuing and discontinued operations, respectively, at March 31, 2021 and $ 1.0 billion relating to discontinued operations at December 31, 2020, generally representing Level 3 fair value.

Real estate held for disposition that was written down in 2021 and in 2020 was valued using either estimated recoverable value, sales price, broker opinions of value, or third-party appraisals, in certain cases, adjusted as deemed appropriate by management to account for the inherent risk associated with specific properties.

Impairment on real estate held for disposition in 2020 also factored in the economic effects of COVID-19 on real estate values.

Fair value of real estate held for disposition was generally reduced for estimated selling costs, where applicable, ranging from 1 % to 3 %.

Impairment of Real Estate Held for Investment

Real estate held for investment that was written down to fair value during the nine months ended September 30, 2020 and year ended December 31, 2019 had carrying values totaling $ 3.6 billion and $ 355.0 million, respectively, at the time of impairment (including properties in the Hospitality segment that were impaired in 2020 and 2019 prior to their reclassification as held for sale and discontinued operations, and similarly including properties in the THL Hotel Portfolio that were impaired in 2019), representing Level 3 fair values.

Impairment was driven by shortened holding period assumptions made in connection with the preparation and review of the financial statements, particularly in the hotel and wellness infrastructure portfolios.

The shortened holding period assumption is attributable to both the Company's accelerated digital transformation, and the risk that the Company is unable to obtain accommodation from lenders on non-recourse mortgage debt that is in default or at risk of default.

The Company's assessment considered various strategic and financial alternatives to maximize the value of its non-digital real estate assets, while also balancing the need to preserve liquidity and prioritize the growth of its digital business.

A shortened holding period was an indicator of impairment as it decreased the amount of carrying value recoverable from future cash flows, which was further exacerbated by a decline in property operating performance and market values as a result of the economic effects of COVID-19.

The Company compared the carrying values to the undiscounted future net cash flows expected to be generated by these properties over their holding periods.

In performing this analysis, the Company considered the likelihood of possible outcomes under various holding period scenarios by applying a probability-weighted approach to different holding periods.

For hotel properties, the Company applied a range of reductions to near term cash flow projections to account for uncertainties due to COVID-19.

For properties for which undiscounted expected net cash flows over their respective holding periods fell short of carrying values, the Company expects that the carrying value of these properties would likely not be recoverable.

Fair values were estimated for these properties based upon one or a combination of the following:

Real estate held for investment that was written down to fair value during the three months ended March 31, 2021 had carrying values of $ 1.1 million relating to continuing operations, and for the year ended December 31, 2020, carrying values of $ 1.3 billion and $ 2.4 billion relating to continuing and discontinued operations, respectively, at the time of impairment, representing Level 3 fair value.

Real estate carrying values at December 31, 2020 included properties in the Hospitality and Other segments that were impaired in 2020 prior to being classified as held for sale and discontinued operations.

Impairment in 2021 relates to the Wellness Infrastructure segment and was based upon an appraised value of a net leased skilled nursing facility that may be repurposed or sold.

Impairment in 2020 was attributed primarily to shortened hold period assumptions, particularly in the hotel and wellness infrastructure portfolios, driven by the Company's accelerated digital transformation in the second quarter of 2020, and/or to a lesser extent, decline in property operating performance, in part from the economic effects of COVID-19.

The Company compared the real estate carrying values to the undiscounted future net cash flows expected to be generated by these properties over their expected hold periods.

For properties for which undiscounted expected net cash flows over their respective hold periods fell short of carrying values, the Company expects that the carrying value of these properties would likely not be recoverable.

Fair value of impaired real estate held for investment in 2020 was estimated based upon:

(i) third party appraisals, (ii) broker opinions of value with discounts applied based upon management judgment, (iii) income capitalization approach, using net operating income for each property and applying capitalization rates between 10.0 % and 12.0 %;

or (iv) discounted cash flow analyses with terminal values determined using terminal capitalization rates between 7.3 % and 11.3 %, and discount rates between 8.5 % and 9.5 %.

The Company considered the risk characteristics

of each property in determining capitalization rates and where applicable, used higher capitalization rates or discount rates to reflect the inherent stress on real estate values in a deteriorating economic environment.

The Company considered the risk characteristics of the properties and adjusted the capitalization rates and/or discount rates as applicable.

Impairment was measured as the excess of carrying value over fair value for each of these properties.

The Company believes that it has materially addressed overall recoverability in the value of its non-digital real estate assets, applying the Company's best estimates and assumptions at this time based upon external factors known to date and the Company's expected digital transformation timeline.

If the extent and duration of the economic effects of COVID-19 negatively affect the Company's real estate operations and its ability to meet its non-recourse mortgage debt obligations beyond the Company's current projections, the estimates and assumptions currently applied by the Company may change, which may lead to further impairment of its non-digital real estate assets, in particular, its wellness infrastructure assets, that could be material in the future.

As assessment of real estate impairment is subjective and judgmental, actual results may differ if changes occur in the assumptions used and/or in market conditions and accordingly, negative changes to these variables would result in further impairment charge in the future.

Property Operating Income

Since December 2019, lease income includes:

(i) fixed lease payments for interconnection services and a committed amount of power in connection with contracted data center leased space;

and (ii) variable payments for additional metered power reimbursements based upon usage by data center tenants at prevailing rates.

The Company also earns data center service revenue, primarily composed of cloud services, data storage, data protection, network services, software licensing, and other related information technology services, which are recognized as services are provided to data center customers;

and to a lesser extent, installation services that are recognized at a point in time upon completion of the installation and accompanying services.

For the three and nine months ended September 30, 2020 and 2019, components of property operating income are as follows, excluding amounts related to discontinued operations (Note 16).

Three Months Ended September 30, Nine Months Ended September 30,

Components of property operating income are as follows, excluding amounts related to discontinued operations (Note 14).

Three Months Ended March 31,

(In thousands) 2021 2020

5 unchanged sentences

259,829 171,980

Hotel operating income

2,860 3,167 5,015 11,693

Data center service revenue 15,387 11,973

$ 275,216 $ 183,953

Lease Concessions Related to COVID-19

As a result of the COVID-19 crisis, a number of tenants failed to make rent payments or make timely payments, and some sought more flexible payment terms or rent concessions.

Local governments in certain jurisdictions have implemented or are considering implementing programs that permit or require forbearance of rent payments by tenants affected by COVID-19.

The Company is currently engaged with affected tenants on a case-by-case basis to evaluate and respond to the current environment.

For lease concessions resulting directly from the impact of COVID-19 that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee, for example, where total payments required by the modified contract will be substantially the same as or less than the original contract, the Company made a policy election to account for the concessions as though the enforceable rights and obligations for those concessions existed in the lease contracts, under a relief provided by the FASB.

Under the relief, the concessions will not be treated as lease modifications that are accounted for over the remaining term of the respective leases, as the Company believes this would not accurately reflect the temporary economic effect of the concessions.

Instead, (i) rent deferrals that meet the criteria will be treated as if no changes were made to the lease contract, with continued recognition of lease income and receivable under the original terms of the contract;

and (ii) rent forgiveness that meets the criteria will be accounted for as variable lease payments in the affected periods.

The Company has agreed to provide the affected tenants primarily with a deferral of full or partial rent for two to three months , generally with deferred rent to be repaid in monthly installments over periods of three to 17 months.

This resulted in an increase in receivables totaling $ 0.4 million as of September 30, 2020.

All lease income receivable, including straight-line rents, are subject to the Company's policy for evaluation of collectability based upon creditworthiness of the lessee.

In certain instances, the Company has also agreed to rent forgiveness, totaling $ 0.6 million for both the nine months ended September 30, 2020 and full year 2020.

Loans Receivable

Effective January 1, 2020, the Company elected the fair value option for all of its outstanding loans receivable under a transitional relief upon adoption of ASC 326.

The previous distinction of purchased credit-impaired ("PCI") loans and troubled debt restructurings ("TDR") are not applicable under fair value accounting.

Refer to Note 12 for additional disclosures on loans receivable carried at fair value under the fair value option.

Loans receivable carried at fair value at September 30, 2020 are as follows:

September 30, 2020

($ in thousands) Unpaid Principal Balance Fair Value Weighted Average Coupon Weighted Average Maturity in Years

Mortgage loans $ 1,623,432 $ 659,673 7.7 % 0.7

Mezzanine loans 592,120 327,025 11.0 % 0.7

Non-mortgage loans 189,296 172,249 13.9 % 4.5

2,404,848 1,158,947

Variable rate

Mortgage loans 167,161 166,197 3.3 % 0.0

Mezzanine loans — — — % 0.0

167,161 166,197

Loans receivable $ 2,572,009 $ 1,325,144

Loans receivable carried at amortized cost at December 31, 2019 were as follows:

December 31, 2019

($ in thousands) Unpaid Principal Balance Amortized Cost Weighted Average Coupon Weighted Average Maturity in Years

Non-PCI Loans

Mortgage loans $ 471,472 $ 492,709 10.7 % 1.6

Mezzanine loans 495,182 494,238 12.6 % 0.6

Non-mortgage loans 149,380 148,623 12.9 % 5.4

1,116,034 1,135,570

Variable rate

Mortgage loans 171,848 172,269 4.1 % 0.3

Mezzanine loans 44,887 44,637 12.7 % 1.6

216,735 216,906

1,332,769 1,352,476

Mortgage loans 1,165,804 248,535

Allowance for loan losses ( 48,187 )

Interest receivable 13,504

Loans receivable $ 2,498,573 $ 1,566,328

Past Due and Nonaccrual Loans

Loans that are 90 days or more past due as to principal or interest, or where reasonable doubt exists as to timely collection, are generally considered nonperforming and placed on nonaccrual status.

The following table presents the fair value and unpaid principal balance by aging of loans held for investment at September 30, 2020 for which fair value option was elected.

September 30, 2020

(In thousands) Fair Value Unpaid Principal Balance Fair Value less Unpaid Principal Balance

Loans receivable—fair value option

Current or less than 30 days past due $ 350,372 $ 361,387 $ ( 11,015 )

30-59 days past due — — —

60-89 days past due — — —

90 days or more past due or nonaccrual 974,772 2,210,622 ( 1,235,850 )

$ 1,325,144 $ 2,572,009 $ ( 1,246,865 )

The following table provides an aging summary of non-PCI loans at carrying values before allowance for loan losses and interest receivable at December 31, 2019:

(In thousands) December 31, 2019

Non-PCI loans at carrying values before allowance for loan losses

Current or less than 30 days past due $ 1,042,260

30-59 days past due —

60-89 days past due —

90 days or more past due or nonaccrual 310,216

For the Three and Nine Months Ended September 30, 2019 and as of December 31, 2019

Troubled Debt Restructuring

During the three and nine months ended September 30, 2019, there were no loans modified in a troubled debt restructuring ("TDR"), in which the Company provided borrowers, who are experiencing financial difficulties, with concessions in interest rates, payment terms or default waivers.

At December 31, 2019, the Company had one existing TDR loan that was in maturity default with a carrying value before allowance for loan loss and interest receivable of $ 37.8 million and an allowance for loan loss of $ 37.8 million.

The Company had no additional lending commitment on the TDR loan.

Non-PCI Impaired Loans

Non-PCI loans, excluding loans carried at fair value, are identified as impaired when it is no longer probable that interest or principal will be collected according to the contractual terms of the original loan agreement.

Non-PCI impaired loans include predominantly loans under nonaccrual, performing and nonperforming TDRs, as well as loans in maturity default.

The following table summarizes the non-PCI impaired loans at December 31, 2019:

Gross Carrying Value before Interest Receivable

(In thousands) Unpaid Principal Balance With Allowance for Loan Losses Without Allowance for Loan Losses Total Allowance for Loan Losses

December 31, 2019 $ 326,151 $ 71,754 $ 259,011 $ 330,765 $ 48,146

The average carrying value and interest income recognized on non-PCI impaired loans for the three and nine months ended September 30, 2019 were as follows.

(In thousands) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019

Average carrying value before allowance for loan losses and interest receivable $ 306,114 $ 298,925

Total interest income recognized during the period impaired 1,651 5,943

Cash basis interest income recognized — 447

Purchased Credit-Impaired Loans

PCI loans are acquired loans with evidence of credit quality deterioration for which it is probable at acquisition that the Company will collect less than the contractually required payments.

PCI loans are recorded at the initial investment in the loans and accreted to the estimated cash flows expected to be collected as measured at acquisition date.

The excess of cash flows expected to be collected, measured as of acquisition date, over the estimated fair value represents the accretable yield and is recognized in interest income over the remaining life of the loan.

The difference between contractually required payments as of the acquisition date and the cash flows expected to be collected, which represents the nonaccretable difference, is not recognized as an adjustment of yield, loss accrual or valuation allowance.

Factors that most significantly affect estimates of cash flows expected to be collected, and accordingly the accretable yield, include:

(i) estimate of the remaining life of acquired loans which may change the amount of future interest income;

(ii) changes to prepayment assumptions;

(iii) changes to collateral value assumptions for loans expected to foreclose;

and (iv) changes in interest rates on variable rate loans.

There were no PCI loans acquired in the nine months ended September 30, 2019.

Changes in accretable yield of PCI loans for the nine months ended September 30, 2019 were as follows:

(In thousands) Nine Months Ended September 30, 2019

Beginning accretable yield $ 9,620

Changes in accretable yield 11,647

Accretion recognized in earnings ( 9,471 )

Effect of changes in foreign exchange rates ( 270 )

Ending accretable yield $ 11,526

At December 31, 2019, there were no PCI loans on the cash basis or cost recovery method for recognition of interest income.

Allowance for Loan Losses

Allowance for loan losses and related carrying values before interest receivable of loans held for investment at December 31, 2019 were as follows:

December 31, 2019

(In thousands) Allowance for

Carrying Value

Non-PCI loans $ 48,146 $ 71,754

PCI loans 41 17,935

$ 48,187 $ 89,689

Changes in allowance for loan losses for the nine months ended September 30, 2019 are presented below.

(In thousands)

Nine Months Ended September 30, 2019

Allowance for loan losses at January 1

Provision for loan losses, net

Allowance for loan losses at September 30 $ 51,858

Provision for loan losses by loan type was as follows:

(In thousands) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019

Non-PCI loans $ 17,228 $ 30,035

PCI loans 5 5,812

Total provision for loan losses, net $ 17,233 $ 35,847

Lending Commitments

The Company has lending commitments to borrowers pursuant to certain loan agreements in which the borrower may submit a request for funding contingent on achieving certain criteria, which must be approved by the Company as lender, such as leasing, performance of capital expenditures and construction in progress with an approved budget.

At September 30, 2020, total unfunded lending commitments was $ 133.6 million, of which the Company's share was $ 29.5 million, net of amounts attributable to noncontrolling interests.

For the three months ended March 31, 2021, property operating income from a single tenant accounted for approximately 11 % of the Company's total revenues, excluding discontinued operations.

The Company's share of property operating income from the tenant is approximately 13 %, net of amounts attributable to noncontrolling interests in investment entities.

There was no similar tenant concentration in the three months ended March 31, 2020.

Equity and Debt Investments

The Company's equity investments and debt securities are represented by the following:

(In thousands) September 30, 2020 December 31, 2019

The Company's equity investments and debt securities, excluding investments held for disposition (Note 7), are represented by the following:

(In thousands) March 31, 2021 December 31, 2020

Equity Investments

Equity method investments

Investment ventures $ 1,462,730 $ 1,845,129

CLNC $ 352,822 $ 385,193

Other investment ventures 18,641 19,903

Private funds 175,364 173,039

Investments under fair value option 39,342 31,012

586,169 609,147

1 unchanged sentence

Marketable equity securities 129,103 218,485

Investment ventures — 91,472

Private funds and non-traded REIT 36,559 38,641

Non-traded REIT and private funds 27,828 20,495

Total equity investments 743,100 848,127

1 unchanged sentence

N-Star CDO bonds, available for sale 34,719 28,576

CMBS of consolidated fund, at fair value — 2,732

Total debt securities 27,898 57,591

Equity and debt investments $ 777,819 $ 876,703

Equity Investments

The Company's equity investments represent noncontrolling equity interests in various entities, including investments for which the Company has elected the fair value option.

The Company's equity investments represent noncontrolling equity interests in various entities, including equity method investments for which the Company has elected the fair value option.

Equity Method Investments

The Company owns a significant interest in CLNC, a publicly-traded REIT that it manages.

The Company accounts for its investment under the equity method as it exercises significant influence over operating and financial policies of CLNC through a combination of its ownership interest, its role as the external manager and board representation, but does not control CLNC.

The Company also owns equity method investments that are structured as joint ventures with one or more private funds or other investment vehicles managed by the Company, or with third party joint venture partners.

These investment ventures are generally capitalized through equity contributions from the members and/or leveraged through various financing arrangements.

The Company elected the fair value option to account for its interests in certain investment ventures and limited partnership interests in third party private equity funds (Note 12).

The liabilities of the equity method investment entities may only be settled using the assets of these entities and there is no recourse to the general credit of either the Company or the other investors for the obligations of these investment entities.

Neither the Company nor the other investors are required to provide financial or other support in excess of their capital commitments.

The Company’s exposure to the investment entities is limited to its equity method investment balance.

The Company’s investments accounted for under the equity method are summarized below:

($ in thousands) Carrying Value at

Investments (1)

Description September 30, 2020 December 31, 2019

Colony Credit Real Estate, Inc.

Common equity in publicly traded commercial real estate credit REIT managed by the Company and membership units in its operating subsidiary ( 36.4 % ownership)

$ 365,872 $ 725,443

RXR Realty, LLC Common equity in investment venture with a real estate investor, developer and investment manager (sold in February 2020)

Preferred equity Preferred equity investments with underlying real estate

126,706 138,428

ADC investments Investments in acquisition, development and construction loans in which the Company participates in residual profits from the projects, and the risk and rewards of the arrangements are more similar to those associated with investments in joint ventures

625,999 543,296

Private funds General partner and/or limited partner interests in private funds (excluding carried interest allocation)

234,765 115,055

Private funds—carried interest Disproportionate allocation of returns to the Company as general partner or equivalent based on the extent to which cumulative performance of the fund exceeds minimum return hurdles

Other investment ventures

Interests in 11 investments at September 30, 2020

180,958 127,088

Fair value option Interests in initial stage ventures, real estate development, hotel co-investments, and limited partnership interests in private equity funds 165,770 222,875

$ 1,700,480 $ 1,987,515

(1) Each equity method investment has been determined to be either a VIE for which the Company was not deemed to be the primary beneficiary or a voting interest entity in which the Company does not have the power to control through a majority of voting interest or through other arrangements.

(2) CLNC is governed by its board of directors.

The Company's role as manager is under the supervision and direction of CLNC's board of directors, which includes representatives from the Company but the majority of whom are independent directors.

Significant Sales of Equity Method Investments

In February 2020, the Company sold its equity investment in RXR Realty, LLC for net proceeds after taxes of $ 179.1 million, recording a gain of $ 106.1 million, which is included in equity method earnings.

Impairment of Equity Method Investments

The Company evaluates its equity method investments for OTTI at each reporting period and recorded impairment of $ 26.0 million and $ 3.1 million for the three months ended September 30, 2020 and 2019, respectively, and $ 323.8 million and $ 253.5 million for the nine months ended September 30, 2020 and 2019, respectively.

Equity method investments that were written down to fair value during the nine months ended September 30, 2020 and year ended December 31, 2019 had carrying values totaling $ 551.2 million and $ 745.3 million, respectively, at the time of impairment.

Impairment charges were generally determined using recoverable values for investments resolved or sold, or investment values based upon projected exit strategies, other than for CLNC as discussed below.

Other-Than-Temporary Impairment ("OTTI") —In the third quarter of 2020, the Company determined that the decline in CLNC's stock price, closing at $ 4.91 per share at September 30, 2020, does not represent further OTTI of its investment in CLNC.

In the second quarters of 2020 and 2019, the Company determined that its investment in CLNC was other-than-temporarily impaired and recorded an impairment charge, included in equity method losses, of $ 274.7 million and $ 227.9 million, respectively.

In each case, the OTTI charge was measured as the excess of carrying value over market value of its investment in CLNC based upon CLNC's closing stock price on the last trading day of the quarter of $ 7.02 per share on June 30, 2020 and $ 15.50 per share on June 28, 2019.

At June 30, 2020, the Company's investment in CLNC had a carrying value of $ 611.2 million prior to the OTTI charge, which was in excess of its market value of $ 336.5 million.

In March and April 2020, there was a significant decrease in CLNC's stock price, which reflected the significant volatility in equity markets and the significant decline in equity prices, for mortgage REITs and across industries, due to the COVID-19 crisis.

Along with other publicly traded mortgage REITs, CLNC has seen a rebound in its stock price in May and June 2020, but its stock continues to trade below pre-COVID-19 levels.

As of June 30, 2020, there was not a large disparity between the Company's carrying value in CLNC and CLNC's internal estimated NAV.

Nevertheless, with increasing uncertainty over the extent and duration of the COVID-19 crisis, and the timeline for a recovery in the U.S economy, the Company believes that it is unlikely that the CLNC stock will recover and trade closer to its NAV in the near term.

Accordingly, the Company also believes that it would

be unlikely that the shortfall in market value relative to carrying value of its investment in CLNC would recover in the near term.

As a result, the Company recognized OTTI on its investment in CLNC.

Basis Difference —The impairment charges resulted in a basis difference between the Company's carrying value of its investment in CLNC and the Company's proportionate share of CLNC's book value of equity.

The Company owns a 36.1 % interest in CLNC, accounted for under the equity method, as it exercises significant influence over CLNC's operating and financial policies through a combination of its ownership interest, and prior to May 2021, its role as the external manager and its representation on CLNC's board of directors.

Other equity method investments, excluding investments held for disposition, are composed primarily of interests in the Company's sponsored digital investment vehicles, and certain investments accounted for under the fair value option (Note 10).

The liabilities of the equity method 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 investment entities.

The Company is not required to provide financial or other support in excess of its capital commitments and its exposure is limited to its investment balance.

Other-Than-Temporary Impairment ("OTTI") —The Company evaluates its equity method investments for OTTI at each reporting period.

The Company determined there was no OTTI in the three months ended March 31, 2021.

In the second quarter of 2020, the Company had determined that its investment in CLNC was other-than-temporarily impaired and recorded an impairment charge, included in equity method losses, of $ 274.7 million, measured as the excess of carrying value of its investment in CLNC over market value of $ 336.5 million based upon CLNC's closing stock price of $ 7.02 per share on June 30, 2020.

At March 31, 2021, the fair value of the Company's investment in CLNC, based upon its closing stock price of $ 8.52 per share, was in excess of its carrying value.

Basis Difference —The impairment charges recorded by the Company on its investment in CLNC resulted in a basis difference between the Company's carrying value of its investment in CLNC and the Company's proportionate share of CLNC's book value of equity.

The impairment charge was applied to the Company's investment in CLNC as a whole and was not determined based on an impairment assessment of individual assets held by CLNC.

In order to address this basis difference, the impairment charges were generally allocated on a relative fair value basis across CLNC's various investments.

Accordingly, for any future impairment charges taken by CLNC on these investments, the Company's share thereof will be applied to reduce the basis difference and will not be recorded as an equity method loss until such time the basis difference associated with the respective investments has been fully eliminated.

For the three and nine months ended September 30, 2020, the Company reduced its share of net loss from CLNC by $ 21.9 million and $ 49.8 million, respectively, representing the basis difference allocated to investments that were resolved or impaired by CLNC during these periods.

The remaining basis difference at September 30, 2020 was $ 311.7 million.

In order to address the basis difference, the impairment charge was generally allocated on a relative fair value basis across CLNC's various investments.

Accordingly, for any future write-downs taken by CLNC on these investments, the Company's share thereof is applied to reduce the basis difference and is not recorded as an equity method loss until such time the basis difference associated with the respective investments has been fully eliminated.

For the three months ended March 31, 2021 and 2020, the Company reduced its share of net loss of CLNC by $ 24.6 million and $ 19.2 million, respectively, representing the basis difference allocated to investments that were resolved or impaired by CLNC during these periods.

The remaining basis difference at March 31, 2021 was $ 252.9 million.

Other Equity Investments

Other equity investments consist of the following:

Marketable Equity Securities —These are primarily equity investment in a third party managed mutual fund and publicly traded equity securities held by a consolidated private open-end fund.

The equity securities of the consolidated fund comprise listed stocks primarily in the U.S.

Marketable Equity Securities —These are publicly traded equity securities held by private open-end funds consolidated by the Company and prior to January 2021, equity investment in a third party mutual fund (Note 10).

The equity securities of the consolidated funds comprise listed stocks primarily in the U.S.

and to a lesser extent, in Europe, and predominantly in the digital real estate and telecommunication sectors.

Investment Ventures —In April 2020, the Company recapitalized its co-investment venture, which holds common equity in the Albertsons supermarket chain, and reduced its interest in the venture from 50 % to 2 %, generating total proceeds of $ 148.5 million and realizing a gain of $ 60.7 million to the venture, of which the Company's share is 50 %.

The interest recapitalized by the venture entitles the Company and its original co-investors to potential future profit allocation, which takes the form of an allocation of returns from the venture in excess of a minimum return threshold achieved by the new venture partner.

The potential future profit allocation, of which the Company shares in 49 %, is assigned a fair value each reporting period assuming a liquidation of the venture as of the reporting date.

Such fair value may fluctuate over time based upon achievement of the minimum return threshold.

Additionally, a portion of the venture's interest in Albertsons was monetized in conjunction with Albertsons' recapitalization and subsequent initial public offering in June 2020.

The Company's remaining equity interest in the venture is valued based upon the publicly traded stock price of Albertsons Companies, Inc.

("ACI"), adjusted for liquidity restrictions attributable to lock-up provisions on the venture's holdings in ACI.

Private Funds and Non-Traded REIT —This represents interests in a Company-sponsored private fund and a non-traded REIT, NorthStar Healthcare Income, Inc.

("NorthStar Healthcare"), and limited partnership interest in a third party private fund sponsored by an equity method investee, for which the Company elected the NAV practical expedient (Note 12).

Investment Commitments

Investment Ventures— Pursuant to the operating agreements of certain unconsolidated ventures, the venture partners may be required to fund additional amounts for future investments, unfunded lending commitments, ordinary operating costs, guaranties or commitments of the venture entities.

The Company also has lending commitments under ADC arrangements which are accounted for as equity method investments.

At September 30, 2020, the Company’s share of these commitments was $ 18.9 million.

Private Funds— At September 30, 2020, the Company has unfunded commitments of $ 147.7 million to Company sponsored and third party sponsored funds.

Non-Traded REIT and Private Funds —These represent interests in a Company-sponsored non-traded REIT, NorthStar Healthcare Income, Inc.

("NorthStar Healthcare"), and a private fund, for which the Company elected the net asset value ("NAV") practical expedient (Note 10), and an investment in a Company-managed sub-account of a third party private fund.

Investment and Lending Commitments

Private Funds— At March 31, 2021, the Company has unfunded commitments of $ 169.9 million to the Company's sponsored digital funds.

Loans Receivable— The Company has lending commitments to borrowers pursuant to certain loan agreements in which the borrower may submit a request for funding contingent on meeting certain criteria, which must be approved by the Company as lender, such as capital expenditures and construction in progress with an approved budget.

At March 31, 2021, total unfunded lending commitments was $ 39.8 million, of which the Company's share was $ 15.3 million, net of amounts attributable to noncontrolling interests in investment entities.

Debt Securities

The Company's investment in debt securities is composed of available-for-sale N-Star CDO bonds, which are investment-grade subordinate bonds retained by NRF from its sponsored collateralized debt obligations ("CDOs"), and CDO bonds originally issued by NRF that were subsequently repurchased by NRF at a discount.

The Company's investment in debt securities is composed of available-for-sale ("AFS") N-Star CDO bonds, which are subordinate bonds retained by a subsidiary of the Company, NRF Holdco, LLC ("NRF Holdco"), from its sponsored collateralized debt obligations ("CDOs"), and CDO bonds originally issued by NRF Holdco that it subsequently repurchased at a discount.

These CDOs are collateralized primarily by commercial real estate ("CRE") debt and CRE securities.

Commercial mortgage-backed securities (“CMBS”) held by a consolidated sponsored investment company, which is in the process of dissolution, were sold in the third quarter of 2020 and liquidating distributions made to its shareholders.

AFS Debt Securities

The following tables summarize the balance and activities of the N-Star CDO bonds.

The following tables summarize the balance of the N-Star CDO bonds.

Amortized Cost Without Allowance for Credit Loss

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(in thousands) Gains Losses Fair Value

September 30, 2020 $ 46,739 $ ( 23,973 ) $ 5,132 $ — $ 27,898

December 31, 2019 46,002 NA 8,857 — 54,859

There were no sales of N-Star CDO bonds during the nine months ended September 30, 2020 and year ended December 31, 2019.

These CDOs have long dated stated maturities through 2037 and 2041, however, the Company expects the N-Star CDO bonds to have remaining future cash flows up to 3.3 years from September 30, 2020.

March 31, 2021 $ 56,207 $ ( 24,882 ) $ 3,394 $ — $ 34,719

December 31, 2020 46,561 ( 24,688 ) 6,703 — 28,576

There were no sales of N-Star CDO bonds during the three months ended March 31, 2021 and year ended December 31, 2020.

These CDOs have long-dated stated maturities through 2037 and 2041, however, the Company expects the N-Star CDO bonds to have remaining future cash flows up to 3 years from March 31, 2021.

Impairment of AFS Debt Securities

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If the Company intends to sell or is more likely than not required to sell the debt security before recovery of its amortized cost, the entire impairment amount is recognized in earnings within other gain (loss) as a write-off of the amortized cost basis of the debt security.

• If the Company does not intend to sell or is not more likely than not required to sell the debt security before recovery of its amortized cost:

• Upon adoption of CECL effective January 1, 2020, the credit component of the loss is recognized in earnings within other gain (loss) as an allowance for credit loss, which may be subject to reversal for subsequent recoveries in fair value.

If the Company does not intend to sell or is not more likely than not required to sell the debt security before recovery of its amortized cost, the credit component of the loss is recognized in earnings within other gain (loss) as an allowance for credit loss, which may be subject to reversal for subsequent recoveries in fair value.

The non-credit loss component is recognized in other comprehensive income or loss ("OCI").

The allowance is charged off against the amortized cost basis of the security if in a subsequent period, the Company intends to or is more likely than not required to sell the security, or if the Company deems the security to be uncollectible.

• Prior to adoption of CECL on January 1, 2020, the Company evaluated if the decline in fair value is other than temporary, in which case, the credit loss component was recognized in earnings as a write-off of the amortized cost basis of the debt security that is not subject to subsequent reversal.

The non-credit loss component was recognized in OCI.

If the impairment is not other-than-temporary, the entire unrealized loss is recognized in OCI.

2020— For the three and nine months ended September 30, 2020, the Company recorded allowance for credit loss in other loss of $ 1.7 million and $ 24.0 million, respectively.

The credit loss was 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.

At September 30, 2020, there were no AFS debt securities in unrealized loss positions without allowance for credit loss.

2019— The Company recorded OTTI loss on AFS debt securities of $ 6.4 million and $ 7.1 million in other loss for the three and nine months ended September 30, 2019, respectively.

The losses were due to an adverse change in expected cash flows on N-Star CDO bonds.

The Company believed that it was not likely that it would recover the full amortized cost on these securities, primarily based upon the performance and value of the underlying collateral.

At December 31, 2019, there were no AFS debt securities with unrealized loss in AOCI.

Goodwill, Deferred Leasing Costs and Other Intangibles

The following table presents changes in the carrying value of goodwill.

Nine Months Ended September 30,

Changes in allowance for credit losses for AFS debt securities are presented below:

Three Months Ended March 31,

(In thousands) 2021 2020

Beginning balance $ 24,688 $ —

Business combination (Note 3) (1)

( 7,134 ) 247,248

Impairment ( 594,000 ) ( 387,000 )

Provision for credit losses 194 816

Ending balance $ 24,882 $ 816

(1) Includes the effects of measurement period adjustments within a one year period following the consummation of a business combination.

In the first quarter of 2020, $ 51.0 million of goodwill was reassigned from the Other segment to the Digital Investment Management segment to reflect the value of expected future investment management economics associated with certain existing investment vehicles that were repurposed to execute an investment strategy focused on the digital sector, as well as a team of professionals dedicated to the strategy.

The amount that was reassigned to the digital segment was determined based upon the fair value of this digital strategy platform relative to the overall fair value of the other investment management reporting unit prior to the reassignment.

Goodwill balance by reportable segment is as follows.

(In thousands) September 30, 2020 December 31, 2019

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.

At March 31, 2021 and December 31, 2020, there were no AFS debt securities in unrealized loss position without allowance for credit loss.

Goodwill, Deferred Leasing Costs and Other Intangibles

Goodwill balance by reportable segment is as follows, excluding goodwill in the Other segment that is held for disposition (Note 7).

(In thousands) March 31, 2021 December 31, 2020

Balance by reportable segment:

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298,248 298,248

Other 81,561 726,561

$ 761,368 $ 761,368

(1) At September 30, 2020 and December 31, 2019, goodwill of $ 140.5 million related to the DBH acquisition was deductible for income tax purposes.

Impairment of Goodwill

Digital Segments

The Company believes that the current shift and increased reliance on a digital economy positions the Company's digital business for further growth.

Therefore, the Company determined that there were no indicators of impairment on goodwill in the digital reportable segments.

Other Segment

Three Months Ended September 30, 2020 —The Company determined that there were no indicators of additional impairment in the third quarter of 2020 on the remaining balance of goodwill in its other investment management business.

Six Months Ended June 30, 2020 —In connection with the review and preparation of the financial statements, the Company determined that the deterioration in economic conditions as a result of COVID-19 and the Company's acceleration of its digital transformation in the second quarter of 2020 represent indicators of impairment to the goodwill in its other investment management business.

Accordingly, the Company updated its quantitative test of the other investment management goodwill, which indicated that the carrying value of the other investment management reporting unit including goodwill at March 31, 2020 and at June 30, 2020 exceeded its estimated fair value at the respective balance sheet date.

As a result, the Company recognized impairment loss on its other investment management goodwill of $ 79.0 million and $ 515.0 million in the first and second quarters of 2020, respectively.

Valuation of the other investment management reporting unit contemplated a transition from certain of the Company's non-digital management business to a digitally-focused investment management business beginning in the fourth quarter of 2019.

As discussed in Note 1, the Company determined in the second quarter of 2020 that it would accelerate the transition and focus on growing its digital investment management business.

Consequently, as of June 30, 2020, the Company did not ascribe any value to future capital raising potential of the other investment management reporting unit, which represents the credit and opportunity fund management business, as it is no longer part of the

Company's long-term strategy.

Regarding the CLNC management contract, the COVID-19 crisis has caused the Company to postpone its plan to sell the contract.

At June 30, 2020, the contract is valued based upon its contractual termination value, which the Company believes approximates fair value.

As previously discussed, the acceleration of a digital strategy, combined with the negative economic effects of COVID-19 on property operations and market values in 2020, resulted in significant reduction in value of the Company's non-digital balance sheet.

Such reduction in turn translated into a significant decrease in value of the other investment management reporting unit.

The Company had previously considered the hypothetical value of its non-digital investment management business in a spinoff that would result in the Company becoming externally managed, and assigned a value to internally managing the Company's non-digital balance sheet assets.

Under current circumstances, the Company determined that as of June 30, 2020, the hypothetical contract would have inconsequential, if any, remaining value to a market participant, and wrote off the value of internally managing its non-digital balance sheet.

The remaining balance of the other investment management goodwill in the Other segment of $ 81.6 million as of September 30, 2020 is expected to be fully written off in the near future when a runoff of the credit management business is substantially completed.

2019 —In the third and fourth quarters of 2019, the Company recognized impairment losses to its other investment management goodwill of $ 387.0 million and $ 401.0 million, respectively, reflecting:

• loss of future fee income from sale of the industrial business, and reduction in CLNC's fee base to reflect its reduced book value in the third quarter of 2019;

• beginning of the Company's transition to a digital focused investment management business in the fourth quarter of 2019.

(1) Goodwill of $ 140.5 million is deductible for income tax purposes.

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, 2020 December 31, 2019

March 31, 2021 December 31, 2020

(In thousands) Carrying Amount (Net of Impairment) (1)

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226,471 ( 98,219 ) 128,252 226,471 ( 90,624 ) 135,847

Customer relationships (4)

Customer relationships and service contracts (4)

218,081 ( 23,275 ) 194,806 217,809 ( 13,547 ) 204,262

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24,596 ( 679 ) 23,917 25,574 ( 651 ) 24,923

38,325 ( 6,015 ) 32,310 32,285 ( 398 ) 31,887

Total deferred leasing costs and intangible assets

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$ 154,103 $ ( 64,188 ) $ 89,915 $ 153,808 $ ( 59,956 ) $ 93,852

(1) For intangible assets and intangible liabilities recognized in connection with business combinations, purchase price allocations may be subject to adjustments during the measurement period, not to exceed 12 months from date of acquisition, based upon new information obtained about facts and circumstances that existed at time of acquisition (Note 3).

Amounts are presented net of impairments and write-offs.

(2) Lease intangible assets are composed of in-place leases, above-market leases and lease incentives.

(2) Lease intangible assets are composed of in-place leases, above-market leases, lease incentives and tenant relationships.

Lease intangible liabilities are composed of below-market leases.

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

(4) Represent DataBank customer relationships.

(5) Finite-lived trade names are amortized over estimated useful lives of 5 to 10 years.

The Colony trade name with a carrying value of $ 15.5 million is determined to have an indefinite useful life and is not currently subject to amortization.

(6) Represents primarily DataBank data center service contracts and hotel franchise agreements which are amortized over the term of the respective contracts or agreements, and value of certificates of need associated with certain wellness infrastructure portfolios which are not amortized.

(4) In connection with data center services provided in the colocation data center business.

(5) Represents primarily assembled workforce acquired in an asset acquisition and certificates of need associated with certain wellness infrastructure portfolios which are not subject to amortization.

Impairment of Identifiable Intangible Assets

In the three and nine months ended September 30, 2020 and in the fourth quarter of 2019, management contract intangible assets were impaired $ 8.2 million and $ 8.6 million, respectively, and written down to aggregate fair value of $ 12.4 million and $ 62.4 million at the time of impairment, respectively.

Fair value was generally based upon revised future net cash flows to be generated over the remaining life of the respective management contracts, representing Level 3 fair value.

Real estate intangibles are subject to impairment as part of the real estate asset group, as discussed in Note 4.

During the year ended December 31, 2020, investment management contracts were impaired by $ 8.2 million to an aggregate fair value of $ 12.4 million at the time of impairment.

Fair value was based upon the revised future net cash flows over the remaining life of the respective contracts, generally discounted at 10 %, and represent Level 3 fair values.

There was no impairment recorded in the three months ended March 31, 2021.

Real estate related intangible assets are subject to impairment as part of the real estate asset group, as discussed in Note 4.

Amortization of Intangible Assets and Liabilities

The following table summarizes amortization of deferred leasing costs and finite-lived intangible assets and intangible liabilities, excluding amounts related to discontinued operations (Note 14):

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2021 2020

Net increase to rental income (1)

Net increase (decrease) to rental income (1)

$ ( 5,836 ) $ 3,660

Amortization expense

Deferred leasing costs and lease intangibles $ 11,189 $ 7,580 $ 69,058 $ 24,119

Deferred leasing costs and lease related intangibles $ 45,475 $ 15,240

Investment management intangibles 6,238 6,658

Customer relationships 1,572 1,327 4,569 2,999

Customer relationships and service contracts 9,837 3,695

Trade name 11,951 1,098

Other 4,169 80 5,617 184

$ 73,960 $ 26,765

(1) Represents the impact of amortizing above- and below-market leases and lease incentives.

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

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.

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Total assets and related liabilities held for disposition are summarized below.

Assets and liabilities held for non-sale disposition in all periods presented represent a portfolio of 48 hotels in the Hospitality segment that has been placed in receivership following the lender's acceleration of the underlying debt that was defaulted in April 2020.

Control over the operations and any eventual sale of these hotels has been transferred to the receivers, who are acting for the benefit of the lender.

Assets and liabilities held for non-sale disposition in all periods presented represent a portfolio of 48 hotels in receivership following the lender's acceleration of the underlying debt that was defaulted in April 2020.

Control over the operations and any eventual sale of these properties has been transferred to the receivers, who are acting for the benefit of the lender.

The Company has not been released from its debt obligations, however, the debt is non-recourse to the Company.

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

(In thousands) Disposition by Sale Non-Sale Disposition Total Held for Disposition Disposition by Sale Non-Sale Disposition Total Held for Disposition

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Loans receivable 977,759 — 977,759 1,211,307 — 1,211,307

Deferred leasing costs and intangible assets, net 29,919 437 30,356 37,399 2,533 39,932

Equity investments 758,953 — 758,953 860,776 — 860,776

Goodwill, deferred leasing costs and other intangible assets, net 139,851 436 140,287 148,552 437 148,989

Other assets (1)

127,235 26,281 153,516 210,238 15,166 225,404

Due from affiliates 14,844 — 14,844 14,355 — 14,355

Total assets held for disposition $ 3,329,199 $ 765,458 $ 4,094,657 $ 6,652,743 $ 773,525 $ 7,426,268

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Total liabilities related to assets held for disposition $ 1,102,475 $ 834,168 $ 1,936,643 $ 3,904,259 $ 827,513 $ 4,731,772

(1) Represents debt related to assets held for disposition if the debt is expected to be assumed by the acquirer upon sale or the debt is expected to be extinguished through lender's assumption of underlying collateral.

Included in the table above are assets and liabilities held for sale and for non-sale disposition that are related to discontinued operations (Note 16), as follows:

September 30, 2020 December 31, 2019

(In thousands) Hotel Industrial Hotel Industrial

(1) Included corporate aircraft that was impaired by $ 11.9 million in the second quarter of 2020 to reflect recoverable value prior to its sale to a third party in January 2021.

(2) Represents debt related to assets held for disposition if the debt is expected to be assumed by the acquirer upon sale or if the debt is expected to be extinguished through lender's assumption of underlying collateral.

Discontinued Operations

The table below presents assets and liabilities held for sale and for non-sale disposition that are related to discontinued operations (Note 14).

These assets and liabilities are composed of OED investments and intangible assets of the Other IM business, both of which resided in the Other segment, and, prior to its disposition in March 2021, the Company's hotel business, with one hotel portfolio remaining in receivership, as discussed above.

March 31, 2021 December 31, 2020

(In thousands) Other Hotel Other Hotel

Restricted cash $ 114,074 $ 2,523 $ 51,528 $ 92,870

Real estate, net 944,730 736,218 1,153,724 3,504,249

Deferred leasing costs and intangible assets, net 1,851 23,599 6,802 25,371

Loans receivable 977,759 — 1,211,307 —

Equity investments 758,953 — 860,776 —

Goodwill, deferred leasing costs and other intangible assets, net 133,187 436 143,122 1,851

Other assets 119,948 26,281 152,871 70,343

Due from affiliates 14,844 — 14,355 —

Total assets held for disposition—discontinued operations

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$ 1,016,192 $ 834,168 $ 1,055,653 $ 3,658,418

Non-Recourse Investment-Level Debt in Default

Investment-level secured debt, which is non-recourse to the Company, totaling $ 1.3 billion related to hotel assets held for disposition was in default as of the date of this filing, driven by the economic fallout from COVID-19.

Of this amount, the Company is in negotiation with lenders to restructure $ 0.5 billion of defaulted hotel debt, which is expected to be assumed by the buyer upon sale of the underlying hotel assets.

The remaining $ 0.8 billion of defaulted hotel debt relates to debt that has been accelerated by the lender, as discussed above.

In August 2020, $ 0.8 billion of debt related to the THL Hotel Portfolio that is held for sale was modified in a troubled debt restructure with no resulting gain from the restructuring.

The debt is no longer in default and will be assumed by the buyer upon sale of the THL Hotel Portfolio.

Impairment of Assets Classified as Held for Disposition and Discontinued Operations

Real Estate and Related Intangible Assets —Impairment loss was recorded on real estate and related intangible assets classified as held for disposition and discontinued operations totaling $ 104.5 million and $ 259.7 million in the three months ended March 31, 2021 and 2020, respectively (Note 14), as discussed in Note 4.

Goodwill — No impairment loss was recorded in the three months ended March 31, 2021 on the Other IM goodwill that is classified as held for disposition and discontinued operations.

In 2020, the Company had recognized impairment loss on its Other IM goodwill of $ 79.0 million in the first quarter and $ 515.0 million in the second quarter.

In light of the economic effects of COVID-19 and the Company's acceleration of its digital transformation in the second quarter of 2020, both of which represented indicators of impairment, the Company's quantitative test in the prior year indicated that the carrying value of the Other IM reporting unit, including goodwill, exceeded its estimated fair value at March 31, 2020 and at June 30, 2020.

In valuing the Other IM reporting unit in 2020, no value was ascribed to (a) the future capital raising potential of the non-digital credit and opportunity fund management business as it is no longer part of the Company's long-term strategy;

and (b) the hypothetical contract of internally managing the Company's non-digital balance sheet assets following significant decreases in asset values in 2020.

The remaining value of the Other IM reporting unit represents principally the CLNC management contract that was valued based upon its contractual termination value, which approximated fair value.

The Other IM goodwill balance of $ 81.6 million at March 31, 2021 was fully realized in April 2021 upon termination of the CLNC management contract.

Other Intangible Assets —In the three months ended March 31, 2021, investor relationship intangible asset in Other IM was impaired by $ 4.0 million (Note 14) to a fair value of $ 5.5 million based upon estimated recoverable value in a potential monetization of the Company's Other IM business.

There was no impairment loss recorded on Other IM identifiable intangible assets held for disposition in 2020.

Equity Method Investments —Impairment was recorded on equity method investments classified as held for disposition and discontinued operations totaling $ 82.9 million and $ 0.8 million for the three months ended March 31, 2021 and 2020, respectively, included within equity method losses (Note 14).

Equity method investments that were impaired and written down to fair value during the three months ended March 31, 2021 and year ended December 31, 2020 had carrying values totaling $ 479.3 million and $ 701.8 million, respectively, at the time of impairment.

Impairment recorded in 2021 was based upon estimated recoverable values, primarily on ADC loans accounted for as equity method investments.

Significant impairment was also recorded on these ADC loans in the fourth quarter of 2020, previously driven by reduced

future cash flow streams expected from these investments, primarily taking into consideration a combination of lower land values, delayed leasing, and/or offer prices in the current market, generally discounted at rates between 10 % to 20 %.

Other impairment charges during 2020 were generally determined using estimated recoverable values for investments resolved or sold, investment values based upon projected exit strategies, or fair values based upon discounted expected future cash flows from the investments.

Assets Carried at Fair Value —For assets classified as held for disposition and discontinued operations that are carried at fair value, unrealized fair value losses were recorded in other loss of $ 3.1 million for interest in a third party fund and $ 200.7 million for loans receivable, and in equity method losses of $ 25.1 million for equity method investments (Note 14).

Additional information is included Note 10 under " —Level 3 Recurring Fair Values.

Restricted Cash, Other Assets and Other Liabilities

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The following table summarizes the Company's restricted cash balance:

(In thousands) September 30, 2020 December 31, 2019

(In thousands) March 31, 2021 December 31, 2020

Capital expenditures reserves (1)

1 unchanged sentence

Real estate escrow reserves (2)

21,247 15,455

Borrower escrow deposits 6,707 8,079

Lender restricted cash (3)

93,809 82,419

38,198 21,806

Total restricted cash $ 125,959 $ 114,952

(1) Represents primarily cash held by lenders for capital improvements, furniture, fixtures and equipment, tenant improvements, lease renewal and replacement reserves related to real estate assets.

(1) Represents primarily cash held by lenders for capital improvements, tenant improvements, lease renewal and replacement reserves related to real estate assets.

(2) Represents primarily insurance, real estate tax, repair and maintenance, tenant security deposits and other escrows related to real estate assets.

(3) Represents operating cash from the Company's investment properties that are restricted by lenders in accordance with respective debt agreements.

(3) Represents cash from the Company's investment properties that is restricted by lenders in accordance with respective debt agreements.

(4) Includes investment sales proceeds held in escrow.

The following table summarizes the Company's other assets:

(In thousands) September 30, 2020 December 31, 2019

(In thousands) March 31, 2021 December 31, 2020

Straight-line rents $ 37,776 $ 52,136

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Prepaid taxes and deferred tax assets, net 66,992 59,932

Receivables from resolution of investments (2)

Operating lease right-of-use asset, net (2)

388,697 391,935

Finance lease right-of-use asset, net 140,271 143,182

Accounts receivable, net (3)

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Fixed assets, net 20,823 21,264

28,802 44,768

Total other assets $ 834,318 $ 886,817

(1) Deferred financing costs relate to revolving credit arrangements.

(2) Represents proceeds from loan repayments and real estate sales held in escrow, and sales of equity investments pending settlement.

(3) Includes receivables from tenants, resident fees, property level insurance, and asset management fees, net of allowance for doubtful accounts, where applicable, of $ 1.5 million at September 30, 2020 and $ 0.1 million at December 31, 2019.

(4) Reflects impairment of $ 12.3 million on the corporate aircraft in the second quarter of 2020 to estimated recoverable value based upon a shortened holding period.

Deferred Tax Asset

Valuation Allowance —During the nine months ended September 30, 2020, a net valuation allowance of $ 60.3 million was established, including $ 26.7 million of allowance related to deferred tax asset in the Company's discontinued hotel operations (Note 16), primarily as a result of uncertainties in future realization of tax benefit on net operating losses in the hotel and healthcare businesses, taking into consideration impairment losses on these assets.

At September 30, 2020, total valuation allowance was $ 92.4 million, of which $ 32.5 million related to deferred tax asset of the Company's hotel business that is held for disposition (Note 8).

Effect of CARES Act —The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was enacted on March 27, 2020.

Among other things, the CARES Act temporarily removed the 80% limitation on the amount of taxable income that can be offset with a net operating loss (“NOL”) for 2019 and 2020, and allowed for a carryback of NOL generated in years 2018 through 2020 to the five taxable years preceding the taxable year of loss.

The Company has approximately $ 28.1 million of NOL available for carryback under the CARES Act and recorded $ 3.3 million of income tax benefit to

reflect the carryback.

The Company also reclassified $ 8.8 million of deferred tax asset to current tax receivable as of September 30, 2020, which reflects refunds received in July 2020 or expected to be received in the next twelve months as a result of the carryback.

(2) Net of impairment of $ 9.4 million at December 31, 2020 for corporate office leases as the Company determined there is a reduced need for office space based upon the Company's current operations and has abandoned certain leased spaces.

(3) Includes primarily receivables from tenants, resident fees, and reimbursable capital expenditures, and is presented net of immaterial allowance for doubtful accounts, where applicable.

Accrued and Other Liabilities

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

(In thousands) September 30, 2020 December 31, 2019

(In thousands) March 31, 2021 December 31, 2020

Tenant security deposits and payable $ 8,761 $ 9,321

Borrower escrow deposits 6,707 9,903

Deferred income (1)

4 unchanged sentences

Operating lease liability 363,594 373,525

Finance lease liability 146,750 148,974

Accrued compensation 52,838 78,748

3 unchanged sentences

Other liabilities 148,732 101,732

Total accrued and other liabilities $ 789,866 $ 887,519

(1) Represents primarily prepaid rental income, prepaid interest from borrowers held in reserve accounts, and deferred management fees, primarily from digital investment vehicles.

Deferred management fees totaling $ 13.4 million at September 30, 2020 and $ 18.3 million at December 31, 2019 will be recognized as fee income over a weighted average period of 1.6 years and 1.2 years, respectively.

Deferred management fees recognized as income of $ 6.2 million and $ 0.3 million in the three months ended September 30, 2020 and 2019, respectively, and $ 12.0 million and $ 1.0 million in the nine months ended September 30, 2020 and 2019, respectively, pertain to the deferred management fee balance at the beginning of each respective period.

The Company's debt consists 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 8).

Accrued and other liabilities $ 1,036,218 $ 1,193,601

(1) Represents primarily prepaid rental income, prepaid interest from borrowers held in reserve accounts, and deferred management fees from digital investment vehicles.

Deferred management fees totaling $ 1.8 million at March 31, 2021 and $ 6.1 million at December 31, 2020 is expected be recognized as fee income over a weighted average period of 4.9 years and 1.9 years, respectively.

The Company's debt balance consists 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 7).

(In thousands) Corporate Credit Facility (1)

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Junior Subordinated Notes Total Debt

September 30, 2020

March 31, 2021

Debt at amortized cost

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(1) Deferred financing costs related to the corporate credit facility are included in other assets.

(2) Debt principal totaling $ 180.2 million at September 30, 2020 and $ 265.6 million at December 31, 2019 relates to financing of assets held for disposition, and are expected to be repaid upon disposition of the respective underlying assets.

Debt associated with assets held for disposition that is expected to be assumed by the counterparty upon disposition is included in liabilities related to assets held for disposition (Note 8).

The following table summarizes certain information about debt carried at amortized cost.

(2) Debt principal totaling $ 253.7 million at March 31, 2021 and $ 272.5 million at December 31, 2020 relates to financing of assets held for disposition, and is expected to be repaid upon disposition of the respective underlying assets.

Debt associated with assets held for disposition that is expected to be assumed by the counterparty is included in liabilities related to assets held for disposition (Note 7).

The following table summarizes certain characteristics of the Company's debt.

Fixed Rate Variable Rate Total

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Weighted Average Years Remaining to Maturity (2)

September 30, 2020

Corporate credit facility $ — N/A N/A $ — N/A 1.3 $ — N/A 1.3

March 31, 2021

Corporate credit facility $ — N/A N/A $ — — % 0.8 $ — — % 0.8

Convertible and exchangeable senior notes (3)

2 unchanged sentences

— N/A N/A 280,117 3.06 % 15.2 280,117 3.06 % 15.2

Secured debt (3)

33,388 5.02 % 5.2 — N/A N/A 33,388 5.02 % 5.2

513,605 280,117 793,722

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Wellness Infrastructure 400,075 4.55 % 3.9 2,283,458 3.89 % 3.1 2,683,533 4.02 % 3.2

403,490 4.55 % 4.4 2,370,198 4.00 % 3.7 2,773,688 4.08 % 3.8

Other 154,850 4.20 % 2.6 832,350 2.97 % 2.2 987,200 3.17 % 2.3

Other—Other Equity and Debt 21,316 5.63 % — 155,317 4.85 % 0.8 176,633 4.94 % 0.7

3,210,729 3,018,775 6,229,504

1 unchanged sentence

December 31, 2020

Corporate credit facility $ — N/A N/A $ — N/A 2.0 $ — N/A 2.0

Corporate credit facility $ — N/A N/A $ — — % 1.0 $ — — % 1.0

Convertible and exchangeable senior notes (3)

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Non-recourse (5)

Digital Operating — N/A N/A 539,155 6.98 % 4.8 539,155 6.98 % 4.8

Digital Operating 2,132,852 2.54 % 4.8 1,093,991 5.92 % 4.4 3,226,843 3.69 % 4.7

Wellness Infrastructure 401,767 4.55 % 4.1 2,331,366 3.95 % 3.3 2,733,133 4.04 % 3.4

405,980 4.55 % 5.1 2,547,726 5.22 % 4.3 2,953,706 5.13 % 4.4

Other 151,777 4.26 % 3.4 1,086,884 3.24 % 2.6 1,238,661 3.37 % 2.7

Other—Other Equity and Debt 21,316 5.63 % — 164,472 3.85 % 0.1 185,788 4.05 % 0.1

2,555,935 3,589,829 6,145,764

$ 3,133,857 $ 3,869,946 $ 7,003,803

(1) Includes the 5.375 % exchangeable senior notes which is an obligation of NRF Holdco, LLC as the issuer, a subsidiary of Colony Capital, Inc., as described further below.

(2) Represents an obligation of NRF Holdco, LLC as the junior subordinated debt was issued by certain of its subsidiaries, as described further below.

(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 initial maturity dates, or extended maturity dates if extension criteria are met and extension is available at the Company's option.

(3) Includes the 5.375 % exchangeable senior notes which is an obligation of NRF Holdco as the issuer, as described further below.

(4) Represents an obligation of NRF Holdco as the junior subordinated debt was issued by certain of its subsidiaries, as described further below.

Accordingly, Colony Capital, Inc.

and its operating company, Colony Capital Operating Company, LLC, do not act as guarantors.

(3) The fixed rate recourse debt is secured by the Company's aircraft.

(4) Calculated based upon outstanding debt principal at balance sheet date and for variable rate debt, the applicable index plus spread at balance sheet date.

(5) Calculated based upon initial maturity dates of the respective debt, or extended maturity dates if extension criteria are met and extension option is at the Company's discretion as described above.

(6) Investment-level secured debt that is non-recourse to the Company of $ 45.0 million financing wellness infrastructure assets and $ 114.0 million financing the Other Equity and Debt portfolio in the Other segment based on outstanding balance at September 30, 2020 ($ 235.6 million in total across both segments at December 31, 2019), was in default as of the date of this filing.

The wellness infrastructure debt is expected to be repaid through a sale of the underlying property that is currently under negotiation.

Of the defaulted debt in the Other Equity and Debt portfolio, the Company has received notice of acceleration on $ 21.3 million of debt and the underlying property has been placed in receivership.

In connection with the remaining defaulted debt, the Company is negotiating with its lenders to restructure the debt or make other arrangements, as appropriate, with no assurance that the Company will be successful in any of the negotiations.

(7) Previously referred to as Healthcare.

Conveyance to Lender

In August 2020, the Company indirectly conveyed the equity of certain of its wellness infrastructure borrower subsidiaries, comprising 36 properties in its senior housing operating portfolio with a carrying value of $ 156.3 million and $ 157.5 million of outstanding principal ($ 156.7 million carrying value) of previously defaulted wellness infrastructure debt, to an affiliate of the lender, which released the Company from all rights and obligations with respect to those wellness infrastructure assets and corresponding debt.

The conveyance of equity in full satisfaction of the outstanding debt was deemed to be a troubled debt restructuring that resulted in an immaterial gain.

and its operating company, Colony Capital Operating Company, LLC, are not guarantors to the debt.

(5) Investment-level secured debt that is non-recourse to the Company in the Other segment of $ 21.3 million at March 31, 2021 and December 31, 2020 is in default and has been accelerated by the lender.

(6) The fixed rate recourse debt was secured by the Company's aircraft and was repaid in January 2021 upon sale of the aircraft.

Corporate Credit Facility

On June 29, 2020, the OP entered into the Fourth Amendment (the “Amendment”) to the Second Amended and Restated Credit Agreement, dated as of January 10, 2017 (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “Credit Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent, and the several lenders from time to time party thereto.

The Amendment modified the aggregate amount of revolving commitments available under the Credit Agreement to $ 500 million (previously $ 750 million).

The credit facility is scheduled to mature in January 2021, with two 6 -month extension options (representing no change to the overall term due to the Amendment), each subject to a fee of 0.10 % of the commitment amount upon exercise.

In the event that the Company exercises its first extension option, the aggregate amount of revolving commitments available under the Credit Agreement will be reduced to $ 400 million on March 31, 2021.

Pursuant to the Amendment, advances under the Credit Agreement accrue interest at a per annum rate equal to, at the Company’s election, either LIBOR plus a margin of 2.50 % (previously 2.25 %), or a base rate determined according to a prime rate or federal funds rate plus a margin of 1.50 % (previously 1.25 %).

In the event that the OP exercises the first extension option, the foregoing rates will be permanently increased by 0.25 % for periods from and after January 11, 2021.

The credit facility provides revolving commitments of $ 400 million as of March 31, 2021 ($ 450 million at December 31, 2020) and is scheduled to mature in July 2021, with one remaining 6 -month extension option, subject to a fee of 0.10 % of the commitment amount upon exercise.

Advances under the credit facility accrue interest at a per annum

rate equal to, at the Company’s election, either LIBOR plus a margin of 2.75 %, or a base rate determined according to a prime rate or federal funds rate plus a margin of 1.75 %.

Unused amounts under the credit facility accrue a per annum commitment fee of 0.35 %.

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As of the date of this filing, the full $ 400 million is available to be drawn under the facility.

The Amendment provided for modifications to the financial covenants and the borrowing base including, among other things:

exclusion of certain non-recourse debt and related assets in the calculation of certain financial ratios (such assets, the “Specified Excluded Assets”), exclusion of EBITDA and fixed charges of Specified Excluded Assets in the calculation of the OP’s fixed charge coverage ratio, which must exceed 1.3 to 1.0 , reduction of the minimum tangible net worth covenant from $ 4.55 billion to $ 1.74 billion, which must exclude the net worth of Specified Excluded Assets, and modification to the borrowing base to increase capacity for digital investment management and include digital infrastructure investments.

As of September 30, 2020 and through the date of this filing, the Company was in compliance with all of the financial covenants.

The Credit Agreement also contains various additional affirmative and negative covenants, including financial covenants that require the Company to maintain minimum tangible net worth, liquidity levels and financial ratios, as defined in the Credit Agreement.

Further, as a result of modifications to the permitted investments and restricted payment provisions in the Amendment, during the term of the Credit Agreement, the Company is prohibited from, among other things, (i) making any investments other than (A) investments in digital infrastructure assets and (B) pre-existing obligations and protective investments in existing assets to preserve, administer or otherwise realize on such investment, (ii) repurchasing capital stock of the Company and (iii) paying dividends, other than for (A) paying dividends to maintain the Company’s status as a REIT, (B) reducing the payment of income taxes and (C) paying dividends on the Company’s preferred equity.

The Credit Agreement contains various affirmative and negative covenants, including financial covenants that require the Company to maintain minimum tangible net worth, and debt service ratios as well as a maximum leverage ratio, as defined in the Credit Agreement.

As of March 31, 2021 and through the date of this filing, the Company was in compliance with all of the financial covenants.

The Credit Agreement also provides the Company with the flexibility to determine not to maintain REIT status without requiring lender approval.

During the term of the Credit Agreement, the Company is prohibited from, among other things, (i) making any investments other than (A) investments in digital infrastructure assets and (B) pre-existing obligations and protective investments in existing assets to preserve, administer or otherwise realize on such investment, (ii) repurchasing capital stock of the Company and (iii) paying dividends, other than for (A) paying dividends to maintain the Company’s status as a REIT, (B) reducing the payment of income taxes and (C) paying dividends on the Company’s preferred equity.

Certain of the Company’s subsidiaries guarantee the obligations of the Company under the Credit Agreement.

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Convertible and Exchangeable Senior Notes

Convertible and exchangeable senior notes (collectively, the senior notes) outstanding as of September 30, 2020 are as follows, each representing senior unsecured obligations of the respective issuers of the senior notes:

Convertible and exchangeable senior notes (collectively, the senior notes) outstanding as of March 31, 2021 are as follows, each representing senior unsecured obligations of Colony Capital, Inc.

or a subsidiary as the respective issuers of the senior notes:

Description Issuance Date Due Date Interest Rate (per annum) Conversion or Exchange Price (per share of common stock) Conversion or Exchange Ratio

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Conversion or Exchange Shares (in thousands) Earliest Redemption Date Outstanding Principal

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Issued by Colony Capital, Inc.

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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.

In the case of the 5.375 % exchangeable senior notes, NRF Holdco, LLC, a subsidiary of the Company, may elect to settle a holder’s exchange into cash, the Company’s common stock or a combination thereof.

In the case of the 5.375 % exchangeable senior notes, NRF Holdco may elect to settle a holder’s exchange into cash, the Company’s common stock or a combination thereof.

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 addition, prior to June 15, 2023 and subject to certain trading conditions of the Company’s common stock, NRF Holdco, LLC may redeem its 5.375 % exchangeable senior notes at a make-whole redemption price.

In addition, prior to June 15, 2023 and subject to certain trading conditions of the Company’s common stock, NRF Holdco may redeem its 5.375 % exchangeable senior notes at a make-whole redemption price.

In the event of certain change in control transactions and, for the 5.375 % exchangeable senior notes only, on each of June 15, 2023 and June 15, 2028, 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.

Issuance of Exchangeable Senior Notes

In July 2020, the OP issued $ 300.0 million of exchangeable senior notes with maturity in July 2025, bearing interest at 5.75 % per annum, and exchangeable into shares of the Company's class A common stock at an initial exchange rate equal to 434.7826 shares of common stock per $1,000 principal amount of notes, equivalent to an exchange price of approximately $ 2.30 per share.

The initial exchange rate is subject to adjustment upon occurrence of certain events, but will not be adjusted for any accrued and unpaid interest.

Net proceeds from this issuance, after deducting underwriting discounts, commissions and offering expenses, were $ 291.0 million.

Repurchase of Convertible Senior Notes

The Company repurchased $ 371.0 million of the outstanding principal of the 3.875 % convertible senior notes in the third quarter of 2020 for total purchase price of $ 371.1 million, including accrued and unpaid interest, funded with net proceeds from issuance of the 5.75 % exchangeable senior notes in July 2020 and cash on hand through a tender offer of the 3.875 % convertible senior notes completed in September 2020.

Repurchase and Repayment of Senior Notes

The 3.875 % convertible senior notes were fully extinguished following a $ 31.5 million repayment upon maturity in January 2021 and a $ 371.0 million repurchase in the third quarter of 2020, primarily funded by net proceeds from the July 2020 issuance of the 5.75 % exchangeable senior notes by the Operating Company.

These are primarily investment level financing, which are non-recourse to the Company, and secured by underlying commercial real estate and mortgage loans receivable.

In October 2020, Vantage SDC in the Digital Operating segment raised $ 1.3 billion in aggregate across two tranches of securitized notes at a blended fixed rate of 1.8 %, with a 6 year weighted average maturity.

The proceeds were applied primarily to refinance outstanding debt, which will meaningfully reduce the cost of debt and extend debt maturities in Vantage SDC.

In March 2021 and October 2020, DataBank and Vantage SDC, the Company's subsidiaries in the Digital Operating segment, raised $ 657.9 million and $ 1.3 billion of securitized notes at blended fixed rates of 2.3 % and 1.8 %, with 5 years and 6 years maturity, respectively.

In both instances, the proceeds were applied principally to refinance outstanding debt, which meaningfully reduced the overall cost of debt and extended debt maturities at DataBank and Vantage SDC.

Junior Subordinated Debt

A subsidiary of the Company (the “Issuer”) assumed certain junior subordinated debt through the Merger at fair value.

Prior to the Merger, subsidiaries of NRF, which were formed as statutory trusts, NorthStar Realty Finance Trust I through VIII (the “Trusts”), issued trust preferred securities ("TruPS") in private placement offerings.

The sole assets of the Trusts consist of a like amount of junior subordinated notes issued by NRF at the time of the offerings (the "Junior Notes").

As Colony Capital, Inc.

and its operating company, Colony Capital Operating Company, LLC, are not issuers of the junior subordinated debt, neither are obligors nor guarantors on the junior subordinated debt and TruPS.

Trust preferred securities ("TruPS") were previously issued in private placement offerings by subsidiaries of NRF Holdco, LLC (the "Issuer," a subsidiary of Colony Capital, Inc.), which were formed as statutory trusts, NorthStar Realty Finance Trust I through VIII (the “Trusts”).

The sole assets of the Trusts consist 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 is an obligor or guarantor on the Junior Notes or the TruPS.

The Issuer may redeem the Junior Notes at par, in whole or in part, for cash, after five years .

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Additional interest accrues on deferred payments at the annual rate payable on the Junior Notes, compounded quarterly.

The Company uses derivative instruments to manage the risk of changes in interest rates and foreign exchange rates, arising from both its business operations and economic conditions.

Specifically, the Company enters into derivative instruments to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and cash payments, the values of which are driven by interest rates, principally relating to the Company’s investments and borrowings.

Additionally, the Company’s foreign operations expose the Company to fluctuations in foreign interest rates and exchange rates.

The Company enters into derivative instruments to protect the value or fix certain of these foreign denominated amounts in terms of its functional currency, the U.S.

Derivative instruments used in the Company’s risk management activities may be designated as qualifying hedge accounting relationships (“designated hedges”) or otherwise used for economic hedging purposes (“non-designated hedges”).

Fair value of derivative assets and derivative liabilities are as follows:

September 30, 2020 December 31, 2019

(In thousands) Designated Hedges Non-Designated Hedges Total Designated Hedges Non-Designated Hedges Total

Derivative Assets

Foreign exchange contracts $ — $ 150 $ 150 $ 15,307 $ 1,271 $ 16,578

Interest rate contracts 55 127 182 78 237 315

Performance swaps — 5,675 5,675 — 4,493 4,493

Included in other assets $ 55 $ 5,952 $ 6,007 $ 15,385 $ 6,001 $ 21,386

Derivative Liabilities

Foreign exchange contracts $ — $ — $ — $ 8,134 $ 2,482 $ 10,616

Forward contracts — 96,944 96,944 — 116,915 116,915

Included in accrued and other liabilities $ — $ 96,944 $ 96,944 $ 8,134 $ 119,397 $ 127,531

Certain counterparties to the derivative instruments require the Company to deposit cash or other eligible collateral.

The Company had cash collateral on deposit, included in other assets, of $ 10.8 million at September 30, 2020 and $ 10.0 million at December 31, 2019, all of which related to the forward contracts and performance swaps discussed below.

Foreign Exchange Contracts

The following table summarizes the aggregate notional amounts and certain key terms of non-designated foreign exchange contracts in place at September 30, 2020:

Hedged Currency

Instrument Type

Notional Amount

(in thousands)

($ per unit of foreign currency)

Range of Expiration Dates

EUR Put options € 336,000 Min $ 0.95 / Max $ 1.00

November 2020 to May 2022

GBP Put options £ 64,000 Min $ 1.05 / Max $ 1.10

November 2020 to May 2021

The Company’s foreign denominated net investments in subsidiaries or joint ventures were € 485.3 million and £ 262.7 million, or a total of $ 0.9 billion at September 30, 2020, and € 517.9 million and £ 275.5 million, or a total of $ 0.9 billion at December 31, 2019.

The Company enters into foreign exchange contracts to hedge the foreign currency exposure of certain investments in foreign subsidiaries or equity method joint ventures, with notional amounts and termination dates based upon the anticipated return of capital from the investments.

Prior to the second quarter of 2020, the Company utilized primarily (i) forward contracts whereby the Company agreed to sell an amount of foreign currency for an agreed upon amount of U.S.

dollars and (ii) costless collars consisting of caps and floors, which consisted of a combination of currency options with single date expirations.

Both types of hedging strategies were designated as net investment hedges.

During the second quarter of 2020, the Company unwound all of its existing foreign currency hedges and entered into foreign currency put options with upfront premiums whereby the Company gains protection against foreign currency weakening below a specified level.

The put options are set to expire in increments according to the Company's expected monetization timeframe of the hedged investments, but the notional amounts are not identifiable to specific investments.

Accordingly, the put options are not designated for hedge accounting purposes.

Designated Net Investment Hedges

Release of AOCI related to net investment hedges occurs upon losing a controlling financial interest in an investment or obtaining control over an equity method investment.

Upon sale, complete or substantially complete liquidation of an investment in a foreign subsidiary, or partial sale of an equity method investment, the gain or loss on the related net investment hedge is reclassified from AOCI to other gain (loss) as summarized below.

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands) 2020 2019 2020 2019

Designated net investment hedges:

Realized gain transferred from AOCI to earnings $ 414 $ — $ 414 $ 1,026

Non-Designated Hedges

At the end of each quarter, the Company reassesses the effectiveness of its net investment hedges and as appropriate, dedesignates the portion of the derivative notional amount that is in excess of the beginning balance of its net investments.

Any unrealized gain or loss on the dedesignated portion of net investment hedges and on non-designated foreign exchange contracts are recorded in other gain (loss).

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands) 2020 2019 2020 2019

Dedesignated net investment hedges:

Unrealized gain (loss) transferred from AOCI to earnings $ — $ 1,767 $ 1,485 $ 1,367

Non-designated foreign exchange contracts:

Unrealized gain (loss) in earnings ( 840 ) — ( 1,616 ) —

Interest Rate Contracts

The Company uses various interest rate contracts, some of which may be designated as cash flows hedges, to limit its exposure to changes in interest rates on various floating rate debt obligations.

The following table summarizes the interest rate contracts held by the Company at September 30, 2020.

Notional Amount

(in thousands)

Strike Rate / Forward Rate

Instrument Type Designated Non-Designated Index Range of Expiration Dates

Interest rate caps

$ — $ 3,868,574 1-Month LIBOR 3.00 % - 5.70 %

November 2020 to November 2021

Interest rate caps

€ 232,845 € 472,405 3-Month EURIBOR 0.25 % - 1.50 %

January 2021 to June 2024

Interest rate caps

£ — £ 354,581 3-Month GBP LIBOR 1.50 % - 2.25 %

November 2020 to October 2022

The following table summarizes amounts recorded in the income statements related to interest rate contracts.

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands) 2020 2019 2020 2019

Interest expense on designated interest rate contracts (1)

$ 6 $ — $ 12 $ —

Realized and unrealized gain (loss), net on non-designated interest rate contracts (2)

( 197 ) ( 91,574 ) ( 123 ) ( 240,710 )

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

(2) For the three and nine months ended September 30, 2019, amounts include unrealized loss of $ 91.5 million and $ 237.6 million, respectively, on a $ 2.0 billion notional forward starting swap assumed through the Merger, which was settled at the end of 2019.

Forward Contracts and Performance Swaps

The Company has an equity investment in a third party managed real estate mutual fund, accounted for as marketable equity securities carried at fair value.

The Company had previously entered into a series of forward contracts on its shares in the mutual fund in an aggregate notional amount of $ 100 million, equal to its initial investment in the fund, and concurrently, entered into a series of swap contracts with the same counterparty to pay the return of the Dow Jones U.S.

Select REIT Total Return Index.

The Company settled the forwards and swaps in cash upon expiration in January 2020, realizing a gain of $ 5.8 million.

In January 2020, the Company entered into another series of forward and swap contracts with similar terms to the previous transaction.

The forward contracts have a combined notional amount of $ 119 million and expire in January 2021, to be settled in cash or through delivery of the mutual fund shares at the election of the Company.

The new forward and swap transactions required an initial combined collateral deposit of $ 14.3 million, subject to daily net settlements in net fair value changes in excess of a predetermined threshold.

The forwards and swaps are not designated as hedges for accounting purposes.

All realized and unrealized gains (losses) are recorded in other gain (loss) as follows:

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands) 2020 2019 2020 2019

Realized and unrealized gain (loss), net on derivatives:

Forward contracts $ ( 2,267 ) $ ( 8,191 ) $ 19,971 $ ( 20,564 )

Performance swaps 2,114 1,443 6,988 5,013

Unrealized gain (loss) on marketable equity securities held at period end:

Real estate mutual fund 2,266 8,180 ( 20,007 ) 21,089

Offsetting Assets and Liabilities

The Company enters into agreements subject to enforceable master netting arrangements with its derivative counterparties that allow the Company to offset the settlement of derivative assets and liabilities in the same currency by derivative instrument type or, in the event of default by the counterparty, to offset all derivative assets and liabilities with the same counterparty.

The Company has elected not to net derivative asset and liability positions, notwithstanding the conditions for right of offset may have been met, and presents derivative assets and liabilities with the same counterparty on a gross basis on the consolidated balance sheets.

The following table sets forth derivative positions where the Company has a right of offset under netting arrangements with the same counterparty.

Gross Assets (Liabilities) on Consolidated Balance Sheets Gross Amounts Not Offset on Consolidated Balance Sheets Net Amounts of Assets (Liabilities)

(In thousands) (Assets) Liabilities Cash Collateral Pledged

September 30, 2020

Derivative Assets

Foreign exchange contracts $ 150 $ — $ — $ 150

Interest rate contracts 182 — — 182

Performance swaps 5,675 ( 5,675 ) — —

$ 6,007 $ ( 5,675 ) $ — $ 332

Derivative Liabilities

Forward contracts $ ( 96,944 ) $ 5,675 $ 10,752 $ ( 80,517 )

December 31, 2019

Derivative Assets

Foreign exchange contracts $ 16,578 $ ( 4,385 ) $ — $ 12,193

Interest rate contracts 315 — — 315

Performance swaps 4,493 ( 4,493 ) — —

$ 21,386 $ ( 8,878 ) $ — $ 12,508

Derivative Liabilities

Foreign exchange contracts $ ( 10,616 ) $ 4,385 $ — $ ( 6,231 )

Forward contracts ( 116,915 ) 4,493 9,981 ( 102,441 )

$ ( 127,531 ) $ 8,878 $ 9,981 $ ( 108,672 )

Recurring Fair Values

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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.

Fair Value Measurements

Fair Value Measurement Hierarchy

(In thousands) Level 1 Level 2 Level 3 Total

September 30, 2020

March 31, 2021

Marketable equity securities $ 129,103 $ — $ — $ 129,103

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Equity method investments — — 39,342 39,342

Equity method investments held for disposition — — 115,161 115,161

Other liabilities — derivative liabilities

4 unchanged sentences

AFS debt securities — — 28,576 28,576

CMBS of consolidated fund — 2,732 — 2,732

Other assets—derivative assets — 99 — 99

Fair Value Option:

Loans held for investment — — 84,030 84,030

Loans held for disposition — — 1,211,307 1,211,307

Equity method investments — — 31,012 31,012

Equity method investments held for disposition — — 150,787 150,787

Other liabilities — derivative liabilities

— 103,772 — 103,772

Other liabilities—contingent consideration for THL Hotel Portfolio — — 9,330 9,330

Other liabilities—settlement liability — — 24,285 24,285

Marketable Equity Securities

Marketable equity securities consist primarily of investment in a third party managed mutual fund and equity securities held by a consolidated fund.

These marketable equity securities are valued based on listed prices in active markets and classified as Level 1 of the fair value hierarchy.

Marketable equity securities consist of publicly traded equity securities held by private open-end funds consolidated by the Company and prior to January 2021, equity investment in a third party mutual fund.

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

N-Star CDO bonds—Fair value of N-Star CDO bonds are determined internally based on recent trades, if any with such securitizations, the Company's knowledge of the underlying collateral and are determined using an internal price interpolated based on third party prices of the senior N-Star CDO bonds of the respective CDOs.

Fair value of N-Star CDO bonds are determined using an internal price interpolated based upon third party prices of the senior N-Star CDO bonds of the respective CDOs, and applying the Company's knowledge of the underlying collateral and recent trades, if any within the securitizations.

All N-Star CDO bonds are classified as Level 3 of the fair value hierarchy.

CMBS of consolidated fund—Fair value was determined based on broker quotes or third party pricing services, classified as Level 2 of the fair value hierarchy.

These CMBS were fully disposed of in the third quarter of 2020.

Derivative instruments consist of interest rate contracts and foreign exchange contracts that are generally traded over-the-counter, and are valued using a third-party service provider.

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 investments in foreign subsidiaries or equity method joint ventures (in EUR and in GBP), with notional amounts and termination dates based upon the anticipated return of capital from these investments;

and (ii) interest rate caps to limit the exposure to changes in interest rates on various floating rate debt obligations (indexed primarily to LIBOR and to a lesser extent, EURIBOR and GBP LIBOR).

These derivative contracts may be designated as qualifying hedge accounting relationships, specifically as net investment hedges and cash flow hedges, respectively.

At March 31, 2021 and December 31, 2020, notional amounts aggregated to the equivalent of $ 427.1 million and $ 350.5 million, respectively, for foreign exchange contracts, and the equivalent of $ 2.8 billion and $ 4.6 billion, respectively, for interest rate contracts, all of which were composed predominantly of non-designated economic hedges.

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.

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 March 31,

(In thousands) 2021 2020

Foreign currency contracts:

Unrealized gain transferred from AOCI to earnings (1)

Unrealized loss in earnings on non-designated contracts ( 245 ) —

Interest rate contracts:

Interest expense on designated contracts (2)

Unrealized gain (loss) in earnings on non-designated contracts ( 16 ) 179

Realized loss transferred from AOCI to earnings ( 1,292 ) —

(1) The portion of derivative notional that is in excess of the beginning balance of the foreign denominated net investment is dedesignated upon a reassessment of the effectiveness of net investment hedges at period end.

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

Prior to January 2021, the Company had entered into a series of forward contracts on its shares in a third party real estate mutual fund in an aggregate notional amount of $ 119 million and a series of swap contracts with the same counterparty to pay the return of the Dow Jones U.S.

Select REIT Total Return Index.

The forward and swap contracts were settled upon expiration in January 2021 through delivery of all of the Company's shares in the mutual fund, realizing an immaterial net loss upon settlement.

The forwards and swaps were not designated accounting hedges.

At December 31, 2020, the forwards and swaps were in a liability position of $ 102.7 million and $ 0.1 million, respectively.

During the three months ended March 31, 2020, the forwards and swaps had realized and unrealized fair value gains totaling $ 34.5 million, which was partially offset by a decrease in the NAV of the mutual fund of $ 33.1 million, both of which were recorded in other loss on the consolidated statement of operations.

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 its derivatives.

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.

Other Liabilities — Contingent Consideration for THL Hotel Portfolio

In connection with the consensual foreclosure in July 2017 of a portfolio of limited service hotels ("THL Hotel Portfolio"), contingent consideration is payable to the former preferred equity holder of the borrower in an amount up to $ 13.0 million based upon the performance of the THL Hotel Portfolio, subject to meeting certain repayment and return thresholds to the Company and certain investment vehicles managed by the Company.

The contingent consideration is measured based upon the probability of the former preferred equity holder receiving such payment, classified as Level 3 fair value.

At September 30, 2020, the contingent consideration liability was determined to have zero value as it was no longer probable that such payment would be made following the adverse effect of COVID-19 on the operations and performance of the THL Hotel Portfolio.

The liability, valued at $ 9.3 million at December 31, 2019, was written off in the

second quarter of 2020 as a gain, recorded in other gain (loss) within income (loss) from discontinued operations (Note 16) on the consolidated statements of operations.

Other Liabilities — Settlement Liability

As discussed in Note 1, in connection with the cooperation agreement entered into with Blackwells in March 2020, the Company and Blackwells contemporaneously entered into a joint venture arrangement for the purpose of acquiring, holding and disposing of the Company's class A common stock.

Settlement Liability

In March 2020, the Company entered into a cooperation agreement with Blackwells Capital LLC ("Blackwells"), a stockholder of the Company.

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.

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Distributions to be made through the joint venture arrangement effectively represent a settlement of the proxy contest with Blackwells.

At the inception of the arrangement, the fair value of future distributions to Blackwells was estimated at $3.9 million, included in other liabilities on the consolidated balance sheet, and as a settlement loss on the consolidated statement of operations, along with $1.2 million reimbursement of legal costs to Blackwells in March 2020.

The initial fair value of the arrangement was recorded as a settlement loss on the statement of operations, with a corresponding liability on the balance sheet, subject to remeasurement at each period end.

The settlement liability is a fair value measure of the disproportionate allocation of future profits distribution to Blackwells pursuant to the joint venture arrangement.

Such profits will be derived from dividend payments and any appreciation in value of the Company's class A common stock, allocated between the Company and Blackwells based upon specified return hurdles.

The profits distribution is payable in cash, the Company's class A common stock or a combination of both at the Company's election.

The profits distribution is payable in cash, the Company's class A common stock or a

combination of both at the Company's election.

The initial fair value of the arrangement was recorded as a settlement loss on the statement of operations with a corresponding settlement liability on the consolidated balance sheet.

The settlement liability, classified as a Level 3 fair value, is measured using a Monte Carlo simulation under a risk-neutral premise, assuming that the final distribution occurs at the end of the third year in March 2023, and is remeasured at each reporting period.

At September 30, 2020, the settlement liability was valued at approximately $ 10.8 million, applying the following assumptions:

At March 31, 2021, the settlement liability was valued at $ 36.9 million, applying the following assumptions:

(a) expected volatility of the Company's class A common stock of 71.9 % based upon a combination of historical and implied volatility of the Company's class A common stock;

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Treasury yield.

The settlement liability increased approximately $ 6.9 million from inception to September 30, 2020, recorded as other loss on the consolidated statement of operations.

The settlement liability increased approximately $ 12.7 million in the three months ended March 31, 2021, recorded as other loss on the consolidated statement of operations.

Fair Value Option

Loans Receivable

Effective January 1, 2020, the Company elected the fair value option for all of its outstanding loans receivable.

Loans receivable consist of mortgage loans, mezzanine loans and non-mortgage loans.

Fair values were determined by comparing the current yield to the estimated yield of newly originated loans with similar credit risk or the market yield at which a third party might expect to purchase such investment;

or based on discounted cash flow projections of principal and interest expected to be collected, which includes, but is not limited to, consideration of the financial standing of the borrower or sponsor as well as operating results and/or value of the underlying collateral.

Equity Method Investments

Equity method investments for which fair value option was elected are carried at fair value on a recurring basis.

Fair values are determined using either discounted cash flow models based on expected future cash flows for income and realization events of the underlying assets, applying revenue multiples, based on transaction price for recently acquired investments, or pending or comparable market sales price on an investment, as applicable.

In valuing the Company's investment in third party private equity funds, the Company considers cash flows provided by the general partners of the funds and the implied yields of the funds.

The Company has not elected the practical expedient to measure the fair value of its investments in these private equity funds using NAV of the underlying funds.

Fair value of equity method investments are classified as Level 3 of the fair value hierarchy, unless investments are valued based on contracted sales prices which are classified as Level 2 of the fair value hierarchy.

Changes in fair value of equity method investments under the fair value option are recorded in equity method earnings.

Level 3 Recurring Fair Value Measurements

Equity method investments for which the fair value option was elected are carried at fair value on a recurring basis.

Fair values are determined using either indicative sales price, NAV of the underlying funds, or discounted future cash flows based upon expected income and realization events of the underlying assets.

Fair value of equity method investments are classified as Level 3 of the fair value hierarchy.

Changes in fair value of equity method investments under the fair value option are recorded in equity method earnings (losses).

Loans Receivable

Loans receivable consist of mortgage loans, mezzanine loans and non-mortgage loans carried at fair value under the fair value option.

Loans held for disposition are measured at their selling price.

Fair value of loans held for investment is determined by comparing the current yield to the estimated yield of newly originated loans with similar credit risk or the market yield at which a third party might expect to purchase such investment, or based upon discounted cash flow projections of principal and interest expected to be collected, which include, but are not limited to, consideration of the financial standing of the borrower or sponsor as well as operating results and/or value of the underlying collateral.

Loans that are 90 days or more past due as to principal or interest, or where reasonable doubt exists as to timely collection, are generally considered nonperforming and placed on nonaccrual status, as presented in the table below.

Such loans include distressed loan portfolios that are held for disposition, previously acquired by the Company at a discount (classified as purchased credit-impaired loans prior to the election of fair value option).

March 31, 2021 December 31, 2020

(In thousands) Fair Value Unpaid Principal Balance Fair Value less Unpaid Principal Balance Fair Value Unpaid Principal Balance Fair Value less Unpaid Principal Balance

90 days or more past due or nonaccrual

Loans held for investment (1)

$ 48,449 $ 43,374 $ 5,075 $ 47,233 $ 43,007 $ 4,226

Loans held for disposition 687,944 2,042,026 ( 1,354,082 ) 825,972 2,116,531 ( 1,290,559 )

(1) Fair value includes accrued interest that is currently expected to be collected.

Level 3 Recurring Fair Values

Quantitative information about recurring Level 3 fair value assets are as follows.

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Weighted Average (1)

September 30, 2020

March 31, 2021

AFS debt securities

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( 7.2 % - 8.8 %)

Loans held for investment 29,700 Transaction price (5)

Loans held for disposition 977,759 Transaction price (4)

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36,800 Discounted cash flows Discount rate 25.0 %

( 18.1 % - 20.0 %)

Equity method investments—other

14,710 Multiple Revenue multiple 4.1 x (4)

Equity method investments—other

140,068 Transaction price (5)

Equity method investments held for disposition 115,161 Transaction price (4)

December 31, 2020

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Fair Value Option:

Equity method investments—third party private equity funds

5,391 NAV (3)

Equity method investments—other

18,574 Discounted cash flows Discount rate 10.1 %

Loans held for investment 84,030 Discounted cash flows Discount rate

( 6.9 % - 8.9 %)

Loans held for disposition 1,211,307 Discounted cash flows Discount rate

( 9.0 % - 25.7 %)

Equity method investments—third party private equity funds 2,472 NAV (3)

Equity method investments—other

25,000 Multiple Revenue multiple 3.7 x (4)

Equity method investments—other 173,910 Transaction price (5)

28,540 Discounted cash flows Discount rate 30.0 % Decrease

Equity method investments held for disposition 8,383 Discounted cash flows Discount rate 19.3 %

( 19.0 % - 20.0 %)

Equity method investments held for disposition 142,404 Transaction price (4)

(1) Weighted average discount rates are calculated based upon undiscounted cash flows.

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Significant increases or decreases in these inputs in isolation could result in significantly higher or lower fair value measures.

(3) Fair value was estimated based on underlying NAV of the respective funds on a quarter lag, adjusted as deemed appropriate by management.

(4) Fair value is affected by change in revenue multiple relative to change in rate of revenue growth.

(5) Valued based upon transaction price of investments recently acquired, settlement amounts under contract, or offer prices on loans, investments or underlying assets of investee pending sales.

Transaction price approximates fair value for investee engaged in real estate development during the development stage.

The following table presents changes in recurring Level 3 fair value assets, including realized and unrealized gains (losses) included in other gain (loss) on the consolidated statement of operations and in AOCI.

(3) Fair value was estimated based upon underlying NAV of the respective funds on a quarter lag, adjusted as deemed appropriate by management, considering the cash flows provided by the general partners of the funds and the implied yields of the funds.

(4) Based upon actual or indicative transaction values of the respective loans, investments or underlying assets of the investee.

At December 31, 2020, acquisition price was deemed to approximate fair value for investee engaged in real estate development during the development stage.

The following table presents changes in recurring Level 3 fair value assets.

Loans receivable and equity method investments under the fair value option are predominantly held for disposition.

Realized and unrealized gains (losses) are included in AOCI for AFS debt securities and in other gain (loss) on the consolidated statement of operations for other assets carried at fair value.

Fair Value Option

(In thousands) AFS Debt Securities Loans Held for Investment Equity Method Investments

(In thousands) AFS Debt Securities Loans Held for Investment and Held for Disposition Equity Method Investments (including Held for Disposition)

Fair value at December 31, 2019 $ 54,859 $ — $ 222,875

Purchases, contributions and accretion

Election of fair value option on January 1, 2020

— 1,556,131 —

Reclassification of accrued interest on January 1, 2020

Purchases, drawdowns, contributions and accretion 594 74,236 762

Paydowns, distributions and sales ( 1,651 ) ( 49,133 ) ( 781 )

Change in accrued interest and capitalization of paid-in-kind interest — 11,849 —

Allowance for credit losses

Realized and unrealized gains (losses) in earnings, net

— 3,105 ( 179 )

Other comprehensive income 6,364 — —

Fair value at September 30, 2019 $ 59,953 $ — $ 172,395

Net unrealized gains (losses) in earnings on instruments held at September 30, 2019 $ ( 7,083 ) $ — $ ( 2,589 )

Fair value at December 31, 2019 $ 54,859 $ — $ 222,875

Election of fair value option on January 1, 2020

Other comprehensive income (loss) (1)

1,488 ( 21,265 ) ( 4,337 )

Reclassification of accrued interest on January 1, 2020

Fair value at March 31, 2020 $ 54,474 $ 1,588,427 $ 218,340

Net unrealized gains (losses) on instruments held at March 31, 2020

$ ( 816 ) $ 3,105 $ ( 179 )

In other comprehensive income (loss)

$ 1,488 $ — $ —

Fair value at December 31, 2020 $ 28,576 $ 1,295,337 $ 181,799

Purchases, drawdowns, contributions and accretion

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( 691 ) ( 8,798 ) ( 6,953 )

Interest accrual, including capitalization of paid-in-kind interest

Transfer to held for disposition — ( 42,985 ) —

Change in accrued interest and capitalization of paid-in-kind interest — 4,745 —

Allowance for credit losses

( 23,973 ) — —

Realized and unrealized gains (losses) in earnings, net — ( 199,082 ) ( 15,635 )

— ( 289,283 ) ( 66,418 )

Other comprehensive income (loss) (1)

( 3,309 ) ( 32,802 ) ( 4,708 )

Fair value at September 30, 2020 $ 27,898 $ 1,325,144 $ 165,770

Net unrealized gains (losses) on instruments held at September 30, 2020:

Fair value at March 31, 2021 $ 34,719 $ 1,063,031 $ 154,503

Net unrealized gains (losses) on instruments held at March 31, 2021

$ ( 194 ) $ ( 199,082 ) $ ( 16,560 )

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$ ( 3,309 ) N/A N/A

(1) Includes $ 4.8 million of unrealized losses on loans held for disposition with aggregate fair value of $ 43.0 million at September 30, 2020 .

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

Investments Carried at Fair Value Using Net Asset Value

Investments in a Company-sponsored private fund and a non-traded REIT, and limited partnership interest in a third party private fund are valued using NAV of the respective vehicles.

September 30, 2020 December 31, 2019

Investments in Company-sponsored private fund and non-traded REIT, and limited partnership interest in a third party real estate private fund that is held for disposition are valued using NAV of the respective vehicles.

March 31, 2021 December 31, 2020

(In thousands) Fair Value Unfunded Commitments Fair Value Unfunded Commitments

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No secondary market currently exists for shares of the non-traded REIT and the Company does not currently expect to seek liquidity of its shares of the non-traded REIT.

Subject to then-existing market conditions, the board of directors of the non-traded REIT, along with the Company, as sponsor, expects to consider alternatives for providing liquidity to the non-traded REIT shares beginning five years from completion of the offering stage in January 2016, but with no definitive date by which it must do so.

Subject to then-existing market conditions, the board of directors of the non-traded REIT, along with the Company, as sponsor, are expected to consider alternatives for providing liquidity to the non-traded REIT shares beginning 2021, five years from completion of the offering stage, but with no definitive date by

which it must do so.

In addition, the Company has agreed that any right to have its shares redeemed is subordinated to third party stockholders for so long as its advisory agreement is in effect.

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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.

Impairments are discussed in Note 4 for real estate, Note 6 for equity method investments, and Note 7 for investment management intangible assets, including goodwill.

Impairments are discussed in Note 4 for real estate, Notes 5 and 14 for equity method investments, and Notes 6 and 14 for investment management intangible assets, including goodwill.

Fair Value Information on Financial Instruments Reported at Cost

Carrying amounts and estimated fair values of financial instruments reported at amortized cost are presented below.

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

There are no loans receivable carried at amortized cost in 2020 as the Company elected the fair value option for all loans receivable effective January 1, 2020.

Carrying amounts and estimated fair value of financial instruments reported at amortized cost are presented below.

Fair Value Measurements Carrying Value

(In thousands) Level 1 Level 2 Level 3 Total

September 30, 2020

March 31, 2021

Debt at amortized cost

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December 31, 2020

Loans at amortized cost $ — $ — $ 1,557,850 $ 1,557,850 $ 1,552,824

Debt at amortized cost

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Junior subordinated debt — — 201,018 201,018 203,848

Debt —Fair value of convertible notes and exchangeable notes were determined using the last trade price in active markets and unadjusted quoted prices in non-active market, respectively.

Fair values of the corporate credit facility and secured debt were estimated by discounting expected future cash outlays at interest rates available to the Company for similar instruments.

Fair value of junior subordinated debt was based on unadjusted quotations from a third party valuation firm, with such quotes derived using a combination of internal valuation models, comparable trades in non-active markets and other market data.

Other —Carrying values of cash, due from and to affiliates, other receivables and other payables generally approximate fair value due to their short term nature, and credit risk, if any, are negligible.

Debt —Senior notes were valued using the last trade price in active markets and unadjusted quoted prices in non-active markets.

Fair value of the corporate credit facility and secured debt was estimated by discounting expected future cash outlays at interest rates available to the Company for similar instruments.

Junior subordinated debt was valued based upon unadjusted quotations from a third party valuation firm, with such quotes derived using a combination of internal valuation models, comparable trades in non-active markets and other market data.

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

Variable Interest Entities

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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 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.

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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 $ 42.7 million at September 30, 2020 and $ 18.5 million at December 31, 2019.

The Company’s exposure is limited to the value of its outstanding investment in the consolidated private funds of $ 47.1 million at March 31, 2021 and $ 46.5 million at December 31, 2020.

The Company, as general partner, is not obligated to provide any financial support to the consolidated private funds.

At September 30, 2020 and December 31, 2019, the consolidated private funds had total assets of $ 101.4 million and $ 24.7 million, respectively, and total liabilities of $ 2.1 million and $ 0.1 million, respectively.

Assets and liabilities were made up primarily of cash, marketable equity securities and unsettled trades.

At March 31, 2021 and December 31, 2020, the consolidated private funds had total assets of $ 192.2 million and $ 172.2 million, respectively, and total liabilities of $ 49.0 million and $ 41.8 million, respectively, made up primarily of cash, marketable equity securities and unsettled trades.

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.

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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 $ 235.2 million at September 30, 2020 and $ 137.0 million at December 31, 2019, included within equity and debt investments and additionally at December 31, 2019, within assets held for disposition, on the consolidated balance sheets.

The Company's maximum exposure to loss is limited to the carrying value of its investment in the unconsolidated sponsored private funds, totaling $ 221.9 million at March 31, 2021 and $ 214.4 million at December 31, 2020, included within equity and debt investments.

Securitizations

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Unconsolidated Securitizations —The Company does not consolidate the assets and liabilities of CDOs in which the Company has an interest but does not retain the collateral management function.

NRF had previously delegated the collateral management rights for certain sponsored N-Star CDOs and third party-sponsored CDOs to a third party collateral manager or collateral manager delegate who is entitled to a percentage of the senior and subordinate collateral management fees.

NRF Holdco had previously delegated the collateral management rights for certain sponsored N-Star CDOs and third party-sponsored CDOs to a third party collateral manager or collateral manager delegate who is entitled to a percentage of the senior and subordinate collateral management fees.

The Company continues to receive fees as named collateral manager or collateral manager delegate and retained administrative responsibilities.

The Company determined that the fees paid to the third party collateral manager or collateral manager delegate represent a variable interest in the CDOs and that the third party is acting as a principal.

The Company concluded that it does not have the power to direct the activities that most significantly impact the

economic performance of these CDOs, which include but are not limited to, the ability to sell distressed collateral, and therefore the Company is not the primary beneficiary of such CDOs and does not consolidate these CDOs.

The Company’s exposure to loss is limited to its investment in these unconsolidated CDOs, comprising CDO bonds, which aggregate to $ 22.8 million at September 30, 2020 and $ 46.0 million at December 31, 2019.

The Company, through the Merger, acquired the Trusts, wholly-owned subsidiaries of NRF formed as statutory trusts.

The Trusts issued preferred securities in private placement offerings, and used the proceeds to purchase junior subordinated notes to evidence loans made to NRF (Note 10).

The Company concluded that it does not have the power to direct the activities that most significantly impact the economic performance of these CDOs, which include but are not limited to, the ability to sell distressed collateral, and therefore the Company is not the primary beneficiary of such CDOs and does not consolidate these CDOs.

The Company’s exposure to loss is limited to its investment in these unconsolidated CDOs, comprising CDO bonds, which aggregate to $ 31.3 million at March 31, 2021 and $ 21.9 million at December 31, 2020.

The Trusts, wholly-owned subsidiaries of NRF Holdco, formed as statutory trusts, previously issued preferred securities and used the proceeds to purchase junior subordinated notes to evidence loans made to NRF Holdco (Note 9).

The Company owns all of the common stock of the Trusts but does not consolidate the Trusts as the holders of the preferred securities issued by the Trusts are the primary beneficiaries of the Trusts.

The Company accounts for its interest in the Trusts under the equity method and its maximum exposure to loss is limited to its investment carrying value of $ 3.7 million at September 30, 2020 and December 31, 2019, recorded in investments in unconsolidated ventures on the consolidated balance sheet.

The Company accounts for its interest in the Trusts under the equity method and its maximum exposure to loss is limited to its investment carrying value of $ 3.7 million at March 31, 2021 and December 31, 2020, recorded in investments in unconsolidated ventures on the consolidated balance sheet.

The junior subordinated notes are recorded as debt on the consolidated balance sheet.

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Shares outstanding at December 31, 2019 41,350 487,044 734

Shares issued upon redemption of OP Units — 188 —

Repurchase of common stock — ( 652 ) —

Repurchase of common stock, net (1)

— ( 12,733 ) —

Equity-based compensation, net of forfeitures — 7,646 —

Shares canceled for tax withholding on vested stock awards — ( 1,839 ) —

Shares outstanding at September 30, 2019 57,464 487,018 734

Shares outstanding at March 31, 2020 41,350 480,118 734

Shares outstanding at December 31, 2020 41,350 483,406 734

Shares issued upon redemption of OP Units — 5 —

Repurchase of common stock, net (1)

— ( 12,733 ) —

Equity-based compensation, net of forfeitures — 4,839 —

Shares canceled for tax withholding on vested stock awards — ( 1,147 ) —

Shares outstanding at September 30, 2020 41,350 481,662 734

Shares outstanding at March 31, 2021 41,350 487,103 734

(1) Net of reissuance of 964,160 shares of class A common stock that had been repurchased by the Company during March 2020.

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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, 2020:

The table below summarizes the preferred stock issued and outstanding at March 31, 2021:

Description Dividend Rate Per Annum Initial Issuance Date Shares Outstanding

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Dividends on Series G, H, I and J of preferred stock are payable quarterly in arrears in January, April, July and October.

Prior to their full redemption as discussed below, dividends on Series B and E preferred stock were payable in February, May, August and November.

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) 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 earlier in order to preserve its qualification as a REIT or upon the occurrence of a change of control (as defined in the articles supplementary relating to each series of preferred stock).

The redemption period for each series of preferred stock is subject to the Company’s right under limited circumstances to redeem the preferred stock earlier in order to preserve its qualification as a REIT or 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.

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.

Redemption of Preferred Stock

The Company redeemed the remaining outstanding shares of Series B preferred stock and all outstanding shares of Series E preferred stock in December 2019, with settlement in January 2020, for $ 402.9 million, applying proceeds from the sale of its light industrial business.

In January 2020, the Company settled the December 2019 redemption of its outstanding Series B and Series E preferred stock for $ 402.9 million.

All preferred stock redemptions were at $ 25.00 per share liquidation preference plus accrued and unpaid dividends prorated to their respective redemption dates.

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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 Executive Chairman.

Each share of class B common stock shall convert automatically into one share of class A common stock if the Executive Chairman or his beneficiaries directly or 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.

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 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.

3 unchanged sentences

Common Stock Repurchases

During the first quarter of 2020 and for the year ended December 31, 2019, the Company repurchased its class A common stock totaling 12,733,204 shares at a cost of $ 24.6 million and 652,311 shares at a cost of $ 3.2 million, respectively, or a weighted average price of $ 1.93 and $ 4.84 per share, respectively.

All share repurchases were made pursuant to a $ 300 million share repurchase program which expired in May 2020.

The Company is restricted from repurchasing additional common shares, subject to certain exceptions, under the terms of its amended corporate credit facility.

During the first quarter of 2020, the Company repurchased 12,733,204 shares of its class A common stock at an aggregate cost of $ 24.6 million, or a weighted average price of $ 1.93 per share, pursuant to a $ 300 million share repurchase program that expired in May 2020.

Effective June 29, 2020, the Company is restricted from repurchasing additional common shares, subject to certain exceptions, under the terms of its Credit Agreement (Note 9).

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.

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.

There were no shares of class A common stock acquired under the DRIP Plan in the form of new issuances in 2021 and 2020.

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Other comprehensive income (loss) before reclassifications ( 23,850 ) 1,330 7 ( 24,929 ) 16,384 ( 31,058 )

9,425 ( 606 ) ( 2,670 ) ( 36,511 ) 37,071 6,709

Amounts reclassified from AOCI — — — 246 ( 634 ) ( 388 )

( 3,554 ) 6,479 — ( 1,128 ) ( 1,617 ) 180

AOCI at September 30, 2019 $ 9,500 $ 2,698 $ ( 2,761 ) $ ( 31,021 ) $ 42,472 $ 20,888

AOCI at March 31, 2020 $ ( 14,569 ) $ 9,153 $ ( 219 ) $ ( 24,544 ) $ 46,401 $ 16,222

AOCI at December 31, 2020 $ 17,718 $ 6,072 $ ( 233 ) $ 52,832 $ 45,734 $ 122,123

Other comprehensive income (loss) before reclassifications ( 2,438 ) ( 2,992 ) — ( 19,631 ) 3,761 ( 21,300 )

3,053 395 ( 3 ) 13,961 15,821 33,227

Amounts reclassified from AOCI — — 233 — — 233

— ( 3,585 ) — 225 ( 925 ) ( 4,285 )

AOCI at September 30, 2020 $ 12,334 $ 4,633 $ ( 229 ) $ 14,325 $ 45,547 $ 76,610

AOCI at March 31, 2021 $ 15,280 $ 3,080 $ — $ 33,201 $ 49,495 $ 101,056

Changes in Components of AOCI—Noncontrolling Interests in Investment Entities

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Other comprehensive income (loss) before reclassifications 33 ( 32,958 ) 4,865 ( 28,060 )

( 6,190 ) ( 57,492 ) 4,543 ( 59,139 )

Amounts reclassified from AOCI — — ( 799 ) ( 799 )

— ( 465 ) ( 653 ) ( 1,118 )

AOCI at September 30, 2019 $ ( 6,580 ) $ ( 58,557 ) $ 13,534 $ ( 51,603 )

AOCI at March 31, 2020 $ ( 972 ) $ ( 50,871 ) $ 14,725 $ ( 37,118 )

AOCI at December 31, 2020 $ ( 1,030 ) $ 83,845 $ 15,099 $ 97,914

Other comprehensive income (loss) before reclassifications — ( 37,686 ) — ( 37,686 )

( 12 ) 43,170 5,313 48,471

Amounts reclassified from AOCI 1,030 — — 1,030

AOCI at September 30, 2020 $ ( 1,017 ) $ 25,162 $ 15,099 $ 39,244

AOCI at March 31, 2021 $ — $ 46,159 $ 15,099 $ 61,258

Reclassifications out of AOCI—Stockholders

Information about amounts reclassified out of AOCI attributable to stockholders by component is presented below.

On the consolidated statement of operations, such amounts are included in other gain (loss) for continuing and discontinued operations, as applicable, except for amounts related to equity method investments, where applicable, are included in equity method losses in discontinued operations.

(In thousands)

Three Months Ended September 30, Nine Months Ended September 30, Affected Line Item in the

Consolidated Statements of Operations

Three Months Ended March 31,

Component of AOCI reclassified into earnings

2020 2019 2020 2019

Relief of basis of AFS debt securities

$ 41 $ — $ 3,585 $ — Other gain (loss), net

Other-than-temporary impairment

— ( 5,853 ) — ( 6,479 ) Other gain (loss), net

Release of foreign currency cumulative translation adjustments

21 — ( 225 ) 1,128 Other gain (loss), net

Unrealized gain (loss) on dedesignated net investment hedges

— 608 552 654 Other gain (loss), net

Realized gain on net investment hedges

373 — 373 963 Other gain (loss), net

Release of equity in AOCI of unconsolidated ventures

— 3,554 — 3,554 Equity method earnings (losses)

$ — $ ( 246 )

Unrealized gain on dedesignated net investment hedges — 634

Realized loss on cash flow hedges ( 233 ) —

Noncontrolling Interests

Redeemable Noncontrolling Interests

The following table presents the activity in redeemable noncontrolling interests in the Company's digital investment management business and in consolidated open-end funds sponsored by the Company.

Nine Months Ended September 30,

The following table presents the activity in redeemable noncontrolling interests in the Company's digital investment management business, as discussed below, and in open-end funds sponsored and consolidated by the Company.

Three Months Ended March 31,

(In thousands) 2021 2020

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The investment entitles Wafra to participate in approximately 31.5 % of the net management fees and carried interest generated by the Digital IM Business.

Wafra has agreed to assume certain of the Company's existing commitments made to DCP and to make commitments to the successor fund to DCP and to the Company’s initial digital credit fund, in an aggregate amount of at least $ 130.0 million.

Pursuant to this strategic partnership, Wafra has assumed directly and also indirectly through a participation interest $ 77.0 million of the Company's commitments to DCP I, and has committed $ 40.0 million to DCP II.

Wafra has 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 Business, subject to certain caps.

1 unchanged sentence

Each warrant entitles Wafra to purchase up to 5,352,000 shares of the Company's class A common stock, with staggered strike prices between $ 2.43 and $ 6.00 for each warrant, exercisable until July 17, 2026.

Consideration paid by Wafra in exchange for its investment in the Digital IM Business and for the warrants is composed of:

(i) cash consideration of $ 253.6 million paid at closing;

and (ii) contingent consideration of approximately $ 29.9 million to be paid if the run-rate of earnings before interest, tax, depreciation and amortization ("EBITDA") of the digital investment management business, as defined, is equal to or greater than $ 72.0 million as of December 31, 2020.

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 the Digital IM Business in April 2021 based upon the Digital IM Business having achieved a minimum run-rate of earnings before interest, tax, depreciation and amortization ("EBITDA") of $ 72.0 million as of December 31, 2020.

Under certain circumstances following such time as the Digital IM Business comprises 90 % or more of the Company's assets, the Company has agreed to use commercially reasonable efforts to facilitate the conversion of Wafra's interest into shares of the Company's class A common stock.

1 unchanged sentence

Wafra has 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 will be triggered upon the occurrence of certain events, including key person or cause events under the governing documents of certain digital funds and for a limited period, upon Marc Ganzi, the Company's Chief Executive Officer, and Ben Jenkins, Chief Investment Officer of the Company's digital real estate and infrastructure platform, ceasing to fulfill certain time and attention commitments to the Digital IM business.

To further enhance the alignment of interests, the Company entered into an amended and restated restrictive covenant agreement with each of Mr.

Ganzi and Mr.

Jenkins ceasing to fulfill certain time and attention commitments to the Digital IM business.

To further enhance the alignment of interests, the Company entered into an amended and restated restrictive covenant agreement with each of Marc Ganzi and Ben Jenkins, pursuant to which each of Messrs.

Ganzi and Jenkins agreed to certain enhanced non-solicitation provisions and extension of the term of existing non-competition agreements.

Wafra’s investment provides the Company with permanent capital to pursue strategic digital infrastructure investments and grow the Digital IM Business.

Noncontrolling Interests in Investment Entities

These are interests in consolidated investment entities held by private investment funds managed by the Company, or by third party joint venture partners.

The Company's investment in its light industrial portfolio, prior to its sale in December 2019, was made alongside third party limited partners through a joint venture consolidated by the Company.

The Company's ownership interest

changed over time as result of capital contributions from or redemptions of limited partner interests.

Limited partners were admitted or redeemed at the net asset value of the joint venture, based upon valuations determined by independent third parties, at the time of their contributions or redemptions.

For the year ended December 31, 2019, the difference between contributions or redemptions and the respective limited partners' share of the joint venture resulted in a net increase to additional paid-in capital of $ 12.4 million.

Jenkins, pursuant to which they agreed to certain enhanced non-solicitation provisions and extension of the term of existing non-competition agreements.

Wafra’s investment provides the Company with permanent capital to pursue strategic digital infrastructure investments and further grow the Digital IM Business.

Noncontrolling Interests in Operating Company

Certain current and past employees of the Company directly or indirectly own interests in OP, presented as noncontrolling interests in the 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 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.

Issuance of OP Units —The Company issued 21,478,515 OP Units in July 2019 and 612,072 OP Units in December 2019 as part of the consideration for the acquisitions of DBH, valued at $ 111.9 million, and DataBank, valued at $ 3.0 million, based upon the closing price of the Company's class A common stock on July 24, 2019 and December 20, 2019, respectively (Note 3).

There were no OP Units issued in the nine months ended September 30, 2020.

Redemption of OP Units —The Company redeemed 184,395 OP Units during the nine months ended September 30, 2020 and 187,995 OP Units during the year ended December 31, 2019, with the issuance of an equal number of shares of class A common stock on a one -for-one basis.

Redemption of OP Units —The Company redeemed 5,147 OP Units during the three months ended March 31, 2021 and 2,184,395 OP Units during the year ended December 31, 2020, with the issuance of an equal number of shares of class A common stock on a one -for-one basis.

Discontinued Operations

Discontinued operations represent results of operations of the following:

• Hotel —in 2020 and 2019, the Company's Hospitality segment and the THL Hotel Portfolio in the Other segment;

• Industrial —(i) light industrial portfolio and related management platform in 2019 prior to its sale in December 2019, which included fee income and general partner interest in the industrial open-end fund that earned carried interest, and interests of all limited partners in the industrial closed-end and open-end funds who represented noncontrolling interests, and (ii) bulk industrial portfolio in 2020 and 2019.

In the second quarter of 2020, final adjustments were made to net sales proceeds from the light industrial business upon release of escrowed funds, resulting in a net loss of $ 7.4 million.

In November 2020, the Company entered into an agreement to sell its 51 % interest in the bulk industrial portfolio to its joint venture partner, with the sale expected to close by the end of 2020.

Discontinued operations represent the following:

• Other —operations of substantially all of the OED investments and Other IM business in the Other segment, composed of non-digital real estate, real estate-related equity and debt investments, fee income from CLNC and the Company's private real estate credit funds and co-investment vehicles, and underlying compensation and administrative costs for managing these non-digital investments and investment vehicles.

• Hotel —operations of the Company's Hospitality segment and the THL Hotel Portfolio in the Other segment.

In March 2021, the Company sold 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.

One hotel portfolio remains in receivership.

• Industrial —operations of the bulk industrial portfolio prior to its sale in December 2020.

Income (loss) from discontinued operations is presented below.

Three Months Ended September 30, 2020 Three Months Ended September 30, 2019

(In thousands)

Hotel Industrial Total Hotel Industrial Total

Property operating income $ 144,130 $ 5,866 $ 149,996 $ 293,297 $ 97,188 $ 390,485

Fee income — — — — 3,400 3,400

Interest and other income 40 5 45 198 1,454 1,652

Revenues from discontinued operations 144,170 5,871 150,041 293,495 102,042 395,537

Property operating expense 119,868 1,712 121,580 193,474 26,051 219,525

Interest expense 34,747 1,530 36,277 55,442 21,130 76,572

Investment and servicing expense 6,053 20 6,073 4,491 54 4,545

Transaction costs 4,500 — 4,500 — — —

Depreciation and amortization 39,978 639 40,617 42,073 12,342 54,415

Impairment loss 115,792 — 115,792 31,868 — 31,868

Compensation expense—cash and equity-based (1)

863 — 863 1,243 3,914 5,157

Compensation expense—carried interest — — — — 17,796 17,796

Administrative expenses 192 259 451 109 960 1,069

Expenses from discontinued operations 321,993 4,160 326,153 328,700 82,247 410,947

Other income (loss)

Gain (loss) on sale of real estate ( 10 ) ( 1,000 ) ( 1,010 ) 3 4,675 4,678

Other gain (loss), net ( 113 ) ( 2 ) ( 115 ) 378 ( 12 ) 366

Equity method earnings, including carried interest — — — — 35,765 35,765

Income (loss) from discontinued operations before income taxes ( 177,946 ) 709 ( 177,237 ) ( 34,824 ) 60,223 25,399

Income tax benefit (expense) 225 ( 2 ) 223 128 127 255

Income (loss) from discontinued operations ( 177,721 ) 707 ( 177,014 ) ( 34,696 ) 60,350 25,654

Income (loss) from discontinued operations attributable to:

Noncontrolling interests in investment entities ( 60,938 ) 82 ( 60,856 ) ( 3,470 ) 27,728 24,258

Noncontrolling interests in Operating Company ( 11,581 ) 62 ( 11,519 ) ( 2,817 ) 2,870 53

Income (loss) from discontinued operations attributable to Colony Capital, Inc.

$ ( 105,202 ) $ 563 $ ( 104,639 ) $ ( 28,409 ) $ 29,752 $ 1,343

(1) Includes equity-based compensation of $ 0.2 million and $ 1.0 million for the three months ended September 30, 2020 and 2019, respectively.

Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019

(In thousands)

Hotel Industrial Total Hotel Industrial Total

Three Months Ended March 31, 2021 Three Months Ended March 31, 2020

(In thousands) Other Hotel Total Other Hotel Industrial Total

Property operating income $ 21,169 $ 122,106 $ 143,275 $ 28,352 $ 213,111 $ 5,379 $ 246,842

Interest income 4,132 — 4,132 30,262 — 17 30,279

Fee income 15,962 — 15,962 18,377 — — 18,377

Interest and other income 149 78 227 420 3,822 4,242

Other income 8,260 22 8,282 136 62 — 198

Revenues from discontinued operations 49,523 122,128 171,651 77,127 213,173 5,396 295,696

1 unchanged sentence

Interest expense 15,700 62,318 78,018 10,002 49,971 2,406 62,379

Investment and servicing expense 12,514 20 12,534 12,347 592 12,939

Transaction costs 4,500 — 4,500 — — —

Transaction-related, investment and servicing costs 5,894 1,794 7,688 4,711 1,560 — 6,271

Depreciation and amortization 11,670 7,668 19,338 13,062 47,561 633 61,256

Impairment loss 108,528 — 108,528 86,373 252,363 — 338,736

Compensation expense—cash and equity-based (1)

Compensation, including carried interest, and administrative expense (1)

20,557 2,410 22,967 2,282 2,033 414 4,729

Compensation expense—carried interest — ( 524 ) ( 524 ) — 18,136 18,136

Administrative expenses 1,294 892 2,186 1,513 3,976 5,489

Expenses from discontinued operations 175,602 187,019 362,621 129,042 521,031 4,926 654,999

Other income (loss)

Gain (loss) on sale of real estate ( 10 ) ( 8,787 ) ( 8,797 ) 913 28,070 28,983

Gain on sale of real estate 391 45,359 45,750 7,932 — — 7,932

Other gain (loss), net ( 200,683 ) 3 ( 200,680 ) 3,375 2,857 4 6,236

1 unchanged sentence

Income (loss) from discontinued operations before income taxes ( 418,982 ) ( 19,529 ) ( 438,511 ) 68,562 ( 305,001 ) 474 ( 235,965 )

Income tax expense ( 2,651 ) ( 2 ) ( 2,653 ) ( 2,028 ) ( 171 ) ( 2,199 )

Income tax benefit (expense) 2,613 ( 1,524 ) 1,089 ( 16,482 ) 2,589 — ( 13,893 )

Income (loss) from discontinued operations ( 416,369 ) ( 21,053 ) ( 437,422 ) 52,080 ( 302,412 ) 474 ( 249,858 )

4 unchanged sentences

$ ( 103,119 ) $ ( 22,095 ) $ ( 125,214 ) $ 15,290 $ ( 244,031 ) $ 274 $ ( 228,467 )

(1) Includes equity-based compensation of $ 0.6 million and $ 3.1 million for the nine months ended September 30, 2020 and 2019, respectively .

(1) Includes equity-based compensation of $ 7.3 million and a reversal of $ 0.4 million for the three months ended March 31, 2021 and 2020, respectively, of which $ 4.6 million and a reversal of $ 3.4 million, respectively, relates to CLNC awards that is grossed up in other income and compensation expense.

Reversal was due to a decline in CLNC stock price (Note 17).

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) 2021 2020

2 unchanged sentences

Loss from continuing operations attributable to noncontrolling interests 69,101 40,507

101,588 62,337 646,172 69,827

Loss from continuing operations attributable to Colony Capital, Inc.

( 121,076 ) ( 113,692 )

Income (loss) from discontinued operations attributable to Colony Capital, Inc.

Loss from discontinued operations attributable to Colony Capital, Inc.

( 125,214 ) ( 228,467 )

13 unchanged sentences

474,899 479,106

Basic loss per share

Loss per share—basic

Loss from continuing operations $ ( 0.30 ) $ ( 0.28 )

Loss from discontinued operations ( 0.26 ) ( 0.48 )

Net loss attributable to common stockholders per basic common share

$ ( 0.44 ) $ ( 1.16 ) $ ( 5.51 ) $ ( 2.35 )

Diluted loss per share

Net loss attributable to common stockholders per common share—basic $ ( 0.56 ) $ ( 0.76 )

Loss per share—diluted

Loss from continuing operations $ ( 0.30 ) $ ( 0.28 )

Loss from discontinued operations ( 0.26 ) ( 0.48 )

Net loss attributable to common stockholders per diluted common share

$ ( 0.44 ) $ ( 1.16 ) $ ( 5.51 ) $ ( 2.35 )

(1) For the three months ended September 30, 2020 and 2019, excluded from the calculation of diluted earnings per share is the effect of adding back $ 8.2 million and $ 7.1 million, respectively, of interest expense and 126,454,900 and 38,112,100 , respectively, weighted average dilutive common share equivalents for the assumed conversion or exchange of the Company's outstanding convertible and exchangeable notes, as their inclusion would be antidilutive.

For the nine months ended September 30, 2020 and 2019, excluded from the calculation of diluted earnings per share is the effect of adding back $ 22.4 million and $ 21.2 million, respectively, and 67,774,600 and 38,112,100 , respectively, weighted average dilutive common share equivalents for the assumed conversion or exchange of the Company's outstanding convertible and exchangeable notes, as their inclusion would be antidilutive.

(2) The calculation of diluted earnings per share excludes the effect of weighted average unvested non-participating restricted shares of 67,300 and 99,100 for the three and nine months ended September 30, 2019, respectively, as the effect would be antidilutive.

No unvested non-participating restricted shares were outstanding during the nine months ended September 30, 2020.

The calculation of diluted earnings per share also excludes the effect of weighted average shares of class A common stock that are contingently issuable in relation to performance stock units (Note 19) of 5,183,400 and 2,451,400 for the three months ended September 30, 2020 and 2019, respectively, and 4,250,400 and 1,320,900 for the nine months ended September 30, 2020 and 2019, respectively.

(3) OP Units, subject to lock-up agreements, may be redeemed for registered or unregistered class A common stock on a one -for-one basis.

At September 30, 2020 and 2019 there were 53,076,700 and 52,649,000 redeemable OP Units, respectively.

These OP Units would not be dilutive and were not included in the computation of diluted earnings per share for all periods presented.

The Company's real estate investment management platform manages capital on behalf of institutional and retail investors in private funds, traded and non-traded REITs, and other investment vehicles for which the Company earns fee income.

For investment vehicles in which the Company co-sponsors with a third party or for which the Company engages a third party sub-advisor, such fee income is shared with the respective co-sponsor or sub-advisor.

Fee income as presented in 2019 excluded management fees from the Company's open-end light industrial fund which was included in income from discontinued operations (Note 16) prior to the sale of the Company's light industrial platform in December 2019.

The Company's fee income is earned from the following sources:

Three Months Ended September 30, Nine Months Ended September 30,

Net loss attributable to common stockholders per common share—diluted $ ( 0.56 ) $ ( 0.76 )

(1) For the three months ended March 31, 2021 and 2020, excluded from the calculation of diluted earnings per share is the effect of adding back $ 7.7 million and $ 7.1 million of interest expense, respectively, and 144,576,000 and 38,112,100 of weighted average dilutive common share equivalents, respectively, for the assumed conversion or exchange of the Company's outstanding convertible and exchangeable notes, as their inclusion would be antidilutive.

(2) No unvested non-participating restricted shares were outstanding during the three months ended March 31, 2021 and 2020.

The calculation of diluted earnings per share excludes the effect of class A common stock that are contingently issuable in relation to performance stock units (Note 17) with weighted average shares of 10,395,900 and 1,520,700 for the three months ended March 31, 2021 and 2020, respectively, as the effect would be antidilutive.

Also excluded from the calculation of diluted earnings per share is the effect of class A common stock that are issuable to net settle the exercise of warrants (Note 13) with weighted average shares of 7,680,900 for the three months ended March 31, 2021 as the effect would be antidilutive.

(3) OP Units may be redeemed for registered or unregistered class A common stock on a one -for-one basis.

At March 31, 2021 and 2020 there were 51,072,000 and 53,261,100 OP Units, respectively.

OP Units would not be dilutive and were not included in the computation of diluted earnings per share for all periods presented.

The Company's real estate investment management platform manages capital on behalf of institutional and retail investors in private funds, non-traded REIT, and other investment vehicles for which the Company earns fee income.

Fee income, as presented below, excludes base management fees from CLNC (which was based upon 1.5% per annum of CLNC's stockholders' equity) and the Company's private real estate credit funds and co-investment vehicles, all of which are included in discontinued operations (Note 14).

The Company earns fee income from the following sources:

Three Months Ended March 31,

(In thousands) 2021 2020

1 unchanged sentence

$ 30,200 $ 20,562

Public companies (CLNC, and NRE prior to its sale in September 2019)

7,355 79,633 22,636 109,777

Non-traded REIT

$ 33,679 $ 25,128

485 615 1,574 3,166

$ 43,919 $ 111,854 $ 130,964 $ 178,315

The following table presents the Company's fee income by type:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2021 2020

Base management fees ($ 42,009 , $ 45,572 , $ 124,457 and $ 108,192 from affiliates, respectively)

$ 42,085 $ 45,763 $ 124,742 $ 108,739

Asset management fees ($ 525 , $ 539 , $ 1,784 and $ 1,775 from affiliates, respectively)

818 819 2,629 2,684

Incentive and termination fee—from affiliates

— 64,555 — 64,555

Other fee income ($ 993 , $ 693 , $ 3,524 and $ 955 from affiliates, respectively)

Management fees ($ 32,096 and $ 24,116 from affiliates, respectively)

$ 32,096 $ 24,116

Incentive fees

Other fee income—affiliates

Total fee income

$ 33,679 $ 25,128

Base Management Fees — The Company earns base management fees for the day-to-day operations and administration of its managed private funds, traded and non-traded REITs, and other investment vehicles, calculated as follows:

• Private Funds and similar investment vehicles—generally (a) 1 % per annum of limited partners' net funded capital, or (b) 0.9 % to 1.75 % per annum of investors' committed capital during commitment or investment period and thereafter, of contributed or invested capital;

• CLNC— 1.5 % per annum of CLNC's stockholders' equity (as defined in its management agreement), with a reduction in fee base to reflect CLNC's reduced book value effective in the beginning of the fourth quarter of 2019;

• Non-Traded REIT— 1.5 % per annum of most recently published NAV (as may be subsequently adjusted for any special distribution) for NorthStar Healthcare, with $ 2.5 million per quarter paid in shares of NorthStar Healthcare common stock at a price per share equal to its most recently published NAV per share (as may be subsequently adjusted for any special distribution);

• NorthStar Realty Europe ("NRE")—prior to termination of the management contract in connection with the sale of NRE on September 30, 2019, a variable fee of 1.5 % per annum of NRE's reported European Public Real Estate Association NAV ("EPRA NAV" as defined in its management agreement) for EPRA NAV up to and including $ 2.0 billion, and 1.25 % per annum for EPRA NAV amounts exceeding $ 2.0 billion.

Asset Management Fees —The Company earns asset management fees from its managed private funds, which represents a one-time fee upon closing of each investment, calculated as a fixed percentage, generally 0.5 % of the limited partners' net funded capital on each investment.

Incentive Fees —The Company may earn incentive fees from CLNC, and prior to its termination, from NRE, determined based on the performance of the investment vehicles subject to the achievement of minimum return hurdles in accordance with the terms set out in their respective governing agreements.

A portion of the incentive fees earned by the Company (generally 40 % to 50 %) is allocable to senior management, investment professionals and certain other employees of the Company, included in carried interest and incentive fee compensation expense.

There were no incentive fees earned in the three and nine months ended September 30, 2020.

Termination of the NRE management contract in September 2019 resulted in payment and recognition of a termination fee to the Company of $ 64.6 million, of which $ 21.5 million represents incentive fees earned for fiscal year 2019 through the date of termination.

Other Fee Income —Other fees include service fees for information technology and operational support services and facilities to portfolio companies, advisory fees, and licensing fee on the Company's proprietary real estate index, a rules-based strategy that invests in common stock of U.S.

Management Fees — The Company earns management fees for the day-to-day operations and administration of its managed private funds, non-traded REIT, and other investment vehicles, calculated as follows:

• Private Funds and similar investment vehicles—generally 0.45 % to 1.50 % per annum of investors' committed capital during commitment or investment period and thereafter, of contributed or invested capital;

• Non-Traded REIT— 1.5 % per annum of most recently published NAV (as may be subsequently adjusted for any special distribution) for NorthStar Healthcare.

$ 2.5 million per quarter of base management fee for NorthStar Healthcare is paid in shares of NorthStar Healthcare common stock at a price per share equal to its most recently published NAV per share (as may be subsequently adjusted for any special distribution).

Incentive Fees —Pursuant to the terms of a sub-advisory agreement, the Company manages a sub-account of a third party private fund and earns an incentive fee, but not management fees, based upon the returns of the sub-account, measured on a monthly basis, and subject to the recovery of any initial losses in the account that are allocated to the Company.

Other Fee Income —Other fees include primarily service fees for information technology, facilities and operational support provided to portfolio companies.

Equity-Based Compensation

The Colony Capital, 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, 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.

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.

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, 2020, an aggregate 64.1 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 relating to the Company's class A common stock are granted to senior executives, directors and certain employees, with a service condition only and are generally subject to annual time-based vesting in equal tranches over a three-year period.

At March 31, 2021, an aggregate 73.8 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 three-year service period.

Restricted Stock Units ("RSUs") — RSUs relating to the Company's class A common stock are subject to a performance condition.

Restricted Stock Units ("RSUs") — 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.

Only vested RSUs are entitled to dividends declared and paid on the Company's class A common stock.

Fair value of RSUs are based on the Company's class A common stock price on grant date.

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") — PSUs are granted to senior executives and certain employees, and are subject to both a service condition and market condition.

Following the end of the measurement period for the PSUs, 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, ranging from 0 % to 200 % of the number of PSUs granted, to be determined based upon the performance of the Company's class A common stock either relative to that of a specified peer group or against a target stock price 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 the PSU grant are eligible to vest in a portion of the PSU award following the end of the measurement period based on achievement of the total shareholder return metric otherwise applicable to the award.

Performance Stock Units ("PSUs") — 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 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:

2020 PSU Grants 2019 PSU Grants 2018 PSU Grant (4)

2021 PSU Grants 2020 PSU Grants 2019 PSU Grants

Expected volatility of the Company's class A common stock (1)

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0.3 % 0.4 % 2.2 % - 2.4 %

(1) Based upon the Company's historical stock volatility or in combination with historical stock volatility of a specified peer group, or a combination of historical volatility and implied volatility on actively traded stock options of a specified peer group.

(2) Based upon a combination of historical dividend yields and current annualized dividends.

(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 is zero for the 2021 PSU award as the Company suspended common dividends beginning with the second quarter of 2020.

(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.

(4) Reflects assumptions applied in valuing the award upon modification in February 2019.

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.

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 do not accrue distributions.

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 12).

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 target closing prices over predetermined measurement periods subject to continuous employment to the time of vesting, valued using a Monte Carlo simulation.

or (2) both a service condition and a market condition based upon the Company's class A common stock achieving target prices over predetermined measurement periods, 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:

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Risk-free rate (per annum) (4)

(1) Represents 10 million LTIP units granted to Marc Ganzi in connection with the acquisition of DBH in July 2019, with vesting based upon achievement of the Company's class A common stock price closing at or above $ 10.00 over any 90 consecutive trading days prior to the fifth anniversary of the grant date.

(1) Represents 10 million LTIP units granted to 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 $ 10 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.

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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.

Any such additional DSUs will also be credited with additional DSUs as cash dividends are paid, subject to the same restrictions and vesting conditions, if any.

Upon separation of service from the Company, vested DSUs are to be settled in shares of the Company’s class A common stock.

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 to the industrial and hotel businesses which are presented as discontinued operations (Note 16), is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Equity-based compensation expense, excluding amounts related to businesses presented as discontinued operations (Note 14), is as follows:

Three Months Ended March 31,

(In thousands)

2020 2019 2020 2019

Compensation expense (including $ 358 , $ 345 , $ 1,221 and $ 777 amortization of fair value of dividend equivalent rights)

Compensation expense (including $ 1,064 and $ 283 amortization of fair value of dividend equivalent rights, respectively)

$ 16,606 $ 5,185

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Grant Date Fair Value

Restricted Stock LTIP Units DSUs RSUs (1)

Restricted Stock LTIP Units (1)

DSUs RSUs (2)

Total PSUs All Other Awards

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Forfeited ( 67,047 ) — — — ( 832,981 ) ( 900,028 ) 4.89 2.86

Unvested shares and units at September 30, 2020

Unvested shares and units at March 31, 2021

11,269,491 11,383,764 324,877 9,589,564 10,539,566 43,107,262 3.52 2.48

(1) Represents the number of RSUs granted that are subject to vesting only upon achievement of performance condition.

(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.

(2) Represents the number of PSUs granted, which 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.

Fair value of equity awards that vested, determined based on their respective fair values at vesting date, was $ 1.4 million and $ 1.2 million for the three months ended September 30, 2020 and 2019, respectively, and $ 14.8 million and $ 11.0 million for the nine months ended September 30, 2020 and 2019, respectively.

At September 30, 2020, aggregate unrecognized compensation cost for all unvested equity awards was $ 65.5 million, which is expected to be recognized over a weighted average period of 2.6 years.

(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, determined based upon their respective fair values at vesting date, was $ 27.5 million and $ 10.1 million for the three months ended March 31, 2021 and 2020, respectively.

At March 31, 2021, aggregate unrecognized compensation cost for all unvested equity awards was $ 92.0 million, which is expected to be recognized over a weighted average period of 2.6 years.

Awards Granted by Managed Companies

CLNC and NRE, both managed by the Company prior to termination of NRE's management agreement concurrent with the sale of NRE in September 2019, issued restricted stock and performance stock units to the Company and certain of the Company's employees (collectively, "managed company awards").

CLNC awards are primarily restricted stock grants that typically vest over a three-year period, subject to service conditions.

NRE awards generally had similar terms as the Company's stock awards, except that the NRE performance stock units measured NRE's stock performance against either an absolute total shareholder return threshold or relative to the performance of a specified market index.

Employees were entitled to receive shares of NRE common stock if service conditions and/or market conditions were met.

Generally, the Company grants the managed company awards that it receives in its capacity as manager to its employees with substantially the same terms and service requirements.

Such grants are made at the discretion of the Company, and the Company may consult with the board of directors or compensation committees of the respective managed companies as to final allocation of awards to its employees.

Prior to the termination of the Company’s management agreement with CLNC on April 30, 2021, CLNC granted restricted stock to the Company and certain of the Company's employees ("managed company awards") that typically vest over a three-year period, subject to a service condition.

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 CLNC 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 assets and other liabilities on the consolidated balance sheet.

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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.

Equity-based compensation recognized related to managed company awards was an expense reversal of $ 0.9 million and $ 1.3 million for the three and nine months ended September 30, 2020, respectively, an expense of $ 24.3 million and $ 30.6 million for the three and nine months ended September 30, 2019, respectively.

A corresponding amount is recognized in other income for managed company awards granted to employees (Note 20).

At September 30, 2020, aggregate unrecognized compensation cost for unvested managed company awards of CLNC was $ 2.3 million, which is expected to be recognized over a weighted average period of 1.1 years.

Equity-based compensation related to CLNC awards granted by the Company to its employees was accelerated in 2021 as the awards fully vest upon termination of the CLNC management contract in April 2021.

For the three months ended March 31, 2021, equity-based compensation of $ 4.6 million was recognized, with a corresponding amount recorded in other income.

For the three months ended March 31, 2020, an expense reversal of $ 3.4 million was recognized based upon a remeasurement of the awards at CLNC's stock price on March 31, 2020.

Amounts recorded in both years are reflected within discontinued operations (Note 14).

Transactions with Affiliates

Affiliates include (i) private funds, traded and non-traded REITs and investment companies that the Company manages or sponsors, and in which the Company may have an equity interest or co-invests with;

Affiliates include (i) private funds, traded and non-traded REITs 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:

(In thousands) September 30, 2020 December 31, 2019

Amounts due from and due to affiliates consist of the following, excluding amounts related to discontinued operations that are presented as assets held for sale (Note 7):

(In thousands) March 31, 2021 December 31, 2020

Due from Affiliates

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Employees and other affiliates

$ 1,279 $ 34,064

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 18.

Cost Reimbursements— The Company received cost reimbursement income related primarily to the following arrangements:

• Direct and indirect operating costs, including but not limited to compensation, overhead and other administrative costs, for managing the operations of non-traded REITs and CLNC, with reimbursements for non-traded REITs limited to the greater of 2 % of average invested assets or 25 % of net income (net of base management fees);

• Direct costs of personnel dedicated solely to NRE (prior to termination of management agreement concurrent with sale of NRE in September 2019) plus 20 % of such personnel costs for related overhead charges, not to exceed, in aggregate, specified thresholds as set out in the NRE management agreement;

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 fee income and fee receivable from CLNC and the Company's private real estate credit funds and co-investment vehicles that are included within discontinued operations (Note 14) and assets held for sale (Note 7).

Cost Reimbursements— The Company received cost reimbursement income related largely to the following arrangements.

• Direct and indirect operating costs, including but not limited to compensation, overhead and other administrative costs, for managing the operations of NorthStar Healthcare, with reimbursements limited to the greater of 2 % of average invested assets or 25 % of net income (net of management fees);

• Costs incurred in performing investment due diligence for NorthStar Healthcare and private funds managed by the Company;

• Equity awards granted to employees of the Company by CLNC and NRE (prior to termination of the NRE management agreement), which are presented gross as other income and compensation expense (Note 19);

• Services provided to the Company's unconsolidated investment ventures for servicing and managing their loan portfolios, including foreclosed properties, and services to the Digital Colony Manager joint venture prior to the Company's acquisition of DBH in July 2019;

• Administrative services provided to certain senior executives of the Company.

Cost reimbursements, included in other income, are as follows.

Amounts related to NRE pertain to periods prior to termination of its management agreement in September 2019.

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands) 2020 2019 2020 2019

Retail companies $ 771 $ 681 $ 2,618 $ 2,108

Public companies (CLNC, NRE) 1,479 6,592 6,007 11,887

Private investment vehicles and other 4,283 2,736 9,517 10,615

Equity awards of CLNC and NRE (Note 19) ( 1,005 ) 24,049 ( 1,605 ) 30,632

$ 5,528 $ 34,058 $ 16,537 $ 55,242

Recoverable Expenses— The Company pays organization and offering costs associated with the formation and capital raising of the retail companies and private funds sponsored by the Company, for which the Company recovers from these investment vehicles, up to specified thresholds for certain private funds and up to 1 % of proceeds expected to be raised from the offering of retail companies (excluding shares offered pursuant to distribution reinvestment plans).

• Services provided to the Company's unconsolidated investment ventures for servicing and managing their loan portfolios, including foreclosed properties.

Such cost reimbursements, included in other income, totaled $ 1.5 million and $ 4.2 million for the three months ended March 31, 2021 and 2020, respectively.

Reimbursements of direct and indirect operating costs for managing the operations of CLNC is reflected in other income within discontinued operations (Note 14) and related receivable is reflected as amount due from affiliates within assets held for sale (Note 7).

Recoverable Expenses— The Company pays organization 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.

NorthStar Healthcare Credit Facility— The Company has committed to provide NorthStar Healthcare with an unsecured revolving credit facility at market terms with a maximum principal amount of $ 35.0 million.

The credit facility matures in December 2021 (extended to December 2022 in July 2020), with a six-month extension option.

The credit facility matures in December 2022, with a six-month extension option.

Advances under the credit facility accrue interest at LIBOR plus 3.5 %.

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The credit facility is intended to provide additional liquidity to NorthStar Healthcare on an as needed basis.

In April 2020, the credit facility was drawn for the full amount of $ 35.0 million and remained outstanding a t September 30, 2020 .

There were no amounts outstanding at December 31, 2019 .

Liquidating Trust— In the formation of CLNC through a merger with NorthStar Real Estate Income Trust, Inc.

("NorthStar I") and NorthStar Real Estate Income II, Inc., non-traded REITs previously sponsored by the Company, a certain loan receivable previously held by NorthStar I was not transferred to CLNC, for which the Company acquired a senior participation interest at par, and the remaining junior participation interest ("NorthStar I Retained Asset") was transferred to a liquidating trust.

The Company entered into a management services agreement with the liquidating trust to service and assist in the potential sale of the NorthStar I Retained Asset, and to provide administrative services on such terms and conditions as approved by the trustees for a management fee of 1.25 % per annum of the net assets of the liquidating trust.

Such fee amount is immaterial.

In October 2020, the loan was paid off at a discount and the liquidating trust is expected to be liquidated by the end of the year.

Deferred Consideration— In the acquisition of DBH in July 2019 (Note 3), payment of a portion of the cash consideration to the principals of DBH, including Marc Ganzi, who became employees or affiliate of the Company post-acquisition, was deferred until the expiration of certain customary seller indemnification obligations.

The entire deferred consideration of $ 32.5 million was paid in May 2020.

Digital Real Estate Acquisitions— In connection with the acquisition of third party interests in DataBank in December 2019 (Note 3) , Marc Ganzi and Ben Jenkins entered into voting agreements with the Company, which provided the Company with majority voting power over DataBank's board of directors.

Additionally, in exchange for incentive units owned by Messrs.

Ganzi and Jenkins allocable to the DataBank stake acquired by the Company, the Company issued OP Units with a value of $ 3 million, which are subject to a multi-year lockup.

The value represents consideration paid to Messrs.

Ganzi and Jenkins by the Company for such incentive units in connection with its investment in DataBank, which was in addition to the cash consideration paid to third parties by the Company for its acquired interests in DataBank.

As a result, the Company will not be subject to future carried interest payments to Messrs.

Ganzi and Jenkins with respect to the Company's investment in DataBank.

In connection with acquisition of Vantage SDC in July 2020 (Note 4), the Company entered into a series of agreements with Messrs.

In April 2020, the credit facility was drawn for the full amount of $ 35.0 million and remained outstanding a t March 31, 2021 .

Digital Real Estate Acquisitions— In connection with acquisition of Vantage SDC in July 2020 (Note 3), the Company entered into a series of agreements with Messrs.

Ganzi and Jenkins, and their respective affiliates, pursuant to which Messrs.

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Such amounts invested represented 40 % of carried interest payments received by each of Messrs.

Ganzi and Jenkins in connection with Vantage SDC acquisition as a result of their respective personal investments in Vantage made prior to the Company’s acquisition of DBH (such carried interest was determined excluding any additional purchase price that may be payable if certain leasing milestones are achieved).

Additionally, the day-to-day operations of Vantage SDC will continue to be managed by Vantage's existing management company, in which Messrs.

Ganzi and Jenkins in connection with the Vantage SDC acquisition as a result of their respective personal investments in Vantage made prior to the Company’s acquisition of DBH.

Payments to be made by the Company and its co-investors to the previous owners of Vantage SDC for future build-out of expansion capacity within the portfolio, including lease up of the expanded capacity and existing inventory, will trigger additional carried interest payments to Messrs.

Ganzi and Jenkins.

Additionally, the day-to-day operations of Vantage SDC will continue to be managed by the existing management company of Vantage, in which Messrs.

Ganzi and Jenkins own a 50 % interest in the aggregate.

Fees paid to Vantage's management company for Vantage SDC was $ 2.3 million for the three and nine months ended September 30, 2020.

Fees paid to the Vantage management company for Vantage SDC was $ 3.0 million for the three months ended March 31, 2021.

DataBank acquired all of zColo's colocation business in December 2020 and February 2021 from Zayo, which is a portfolio company of DCP I and other co-invest vehicles sponsored and managed by the Company.

In the aforementioned transactions, t he Company took a series of steps to mitigate conflicts in the transactions, including receiving fairness opinions on the purchase price from a nationally recognized third party valuation firm.

Additionally, the transactions, specifically the related party aspects of the transactions, were subjected to the approval of either the Company's board of directors or the audit committee of the board of directors.

Additionally, the transactions, specifically the related party aspects of the transactions, were subject to the approval of either the Company's board of directors or the audit committee of the board of directors.

Arrangements with Company-Sponsored Private Funds— The Company co-invests alongside its sponsored private funds through joint ventures between the Company and the sponsored private fund.

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In connection with the Company's commitments as an affiliate of the general partner, the Company is allocated a proportionate share of the costs of the private funds such as financing and administrative costs.

Such costs expensed during the three and nine months ended September 30, 2020 and 2019 were immaterial and relate primarily to the Company's share of the fund's operating costs and deferred financing costs on borrowings of the fund.

Equity Awards of CLNC and NRE —As discussed in Note 19, CLNC and NRE (prior to termination of the NRE management agreement) grant equity awards to the Company and certain of the Company's employees, either directly or indirectly through the Company, are recognized as a gross-up of equity-based compensation expense over the vesting period with a corresponding amount in other income.

Such costs expensed in the periods presented were immaterial and relate primarily to the Company's share of the funds' operating costs and deferred financing costs on borrowings of the funds.

Equity Awards of CLNC —As discussed in Note 17, prior to termination of the Company’s management agreement with CLNC on April 30, 2021, CLNC granted equity awards to the Company and certain of the Company's employees, either directly or indirectly through the Company, are recognized as a gross-up of equity-based compensation expense over the vesting period with a corresponding amount in other income.

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, 2020 and December 31, 2019, such investments in consolidated investment vehicles and general partner entities totaled $ 13.2 million and $ 4.0 million, respectively, reflected in redeemable noncontrolling interests and noncontrolling interests on the balance sheet.

Their share of net

income was $ 4.4 million and $ 0.3 million for the three months ended September 30, 2020 and 2019, respectively, and $ 4.2 million and $ 1.3 million for the nine months ended September 30, 2020 and 2019, respectively.

Aircraft— The Company, through its subsidiary, Colony Capital Advisors, LLC, has entered into a time sharing agreement with Thomas J.

Barrack, Jr., the Company's Executive Chairman, under which Mr.

Barrack may use the Company’s aircraft for personal travel.

Under this arrangement, Mr.

Barrack pays the Company for personal usage based on the incremental cost to the Company, including direct and indirect variable costs, but in no case more than the maximum reimbursement permitted by the Federal Aviation Regulations under the agreement.

Barrack reimbursed the Company $ 0.2 million for both the three months ended September 30, 2020 and 2019, and $ 0.6 million and $ 0.8 million for the nine months ended September 30, 2020 and 2019, respectively.

Separately, pursuant to Mr.

Ganzi’s employment agreement, the Company has agreed to reimburse Mr.

At March 31, 2021 and December 31, 2020, such investments in consolidated investment vehicles and general partner entities totaled $ 27.3 million and $ 19.1 million, respectively, reflected in redeemable noncontrolling interests and noncontrolling interests on the balance sheet.

Their share was a net income of $ 0.3 million and a net loss of $ 0.5 million for the three months ended March 31, 2021 and 2020, respectively.

Aircraft— P ursuant 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.

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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 Mr.

The fixed cost reimbursements will be made based on an allocable portion of an aircraft’s annual budgeted cash fixed 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 true-up payment for any difference.

The Company reimbursed Mr.

Ganzi $ 39,000 and $ 0.1 million for the three months ended September 30, 2020 and 2019, respectively, and $ 0.4 million and $ 0.1 million for the nine months ended September 30, 2020 and 2019, respectively.

In November 2020, the Company's board of directors approved an amendment to Mr.

Ganzi's employment agreement to provide for the reimbursement by the Company of certain defined fixed costs of any aircraft owned by Mr.

Ganzi $ 1.1 million and $ 0.3 million for the three months ended March 31, 2021 and 2020, respectively.

Separately, based upon an agreement between Colony Capital Advisors, LLC, a subsidiary of the Company, and Thomas J.

Barrack, Jr., the Company's former Executive Chairman, Mr.

Barrack was previously provided use of the Company’s aircraft for personal travel.

Under this arrangement, Mr.

Barrack paid the Company for personal usage based on the incremental cost to the Company, including direct and indirect variable costs, but in no case more than the maximum reimbursement permitted by the Federal Aviation Regulations under the agreement.

Barrack reimbursed the Company $ 0.4 million for the three months ended March 31, 2020.

The Company's aircraft was sold in January 2021.

Commitments and Contingencies

Litigation and Claims

The Company may be involved in litigation and claims in the ordinary course of business.

As of September 30, 2020, 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.

The Company may be involved in litigation in the ordinary course of business.

As of March 31, 2021, 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.

Segment Reporting

The Company's five reportable segments are as follows:

The Company currently conducts its business through five reportable segments as follows:

• Digital Investment Management ("Digital IM")— This business encompasses the investment and stewardship of third party capital in digital infrastructure and real estate.

The Company's flagship opportunistic strategy is conducted through DCP and separately capitalized vehicles while other strategies, including digital credit and public equities, will be or 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 have the potential to earn carried interest based on the performance of such investment vehicles subject to achievement of minimum return hurdles.

• Digital Operating— This business is composed of balance sheet equity interests in digital infrastructure and real estate operating companies, which generally earns rental income from providing use of space and/or capacity in or on digital assets through leases, services and other agreements.

The Company currently owns interests in two companies, DataBank's edge colocation data centers and Vantage stabilized hyperscale data centers, which are also portfolio companies under Digital IM for the equity interests owned by third party capital.

• Digital Other— This segment is composed of equity interests in digital investment vehicles, the largest of which is the Company’s investment and commitment to DCP.

The Company's flagship opportunistic strategy is conducted through Digital Colony Partners ("DCP") and separately capitalized vehicles, while other strategies, including digital credit 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 carried interest based upon the performance of such investment vehicles subject to achievement of minimum return hurdles.

• 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;

and Vantage SDC, a stabilized hyperscale data center business.

Both DataBank and Vantage are also portfolio companies managed under Digital IM for the equity interests owned by third party capital.

• Digital Other— This segment is composed of equity interests in digital investment vehicles, the largest of which is the Company’s investment and commitment to the DCP flagship funds.

This segment also includes the Company’s investment and commitment to the digital liquid strategies and seed investments for future digital investment vehicles.

• Wellness Infrastructure (previously referred to as Healthcare)— This segment is composed of a diverse portfolio of senior housing, skilled nursing facilities, medical office buildings, and hospitals.

• Wellness Infrastructure— This segment is composed of a diverse portfolio of senior housing, skilled nursing facilities, medical office buildings, and hospitals.

The Company earns rental income from senior housing, skilled nursing facilities and hospital assets that are under net leases to single tenants/operators and from medical office buildings which are both single tenant and multi-tenant.

In addition, certain of the Company's senior housing properties are managed by operators under a RIDEA (REIT Investment Diversification and Empowerment Act) structure, which allows the Company to gain financial exposure to underlying operations of the facility in a tax efficient manner versus receiving contractual rent under a net lease arrangement.

• Other— This segment is composed of other equity and debt investments ("OED") and non-digital investment management business ("Other IM").

OED encompasses a diversified group of non-digital real estate and real estate-related equity and debt investments, including investments for which the Company acts as a general partner and/or manager ("GP co-investments") and receives various forms of investment management economics on related third-party capital on such investments (including CLNC), other real estate equity and debt investments and

other real estate related securities, among other holdings.

Over time, the Company expects to monetize the bulk of its OED portfolio as it completes its digital evolution.

Other IM, which is separate from Digital IM, encompasses the Company’s management of private real estate credit funds and related co-investment vehicles, CLNC, and NorthStar Healthcare, a public non-traded healthcare REIT.

Many of the investments underlying these vehicles are co-owned by the Company’s balance sheet and categorized under OED.

The Company earns management fees, generally based on the amount of assets or capital managed, and contractual incentive fees or potential carried interest based on the performance of the investment vehicles managed subject to achievement of minimum return hurdles.

Amounts not allocated to specific segments generally include corporate level cash and corresponding interest income, fixed assets for administrative use, corporate level financing and related interest expense, income and expense related to cost reimbursement arrangements with certain affiliates, costs in connection with unconsummated investments, compensation expense not directly attributable to reportable segments, corporate level administrative and overhead costs as well as corporate level transaction costs.

This segment also holds other wellness infrastructure-related assets, principally equity interests in and the management contract of NorthStar Healthcare .

• Other— This segment primarily composed of the Company's interest in CLNC.

The Company expects to monetize the remaining assets in its Other segment as it completes its digital evolution.

Amounts not allocated to specific segments generally include corporate level cash and corresponding interest income, fixed assets for administrative use, corporate level financing and related interest expense, costs in connection with unconsummated investments, compensation expense not directly attributable to reportable segments, corporate level administrative and overhead costs as well as corporate level transaction costs.

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.

In the third quarter of 2020, the Company applied a more specific identification of individual compensation and administrative costs to more precisely attribute these costs to the respective reportable segments.

The more refined cost attribution methodology is a better reflection of the underlying cost of operations of the individual reportable segments and was retrospectively applied to prior periods.

Aligned with the Company's acceleration of its digital transformation, the Company disaggregated its digital operating segments and beginning the third quarter of 2020, presents three digital reportable segments, as described further below.

Concurrently, the Company aggregated three of its non-digital operating segments, that is CLNC, OED and Other IM, and presents a single reportable segment, renamed as Other.

These changes reflect the different business strategies for the various digital operating segments and collectively, for the non-digital operating segments, and also reflect the Company's focus on its digital business which represents the future growth of the Company.

Additionally, effective the first and third quarters of 2020, the Industrial segment and the Hospitality segment, respectively, no longer constitute reportable segments.

In December 2019, the Company completed the sale of the light industrial portfolio and its related management platform, which represented the vast majority of the industrial segment.

The Company continues to own the bulk industrial assets which remain held for sale.

In September 2020, the Company entered into a definitive agreement to sell five of the six hotel portfolios in its Hospitality segment (remaining portfolio is in receivership) and the THL Hotel Portfolio in the Other segment.

Current and prior period results of the Industrial segment, Hospitality segment and THL Hotel Portfolio in the Other segment are presented as discontinued operations on the consolidated statements of operations (Note 16).

In connection with accelerating the monetization of a substantial majority of the assets in the Company's Other segment in the first quarter of 2021, the Company reorganized its Wellness Infrastructure segment to retrospectively include other healthcare related assets and obligations.

These assets and obligations encompass:

(i) the Company's equity interests in and the management contract of NorthStar Healthcare, equity investment in a healthcare asset manager, and N-Star CDOs collateralized largely by certain debt and preferred equity within the capital structure of Wellness Infrastructure, all of which previously resided in the Other segment;

as well as (ii) the 5.375% exchangeable senior notes, trust preferred securities and corresponding junior subordinated debt that were not previously allocated to reportable segments, all of which were issued by NRF Holdco, which holds the Wellness Infrastructure portfolio as its primary asset and acts as guarantor.

Segment Results of Operations

The following table presents results of operations of the Company's reportable segments.

Refer to Note 14 for further details on discontinued operations.

(In thousands) Digital Operating Digital Investment Management Digital Other Wellness Infrastructure Other Amounts Not Allocated to Segments Total

Three Months Ended September 30, 2020

Total revenues $ 98,549 $ 20,137 $ 736 $ 124,193 $ 69,298 $ 3,764 $ 316,677

Income (loss) from continuing operations ( 38,479 ) 3,539 6,757 ( 6,969 ) ( 101,128 ) ( 47,936 ) ( 184,216 )

Net income (loss) from continuing operations attributable to Colony Capital, Inc.

( 4,797 ) 1,730 5,616 ( 11,349 ) ( 32,481 ) ( 41,347 ) ( 82,628 )

Net loss from discontinued operations attributable to Colony Capital, Inc.

Net loss attributable to Colony Capital, Inc.

$ ( 187,267 )

Three Months Ended September 30, 2019

Total revenues $ — $ 14,517 $ — $ 136,091 $ 205,706 $ 2,686 $ 359,000

Income (loss) from continuing operations — 41,841 ( 251 ) ( 114,154 ) ( 369,511 ) ( 149,421 ) ( 591,496 )

Net income (loss) from continuing operations attributable to Colony Capital, Inc.

— 38,160 ( 229 ) ( 84,222 ) ( 348,898 ) ( 133,970 ) ( 529,159 )

Net income from discontinued operations attributable to Colony Capital, Inc.

Net loss attributable to Colony Capital, Inc.

$ ( 527,816 )

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

Total revenues $ 189,202 $ 29,498 $ 1,140 $ 93,543 $ 1,580 $ 741 $ 315,704

Income (loss) from continuing operations ( 62,844 ) 6,041 7,869 ( 41,210 ) ( 32,218 ) ( 67,815 ) ( 190,177 )

Net income (loss) from continuing operations attributable to Colony Capital, Inc.

( 12,384 ) 5,597 14,097 ( 497,371 ) ( 888,049 ) ( 152,773 ) ( 1,530,883 )

Net loss from discontinued operations attributable to Colony Capital, Inc.

Income (loss) from continuing operations attributable to Colony Capital, Inc.

( 8,793 ) 5,412 3,949 ( 32,906 ) ( 29,145 ) ( 59,593 ) ( 121,076 )

Loss from discontinued operations attributable to Colony Capital, Inc.

Net loss attributable to Colony Capital, Inc.

$ ( 246,290 )

Nine Months Ended September 30, 2019

Three Months Ended March 31, 2020

Total revenues $ 45,167 $ 19,179 $ 160 $ 144,679 $ 3,198 $ 4,830 $ 217,213

Income (loss) from continuing operations ( 18,295 ) 2,110 ( 3,035 ) ( 66,288 ) ( 11,295 ) ( 57,396 ) ( 154,199 )

Net income (loss) from continuing operations attributable to Colony Capital, Inc.

Income (loss) from continuing operations attributable to Colony Capital, Inc.

( 3,418 ) 1,902 ( 2,242 ) ( 49,938 ) ( 10,179 ) ( 49,817 ) ( 113,692 )

Net loss from discontinued operations attributable to Colony Capital, Inc.

Loss from discontinued operations attributable to Colony Capital, Inc.

Net loss attributable to Colony Capital, Inc.

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(In thousands) Digital Operating Digital Investment Management Digital Other Wellness Infrastructure Other Amounts Not Allocated to Segments Total

Three Months Ended September 30, 2020

Interest income $ — $ 2 $ 2 $ 992 $ 12,566 $ 1,254 $ 14,816

Interest expense 18,589 — — 32,310 6,479 14,471 71,849

Depreciation and amortization 73,032 6,427 — 31,961 13,208 1,105 125,733

Impairment loss — 3,832 — 2,451 29,886 — 36,169

Gain on sale of real estate — — — 186 13,072 — 13,258

Equity method earnings (losses), including carried interest — 6,134 4,400 — ( 67,450 ) — ( 56,916 )

Income tax benefit (expense) 6,091 ( 144 ) ( 73 ) ( 5,868 ) 10,053 ( 137 ) 9,922

Three Months Ended September 30, 2019

Interest income $ — $ 7 $ — $ 956 $ 38,828 $ 446 $ 40,237

Interest expense — 1,585 — 46,029 12,627 14,351 74,592

Depreciation and amortization — 4,753 — 38,998 71,678 1,503 116,932

Impairment loss — — — 92,885 440,146 — 533,031

Gain on sale of real estate — — — 833 7,388 — 8,221

Equity method earnings (losses), including carried interest — 848 ( 251 ) — 45,706 — 46,303

Income tax benefit (expense) — ( 13,090 ) — 566 2,717 ( 289 ) ( 10,096 )

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

Property operating income $ 189,002 $ — $ — $ 86,214 $ — $ — $ 275,216

Interest income 104 1 690 1,815 7 59 2,676

Fee income — 29,443 — 2,769 1,467 — 33,679

Property operating expense 79,862 — — 52,400 2 — 132,264

Interest expense 31,132 — — 32,705 — 8,648 72,485

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Impairment loss — — — 15,232 — — 15,232

Gain on sale of real estate — — — 186 23,872 — 24,058

Equity method earnings (losses), including carried interest — ( 195 ) 2,776 — ( 21,489 ) — ( 18,908 )

Income tax benefit (expense) 12,268 ( 2,645 ) 1,090 2,421 208 12,483 25,825

Nine Months Ended September 30, 2019

Three Months Ended March 31, 2020

Property operating income $ 45,149 $ — $ — $ 138,249 $ 555 $ — $ 183,953

Interest income — 30 7 792 54 1,724 2,607

Fee income — 18,944 — 4,431 1,753 — 25,128

Property operating expense 16,906 — — 66,567 4 — 83,477

Interest expense 9,402 — — 43,952 405 9,682 63,441

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Impairment loss — — — 48,532 — — 48,532

Gain on sale of real estate — — — 833 42,008 — 42,841

Equity method earnings (losses), including carried interest — 3 465 — ( 12,347 ) — ( 11,879 )

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

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

(In thousands) Total Assets Equity Method Investments Total Assets Equity Method Investments

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Geography is generally presented as the location in which the income producing assets reside or the location in which income generating services are performed.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

2020 2019 2020 2019

Total income by geography:

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$ 295,311 $ 201,152

1,744 2,472 4,554 4,450

$ 280,246 $ 374,356 $ 870,535 $ 933,823

(In thousands) September 30, 2020 December 31, 2019

(In thousands) March 31, 2021 December 31, 2020

Long-lived assets by geography:

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Europe 771,768 730,358

Other 631,039 624,680

$ 9,315,559 $ 9,494,603

(1) Total income includes the Company's share of earnings (loss) from its equity method investments (but excludes the Company's impairment of its equity method investments of $ 26.0 million and $ 3.1 million for the three months ended September 30, 2020 and 2019, respectively, and $ 323.8 million and $ 253.5 million for the nine months ended September 30, 2020 and 2019, respectively);

and excludes cost reimbursement income from affiliates and income from discontinued operations.

All income from discontinued operations is generated in the United States.

(2) Long-lived assets comprise real estate held for investment, real estate related intangible assets, operating lease right-of-use assets and fixed assets, and exclude financial instruments, assets held for disposition and investment management related intangible assets.

Long-lived assets that are held for disposition at September 30, 2020 and December 31, 2019 included $ 4.0 billion and $ 5.2 billion located in the United States, respectively, and $ 0.2 billion and $ 0.3 billion located in Europe, respectively.

and excludes cost reimbursement income from affiliates (Note 18) and income from discontinued operations (Note 14).

Income (loss) from discontinued operations for the three months ended March 31, 2021 and 2020 is composed of $ 143.8 million and $ 369.8 million from United States, respectively, and ($ 2.3 million) and $ 32.8 million from Europe, respectively.

The negative income attributed to Europe for the three months ended March 31, 2021 for continuing operations reflects a reversal of straight-line rent receivable based upon current assessment of collectability, and for discontinued operations, due to losses from equity method investments.

(2) Long-lived assets comprise real estate held for investment, lease related intangible assets, lease right-of-use assets and fixed assets, and exclude financial instruments, assets held for disposition and non-lease related intangible assets.

Long-lived assets that are held for disposition at March 31, 2021 and December 31, 2020 included $ 1.1 billion and $ 3.8 billion located in the United States, respectively, and $ 1.0 billion and $ 1.2 billion located in Europe, respectively.

Supplemental Disclosure of Cash Flow Information

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2021 2020

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$ 126,892 $ 112,278

Cash paid for income taxes, net 36,098 6,377

Cash paid for operating leases

21,022 11,777

Cash paid for income taxes, net of refunds 2,123 1,272

Cash paid for operating lease liabilities 16,781 7,096

Supplemental Disclosure of Cash Flows from Discontinued Operations

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Net cash provided by (used in) financing activities of discontinued operations — ( 3,886 )

Supplemental Disclosure of Cash Flows from Investing and Financing Activities

Net cash provided by (used in) operating activities of discontinued operations ( 640 ) 22,954

Net cash provided by (used in) investing activities of discontinued operations 52,907 27,465

Net cash provided by (used in) financing activities of discontinued operations ( 1,563 ) ( 57,627 )

Supplemental Disclosure of Noncash Investing and Financing Activities

Dividends and distributions payable

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Improvements in operating real estate in accrued and other liabilities

19,806 22,253

Proceeds from loan repayments and asset sales held in escrow

Right-of-use assets and operating lease liabilities established

14,683 138,731

Operating lease right-of-use assets and lease liabilities established 7,170 2,408

Finance lease payments accrued in accounts payable 2,224 —

Redemption of OP Units for common stock

Assets and liabilities of investment entities deconsolidated 172,927 —

Assets consolidated in real estate acquisition, net of cash and restricted cash 3,597,271 —

Liabilities assumed in real estate acquisition 2,142,657 —

Noncontrolling interests assumed in real estate acquisition 366,136 —

Deferred cash consideration for acquisition of DBH (Note 3) — 35,500

Issuance of OP Units for business combinations (Note 3) — 111,903

Foreclosures and exchanges of loans receivable for real estate

Financing provided to buyer in sale of real estate — 4,000

Fair value of Digital Colony Manager contract intangible consolidated (Note 3)

Assets of investment entities deconsolidated, net of cash and restricted cash contributed (Note 14)

Liabilities of investment entities deconsolidated (Note 14)

Noncontrolling interests of investment entities deconsolidated (Note 14)

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.

Other than as disclosed elsewhere, and in particular, termination of the CLNC management contract as discussed in Note 1, no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the accompanying notes.

FORWARD-LOOKING STATEMENTS

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• 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 impact 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 uncertainty that may adversely affect the Company;

• 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 result in significant further impairments to certain of our investments, including wellness infrastructure and hospitality assets and whether such transformation and any resulting impairments or dispositions 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, including our ability to obtain forbearances and/or debt modifications on our corporate credit facility and our non-recourse mortgage debt;

• 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 uncertainty that may adversely affect the Company;

• our ability to obtain and maintain financing arrangements, including securitizations, on favorable or comparable terms or at all, including our ability to extend and/or replace our corporate credit facility;

• the Company's ability to complete anticipated monetizations of non-core assets within the timeframe and on the terms contemplated, if at all;

• the Company's ability to complete the pending exit of the Company's hospitality business within the timeframe and on the terms contemplated, if at all, and the amount of proceeds, if any, the Company will receive as a result of the exit after the impact of transaction costs and other transaction related expenses, including any required capital contributions to the hotel portfolios;

• whether we will realize any of the anticipated benefits of the Company's pending exit from its hospitality business, if consummated;

• the impact of completed or anticipated initiatives related to our strategic shift to the digital industry, including the acquisitions of Digital Bridge Holdings, LLC and an ownership interest in Data Bridge Holdings, LLC, the strategic investment by Wafra, and the formation of certain other investment management platforms, on our company's growth and earnings profile;

• the impact of the completion of the sale of the Company's hospitality portfolios in connection with its strategic transformation 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 (such as Digital Bridge Holdings, LLC and Data Bridge Holdings, LLC);

• the impact to our business operations and financial condition of realized or anticipated compensation and administrative cost reductions in connection with corporate restructuring;

• 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 efficiencies, as well as anticipated strategic and financial benefits from terminating the management agreement with Colony Credit Real Estate, Inc.

• 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 Colony Credit Real Estate, Inc.

(NYSE:CLNC)) to execute their business strategies, particularly in light of the current COVID-19 pandemic;

• our business and investment strategy, including the ability of the businesses in which we have a significant investment (such as CLNC) to execute their business strategies, particularly in light of the current COVID-19 pandemic;

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

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• our ability to satisfy and manage our capital requirements;

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

• 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 and hospitality portfolios;

• 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;

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• our levels of leverage;

• adverse domestic or international economic conditions, including the COVID-19 pandemic, and the impact on the commercial real estate or real-estate related sectors;

• 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;

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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.

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.

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"Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and in Part I, Item 2.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A.

“Risk Factors” in this Quarterly Report.

Readers of this Quarterly Report should also read our other periodic filings made with the Securities and Exchange Commission and other publicly filed documents for further discussion regarding such factors.

“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 and other publicly filed documents for further discussion regarding such factors.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements