What changed in this filing

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Item 1. Financial Statements

2021-11-09 compared with 2021-08-09 · 428 added, 354 removed, 1417 unchanged (36% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

June 30, 2021 (Unaudited)

September 30, 2021 (Unaudited)

December 31, 2020

33 unchanged sentences

Preferred stock, $ 0.01 par value per share;

$ 1,033,750 liquidation preference;

$ 947,500 and $ 1,033,750 liquidation preference;

250,000 shares authorized;

41,350 shares issued and outstanding

37,900 and 41,350 shares issued and outstanding

916,105 999,490

1 unchanged sentence

Class A, 949,000 shares authorized;

491,922 and 483,406 shares issued and outstanding, respectively

493,456 and 483,406 shares issued and outstanding

Class B, 1,000 shares authorized;

734 shares issued and outstanding

666 and 734 shares issued and outstanding

Additional paid-in capital

17 unchanged sentences

(In thousands, except per share data)

Three Months Ended June 30, Six Months Ended June 30,

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

2021 2020 2021 2020

32 unchanged sentences

Income tax benefit 10,973 13,226 109,408 28,360

Income (loss) from continuing operations 3,823 ( 393,197 ) ( 142,516 ) ( 479,718 )

Loss from continuing operations ( 40,935 ) ( 52,649 ) ( 183,451 ) ( 524,116 )

Loss from discontinued operations ( 10,429 ) ( 308,581 ) ( 590,595 ) ( 2,960,164 )

7 unchanged sentences

4,311 ( 22,651 ) ( 38,565 ) ( 287,308 )

Net loss attributable to DigitalBridge Group, Inc.

Net income (loss) attributable to DigitalBridge Group, Inc.

61,357 ( 187,267 ) ( 307,677 ) ( 2,553,701 )

Preferred stock dividends

Preferred stock redemption (Note 9)

2,865 — 2,865 —

Net loss attributable to common stockholders

Preferred stock dividends

17,456 18,517 54,488 56,507

Loss per share—basic

Net income (loss) attributable to common stockholders $ 41,036 $ ( 205,784 ) $ ( 365,030 ) $ ( 2,610,208 )

Income (loss) per share—basic

Loss from continuing operations per common share—basic $ ( 0.06 ) $ ( 0.08 ) $ ( 0.30 ) $ ( 0.99 )

Net loss attributable to common stockholders per common share—basic $ ( 0.29 ) $ ( 4.33 ) $ ( 0.85 ) $ ( 5.06 )

Loss per share—diluted

Net income (loss) attributable to common stockholders per common share—basic $ 0.08 $ ( 0.44 ) $ ( 0.76 ) $ ( 5.51 )

Income (loss) per share—diluted

Loss from continuing operations per common share—diluted $ ( 0.06 ) $ ( 0.08 ) $ ( 0.30 ) $ ( 0.99 )

Net loss attributable to common stockholders per common share—diluted $ ( 0.29 ) $ ( 4.33 ) $ ( 0.85 ) $ ( 5.06 )

Net income (loss) attributable to common stockholders per common share—diluted $ 0.08 $ ( 0.44 ) $ ( 0.76 ) $ ( 5.51 )

Weighted average number of shares

7 unchanged sentences

(In thousands)

Three Months Ended June 30, Six Months Ended June 30,

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

2021 2020 2021 2020

15 unchanged sentences

Operating Company 2,539 ( 19,102 ) ( 44,395 ) ( 284,101 )

Comprehensive loss attributable to stockholders $ ( 140,044 ) $ ( 1,996,141 ) $ ( 407,477 ) $ ( 2,369,714 )

Comprehensive income (loss) attributable to stockholders $ 44,535 $ ( 155,028 ) $ ( 362,942 ) $ ( 2,524,742 )

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

43 unchanged sentences

(In thousands, except per share data)

Preferred Stock Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders’ Equity Noncontrolling Interests in Investment Entities Noncontrolling Interests in Operating Company Total Equity

Balance at June 30, 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 awards issued, net of forfeitures — 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 10 )

— — 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 (Notes 2 and 10)

— — ( 655 ) — 4 ( 651 ) ( 336 ) 987 —

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

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

DigitalBridge Group, Inc.

Consolidated Statements of Equity (Continued)

(In thousands, except per share data)

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

13 unchanged sentences

Balance at March 31, 2021 999,490 4,878 7,576,873 ( 6,460,262 ) 101,056 2,222,035 4,003,905 124,397 6,350,337

Net loss — — — ( 122,744 ) — ( 122,744 ) 36,616 ( 14,980 ) ( 101,108 )

Other comprehensive income — — — — ( 15,818 ) ( 15,818 ) 7,805 ( 1,625 ) ( 9,638 )

Net income (loss) — — — ( 122,744 ) — ( 122,744 ) 36,616 ( 14,980 ) ( 101,108 )

Other comprehensive income (loss) — — — — ( 15,818 ) ( 15,818 ) 7,805 ( 1,625 ) ( 9,638 )

Shares issued pursuant to settlement liability (Note 13)

14 unchanged sentences

DigitalBridge Group, Inc.

Consolidated Statements of Equity (Continued)

(In thousands, except per share data)

Balance at June 30, 2021 $ 999,490 $ 4,927 $ 7,622,382 $ ( 6,601,522 ) $ 83,675 $ 2,108,952 $ 3,836,609 $ 113,469 $ 6,059,030

Net income (loss) — — — 61,357 — 61,357 ( 124,301 ) 4,311 ( 58,633 )

Other comprehensive loss — — — — ( 16,822 ) ( 16,822 ) ( 19,921 ) ( 1,772 ) ( 38,515 )

Redemption of preferred stock (Note 9)

( 83,385 ) — ( 2,865 ) — — ( 86,250 ) — — ( 86,250 )

Deconsolidation of investment entities (Note 21)

— — — — — — ( 149,515 ) — ( 149,515 )

Redemption of OP Units for cash and class A common stock

— 5 1,085 — — 1,090 — ( 1,090 ) —

Equity awards issued, net of forfeitures — 12 7,351 — — 7,363 308 903 8,574

Shares canceled for tax withholdings on vested stock awards

— ( 3 ) ( 1,670 ) — — ( 1,673 ) — — ( 1,673 )

Contributions from noncontrolling interests — — — — — — 24,292 — 24,292

Distributions to noncontrolling interests — — — — — — ( 51,584 ) — ( 51,584 )

Preferred stock dividends — — — ( 17,456 ) — ( 17,456 ) — — ( 17,456 )

Reallocation of equity (Notes 2 and 10)

— — ( 731 ) — 27 ( 704 ) — 704 —

Balance at September 30, 2021 $ 916,105 $ 4,941 $ 7,625,552 $ ( 6,557,621 ) $ 66,880 $ 2,055,857 $ 3,515,888 $ 116,525 $ 5,688,270

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

DigitalBridge Group, Inc.

Consolidated Statements of Cash Flows

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows from Operating Activities

10 unchanged sentences

Allowance for doubtful accounts 3,640 8,655

Impairment of real estate and related intangibles and right-of-use assets 366,347 1,794,825

Impairment of real estate and related intangibles and right-of-use asset 359,996 1,946,786

Goodwill impairment — 594,000

6 unchanged sentences

Payment of cash collateral on derivative — ( 771 )

Deferred income tax (benefit) expense ( 85,458 ) 577

Deferred income tax benefit ( 99,268 ) ( 10,602 )

Other loss, net 102,908 195,805

17 unchanged sentences

Proceeds from paydown and maturity of debt securities 544 4,479

Cash and restricted cash assumed by buyer upon sale of hotel portfolio in receivership ( 35,098 ) —

Proceeds from sale of equity investments 313,595 254,921

1 unchanged sentence

( 343 ) ( 8,150 )

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

Proceeds from sale of corporate fixed assets 14,946 —

Net receipts on settlement of derivatives 17,123 27,097

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

Acquisition of DBH, net of cash acquired, and payment of deferred purchase price

Other investing activities, net

Net cash provided by investing activities 408,596 114,565

( 833 ) 7,274

Net cash provided by (used in) investing activities 85,698 ( 981,923 )

DigitalBridge Group, Inc.

1 unchanged sentence

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

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

Repayment of senior notes ( 31,502 ) ( 370,998 )

Borrowings from corporate credit facility 45,000 600,000

Borrowings from corporate credit facility and securitized financing facility 345,000 600,000

Repayment of borrowings from corporate credit facility ( 45,000 ) ( 600,000 )

3 unchanged sentences

Contributions from noncontrolling interests 203,059 1,353,866

Distributions to and redemptions of noncontrolling interests ( 72,596 ) ( 197,791 )

Distributions to and redemptions by noncontrolling interests ( 129,790 ) ( 261,314 )

Contribution from Wafra (Note 10)

Redemption of preferred stock ( 86,250 ) ( 402,855 )

Shares canceled for tax withholdings on vested equity awards ( 18,570 ) ( 6,738 )

Net cash used in financing activities ( 308,682 ) ( 329,490 )

Net cash provided by financing activities 198,221 363,225

Effect of exchange rates on cash, cash equivalents and restricted cash 590 3,500

3 unchanged sentences

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

Six Months Ended June 30,

Nine Months Ended September 30,

Beginning of the period

11 unchanged sentences

Notes to Consolidated Financial Statements

June 30, 2021

September 30, 2021

Business and Organization

4 unchanged sentences

(formerly Colony Capital, Inc.) and trades under the ticker symbol, DBRG, signifying the Company's transformation to digital infrastructure.

At June 30, 2021, the Company has $ 48 billion of total assets under management, including both third party capital and the Company's balance sheet, and $ 20 billion of fee earning equity under management.

At September 30, 2021, the Company has $ 49 billion of total assets under management, including both third party capital and the Company's balance sheet, of which $ 38 billion is dedicated to digital real estate and infrastructure.

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

At June 30, 2021, the Company owned 90.5 % of the OP , as its sole managing member.

At September 30, 2021, the Company owned 90.5 % of the OP , as its sole managing member.

The remaining 9.5 % is owned primarily by certain current and former employees of the Company as noncontrolling interests.

2 unchanged sentences

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.

In 2021, having successfully exited its hotel business, the Company is continuing the process of monetizing the remainder of its non-digital businesses to complete its digital transformation.

This includes the Company's Wellness Infrastructure segment, and a substantial majority of the Company's other equity and debt ("OED") investments and its non-digital investment management ("Other IM") business, both of which reside in the Other segment.

The completed and pending dispositions of the Company’s hotel business, OED investments and Other IM business, and Wellness Infrastructure segment 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 11) and the related operating results are presented as loss from discontinued operations on the consolidated statements of operations (Note 12).

Significant healthcare and economic challenges arising from the coronavirus disease 2019 pandemic, or COVID-19, reinforced the critical role and the resilience of the digital 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.

This digital transformation requires a rotation of the Company's traditional non-digital assets into digital-focused investments.

Following the successful exit of its hotel business in March 2021, the Company is now in the final stages of monetizing the remainder of its non-digital business to complete its digital transformation.

This encompasses the Company's Wellness Infrastructure segment, and a substantial majority of the Company's other equity and debt ("OED") investments and its non-digital investment management ("Other IM") business, both of which previously resided in the Other segment.

The Company's completed disposition of its hotel business, and pending disposition of its OED investments, Other IM business and Wellness Infrastructure segment each represents a strategic shift in the Company's business that has or is expected to have a significant effect on the Company’s operations and financial results, and accordingly, each has met the criteria as discontinued operations.

For all current and prior periods presented, the related assets and liabilities, to the extent they have not been disposed at the respective balance sheet dates, are presented as assets and liabilities held for disposition on the consolidated balance sheets (Note 11) and the related operating results are presented as discontinued operations on the consolidated statements of operations (Note 12).

Accelerating the Monetization of Wellness Infrastructure and Other Segments

In the second quarter of 2021, the Company started the process to dispose of its Wellness Infrastructure business along with other non-core assets, all of which are held by its subsidiary, NRF Holdco, LLC ("NRF Holdco").

In September 2021 and June 2021, the Company entered into separate definitive agreements with third parties to sell (a) its Wellness Infrastructure business, that, along with other non-core assets, are held by the Company's subsidiary, NRF Holdco, LLC ("NRF Holdco");

and (b) a substantial majority of its OED investments and Other IM business.

In assessing the recovery of assets classified as held for disposition and discontinued operations, in particular considering the sales price for the Wellness Infrastructure assets, and for the OED investments and Other IM business, the Company wrote down the carrying value of these assets by $ 645.6 million in aggregate, of which $ 294.2 million was attributable to the OP.

This was recorded within impairment loss, equity method loss and other loss in discontinued operations, as discussed further in Note 11.

Consummation of these dispositions is subject to customary closing conditions, including third party consents and additionally, regulatory approvals in relation to OED and Other IM, with no financing conditions attached to both dispositions.

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

Wellness Infrastructure

The Wellness Infrastructure business is composed of senior housing, skilled nursing facilities, medical office buildings, and hospitals.

2 unchanged sentences

("NorthStar Healthcare"), debt securities collateralized largely by certain debt and preferred equity within the capital structure of the Wellness Infrastructure portfolio, limited partner interests in private equity real estate funds;

and (ii) the 5.375% exchangeable senior notes, trust preferred securities and corresponding junior subordinated debt, all of which were issued by NRF Holdco who acts as guarantor.

In June 2021, the Company entered into a definitive agreement with a third party to sell a substantial majority of its OED investments and Other IM business, composed of the Company's interests in various non-digital real estate, real estate-related equity and debt investments, and the Company's general partner interests and management rights with respect to these assets.

and (ii) the 5.375% exchangeable senior notes, trust preferred securities and corresponding junior subordinated debt, all of which were issued by NRF Holdco and its subsidiaries.

The sales price for 100% of the equity of NRF Holdco is $281.0 million, composed of $190.7 million in cash and $90.3 million unsecured promissory note (the "Seller Note").

The sale includes the acquirer's assumption of $2.6 billion of consolidated investment level debt, for which we own between 69.6% and 81.3% of the various healthcare portfolios, and $293.7 million of debt at NRF Holdco.

The sales price will be adjusted for certain amounts contributed to, or distributed from, NRF Holdco prior to closing of the sale, with any adjustment to be applied pro rata to the cash portion and the Seller Note.

The Seller Note matures five years from closing of the sale, accruing interest at a per annum rate of 6.5% in the period prior to two years from the closing date and 8.5% thereafter.

OED and Other IM

The OED investments and Other IM business that are under contract for sale are composed of the Company's interests in various non-digital real estate, real estate-related equity and debt investments, and the Company's general partner interests and management rights with respect to these assets.

The aggregate sales price is approximately $535 million, subject to customary adjustments, including adjustments if consents with respect to certain assets cannot be obtained.

Consummation of the sale is subject to customary closing conditions, including regulatory approvals and third party consents, but no financing conditions.

During the six months ended June 30, 2021, taking into consideration the agreed upon sales price and/or estimated recoverable values for the OED, Other IM and Wellness Infrastructure assets that are classified as held for disposition, the Company wrote down the carrying value of these assets by $ 537.8 million in aggregate, of which $ 276.5 million was attributable to the OP, recorded within impairment loss, equity method loss and other loss in discontinued operations, as discussed further in Note 11.

Internalization of BrightSpire Capital, Inc.

6 unchanged sentences

Except as aforementioned, the Company may vote its shares in its sole discretion in any votes of BRSP’s stockholders.

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

The Company is prohibited from acquiring additional BRSP shares and currently holds a 29% equity ownership in BRSP following the sale of a portion of its BRSP shares in August 2021.

Exit of the Hotel Business

In March 2021, the Company completed the sale of its hotel business.

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 currently under contract for sale by the lender, while the remaining interests in the THL Hotel Portfolio continue to be held by investment vehicles managed by the Company.

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 100% of the equity in its hotel subsidiaries which held five of the six hotel portfolios in the Hospitality segment and its 55.6% equity interest in a portfolio of limited service hotels in the Other segment that was previously acquired through a consensual foreclosure (the "THL Hotel Portfolio"), composed of 197 hotel properties in aggregate.

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.

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 consolidated investment-level debt.

In September 2021, the remaining interests in the THL Hotel Portfolio held by investment vehicles managed by the Company were sold to the same buyer.

Also in September 2021, the remaining portfolio in the Hospitality segment that was in receivership was sold by the lender for no proceeds to the Company.

Summary of Significant Accounting Policies

9 unchanged sentences

All significant intercompany accounts and transactions have been eliminated.

The portions of equity, net income and other comprehensive income of consolidated subsidiaries that are not attributable to the parent are presented

separately as amounts attributable to noncontrolling interests in the consolidated financial statements.

The portions of equity, net income and other comprehensive income of consolidated subsidiaries that are not attributable to the parent are presented separately as amounts attributable to noncontrolling interests in the consolidated financial statements.

A substantial portion of noncontrolling interests represents interests held by private investment funds or other investment vehicles managed by the Company and which invest alongside the Company, and membership interests in OP primarily held by certain employees of the Company.

30 unchanged sentences

Allocation of net income or loss to redeemable noncontrolling interests is based upon their ownership percentage during the period.

The carrying amount of

redeemable noncontrolling interests is adjusted to its redemption value at the end of each reporting period to an amount not less than its initial carrying value, except for amounts contingently redeemable which will be adjusted to redemption value only when redemption is probable.

The carrying amount of redeemable noncontrolling interests is adjusted to its redemption value at the end of each reporting period to an amount not less than its initial carrying value, except for amounts contingently redeemable which will be adjusted to redemption value only when redemption is probable.

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

17 unchanged sentences

The identifiable assets acquired, liabilities assumed and noncontrolling interests in an acquired entity are recognized and measured at their estimated fair values.

The excess of the fair value of consideration transferred over the fair values of identifiable assets acquired, liabilities assumed and noncontrolling interests in an acquired entity, net of fair value of any previously held interest in the acquired entity, is recorded as goodwill.

The excess of the fair value of

consideration transferred over the fair values of identifiable assets acquired, liabilities assumed and noncontrolling interests in an acquired entity, net of fair value of any previously held interest in the acquired entity, is recorded as goodwill.

Such valuations require management to make significant estimates and assumptions.

1 unchanged sentence

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.

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

Discontinued Operations

1 unchanged sentence

A business or asset group acquired in connection with a business combination that meets the criteria to be accounted for as held for sale at the date of acquisition is reported as discontinued operations, regardless of whether it meets the strategic shift criterion.

The accelerated monetization of the Wellness Infrastructure segment that is in progress as of June 2021;

pending disposition of a substantial majority of the OED investments and Other IM business in the Other segment;

The pending dispositions of the Wellness Infrastructure segment and a substantial majority of the OED investments and Other IM business in the Other segment;

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

12 unchanged sentences

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 Pending Adoption

Amendment to Lessor Accounting

In July 2021, the FASB issued ASU No.

2021-5, Lessors—Certain Leases with Variable Lease Payments , which amends existing lease classification guidance for lessors to better reflect the economics of certain lease arrangements.

The ASU requires a lease with variable lease payments that are not based upon a rate or index to be classified as an operating lease if classification as a direct financing lease or sales-type lease would have resulted in a loss to the lessor at lease commencement.

A loss could have otherwise arisen even if the lease is expected to be profitable as the exclusion of these variable lease payments result in the recognition of a lower net investment in a lease relative to the carrying value of the underlying asset that is derecognized at the commencement of a direct financing or sales-type lease.

Under the amended guidance, this uneconomic outcome is avoided because the classification as an operating lease does not result in a derecognition of the underlying asset by the lessor, and the recognition of variable lease payments earned and

depreciation expense on the underlying asset will partially offset in earnings over time.

The ASU is effective January 1, 2022 and can be applied either retrospectively to leases that commenced or were modified upon adoption of Topic 842, Leases, or prospectively to new or modified leases.

The Company, as lessor, does not currently have any leases that would be subject to this amendment.

Accounting Standards Adopted in 2021

18 unchanged sentences

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity .

The ASU (1) simplifies an issuer’s accounting for convertible

instruments as a single unit of account;

The ASU (1) simplifies an issuer’s accounting for convertible instruments as a single unit of account;

(2) allows more contracts on an entity’s own equity to qualify for equity classification and more embedded derivatives meeting the derivative scope exception;

6 unchanged sentences

The guidance also clarifies that freestanding contracts on an entity’s own equity that do not qualify for equity classification under the indexation criteria (ASC 815-40-15) or settlement criteria (ASC 815-40-25) are to be measured at fair value through earnings, even if they do not meet the definition of a derivative under ASC 815.

• The ASU also amends certain guidance on computation of diluted EPS for convertible instruments and contracts on an entity’s own equity that results in a more dilutive EPS, including (1) requiring the if converted method to be applied for all convertible instruments (the treasury stock method is no longer available), and (2) removing the ability to rebut the presumption of share settlement for contracts that may be settled in cash or stock and that are not liability classified share based payments.

ability to rebut the presumption of share settlement for contracts that may be settled in cash or stock and that are not liability classified share based payments.

• Expanded disclosures are required, including but not limited to, (1) terms and features of convertible instruments and contracts on entity’s own equity;

13 unchanged sentences

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.

The Company and its co-investors have also committed to acquire the future build-out of expansion capacity, along with lease-up of the expanded capacity and existing inventory, including those associated with an add-on acquisition to the Vantage SDC portfolio described below, the costs of which will be borne by the previous owners of Vantage SDC, for estimated payments of approximately $ 350 million.

It is anticipated that most, if not all, 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 two tenant leases related to a portion of the expansion capacity during the six months ended June 30, 2021, which triggered aggregate payments of $ 73.6 million to the previous owners of Vantage SDC.

These payments were treated as asset acquisitions, which consideration was allocated to data center infrastructure and in-place lease acquired, and as additional consideration for land and building.

Pursuant to this arrangement, Vantage SDC entered into two tenant leases in 2021 related to a portion of the expansion capacity which triggered aggregate payments of $ 73.6 million.

As part of the July 2020 acquisition, the Company had an option to purchase an additional data center in Santa Clara, California.

In September 2021, the Company exercised the option and purchased the data center for $ 404.5 million in cash, funded through borrowings by Vantage SDC, and a deferred amount of $ 56.9 million to be paid upon future lease-up.

All of these payments were made to the previous owners of Vantage SDC and are treated as asset acquisitions.

zColo Colocation Data Centers

5 unchanged sentences

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

Acquisitions by DataBank

In the third quarter of 2021, DataBank and its zColo portfolio each acquired a building in the U.S.

for a combined $ 38.5 million, to be redeveloped into data centers.

Allocation of Consideration Transferred

2 unchanged sentences

Asset Acquisitions

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

(In thousands) Vantage SDC Expansion Capacity and Add-On Acquisition Acquisitions by DataBank / zColo US zColo France Vantage SDC zColo US and UK

Assets acquired and liabilities assumed

5 unchanged sentences

Intangible, lease and other liabilities ( 56,889 ) — ( 11,303 ) ( 82,350 ) ( 419,262 )

Fair value of net assets acquired for cash consideration $ 73,600 $ 33,018 $ 1,524,610 $ 1,181,488

Fair value of net assets acquired $ 478,143 $ 38,500 $ 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;

17 unchanged sentences

Other real estate acquisitions include the following.

Some of the acquired real estate has since been disposed, and all of the remaining assets and associated liabilities were classified as held for disposition in 2021.

Some of the acquired assets have been disposed, and all other remaining assets and associated liabilities were classified as held for disposition in 2021.

• Hotel properties in France that are under receivership, for which the Company's bid was accepted by the French courts in 2019.

7 unchanged sentences

Real estate held for disposition is presented in Note 11.

(In thousands) June 30, 2021 December 31, 2020

(In thousands) September 30, 2021 December 31, 2020

Land $ 206,296 $ 168,145

6 unchanged sentences

Real Estate Depreciation

Depreciation of real estate held for investment was $ 74.3 million and $ 16.0 million for the three months ended June 30, 2021 and 2020, respectively, and $ 141.5 million and $ 29.3 million for the six months ended June 30, 2021 and 2020, respectively.

Depreciation of real estate held for investment was $ 69.7 million and $ 36.6 million for the three months ended September 30, 2021 and 2020, respectively, and $ 211.3 million and $ 65.9 million for the nine months ended September 30, 2021 and 2020, respectively.

Property Operating Income

Components of property operating income are as follows, excluding amounts related to discontinued operations (Note 12).

Three Months Ended June 30, Six Months Ended June 30,

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

(In thousands) 2021 2020 2021 2020

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$ 194,854 $ 98,522 $ 572,841 $ 185,688

For the six months ended June 30, 2021, property operating income from a single tenant accounted for approximately 17 % of the Company's total revenues from continuing operations, or approximately 8.5 % based upon the Company's share of total revenues from continuing operations, net of amounts attributable to noncontrolling interests in investment entities.

There was no similar tenant concentration in the six months ended June 30, 2020.

For the nine months ended September 30, 2021, property operating income from a single tenant accounted for approximately 16.2 % of the Company's total revenues from continuing operations, or approximately 7.8 % based upon the Company's share of total revenues from continuing operations, net of amounts attributable to noncontrolling interests in investment entities.

There was no similar tenant concentration in the nine months ended September 30, 2020.

Equity Investments

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

(In thousands) June 30, 2021 December 31, 2020

(In thousands) September 30, 2021 December 31, 2020

Equity method investments

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Company-sponsored private funds (2)

314,773 173,039

Investments under fair value option — 28,540

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$ 793,065 $ 792,996

(1) Excludes approximately 461,000 shares and 3.1 million units in BRSP that are held by NRF Holdco and included in assets held for disposition (Note 11), of the Company's aggregate holdings of 48 million shares and units in BRSP.

(1) Excludes approximately 461,000 shares and 3.1 million units in BRSP held by NRF Holdco that are included in assets held for disposition (Note 11), of the Company's aggregate holdings of 38.5 million shares and units in BRSP at September 30, 2021 ( 47.9 million at December 31, 2020).

(2) Includes unrealized carried interest of approximately $ 82.0 million at September 30, 2021 and $ 12.7 million at December 31, 2020, a portion of which is shared with certain employees.

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

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Other than BRSP, OTTI was recorded only on equity method investments held for disposition, as discussed in Note 11.

The Company owns a 36.15 % interest in BRSP, accounted for under the equity method, as it exercises significant influence over BRSP's operating and financial policies through its substantial ownership interest.

The Company owns a 29 % interest in BRSP at September 30, 2021 ( 36.4 % at December 31, 2020), accounted for under the equity method as it exercises significant influence over BRSP's operating and financial policies through its substantial ownership interest.

The following discussion encompasses all of the Company's interest in BRSP, including such interest held by NRF Holdco that is presented as held for disposition and discontinued operations.

Disposition —In August 2021, the Company sold 9,487,500 BRSP shares through a secondary offering by BRSP for net proceeds of approximately $ 81.8 million, after underwriting discounts.

A net gain was recognized in equity method earnings within continuing operations of $ 7.6 million (including a proportion of basis difference associated with the BRSP shares disposed, as discussed below).

OTTI —The Company determined there was no OTTI on its investment in BRSP in 2021.

At June 30, 2021, the fair value of the Company's investment in BRSP, based upon its closing stock price of $ 9.40 per share, was in excess of its carrying value.

At September 30, 2021, the fair value of the Company's investment in BRSP, based upon its closing stock price of $ 9.39 per share, was in excess of its carrying value.

In the second quarter of 2020, the Company had determined that its investment in BRSP 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 BRSP over market value of $ 336.5 million based upon BRSP's closing stock price of $ 7.02 per share on June 30, 2020.

Basis Difference —The impairment charges recorded by the Company on its investment in BRSP in 2020 and 2019 resulted in a basis difference between the Company's carrying value of its investment in BRSP and the Company's proportionate share of BRSP's book value of equity.

Basis Difference —The impairment charges recorded by the Company on its investment in BRSP in 2020 and 2019 resulted in a basis difference between the Company's carrying value of its investment in BRSP (based upon BRSP's share price at the time of impairment) and the Company's proportionate share of BRSP's book value of equity at the time of impairment.

The impairment charges were applied to the Company's investment in BRSP as a whole and were not determined based upon an impairment assessment of individual assets held by BRSP.

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

Accordingly, for any future write-downs taken by BRSP 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.

Upon resolution of these investments, the associated basis differences is applied to calculate the Company's share of any net gain or loss resulting

from such resolution.

The Company increased its share of net earnings or reduced its share of net losses from BRSP by $ 34.5 million and $ 8.7 million for the three months ended June 30, 2021 and 2020, respectively, and $ 59.2 million and $ 27.9 million for the six months ended June 30, 2021 and 2020 , respectively, representing the basis difference allocated to investments that were resolved or impaired by BRSP during these periods.

The remaining basis difference at June 30, 2021 was $ 218.4 million.

Therefore, the impairment charges were generally allocated on a relative fair value basis across BRSP's various investments.

Accordingly, for any subsequent resolutions or write-downs taken by BRSP on these investments, the Company's share thereof is not recorded as an equity method loss but is applied to reduce the basis difference until such time the basis difference in

connection with the respective investments has been fully eliminated.

Upon resolution of these investments by BRSP or upon the Company's disposition of its shares in BRSP, the basis difference related to resolved investments or the proportion of basis difference associated with the BRSP shares disposed is applied to calculate the Company's share of net gain or loss resulting from such resolution or disposition.

The Company increased its share of net earnings or reduced its share of net losses from BRSP by $ 41.4 million and $ 21.9 million for the three months ended September 30, 2021 and 2020, respectively, and $ 100.5 million and $ 49.8 million for the nine months ended September 30, 2021 and 2020 , respectively, representing the basis difference allocated to investments that were resolved or impaired by BRSP during these periods and the basis difference proportionate to the Company's ownership in BRSP that was disposed in August 2021.

The remaining basis difference at September 30, 2021 was $ 177.0 million.

Investment and Lending Commitments

Private Funds— At June 30, 2021, the Company has unfunded commitments of $ 128.4 million to the Company's sponsored funds in its flagship digital opportunistic strategy, Digital Colony Partners, LP ("DCP I") and Digital Colony Partners II, LP ("DCP II").

Loans Receivable— The Company has lending commitment to a borrower 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 agreed upon benchmarks, financial and operating metrics and approved budget.

At June 30, 2021, the unfunded lending commitment was $ 25.0 million, of which the Company's share was $ 5.0 million, net of amounts attributable to noncontrolling interests in investment entities.

Sponsored Funds— At September 30, 2021, the Company has unfunded commitments of $ 116.7 million to the Company's sponsored funds in its flagship digital opportunistic strategy, Digital Colony Partners, LP ("DCP I") and Digital Colony Partners II, LP ("DCP II").

Loan Receivable— The Company's DataBank subsidiary has a lending commitment to a borrower, the funding of which is contingent on the borrower meeting certain criteria such as agreed upon benchmarks, financial and operating metrics and approved budgets.

At September 30, 2021, the unfunded lending commitment was $ 25.0 million, of which the Company's share was $ 5.0 million, net of amounts attributable to noncontrolling interests in investment entities.

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 11).

(In thousands) June 30, 2021 December 31, 2020

Goodwill balance by reportable segment is as follows at September 30, 2021 and December 31, 2020.

(In thousands)

Balance by reportable segment:

Digital Operating $ 463,120 $ 463,120

Digital Investment Management (1)

298,248 298,248

$ 761,368 $ 761,368

Digital Operating 463,120

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

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

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

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

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The following table summarizes amortization of deferred leasing costs and finite-lived intangible assets and intangible liabilities, excluding amounts related to discontinued operations (Note 12):

Three Months Ended June 30, Six Months Ended June 30,

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

(In thousands) 2021 2020 2021 2020

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$ 58,100 $ 42,756 $ 191,936 $ 84,950

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

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

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

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(In thousands) Remaining 2021 2022 2023 2024 2025 2026 and Thereafter Total

Net increase (decrease) to rental income $ ( 1,909 ) $ ( 1,404 ) $ ( 410 ) $ ( 534 ) $ ( 1,031 ) $ ( 2 ) $ ( 5,290 )

Net decrease to rental income $ ( 893 ) $ ( 1,401 ) $ ( 645 ) $ ( 522 ) $ ( 1,031 ) $ ( 62 ) $ ( 4,554 )

Amortization expense 59,690 159,737 142,691 115,032 103,467 621,112 1,201,729

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Restricted Cash

Restricted cash represents principally cash reserve accounts that are maintained pursuant to requirements under the respective agreements governing the Company's securitized debt.

Restricted cash represents principally cash reserve accounts that are maintained pursuant to requirements under the respective agreements governing the various securitized debt of the Company and its subsidiaries.

The following table summarizes the Company's other assets:

(In thousands) June 30, 2021 December 31, 2020

(In thousands) September 30, 2021 December 31, 2020

Straight-line rents $ 22,315 $ 8,991

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

(In thousands) June 30, 2021 December 31, 2020

(In thousands) September 30, 2021 December 31, 2020

Deferred income (1)

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(1) Represents primarily prepaid rental income and deferred management fees from digital investment vehicles.

Deferred management fees of $ 1.7 million at June 30, 2021 and $ 6.1 million at December 31, 2020 is expected to be recognized as fee income over a weighted average period of 4.7 years and 1.9 years, respectively.

Deferred management fees of $ 4.3 million at September 30, 2021 and $ 6.1 million at December 31, 2020 is expected to be recognized as fee income over a weighted average period of 4.2 years and 1.9 years, respectively.

Deferred Income Tax

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federal income taxes on income earned by any of its taxable subsidiaries.

In the second quarter of 2021, DataBank recorded a net deferred tax benefit of $ 66.8 million, primarily reflecting the write-off of its deferred tax liabilities.

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 11).

(In thousands) Corporate Credit Facility Convertible and Exchangeable Senior Notes Secured Debt Total Debt

June 30, 2021

DataBank recorded a net deferred tax benefit of $ 66.8 million in the second quarter of 2021, reflecting principally the write-off of its deferred tax liabilities.

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

(In thousands) Securitized Financing Facility Convertible and Exchangeable Senior Notes Secured Debt Total Debt

September 30, 2021

Debt at amortized cost

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$ — $ 520,522 $ 3,410,467 $ 3,930,989

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

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

Fixed Rate Variable Rate Total

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Weighted Average Years Remaining to Maturity (2)

June 30, 2021

Corporate credit facility $ — N/A N/A $ 45,000 4.75 % — $ 45,000 4.75 % —

September 30, 2021

Secured Fund Fee Revenue Notes (3)

$ 300,000 3.93 % 5.0 $ — N/A — $ 300,000 3.93 % 5.0

Convertible and exchangeable senior notes (4)

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800,000 — 800,000

Secured Debt—Digital Operating 2,787,781 2.49 % 4.4 586,474 5.69 % 4.4 3,374,255 3.05 % 4.4

Digital Operating 2,786,223 2.49 % 4.1 1,031,017 4.06 % 2.7 3,817,240 2.91 % 3.7

Corporate and Other — N/A N/A 4,000 1.23 % 1.8 4,000 1.23 % 1.8

2,786,223 1,035,017 3,821,240

$ 3,586,223 $ 1,035,017 $ 4,621,240

December 31, 2020

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

Other—Other Equity and Debt — N/A N/A 164,472 3.85 % 0.1 164,472 3.85 % 0.1

Corporate and Other — N/A N/A 164,472 3.85 % 0.1 164,472 3.85 % 0.1

2,132,852 1,258,463 3,391,315

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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.

(2) Calculated based upon anticipated repayment dates for notes issued under securitization financing;

otherwise based upon initial maturity dates, or extended maturity dates if extension criteria are met and extension is available at the Company's option.

(3) Represent obligations of special-purpose subsidiaries of the OP as co-issuers and certain other special-purpose subsidiaries of DBRG, as further described below.

(4) Excludes the 5.375 % exchangeable senior notes issued by NRF Holdco as they are classified as held for disposition (Note 11).

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In July 2021, the Company repaid the outstanding balance and terminated its corporate credit facility, which was replaced with the Company's new securitized financing facility, as discussed below.

Prior to termination, the credit facility provided revolving commitments of $ 300 million as of June 30, 2021, based upon terms amended in May 2021 ($ 450 million at December 31, 2020), with the maximum amount available to be drawn limited by a borrowing base of certain investment assets, generally valued based upon a percentage of adjusted net book value or a multiple of base management fee EBITDA (as defined in the credit agreement).

Prior to termination, the credit facility provided revolving commitments of $ 300 million based upon terms amended in May 2021 ($ 450 million at December 31, 2020), with the maximum amount available to be drawn limited by a borrowing base of certain investment assets, generally valued based upon a percentage of adjusted net book value or a multiple of base management fee EBITDA (as defined in the credit agreement).

Advances under the credit facility accrued interest at a per annum rate equal to, at the Company’s election, either the 1-month London Interbank Offered Rate ("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 %.

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Unused amounts under the VFN Notes facility is subject to a commitment fee of 0.5 % per annum.

The final maturity date is in September 2051 for the Class A-2 Notes, with an anticipated repayment date in September 2026.

The anticipated repayment date for the VFN Notes is in September 2024, subject to two one -year extensions at the option of the Co-Issuers.

The final maturity date of the Class A-2 Notes is in September 2051, with an anticipated repayment date in September 2026.

The anticipated repayment date of the VFN Notes is in September 2024, subject to two one -year extensions at the option of the Co-Issuers.

If the Series 2021-1 Notes are not repaid or refinanced prior to their anticipated repayment date, or such date is not extended for the VFN Notes, interest will accrue at a higher rate and the Series 2021-1 Notes will begin to amortize quarterly.

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As of the date of this filing, the Co-Issuers are in compliance with all of the financial covenants.

Proceeds from issuance of the Class A-2 Notes of $ 285.1 million, net of offering expenses and $ 5.4 million of interest reserve deposits, will be used for acquisition of digital infrastructure investments, funding of commitments to sponsored funds, redemption or repayment of the Company's other higher cost corporate securities, and/or general corporate purposes.

The full $ 200 million under the VFN Notes is available to be drawn as of the date of this filing.

Issuance of the Class A-2 Notes generated proceeds of $ 285.1 million, net of offering expenses and $ 5.4 million of interest reserve deposits.

The Series 2021-1 Notes will provide funding for acquisition of digital infrastructure investments, satisfying commitments to sponsored funds, redemption or repayment of the Company's other higher cost corporate securities, and/or general corporate utilization.

As of the date of this filing, the full $ 200 million under the VFN Notes is available to be drawn.

Convertible and Exchangeable Senior Notes

Convertible and exchangeable senior notes (collectively, the senior notes) outstanding as of June 30, 2021 are as follows, each representing senior unsecured obligations of DigitalBridge Group, Inc.

Convertible and exchangeable senior notes (collectively, the senior notes) are composed of the following, each representing senior unsecured obligations of DigitalBridge Group, Inc.

or a subsidiary as the respective issuers of the senior notes:

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Conversion or Exchange Shares (in thousands) Earliest Redemption Date Outstanding Principal

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Issued by DigitalBridge Group, Inc.

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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 OP.

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 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 -year and 6 -year maturities, respectively.

Exchange of Senior Notes into Common Shares

In October 2021, DBRG and the OP entered into a privately negotiated exchange agreement (the "Early Exchange Agreement") with certain noteholders of the 5.75 % exchangeable notes.

The parties to the Early Exchange Agreement agreed to an exchange transaction for which the original exchange ratio of 434.7826 shares per $1,000 of principal amount of notes was adjusted to account for savings on avoided future interest payments otherwise due to the noteholders.

Pursuant to the Early Exchange Agreement, in October 2021, the Company exchanged approximately $ 44.0 million of the outstanding principal of the 5.75 % exchangeable notes into 20,040,072 shares of the Company's class A common stock and paid approximately $ 0.7 million for accrued but unpaid interest.

These are primarily investment level financing, which are non-recourse to the Company, and secured by underlying commercial real estate or loans receivable.

Digital Operating —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 2.32 % and 1.81 % per annum, with 5 -year and 6 -year maturities, 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.

In October 2021 and November 2021, DataBank and Vantage SDC each issued additional 5 -year securitized notes of $ 332 million and $ 530 million at blended fixed rates of 2.43 % and 2.17 % per annum, respectively.

Proceeds will be used by DataBank to repay borrowings on its credit facility and finance future acquisitions, and by Vantage SDC to replace its current bridge financing and fund capital expenditures on its September 2021 add-on acquisition as well as to fund payments for future build-out and lease-up of expansion capacity.

Other —In the third quarter of 2021, the Company entered into a $50.0 million credit facility to fund the acquisition of loans that are warehoused for a future securitization vehicle.

Stockholders’ Equity

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Shares canceled for tax withholding on vested equity awards — ( 2,554 ) —

Shares outstanding at June 30, 2020 41,350 481,391 734

Shares outstanding at September 30, 2020 41,350 481,662 734

Shares outstanding at December 31, 2020 41,350 483,406 734

Redemption of preferred stock ( 3,450 ) — —

Shares issued upon redemption of OP Units — 505 —

Conversion of class B to class A common stock — 68 ( 68 )

Shares issued pursuant to settlement liability (1)

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Shares canceled for tax withholding on vested equity awards — ( 2,675 ) —

Shares outstanding at June 30, 2021 41,350 491,922 734

(1) For 2020, activity is presented net of reissuance of 964,160 shares of class A common stock in connection with a settlement liability.

In 2021, the liability was settled through the reissuance of some of the shares previously repurchased and held in a subsidiary (Note 13).

Shares of class A common stock repurchased and not reissued in the settlement of the liability were subsequently cancelled.

Shares outstanding at September 30, 2021 37,900 493,456 666

(1) Shares repurchased in 2020 are presented net of reissuance of 964,160 shares of class A common stock in connection with a settlement liability.

In 2021, the liability was settled through the reissuance of some of the repurchased shares that were held in a subsidiary (Note 13).

Shares repurchased and not reissued were cancelled.

Preferred Stock

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

The table below summarizes the preferred stock issued and outstanding at June 30, 2021:

The table below summarizes the preferred stock issued and outstanding at September 30, 2021:

Description Dividend Rate Per Annum Initial Issuance Date Shares Outstanding

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Earliest Redemption Date

Series G 7.5 % June 2014 3,450 $ 35 $ 86,250 Currently redeemable

Series H 7.125 % April 2015 11,500 115 $ 287,500 Currently redeemable

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All series of preferred stock are at parity with respect to dividends and distributions, including distributions upon liquidation, dissolution or winding up of the Company.

Dividends on Series G, H, I and J of preferred stock are payable quarterly in arrears in January, April, July and October.

Dividends on Series H, I and J of preferred stock are payable quarterly in arrears in January, April, July and October.

Each series of preferred stock is redeemable on or after the earliest redemption date for that series at $ 25.00 per share plus accrued and unpaid dividends (whether or not declared) exclusively at the Company’s option.

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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.

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.

Redemption of Preferred Stock

In August 2021, the Company redeemed all of its outstanding 7.5 % Series G preferred stock for $ 86.8 million using proceeds from its securitized financing facility.

In October 2021, the Company issued notices of redemption for 2,560,000 shares of its 7.125 % Series H preferred stock with redemption to be settled in November 2021 for approximately $ 64.4 million.

In January 2020, the Company settled the December 2019 redemption of its outstanding Series B and Series E preferred stock for $ 402.9 million.

In July 2021, the Company issued a notice of redemption for all of its outstanding Series G preferred stock, to be settled in August 2021 using proceeds from its securitized financing facility.

All preferred stock redemptions are at $ 25.00 per share liquidation preference plus accrued and unpaid dividends prorated to their respective redemption dates.

The excess or deficit of the $ 25.00 per share liquidation preference over the carrying value of the respective preferred stock redeemed results in a decrease or increase to net income attributable to common stockholders.

All preferred stock redemptions are at $ 25.00 per share liquidation preference plus accrued and unpaid dividends prorated to their redemption dates.

The excess or deficit of the $ 25.00 per share liquidation preference over the carrying value of the preferred stock redeemed results in an increase or decrease to net loss attributable to common stockholders, respectively.

Except with respect to voting rights, class A common stock and class B common stock have the same rights and privileges and rank equally, share ratably in dividends and distributions, and are identical in all respects as to all matters.

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Payment of common dividends was previously subject to certain restrictions under the terms of the corporate credit facility, which was terminated in July 2021.

The Company continues to monitor its financial performance and liquidity position, and as economic conditions improve, the Company will reevaluate its dividend policy.

The Company continues to monitor its financial performance and liquidity position, and will reevaluate its dividend policy as conditions improve.

Common Stock Repurchases

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Amounts reclassified from AOCI — ( 3,585 ) — 225 ( 925 ) ( 4,285 )

AOCI at June 30, 2020 $ 8,383 $ 6,836 $ ( 226 ) $ ( 16,544 ) $ 45,918 $ 44,367

AOCI at September 30, 2020 $ 12,334 $ 4,633 $ ( 229 ) $ 14,325 $ 45,547 $ 76,610

AOCI at December 31, 2020 $ 17,718 $ 6,072 $ ( 233 ) $ 52,832 $ 45,734 $ 122,123

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Amounts reclassified from AOCI ( 2,998 ) — 233 ( 20,221 ) ( 1,375 ) ( 24,361 )

AOCI at June 30, 2021 $ 15,739 $ 4,311 $ — $ 17,969 $ 45,656 $ 83,675

AOCI at September 30, 2021 $ 11,772 $ 5,775 $ — $ 3,661 $ 45,672 $ 66,880

Changes in Components of AOCI—Noncontrolling Interests in Investment Entities

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Amounts reclassified from AOCI — ( 95 ) ( 873 ) ( 968 )

AOCI at June 30, 2020 $ ( 1,006 ) $ ( 29,602 ) $ 15,099 $ ( 15,509 )

AOCI at September 30, 2020 $ ( 1,017 ) $ 25,162 $ 15,099 $ 39,244

AOCI at December 31, 2020 $ ( 1,030 ) $ 83,845 $ 15,099 $ 97,914

Other comprehensive income (loss) before reclassifications — ( 39,074 ) — ( 39,074 )

Other comprehensive loss before reclassifications — ( 58,995 ) — ( 58,995 )

Amounts reclassified from AOCI 1,030 810 — 1,840

AOCI at June 30, 2021 $ — $ 45,581 $ 15,099 $ 60,680

AOCI at September 30, 2021 $ — $ 25,660 $ 15,099 $ 40,759

Reclassifications out of AOCI—Stockholders

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(In thousands)

Three Months Ended June 30, Six Months Ended June 30,

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

Component of AOCI reclassified into earnings 2021 2020 2021 2020

2021 2020 2021 2020

Relief of basis of AFS debt securities

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— 21 20,221 ( 225 )

Unrealized gain (loss) on dedesignated net investment hedges — ( 82 ) — 552

Unrealized gain on dedesignated net investment hedges — — — 552

Realized gain on net investment hedges

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Realized loss on cash flow hedges — — ( 233 ) —

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

Noncontrolling Interests

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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.

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands) 2021 2020

Redeemable noncontrolling interests

Beginning balance $ 305,278 $ 6,107

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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.

In addition, the Company issued Wafra five warrants to purchase up to an aggregate of 5 % (on a fully-diluted, post-transaction basis) of the Company’s class A common stock.

In addition, the Company issued Wafra five warrants to purchase up to an aggregate of 5 % of the Company’s class A common stock ( 5 % at the time of the transaction, on a fully-diluted, post-transaction basis).

Each warrant entitles Wafra to purchase up to 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.

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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 (as defined for the purpose of this computation) of $ 72.0 million as of December 31, 2020.

The Compensation Committee of the Board of Directors has approved an allocation of 50 % of the contingent consideration received from Wafra as additional bonus compensation to management, to be paid on behalf of certain employees to fund a portion of their share of capital contributions to the DCP funds as capital calls are made for these funds.

Compensation expense is recognized over time based upon an estimated timeline for deployment of capital by the funds, which will correspond to the timing of capital calls to be funded by the Company on behalf of management.

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.

10 unchanged sentences

At the end of each period, noncontrolling interests in OP is adjusted to reflect their ownership percentage in OP at the end of the period, through a reallocation between controlling and noncontrolling interests in OP.

Redemption of OP Units —The Company redeemed 5,367 OP Units during the six months ended June 30, 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.

Redemption of OP Units —The Company redeemed 505,367 OP Units during the nine months ended September 30, 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.

Assets and Related Liabilities Held for Disposition

2 unchanged sentences

(i) those held by NRF Holdco, predominantly related to Wellness Infrastructure assets and obligations;

(ii) OED investments and intangible assets of the Other IM business, both of which resided in the Other segment;

and (iii) prior to its disposition in March 2021, the Company's hotel business, with one hotel portfolio remaining in receivership and currently under contract for sale by the lender.

(In thousands) June 30, 2021 December 31, 2020

(ii) OED investments and intangible assets of the Other IM business, both of which previously resided in the Other segment;

and (iii) prior to its disposition in March 2021, the Company's hotel business, with the remaining hotel portfolio that was in receivership sold by the lender in September 2021.

(In thousands) September 30, 2021 December 31, 2020

Restricted cash $ 63,645 $ 191,692

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Impairment of Assets Classified as Held for Disposition and Discontinued Operations

Real Estate and Related Intangible Assets —Real estate classified as held for disposition and discontinued operations that has been written down and carried at fair value totaled $ 3.8 billion at June 30, 2021 and $ 4.7 billion at December 31, 2020, generally representing fair value using Level 3 inputs.

Impairment of real estate and related intangibles held for disposition was $ 242.6 million and $ 1.5 billion for the three months ended June 30, 2021 and 2020, respectively, and $ 362.3 million and $ 1.8 billion for the six months ended June 30, 2021 and 2020, respectively, reflected in discontinued operations (Note 12).

Real Estate and Related Intangible Assets —Real estate classified as held for disposition and discontinued operations that has been written down and carried at fair value totaled $ 3.7 billion at September 30, 2021 and $ 4.7 billion at December 31, 2020, generally representing fair value using Level 3 inputs.

Impairment of real estate and related intangibles held for disposition was a reversal of $ 8.2 million and a charge of $ 143.4 million for the three months ended September 30, 2021 and 2020, respectively, and charges of $ 354.1 million and $ 1.93 billion for the nine months ended September 30, 2021 and 2020, respectively, reflected in discontinued operations (Note 12).

Properties that were written down to estimated fair value at the time they were classified as held for disposition in both years were valued using either estimated recoverable value, sales price, broker opinions of value, or third-party appraisals, and in certain cases, adjusted as deemed appropriate by management to account for the inherent risk associated with specific properties.

The impairment assessment in 2020 also factored in the economic effects of COVID-19 on real estate values.

The impairment assessment in 2020 also factored in the economic effects of

COVID-19 on real estate values.

Fair value of these properties was generally reduced for estimated selling costs, ranging from 1 % to 3 % of fair value.

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

Equity Method Investments —Impairment on equity method investments classified as held for disposition and discontinued operations was $ 57.5 million and $ 23.1 million in the six months ended June 30, 2021 and 2020, respectively, reflected within equity method losses in discontinued operations (Note 12).

Equity method investments that were impaired and written down to fair value during the six months ended June 30, 2021 and year ended December 31, 2020 totaled $ 491.8 million and $ 701.8 million, respectively, at the time of impairment, representing fair value using Level 3 inputs.

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

Equity Method Investments —Impairment on equity method investments classified as held for disposition and discontinued operations was $ 125.3 million and $ 26.0 million in the three months ended September 30, 2021 and 2020, respectively, and $ 182.9 million and $ 49.1 million in the nine months ended September 30, 2021 and 2020, respectively, reflected within equity method losses in discontinued operations (Note 12).

Equity method investments that were impaired and written down to fair value during the nine months ended September 30, 2021 and year ended December 31, 2020 totaled $ 496.0 million and $ 701.8 million, respectively, at the time of impairment, representing fair value using Level 3 inputs.

Impairment recorded in 2021 was based upon estimated recoverable values, including 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 %.

1 unchanged sentence

Assets Carried at Fair Value —These assets are composed of equity investments valued based upon NAV, and equity method investments and loans receivable for which the fair value option was elected.

During the six months ended June 30, 2021 when these assets were classified as held for disposition and discontinued operations, unrealized fair value losses were recognized in other loss of $ 3.1 million for equity investments and $ 101.8 million for loans receivable, and in equity method losses of $ 24.3 million for equity method investments (Note 12).

Additional information is included Note 13 under " —Level 3 Recurring Fair Values.

During the nine months ended September 30, 2021 when these assets were classified as held for disposition and discontinued operations, unrealized fair value losses were recognized in other loss of $ 3.1 million for equity investments and $ 94.3 million for loans receivable, and in equity method losses of $ 24.3 million for equity method investments (Note 12).

Additional information is included in Note 13 under " —Level 3 Recurring Fair Values.

Discontinued Operations

3 unchanged sentences

as well as (ii) the 5.375 % exchangeable senior notes, trust preferred securities and corresponding junior subordinated debt, all of which were issued by NRF Holdco who acts as guarantor.

• Other —operations of substantially all of the OED investments and Other IM business in the Other segment, composed of various non-digital real estate, real estate-related equity and debt investments, general partner interests and management rights with respect to these assets, management of BRSP prior to termination of its contract, and underlying compensation and administrative costs for managing these assets.

• 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 and is under contract for sale by the lender.

• Industrial —operations of the bulk industrial portfolio prior to its sale in December 2020.

Loss from discontinued operations is presented below.

Three Months Ended June 30, Six Months Ended June 30,

• Other —operations of substantially all of the OED investments and Other IM business that were previously in the Other segment, composed of various non-digital real estate, real estate-related equity and debt investments, general partner interests and management rights with respect to these assets, management of BRSP prior to termination of its contract, and underlying compensation and administrative costs for managing these assets.

• Hotel —operations of the Company's Hospitality segment and the THL Hotel Portfolio that was previously in the Other segment.

In March 2021, the Company sold the equity in its hotel subsidiaries holding five of the six portfolios in the Hospitality segment, and the Company's 55.6 % interest in the THL Hotel Portfolio which was deconsolidated upon sale.

The remaining hotel portfolio that was in receivership was sold by the lender in September 2021.

• Industrial —operations of the bulk industrial portfolio prior to the sale of the Company's 50 % interest and deconsolidation in December 2020.

Income (loss) from discontinued operations is presented below.

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

(In thousands) 2021 2020 2021 2020

2 unchanged sentences

Fee income 12,248 24,006 46,348 71,800

13,902 23,367 34,100 47,794

Other income 5,437 8,523 23,963 19,194

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Depreciation and amortization 8,909 85,787 91,673 284,076

Impairment loss 242,587 1,989,260 366,347 2,376,528

Compensation, including carried interest, and administrative expense (2)

23,957 25,819 52,716 36,980

(Reversal of) impairment loss ( 8,210 ) 148,130 358,137 2,524,658

Compensation and administrative expense 21,901 25,646 74,617 62,626

Expenses from discontinued operations 199,369 566,732 1,162,513 3,816,986

Other income (loss)

Gain (loss) on sale of real estate 2,968 ( 4,919 ) 48,718 3,013

Gain on sale of real estate 514 12,248 49,232 15,261

Other gain (loss), net 98,286 ( 14,428 ) 40,262 ( 188,956 )

Equity method earnings (losses), including carried interest 30,627 ( 58,503 ) ( 64,259 ) 49,134

Equity method losses ( 125,565 ) ( 80,289 ) ( 189,824 ) ( 31,155 )

Loss from discontinued operations before income taxes ( 7,678 ) ( 305,500 ) ( 567,657 ) ( 2,925,905 )

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Noncontrolling interests in Operating Company 7,177 ( 18,680 ) ( 23,354 ) ( 235,917 )

Loss from discontinued operations attributable to DigitalBridge Group, Inc.

Income (loss) from discontinued operations attributable to DigitalBridge Group, Inc.

$ 68,135 $ ( 169,602 ) $ ( 221,036 ) $ ( 2,143,043 )

(1) Represents management fees from:

(i) the Company's non-digital private real estate credit funds and co-investment vehicles;

(ii) BRSP (based upon 1.5 % per annum of BRSP's stockholders' equity) prior to the BRSP Internalization on April 30, 2021;

and (iii) NorthStar Healthcare (based upon 1.5 % per annum of NorthStar Healthcare's most recently published NAV, with $ 2.5 million per quarter paid in shares of NorthStar Healthcare common stock priced at its most recently published NAV.

Beginning July 2021, fees are paid fully in shares.

(2) Includes equity-based compensation of $ 4.5 million and $ 6.4 million for the three months ended June 30, 2021 and 2020, respectively, and $ 12.6 million and $ 6.8 million for the six months ended June 30, 2021 and 2020, respectively, of which an expense of $ 0.7 million, $ 3.0 million and $ 5.3 million and a reversal of $ 0.4 million, respectively, relates to BRSP awards that is grossed up in other income and compensation expense.

Reversal was due to a decline in BRSP stock price in the first quarter of 2020 (Note 17).

Recurring Fair Values

5 unchanged sentences

(In thousands) Level 1 Level 2 Level 3 Total

June 30, 2021

September 30, 2021

Marketable equity securities $ 180,112 $ — $ — $ 180,112

AFS debt securities — — 35,899 35,899

AFS debt securities held for disposition — — 37,108 37,108

Other assets—derivative assets — 1,179 — 1,179

3 unchanged sentences

Equity method investments held for disposition — — 115,753 115,753

Other liabilities — derivative liabilities

— 1,291 — 1,291

December 31, 2020

Marketable equity securities $ 218,485 $ — $ — $ 218,485

AFS debt securities — — 28,576 28,576

AFS debt securities held for disposition — — 28,576 28,576

Other assets—derivative assets — 99 — 99

19 unchanged sentences

(in thousands) Gains Losses Fair Value

June 30, 2021 $ 56,032 $ ( 24,882 ) $ 4,749 $ — $ 35,899

September 30, 2021 $ 55,618 $ ( 24,882 ) $ 6,372 $ — $ 37,108

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

There were no sales of N-Star CDO bonds during the six months ended June 30, 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 2.5 years from June 30, 2021.

The N-Star CDO bonds are included in the pending sale of NRF Holdco.

There were no sales of N-Star CDO bonds during the nine months ended September 30, 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 2.3 years from September 30, 2021.

Fair value of N-Star CDO bonds, classified as Level 3, 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.

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

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands) 2021 2020

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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 June 30, 2021 and December 31, 2020, there were no AFS debt securities in unrealized loss position without allowance for credit loss.

At September 30, 2021 and December 31, 2020, there were no AFS debt securities in unrealized loss position without allowance for credit loss.

The Company's derivative instruments generally consist of:

2 unchanged sentences

These derivative contracts may be designated as qualifying hedge accounting relationships, specifically as net investment hedges and cash flow hedges, respectively.

At June 30, 2021 and December 31, 2020, notional amounts aggregated to the equivalent of $ 164.6 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.

At September 30, 2021 and December 31, 2020, notional amounts aggregated to the equivalent of $ 184.9 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.

1 unchanged sentence

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 June 30, Six Months Ended June 30,

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

(In thousands) 2021 2020 2021 2020

1 unchanged sentence

Realized gain transferred from AOCI to earnings $ — $ 414 $ 1,520 $ 414

Unrealized gain (loss) transferred from AOCI to earnings (1)

— ( 17 ) — 1,485

Unrealized loss in earnings on non-designated contracts ( 83 ) ( 776 ) ( 328 ) ( 776 )

Unrealized gain transferred from AOCI to earnings (1)

Unrealized gain (loss) in earnings on non-designated contracts 1,457 ( 840 ) 1,129 ( 1,616 )

Interest rate contracts:

Interest expense on designated contracts (2)

Unrealized gain (loss) in earnings on non-designated contracts ( 263 ) ( 105 ) ( 235 ) 74

Realized gain (loss) transferred from AOCI to earnings ( 36 ) — ( 1,328 ) —

— 6 ( 20 ) 12

Unrealized loss in earnings on non-designated contracts ( 13 ) ( 197 ) ( 248 ) ( 123 )

Realized loss transferred from AOCI to earnings — — ( 1,328 ) —

(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.

5 unchanged sentences

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 and six months ended June 30, 2020, the forwards and swaps had realized and unrealized fair value losses totaling $ 7.4 million and gains totaling $ 27.1 million, respectively, which were partially offset by an increase in NAV of $ 10.8 million and a decrease in NAV of $ 22.3 million, respectively, in the Company's investment in the mutual fund, both of which were recorded in other income on the consolidated statement of operations.

During the three and nine months ended September 30, 2020, the forwards and swaps had realized and unrealized fair value losses totaling $ 0.2 million and gains totaling $ 27.0 million, respectively, which were partially offset by an increase in NAV of $ 2.3 million and a decrease in NAV of $ 20.0 million, respectively, in the Company's investment in the mutual fund, both of which were recorded in other income 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.

4 unchanged sentences

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.

Pursuant to the cooperation agreement, Blackwells agreed to a standstill in its proxy contest with the Company, and to abide by certain voting commitments, including a standstill with respect to the Company until the expiration of the agreement in March 2030 and voting in favor of the Board of Directors' recommendations until the third anniversary of the agreement.

Contemporaneously, the Company and Blackwells entered into a joint venture arrangement for the purpose of acquiring, holding and disposing of the Company's class A common stock.

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The profits distribution allocated to Blackwells was valued at $ 47.0 million and paid in the form of 5.95 million shares of the Company's class A common stock, with $ 22.8 million recognized in 2021 through termination as other loss on the consolidated statement of operations.

Prior to dissolution of the arrangement, the settlement liability, classified as a Level 3 fair value, was measured using a Monte Carlo simulation under a risk-neutral premise, assuming that the final distribution would occur at the end of the third year in March 2023.

third year in March 2023.

At December 31, 2020, the settlement liability was valued at $ 24.3 million, applying the following assumptions:

16 unchanged sentences

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).

June 30, 2021 December 31, 2020

September 30, 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

7 unchanged sentences

Weighted Average (1)

June 30, 2021

AFS debt securities

$ 35,899 Discounted cash flows Discount rate

September 30, 2021

AFS debt securities held for disposition $ 37,108 Discounted cash flows Discount rate

( 5.8 % - 57.8 %)

6 unchanged sentences

December 31, 2020

AFS debt securities

$ 28,576 Discounted cash flows Discount rate 28.9 %

AFS debt securities held for disposition $ 28,576 Discounted cash flows Discount rate 28.9 %

( 18.3 % - 57.8 %)

4 unchanged sentences

( 6.9 % - 25.7 %)

Equity method investments—other

28,540 Discounted cash flows Discount rate 30 % Decrease

Equity method investments 28,540 Discounted cash flows Discount rate 30 % Decrease

Equity method investments held for disposition 2,472 NAV (3)

21 unchanged sentences

Change in accrued interest and capitalization of paid-in-kind interest — 32,544 —

Transfer to held for disposition — ( 42,985 ) —

Allowance for credit losses

( 23,973 ) — —

Realized and unrealized gains (losses) in earnings, net

— ( 281,266 ) ( 12,139 )

Realized and unrealized losses in earnings, net — ( 289,283 ) ( 66,418 )

Other comprehensive income (loss) (1)

( 1,425 ) 30,419 5,599

Fair value at June 30, 2020 $ 32,271 $ 1,398,087 $ 209,263

Net unrealized gains (losses) on instruments held at June 30, 2020

Fair value at September 30, 2020 $ 27,898 $ 1,325,144 $ 165,770

Net unrealized losses on instruments held at September 30, 2020

$ — $ ( 280,822 ) $ ( 66,418 )

In other comprehensive income (loss)

$ 1,021 N/A N/A

In other comprehensive loss $ ( 1,425 ) N/A N/A

Fair value at December 31, 2020 $ 28,576 $ 1,295,337 $ 181,799

9 unchanged sentences

Allowance for credit losses

Realized and unrealized gains (losses) in earnings, net — ( 100,063 ) ( 13,837 )

Other comprehensive income (loss) (1)

Realized and unrealized losses in earnings, net — ( 91,981 ) ( 13,846 )

Other — 4,834 —

Other comprehensive loss (1)

( 331 ) ( 34,792 ) ( 6,454 )

Fair value at June 30, 2021 $ 35,899 $ 814,031 $ 120,397

Net unrealized gains (losses) on instruments held at June 30, 2021

Fair value at September 30, 2021 $ 37,108 $ 499,916 $ 115,753

Net unrealized losses on instruments held at September 30, 2021

$ — $ ( 42,148 ) $ ( 23,031 )

In other comprehensive income (loss)

$ ( 1,953 ) N/A N/A

In other comprehensive loss $ ( 331 ) N/A N/A

(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.

1 unchanged sentence

Investments in Company-sponsored private fund and non-traded REIT, and limited partnership interest in a third party real estate private fund, all of which are held for disposition (Note 11), are valued using NAV of the respective vehicles.

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(In thousands) Fair Value Unfunded Commitments Fair Value Unfunded Commitments

15 unchanged sentences

(In thousands) Level 1 Level 2 Level 3 Total

June 30, 2021

September 30, 2021

Debt at amortized cost

Corporate credit facility $ — $ 45,000 $ — $ 45,000 $ 45,000

Secured fund fee revenue notes $ — $ — $ 290,939 $ 290,939 $ 290,939

Convertible and exchangeable senior notes 1,055,861 — — 1,055,861 490,855

7 unchanged sentences

Debt —Senior notes were valued using the last trade price in active markets or unadjusted quoted price in non-active market for the senior note that is held for disposition.

Fair value of the corporate credit facility and secured debt, including amounts held for disposition, was estimated by discounting expected future cash outlays at interest rates available to the Company for similar instruments.

Fair value of the secured fund fee revenue notes and secured debt, including amounts held for disposition, was estimated by discounting expected future cash outlays at interest rates available to the Company for similar instruments.

Junior subordinated debt that is held for disposition 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.

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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.

The Company, as managing member, has the power to direct the core activities of OP that most significantly affect OP's performance, and through its majority interest in OP, has both the right to receive benefits from and the obligation to absorb losses of OP.

Accordingly, the Company is the primary beneficiary of OP and consolidates OP.

9 unchanged sentences

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 $ 49.0 million at June 30, 2021 and $ 46.5 million at December 31, 2020.

The Company’s exposure is limited to the value of its outstanding investment in the consolidated private funds of $ 50.5 million at September 30, 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 June 30, 2021 and December 31, 2020, the consolidated private funds had total assets of $ 207.6 million and $ 172.2 million, respectively, and total liabilities of $ 56.8 million and $ 41.8 million, respectively, made up primarily of cash, marketable equity securities and unsettled trades.

At September 30, 2021 and December 31, 2020, the consolidated private funds had total assets of $ 215.3 million and $ 172.2 million, respectively, and total liabilities of $ 59.7 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.

3 unchanged sentences

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 $ 304.0 million at June 30, 2021 and $ 214.4 million at December 31, 2020, included within equity and debt investments.

The Company's maximum exposure to loss is limited to the carrying value of its investment in the unconsolidated sponsored private funds, totaling $ 362.4 million at September 30, 2021 and $ 214.4 million at December 31, 2020, included within equity and debt investments.

Securitizations

2 unchanged sentences

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

The securitization vehicles were structured as pass-through entities that receive principal and interest on the underlying mortgage loans and debt securities and distribute those payments to the holders of the notes, certificates or bonds issued by the securitization vehicles.

by the securitization vehicles.

The loans and debt securities were transferred into securitization vehicles such that these assets are restricted and legally isolated from the creditors of the Company, and therefore are not available to satisfy the Company's obligations but only the obligations of the securitization vehicles.

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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 $ 31.2 million at June 30, 2021 and $ 21.9 million at December 31, 2020, as described further in Note 13.

The Company’s exposure to loss is limited to its investment in these unconsolidated CDOs, comprising CDO bonds, which aggregate to $ 30.7 million at September 30, 2021 and $ 21.9 million at December 31, 2020, as described further in Note 13.

These CDOs are included within assets held for disposition on the consolidated balance sheet (Note 11).

5 unchanged sentences

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 June 30, 2021 and December 31, 2020.

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, 2021 and December 31, 2020.

The Trusts are recorded as equity investments and the junior subordinated notes as debt, both classified as held for disposition on the consolidated balance sheet (Note 11).

1 unchanged sentence

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

Three Months Ended June 30, Six Months Ended June 30,

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

(In thousands, except per share data) 2021 2020 2021 2020

Net loss allocated to common stockholders

Income (loss) from continuing operations $ 3,823 $ ( 393,197 ) $ ( 142,516 ) $ ( 479,718 )

Loss from continuing operations $ ( 40,935 ) $ ( 52,649 ) $ ( 183,451 ) $ ( 524,116 )

Loss from continuing operations attributable to noncontrolling interests 34,157 34,984 96,810 113,458

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

Loss from continuing operations attributable to DigitalBridge Group, Inc.

$ ( 6,778 ) $ ( 17,665 ) $ ( 86,641 ) $ ( 410,658 )

Loss from discontinued operations attributable to DigitalBridge Group, Inc.

Income (loss) from discontinued operations attributable to DigitalBridge Group, Inc.

68,135 ( 169,602 ) ( 221,036 ) ( 2,143,043 )

Preferred stock redemption ( 2,865 ) — ( 2,865 ) —

Preferred dividends ( 17,456 ) ( 18,517 ) ( 54,488 ) ( 56,507 )

Net loss attributable to common stockholders ( 141,260 ) ( 2,042,790 ) ( 406,066 ) ( 2,404,423 )

Net income (loss) attributable to common stockholders 41,036 ( 205,784 ) ( 365,030 ) ( 2,610,208 )

Net income allocated to participating securities ( 736 ) — — ( 1,250 )

Net loss allocated to common stockholders—basic ( 141,260 ) ( 2,042,790 ) ( 406,066 ) ( 2,405,673 )

Net income (loss) allocated to common stockholders—basic 40,300 ( 205,784 ) ( 365,030 ) ( 2,611,458 )

Interest expense attributable to convertible and exchangeable notes (1)

Net loss allocated to common stockholders—diluted $ ( 141,260 ) $ ( 2,042,790 ) $ ( 406,066 ) $ ( 2,405,673 )

Net income (loss) allocated to common stockholders—diluted $ 40,300 $ ( 205,784 ) $ ( 365,030 ) $ ( 2,611,458 )

Weighted average common shares outstanding

4 unchanged sentences

485,833 471,739 480,165 474,081

Loss per share—basic

Income (Loss) per share—basic

Loss from continuing operations $ ( 0.06 ) $ ( 0.08 ) $ ( 0.30 ) $ ( 0.99 )

Loss from discontinued operations ( 0.27 ) ( 3.58 ) ( 0.61 ) ( 4.14 )

Net loss attributable to common stockholders per common share—basic $ ( 0.29 ) $ ( 4.33 ) $ ( 0.85 ) $ ( 5.06 )

Loss per share—diluted

Income (Loss) from discontinued operations 0.14 ( 0.36 ) ( 0.46 ) ( 4.52 )

Net income (loss) attributable to common stockholders per common share—basic $ 0.08 $ ( 0.44 ) $ ( 0.76 ) $ ( 5.51 )

Income (Loss) per share—diluted

Loss from continuing operations $ ( 0.06 ) $ ( 0.08 ) $ ( 0.30 ) $ ( 0.99 )

Loss from discontinued operations ( 0.27 ) ( 3.58 ) ( 0.61 ) ( 4.14 )

Net loss attributable to common stockholders per common share—diluted $ ( 0.29 ) $ ( 4.33 ) $ ( 0.85 ) $ ( 5.06 )

Income (Loss) from discontinued operations 0.14 ( 0.36 ) ( 0.46 ) ( 4.52 )

Net income (loss) attributable to common stockholders per common share—diluted $ 0.08 $ ( 0.44 ) $ ( 0.76 ) $ ( 5.51 )

(1) With respect to the assumed conversion or exchange of the Company's outstanding senior notes, the following are excluded from the calculation of diluted earnings per share as their inclusion would be antidilutive:

(a) for the three months ended June 30, 2021 and 2020, the effect of adding back $ 7.9 million and $ 7.1 million of interest expense, respectively, and 144,259,100 and 38,112,100 of weighted average dilutive common share equivalents, respectively;

and (b) for the six months ended June 30, 2021 and 2020, the effect of adding back $ 15.6 million and $ 14.2 million of interest expense, respectively, and 144,416,700 and 38,112,100 of weighted average dilutive common share equivalents, respectively.

(a) for the three months ended September 30, 2021 and 2020, the effect of adding back $ 7.6 million and $ 8.2 million of interest expense, respectively, and 144,259,100 and 126,454,900 of weighted average dilutive common share equivalents, respectively;

and (b) for the nine months ended September 30, 2021 and 2020, the effect of adding back $ 23.3 million and $ 22.4 million of interest expense, respectively, and 144,363,600 and 67,774,600 of weighted average dilutive common share equivalents, respectively.

(2) The calculation of diluted earnings per share excludes the effect of the following as their inclusion would be antidilutive:

(a) class A common shares that are contingently issuable in relation to performance stock units (Note 17) with weighted average shares of 13,225,000 and 6,047,300 for the three months ended June 30, 2021 and 2020, respectively, and 11,810,500 and 3,784,000 for the six months ended June 30, 2021 and 2020, respectively;

and (b) class A common shares that are issuable to net settle the exercise of warrants (Note 10) with weighted average shares of 11,458,300 and 9,670,500 for the three and six months ended June 30, 2021, respectively.

(a) class A common shares that are contingently issuable in relation to performance stock units (Note 17) with weighted average shares of 9,891,200 and 5,183,400 for the three months ended September 30, 2021 and 2020, respectively, and 11,170,700 and 4,250,400 for the nine months ended September 30, 2021 and 2020, respectively;

and (b) class A common shares that are issuable to net settle the exercise of warrants (Note 10) with weighted average shares of 10,903,700 and 10,111,300 for the three and nine months ended September 30, 2021, respectively.

(3) OP Units may be redeemed for registered or unregistered class A common stock on a one -for-one basis and are not dilutive.

At June 30, 2021 and 2020, 51,993,800 and 53,076,700 of OP Units, respectively, were not included in the computation of diluted earnings per share for all periods presented.

At September 30, 2021 and 2020, 51,955,100 and 53,076,700 of OP Units, respectively, were not included in the computation of diluted earnings per share for all periods presented.

The Company's digital real estate investment management platform manages capital on behalf of largely institutional investors in private funds and other investment vehicles for which the Company earns fee income.

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

Three Months Ended June 30, Six Months Ended June 30,

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

(In thousands) 2021 2020 2021 2020

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Incentive Fees —The Company earns incentive fees from various managed accounts based upon the performance of the respective accounts, subject to the achievement of specified return thresholds in accordance with the terms set out in their respective governing agreements.

A portion of the incentive fees earned by the Company (generally 60 %) is allocable to senior management, investment professionals, and certain other employees of the Company, included in carried interest and incentive fee compensation expense.

A portion of the incentive fees earned by the Company is allocable to senior management, investment professionals, and certain other employees of the Company, included in carried interest and incentive fee compensation expense.

Other Fee Income —Other fees include primarily service fees for information technology, facilities and operational support provided to portfolio companies.

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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 June 30, 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.

At September 30, 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.

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Equity-based compensation expense, excluding amounts related to businesses presented as discontinued operations (Note 12), is as follows:

Three Months Ended June 30, Six Months Ended June 30,

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

(In thousands)

2021 2020 2021 2020

Compensation expense (including $ 50 , $ 580 , $ 1,114 and $ 863 amortization of fair value of dividend equivalent rights, respectively)

Compensation expense (including $ 50 , $ 358 , $ 1,164 and $ 1,221 related to dividend equivalent rights)

$ 6,914 $ 4,997 $ 30,593 $ 16,439

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Forfeited ( 166,553 ) — — — ( 871,467 ) ( 1,038,020 ) 4.88 3.21

Unvested shares and units at June 30, 2021

Unvested shares and units at September 30, 2021

9,117,388 10,461,256 127,185 9,589,564 10,501,080 39,796,473 3.69 2.59

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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 $ 26.1 million and $ 3.3 million for the three months ended June 30, 2021 and 2020, respectively, and $ 53.7 million and $ 13.4 million for the six months ended June 30, 2021 and 2020, respectively.

At June 30, 2021, aggregate unrecognized compensation cost for all unvested equity awards was $ 73.7 million, which is expected to be recognized over a weighted average period of 2.5 years.

Fair value of equity awards that vested, determined based upon their respective fair values at vesting date, was $ 7.5 million and $ 1.4 million for the three months ended September 30, 2021 and 2020, respectively, and $ 61.1 million and $ 14.8 million for the nine months ended September 30, 2021 and 2020, respectively.

At September 30, 2021, aggregate unrecognized compensation cost for all unvested equity awards was $ 72.8 million, which is expected to be recognized over a weighted average period of 2.3 years.

Awards Granted by Managed Companies

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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 related to BRSP awards granted by the Company to its employees was accelerated in the six months ended June 30, 2021 as the awards fully vested upon termination of the BRSP management contract in April 2021.

Equity-based compensation was an expense of $ 0.7 million and $ 3.0 million for the three months ended June 30, 2021 and 2020, respectively, and an expense of $ 5.3 million and expense reversal of $ 0.4 million for the six months ended June 30, 2021 and 2020, respectively, with corresponding amounts recognized in other income.

The expense reversal occurred in the first quarter of 2020 due to a decrease in BRSP's stock price on March 31, 2020.

Equity-based compensation related to BRSP awards granted by the Company to its employees was accelerated in 2021 as the awards fully vested upon termination of the BRSP management contract in April 2021.

Equity-based compensation was an expense of $ 5.3 million and expense reversal of $ 1.3 million for the nine months ended September 30, 2021 and 2020, respectively, with corresponding amounts recognized in other income.

The expense reversal occurred due to a decrease in BRSP's stock price in 2020.

Amounts recorded in both years are reflected within discontinued operations (Note 12).

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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 11):

(In thousands) June 30, 2021 December 31, 2020

(In thousands) September 30, 2021 December 31, 2020

Due from Affiliates

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Cost Reimbursements— The Company receives reimbursements related largely to costs incurred in performing investment due diligence for funds and other investment vehicles managed by the Company.

Such cost reimbursements, included in other income, totaled $ 0.9 million and $ 2.8 million for the three months ended June 30, 2021 and 2020, respectively, and $ 1.4 million and $ 6.1 million for the six months ended June 30, 2021 and 2020, respectively.

Such cost reimbursements, included in other income, totaled $ 3.1 million and $ 2.5 million for the three months ended September 30, 2021 and 2020, respectively, and $ 4.6 million and $ 8.5 million for the nine months ended September 30, 2021 and 2020, respectively.

Reimbursements of direct and indirect operating costs for managing the operations of BRSP prior to April 30, 2021 and NorthStar Healthcare are reflected in other income within discontinued operations (Note 12) and related receivables are reflected as amounts due from affiliates within assets held for sale (Note 11).

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Advances under the credit facility accrue interest at LIBOR plus 3.5 %, with no commitment fee for the unused portion.

In April 2020, the credit facility was fully drawn and remained outstanding a t June 30, 2021, reflected as amounts due from affiliates within assets held for sale (Note 11) .

The borrowing was fully repaid by NorthStar Healthcare in July 2021.

The credit facility was fully drawn in April 2020, reflected as amounts due from affiliates within assets held for sale at December 31, 2020 (Note 11), and was fully repaid in July 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.

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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 the Vantage management company were $ 3.2 million and $ 6.2 million for the three and six months ended June 30, 2021, respectively.

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.

Separately, 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.

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Equity Awards of BRSP —As discussed in Note 17, prior to termination of the Company’s management agreement with BRSP in April 2021, BRSP 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, reflected in discontinued operations.

Carried Interest Allocation from Sponsored Investment Vehicles —With respect to investment vehicles sponsored by the Company for which Messrs.

Ganzi and Jenkins are invested in their capacity as former owners of DBH, and not in their capacity as employees of the Company, any carried interest allocation attributed to such investments by Messrs.

Ganzi and Jenkins as general partner do not represent compensatory arrangements to the Company.

Such carried interest allocation to Messrs.

Ganzi and Jenkins that are unrealized and/or unpaid are included in noncontrolling interests on the balance sheet of $ 22.2 million at September 30, 2021 and $ 3.2 million at December 31, 2020.

Carried interest allocated during the period are recorded as net income attributable to noncontrolling interests in the income statement totaling $ 18.3 million and $ 19.0 million for the three and nine months ended September 30, 2021, respectively.

There were no amounts allocated in the corresponding periods in 2020.

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 June 30, 2021 and December 31, 2020, such investments in consolidated investment vehicles and general partner entities totaled $ 31.7 million and $ 19.1 million, respectively, reflected in redeemable noncontrolling interests and noncontrolling interests on the balance sheet.

For the three months ended June 30, 2021 and 2020, their share of net income was $ 2.3 million and $ 0.3 million, respectively.

For the six months ended June 30, 2021 and 2020, their share of net income was $ 2.5 million and a net loss of $ 0.2 million, respectively.

At September 30, 2021 and December 31, 2020, such investments in consolidated investment vehicles and general partner entities totaled $ 19.0 million and $ 10.2 million, respectively, reflected in redeemable noncontrolling interests and noncontrolling interests on the balance sheet.

Their share of net income was $ 0.6 million and $ 0.1 million for the three months ended September 30, 2021 and 2020, respectively, and $ 1.1 million and $ 0.1 million for the nine months ended September 30, 2021 and 2020, respectively.

Aircraft— P ursuant to Mr.

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The Company reimbursed Mr.

Ganzi $ 0.9 million and $ 0.1 million for the three months ended June 30, 2021 and 2020, respectively, and $ 2.0 million and $ 0.4 million for the six months ended June 30, 2021 and 2020, respectively.

Ganzi $ 0.5 million for each of the three months ended September 30, 2021 and 2020, and $ 2.6 million and $ 0.9 million for the nine months ended September 30, 2021 and 2020, respectively.

Separately, prior to the sale of the Company's aircraft in January 2021, Thomas J.

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Barrack paid the Company for personal usage based upon 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 six months ended June 30, 2020.

Such reimbursements were immaterial in 2021.

Barrack reimbursed the Company $ 0.2 million and $ 0.6 million for the three and nine months ended September 30, 2020, respectively.

Investment Venture— Pursuant to an investment agreement entered into between a subsidiary of the Company and Mr.

Barrack effective April 1, 2021, the Company invested $ 26.0 million in Mr.

Barrack's newly formed investment entity (the “Venture”), which entitles the Company to a portion of carried interest payable to Mr.

Barrack's newly formed investment entity

(the “Venture”), which entitles the Company to a portion of carried interest payable to Mr.

Barrack from the Venture.

Following recent events which significantly reduce the likelihood that fundraising by the Venture will sufficiently support its value, the Company determined that its investment would likely not be recoverable and wrote off its investment as of June 30, 2021.

Commitments and Contingencies

The Company may be involved in litigation in the ordinary course of business.

As of June 30, 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 currently conducts its business through four reportable segments as follows:

The Company conducts its business through two 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.

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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.

Earnings from our Digital IM segment are generally attributed 31.5% to Wafra, a significant investor in our Digital IM business effective July 2020.

• 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.

DataBank, including zColo, an edge colocation data center business (20% DBRG ownership);

and Vantage SDC, a stabilized hyperscale data center business (13% DBRG ownership).

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.

• Other— This segment is composed of the remaining non-digital equity investments, primarily the Company's interest in BRSP, that are not substantially available for immediate sale and are expected to be monetized over an extended period beyond the near term.

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.

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

• Other investment activities are composed of the Company's equity interests in:

(i) digital investment vehicles, the largest of which is in the DCP flagship funds, and seed investments in various strategies such as digital liquid and digital credit;

and (ii) remaining non-digital investments, primarily in BRSP.

Outside of its general partner interests, the Company's other equity interests in its sponsored and/or managed digital investment vehicles are considered to be incidental to its digital investment management business.

The primary economics to the Company are represented by fee income and carried interest as general partner and/or manager, rather than economics from its equity interest in the investment vehicles as a limited partner or equivalent.

With respect to seed investments, these are not intended to be a long-term deployment of capital by the Company and are expected to be warehoused temporarily on the Company's balance sheet until sufficient third party capital has been raised.

At this time, the remaining non-digital investments are not substantially available for immediate sale and are expected to be monetized over an extended period beyond the near term.

These other investment activities generate largely equity method earnings or losses and to a lesser extent, revenues in the form of interest income or dividend income from warehoused investments and consolidated investment vehicles.

Effective the third quarter of 2021, these activities are no longer presented separately as the Digital Other and Other segments, which is consistent with and reflects management's focus on its core digital operations and overall simplification of the Company's business.

• Corporate activities include corporate level cash and corresponding interest income, corporate level financing and related interest expense, corporate level transaction costs, costs in connection with unconsummated investments, income and expense related to cost reimbursement arrangements with affiliates, fixed assets for administrative use, compensation expense not directly attributable to reportable segments, corporate level administrative and overhead costs, and adjustments to eliminate intercompany fees.

Costs which are directly attributable, or otherwise can be subjected to a reasonable and systematic allocation, have been allocated to each of the reportable segments.

Fee income is earned by the Digital Investment Management segment from third party capital in investment vehicles managed by the Company and consolidated within the Digital Operating and Digital Other segments.

Prior to the second quarter of 2021, the fee income in Digital Investment Management and fee expense in Digital Operating and Digital Other were eliminated within the respective segments.

Effective the second quarter of 2021, segment results are presented before elimination of intercompany fees and the elimination adjustment is included within amounts not allocated to segments.

This change in presentation was made for all prior periods presented.

Elimination adjustment pertains to fee income earned by the Digital Investment Management segment from third party capital in investment vehicles managed by the Company and consolidated within the Digital Operating segment and in Corporate and Other.

Such adjustments amount to $ 1.6 million and $ 0.4 million for the three months ended September 30, 2021 and 2020, respectively, and $ 4.9 million and $ 0.6 million for the nine months ended September 30, 2021 and 2020, respectively.

Effective the second quarter of 2021, segment results are presented before elimination of intercompany fees.

Fee income in Digital IM and fee expense in Digital Operating and in Corporate and Other were previously eliminated within the respective segments.

All changes in segment presentation are reflected for all prior periods presented.

Segment Results of Operations

The following table presents results of operations of the Company's reportable segments.

Refer to Note 12 for further details on discontinued operations.

(In thousands) Digital Operating Digital Investment Management Digital Other Other Amounts Not Allocated to Segments Total

Three Months Ended June 30, 2021

Total revenues $ 189,093 $ 46,873 $ 1,720 $ — $ ( 499 ) $ 237,187

Income (loss) from continuing operations ( 10,850 ) 15,786 13,280 45,983 ( 60,376 ) 3,823

Net income (loss) from continuing operations attributable to DigitalBridge Group, Inc.

( 376 ) 12,100 5,424 41,606 ( 52,828 ) 5,926

Net loss from discontinued operations attributable to DigitalBridge Group, Inc.

Net loss attributable to DigitalBridge Group, Inc.

$ ( 122,744 )

Three Months Ended June 30, 2020

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

(In thousands) Digital Investment Management Digital Operating Corporate and Other Total

Three Months Ended September 30, 2021

Total revenues $ 53,796 $ 194,966 $ 3,412 $ 252,174

Property operating expense — 80,226 — 80,226

Interest expense 2,250 29,839 7,806 39,895

Depreciation and amortization 8,242 120,458 486 129,186

Equity method earnings, including carried interest 59,196 — 6,173 65,369

Income tax benefit (expense) ( 3,089 ) ( 1,922 ) 15,984 10,973

Income (loss) from continuing operations 39,272 ( 71,822 ) ( 8,385 ) ( 40,935 )

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Net income from discontinued operations attributable to DigitalBridge Group, Inc.

( 1,686,347 )

Net loss attributable to DigitalBridge Group, Inc.

$ ( 2,024,274 )

Six Months Ended June 30, 2021

Net income attributable to DigitalBridge Group, Inc.

Three Months Ended September 30, 2020

Total revenues $ 20,397 $ 98,549 $ 4,071 $ 123,017

Property operating expense — 37,544 — 37,544

Interest expense — 18,589 11,410 29,999

Depreciation and amortization 6,427 73,032 1,105 80,564

Impairment loss 3,832 — — 3,832

Equity method earnings, including carried interest 6,134 — 17,237 23,371

Income tax benefit (expense) ( 144 ) 6,091 7,279 13,226

Income (loss) from continuing operations 3,799 ( 38,795 ) ( 17,653 ) ( 52,649 )

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$ ( 187,267 )

Six Months Ended June 30, 2020

(In thousands) Digital Investment Management Digital Operating Corporate and Other Total

Nine Months Ended September 30, 2021

Total revenues $ 131,789 $ 573,261 $ 4,892 $ 709,942

Property operating expense — 237,228 — 237,228

Interest expense 2,250 90,243 25,120 117,613

Depreciation and amortization 20,808 368,906 17,126 406,840

Equity method earnings, including carried interest 70,203 — 41,177 111,380

Income tax benefit (expense) ( 7,970 ) 77,134 40,244 109,408

Income (loss) from continuing operations 62,721 ( 146,932 ) ( 99,240 ) ( 183,451 )

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Net loss from discontinued operations attributable to DigitalBridge Group, Inc.

( 1,966,009 )

Net loss attributable to DigitalBridge Group, Inc.

$ ( 307,677 )

Included in the table below are selected income and expense items of reportable segments.

(In thousands) Digital Operating Digital Investment Management Digital Other Other Amounts Not Allocated to Segments Total

Three Months Ended June 30, 2021

Property operating income $ 188,985 $ — $ — $ — $ — $ 188,985

Interest income 91 — 988 — 240 1,319

Fee income — 46,789 — — ( 1,632 ) 45,157

Property operating expense 77,140 — — — — 77,140

Interest expense 29,272 — — — 8,666 37,938

Depreciation and amortization 126,227 6,299 — 5,167 536 138,229

Equity method earnings (losses), including carried interest — 11,202 6,396 45,052 — 62,650

Income tax benefit (expense) 66,788 ( 2,236 ) ( 1,047 ) 3,648 8,086 75,239

Three Months Ended June 30, 2020

Property operating income $ 42,017 $ — $ — $ — $ — $ 42,017

Interest income — 4 2 — 2,096 2,102

Fee income — 20,293 — — ( 120 ) 20,173

Property operating expense 18,055 — — — — 18,055

Interest expense 8,170 — — — 12,682 20,852

Depreciation and amortization 28,571 6,606 — — 1,503 36,680

Impairment loss — — — — 12,297 12,297

Equity method earnings (losses), including carried interest — 158 7,782 ( 324,456 ) — ( 316,516 )

Income tax benefit (expense) 2,673 ( 280 ) ( 679 ) — ( 64 ) 1,650

Six Months Ended June 30, 2021

Property operating income $ 377,987 $ — $ — $ — $ — $ 377,987

Interest income 195 1 1,678 — 299 2,173

Fee income — 77,854 — — ( 3,254 ) 74,600

Property operating expense 157,002 — — — — 157,002

Interest expense 60,404 — — — 17,314 77,718

Depreciation and amortization 248,448 12,566 — 15,500 1,140 277,654

Equity method earnings (losses), including carried interest — 11,007 9,172 25,832 — 46,011

Income tax benefit (expense) 79,056 ( 4,881 ) 43 3,648 20,569 98,435

Six Months Ended June 30, 2020

Property operating income $ 87,166 $ — $ — $ — $ — $ 87,166

Interest income — 34 9 43 3,820 3,906

Fee income — 39,357 — 134 ( 240 ) 39,251

Nine Months Ended September 30, 2020

Total revenues $ 60,545 $ 185,737 $ 14,758 $ 261,040

Property operating expense — 72,505 — 72,505

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Income tax benefit (expense) ( 817 ) 14,494 14,683 28,360

Income (loss) from continuing operations 8,453 ( 78,472 ) ( 454,097 ) ( 524,116 )

Net income (loss) from continuing operations attributable to DigitalBridge Group, Inc.

6,047 ( 12,885 ) ( 403,820 ) ( 410,658 )

Net loss from discontinued operations attributable to DigitalBridge Group, Inc.

( 2,143,043 )

Net loss attributable to DigitalBridge Group, Inc.

$ ( 2,553,701 )

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

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(In thousands) Total Assets Equity Method Investments Total Assets Equity Method Investments

Digital Operating $ 6,925,412 $ — $ 6,926,634 $ —

Digital Investment Management $ 600,362 $ 100,468 $ 490,632 $ 19,167

Digital Other 475,553 232,887 482,464 158,564

Other 482,524 375,176 602,394 396,781

Amounts not allocated to segments 818,116 — 461,117 —

Digital Operating 7,382,098 — 6,926,634 —

Corporate and Other 1,990,494 496,969 1,545,975 555,344

9,972,954 597,437 8,963,241 574,511

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$ 15,442,981 $ 1,311,470 $ 20,200,560 $ 1,454,240

Commitments and Contingencies

The Company may be involved in litigation in the ordinary course of business.

As of September 30, 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.

Supplemental Disclosure of Cash Flow Information

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands) 2021 2020

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$ 332,703 $ 258,508

Cash received (paid) for income tax, net 3,279 ( 8,099 )

Cash received for income tax, net 7,913 36,098

Operating lease payments 51,088 21,022

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Improvements in operating real estate in accrued and other liabilities

Proceeds from loan repayments and asset sales held in escrow

29,324 19,806

Receivable from loan repayments and asset sales held in escrow 53,948 3,049

Operating lease right-of-use assets and lease liabilities established 23,366 14,683

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Redemption of OP Units for common stock

Assets and liabilities of investment entities liquidated or conveyed to lender (1)

Assets from real estate acquisitions, net of cash and restricted cash — 3,597,271

Liabilities assumed in real estate acquisitions — 2,142,657

Noncontrolling interests assumed in real estate acquisitions — 366,136

Debt assumed by buyer in sale of real estate 44,148 —

Assets disposed in sale of equity of investment entities 2,813,856 —

Liabilities disposed in sale of equity of investment entities 2,850,158 —

Assets disposed in sale of equity of investment entities or sale by receiver (Note 12)

Liabilities disposed in sale of equity of investment entities or sale by receiver (Note 12)

Assets of investment entities deconsolidated (2)

Noncontrolling interests of investment entities deconsolidated (2)

(1) Represents (a) deconsolidation of noncontrolling interests in THL Hotel portfolio following a sale of the Company's equity interest (Note 12);

and (b) deconsolidation of two investment holding entities for which the Company is no longer the primary beneficiary as a result of a reconsideration event in the second quarter of 2021, following which the Company accounts for its interests in these entities under the equity method (presented as held for disposition in Note 11).

(1) The Company indirectly conveyed the equity of certain of its wellness infrastructure borrower subsidiaries to an affiliate of the lender, which released the Company from all rights and obligations with respect to the assets and previously defaulted debt of these subsidiaries.

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

and (b) deconsolidation of investment holding entities for which the Company is no longer the primary beneficiary as a result of reconsideration events in 2021, following which the Company accounts for its interests in these entities under the equity method (presented as held for disposition in Note 11).

Subsequent Events

On August 9, 2021, the Company agreed to provide a commitment of up to $ 650 million in the form of a preferred equity investment to support the acquisition of a digital infrastructure business by the Company's investment management platform.

In July 2021, the Company's corporate credit facility was terminated and replaced with a new securitized financing facility (Note 8), and a notice of redemption was sent for all outstanding Series G preferred stock (Note 9) .

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.

FORWARD-LOOKING STATEMENTS

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

• the Company's ability to complete anticipated monetizations of non-core assets within the timeframe and on the terms contemplated, if at all;

• the impact of the completion of the sale of the Company's hospitality portfolios in connection with its strategic transformation and whether we will realize the anticipated benefits of our exit from our hospitality business;

• the Company's ability to complete anticipated monetizations of non-core assets within the timeframe and on the terms contemplated, if at all, and the impact of the completion of such sales;

• 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;

• 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 IM 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;

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

• stability of the capital structure of our wellness infrastructure portfolio and remaining hospitality portfolio;

• stability of the capital structure of our wellness infrastructure portfolio and OED portfolio;

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

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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