What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-09 compared with 2021-08-09 · 311 added, 361 removed, 330 unchanged (67% of the section changed)

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We conduct substantially all of our activities and hold substantially all of our assets and liabilities through our operating subsidiary, DigitalBridge Operating Company, LLC (the "Operating Company" or the "OP").

At June 30, 2021, we owned 90% of the Operating Company, as its sole managing member.

Having completed the transformational plan for the Company set in motion two years ago, Thomas J.

has stepped down as Executive Chairman of the Company effective April 1, 2021.

In July 2021, Mr.

Barrack resigned from his position as a member of the Company's Board of Directors.

Barrack's decision was not the result of any disagreement with the Company on any matter relating to its operations, polices or practices.

Nancy Curtin, a long-time member of the Board and most recently the Lead Independent Director, transitioned to independent, non-executive Chairperson of the Board effective April 1, 2021.

At September 30, 2021, we owned 90% of the Operating Company, as its sole managing member.

Our vision is to establish the Company as a leading owner, operator and investment manager of digital infrastructure.

We are currently the only global REIT that owns, manages, and/or operates across all major infrastructure components of the digital ecosystem including data centers, cell towers, fiber networks and small cells .

At June 30, 2021, the Company has $48 billion of assets under management ("AUM"), including both third party capital and the Company's balance sheet, of which $35 billion is dedicated to digital real estate and infrastructure.

The Company currently conducts its business through four reportable segments, as follows:

At September 30, 2021, the Company has $49 billion of assets under management ("AUM"), 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 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 our interest in BrightSpire Capital, Inc.

BRSP), that are not substantially available for immediate sale and are expected to be monetized over an extended period beyond the near term.

Digital Transformation

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 and the related operating results are presented as loss from discontinued operations on the consolidated statements of operations (refer to Item 1.

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 and the related operating results are presented as discontinued operations on the consolidated statements of operations (refer to Item 1.

"Financial Statements" of this Quarterly Report).

Accelerating the Monetization of Wellness Infrastructure, OED and Other IM

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 $646 million in aggregate, of which $294 million was attributable to the OP, recorded within impairment loss, equity method loss and other loss in discontinued operations (Note 11 to the consolidated financial statements).

Wellness Infrastructure

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

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("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.

Consummation of the sale is subject to customary closing conditions, with no financing conditions, and is expected to close in the first half of 2022.

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

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 $538 million in aggregate, of which $277 million was attributable to the OP, recorded within impairment loss, equity method loss and other loss in discontinued operations (Note 11 to the consolidated financial statements).

Internalization of BRSP

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

In October 2021, a joint venture partner applied in Ireland for an injunction to delay the closing and a temporary injunction was granted pending a hearing in November 2021.

The outcome of the hearing may delay the closing and/or impact the Company's ability to close the sale.

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

Internalization of BrightSpire Capital, Inc.

In early April 2021, the Company and BRSP (formerly Colony Credit Real Estate, Inc.

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

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

The Company also entered into a stockholders agreement with BRSP, pursuant to which the Company agreed, for so long as the Company owns at least

10% of BRSP's outstanding common shares, to vote in BRSP director elections as recommended by BRSP’s board of directors at any stockholders' meeting that occurs prior to BRSP's 2023 annual stockholders' meeting.

In addition, the Company is subject to customary standstill restrictions, including an obligation not to initiate or make stockholder proposals, nominate directors or participate in proxy solicitations, until the beginning of the advance notice window for BRSP's 2023 annual meeting.

Except as aforementioned, the Company may vote its 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.

Significant Developments

Through the date of this filing, significant developments in 2021 affecting our business and results of operations included the following.

• In July 2021, our corporate credit facility was terminated and replaced with $500 million aggregate principal amount of Series 2021-1 Secured Fund Fee Revenue Notes issued by subsidiaries of the OP (the "Co-Issuers"), composed of:

• Securitized Financing Facility— In July 2021, our corporate credit facility was terminated and replaced with $500 million aggregate principal amount of Series 2021-1 Secured Fund Fee Revenue Notes issued by subsidiaries of the OP (the "Co-Issuers"), composed of:

(i) $300 million aggregate principal amount of 3.933% Secured Fund Fee Revenue Notes, Series 2021-1, Class A-2 (the “Class A-2 Notes”);

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The VFN Notes allow the Co-Issuers to borrow on a revolving basis.

Net proceeds from the securitized financing facility will be used for acquisition of digital infrastructure investments, funding of commitments to sponsored funds, redemption or repayment of other higher cost corporate securities, and/or general corporate purposes.

Proceeds from issuance of the Class A-2 Notes of $285 million, net of offering costs and $5.4 million of interest reserve deposit, will be used for acquisition of digital infrastructure investments, funding of commitments to sponsored funds, redemption or repayment of other higher cost corporate securities, and/or general corporate purposes.

The issuance of the Series 2021-1 Notes represents a key milestone for the Company on a number of fronts:

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▪ Greater flexibility — This new financing structure, which we intend to continue to utilize as it grows, creates greater flexibility around capital allocation and corporate liability management, including our ability to retire higher cost debt or securities and eventually pay regular dividends on our common stock.

• In July 2021, we issued notices of redemption for all of our outstanding 7.5% Series G preferred stock with total liquidation value of $86.25 million, to be settled in August 2021 using proceeds from our securitized financing facility, which will lower our cost of corporate debt by approximately 350 basis points.

• Preferred Stock— We redeemed all of our outstanding 7.5% Series G preferred stock in August 2021 for $86.8 million using proceeds from our securitized financing facility, which lowered our cost of corporate debt by approximately 350 basis points.

Additionally, we issued notices of redemption in October 2021 for 2.6 million shares or 22% of our 7.125% Series H preferred stock with redemption to be settled in November 2021 for $64.4 million.

Redemption amounts include accrued and unpaid dividends through the redemption date.

• Senior Notes— In October 2021, we exchanged approximately $44 million of the outstanding principal of the 5.75% exchangeable notes into approximately 20 million shares of class A common stock, which will result in future interest savings.

Digital Business

• We held a first closing of DCP II, our second digital opportunistic fund in February 2021.

As of August 5, 2021, total commitments was $6.6 billion, inclusive of $135 million of our commitments as limited partner and general partner.

• In February 2021, we announced the first closing of DCP II, our second flagship digital infrastructure fund.

As of November 4, 2021, DCP II has total commitments of $8.1 billion (inclusive of $120 million of our commitments as limited partner and general partner).

Digital Operating

• Our DataBank subsidiary completed its restructuring in the second quarter of 2021 and expects to elect REIT status for the 2021 taxable year, resulting in a write-off of $67 million of net deferred tax liabilities.

• In February 2021, we completed the add-on acquisition of zColo's remaining five data centers in France for $33 million.

• We acquired additional build-out of expansion capacity within the Vantage SDC portfolio, including lease-up of the expanded capacity and existing inventory, for aggregate payments of $73.6 million.

• We acquired an additional data center and build-out of expansion capacity within the Vantage SDC portfolio, including lease-up of the expanded capacity and existing inventory, for aggregate payments of $478 million, funded primarily through borrowings by Vantage SDC.

• In March 2021 and October 2021, DataBank raised $658 million and $332 million of 5-year securitized notes at blended fixed rates of 2.32% and 2.43% per annum, respectively.

Proceeds from the March securitization were applied principally to refinance $514 million of outstanding debt, which meaningfully reduced DataBank's overall cost of debt and extended its debt maturities, while the October proceeds will be used to repay borrowings on its credit facility and finance future acquisitions.

• In November 2021, Vantage SDC issued $530 million of 5-year securitized notes at a blended per annum fixed rate of 2.17%.

Proceeds will be applied to replace its current bridge financing and fund capital expenditures on the September 2021 add-on acquisition as well as to fund payments for future build-out and lease-up of expansion capacity.

◦ DCP II, together with other third party co-invest capital, acquired a digital communications infrastructure business in October 2021.

No capital was drawn from DBRG's balance sheet to bridge the financing for this acquisition and DBRG's previous commitment to a preferred equity investment has been cancelled.

Non-Digital Assets

• In the first half of 2021, we determined we would accelerate the monetization of our remaining non-digital assets in Wellness Infrastructure, OED and Other IM.

• In June 2021, we entered into a definitive agreement to sell a substantial majority of our OED investments and Other IM business, including our general partner interests and management rights with respect to these OED assets.

The aggregate sales price is approximately $535 million, subject to customary adjustments.

• During the six months ended June 30, 2021, based upon the sales price for the OED assets and Other IM business, and potential recoverable values of the Wellness Infrastructure assets, the carrying value of these assets were written down in the aggregate of $538 million, of which $277 million was attributable to the OP.

• In September 2021 and June 2021, we entered into separate definitive agreements to sell (i) NRF Holdco, which holds our Wellness Infrastructure business, for $281 million;

and (ii) a substantial majority of our OED investments and Other IM business for approximately $535 million.

• Based upon recoverable values, in particular, the sales price for the Wellness Infrastructure assets, OED investments and Other IM business, the carrying values of these assets were written down in for an aggregate $646 million, of which $294 million was attributable to the OP, included in discontinued operations.

• On April 30, 2021, we terminated the BRSP management contract, which resided in the Other IM business, for a one-time termination payment of $102.3 million at closing.

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• In March 2021, we sold five of the six hotel portfolios in our Hospitality segment and our 55.6% interest in the THL Hotel Portfolio in the Other segment, generating net proceeds of $45.6 million.

The transaction was valued at $2.8 billion, including aggregate selling price of $67.5 million and the buyer's assumption of $2.7 billion of investment-level debt.

The remaining one hotel portfolio is in receivership and currently under contract for sale by the lender.

• In April 2021, we received proceeds from a sale of the two largest assets securing our Irish loan portfolio, which were applied to repay $305 million of our outstanding loan receivable and extinguish the full $155 million of debt financing the portfolio.

The transaction was valued at $2.8 billion, including aggregate selling price of $67.5 million and the buyer's assumption of $2.7 billion of consolidated investment-level debt.

The remaining one hotel portfolio that was in receivership was sold by the lender in September 2021 for no proceeds to us.

• In August 2021, we sold 9.5 million BRSP shares for net proceeds of approximately $82 million.

• In April 2021, we received proceeds from the sale of the two largest assets securing our Irish loan portfolio, which were applied to repay $305 million of our outstanding loan receivable and extinguish the full $155 million of debt financing the portfolio.

This removed all encumbrances on the remaining assets in the portfolio.

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The Irish loan portfolio is composed of distressed loans that were previously acquired at a discount.

• For all current and prior periods presented, all non-digital assets that have been disposed or subject to planned dispositions and their corresponding liabilities are presented as held for disposition, and the related operating results are presented as discontinued operations (Notes 11 and 12 to the consolidated financial statements).

• For all current and prior periods presented, all non-digital assets that have been disposed or subject to planned disposition and associated liabilities (excluding our interest in BRSP other than BRSP shares and units held by NRF Holdco) are presented as held for disposition, and the related operating results are presented as discontinued operations (Notes 11 and 12 to the consolidated financial statements).

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

Below is a summary of our AUM and FEEUM.

AUM (1) (In billions)

FEEUM (2) (In billions)

Type Products Description September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020

Third Party Managed Capital

Institutional Funds Digital Colony Partners opportunistic strategy Earns management fees and potential for carried interest or incentive fees $ 14.2 $ 9.3 $ 10.2 $ 7.0

Liquid securities strategy 0.6 0.5 0.5 0.4

Other Investment Vehicles Digital co-invest vehicles Earns management fees, business service fees from portfolio companies, and potential for carried interest 11.4 9.9 3.2 2.6

Digital real estate and infrastructure held by portfolio companies 10.1 8.9 2.6 2.8

36.3 28.6 16.5 12.8

Balance Sheet Capital (3)

Digital Operating 1.2 1.1 NA NA

Other 0.3 0.3 NA NA

Total Digital 37.8 30.0 16.5 12.8

Non-Digital (4)

Third Party Managed Capital 8.2 13.4 4.4 7.2

Balance Sheet Capital (3)

3.4 8.6 NA NA

Total Company $ 49.4 $ 52.0 $ 20.9 $ 20.0

(1) AUM is composed of (a) third party managed capital, which are assets for which the Company and its affiliates provide investment management services, including assets for which the Company may or may not charge management fees and/or performance allocations;

and (b) assets invested using the Company's own balance sheet capital and managed on behalf of the Company's shareholders.

Third party AUM is based upon the cost basis of managed investments as reported by each underlying vehicle as of the reporting date and may include uncalled capital commitments.

Balance sheet AUM is based upon the undepreciated carrying value of the Company's balance sheet investments as of the reporting date.

The Company's calculation of AUM may differ from other asset managers, and as a result, may not be comparable to similar measures presented by other asset managers.

(2) FEEUM is equity for which the Company and its affiliates provide investment management services and derive management fees and/or incentives.

FEEUM generally represents the basis used to derive fees, which may be based upon invested equity, stockholders’ equity, or fair value, pursuant to the terms of each underlying investment management agreement.

The Company's calculation of FEEUM may differ from other asset managers, and as a result, may not be comparable to similar measures presented by other asset managers.

(3) Represents the Company's investment interests on its balance sheet, excluding the portion held by noncontrolling interests in investment entities, that is managed by the Company on behalf of its stockholders, therefore is not fee-bearing.

Balance sheet AUM reflects generally the OP's share of net book value of the respective segments, determined based upon undepreciated carrying value of assets, and where applicable, after impairment charges that create a new basis for the affected assets, in all instances, net of liabilities.

(4) Represents predominantly assets held for disposition and discontinued operations.

Total FEEUM increased $0.9 billion from December 31, 2020 to $20.9 billion at September 30, 2021.

• Digital FEEUM increased $3.7 billion to $16.5 billion, attributable primarily to the successful fundraising for DCP II and to a lesser extent, additional capital from co-investment vehicles, both of which were partially offset by a lower DCP I FEEUM as the fee base of DCP I changed from committed capital to net capital contributions following the closing of DCP II.

In the nine months ended September 30, 2021, DCP II has raised $2.7 billion of capital, with an additional $1.3 billion through November 4, 2021.

• Non-digital FEEUM decreased $2.8 billion, driven by the termination of our management agreement with BRSP in April 2021, for which we received a one-time termination fee of $102.3 million.

Sales and fair value decreases in investments held by our distressed credit funds further contributed to a lower non-digital FEEUM.

Our management contract with these funds and with NorthStar Healthcare will be sold in conjunction with the disposition of our Other IM business and of NRF Holdco, respectively.

Total AUM decreased $2.6 billion from December 31, 2020 to $49.4 billion at September 30, 2021.

• This was driven by a significant decrease in our non-digital balance sheet capital in 2021, attributed to the sale of our hospitality business, along with sales and fair value decreases in OED investments.

Upon completing the pending disposition of a substantial majority of our OED investments and of NRF Holdco, we expect our balance sheet capital to be fully rotated to digital by mid-2022.

• In 2021, we have made significant progress in the digital rotation of our investment management business.

As of September 30, 2021, Digital AUM at $36.3 billion, following a $7.8 billion increase in 2021, represents 77% of our total AUM, up from 58% at December 31, 2020.

Results of Operations

The following table summarizes our consolidated results of operations by segments.

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

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

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

(In thousands) 2021 2020 Change 2021 2020 Change

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Digital Operating 194,966 98,549 96,417 573,261 185,737 387,524

Digital Other 1,720 663 1,057 2,860 823 2,037

Other — — — — 814 (814)

Amounts not allocated to segments (1)

Corporate and Other (1)

3,412 4,071 (659) 4,892 14,758 (9,866)

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Digital Operating (71,822) (38,795) (33,027) (146,932) (78,472) (68,460)

Digital Other 13,280 12,292 988 20,943 9,257 11,686

Other 45,983 (324,456) 370,439 16,393 (334,361) 350,754

Amounts not allocated to segments (60,376) (62,195) 1,819 (128,191) (119,591) (8,600)

Corporate and Other (8,385) (17,653) 9,268 (99,240) (454,097) 354,857

$ (40,935) $ (52,649) 11,714 $ (183,451) $ (524,116) 340,665

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Digital Operating (12,142) (5,082) (7,060) (22,592) (12,885) (9,707)

Digital Other 5,424 10,723 (5,299) 9,187 8,481 706

Other 41,606 (292,254) 333,860 14,842 (301,176) 316,018

Amounts not allocated to segments (52,828) (54,192) 1,364 (112,421) (104,009) (8,412)

Corporate and Other (11,506) (14,547) 3,041 (99,898) (403,820) 303,922

$ (6,778) $ (17,665) 10,887 $ (86,641) $ (410,658) 324,017

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

Revenues increased $169.3 million quarter-to-date and $319.7 million year-to-date, or over 200%.

The increase reflects growth in our digital businesses:

• Digital Operating— acquisition of Vantage SDC's 12 hyperscale data centers (13% DBRG ownership) and zColo's 44 colocation data centers (through our subsidiary, DataBank, 20% DBRG ownership);

• Digital Investment Management— fundraising for our second flagship digital infrastructure fund, DCP II, and co-invest capital raised alongside our balance sheet investment for new acquisitions in Digital Operating .

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

Total revenues increased $129.2 million quarter-to-date and $448.9 million year-to-date, or over 100%.

• Digital Investment Management— Revenues from our investment management business grew 164% to $53.8 million quarter-to-date and 118% to $131.8 million year-to-date as a result of significant growth in our Digital IM FEEUM from $8.5 billion at September 30, 2020 to $16.5 billion at September 30, 2021 following successful fundraising for DCP II and co-invest vehicles, including capital raised alongside our balance sheet for new acquisitions in Digital Operating.

The third quarter of 2021 also included a catch-up of DCP II inception-to-date fee income for significant commitments that closed during the period.

• Digital Operating— 2021 includes revenues from acquisition of Vantage SDC's 12 hyperscale data centers (13% DBRG ownership) in July 2020 and zColo's 44 colocation data centers (through our subsidiary, DataBank, 20% DBRG ownership) in December 2020 and February 2021.

Income (loss) from continuing operations

Continuing operations generated net income in the second quarter of 2021 and net losses in all other periods.

The second quarter of 2021 benefited from a $66.8 million net deferred tax benefit at our DataBank subsidiary, driven by the write-off of deferred tax liabilities as DataBank completed its restructuring to qualify as a REIT in the second quarter and expects to elect REIT status for the 2021 taxable year.

Our Digital Operating segment generally records net losses, reflecting the effects of depreciation and amortization.

In 2020, the large net loss arose from $254.5 million of impairment charge on our equity investment in BRSP.

Key components of revenue and income (loss) from continuing operations are addressed in more detail in our discussion of consolidated results of operations below.

Consolidated Results of Operations

Comparison of Three and Six Months Ended June 30, 2021 to Three and Six Months Ended June 30, 2020

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

• Digital Investment Management— In addition to higher fee income in 2021, the third quarter of 2021 also recorded significant unrealized carried interest income, of which generally 65% is allocated to management, investment professionals and certain other employees.

• Digital Operating— Our Digital Operating segment generally records a net loss, reflecting the effects of real estate depreciation.

In year-to-date 2021, net loss in Digital Operating was reduced by a $66.8 million net deferred tax benefit at our DataBank subsidiary, driven by the write-off of deferred tax liabilities as DataBank completed its restructuring to qualify as a REIT in the second quarter and expects to elect REIT status for the 2021 taxable year.

We present our supplemental operating results measure of earnings before interest, tax, depreciation and amortization for real estate ("EBITDA re ") for Digital Operating under " —Non-GAAP Measures ".

• Corporate and Other— Net losses generally reflect corporate level costs that have not been allocated to our reportable segments.

In the year-to-date period, however, the large net losses were driven by impairment of our various other equity investments, primarily BRSP in which we recorded a $254.5 million charge in June 2020.

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

Comparison of Three and Nine Months September 30, 2021 to Three and Nine Months September 30, 2020

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

(In thousands) 2021 2020 Change 2021 2020 Change

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Impairment loss — 3,832 (3,832) — 16,129 (16,129)

Compensation expense 56,465 44,628 11,837 135,218 82,684 52,534

Compensation expense, including carried interest 87,669 37,312 50,357 222,887 119,996 102,891

Administrative expenses 28,933 16,551 12,382 75,234 57,129 18,105

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Other gain (loss), net 4,657 1,339 3,318 (31,734) (632) (31,102)

Equity method earnings (losses) 62,650 (316,516) 379,166 46,011 (326,864) 372,875

Equity method earnings (losses), including carried interest 65,369 23,371 41,998 111,380 (303,493) 414,873

Loss before income taxes (51,908) (65,875) 13,967 (292,859) (552,476) 259,617

Income tax benefit 10,973 13,226 (2,253) 109,408 28,360 81,048

Gain (Loss) from continuing operations 3,823 (393,197) 397,020 (142,516) (479,718) 337,202

Loss from continuing operations (40,935) (52,649) 11,714 (183,451) (524,116) 340,665

Loss from discontinued operations (10,429) (308,581) 298,152 (590,595) (2,960,164) 2,369,569

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Operating Company 4,311 (22,651) 26,962 (38,565) (287,308) 248,743

Net loss attributable to DigitalBridge Group, Inc.

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

61,357 (187,267) 248,624 (307,677) (2,553,701) 2,246,024

Preferred stock redemption 2,865 — 2,865 2,865 — 2,865

Preferred stock dividends 17,456 18,517 (1,061) 54,488 56,507 (2,019)

Net loss attributable to common stockholders $ (141,260) $ (2,042,790) 1,901,530 $ (406,066) $ (2,404,423) 1,998,357

Property Operating Income and Property Operating Expenses

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

Net income (loss) attributable to common stockholders $ 41,036 $ (205,784) 246,820 $ (365,030) $ (2,610,208) 2,245,178

Property Operating Income and Expense

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

(In thousands) 2021 2020 Change 2021 2020 Change

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$ 194,854 $ 98,522 96,332 $ 572,841 $ 185,688 387,153

Property operating expenses 77,140 18,055 59,085 157,002 34,961 122,041

Amounts are higher in 2021 as it includes the operating results from 12 hyperscale data centers in the Vantage SDC portfolio, acquired in July 2020 and 44 co-location data centers held by zColo, acquired in December 2020 and February 2021.

On a same store basis, there was an increase in property operating income and expense quarter-to-date and year-to-date, reflecting an increase in rentable square footage and a higher utilization rate.

Additionally, higher power costs were incurred in connection with inclement weather conditions, with the incremental cost billed to our tenants.

Property operating expense $ 80,226 $ 37,544 42,682 $ 237,228 $ 72,505 164,723

Property operating income and expense amounts are higher in 2021, which includes the operating results of zColo's 44 colocation data centers, acquired in December 2020 and February 2021, Vantage SDC's 12 hyperscale data centers, acquired in July 2020, and additional lease-up of expanded capacity and existing inventory in Vantage in 2021.

Total real estate carrying value in our Digital Operating segment stood at $4.91 billion at September 30, 2021 compared to $4.45 billion at December 31, 2020.

Our portfolio includes 68 data centers in the U.S., three in Canada, one in the U.K., and five in France.

September 30, 2021 December 31, 2020

Number of data centers

Leasehold 51 46

(In thousands, except %)

Max Critical I.T.

Square Feet or Total Rentable Square Feet (1)

Leased Square Feet (1)

% Utilization Rate (% Leased) (1)

(1) Excludes data centers that are not held for the entire period during the most recent quarter;

in this case, one data center that was acquired during the quarter ended September 30, 2021.

On a same store basis, property operating income and expense also increased quarter-to-date and year-to-date, reflecting an increase in rentable square footage.

Additionally, in the year-to-date period, higher power costs were incurred in connection with inclement weather conditions, with the incremental cost billed to our colocation tenants.

Interest Income

Interest income was $0.8 million lower quarter-to-date and $1.7 million lower year-to-date.

There was additional interest income in 2021 from new loans originated or acquired in the digital segment, primarily warehousing for a future digital credit investment vehicle.

However, this increase was largely offset by lower interest income on available cash as proceeds from the sale of our light industrial business in December 2019 have since been redeployed.

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

Interest income was $1.8 million higher quarter-to-date and largely consistent in the year-to-date period.

In 2021, there was additional interest income from new loans originated or acquired that are being warehoused for future investment vehicles in our digital credit strategy.

However, for the year-to-date period, this increase was largely offset by lower interest income on available cash in 2021 as proceeds from the sale of our light industrial business in December 2019 have since been redeployed.

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

(In thousands) 2021 2020 Change 2021 2020 Change

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The increase was driven by:

(i) fundraising for DCP II beginning November 2020, partially offset by lower fees from DCP I in 2021 as the fee base changed from committed capital to net contributed capital following the closing of DCP II;

and (ii) incentive fees earned based upon the performance of third party accounts managed by our digital liquid securities team.

The decrease in other income can be attributed primarily to lower cost reimbursements from our investment holding entities.

(i) fundraising for DCP II beginning November 2020, partially offset by lower fees from DCP I in 2021 with a change in its fee base from committed capital to net contributed capital following the closing of DCP II;

and (ii) incentive fees earned based upon the performance of managed third party accounts in our digital liquid strategy.

In particular, there was a larger contribution of fee income from DCP II in the third quarter of 2021 following the closing of $1.0 billion of commitments during this period and a catch-up of inception-to-date fee income for the new investors.

There was a marginal increase in other income quarter-to-date.

In the year-to-date period, other income decreased $4.0 million, which can be attributed primarily to lower cost reimbursements from our investment holding entities.

Interest Expense

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

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

(In thousands) 2021 2020 Change 2021 2020 Change

Investment-level financing — Digital Operating

Digital Investment Management $ 2,250 $ — $ 2,250 $ 2,250 $ — $ 2,250

Digital Operating

29,839 18,589 11,250 90,243 36,161 54,082

Other investment-level debt 268 — 268 268 — 268

Corporate-level debt 7,538 11,410 (3,872) 24,852 33,774 (8,922)

$ 39,895 $ 29,999 9,896 $ 117,613 $ 69,935 47,678

Digital Operating— The increase of $21.1 million quarter-to-date and $42.8 million year-to-date is attributed to additional interest expense incurred on debt financing the Vantage SDC and zColo portfolios, acquired in July 2020 and December 2020, respectively.

This was partially offset by lower interest expense on the DataBank portfolio as its March 2021 securitization transaction meaningfully reduced its cost of debt.

Digital Investment Management— This represents interest expense from our securitized financing facility beginning in July 2021 as the $300 million term loan is attributed largely to the Digital IM segment.

Digital Operating— The increase of $11.3 million quarter-to-date and $54.1 million year-to-date is attributed to interest expense incurred on debt financing the zColo portfolio, acquired in December 2020, and an additional acquisition by DataBank in the third quarter of 2021, interest expense from our securitized financing facility which is partially allocated to the Digital Operating segment, and for the year-to-date period, debt financing the Vantage SDC portfolio, acquired in July 2020.

This increase was partially offset by lower interest expense on the DataBank portfolio following its March 2021 securitization transaction which meaningfully reduced its cost of debt.

DataBank's weighted average interest rate was 6.1% per annum as of December 31, 2020 and 2.4% per annum as of March 2021 post-securitization.

Corporate-level Debt— Interest expense decreased $4.0 million quarter-to-date and $5.1 million year-to-date as there was no outstanding balance on our corporate credit facility in 2021 until the last week of June 2021.

This was partially offset by a net increase in interest expense on our senior notes, with a higher rate on the new exchangeable notes issued in July 2020 (5.75% per annum) relative to the convertible notes that were substantially repurchased in the third quarter of 2020 and fully repaid in January 2021 (3.875% per annum) .

Overall, at September 30, 2021, our data center portfolio was financed by an aggregate $3.82 billion of outstanding debt principal ($3.23 billion at December 31, 2020), bearing a combined weighted average interest rate of 2.91% per annum (3.69% per annum at December 31, 2020).

Other Investment-level Debt— This represents primarily interest expense from our securitized financing facility that is partially allocated to our digital credit and digital liquid investments on the balance sheet.

Corporate-level Debt— Interest expense was $3.9 million lower quarter-to-date and $8.9 million lower year-to-date.

This can be attributed to a higher average outstanding balance in 2020 on our corporate credit facility which was terminated in July 2021, and additionally, for the year-to-date period, a proportional write-off of deferred financing costs in June 2020 to reflect a previous reduction in the corporate credit facility amount.

This decrease was partially offset by a net increase in interest expense on our senior notes, with a higher interest rate on the new exchangeable notes issued in July 2020 (5.75% per annum) relative to the convertible notes that were substantially repurchased in the third quarter of 2020 and fully repaid in January 2021 (3.875% per annum).

Investment Expense

Investment expense was $2.8 million higher quarter-to-date and $10.8 million higher year-to-date.

The increase was related primarily to management fees paid to Vantage for the day-to-day operations of Vantage SDC beginning the second half of 2020, and fees paid in 2021 for transitional services in connection with the zColo portfolio.

The increase was related primarily to management fees paid to Vantage for the day-to-day operations of Vantage SDC beginning the end of July 2020, fees paid in 2021 for transitional services in connection with the zColo portfolio, and reimbursable due diligence costs incurred in our investment management business.

Transaction-Related Costs

Transaction-related costs were generally in connection with unconsummated investments and ongoing corporate restructuring transactions.

Transaction-related costs were generally in connection with unconsummated investments and corporate restructuring transactions.

Depreciation and Amortization

Increase in depreciation and amortization expense is primarily related to real estate and intangible assets from acquisition of Vantage SDC and zColo.

Increase in depreciation and amortization expense is primarily related to real estate and intangible assets from acquisition of Vantage SDC in July 2020, including additional lease-up of expanded capacity and existing inventory in 2021, and zColo in December 2020.

Impairment Loss

Impairment was recorded on the corporate aircraft in 2020 to reflect its recoverable value prior to its sale to a third party in January 2021.

Impairment loss in 2020 reflects:

(i) reduced cash flows from the original Vantage management contract, which was replaced by a new fee stream from third party capital that was raised in our acquisition of Vantage SDC from its existing owners;

and (ii) write down to recoverable value on the corporate aircraft prior to its sale in January 2021.

Compensation Expense

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

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

(In thousands) 2021 2020 Change 2021 2020 Change

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$ 87,669 $ 37,312 50,357 $ 222,887 $ 119,996 102,891

Total compensation expense was $11.8 million higher quarter-to-date and $52.5 million higher year-to-date, driven by significant severance payments, including acceleration of equity-based compensation in the first quarter of 2021, and compensation costs associated with data center employees of the new zColo portfolio in 2021.

Additionally, there was $8.2 million of compensation accrued in 2021, representing approximately 60% of incentive fees earned and unrealized carried interest from our managed accounts and sponsored investment vehicles that are shared with certain employees.

Unlike incentive fee and related compensation which have been earned, unrealized carried interest and corresponding compensation amounts are subject to adjustments each period, including reversals, until such time they are realized, based upon the cumulative performance of the underlying investments of the respective vehicles that are carried at fair value.

Total compensation expense was $50.4 million higher quarter-to-date and $102.9 million higher year-to-date, driven primarily by:

• significant severance payments, including acceleration of equity-based compensation in the first quarter of 2021;

• incentive and carried interest compensation accrued in 2021, representing a portion of incentive fees earned and unrealized carried interest from our managed accounts and sponsored investment vehicles that are shared with management and certain employees.

Unlike incentive fees and related compensation which have been earned, unrealized carried interest and corresponding compensation amounts are subject to adjustments each period, including reversals, until such time they are realized, based upon the cumulative performance of the underlying investments of the respective vehicles that are carried at fair value.

Administrative Expenses

Administrative expense increased $15.7 million quarter-to-date and $5.7 million year-to-date, attributable largely to placement fees incurred in fundraising for DCP II in the second quarter of 2021, administrative costs associated with our new zColo portfolio and growth in our Digital Operating business, and costs incurred in connection with our investor conference in June 2021.

Administrative expense increased $12.4 million quarter-to-date and $18.1 million year-to-date, attributable largely to administrative costs associated with our new zColo portfolio, growth in our Digital Operating business, placement fees incurred in fundraising for DCP II, higher professional fees, and costs incurred in connection with our 2021 investor conference.

Settlement Loss

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Refer to additional discussion in Note 13 to the consolidated financial statements.

Other Gain (Loss)

The large year-to-date loss in 2021 can be attributed to a write-off of an equity investment in the second quarter of 2021 that was determined to be unrecoverable.

Additionally, we recorded losses from increase in value of the Blackwells settlement liability in all periods prior to its settlement in June 2021 based upon an increase in the DBRG stock price, which was more pronounced in 2021 (refer to Note 13 to the consolidated financial statements).

During 2021, however, there were also fair value increases in our marketable equity securities, held primarily by our consolidated digital liquid securities funds.

Unlike the year-to-date period, these gains were not offset by various other losses in the third quarter of 2021.

Equity Method Earnings (Losses)

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

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

(In thousands) 2021 2020 Change 2021 2020 Change

Digital Investment Management $ 59,196 $ 6,134 $ 53,062 $ 70,203 $ 6,295 $ 63,908

Digital Other 6,396 7,782 (1,386) 9,172 8,247 925

Other 6,173 17,237 (11,064) 41,177 (309,788) 350,965

$ 65,369 $ 23,371 41,998 $ 111,380 $ (303,493) 414,873

Digital Investment Management— Unrealized carried interest was recognized in the second quarter of 2021 in relation to our general partner interests in the DCP funds and a Vantage SDC co-invest vehicle.

Such carried interest is subject to adjustments each period, including reversals, based upon the cumulative performance of the underlying investments of these vehicles that are measured at fair value, until such time the carried interest is realized.

Digital Other— Equity method earnings represent our share of earnings, principally from our limited partner interests in DCP I and beginning 2021, DCP II.

The earnings of the DCP funds include unrealized fair value changes on their respective underlying investments.

Other— The large equity method loss in the Other segment in 2020 was driven by $254.5 million of impairment charge on our equity investment in BRSP (excluding amounts associated with BRSP shares and units held by NRF Holdco that is presented as discontinued operations).

Additionally, our share of BRSP's net losses was higher in 2020 as a result of the economic effects of COVID-19.

We also recorded net losses from BRSP in 2021, attributable largely to BRSP's restructuring costs, including the termination fee that was paid to us.

These net losses from BRSP were reduced by $54.8 million and $17.8 million of basis difference year-to-date 2021 and 2020, respectively, allocated to investments that were resolved or written-down by BRSP during these periods (Note 5 to consolidated financial statements).

Separately, the Other segment also realized a gain from partial sale of an equity investment in the second quarter of 2021, having recorded unrealized gains in the first quarter to reflect an increase in the value of the investment.

Other Gain (Loss)

The large other loss in 2021 can be attributed to a write-off of an equity investment that was determined to be unrecoverable.

We also recorded a loss from increases in value of the Blackwells settlement liability in all periods based upon an increase in the DBRG stock price, which was more pronounced in 2021.

The Blackwells liability was settled in June 2021 (refer to Note 13 to the consolidated financial statements).

These losses were partially offset by fair value increases in our marketable equity securities, held primarily by our consolidated digital liquid securities funds, in all periods except for the first quarter of 2020.

Digital Investment Management— These amounts represent earnings, predominantly unrealized carried interest income, from our general partner interests in sponsored investment vehicles.

Carried interest income is subject to adjustments each period, including reversals, based upon the cumulative performance of the underlying investments of these vehicles that are measured at fair value, until such time the carried interest is realized.

Other— These amounts are driven primarily by our investment in BRSP.

The large equity method loss year-to-date 2020 can be attributed to $254.5 million of impairment charge on our equity investment in BRSP in June 2020 (excluding amounts associated with BRSP shares and units held by NRF Holdco that is presented as discontinued operations).

Additionally, our share of BRSP's net losses was higher overall in 2020 as a result of the economic effects of COVID-19.

We also recorded net losses from BRSP in 2021, attributable largely to investment write-downs and BRSP's restructuring costs, including the BRSP management contract termination fee that was paid to us.

These net losses from BRSP, however, were reduced by a higher basis difference in 2021 year-to-date of $95.5 million compared to $38.1 million in 2020 year-to-date.

The basis difference were allocated to investments that were resolved or written-down by BRSP during these periods and also, in proportion to the Company's ownership in BRSP that was disposed in August 2021 (Note 5 to consolidated financial statements).

Additionally, 2021 included a gain from partial realization of another equity investment that had unrealized losses in 2020;

and higher contribution of earnings, primarily from our limited partner interests in DCP I and DCP II funds, which include unrealized fair value changes on their underlying investments.

Income Tax Benefit

The large income tax benefit in 2021 arose primarily from a $66.8 million net deferred tax benefit at our DataBank subsidiary, driven by the write-off of deferred tax liabilities as DataBank completed its restructuring to qualify as a REIT in the second quarter and expects to elect REIT status for the 2021 taxable year.

Additional deferred tax benefit was also recorded in relation to significant severance costs incurred in the first quarter of 2021.

Loss from Discontinued Operations

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

Income tax benefit decreased $2.3 million quarter-to-date as 2020 included a deferred tax benefit at our DataBank subsidiary compared to a tax expense in the third quarter of 2021, and additionally, a higher tax expense in 2021 from an increase in fee income.

These income tax expense items in 2021, however, were partially offset by additional deferred tax benefit in relation to higher compensation expense in 2021.

The large income tax benefit year-to-date in 2021 arose primarily from a $66.8 million net deferred tax benefit at our DataBank subsidiary, driven by the write-off of deferred tax liabilities as DataBank completed its restructuring to qualify as a REIT in the second quarter and expects to elect REIT status for the 2021 taxable year.

Additionally, higher deferred tax benefit was also recorded in relation to an increase in compensation expense, primarily significant severance costs incurred in the first quarter of 2021.

Income (loss) from Discontinued Operations

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

(In thousands) 2021 2020 Change 2021 2020 Change

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Expenses (199,369) (566,732) 367,363 (1,162,513) (3,816,986) 2,654,473

Other income (loss) 175,614 (237,708) 413,322 (73,565) (122,381) 48,816

Other loss (26,765) (82,469) 55,704 (100,330) (204,850) 104,520

Income tax expense (2,751) (3,081) 330 (22,938) (34,259) 11,321

Loss from discontinued operations (10,429) (308,581) 298,152 (590,595) (2,960,164) 2,369,569

Loss from discontinued operations attributable to noncontrolling interests:

Income (loss) from discontinued operations attributable to noncontrolling interests:

Investment entities (85,741) (120,299) 34,558 (346,205) (581,204) 234,999

Operating Company 7,177 (18,680) 25,857 (23,354) (235,917) 212,563

Loss from discontinued operations attributable to DigitalBridge Group, Inc.

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

$ 68,135 $ (169,602) 237,737 $ (221,036) $ (2,143,043) 1,922,007

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(3) credit investment management business in Other IM;

and (4) our hotel business that was disposed in March 2021, except for one hotel portfolio that is in receivership and under contract for sale by the lender.

and (4) 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.

Results from discontinued operations reflect the sale of our hotel business in March 2021 and monetization of various properties in our Wellness Infrastructure segment in the first six months of 2021.

Losses in all periods are driven by significant impairment expense and decreases in asset fair values, particularly in the second quarter of 2020.

In 2021, the write-down in asset values was based upon either pending sales price or estimated recoverable values in a monetization of our OED, Other IM and Wellness Infrastructure portfolios.

In the second quarter of 2020, our determination to accelerate our digital transformation necessitated an assumption of accelerated monetization of all of our non-digital businesses in estimating recoverable values and in combination with the negative economic effects of COVID-19, resulted in significant write-down in asset values.

Losses in the year-to-date period are driven by significant impairment expense and decreases in asset fair values, particularly in the second quarter of 2020.

Our determination to accelerate our digital transformation in the second quarter of 2020 necessitated an assumption of accelerated monetization of all of our non-digital businesses in estimating recoverable values and in combination with the negative economic effects of COVID-19, resulted in significant write-down in asset values.

In the year-to-date period in 2021, asset values were further written-down, but to a much lesser extent than in 2020, based upon recoverable values, in particular, the respective sales price for our Wellness Infrastructure, and OED and Other IM business.

The third quarter of 2021, however, benefited from significantly less depreciation and amortization expense.

Additionally, impairment of our investment assets were largely offset by various gains recognized during the period, including a gain on extinguishment of debt on our hotel portfolio that was sold in September 2021.

Such gains were attributed predominantly to DBRG while impairment loss was largely attributable to noncontrolling interests in investment entities, resulting in a net income attributed to DBRG in the third quarter of 2021.

Further discussion on the monetization of our discontinued businesses is included above under " —Business.

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

Below is a summary of our AUM and FEEUM.

AUM (1) (In billions)

FEEUM (2) (In billions)

Type Products Description June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020

Third Party Managed Capital

Institutional Funds Digital Colony Partners opportunistic strategy Earns management fees and potential for carried interest or incentive fees $ 12.4 $ 9.3 $ 8.6 $ 7.0

Liquid securities strategy 0.6 0.5 0.5 0.4

Other Investment Vehicles Digital co-invest vehicles Earns management fees, business service fees from portfolio companies, and potential for carried interest 10.3 9.9 2.8 2.6

Digital real estate and infrastructure held by portfolio companies 10.3 8.9 2.6 2.8

Subtotal — Third Party Managed Capital

33.6 28.6 14.5 12.8

Balance Sheet Capital (3)

Digital Operating 1.1 0.3 NA NA

Digital Other 0.2 1.1 NA NA

Total Digital 34.9 30.0 14.5 12.8

Third Party Managed Capital 9.8 13.4 5.1 7.2

Balance Sheet Capital (3)

Wellness Infrastructure 2.4 2.7 NA NA

Hospitality — 2.5 NA NA

Other—OED 1.3 3.3 NA NA

Total Other 13.5 21.9 5.1 7.2

Total Company $ 48.4 $ 51.9 $ 19.6 $ 20.0

and (b) assets invested using the Company's own balance sheet capital and managed on behalf of the Company's shareholders.

Third party AUM is based upon the cost basis of managed investments as reported by each underlying vehicle as of the reporting date and may include uncalled capital commitments.

Balance sheet AUM is based upon the undepreciated carrying value of the Company's balance sheet investments as of the reporting date.

The Company's calculation of AUM may differ from other asset managers, and as a result, may not be comparable to similar measures presented by other asset managers.

(2) FEEUM is equity for which the Company and its affiliates provide investment management services and derive management fees and/or incentives.

The Company's calculation of FEEUM may differ from other asset managers, and as a result, may not be comparable to similar measures presented by other asset managers.

(4) All of the remaining non-digital AUM represents assets held for disposition and discontinued operations.

Total FEEUM decreased $0.4 billion from December 31, 2020 to $19.6 billion at June 30, 2021.

• Digital FEEUM increased $1.7 billion, attributable to fundraising for DCP II, partially offset by a decrease in DCP I FEEUM as the fee base of DCP I changed from committed capital to net capital contributions following the closing of DCP II.

• However, the overall decrease in FEEUM was driven by the termination of our management agreement with BRSP in April 2021, for which we received a one-time termination fee of $102.3 million.

The following discussion summarizes key information on our Digital reportable segments.

Digital Investment Management ("Digital IM")

This business encompasses the investment and stewardship of third party capital in digital infrastructure and real estate.

The Company's flagship opportunistic strategy is conducted through DCP and separately capitalized vehicles, while other strategies, including digital credit and public equities, are conducted through other investment vehicles.

We held a first closing of DCP II, our second digital opportunistic fund in February 2021.

As of August 5, 2021, total commitments was $6.6 billion, inclusive of $135 million of our commitments as limited partner and general partner.

Fee Earning Equity Under Management

Digital IM FEEUM was $14.5 billion at June 30, 2021.

Refer to further details in " —Assets Under Management and Fee Earning Equity Under Management.

Operating Performance

Results of operations of our Digital IM segment is summarized below:

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

(In thousands) 2021 2020 Change 2021 2020 Change

Total revenues $ 46,873 $ 20,849 $ 26,024 $ 77,993 $ 40,148 $ 37,845

Net income 15,786 2,424 13,362 23,449 4,654 18,795

Net income attributable to DigitalBridge Group, Inc.

12,100 2,073 10,027 18,979 4,083 14,896

• Fee income from our Digital IM business is trending positively in 2021 following fundraising for DCP II and other vehicles which co-invest with our balance sheet, and reflects the significant growth in our Digital IM FEEUM from $7.8 billion at June 30, 2020 to $14.5 billion at June 30, 2021.

Refer to further discussion of fee income in " —Results of Operations."

• Net income from our Digital IM segment is 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.

Both DataBank and Vantage are also portfolio companies managed under Digital IM for the equity interests owned by third party capital.

Our ownership interest is at 20% for DataBank, including zColo, and 13% for Vantage SDC.

Significant Developments

• DataBank Strategic Investment— Following DataBank's acquisition of zColo's 39 U.S and U.K.

colocation assets in December 2020 for approximately $1.2 billion, an add-on acquisition of zColo's remaining five data centers in France for $33 million closed in February 2021.

• DataBank REIT Conversion— In the second quarter of 2021, our DataBank subsidiary completed the restructuring of its operations to qualify as a REIT and anticipates electing REIT status for U.S.

federal income tax purposes for the 2021 taxable year.

As a REIT, DataBank would generally not be subject to U.S.

federal income taxes on its taxable income to the extent that it annually distributes such taxable income to its stockholders and maintains certain asset and income requirements.

However, DataBank would continue to be subject to U.S.

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, reflecting primarily the write-off of its deferred tax liabilities.

• Vantage SDC— We acquired additional build-out of expansion capacity within the Vantage SDC portfolio in 2021, including lease-up of the expanded capacity and existing inventory, for aggregate payments of $73.6 million

Portfolio Overview

Our data center portfolio currently spans across 21 states in the U.S, three in Canada, one in the U.K.

and five in France.

June 30, 2021 December 31, 2020

Number of data centers

Leasehold 51 46

(In thousands, except %)

Max Critical I.T.

Square Feet or Total Rentable Square Feet 1,810 1,720

Leased Square Feet 1,439 1,386

% Utilization Rate (% Leased) 79.5% 80.6%

Balance Sheet Information

The following table presents key balance sheet data of our Digital Operating segment:

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

Real estate $ 4,491,287 $ 4,451,864

Loan receivable 5,250 5,070

Debt 3,342,453 3,213,240

• Real estate balance increased, driven by the acquisition of zColo France and additional build-out in the Vantage SDC portfolio.

• Loan receivable represents a loan originated by DataBank to an owner/operator of edge modular data centers

• Higher debt balance reflects additional debt obtained through DataBank's securitization transaction, as described below.

At June 30, 2021, our data center business was financed by an aggregate $3.4 billion of outstanding debt principal, of which $2.8 billion is fixed rate debt and $0.6 billion is variable rate debt, bearing a combined weighted average interest rate of 3.05% per annum.

In March 2021, DataBank raised $658 million of securitized notes at a blended fixed rate of 2.3%, with 5 years maturity.

The proceeds were applied principally to refinance $514 million of outstanding debt, which meaningfully reduced the overall cost of debt from 6.1% per annum as of December 31, 2020 to 2.4% per annum as of March 31, 2021 and extended debt maturities at DataBank.

Operating Performance

Results of operations of our Digital Operating segment is summarized below:

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

(In thousands) 2021 2020 Change 2021 2020 Change

Total revenues $ 189,093 $ 42,021 $ 147,072 $ 378,295 $ 87,188 $ 291,107

Net loss (10,850) (21,262) 10,412 (75,110) (39,677) (35,433)

Net loss attributable to DigitalBridge Group, Inc.

(376) (4,277) 3,901 (10,450) (7,803) (2,647)

• 2021 includes the operating results from 12 hyperscale data centers in the Vantage SDC portfolio, acquired in July 2020 and 44 co-location data centers held by zColo, acquired in December 2020 and February 2021.

• Net loss is driven by the effects of depreciation and amortization, income tax and also interest expense.

Operating results excluding these items are presented below as earnings before interest, tax, depreciation and amortization for real estate ("EBITDA re ").

• The second quarter of 2021 recorded a lower net loss, benefiting from a $66.8 million net deferred tax benefit as discussed above.

EBITDA re generated by our Digital Operating segment is as follows.

A reconciliation of the most directly comparable GAAP measure to EBITDA re is presented in " —Non-GAAP Supplemental Financial Measures.

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

(In thousands) 2021 2020 Change 2021 2020 Change

Total revenues $ 189,093 $ 42,021 $ 147,072 $ 378,295 $ 87,188 $ 291,107

Property operating expenses (77,140) (18,055) (59,085) (157,002) (34,961) (122,041)

Transaction-related costs and investment expense (5,255) (696) (4,559) (11,820) (1,013) (10,807)

Compensation and administrative expense (28,488) (10,464) (18,024) (54,435) (23,120) (31,315)

Other loss, net (349) — (349) (352) — (352)

EBITDA re —Digital Operating

$ 77,861 $ 12,806 65,055 $ 154,686 $ 28,094 126,592

The higher EBITDA re in the first quarter of 2021 reflects the addition of Vantage SDC and zColo.

On a same store basis, EBITDA re was largely consistent quarter-to-date and year-to-date.

While there was an increase in revenues from a higher utilization rate, this was mostly offset by higher compensation and administrative costs as we ramped up resources to support the growth in our business, and additional costs were incurred in the restructuring of DataBank's operations for REIT qualification which was completed in the second quarter of 2021.

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.

Balance Sheet Information

The following table presents key balance sheet data of our Digital Other segment:

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

Loans receivable $ 47,540 $ 31,727

Equity investments

DCP funds 227,957 153,872

Digital liquid securities strategy 149,613 223,176

• We have been acquiring loans receivable that are warehoused on our balance sheet for a future digital credit investment vehicle.

• Equity investments represent primarily:

▪ our equity interest in the DCP funds;

▪ equity investments in our digital liquid securities strategy, of which $103 million in a third party mutual fund was liquidated in January 2021.

Remaining balance is composed principally of marketable equity securities held by private open-end funds that are sponsored and consolidated by us (our interests in the funds range between 23% and 55%).

• At June 30, 2021, we have remaining unfunded commitments to the DCP funds totaling $128.4 million.

Operating Performance

Results of operations of our Digital Other segment are summarized as follows:

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

(In thousands) 2021 2020 Change 2021 2020 Change

Interest income 988 $ 2 $ 986 $ 1,678 $ 9 $ 9

Equity method earnings 6,396 7,782 (1,386) 9,172 8,247 925

Other gain, net 6,746 5,481 1,265 9,934 1,909 8,025

Net income 13,280 12,292 988 20,943 9,257 11,686

Net income attributable to DigitalBridge, Inc.

5,424 10,723 (5,299) 9,187 8,481 706

• Operating results include unrealized fair value changes related to i) our share of investments held by the DCP funds (reflected in equity method earnings);

and ii) marketable equity securities held by consolidated funds in the digital liquid securities strategy (reflected in other gain).

Preferred Stock Redemption

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

Non-GAAP Supplemental Financial Measures

The Company reports funds from operations ("FFO") as an overall non-GAAP supplemental financial measure.

The Company also reports EBITDA re for the Digital Operating segment and NOI for the Wellness Infrastructure segment, which are supplemental non-GAAP financial measures widely used in the equity REIT industry.

These non-GAAP measures should not be considered alternatives to GAAP net income as indications of operating performance, or to cash flows from operating activities as measures of liquidity, nor as indications of the availability of funds for our cash needs, including funds available to make distributions.

Our calculation of FFO, EBITDA re and NOI may differ from methodologies utilized by other REITs for similar performance measurements, and, accordingly, may not be comparable to those of other REITs.

We report Company-wide funds from operations ("FFO") and for the Digital Operating segment, earnings before interest, tax, depreciation and amortization for real estate ("EBITDA re "), both of which are supplemental non-GAAP financial measures widely used in the equity REIT industry.

These non-GAAP measures should not be considered alternatives to GAAP net income (loss) as indications of operating performance, or to cash flows from operating activities as measures of liquidity, nor as indications of the availability of funds for our cash needs, including funds available to make distributions.

Our calculation of FFO and EBITDA re may differ from methodologies utilized by other REITs for similar performance measurements, and, accordingly, may not be comparable to those of other REITs.

Funds from Operations

We calculate FFO in accordance with standards established by the National Association of Real Estate Investment Trusts ("NAREIT"), which defines FFO as net income or loss calculated in accordance with GAAP, excluding (i) extraordinary items, as defined by GAAP;

(ii) gains and losses from sales of depreciable real estate;

(iii) impairment write-downs associated with depreciable real estate;

and (iv) gains and losses from a change in control in connection with interests in depreciable real estate or in-substance real estate;

plus (v) real estate-related depreciation and amortization;

and (vi) including similar adjustments for equity method investments.

Included in FFO are gains and losses from sales of assets which are not depreciable real estate such as loans receivable, equity method investments, and equity and debt securities, as applicable.

We believe that FFO is a meaningful supplemental measure of the operating performance of our business because historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets

diminishes predictably over time, as reflected through depreciation.

(ii) impairment of depreciable real estate and impairment of investments in unconsolidated ventures directly attributable to decrease in value of depreciable real estate held by the venture;

from sale of depreciable real estate;

(iv) gain or loss from a change in control in connection with interests in depreciable real estate or in-substance real estate;

and (v) adjustments to reflect the Company's share of FFO from investments in unconsolidated ventures.

Included in FFO are gains and losses from sales of assets which are not depreciable real estate such as loans receivable, equity investments, and debt securities, as applicable.

Because real estate values fluctuate with market conditions, management considers FFO an appropriate supplemental performance measure by excluding historical cost depreciation, gains related to sales of previously depreciated real estate, and impairment of previously depreciated real estate which is an early recognition of loss on sale.

The following table presents a reconciliation of net income attributable to common stockholders to FFO attributable to common interests in OP and common stockholders.

Amounts in the table include our share of activity in unconsolidated ventures.

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

The following table presents a reconciliation of net income (loss) attributable to common stockholders to FFO attributable to common interests in OP and common stockholders, both of which include results from discontinued operations.

Amounts in the table include our share of the relevant activities from equity method investments, where applicable.

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

(In thousands) 2021 2020 2021 2020

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)

Adjustments for FFO attributable to common interests in OP and common stockholders:

Net loss attributable to noncontrolling common interests in Operating Company

Net income (loss) attributable to noncontrolling common interests in Operating Company 4,311 (22,651) (38,565) (287,308)

Real estate depreciation and amortization ($6,825, $87,263, $99,794 and $284,472 related to discontinued operations)

126,494 162,705 461,714 424,950

Real estate depreciation and amortization

(Reversal of) Impairment of real estate—discontinued operations

(8,210) 142,767 340,770 1,925,297

Impairment of real estate

Gain on sale of real estate — discontinued operations

(514) (12,332) (41,585) (15,346)

Gain on sales of real estate (2,969) 4,919 (41,071) (3,014)

Adjustments attributable to noncontrolling interests in investment entities (1)

(95,512) (146,905) (446,029) (558,835)

FFO attributable to common interests in OP and common stockholders $ 72,131 $ (986,545) $ (156,330) $ (1,039,250)

FFO attributable to common interests in OP and common stockholders ($75,275, ($52,435), $2,336 and ($635,777) related to discontinued operations) $ 67,605 $ (82,200) $ (88,725) $ (1,121,450)

(1) The components of adjustments attributable to noncontrolling interests in investment entities for FFO are 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

FFO adjustments attributable to noncontrolling interests in investment entities:

Real estate depreciation and amortization $ 104,361 $ 46,499 $ 221,642 $ 94,214

Impairment of real estate 58,438 279,840 129,589 319,974

Gain on sales of real estate (778) 3,262 (714) (2,258)

Real estate depreciation and amortization ($4,161, $19,198, $29,401 and $70,872 related to discontinued operations)

$ 101,535 $ 84,252 $ 323,177 $ 178,466

(Reversal of) Impairment of real estate — discontinued operations

(5,999) 70,734 123,590 390,708

Gain on sale of real estate — discontinued operations

(24) (8,081) (738) (10,339)

$ 95,512 $ 146,905 $ 446,029 $ 558,835

We calculate EBITDA re for our Digital Operating segment in accordance with standards established by NAREIT, which defines EBITDA re as net income or loss calculated in accordance with GAAP, excluding (i) interest expense;

(ii) income tax benefit (expense);

(ii) income tax benefit or expense;

(iii) depreciation and amortization;

(iv) gains on disposition of depreciated real estate, including gains or losses on change of control;

(v) impairment of depreciated real estate and of investments in unconsolidated affiliates, if any, caused by a decrease in value of depreciated real estate in the affiliate;

and (vi) including similar adjustments for equity method investments, if any, to reflect the Company's share of EBITDAre of unconsolidated affiliates

(iv) impairment of depreciable real estate and impairment of investments in unconsolidated ventures directly attributable to decrease in value of depreciable real estate held by the venture;

(v) gain on disposition of depreciated real estate;

(vi) gain or loss from a change in control in connection with interests in depreciable real estate or in-substance real estate;

and (vii) adjustments to reflect the Company's share of EBITDA re from investments in unconsolidated ventures.

EBITDA re represents a widely known supplemental measure of performance, EBITDA, but for real estate entities, which we believe is particularly helpful for generalist investors in REITs.

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For example, EBITDA re focuses on profitability from operations, and does not take into account financing costs, and capital expenditures needed to maintain operating real estate.

Reconciliation of Non-GAAP Financial Measures

EBITDA re generated by our Digital Operating segment is as follows.

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

(In thousands) 2021 2020 Change 2021 2020 Change

Digital Operating

Total revenues $ 194,966 $ 98,549 $ 96,417 $ 573,261 $ 185,737 $ 387,524

Property operating expenses (80,226) (37,544) (42,682) (237,228) (72,505) (164,723)

Transaction-related costs and investment expense (4,862) (2,362) (2,500) (16,682) (3,375) (13,307)

Compensation and administrative expense (29,766) (11,863) (17,903) (84,201) (34,983) (49,218)

Other gain (loss), net 285 (45) 330 (67) (45) (22)

$ 80,397 $ 46,735 33,662 $ 235,083 $ 74,829 160,254

The following table presents a reconciliation of net loss to EBITDA re for the Digital Operating segment.

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

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

(In thousands)

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Digital Operating

$ (10,850) $ (21,262) $ (75,110) $ (39,677)

Net loss $ (71,822) $ (38,795) $ (146,932) $ (78,472)

Interest expense 29,839 18,589 90,243 36,161

29,272 8,170 60,404 17,572

Depreciation and amortization 120,458 73,032 368,906 131,634

126,227 28,571 248,448 58,602

Income tax (benefit) expense

(66,788) (2,673) (79,056) (8,403)

Income tax expense (benefit) 1,922 (6,091) (77,134) (14,494)

$ 80,397 $ 46,735 $ 235,083 $ 74,829

The higher 2021 year-to-date EBITDA re reflects the acquisition Vantage SDC in July 2020 and zColo in December 2020 and February 2021.

On a same store basis, EBITDA re was largely consistent quarter-to-date and year-to-date.

While there was an increase in revenues attributed to an increase in rentable square footage, this was mostly offset by higher compensation and administrative costs as we ramped up resources to support the growth in our business, and additional costs were incurred in the restructuring of DataBank's operations for REIT qualification.

Liquidity and Capital Resources

We believe that our capital resources are sufficient to meet our short-term and long-term capital requirements.

In addition to our cash balance at June 30, 2021, our expected liquidity position is $780 million, including net proceeds from issuance of our Class A-2 Notes in July 2021 and full availability under our VFN Notes, after the repayment of our corporate credit facility in July 2021 and the upcoming redemption of our Series G preferred equity in August 2021.

Our liquidity position was $774 million at September 30, 2021, composed of corporate cash on hand and the full $200 million availability under our VFN Notes.

We regularly evaluate our liquidity position, debt obligations, and anticipated cash needs to fund our operating and investing activities, based upon our projected financial and operating performance, and investment opportunities as we divest non-digital assets and complete our digital transformation.

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• These Series 2021-1 Notes provide a lower cost of capital, extend our revolving credit maturity to 2026 from 2022, and removes certain restrictions under our previous corporate credit facility around dividend payments and stock repurchases.

• We expect to use net proceeds from the securitized financing facility for acquisition of digital infrastructure investments, funding of commitments to sponsored funds, redemption or repayment of other higher cost corporate securities, and/or general corporate purposes.

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

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

Preferred Stock Redemption

We redeemed all of our outstanding 7.5% Series G preferred stock in August 2021 for $86.8 million using proceeds from our securitized financing facility, which lowered our cost of corporate debt by approximately 350 basis points.

Additionally, we issued notices of redemption in October 2021 for 2.6 million shares or 22% of our 7.125% Series H preferred stock with redemption to be settled with cash on hand in November 2021 for $64.4 million.

Redemption amounts include accrued and unpaid dividends through the redemption date.

Liquidity Needs and Sources of Liquidity

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Investment Commitments

As of June 30, 2021, we have $128 million of unfunded commitments to the DCP funds, of which Wafra has acquired a participation interest and is responsible for $13 million of our unfunded commitments to DCP I.

This excludes $60 million of our DCP I commitments that has been separately assumed by Wafra.

We expect to fund our remaining fund commitments through cash on hand and/or proceeds from future asset monetization.

As of September 30, 2021, we have unfunded commitments of $117 million to the DCP funds.

We expect to fund our commitments using proceeds from issuance of our Class A-2 Notes, sales of our BRSP shares and/or other future asset monetization, cash on hand or a combination thereof.

Lease Obligations

At June 30, 2021, we have $145.2 million and $323.3 million of finance and operating lease obligations, respectively, that were assumed through acquisitions, primarily leasehold data centers, and $39.9 million of operating lease obligations on corporate offices.

At September 30, 2021, we have $143.6 million and $310.4 million of finance and operating lease obligations, respectively, that were assumed through acquisitions, primarily leasehold data centers, and $43.0 million of operating lease obligations on corporate offices.

These amounts represent fixed lease payments on an undiscounted basis, excluding any contingent or other variable lease payments, and factor in lease renewal or termination options only if it is reasonably certain that such options would be exercised.

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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.

Preferred Stock— At June 30, 2021, the Company's outstanding preferred stock, totaling $1.03 billion in liquidation preference, bears a weighted average dividend rate of 7.165% per annum, with aggregate cash distributions of $18.5 million per quarter.

In July 2021, we issued notices of redemption for all of our outstanding 7.5% Series G preferred stock with total liquidation value of $86.25 million, to be settled in August 2021 using proceeds from our securitized financing facility, which will lower our cost of corporate debt by 350 basis points.

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

Preferred Stock— After redeeming Series G preferred stock in August 2021 and incorporating a partial redemption of Series H preferred stock that will settle in November 2021, our outstanding preferred stock is expected to total $883.5 million in liquidation preference, bearing a weighted average dividend rate of 7.135% per annum, with aggregate dividend payments of $15.8 million per quarter.

Sources of Liquidity

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Our investments generate cash, either from operations or as a return of our invested capital.

We primarily generate revenue from net operating income of our real estate properties, and expect such earnings to be increasingly sourced

from our Digital Operating segment as we complete our digital transformation.

We also generate interest income from commercial real estate related loans and securities as well as receive periodic distributions from our equity investments, including our GP co-investments.

Such income is offset by interest expense associated with non-recourse borrowings on our investments.

Additionally, we generate fee revenue from our investment management business, with increasing contribution of fees from our digital investment management business following the significant growth in digital FEEUM in 2020.

Of our fee revenue from digital investment management business, 31.5% is attributable to Wafra.

We primarily generate revenue from net operating income of our digital infrastructure business, which is partially offset by interest expense associated with non-recourse borrowings on our digital portfolio.

We also receive periodic distributions from our equity investments, including our GP co-investments.

Additionally, we generate fee related earnings from our digital investment management business, of which 31.5% is attributable to our noncontrolling investor, Wafra.

Management fee income is generally a predictable and stable revenue stream, while carried interest and contractual incentive fees are by nature less predictable in amount and timing.

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

In 2021, we anticipate monetizing a substantial majority of the assets in our Other segment as we complete our digital transformation.

In August 2021, we sold 9.5 million BRSP shares through a secondary offering by BRSP for net proceeds of approximately $81.8 million.

As we complete our digital transformation, we anticipate monetizing a substantial majority of our OED assets and our Wellness Infrastructure assets.

Description of our debt is included in Note 8 to the consolidated financial statements (and Note 11 for debt related to assets held for disposition).

Summary of Indebtedness

Our indebtedness at June 30, 2021 is summarized as follows:

Our indebtedness at September 30, 2021 is summarized as follows:

($ in thousands) Outstanding Principal Weighted Average Interest Rate

(Per Annum) Weighted Average Years Remaining to Maturity (1)

Corporate credit facility $ 45,000 4.75 % —

Secured Fund Fee Revenue Notes $ 300,000 3.93 % 5.0

Convertible and exchangeable senior notes 500,000 5.45 % 2.9

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Debt related to assets held for disposition (to be assumed by counterparty) $ 3,554,000

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

(1) 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.

Securitized Financing Facility

As discussed above and further in Note 8 to the consolidated financial statements, we replaced our corporate credit facility with a securitized financing facility in July 2021.

As discussed above and further in Note 8 to the consolidated financial statements, we replaced our corporate credit facility with a securitized financing facility in July 2021 through the issuance of $300 million 3.933% Class A-2 Notes, and $200 million of VFN Notes which is available to be drawn in full as of the date of this filing.

Non-Recourse Investment-Level Financing

Investment level financing is non-recourse to us, and secured by the respective underlying commercial real estate or mortgage loans receivable.

Investment level financing is non-recourse to us, and secured by the respective underlying commercial real estate or loans receivable.

Developments in 2021

• Digital Operating— In March 2021, DataBank raised $658 million of securitized notes at a blended fixed rate of 2.3%, with 5 years maturity.

• Hotels— Upon closing of the sale of our hotel assets in March 2021, $2.7 billion of the underlying debt (previously classified as held for disposition) was assumed by the acquirer, which resulted in a significant deleveraging of our balance sheet.

• Digital Operating— In March 2021 and October 2021, DataBank raised $658 million and $332 million of 5-year securitized notes at blended fixed rates of 2.32% and 2.43% per annum, respectively.

In November 2021, Vantage SDC issued $530 million of 5-year securitized notes at a blended fixed rate of 2.17% per annum.

• 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.

• Hotels— $3.5 billion of underlying hotel debt (previously classified as held for disposition) have been assumed by the acquirers upon sale of our hotel assets, resulting in a significant deleveraging of our balance sheet.

We expect to materially deleverage our balance sheet further when we consummate the sales of our remaining non-digital assets, which will include the assumption of all underlying debt, through a sale of our OED investments in the fourth quarter of 2021 and our NRF Holdco subsidiary that conducts our Wellness Infrastructure business in 2022, which have outstanding debt of $687.7 million and $2.87 billion, respectively, at September 30, 2021.

Public Offerings

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The following table summarizes the activities from our statements of cash flows.

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands) 2021 2020

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Investing activities include primarily cash outlays for acquisition of real estate, disbursements on new and/or existing loans, and contributions to unconsolidated ventures, which are partially offset by repayments and sales of loans receivable, distributions of capital received from unconsolidated ventures, and proceeds from sale of real estate and equity investments.

Our investing activities resulted in net cash inflows of $408.6 million in 2021 and $114.6 million in 2020.

• Debt investments —Investing cash inflows in 2021 included $320.9 million from our debt investments, attributed to loan repayments, in particular a $305.0 million repayment on two loans in our Irish loan portfolio, partially offset by a loan acquired and warehoused for a future digital credit vehicle, other loan disbursements and acquisition of additional N-Star CDOs at a discount by our Wellness Infrastructure segment.

Our investing activities resulted in net cash inflows of $85.7 million in 2021 compared to net cash outflows of $981.9 million in 2020.

• Debt investments —Investing cash inflows in 2021 included $390.8 million from our debt investments, attributed to loan repayments, in particular a $305.0 million repayment received on two loans in our Irish loan portfolio, partially offset by loans acquired and warehoused for future digital credit vehicles, including a potential CLO, other loan disbursements and acquisition of additional N-Star CDOs at a discount by our Wellness Infrastructure segment.

In comparison, in 2020, loan disbursements exceeded repayments, resulting in net cash outflows of $44.9 million, which partially offset net cash inflows from equity investments.

• Real estate investments —2021 also saw net cash inflows of $176.8 million from sales of various properties in Europe, in our Wellness Infrastructure segment and our hotel business, which more than offset capital expenditures in our digital real estate portfolio.

In 2020, real estate activities generated much lower net cash inflows of $38.1 million from sales, net of acquisitions, coupled with lower capital expenditures on a smaller digital real estate portfolio.

• Real estate investments —Real estate investing activities generated net cash outflows in both years, with significantly higher outflows in 2020 of $1.0 billion, driven by the acquisition of Vantage SDC in July 2020.

In 2021, net cash outflows were $244.7 million as add-on acquisitions in the Vantage SDC portfolio and capital expenditures were partially offset by sales of various properties in Europe, in our Wellness Infrastructure segment and our hotel business.

• Equity investments —In 2021, net cash inflows from our debt and real estate investments were partially offset by net cash outflows of $56.2 million in connection with our equity investments.

This can be attributed largely to funding our digital fund commitments and draws on acquisition, development and construction ("ADC") loans that are accounted for as equity method investments, as well as the acquisition and sale of marketable equity securities by consolidated funds in our digital liquid securities strategy.

In contrast, investing cash inflows in 2020 was driven by $203.7 million generated from equity investments, attributed primarily to $179.1 million of net proceeds received from sale of our investment in RXR Realty and $87.4 million from recapitalization of our joint venture investment in Albertsons, both of which were partially offset by additional draws on ADC loans.

This can be attributed largely to funding of our digital fund commitments and draws on acquisition, development and construction ("ADC") loans that are accounted for as equity method investments, partially offset by net proceeds of approximately $81.8 million from sales of 9.5 million BRSP shares, as well as trading activities in marketable equity securities by our consolidated funds in the digital liquid strategy.

In contrast, 2020 had $89.8 million of net cash inflows from equity investments, attributed primarily to $179.1 million of net proceeds received from sale of our investment in RXR Realty and $87.4 million from recapitalization of our joint venture investment in Albertsons, both of which were partially offset by funding of our commitments to DCP I and additional draws on ADC loans.

Financing Activities

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We also draw upon our corporate credit facility to finance our investing and operating activities, as well as have the ability to raise capital in the public markets through issuances of preferred stock, common stock and senior notes.

Accordingly, we incur cash outlays for payments on our investment-level and corporate debt, dividends to our preferred stockholders and common stockholders (common dividends temporarily suspended), as well as distributions to noncontrolling interests in our investments.

Financing activities generated net cash outflows of $308.7 million in 2021 and $329.5 million in 2020.

• In 2021, financing net cash outflows were driven by $360.9 million of debt repayments exceeding borrowings, primarily repayment of debt financing real estate and loans that were sold or resolved during the year.

The net cash outflow from debt financing was partially offset by $106.2 million of net contributions from noncontrolling interests.

This was composed largely of a syndication of our interest to a new third party investor in our zColo investment vehicle, assumption of a portion of our commitments to DCP I by Wafra, and additional consideration paid by Wafra for its investment in our digital investment management business.

We also had lower dividend payments of $37.0 million to preferred stockholders, as common dividends were suspended beginning with the second quarter of 2020.

• The financing net cash outflow in 2020 was driven by a $402.9 million settlement in January 2020 of the redemption of our Series B and E preferred stock using proceeds from the sale of our light industrial portfolio in December 2019.

This was partially offset by $224.8 million of net cash inflow from debt financing as borrowings exceeded repayments, attributed largely to a net draw of $400 million on our corporate credit facility.

Additionally, dividend payments were higher at $148.8 million as it included common stock for the first quarter of 2020 in addition to preferred stock.

Financing activities generated net cash inflows of $198.2 million in 2021 and $363.2 million in 2020.

• In 2021, financing net cash inflows were driven by $285.9 million of borrowings exceeding debt repayments.

Investment-level financing activities include primarily borrowings by Vantage SDC to finance an add-on acquisition and expansion capacity, issuance of securitized notes by DataBank that was largely used to refinance its existing debt, and repayment of debt financing real estate in Europe that were sold during the year.

We replaced our corporate credit facility with a securitized financing facility, from which we received $285.1 million of net proceeds in July through issuance of Class A-2 Notes, some of which were applied to redeem our Series G preferred stock in August for $86.8 million.

Additionally, there was $73.3 million of net contributions from noncontrolling interests.

Such contributions were composed largely of a syndication of our interest to a new third party investor in our zColo investment vehicle, assumption of a portion of our commitments to DCP I by Wafra, and additional consideration paid by Wafra for its investment in our digital investment management business.

Cash outflows include dividend payments of $56.1 million, which is lower in 2021 following the redemption of Series G preferred stock and suspension of common dividends beginning with the second quarter of 2020.

• The financing net cash inflows in 2020 were driven by $1.3 billion of net contributions from noncontrolling interests, of which $1.0 billion represented third party investors in Vantage SDC, primarily fee bearing capital that we raised, and a $253.6 million investment by Wafra in our digital investment management business.

However, these financing cash inflows were largely offset by:

(i) $402.9 million settlement in January 2020 of the December 2019 redemption of our Series B and E preferred stock using proceeds from our industrial sale in December 2019;

(ii) repayments on our investment level debt exceeding borrowings by $298.3 million;

(iii) higher dividend payments of $167.3 million which included common stock dividends in the first quarter of 2020 in addition to preferred stock;

and (iv) partial repurchase of our 3.875% convertible senior notes for $81.3 million through a tender offer in September 2020.

An additional repurchase of our 3.875% convertible senior notes for $289.7 million was made through a concurrent application of all of the net proceeds from our issuance of $300.0 million of new 5.75% exchangeable senior notes in July 2020.

Guarantees and Off-Balance Sheet Arrangements

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financial data including historical and budgeted financial statements, tenant or customer quality, lease terms and structure, renewal probability, capital expenditure plans, sales pipeline , technical/energy requirements and supply, local and macroeconomic market conditions, ESG, leverage and comparable transactions, as applicable.

For debt investments,

we also analyze metrics such as loan-to-collateral value ratios, debt service coverage ratios, debt yields, sponsor credit ratings and performance history.

For debt investments, we also analyze metrics such as loan-to-collateral value ratios, debt service coverage ratios, debt yields, sponsor credit ratings and performance history.

In addition to evaluating the merits of any particular proposed investment, we evaluate the diversification of our or a particular managed investment vehicle’s portfolio of assets, as the case may be.

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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 2. Management’s Discussion and Analysis