What changed in this filing

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Item 1. Financial Statements

2022-05-09 compared with 2021-11-09 · 520 added, 900 removed, 945 unchanged (60% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

September 30, 2021 (Unaudited)

March 31, 2022

December 31, 2021

23 unchanged sentences

Liabilities related to assets held for disposition 758 3,088,699

Due to affiliates

Dividends and distributions payable

7 unchanged sentences

Preferred stock, $ 0.01 par value per share;

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

$ 883,500 liquidation preference;

250,000 shares authorized;

37,900 and 41,350 shares issued and outstanding

35,340 shares issued and outstanding

854,232 854,232

3 unchanged sentences

Class B, 1,000 shares authorized;

666 and 734 shares issued and outstanding

666 shares issued and outstanding

Additional paid-in capital

5 unchanged sentences

Total stockholders’ equity 1,390,832 2,146,934

2,055,857 2,501,471

Noncontrolling interests in investment entities

9 unchanged sentences

(In thousands, except per share data)

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

2021 2020 2021 2020

Three Months Ended March 31,

Property operating income $ 202,511 $ 189,002

Interest income 5,166 854

3,086 1,258 5,259 5,164

Fee income (from affiliates) 42,837 29,443

Other income ($ 3,379 and $ 519 from affiliates)

4,008 3,323 7,016 11,023

Total revenues 257,459 220,581

252,174 123,017 709,942 261,040

Property operating expense 84,003 79,862

80,226 37,544 237,228 72,505

Interest expense 44,030 39,780

39,895 29,999 117,613 69,935

Investment expense 9,565 6,893

1 unchanged sentence

Depreciation and amortization 128,567 139,425

129,186 80,564 406,840 155,387

Impairment loss

— 3,832 — 16,129

Compensation expense—cash and equity-based 65,542 78,786

55,933 36,400 182,918 119,084

Compensation expense—incentive fee and carried interest 31,736 912 39,969 912

Compensation expense (reversal)—incentive fee and carried interest ( 20,352 ) ( 33 )

Administrative expenses 27,885 17,796

28,933 16,551 75,234 57,129

Settlement loss — — — 5,090

Total expenses 339,405 364,127

374,108 213,602 1,082,447 509,391

Other income (loss)

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

Other loss, net ( 149,881 ) ( 9,350 )

Equity method earnings (losses) 19,207 ( 16,417 )

Equity method earnings—carried interest 58,382 6,082 69,329 6,082

Equity method losses—carried interest ( 31,079 ) ( 222 )

Loss from continuing operations before income taxes

6 unchanged sentences

Redeemable noncontrolling interests ( 11,220 ) 2,449

7,269 ( 2,158 ) 15,743 ( 2,316 )

Investment entities ( 63,045 ) ( 355,862 )

( 124,301 ) ( 149,154 ) ( 443,547 ) ( 640,955 )

Operating Company ( 22,862 ) ( 27,896 )

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

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

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

Preferred stock redemption (Note 9)

Net loss attributable to DigitalBridge Group, Inc.

( 246,557 ) ( 246,290 )

Preferred stock dividends 15,759 18,516

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

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

Income (loss) per share—basic

Net loss attributable to common stockholders $ ( 262,316 ) $ ( 264,806 )

Loss per share—basic

Loss from continuing operations per common share—basic $ ( 0.30 ) $ ( 0.22 )

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

Income (loss) per share—diluted

Net loss attributable to common stockholders per common share—basic $ ( 0.46 ) $ ( 0.56 )

Loss per share—diluted

Loss from continuing operations per common share—diluted $ ( 0.30 ) $ ( 0.22 )

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

Net loss attributable to common stockholders per common share—diluted $ ( 0.46 ) $ ( 0.56 )

Weighted average number of shares

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

Dividends declared per common share

$ — $ — $ — $ 0.11

Basic 569,940 474,899

Diluted 569,940 474,899

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

2 unchanged sentences

(In thousands)

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

2021 2020 2021 2020

Three Months Ended March 31,

Net loss $ ( 343,684 ) $ ( 627,599 )

2 unchanged sentences

Available-for-sale debt securities ( 6,373 ) ( 3,309 )

1,615 ( 2,446 ) ( 331 ) ( 3,535 )

Cash flow hedges — 1,285

Foreign currency translation ( 37,941 ) ( 59,618 )

( 35,739 ) 89,030 ( 112,626 ) 58,821

Net investment hedges — 4,118

— ( 414 ) — 21,001

Other comprehensive income (loss) ( 44,312 ) ( 60,232 )

4 unchanged sentences

Operating Company ( 25,458 ) ( 30,329 )

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

Comprehensive loss attributable to stockholders $ ( 276,262 ) $ ( 267,433 )

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

4 unchanged sentences

Balance at December 31, 2020 $ 999,490 $ 4,841 $ 7,570,473 $ ( 6,195,456 ) $ 122,123 $ 2,501,471 $ 4,327,372 $ 155,747 $ 6,984,590

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

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

Net loss — — — ( 246,290 ) — ( 246,290 ) ( 355,862 ) ( 27,896 ) ( 630,048 )

Other comprehensive loss — — — — ( 21,143 ) ( 21,143 ) ( 36,656 ) ( 2,433 ) ( 60,232 )

Common stock repurchases

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

Equity awards issued, net of forfeitures — 76 12,114 — — 12,190 — 584 12,774

Shares canceled for tax withholdings on vested equity awards — ( 18 ) ( 5,051 ) — — ( 5,069 ) — — ( 5,069 )

Contributions from noncontrolling interests

— — — — — — 87,736 — 87,736

Distributions to noncontrolling interests

— — — — — — ( 55,829 ) ( 5,857 ) ( 61,686 )

Preferred stock dividends

— — — ( 18,516 ) — ( 18,516 ) — — ( 18,516 )

Common stock dividends declared ($ 0.11 per share)

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

Reallocation of equity (Notes 2 and 10)

— — ( 3,827 ) — ( 32 ) ( 3,859 ) — 3,859 —

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

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

Other comprehensive income

Deconsolidation of investment entities (Note 21)

— — — — — — ( 22,413 ) — ( 22,413 )

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

— 2 1,421 — — 1,423 — ( 1,423 ) —

Equity awards issued, net of forfeitures — 48 16,536 — — 16,584 308 1,308 18,200

8 unchanged sentences

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

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

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

DigitalBridge Group, Inc.

Consolidated Statements of Equity (Continued)

(In thousands, except per share data)

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

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

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

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

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

Equity awards issued, net of forfeitures — 5 6,566 — — 6,571 148 668 7,387

Shares canceled for tax withholdings on vested stock awards — ( 2 ) ( 510 ) — — ( 512 ) — — ( 512 )

Warrant issuance (Note 10 )

— — 20,240 — — 20,240 — — 20,240

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

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

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

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

Reallocation of equity (Notes 2 and 10)

— — ( 655 ) — 4 ( 651 ) ( 336 ) 987 —

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

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

DigitalBridge Group, Inc.

Consolidated Statements of Equity (Continued)

(In thousands, except per share data)

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

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

Balance at December 31, 2021 $ 854,232 $ 5,692 $ 7,820,807 $ ( 6,576,180 ) $ 42,383 $ 2,146,934 $ 2,653,173 $ 112,283 $ 4,912,390

1 unchanged sentence

Other comprehensive loss — — — — ( 29,705 ) ( 29,705 ) ( 12,011 ) ( 2,596 ) ( 44,312 )

Deconsolidation of investment entities (Note 21)

— — — — — — ( 22,413 ) — ( 22,413 )

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

Equity awards issued, net of forfeitures — 48 16,536 — — 16,584 308 1,308 18,200

Shares canceled for tax withholdings on vested equity awards — ( 11 ) ( 7,707 ) — — ( 7,718 ) — — ( 7,718 )

Contributions from noncontrolling interests — — — — — — 113,213 — 113,213

Distributions to noncontrolling interests — — — — — — ( 26,739 ) — ( 26,739 )

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

Reallocation of equity (Notes 2 and 10)

Exchange of notes for common stock (Note 8)

— 256 177,562 — — 177,818 — — 177,818

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

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

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

Shares issued pursuant to settlement liability (Note 13)

Adjustment to fair value of redeemable noncontrolling interests (Note 10)

— — ( 690,000 ) — — ( 690,000 ) — — ( 690,000 )

2 unchanged sentences

Redemption of OP Units for class A common stock — — 2 — — 2 — ( 2 ) —

— — 1 — — 1 — ( 1 ) —

Equity awards issued, net of forfeitures — 50 14,286 — — 14,336 2,734 1,555 18,625

Shares canceled for tax withholdings on vested equity awards — ( 17 ) ( 11,393 ) — — ( 11,410 ) — — ( 11,410 )

Contributions from noncontrolling interests — — — — — — 24,540 — 24,540

Distributions to noncontrolling interests — — — — — — ( 33,678 ) — ( 33,678 )

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

Reallocation of equity (Notes 2 and 10)

— — ( 4,530 ) — ( 81 ) ( 4,611 ) — 4,611 —

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

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

DigitalBridge Group, Inc.

Consolidated Statements of Equity (Continued)

(In thousands, except per share data)

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

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

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

Redemption of preferred stock (Note 9)

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

Deconsolidation of investment entities (Note 21)

— — — — — — ( 149,515 ) — ( 149,515 )

Redemption of OP Units for cash and class A common stock

— 5 1,085 — — 1,090 — ( 1,090 ) —

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

Shares canceled for tax withholdings on vested stock awards

Acquisition of noncontrolling interest (Note 10)

— — — — — — ( 32,076 ) — ( 32,076 )

4 unchanged sentences

— — 45,099 — 75 45,174 — ( 45,174 ) —

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

Balance at March 31, 2022 $ 854,232 $ 5,981 $ 7,356,363 $ ( 6,838,497 ) $ 12,753 $ 1,390,832 $ 2,688,907 $ 43,204 $ 4,122,943

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

2 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash Flows from Operating Activities

1 unchanged sentence

Adjustments to reconcile net loss to net cash provided by operating activities:

Amortization of discount and net origination fees on loans receivable and debt securities — ( 5,090 )

Paid-in-kind interest added to loan principal, net of interest received ( 1,144 ) ( 4,267 )

8,492 ( 36,856 )

Straight-line rent income ( 4,530 ) 18,800

1 unchanged sentence

Amortization of deferred financing costs and debt discount and premium, net 96,279 43,729

Equity method losses 78,444 334,648

Equity method (gains) losses ( 116 ) 111,519

Distributions of income from equity method investments — 520

1 unchanged sentence

Impairment of real estate and related intangibles and right-of-use asset 23,802 123,760

Goodwill impairment — 594,000

Depreciation and amortization 130,906 190,305

498,513 439,463

Equity-based compensation 18,719 19,319

40,001 26,415

Unrealized settlement loss — 3,890

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

Payment of cash collateral on derivative — ( 771 )

Deferred income tax benefit ( 9,040 ) ( 34,480 )

Loss on extinguishment of exchangeable notes 133,173 —

Other loss, net 17,332 213,661

2 unchanged sentences

Other adjustments, net ( 986 ) ( 576 )

( 4,895 ) ( 4,583 )

Net cash provided by operating activities 181,412 89,886

Net cash provided by (used in) operating activities 1,257 ( 23,937 )

Cash Flows from Investing Activities

Contributions to and acquisition of equity investments ( 215,040 ) ( 117,776 )

( 411,593 ) ( 289,091 )

Return of capital from equity method investments 11,829 2,253

41,779 123,952

Acquisition of loans receivable and debt securities ( 101,607 ) ( 9,697 )

Net disbursements on originated loans ( 205,507 ) ( 3,631 )

( 33,272 ) ( 180,756 )

Repayments of loans receivable 15,845 8,798

492,022 131,368

Proceeds from sales of loans receivable and debt securities 126,644 —

Acquisition of and additions to real estate, related intangibles and leasing commissions ( 822,368 ) ( 74,024 )

Proceeds from sales of real estate 96,660 143,328

Cash and restricted cash assumed by buyer in sales of real estate investment holding entities ( 189,453 ) ( 78,520 )

Proceeds from paydown and maturity of debt securities 566 —

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

Proceeds from sale of equity investments 194,524 90,509

Investment deposits ( 13,367 ) —

( 343 ) ( 8,150 )

Proceeds from sale of corporate fixed assets — 14,946

Net receipts on settlement of derivatives — 15,913

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

Other investing activities, net ( 875 ) —

( 833 ) 7,274

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

Net cash used in investing activities ( 1,102,149 ) ( 7,901 )

DigitalBridge Group, Inc.

1 unchanged sentence

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash Flows from Financing Activities

Dividends paid to preferred stockholders $ ( 15,760 ) $ ( 18,516 )

Dividends paid to common stockholders — ( 106,510 )

Repurchase of common stock — ( 24,749 )

Payment of offering costs — ( 2,962 )

Proceeds from issuance of exchangeable senior notes — 291,000

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

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

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

Repayment or repurchase of senior notes ( 14,237 ) ( 31,502 )

Borrowings from secured debt 326,500 684,537

Repayments of secured debt ( 1,103,172 ) ( 323,150 )

Repayment of secured debt ( 3,894 ) ( 600,082 )

Payment of deferred financing costs ( 6,999 ) ( 18,543 )

1 unchanged sentence

Distributions to and redemptions by noncontrolling interests ( 35,962 ) ( 32,857 )

Contribution from Wafra (Note 10)

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

Shares canceled for tax withholdings on vested equity awards ( 11,410 ) ( 7,718 )

Acquisition of noncontrolling interest ( 32,076 ) —

Net cash provided by financing activities 559,318 99,171

4 unchanged sentences

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

Nine Months Ended September 30,

Three Months Ended March 31,

Beginning of the period

11 unchanged sentences

Notes to Consolidated Financial Statements

September 30, 2021

March 31, 2022

Business and Organization

DigitalBridge Group, Inc.

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

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

Effective June 22, 2021, the Company changed its name to DigitalBridge Group, Inc.

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

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

or DBRG (together with its consolidated subsidiaries, the "Company") is a leading global-scale digital infrastructure firm.

The Company invests, directly and through its portfolio companies, across the digital ecosystem, including data centers, cell towers, fiber networks, small cells, and edge infrastructure, and manages digital infrastructure assets on behalf of its limited partners and shareholders.

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

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

At March 31, 2022, the Company owned 92 % of the OP , as its sole managing member.

The remaining 8 % is owned primarily by certain current and former employees of the Company as noncontrolling interests.

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

federal income tax purposes.

Transition to C-Corporation

Prior to January 1, 2022, the Company elected to be taxed as a real estate investment trust ("REIT") for U.S.

federal income tax purposes, which generally provided that the Company was not subject to U.S.

federal and state income taxes on its taxable income to the extent that it annually distributed such income to stockholders.

The income earned through the Company’s underlying taxable REIT subsidiaries ("TRS"), primarily the investment management earnings, however, was subject to U.S.

federal and state income tax.

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

Due to the pace of growth of the Company's Digital IM business and other strategic transactions that the Company may pursue, the Company’s Board of Directors and management agreed to discontinue actions necessary to maintain qualification as a REIT for 2022.

Commencing with the taxable year ending December 31, 2022, all of the Company’s taxable income, except for income generated by subsidiaries that have elected or anticipate electing REIT status, is subject to U.S.

federal and state income tax at the applicable corporate tax rate.

Any dividends paid to stockholders will no longer be tax deductible.

The Company is also no longer subject to the REIT requirement for distributions to stockholders when the Company has taxable income.

The Company anticipates that operating as a C-Corporation will provide the Company with flexibility to execute various strategic initiatives without the constraints of complying with REIT requirements.

This includes the intended deployment of capital to redeem third party interest in the Company’s Digital IM business, retaining and reinvesting earnings in other new initiatives in the Digital IM business, and warehousing digital infrastructure investments in the future that may be non-REIT qualified assets.

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

As of March 31, 2022, there was no material net tax effect on the Company’s consolidated statement of operations as a result of the Company's transition to a C-Corporation, as discussed in Note 7.

Digital Transformation

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

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

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

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

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

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

In February 2022, the Company completed its digital transformation that commenced in the second quarter of 2020.

The Company's completed disposition of its hotel business (March 2021), Other Equity and Debt ("OED") investments and non-digital investment management ("Other IM") business (December 2021), and its Wellness Infrastructure business (February 2022) each represented a strategic shift in the Company's business that had a significant effect on the Company’s operations and financial results, and accordingly, had met the criteria as discontinued operations.

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

Accelerating the Monetization of Wellness Infrastructure and Other Segments

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

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

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

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

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

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

Wellness Infrastructure

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

Other assets and obligations held by NRF Holdco include primarily:

(i) the Company's equity interest in and management of its sponsored non-traded REIT, NorthStar Healthcare Income, Inc.

("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 and its subsidiaries.

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

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

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

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

OED and Other IM

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

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

Internalization of BrightSpire Capital, Inc.

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

or CLNC) agreed to terminate the BRSP management agreement for a one-time termination payment of $102.3 million in cash.

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

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.

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 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 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 consolidated investment-level debt.

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

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

Summary of Significant Accounting Policies

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A VIE is consolidated by its primary beneficiary, which is defined as the party who has a controlling financial interest in the VIE through (a) power to direct the activities of the VIE that most significantly affect the VIE’s economic performance, and (b) obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE.

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

The Company assesses whether it is a member of a related party group that collectively meets the power and benefits criteria and, if so, whether the Company is most closely associated with the VIE.

This assessment may involve subjectivity in the determination of which activities most significantly affect the VIE’s performance, and estimates about current and future fair value of the assets held by the VIE and financial performance of the VIE.

In assessing its interests in the VIE, the Company also considers interests held by its related parties, including de facto agents.

Additionally, the Company assesses whether it is a member of a related party group that collectively meets the power and benefits criteria and, if so, whether the Company is most closely associated with the VIE.

In performing the related party analysis, the Company considers both qualitative and quantitative factors, including, but not limited to:

the amount and characteristics of its investment relative to the related party;

the characteristics and size of its investment relative to the related party;

the Company’s and the related party's ability to control or significantly influence key decisions of the VIE including consideration of involvement by de facto agents;

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and the similarity and significance of the VIE’s business activities to those of the Company and the related party.

The determination of whether an entity is a VIE, and whether the Company is the primary beneficiary, may involve significant judgment, including the determination of which activities most significantly affect the entities’ performance, and estimates about the current and future fair values and performance of assets held by the VIE.

The determination of whether an entity is a VIE, and whether the Company is the primary beneficiary, may involve significant judgment, and depends upon facts and circumstances specific to an entity at the time of the assessment.

Voting Interest Entities —Unlike VIEs, voting interest entities have sufficient equity to finance their activities and equity investors exhibit the characteristics of a controlling financial interest through their voting rights.

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

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

Noncontrolling Interests in Investment Entities —This represents predominantly interests in consolidated investment entities held by co-investors through investment vehicles managed by the Company or held by third party joint venture partners.

Allocation of net income or loss is generally based upon relative ownership interests held by equity owners in each investment entity, or based upon contractual arrangements that may provide for disproportionate allocation of economic returns among equity interests, including using a hypothetical liquidation at book value basis, where applicable and substantive.

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Transaction costs related to acquisition of a business are expensed as incurred and excluded from the fair value of consideration transferred.

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

The excess of the fair value of

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

The identifiable assets acquired, liabilities assumed and noncontrolling interests

in an acquired entity are recognized and measured at their estimated fair values.

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

Such valuations require management to make significant estimates and assumptions.

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

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

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

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

The disposition of (i) NRF Holdco, LLC ("NRF Holdco"), a former subsidiary of the Company that held the Wellness Infrastructure business, in February 2022, (ii) a substantial majority of the OED investments and Other IM business in December 2021, and (iii) the hotel business, composed of the Hospitality segment and the THL Hotel Portfolio in March 2021, all represent strategic shifts that have or are expected to have major effects on the Company’s operations and financial results, and have met the criteria as discontinued operations as of June 2021, March 2021, and September 2020, respectively.

Accordingly, for all prior periods presented, the related assets and liabilities are presented as assets and liabilities held for disposition on the consolidated balance sheets (Note 11) and the related operating results are presented as income (loss) from discontinued operations on the consolidated statements of operations (Note 12).

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Reclassifications were made related to discontinued operations as discussed in "—Discontinued Operations" above and to prior period segment reporting presentation as discussed in Note 19.

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

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

Adjustment to Accumulated Deficit

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

2016-13, Financial Instruments—

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

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

partially offset by (ii) a $ 3.3 million decrease to accumulated deficit, reflecting the cumulative effect adjustment of the Company's election of the fair value option for all of its then outstanding loans receivable.

Accounting Standards Pending Adoption

Accounting Standards Adopted in 2022

Amendment to Lessor Accounting

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

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

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

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

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

Accounting Standards Adopted in 2021

Income Tax Accounting

In December 2019, the FASB issued ASU No.

2019-12, Simplifying Accounting for Income Taxes .

The ASU simplifies accounting for income taxes by eliminating certain exceptions to the general approach in ASC 740, Income Taxes, and clarifies certain aspects of the guidance for more consistent application.

The simplifications relate to intraperiod tax allocations when there is a loss in continuing operations and a gain outside of continuing operations, accounting for tax law or tax rate changes and year-to-date losses in interim periods, recognition of deferred tax liability for outside basis difference when investment ownership changes, and accounting for franchise taxes that are partially based on income.

The ASU also provides new guidance that clarifies the accounting for transactions resulting in a step-up in tax basis of goodwill, among other changes.

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

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

Accounting for Certain Equity Investments

In January 2020, the FASB issued ASU No.

2020-01, Clarifying the Interactions between Topic 321 Investments—Equity Securities, Topic 323—Investments Equity Method and Joint Ventures, and Topic 815—Derivatives and Hedging .

The ASU clarifies that if as a result of an observable transaction, an equity investment under the measurement alternative is transitioned into equity method and vice versa, an equity method investment is transitioned into measurement alternative, the investment is to be remeasured immediately before and after the transaction, respectively.

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

2020-01 is to be applied prospectively.

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

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

In August 2020, the FASB issued ASU No.

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

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

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

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

and (3) simplifies diluted earnings per share ("EPS") computation.

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

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

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

and (2) embedded derivatives from qualifying for the derivative scope exception, have been removed;

for example, the requirement that equity contracts permit settlement in unregistered shares unless such contracts explicitly require settlement in cash if registered shares are unavailable.

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

• The ASU also amends certain guidance on computation of diluted EPS for convertible instruments and contracts on an entity’s own equity that results in a more dilutive EPS, including (1) requiring the if converted method to be applied for all convertible instruments (the treasury stock method is no longer available), and (2) removing the

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

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

and (2) information about events, conditions, and circumstances that could affect amount or timing of future cash flows related to these instruments or contracts;

and in the period of adoption (3) nature of and reason for the change in accounting principle;

and (4) effects of the change on EPS.

Upon adoption, a one-time election may be made to apply the fair value option for any liability-classified convertible securities.

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

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

The Company adopted the ASU on its effective date of January 1, 2022.

At the time of adoption, the Company, as lessor, did not have any leases that would have been subject to this amendment.

Acquired Contracts with Customers

In October 2021, the FASB issued ASU No.

2021-8, Accounting for Contract Assets and Contract Liabilities From Contracts With Customers , which applies the principles of ASC 606, Revenue from Contracts with Customers , rather than a fair value basis under ASC 805, Business Combinations , in the recognition of contract assets and contract liabilities acquired in a business combination.

The ASU addresses the following inconsistencies:

(1) measurement of contract

liability or deferred revenue at fair value that is typically lower than carrying value, reducing post-acquisition revenues;

and (2) timing of contractual payments affecting the fair value of deferred revenue and the amount of post-acquisition revenue in otherwise similar contracts.

Under the new guidance, an acquirer records a contract asset or contract liability as if it had originated the acquired revenue contract, which requires the acquirer to evaluate performance obligations, transaction price and relative stand-alone selling price at the original contract inception date or subsequent modification dates.

This will generally result in the recognition and measurement of a contract asset and contract liability that will likely be more comparable to the books of the acquiree at acquisition date.

In circumstances where an acquirer is unable to assess or rely on the acquiree's accounting under ASC 606, the ASU provides a practical expedient that allows an acquirer to determine the stand-alone selling price of each performance obligation in the contract as of acquisition date, instead of contract inception date, for purposes of allocating the transaction price.

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

The ASU is effective January 1, 2023 and is to be applied prospectively.

Early adoption is permitted with retrospective application to all business combinations that occurred during the fiscal year of early adoption.

The Company early adopted the ASU on January 1, 2022.

Asset Acquisitions

Vantage SDC Hyperscale Data Centers

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

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

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

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

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

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

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

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

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

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

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

In connection with the Company's acquisition of Vantage Data Centers Holdings, LLC's ("Vantage") portfolio of stabilized hyperscale data centers (“Vantage SDC”) in July 2020, the Company had an option to purchase an additional data center in Santa Clara, California.

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

The Company and its co-investors also committed to acquire the future build-out of expansion capacity, along with lease-up of the expanded capacity and existing inventory, the costs of which are borne by the previous owners of Vantage SDC.

As of March 31, 2022, the remaining consideration for the incremental lease-up acquisitions is estimated to be approximately $ 265 million.

Most, if not all, of the cost of the expansion capacity has been or will be funded by Vantage SDC from borrowings under its credit facilities and/or cash from operations.

Pursuant to this arrangement, Vantage SDC had 5 new tenant leases that commenced in the first quarter of 2022 and 11 new tenant leases that commenced in 2021 related to a portion of the expansion capacity, for aggregate consideration of $ 36.2 million and $ 100.8 million, respectively.

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

zColo Colocation Data Centers

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

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

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

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

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

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

Acquisitions by DataBank

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

• In March 2022, the Company's subsidiary, DataBank, acquired four colocation data centers in Houston, Texas for $ 670 million.

The acquisition was funded by a combination of $ 262.5 million of debt and $ 407.5 million of equity, of which the Company's share was $ 87.0 million.

• In February 2022, DataBank acquired a data center in Denver that was previously leased by its zColo subsidiary for $ 17.6 million.

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

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

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

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

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

Consideration for asset acquisitions incorporates capitalized transaction costs, where applicable.

Asset Acquisitions

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

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

Assets acquired and liabilities assumed

Cash $ — $ — $ — $ — $ 266

Real estate $ 616,563 $ 30,736 $ 479,587 $ 38,500 $ 26,083

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Lease right-of-use ("ROU") and other assets 3,994 — — — 9,536

Debt — — — ( 2,060,307 ) —

Intangible, lease and other liabilities ( 2,839 ) — ( 56,889 ) — ( 11,303 )

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

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

Useful lives of real estate acquired range from 30 to 50 years for buildings and improvements, 7 to 21 years for site improvements, 12 to 20 years for data center infrastructure, and 1 to 5 years for furniture, fixtures and equipment.

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

Useful lives of real estate acquired range from 35 to 50 years for buildings and improvements, 15 to 20 years for site improvements, and 11 to 20 years for data center infrastructure.

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

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• Tenant relationships represent the estimated net cash flows attributable to the likelihood of lease renewal by an existing tenant relative to the cost of obtaining a new lease, taking into consideration the estimated time it would require to execute a new lease or backfill a vacant space, discounted at rates between 5.5 % and 11.5 %, with estimated useful lives between 9 and 15 years.

• Other intangible assets acquired were as follows:

• Customer service contracts were valued based upon estimated net cash flows generated from the zColo customer service contracts that would have been forgone if such contracts were not in place, taking into consideration the time it would require to execute a new contract, with remaining term of the contracts ranging between 3 and 15 years.

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

• Trade name of zColo was valued based upon estimated savings from avoided royalty at a rate of 1 %, discounted at 10.0 %, with useful life of 1 year.

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

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

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

Lease liabilities were measured based upon the present value of future lease payments over the lease term, discounted at the incremental borrowing rate of the respective acquirees.

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

Other Real Estate Asset Acquisitions

Other real estate acquisitions include the following.

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

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

The acquisitions closed throughout 2020 and 2021 for total purchase price of $ 37.9 million and $ 38.8 million, respectively, including $ 2.2 million and $ 3.4 million of assumed debt, respectively.

This includes the acquisition of hotel operations pursuant to operating leases on hotels owned by third parties.

• Office properties in the U.K.

and Ireland in 2020, valued at approximately $ 33.0 million, including the assumption of approximately $ 125.0 million of debt.

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

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

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

Real estate held for disposition is presented in Note 11.

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

Other liabilities in 2021 also included a deferred purchase consideration associated with the Vantage SDC add-on acquisition.

Purchase Commitments

Infrastructure Investment Management Platform

In April 2022, the Company entered into a definitive agreement to acquire the global infrastructure equity investment management business of AMP Capital Investors International Holdings Limited ("AMP Capital").

Consideration for the acquisition consists of:

(i) an upfront amount of A$ 458 million (approximately $ 327 million), subject to certain customary adjustments;

and (ii) a contingent amount of up to A$ 180 million (approximately $ 129 million), primarily based upon future fundraising for AMP Capital's global infrastructure funds.

The transaction is expected to close in the second half of 2022, subject to customary closing conditions, including regulatory approvals.

In March 2022, the Company entered into a definitive agreement to acquire the mobile telecommunications tower business (“TowerCo”) of Telenet Group Holding NV (Euronext Brussels:

TNET) for approximately € 745 million (or approximately $ 820 million ) , to be funded through a combination of debt and equity, including a € 458 million (approximately $ 504 million) equity commitment from the Company.

The TowerCo investment is intended to be transferred to a new investment vehicle to be sponsored by the Company.

The transaction is expected to close in the second quarter of 2022, subject to customary closing conditions.

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

The following table summarizes the Company's real estate held for investment in the digital operating segment.

(In thousands) March 31, 2022 December 31, 2021

Land $ 253,633 $ 206,588

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Real Estate Depreciation

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

Depreciation of real estate held for investment was $ 79.1 million and $ 68.1 million for the three months ended March 31, 2022 and 2021, respectively.

Property Operating Income

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

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

Components of property operating income in the digital operating segment are as follows.

Three Months Ended March 31,

(In thousands) 2022 2021

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$ 202,511 $ 189,002

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

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

For the three months ended March 31, 2022 and 2021, property operating income from a single customer accounted for approximately 18.7 % and 16.9 %, respectively, of the Company's total revenues from continuing operations, or approximately 8.4 % and 9.1 %, respectively, of the Company's share of total revenues from continuing operations, net of amounts attributable to noncontrolling interests in investment entities.

Equity Investments

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

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

(In thousands) March 31, 2022 December 31, 2021

Equity method investments

$ 291,695 $ 284,985

Other investment ventures 13,220 16,160

Company-sponsored private funds (2)

358,468 382,694

Investments under fair value option — 28,540

Other 4,906 5,417

655,069 673,096

Other equity investments

Marketable securities 180,112 218,485

Marketable securities (Note 13)

197,715 201,912

Private funds and non-traded REIT 47,193 49,575

Other 40,624 10,570

$ 940,601 $ 935,153

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

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

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

(1) At December 31, 2021, excluded approximately 461,000 shares and 3.1 million units in BRSP held by NRF Holdco that were included in assets held for disposition (Note 11).

NRF Holdco was sold in February 2022.

(2) Includes unrealized carried interest of $ 80.8 million at March 31, 2022 and $ 112.0 million at December 31, 2021 in connection with sponsored investment vehicles that are in the early stage of their lifecycle, of which a substantial portion is shared with certain employees.

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

For equity method investments, the liabilities of the investment entities may only be settled using the assets of these entities and there is no recourse to the general credit of the Company for the obligations of these entities.

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The Company evaluates its equity method investments for other-than-temporary impairment ("OTTI") at each reporting period.

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

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

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

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

BrightSpire Capital, Inc.

At March 31, 2022, the Company owned approximately 35.0 million shares in BRSP for a 26.4 % interest in BRSP ( 29.0 % at December 31, 2021, including BRSP shares and units held by NRF Holdco that were disposed in February 2022), accounted for under the equity method as it exercises significant influence over BRSP's operating and financial policies through its substantial ownership interest.

In connection with the internalization of BRSP in April 2021, the Company had entered into a stockholders agreement with BRSP, pursuant to which the Company agreed, for so long as the Company owns at least 10 % of BRSP's outstanding common shares, to vote in BRSP director elections as recommended by BRSP’s board of directors at any stockholders' meeting that occurs prior to BRSP's 2023 annual stockholders' meeting.

Except as aforementioned, the Company may vote its shares in its sole discretion in any votes of BRSP’s stockholders and is prohibited from acquiring additional BRSP shares.

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

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

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

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

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

OTTI —The Company determined there was no OTTI on its investment in BRSP at March 31, 2022 and in 2021 as the fair value of the Company's investment in BRSP, based upon BRSP's stock price, was in excess of its carrying value.

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

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

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

connection with the respective investments has been fully eliminated.

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

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

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

The Company increased its share of net earnings from BRSP by $ 14.1 million and reduced its share of net losses from BRSP by $ 24.6 million for the three months ended March 31, 2022 and 2021 , respectively, representing the basis difference allocated to investments that were resolved or impaired by BRSP during these periods.

The remaining basis difference at March 31, 2022 was $ 153.2 million.

Investment and Lending Commitments

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

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

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

Sponsored Funds

At March 31, 2022, the Company had unfunded commitments of $ 91.2 million, predominantly to the Company's sponsored funds in its flagship digital opportunistic strategy, Digital Bridge Partners I, LP ("DBP I") and Digital Bridge Partners II, LP ("DBP II").

Loans Receivable

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

At March 31, 2022, the unfunded lending commitment was $ 24.7 million, of which the Company's share was $ 5.8 million, net of amounts attributable to noncontrolling interests in investment entities.

Warehoused Loans— At March 31, 2022, the Company had $ 55.9 million of unsettled trades and $ 19.8 million of unfunded lending commitments on loans receivable that are warehoused for future securitization vehicles and credit funds.

Up to 75 % of the unsettled trades will be funded through credit facilities that are earmarked to finance the acquisition of such loans.

Goodwill, Deferred Leasing Costs and Other Intangibles

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

Goodwill balance by reportable segment at both March 31, 2022 and December 31, 2021 is as follows.

(In thousands)

Balance by reportable segment:

Digital Investment Management (1)

Digital Operating 463,120

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

Total goodwill $ 761,368

(1) Remaining goodwill deductible for income tax purposes was $ 130.3 million at March 31, 2022 and $ 133.0 million at December 31, 2021.

Deferred Leasing Costs, Other Intangible Assets and Intangible Liabilities

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

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

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Total deferred leasing costs and intangible assets $ 1,648,735 $ ( 423,248 ) $ 1,225,487 $ 1,563,912 $ ( 376,285 ) $ 1,187,627

$ 1,560,196 $ ( 319,154 ) $ 1,241,042 $ 1,476,191 $ ( 135,431 ) $ 1,340,760

Intangible Liabilities

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$ 46,610 $ ( 12,151 ) $ 34,459 $ 44,076 $ ( 10,775 ) $ 33,301

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

(1) Amounts are presented net of impairments and write-offs.

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

Impairment of Identifiable Intangible Assets

During the year ended December 31, 2020, an investment management contract was impaired by $ 3.8 million to a fair value of $ 4.0 million at the time of impairment.

Fair value was based upon the revised future net cash flows over the remaining life of the contract, and represents fair value using Level 3 inputs.

In 2021, impairment was recorded only on identifiable intangible assets held for disposition, as discussed in Note 11.

Amortization of Intangible Assets and Liabilities

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

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

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

Three Months Ended March 31,

(In thousands) 2022 2021

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(In thousands) Remaining 2022 2023 2024 2025 2026 2027 and thereafter Total

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

Net increase (decrease) to rental income $ ( 259 ) $ ( 872 ) $ ( 1,538 ) $ ( 1,392 ) $ ( 1,310 ) $ 794 $ ( 4,577 )

Amortization expense 141,475 149,706 118,269 107,660 121,539 547,802 1,186,451

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Restricted Cash

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

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

The following table summarizes the Company's other assets:

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

(In thousands) March 31, 2022 December 31, 2021

Straight-line rents $ 29,214 $ 25,516

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Prefunded capital expenditures for Vantage SDC 19,574 24,293

Deferred financing costs, net (1)

Derivative assets 5,176 944

Prepaid taxes and deferred tax assets, net 37,350 29,347

Receivables from resolution of investment 10,499 10,463

Operating lease right-of-use asset, net 344,583 349,509

365,846 363,829

Finance lease right-of-use asset, net 128,997 131,909

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Fixed assets, net (3)

18,062 17,160

Total other assets $ 746,176 $ 740,395

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

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

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

(1) Deferred financing costs relate to revolving credit arrangements originated by the Company and its subsidiaries.

The Company's corporate credit facility was terminated in July 2021.

(2) Includes primarily receivables from tenants.

(3) Net of accumulated depreciation of $ 20.5 million as of March 31, 2022 and $ 19.2 million as of December 31, 2021 .

Accrued and Other Liabilities

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

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

(In thousands) March 31, 2022 December 31, 2021

Deferred income (1)

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Payable for Vantage SDC expansion capacity (Note 3)

57,707 55,896

Accounts payable and accrued expenses 114,682 121,931

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Accrued and other liabilities $ 896,253 $ 928,042

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

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

(1) Represents primarily prepaid rental income, upfront payment received for data center installation services, and deferred investment management fees.

Deferred investment management fees of $ 4.5 million at March 31, 2022 and $ 6.0 million at December 31, 2021 are expected to be recognized as fee income over a weighted average period of 4.0 years and 3.2 years, respectively.

Deferred investment management fees recognized as income of $ 2.4 million and $ 0.1 million in the three months ended March 31, 2022 and 2021, respectively, pertain to the deferred management fee balance at the beginning of each respective period.

Deferred Income Tax

In the second quarter of 2021, the Company's DataBank subsidiary completed a 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.

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

As a result of the Company’s transition to a C-Corporation (as discussed in Note 1), a preliminary estimate of deferred tax asset of approximately $ 400 million was recognized in the first quarter of 2022 on the capital loss and NOL carryforwards as well as outside basis difference in the Company's investment in certain partnerships.

As of March 31, 2022 , a full valuation allowance was established on the deferred tax asset due to uncertainties in future realization of the tax benefit in consideration of the Company’s history of cumulative operating losses.

The Company will continue to assess the realizability of the deferred tax asset each reporting period as circumstances change.

For the three months ended March 31, 2022, the net income tax benefit of $ 7.4 million reflects the tax effect of activities in the Company's TRS in the normal course of business.

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

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

September 30, 2021

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

March 31, 2022

Debt at amortized cost

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Weighted Average Years Remaining to Maturity (2)

September 30, 2021

March 31, 2022

Secured Fund Fee Revenue Notes (3)

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

Convertible and exchangeable senior notes (4)

$ 300,000 3.93 % 4.5 $ — N/A N/A $ 300,000 3.93 % 4.5

Convertible and exchangeable senior notes 278,422 5.21 % 1.7 — N/A N/A 278,422 5.21 % 1.7

578,422 — 578,422

Investment-Level Secured Debt

Digital Operating 3,644,908 2.44 % 3.8 833,767 5.04 % 2.9 4,478,675 2.92 % 3.7

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

Other — N/A N/A 130,500 2.07 % 1.4 130,500 2.07 % 1.4

3,644,908 964,267 4,609,175

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December 31, 2021

Convertible and exchangeable senior notes (4)

Secured Fund Fee Revenue Notes (3)

$ 300,000 3.93 % 4.7 $ — N/A N/A $ 300,000 3.93 % 4.7

Secured debt (5)

Convertible and exchangeable senior notes (4)

338,739 5.31 % 2.2 — N/A N/A 338,739 5.31 % 2.2

638,739 — 638,739

Investment-Level Secured Debt

Digital Operating 3,646,466 2.44 % 4.1 571,017 5.74 % 4.0 4,217,483 2.88 % 4.1

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

Other — N/A N/A 66,500 1.31 % 1.6 66,500 1.31 % 1.6

3,646,466 637,517 4,283,983

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

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

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

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

(5) The fixed rate recourse debt was secured by the Company's aircraft and was repaid in January 2021 upon sale of the aircraft.

Corporate Credit Facility

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

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

Advances under the credit facility accrued interest at a per annum rate equal to, at the Company’s election, either the 1-month London Interbank Offered Rate ("LIBOR") plus a margin of 2.75 %, or a base rate determined according to a prime rate or federal funds rate plus a margin of 1.75 %.

Unused commitments under the credit facility were subject to a commitment fee of 0.35 % per annum.

otherwise based upon initial maturity dates, or extended maturity dates if extension criteria are met for extensions that are at the Company's option.

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

DBRG and the OP are not guarantors to the debt.

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

Securitized Financing Facility

In July 2021, special-purpose subsidiaries of the OP (the "Co-Issuers") issued $ 500 million aggregate principal amount of Series 2021-1 Secured Fund Fee Revenue Notes, composed of:

In July 2021, special-purpose subsidiaries of the OP (the "Co-Issuers") issued Series 2021-1 Secured Fund Fee Revenue Notes, composed of:

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

and (ii) up to $ 200 million Secured Fund Fee Revenue Variable Funding Notes, Series 2021-1, Class A-1 (the “VFN Notes” and, together with the Class A-2 Notes, the “Series 2021-1 Notes”).

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

The Series 2021-1 Notes were issued under an Indenture that allows the Co-Issuers to issue additional series of notes in the future, subject to certain conditions.

and (ii) up to $ 300 million (after a $ 100 million increase in April 2022) Secured Fund Fee Revenue Variable Funding Notes, Series 2021-1, Class A-1 (the “VFN” and, together with the Class A-2 Notes, the “Series 2021-1 Notes”).

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

The Series 2021-1 Notes were issued under an Indenture dated July 2021, as amended in April 2022, that allows the Co-Issuers to issue additional series of notes in the future, subject to certain conditions.

The Series 2021-1 Notes had replaced the Company's previous corporate credit facility.

The Series 2021-1 Notes represent obligations of the Co-Issuers and certain other special-purpose subsidiaries of DBRG, and neither DBRG, the OP nor any of its other subsidiaries are liable for the obligations of the Co-Issuers.

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The Class A-2 Notes bear interest at a rate of 3.933 % per annum, payable quarterly.

The VFN Notes bear interest generally based upon 3-month LIBOR (or an alternate benchmark as set forth in the purchase agreement of the VFN Notes) plus 3 %.

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

The VFN bear interest generally based upon 1-month Term Secured Overnight Financing Rate or SOFR (prior to April 2022, 3-month LIBOR) or an alternate benchmark as set forth in the purchase agreement of the VFN plus 3 %.

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

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

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

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

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

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

The Series 2021-1 Notes may be optionally prepaid, in whole or in part, prior to their anticipated repayment dates.

There is no prepayment penalty on the VFN Notes.

There is no prepayment penalty on the VFN.

However, prepayment of the Class A-2 Notes will be subject to additional consideration based upon the difference between the present value of future payments of principal and interest and the outstanding principal of such Class A-2 Note that is being prepaid;

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The Indenture of the Series 2021-1 Notes contains various covenants, including financial covenants that require the maintenance of minimum thresholds for debt service coverage ratio and maximum loan-to-value ratio, as defined.

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

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

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

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

As of the date of this filing, the Co-Issuers are in compliance with all of the financial covenants and the full $ 300 million under the VFN is available to be drawn.

Convertible and Exchangeable Senior Notes

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Issued by DigitalBridge Group, Inc.

5.00% Convertible Senior Notes April 2013 April 15, 2023 5.00 % $ 15.76 63.4700 12,694 April 22, 2020 $ 200,000 $ 200,000

3.875% Convertible Senior Notes January and June 2014 January 15, 2021 3.875 % 16.57 60.3431 1,901 January 22, 2019 — 31,502

Issued by DigitalBridge Operating Company, LLC

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

Repurchase and Repayment of Senior Notes

The 3.875 % convertible senior notes were fully extinguished following a $ 31.5 million repayment upon maturity in January 2021 and a $ 371.0 million repurchase in the third quarter of 2020, primarily funded by net proceeds from the July 2020 issuance of the 5.75 % exchangeable senior notes by the OP.

Exchange of Senior Notes into Common Shares

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

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

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

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

Digital Operating —In March 2021 and October 2020, DataBank and Vantage SDC, the Company's subsidiaries in the Digital Operating segment, raised $ 657.9 million and $ 1.3 billion of securitized notes at blended fixed rates of 2.32 % and 1.81 % per annum, with 5 -year and 6 -year maturities, respectively.

In both instances, the proceeds were applied principally to refinance outstanding debt, which meaningfully reduced the overall cost of debt and extended debt maturities at DataBank and Vantage SDC.

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

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

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

Exchange of Senior Notes For Common Stock and Cash

DBRG and the OP completed separate privately negotiated exchange transactions with certain noteholders of the 5.75 % exchangeable notes, as follows:

Principal of 5.75% Exchangeable Notes Exchanged

Consideration for Exchange

(In thousands) Class A Common Stock Issued Cash Paid

March 2022 $ 60,317 25,557 $ 13,887

October and November 2021 161,261 73,365 —

$ 221,578 98,922 $ 13,887

The March 2022 exchanges resulted in a debt extinguishment loss of $ 133.2 million, calculated as the excess of consideration paid over the carrying value of the notes exchanged, and recorded in other loss on the consolidated statement of operations.

Consideration was measured at fair value based upon the closing price of the Company's class A common stock on the date of the respective exchanges, and cash paid, net of transaction costs.

Unlike the exchange transactions in 2021, the March 2022 exchanges did not qualify for debt conversion accounting and were treated as a debt extinguishment as the Company issued less than the number of shares issuable under the original exchange ratio of 434.7826 shares per $1,000 of note principal exchanged.

The exchange transactions in the fourth quarter of 2021 were treated as debt conversions that resulted in a debt conversion expense of $ 25.1 million, recorded as interest expense, as the original exchange ratio was adjusted to account for savings on avoided future interest payments otherwise due to the noteholders.

The debt conversion expense represents the shares of the Company's class A common stock issued in excess of such shares issuable pursuant to the original exchange ratio, and measured at fair value based upon the closing price of the Company's class A common stock on the date of the respective exchanges.

Investment-Level Secured Debt

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

Digital Operating —In March 2021 and October 2021, DataBank raised $ 657.9 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 were used to repay borrowings on its credit facility and to finance future acquisitions.

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

Proceeds were 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.

Other —The Company has entered into credit facilities to fund the acquisition of loans that are warehoused for future securitization vehicles.

At March 31, 2022, $ 169.5 million in aggregate was available to be drawn from these facilities.

Stockholders' Equity

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Shares issued upon redemption of OP Units — 5 —

Repurchase of common stock, net (1)

— ( 12,733 ) —

Equity awards issued, net of forfeitures — 4,839 —

Shares canceled for tax withholding on vested equity awards — ( 1,147 ) —

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

Shares outstanding at March 31, 2021 41,350 487,103 734

Shares outstanding at December 31, 2021 35,340 568,577 666

Redemption of preferred stock ( 3,450 ) — —

Exchange of notes for class A common stock — 25,557 —

Shares issued upon redemption of OP Units — 1 —

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

Shares issued pursuant to settlement liability (1)

Equity awards issued, net of forfeitures — 4,992 —

Shares canceled for tax withholding on vested equity awards — ( 1,647 ) —

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

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

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

Shares repurchased and not reissued were cancelled.

Shares outstanding at March 31, 2022 35,340 597,480 666

Preferred Stock

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

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

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

Description Dividend Rate Per Annum Initial Issuance Date Shares Outstanding

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

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

The redemption period for each series of preferred stock is subject to the Company’s right under limited circumstances to redeem the preferred stock earlier in order to preserve its qualification as a REIT or upon the occurrence of a change of control (as defined in the articles supplementary relating to each series of preferred stock).

Preferred stock generally does not have any voting rights, except if the Company fails to pay the preferred dividends for six or more quarterly periods (whether or not consecutive).

Under such circumstances, the preferred stock will be

entitled to vote, together as a single class with any other series of parity stock upon which like voting rights have been conferred and are exercisable, to elect two additional directors to the Company’s board of directors, until all unpaid dividends have been paid or declared and set aside for payment.

Under such circumstances, the preferred stock will be entitled to vote, together as a single class with any other series of parity stock upon which like voting rights have been conferred and are exercisable, to elect two additional directors to the Company’s board of directors, until all unpaid dividends have been paid or declared and set aside for payment.

In addition, certain changes to the terms of any series of preferred stock cannot be made without the affirmative vote of holders of at least two-thirds of the outstanding shares of each such series of preferred stock voting separately as a class for each series of preferred stock.

Redemption of Preferred Stock

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

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

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

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

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

The Company redeemed all of its outstanding 7.5 % Series G preferred stock in August 2021 for $ 86.8 million using proceeds from its securitized financing facility and 2,560,000 shares of its 7.125 % Series H preferred stock in November 2021 for approximately $ 64.4 million.

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

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

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

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

Common Stock Repurchases

During the first quarter of 2020, the Company repurchased 12,733,204 shares of its class A common stock at an aggregate cost of $ 24.6 million, or a weighted average price of $ 1.93 per share, pursuant to a $ 300 million share repurchase program that expired in May 2020.

The Company expects to reinstate quarterly common stock dividends beginning the third quarter of 2022, subject to approval of its Board of Directors.

Dividend Reinvestment and Direct Stock Purchase Plan

1 unchanged sentence

The DRIP Plan involves the acquisition of the Company's class A common stock either in the open market, directly from the Company as newly issued common stock, or in privately negotiated transactions with third parties.

There were no shares of class A common stock acquired under the DRIP Plan in the form of new issuances in 2021 and 2020.

To date, no shares of class A common stock have been acquired under the DRIP Plan in the form of new issuances in the last three years.

Accumulated Other Comprehensive Income (Loss)

9 unchanged sentences

Amounts reclassified from AOCI — — 233 — — 233

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

AOCI at March 31, 2021 $ 15,280 $ 3,080 $ — $ 33,201 $ 49,495 $ 101,056

AOCI at December 31, 2021 $ 2,334 $ 5,861 $ — $ 26,502 $ 7,686 $ 42,383

1 unchanged sentence

Amounts reclassified from AOCI ( 200 ) ( 5,861 ) — ( 20,680 ) — ( 26,741 )

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

AOCI at March 31, 2022 $ 2,351 $ — $ — $ 2,691 $ 7,711 $ 12,753

Changes in Components of AOCI—Noncontrolling Interests in Investment Entities

1 unchanged sentence

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

Other comprehensive income (loss) before reclassifications ( 12 ) 43,170 5,313 48,471

Other comprehensive loss before reclassifications — ( 37,686 ) — ( 37,686 )

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

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

AOCI at March 31, 2021 $ — $ 46,159 $ 15,099 $ 61,258

AOCI at December 31, 2021 $ — $ 11,057 $ — $ 11,057

1 unchanged sentence

Amounts reclassified from AOCI — ( 9,827 ) — ( 9,827 )

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

AOCI at March 31, 2022 $ — $ ( 954 ) $ — $ ( 954 )

Reclassifications out of AOCI—Stockholders

2 unchanged sentences

(In thousands)

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

Three Months Ended March 31, Affected Line Item in the

Consolidated Statements of Operations

Component of AOCI reclassified into earnings 2022 2021

Relief of basis of AFS debt securities

$ — $ 41 $ — $ 3,585

Release of foreign currency cumulative translation adjustments

— 21 20,221 ( 225 )

Unrealized gain on dedesignated net investment hedges — — — 552

Realized gain on net investment hedges

— 373 1,375 373

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

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

Relief of basis of AFS debt securities $ 5,861 $ — Other gain (loss), net

Release of foreign currency cumulative translation adjustments 20,680 — Other gain (loss), net

Realized loss on cash flow hedges — ( 233 ) Other gain (loss), net

Release of equity in AOCI of equity method investments 200 — Equity method earnings (losses)

Noncontrolling Interests

1 unchanged sentence

The following table presents the activity in redeemable noncontrolling interests in the Company's digital investment management business, as discussed below, and in open-end funds sponsored and consolidated by the Company.

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2022 2021

4 unchanged sentences

Net income (loss) ( 11,220 ) 2,449

Adjustment to estimated redemption value 690,000 —

Ending balance $ 1,038,739 $ 315,922

Strategic Partnership in the Company's Digital Investment Management Business

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

Strategic Investment in 2020

In July 2020, the Company formed a strategic partnership with affiliates of Wafra, Inc.

(collectively, "Wafra"), a private investment firm and a global partner for alternative asset managers, in which Wafra made a minority investment in substantially all of the Company's digital investment management business (as defined for purposes of this transaction, the "Digital IM Business").

The investment entitles Wafra to participate in approximately 31.5 % of the net management fees and carried interest generated by the Digital IM business.

Pursuant to this strategic partnership, Wafra has assumed directly and also indirectly through a participation interest $ 124.9 million of the Company's commitments to DCP I, and has a $ 125.0 million commitment to DCP II that has been partially funded to-date.

Pursuant to this strategic partnership, Wafra has assumed directly and also indirectly through a participation interest $ 124.9 million of the Company's commitments to DBP I, and has a $ 125.0 million commitment to DBP II that has been partially funded to-date.

Wafra has also agreed to make commitments to the Company's future digital funds and investment vehicles on a pro rata basis with the Company based on Wafra's percentage interest in the Digital IM business, subject to certain caps.

3 unchanged sentences

Wafra paid cash consideration of $ 253.6 million at closing in exchange for its investment in the Digital IM business and for the warrants.

As previously agreed, Wafra paid additional consideration of $ 29.9 million in the Digital IM Business in April 2021 based upon the Digital IM Business having achieved a minimum run-rate of earnings before interest, tax, depreciation and amortization (as defined for the purpose of this computation) of $ 72.0 million as of December 31, 2020.

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

As previously agreed, Wafra paid additional consideration of $ 29.9 million in April 2021 based upon the Digital IM business having achieved a minimum run-rate of earnings before interest, tax, depreciation and amortization (as defined for the purpose of this computation) of $ 72.0 million as of December 31, 2020.

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

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

Under certain circumstances following such time as the Digital IM business comprises 90 % or more of the Company's assets, the Company has agreed to use commercially reasonable efforts to facilitate the conversion of Wafra's interest into shares of the Company's class A common stock.

There can be no assurances that such conversion would occur or on what terms and conditions such conversion would occur, including whether such conversion, if it did occur in the future, would have any adverse impact on the Company, the Company’s stock price, governance and other matters.

Wafra has customary minority rights and certain other structural protections designed to protect its interests, including redemption rights with respect to its investment in the Digital IM business and its funded commitments in certain digital funds.

Wafra's redemption rights will be triggered upon the occurrence of certain events, including key person or cause events under the governing documents of certain digital funds and for a limited period, upon Marc Ganzi, the Company's Chief Executive Officer, and Ben Jenkins, Chief Investment Officer of the Company's digital real estate and infrastructure platform, ceasing to fulfill certain time and attention commitments to the Digital IM business.

To further enhance the alignment of interests, the Company entered into an amended and restated restrictive covenant agreement with each of Mr.

Ganzi and Mr.

Jenkins, pursuant to which they agreed to certain enhanced non-solicitation provisions and extension of the term of existing non-competition agreements.

Wafra’s investment provides the Company with permanent capital to pursue strategic digital infrastructure investments and further grow the Digital IM Business.

Wafra's redemption rights will be triggered upon the occurrence of certain events, including key person or cause events under the governing documents of certain digital funds.

Agreement to Redeem Strategic Investment in 2022 for Cash and Stock

In April 2022, the Company entered into a definitive purchase and sale agreement ("PSA") with Wafra, pursuant to which:

(a) the Company will acquire Wafra's 31.5 % interest in the Digital IM business;

(b) Wafra’s entitlement to carried interest in DBP II will be reduced from 12.6 % to 7 %;

and (c) with certain limited exceptions, Wafra will sell or forgo its right to invest in, or receive carried interest from, future investment management products, but except as otherwise provided, retain its investment in and its allocation of carried interest from existing investment management products.

Consideration for the redemption of Wafra's interest consists of:

(i) upfront amount of $ 390 million in cash (subject to certain net cash and closing adjustments) and 57,741,599 shares of the Company's Class A common stock;

and (ii) contingent amount between $ 90 million and up to $ 125 million based upon fee earning equity under management (as defined in the PSA) raised of at least $ 4 billion and up to at least $ 6 billion during the period from December 31, 2021 to December 31, 2023, payable in March 2023 and March 2024, with up to 50 % payable in shares of the Company's Class A common stock at the Company's election.

As a redemption was deemed to be probable, the carrying value of Wafra's redeemable noncontrolling interest was adjusted to fair value at March 31, 2022, measured based upon the estimated fair value of the total consideration expected to be paid, including both upfront and contingent amounts.

This adjustment resulted in a reclassification of $ 690.0 million from additional paid-in capital to redeemable noncontrolling interests on the consolidated balance sheets.

The PSA also provides for a net cash settlement upon exercise of the five warrants previously issued to Wafra, at election of either the Company or Wafra, if such exercise would result in Wafra beneficially owning in excess of 9.8 % of the issued and outstanding shares of the Company's Class A common stock.

In addition, the Chief Investment Officer of Wafra, Adel Alderbas, will serve as a senior advisor to the Company for a period of three years from the closing of this transaction.

The transaction is expected to close in May 2022, subject to regulatory clearance and other customary closing conditions.

There is no assurance that the transaction will close in the timeframe contemplated or on the terms anticipated, if at all.

Noncontrolling Interests in Investment Entities

In January 2022, a shareholder of DataBank sold its equity interest to the Company and an existing investor, resulting in an additional $ 32.0 million investment by the Company in DataBank.

Following this transaction and additional equity funded by the shareholders of DataBank in connection with its data center acquisition in March 2022 (Note 3), the Company's interest in DataBank increased from 20 % to 21.8 %.

Noncontrolling Interests in Operating Company

2 unchanged sentences

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

Redemption of OP Units —The Company redeemed 505,367 OP Units during the nine months ended September 30, 2021 and 2,184,395 OP Units during the year ended December 31, 2020, with the issuance of an equal number of shares of class A common stock on a one -for-one basis.

Redemption of OP Units —The Company redeemed 882 OP Units during the three months ended March 31, 2022 and 2,005,367 during the year ended December 31, 2021 through the issuance of an equal number of shares of class A common stock on a one -for-one basis.

Assets and Related Liabilities Held for Disposition

Total assets and related liabilities held for disposition are summarized below, all of which relate to discontinued operations (Note 12).

These assets and liabilities are composed of:

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

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

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

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

At March 31, 2022, these were composed predominantly of five remaining equity method investments excluded from the December 2021 OED sale.

At December 31, 2021, they also included assets and liabilities held by NRF Holdco related primarily to the Wellness Infrastructure business, prior to its sale in February 2022.

(In thousands) March 31, 2022 December 31, 2021

Restricted cash $ — $ 65,022

2 unchanged sentences

Equity and debt investments 149,826 250,246

Goodwill, deferred leasing costs and other intangible assets, net 144,048 275,954

Deferred leasing costs and other intangible assets, net — 118,300

Other assets 1,481 100,720

5 unchanged sentences

Total liabilities related to assets held for disposition $ 758 $ 3,088,699

(1) Represents debt related to assets held for disposition if the debt is expected to be assumed by the acquirer upon sale or if the debt is expected to be extinguished through lender's assumption of underlying collateral, and includes debt that is in receivership, in payment default or not in compliance with certain debt covenants.

Includes the 5.375 % exchangeable senior notes and junior subordinated debt (as described in Note 14) which are obligations of NRF Holdco as the issuer.

Impairment of Assets Classified as Held for Disposition and Discontinued Operations

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

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

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

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

COVID-19 on real estate values.

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

For properties that were impaired prior to being classified as held for sale and discontinued operations, largely in 2020, impairment was attributed primarily to shortened hold period assumptions, particularly in the hotel and wellness infrastructure portfolios, driven by the Company's accelerated digital transformation in the second quarter of 2020, and/or to a lesser extent, decline in property operating performance, in part from the economic effects of COVID-19.

Fair value of these properties was estimated based upon:

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

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

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

Goodwill —Upon termination of the BRSP management contract on April 30, 2021, the Other IM goodwill balance of $ 81.6 million was fully written off as the remaining value of the Other IM reporting unit represented principally the BRSP management contract.

The receipt of a one-time termination payment of $ 102.3 million at closing consequently resulted in a net gain of $ 20.7 million, recognized within other gain (loss) in discontinued operations (Note 12).

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

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

The remaining fair value of the Other IM reporting unit was determined to be principally in the BRSP management contract, as no value was ascribed to (a) the future capital raising potential of the non-digital credit and opportunity fund management business as it is no longer part of the Company's long-term strategy;

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

Other Intangible Assets —In the first quarter of 2021, investor relationship intangible asset in Other IM was impaired by $ 4.0 million (Note 12) to a fair value of $ 5.5 million at the time of impairment based upon estimated recoverable value in a potential monetization of the Company's Other IM business.

During the year ended December 31, 2020, management contracts were impaired by $ 4.3 million to an aggregate fair value of $ 8.4 million at the time of impairment.

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

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

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

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

Significant impairment was also recorded on these ADC loans in the fourth quarter of 2020, previously driven by reduced future cash flow streams expected from these investments, primarily taking into consideration a combination of lower land values, delayed leasing, and/or offer prices in the current market, generally discounted at rates between 10 % to 20 %.

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

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

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

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

(1) Represents debt related to assets held for disposition that was assumed by the acquirer upon sale of the assets.

Included the 5.375 % exchangeable senior notes and junior subordinated debt (as described in Note 14) which were obligations of NRF Holdco as the issuer.

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

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

The Company initially measures assets classified as held for disposition at the lower of their carrying amounts or fair value less disposal costs.

For bulk sale transactions, the unit of account is the disposal group, with any excess of the aggregate carrying value over estimated fair value less costs to sell allocated to the individual assets within the group.

At March 31, 2022, there were no assets held for sale that were measured at fair value on a nonrecurring basis.

Impairment loss of $ 23.8 million was recorded in the three months ended March 31, 2022 based upon the final carrying value of net assets of the Wellness Infrastructure business upon closing of the disposition of NRF Holdco in February 2022.

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

For the three months ended March 31, 2021, impairment was $ 15.2 million, primarily on Wellness Infrastructure real estate held for disposition prior to its classification as discontinued operations.

Other assets that had been impaired during 2021 pertained to the OED and Other IM portfolio that were disposed in December 2021.

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

Equity Investments Carried at Net Asset Value ("NAV") —These are equity investments held for disposition that were valued based upon NAV, specifically interest in a private fund of $ 2.3 million at March 31, 2022, and additionally, including interest in a Company-sponsored non-traded REIT that was disposed in February 2022, totaling $ 31.2 million at December 31, 2021.

Equity Method Investments under Fair Value Option —Equity method investments under fair value option of $ 76.7 million at March 31, 2022 and $ 79.3 million at December 31, 2021 were measured based upon indicative sales price, classified as Level 3 fair value.

Loans Receivable under Fair Value Option —There were no loans held for disposition at March 31, 2022.

At December 31, 2021, the loan held for disposition represents a component of the overall sales price for NRF Holdco, which was subsequently disposed in February 2022.

Debt Securities —Prior to the sale of NRF Holdco in February 2022, the Company had investments in debt securities, composed of AFS N-Star CDO bonds, which were subordinate bonds retained by NRF Holdco from its sponsored collateralized debt obligations ("CDOs"), and CDO bonds originally issued by NRF Holdco that it subsequently repurchased at a discount, all of which were collateralized primarily by commercial real estate debt and securities.

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

Amortized Cost without Allowance for Credit Loss

Allowance for Credit Loss Gross Cumulative Unrealized

(in thousands) Gains Losses Fair Value

December 31, 2021 $ 55,041 $ ( 24,882 ) $ 6,372 $ — $ 36,531

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

There was no provision for credit loss in 2022 prior to disposition but $ 0.2 million was recognized in 2021.

Credit losses were determined based upon an analysis of the present value of contractual cash flows expected to be collected from the underlying collateral as compared to the amortized cost basis of the security.

Level 3 Recurring Fair Values

The following table presents changes in recurring Level 3 fair value assets held for disposition.

Realized and unrealized gains (losses) are included in AOCI for AFS debt securities, other gain (loss) for loans receivable and equity method losses for equity method investments, all of which are presented in discontinued operations (Note 12).

Fair Value Option

(In thousands) AFS Debt Securities Held for Disposition Loans Held for Disposition Equity Method Investments Held for Disposition

Fair value at December 31, 2020 $ 28,576 $ 1,258,539 $ 153,259

Purchases, drawdowns, contributions and accretion 10,283 3,631 ( 6,953 )

Paydowns, distributions and sales ( 691 ) ( 8,798 ) —

Change in accrued interest and capitalization of paid-in-kind interest — 4,991 —

Allowance for credit losses

Realized and unrealized losses in earnings, net — ( 199,082 ) ( 23,895 )

Other comprehensive loss (1)

( 3,309 ) ( 33,072 ) ( 4,707 )

Fair value at March 31, 2021 $ 34,665 $ 1,026,209 $ 117,704

Net unrealized gains (losses) on instruments held at March 31, 2021

$ ( 194 ) $ ( 199,082 ) $ ( 24,820 )

In other comprehensive loss $ ( 3,309 ) N/A N/A

Fair value at December 31, 2021 $ 36,531 $ 55,878 $ 79,309

Purchases, drawdowns, contributions and accretion

Paydowns, distributions and sales

( 36,726 ) ( 54,490 ) ( 903 )

Change in accrued interest and capitalization of paid-in-kind interest — ( 1,013 ) —

Realized and unrealized losses in earnings, net — ( 375 ) —

Other comprehensive loss (1)

— — ( 1,721 )

Fair value at March 31, 2022 $ — $ — $ 76,685

Net unrealized gains (losses) on instruments held at March 31, 2022

In other comprehensive loss $ — N/A N/A

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

Discontinued Operations

Discontinued operations represent the following:

• Wellness Infrastructure —operations of the Wellness Infrastructure business, along with other non-core assets held by NRF Holdco, primarily:

(i) the Company's equity interest in and management of NorthStar Healthcare, debt securities collateralized largely by certain debt and preferred equity within the capital structure of the Wellness Infrastructure portfolio, limited partnership interests in private equity real estate funds;

• Wellness Infrastructure —operations of the Wellness Infrastructure business, along with other non-core assets held by NRF Holdco prior to the sale of 100 % of the equity of NRF Holdco in February 2022.

The non-core assets held by NRF Holdco were composed primarily of:

(i) the Company's equity interest in and management of NorthStar Healthcare Income, Inc., debt securities collateralized largely by certain debt and preferred equity within the capital structure of the Wellness Infrastructure portfolio, limited partnership interests in private equity real estate funds;

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

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

The sales price for 100 % of the equity of NRF Holdco was $ 281 million, composed of $ 126 million in cash and a $ 155 million unsecured promissory note (the "Seller Note").

In addition, NRF Holdco distributed approximately $ 35 million of cash to the Company prior to closing.

The Seller Note, which is classified as held for investment, matures five years from closing of the sale, accruing paid-in-kind interest at 5.35 % per annum.

The sale included the acquirer's assumption of $ 2.57 billion of consolidated investment level debt on various healthcare portfolios in which the Company owned between 69.6 % and 81.3 %, and $ 293.7 million of debt at NRF Holdco.

• Other —operations of substantially all of the Company's OED investments and Other IM business that were previously in the Other segment prior to sale of the Company's equity interests and subsequent deconsolidation of these subsidiaries in December 2021, for which the Company received cash consideration of $ 443.4 million, net of closing adjustments of $ 31.2 million.

The OED investments and Other IM business are composed of various

non-digital real estate, real estate-related equity and debt investments, general partner interests and management rights with respect to these assets, and underlying compensation and administrative costs for managing these assets.

Also included in discontinued operations are the economics related to the management of BRSP prior to termination of its management contract, which had resulted in a one-time termination payment of $ 102.3 million in April 2021.

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

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

In March 2021, the Company sold 100 % of the equity in its hotel subsidiaries holding five of the six portfolios in the Hospitality segment, and the Company's 55.6 % interest in the THL Hotel Portfolio which was deconsolidated upon sale.

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

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

Income (loss) from discontinued operations is presented below.

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

Three Months Ended March 31,

(In thousands) 2022 2021

8 unchanged sentences

Depreciation and amortization 2,339 50,880

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

Impairment loss 23,802 123,760

Compensation and administrative expense 22,051 28,759

2 unchanged sentences

Gain on sale of real estate — 45,750

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

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

Other loss, net ( 624 ) ( 200,043 )

Equity method earnings (losses) 11,988 ( 94,886 )

Loss from discontinued operations before income taxes ( 109,510 ) ( 484,978 )

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

Income tax benefit 2,112 3,718

Loss from discontinued operations ( 107,398 ) ( 481,260 )

Income (loss) from discontinued operations attributable to:

Loss from discontinued operations attributable to:

Noncontrolling interests in investment entities ( 6,175 ) ( 303,851 )

Noncontrolling interests in Operating Company ( 8,135 ) ( 16,908 )

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

Loss from discontinued operations attributable to DigitalBridge Group, Inc.

$ ( 93,088 ) $ ( 160,501 )

Recurring Fair Values

The table below presents a summary of financial assets and financial liabilities carried at fair value on a recurring basis, including financial instruments for which the fair value option was elected, but excluding financial assets under the NAV practical expedient, categorized into the three tier fair value hierarchy that is prioritized based upon the level of transparency in inputs used in the valuation techniques, as follows:

Financial assets and financial liabilities carried at fair value on a recurring basis include financial instruments for which the fair value option was elected, but exclude financial assets under the NAV practical expedient.

Fair value is categorized into a three tier hierarchy that is prioritized based upon the level of transparency in inputs used in the valuation techniques, as follows.

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

1 unchanged sentence

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

Fair Value Measurement Hierarchy

(In thousands) Level 1 Level 2 Level 3 Total

September 30, 2021

Marketable Equity Securities

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

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

Fair Value Option:

Loans held for investment — — 112,252 112,252

Loans held for disposition — — 387,664 387,664

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

December 31, 2020

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

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

Other assets—derivative assets — 99 — 99

Fair Value Option:

Loans held for investment — — 36,797 36,797

Loans held for disposition — — 1,258,539 1,258,539

Equity method investments — — 28,540 28,540

Equity method investments held for disposition — — 153,259 153,259

Other liabilities — derivative liabilities

— 103,772 — 103,772

Other liabilities—settlement liability — — 24,285 24,285

Marketable Equity Securities

Marketable equity securities consist of publicly traded equity securities held largely by private open-end funds sponsored and consolidated by the Company, and prior to January 2021, equity investment in a third party mutual fund.

Marketable equity securities of $ 197.7 million at March 31, 2022 and $ 201.9 million at December 31, 2021 (Note 5) consist of publicly traded equity securities held largely by private open-end funds sponsored and consolidated by the Company.

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

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

and to a lesser extent, in Europe, and predominantly in the technology, media and telecommunications sectors.

These marketable equity securities are valued based upon listed prices in active markets and classified as Level 1 of the fair value hierarchy.

Debt Securities

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

These CDOs are collateralized primarily by commercial real estate debt and securities.

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

Amortized Cost without Allowance for Credit Loss

Allowance for Credit Loss Gross Cumulative Unrealized

(in thousands) Gains Losses Fair Value

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

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

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

There were no sales of N-Star CDO bonds during the nine months ended September 30, 2021 and year ended December 31, 2020.

These CDOs have long-dated stated maturities through 2037 and 2041, however, the Company expects the N-Star CDO bonds to have remaining future cash flows up to 2.3 years from September 30, 2021.

Fair value of N-Star CDO bonds, classified as Level 3, are determined using an internal price interpolated based upon third party prices of the senior N-Star CDO bonds of the respective CDOs, and applying the Company's knowledge of the underlying collateral and recent trades, if any within the securitizations.

Impairment of AFS Debt Securities

AFS debt securities are considered to be impaired if their fair value is less than their amortized cost basis.

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

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

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

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

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

Nine Months Ended September 30,

(In thousands) 2021 2020

Allowance for credit losses

Beginning balance $ 24,688 $ —

Provision for credit losses 194 23,973

Ending balance $ 24,882 $ 23,973

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

The Company's derivative instruments generally consist of:

(i) foreign currency put options, forward contracts and costless collars to hedge the foreign currency exposure of certain investments in foreign subsidiaries or equity method joint ventures (in EUR and in GBP), with notional amounts and termination dates based upon the anticipated return of capital from these investments;

and (ii) interest rate caps to limit the exposure to changes in interest rates on various floating rate debt obligations (indexed primarily to LIBOR and to a lesser extent, EURIBOR and GBP LIBOR).

(i) foreign currency put options, forward contracts and costless collars to hedge the foreign currency exposure of certain foreign-denominated investments or investments in foreign subsidiaries (in GBP and EUR), with notional amounts and termination dates based upon the anticipated return of capital from these investments;

and (ii) interest rate caps to limit the exposure to changes in interest rates on various floating rate debt obligations (indexed to LIBOR and GBP LIBOR at December 31, 2021).

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

At September 30, 2021 and December 31, 2020, notional amounts aggregated to the equivalent of $ 184.9 million and $ 350.5 million, respectively, for foreign exchange contracts, and the equivalent of $ 2.8 billion and $ 4.6 billion, respectively, for interest rate contracts, all of which were composed predominantly of non-designated economic hedges.

Fair values were $ 5.2 million at March 31, 2022 and $ 0.9 million at December 31, 2021 for derivative assets, included in other assets, and $ 4.9 million at March 31, 2022 for derivative liabilities, included in other liabilities.

The Company did not have any derivatives in a liability position at December 31, 2021.

All derivative positions were non-designated economic hedges.

Derivative notional amounts aggregated to the equivalent of $ 1.2 billion at March 31, 2022 and $ 182.3 million at December 31, 2021 for foreign exchange contracts, and $ 2.0 billion at December 31, 2021 for interest rate contracts.

There were no interest rate contracts at March 31, 2022.

The derivative instruments are subject to master netting arrangements with counterparties that allow the Company to offset the settlement of derivative assets and liabilities in the same currency by instrument type or, in the event of default by the counterparty, to offset all derivative assets and liabilities with the same counterparty.

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

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

Three Months Ended March 31,

(In thousands) 2022 2021

Foreign currency contracts:

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

Unrealized gain transferred from AOCI to earnings (1)

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

Non-designated contracts

Realized and unrealized gain (loss) in earnings $ 1,510 $ ( 245 )

Interest rate contracts:

Interest expense on designated contracts (2)

— 6 ( 20 ) 12

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

Designated contracts

Interest expense (1)

Realized loss transferred from AOCI to earnings — ( 1,292 )

(1) The portion of derivative notional that is in excess of the beginning balance of the foreign denominated net investment is dedesignated upon a reassessment of the effectiveness of net investment hedges at period end.

Non-designated contracts

Realized and unrealized gain (loss) in earnings 61 ( 16 )

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

Prior to January 2021, the Company had entered into a series of forward contracts on its shares in a third party real estate mutual fund in an aggregate notional amount of $ 119 million and a series of swap contracts with the same counterparty to pay the return of the Dow Jones U.S.

Select REIT Total Return Index.

The forward and swap contracts were settled upon expiration in January 2021 through delivery of all of the Company's shares in the mutual fund, realizing an immaterial net loss upon settlement.

The forwards and swaps were not designated accounting hedges.

At December 31, 2020, the forwards and swaps were in a liability position of $ 102.7 million and $ 0.1 million, respectively.

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

The Company's foreign currency and interest rate contracts are generally traded over-the-counter, and are valued using a third-party service provider.

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In March 2020, the Company entered into a cooperation agreement with Blackwells Capital LLC ("Blackwells"), a stockholder of the Company.

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

expiration of the agreement in March 2030 and voting in favor of the Board of Directors' recommendations until the third anniversary of the agreement.

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

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

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

third year in March 2023.

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

(a) expected volatility of the Company's class A common stock of 67.2 % based upon a combination of historical and implied volatility of the Company's class A common stock;

(b) zero expected dividend yield given the Company's suspension of its common stock dividend beginning the second quarter of 2020;

and (c) risk free rate of 0.14 % per annum based upon a compounded zero-coupon U.S.

Treasury yield.

During 2020, the settlement liability increased approximately $ 20.4 million from inception in March 2020, recorded as other loss on the consolidated statement of operations.

Fair Value Option

Equity Method Investments

Equity method investments for which the fair value option was elected are carried at fair value on a recurring basis.

Fair values are determined using either indicative sales price, NAV of the underlying funds, or discounted future cash flows based upon expected income and realization events of the underlying assets.

Fair value of equity method investments are classified as Level 3 of the fair value hierarchy.

Changes in fair value of equity method investments under the fair value option are recorded in equity method earnings (losses).

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

Loans Receivable

Loans receivable consist of mortgage loans, mezzanine loans and non-mortgage loans carried at fair value under the fair value option.

Loans held for disposition are measured at their selling price.

Fair value of loans held for investment is determined by comparing the current yield to the estimated yield of newly originated loans with similar credit risk or the market yield at which a third party might expect to purchase such investment, or based upon discounted cash flow projections of principal and interest expected to be collected, which include, but are not limited to, consideration of the financial standing of the borrower or sponsor as well as operating results and/or value of the underlying collateral.

Loans that are 90 days or more past due as to principal or interest, or where reasonable doubt exists as to timely collection, are generally considered nonperforming and placed on nonaccrual status, all of which are held for disposition as presented in the table below.

Such loans include distressed loan portfolios that are held for disposition, previously acquired by the Company at a discount (classified as purchased credit-impaired loans prior to the election of fair value option).

September 30, 2021 December 31, 2020

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

90 days or more past due or nonaccrual

Loans held for disposition $ 224,274 $ 1,173,066 $ ( 948,792 ) $ 873,205 $ 2,159,538 $ ( 1,286,333 )

Level 3 Recurring Fair Values

Quantitative information about recurring Level 3 fair value assets are as follows.

Valuation Technique Key Unobservable Inputs Input Value Effect on Fair Value from Increase in Input Value (2)

Financial Instrument

(In thousands)

Weighted Average (1)

September 30, 2021

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

( 5.8 % - 57.8 %)

Fair Value Option:

Loans held for investment 112,252 Discounted cash flows Discount rate

( 4.7 % - 11.3 %)

Loans held for disposition 387,664 Transaction price (4)

Equity method investments held for disposition 1,553 NAV (3)

Equity method investments held for disposition 114,200 Transaction price (4)

December 31, 2020

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

( 18.3 % - 57.8 %)

Fair Value Option:

Loans held for investment 36,797 Discounted cash flows Discount rate

( 7.2 % - 8.9 %)

Loans held for disposition 1,258,539 Discounted cash flows Discount rate

( 6.9 % - 25.7 %)

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

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

Equity method investments held for disposition 8,383 Discounted cash flows Discount rate 19.3 %

( 19.0 % - 20.0 %)

Equity method investments held for disposition 142,404 Transaction price (4)

(1) Weighted average discount rates are calculated based upon undiscounted cash flows.

(2) Represents the directional change in fair value that would result from an increase to the corresponding unobservable input.

A decrease to the unobservable input would have the reverse effect.

Significant increases or decreases in these inputs in isolation could result in significantly higher or lower fair value measures.

(3) Fair value was estimated based upon underlying NAV of the respective funds on a quarter lag, adjusted as deemed appropriate by management, considering the cash flows provided by the general partners of the funds and the implied yields of the funds.

(4) Based upon actual or indicative transaction values of the respective loans, investments or underlying assets of the investee.

At December 31, 2020, acquisition price was deemed to approximate fair value for investee engaged in real estate development during the development stage.

The following table presents changes in recurring Level 3 fair value assets.

Loans receivable and equity method investments under the fair value option are predominantly held for disposition.

Realized and unrealized gains (losses) are included in AOCI for AFS debt securities and in other gain (loss) on the consolidated statement of operations for other assets carried at fair value.

Loans receivable held for investment are carried at fair value under the fair value option, consisting of corporate loans to borrowers in the digital infrastructure and telecommunications sector, and are predominantly warehoused for a future digital credit investment vehicle and securitization vehicles.

At March 31, 2022, fair value of loans held for investment totaled $ 504.7 million ($ 173.9 million at December 31, 2021), with $ 176.8 million classified as Level 2 ($ 91.0 million at December 31, 2021) and $ 328.0 million classified as Level 3 ($ 82.9 million at December 31, 2021).

Level 2 loans held for investment represent bank syndicated loans for which fair value was obtained from a reputable pricing service and was based upon quotations from dealers who act as market makers for these loans.

Fair value of Level 3 loans held for investment were determined based upon discounted cash flow projections of principal and interest expected to be collected, which include, but are not limited to, consideration of the financial standing and operating results of the borrower, and applying discount rates ranging between 5.5 % to 10.0 % at March 31, 2022 and 8.9 % to 10.0 % at December 31, 2021.

There were no loans that were 90 days or more past due as to principal or interest at March 31, 2022 and December 31, 2021.

As of March 31, 2022, one loan with fair value of $ 4.7 million and unpaid principal balance of $ 5.4 million has been placed on nonaccrual.

Equity Method Investments

At March 31, 2022 and December 31, 2021, there were no equity method investments under the fair value option other than investments held for disposition (Note 11).

One equity method investment that was under the fair value option was accounted for as a marketable equity security beginning May 2021 following a merger of the investee into a special purpose acquisition company.

The following table presents changes in recurring Level 3 fair value assets held for investment.

Realized and unrealized gains (losses) are included in other gain (loss) for loans receivable and equity method earnings (losses) for equity method investments.

Fair Value Option

(In thousands) AFS Debt Securities Loans Held for Investment and Held for Disposition Equity Method Investments (including Held for Disposition)

(In thousands) Loans Held for Investment Equity Method Investments

Fair value at December 31, 2020 $ 36,798 $ 28,540

Election of fair value option on January 1, 2020

— 1,556,131 —

Reclassification of accrued interest on January 1, 2020

Purchases, drawdowns, contributions and accretion 2,979 156,179 4,614

Paydowns, distributions and sales ( 4,542 ) ( 131,365 ) ( 900 )

Change in accrued interest and capitalization of paid-in-kind interest ( 245 ) —

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

Allowance for credit losses

( 23,973 ) — —

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

Other comprehensive income (loss) (1)

( 1,425 ) 30,419 5,599

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

Net unrealized losses on instruments held at September 30, 2020

$ — $ ( 280,822 ) $ ( 66,418 )

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

Realized and unrealized gain in earnings, net 270 8,260

Fair value at March 31, 2021 $ 36,823 $ 36,800

Net unrealized gains (losses) in earnings on instruments held at March 31, 2021 $ — $ 8,260

Fair value at December 31, 2021 $ 82,930 $ —

Purchases, drawdowns, contributions and accretion

11,120 92,967 8

Purchases, originations, drawdowns and contributions 360,990 —

Paydowns, distributions and sales

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Change in accrued interest and capitalization of paid-in-kind interest ( 650 ) —

Change in accounting method for equity interest

— — ( 27,626 )

Deconsolidation of investment entities (Note 21 )

— ( 341,577 ) —

Allowance for credit losses

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

Other — 4,834 —

Other comprehensive loss (1)

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

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

Net unrealized losses on instruments held at September 30, 2021

$ — $ ( 42,148 ) $ ( 23,031 )

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

Investments Carried at Fair Value Using Net Asset Value

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

September 30, 2021 December 31, 2020

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

Private fund—real estate $ 12,064 $ 7,117 $ 15,680 $ 8,026

Non-traded REIT—real estate 26,041 — 18,272 —

Private fund—emerging market private equity 2,172 — 2,224 —

The Company's interests in the private funds are not subject to redemption, with distributions to be received through liquidation of underlying investments of the funds.

The private funds each have eight and ten year lives, respectively, at inception, both of which may be extended in one year increments up to two years .

No secondary market currently exists for shares of the non-traded REIT and the Company does not currently expect to seek liquidity of its shares of the non-traded REIT.

Subject to then-existing market conditions, the board of directors of the non-traded REIT, along with the Company, as sponsor, are expected to consider alternatives for providing liquidity to the non-traded REIT shares beginning 2021, five years from completion of the offering stage, but with no definitive date by which it must do so.

In addition, the Company has agreed that any right to have its shares redeemed is subordinated to third party stockholders for so long as its advisory agreement is in effect.

Realized and unrealized loss in earnings, net ( 2,815 ) —

Fair value at March 31, 2022 $ 327,955 $ —

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

Investment Carried at Fair Value Using Net Asset Value

The Company has an investment in a non-traded healthcare REIT of $ 45.2 million at March 31, 2022 and $ 44.6 million at December 31, 2021.

The investment is valued based upon NAV beginning October 2021 when the investee, a healthcare real estate investor/manager, was acquired in conjunction with a merger of its co-sponsored non-traded REITs.

The transaction diluted the Company's equity interest in the investee, which was previously accounted for as an equity method investment.

Redemption of the Company's partnership interest in the non-traded healthcare REIT is restricted until the earliest of (1) the second anniversary of the issuance to the Company of such partnership units, (2) change in control of the general partner, and (3) initial public offering of the equity of the non-traded healthcare REIT, which may be subject to further restriction on redemption by the underwriters.

Nonrecurring Fair Values

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Adjustments to fair value generally result from the application of lower of amortized cost or fair value accounting for assets held for disposition or otherwise, write-down of asset values due to impairment.

Impairment is discussed in Note 11 for real estate, Notes 5 and 11 for equity method investments, and Notes 6 and 11 for intangible assets, including goodwill.

Fair Value Information on Financial Instruments Reported at Cost

Carrying amounts and estimated fair value of financial instruments reported at amortized cost are presented below.

Impairment is discussed in Note 11 for real estate, Notes 5 and 11 for equity method investments, and Note 11 for intangible assets.

Fair Value of Financial Instruments Reported at Cost

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

Fair Value Measurements Carrying Value

(In thousands) Level 1 Level 2 Level 3 Total

September 30, 2021

March 31, 2022

Debt at amortized cost

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Convertible and exchangeable senior notes 457,991 — — 457,991 275,766

Secured debt — — 3,789,416 3,789,416 3,789,416

Debt related to assets held for disposition — — 3,443,376 3,443,376 3,443,376

Investment-level secured debt — 3,422,265 966,890 4,389,155 4,555,632

December 31, 2021

Debt at amortized cost

Secured fund fee revenue notes $ — $ — $ 291,394 $ 291,394 $ 291,394

Convertible and exchangeable senior notes 716,970 — — 716,970 334,264

Secured debt — — 3,407,175 3,407,175 3,410,467

Debt related to assets held for disposition — 13,095 7,055,237 7,068,332 7,352,828

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

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

Junior subordinated debt that is held for disposition was valued based upon unadjusted quotations from a third party valuation firm, with such quotes derived using a combination of internal valuation models, comparable trades in non-active markets and other market data.

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

Investment-level secured debt — 3,598,655 655,270 4,253,925 4,234,744

Debt —Senior notes were valued using the last trade price in active markets.

Fair value of investment-level debt were estimated by either discounting expected future cash outlays at interest rates available to the respective borrower subsidiaries for similar instruments or for securitized debt, based upon indicative bond prices quoted by brokers in the secondary market.

Fair value of the secured fund fee revenue notes approximated its carrying value.

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

Variable Interest Entities

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Company-Sponsored Private Funds

The Company sponsors private funds and other investment vehicles as general partner for the purpose of providing investment management services in exchange for management fees and performance-based fees.

The Company sponsors private funds and other investment vehicles as general partner for the purpose of providing investment management services in exchange for management fees and carried interest.

These private funds are established as limited partnerships or equivalent structures.

1 unchanged sentence

Accordingly, the absence of such rights, which represent voting rights in a limited partnership, results in the private funds being considered VIEs.

The nature of the Company's involvement with its sponsored funds comprise fee arrangements and equity interests.

The nature of the Company's involvement with its sponsored funds comprise fee arrangements and general partner and limited partner equity interests.

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

1 unchanged sentence

As a result, the Company is considered to be acting in the capacity of a principal of the sponsored private fund and is therefore the primary beneficiary of the fund.

The Company’s exposure is limited to the value of its outstanding investment in the consolidated private funds of $ 50.5 million at September 30, 2021 and $ 46.5 million at December 31, 2020.

The Company’s exposure is limited to the value of its outstanding investment in the consolidated private funds of $ 51.0 million at March 31, 2022 and $ 53.1 million at December 31, 2021.

The Company, as general partner, is not obligated to provide any financial support to the consolidated private funds.

At September 30, 2021 and December 31, 2020, the consolidated private funds had total assets of $ 215.3 million and $ 172.2 million, respectively, and total liabilities of $ 59.7 million and $ 41.8 million, respectively, made up primarily of cash, marketable equity securities and unsettled trades.

At March 31, 2022 and December 31, 2021, the consolidated private funds had total assets of $ 238.5 million and $ 230.6 million, respectively, and total liabilities of $ 71.7 million and $ 63.0 million, respectively, made up primarily of cash, marketable equity securities and unsettled trades.

Unconsolidated Company-Sponsored Private Funds —The Company does not consolidate its sponsored private funds where it has insignificant direct equity interests or capital commitments to these funds as general partner.

3 unchanged sentences

The Company accounts for its equity interests in unconsolidated sponsored private funds under the equity method.

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

The Company's maximum exposure to loss is limited to the carrying value of its investment in the unconsolidated sponsored private funds, totaling $ 362.4 million at March 31,

2022 and $ 382.7 million at December 31, 2021, included in equity investments, and $ 46.0 million at March 31, 2022 and $ 45.4 million at December 31, 2021, included within assets held for disposition.

Securitizations

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Upon securitization, the Company had retained beneficial interests in the securitization vehicles, usually in the form of equity tranches or subordinate securities.

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

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

by the securitization vehicles.

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

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

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

The obligations of the securitization vehicles did not have any recourse to the general credit of the Company and its other subsidiaries.

Unconsolidated Securitizations —The Company does not consolidate the assets and liabilities of CDOs in which the Company has an interest but does not retain the collateral management function.

NRF Holdco had previously delegated the collateral management rights for certain sponsored N-Star CDOs and third party-sponsored CDOs to a third party collateral manager or collateral manager delegate who is entitled to a percentage of the senior and subordinate collateral management fees.

The Company continues to receive fees as named collateral manager or collateral manager delegate and retained administrative responsibilities.

The Company determined that the fees paid to the third party collateral manager or collateral manager delegate represent a variable interest in the CDOs and that the third party is acting as a principal.

The Company concluded that it does not have the power to direct the activities that most significantly impact the economic performance of these CDOs, which include but are not limited to, the ability to sell distressed collateral, and therefore the Company is not the primary beneficiary of such CDOs and does not consolidate these CDOs.

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

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

Wholly-owned subsidiaries of NRF Holdco that were formed as statutory trusts, NorthStar Realty Finance Trust I through VIII (the “Trusts”), previously issued trust preferred securities ("TruPS") in private placement offerings and used the proceeds to purchase junior subordinated notes to evidence loans made to NRF Holdco.

The sole assets of the Trusts consist of a like amount of junior subordinated notes issued by the Issuer at the time of the offerings (the "Junior Notes").

Neither the Company nor the OP is an obligor or guarantor on the Junior Notes or the TruPS.

NRF Holdco may redeem the Junior Notes at par, in whole or in part, for cash, after five years .

To the extent NRF Holdco redeems the Junior Notes, the Trusts are required to redeem a corresponding amount of TruPS.

The Company owns all of the common stock of the Trusts but does not consolidate the Trusts as the holders of the preferred securities issued by the Trusts are the primary beneficiaries of the Trusts.

The Company accounts for its interest in the Trusts under the equity method and its maximum exposure to loss is limited to its investment carrying value of $ 3.7 million at September 30, 2021 and December 31, 2020.

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

Unconsolidated Securitizations —The Company did not consolidate the assets and liabilities of CDOs in which the Company had an interest but did not retain the collateral management function.

Prior to a disposition in February 2022 of all the unconsolidated CDOs, comprising CDO bonds held by NRF Holdco (Note 13), the Company’s exposure to loss was limited to its investment in these CDOs, which aggregated to $ 30.2 million at December 31, 2021, previously presented as debt securities within assets held for disposition (Note 11).

Prior to the sale of NRF Holdco in February 2022, wholly-owned subsidiaries of NRF Holdco that were formed as statutory trusts, NorthStar Realty Finance Trust I through VIII (the “Trusts”), previously issued trust preferred securities ("TruPS") in private placement offerings and used the proceeds to purchase junior subordinated notes to evidence loans made to NRF Holdco.

The sole assets of the Trusts consisted of a like amount of junior subordinated notes issued by the Issuer at the time of the offerings (the "Junior Notes").

Neither the Company nor the OP was an obligor or guarantor on the Junior Notes or the TruPS.

The Company had owned all of the common stock of the Trusts but did not consolidate the Trusts as the holders of the preferred securities issued by the Trusts were the primary beneficiaries of the Trusts.

The Company had accounted for its interest in the Trusts under the equity method and its maximum exposure to loss was limited to its investment carrying value of $ 3.7 million at December 31, 2021.

The Trusts were recorded as equity investments and the junior subordinated notes as debt, both previously classified as held for disposition (Note 11) .

Earnings per Share

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

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

Three Months Ended March 31,

(In thousands, except per share data) 2022 2021

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$ ( 153,469 ) $ ( 85,789 )

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

Loss from discontinued operations attributable to DigitalBridge Group, Inc.

( 93,088 ) ( 160,501 )

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

Preferred dividends ( 15,759 ) ( 18,516 )

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

Net loss attributable to common stockholders ( 262,316 ) ( 264,806 )

Net income allocated to participating securities — —

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

Net loss allocated to common stockholders—basic ( 262,316 ) ( 264,806 )

Interest expense attributable to convertible and exchangeable notes (1)

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

Net loss allocated to common stockholders—diluted $ ( 262,316 ) $ ( 264,806 )

Weighted average common shares outstanding

Weighted average number of common shares outstanding—basic 569,940 474,899

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

Weighted average effect of dilutive shares (1)(2)(3)

Weighted average number of common shares outstanding—diluted 569,940 474,899

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

Income (Loss) per share—basic

Loss per share—basic

Loss from continuing operations $ ( 0.30 ) $ ( 0.22 )

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

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

Income (Loss) per share—diluted

Loss from discontinued operations ( 0.16 ) ( 0.34 )

Net loss attributable to common stockholders per common share—basic $ ( 0.46 ) $ ( 0.56 )

Loss per share—diluted

Loss from continuing operations $ ( 0.30 ) $ ( 0.22 )

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

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

Loss from discontinued operations ( 0.16 ) ( 0.34 )

Net loss attributable to common stockholders per common share—diluted $ ( 0.46 ) $ ( 0.56 )

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

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

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

(a) for the three months ended March 31, 2022 and 2021, the effect of adding back $ 138.0 million of debt extinguishment loss (Note 8) and interest expense and $ 7.7 million of interest expense, respectively, and 66,323,000 and 144,576,000 of weighted average dilutive common share equivalents, respectively.

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

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

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

(a) class A common shares that are contingently issuable in relation to performance stock units (Note 17) with weighted average shares of 8,657,000 and 10,395,900 for the three months ended March 31, 2022 and 2021, respectively;

and (b) class A common shares that are issuable to net settle the exercise of warrants (Note 10) with weighted average shares of 11,751,000 and 7,680,900 for the three months ended March 31, 2022 and 2021, respectively.

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

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

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

At March 31, 2022 and 2021, 50,915,500 and 51,532,800 of OP Units, respectively, were not included in the computation of diluted earnings per share in the respective periods presented.

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

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

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

Three Months Ended March 31,

(In thousands) 2022 2021

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Incentive fees

1,313 — 6,396 —

Other fee income

1,194 1,088 3,245 3,794

Total fee income—affiliates $ 42,837 $ 29,443

Management Fees — The Company earns management fees for the day-to-day operations and administration of its sponsored digital private funds and other digital investment vehicles, generally at an annual rate ranging from 0.3 % to 1.5 % of investors' committed capital during commitment or investment period, and thereafter, of contributed or invested capital.

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

Management Fees — The Company earns management fees for providing investment management services to its sponsored private funds and other investment vehicles, portfolio companies and managed accounts.

Management fees are calculated generally at annual rates ranging from 0.2 % to 1.5 % of investors' committed capital during the commitment period of the vehicle, and thereafter, contributed or invested capital;

or net asset value for vehicles in the liquid securities strategy.

Incentive Fees —The Company is entitled to incentive fees from funds and managed accounts in its liquid securities strategy.

Incentive fees are determined based upon the performance of the respective funds or accounts, subject to the achievement of specified return thresholds in accordance with the terms set out in their respective governing agreements.

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

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Equity-Based Compensation

The Colony Capital, Inc.

The DigitalBridge Group, Inc.

2014 Omnibus Stock Incentive Plan (the "Equity Incentive Plan") provides for the grant of restricted stock, performance stock units ("PSUs"), Long Term Incentive Plan ("LTIP") units, restricted stock units ("RSUs"), deferred stock units ("DSUs"), options, warrants or rights to purchase shares of the Company's common stock, cash incentives and other equity-based awards to the Company's officers, directors (including non-employee directors), employees, co-employees, consultants or advisors of the Company or of any parent or subsidiary who provides services to the Company.

Shares reserved for the issuance of awards under the Equity Incentive Plan are subject to equitable adjustment upon the occurrence of certain corporate events, provided that this number automatically increases each January 1st by 2 % of the outstanding number of shares of the Company’s class A common stock on the immediately preceding December 31st.

At September 30, 2021, an aggregate 73.8 million shares of the Company's class A common stock were reserved for the issuance of awards under the Equity Incentive Plan.

At March 31, 2022, an aggregate 85.2 million shares of the Company's class A common stock were reserved for the issuance of awards under the Equity Incentive Plan.

Restricted Stock — Restricted stock awards in the Company's class A common stock are granted to senior executives, directors and certain employees, generally subject to a service condition only, with annual time-based vesting in equal tranches over a three-year period.

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Performance Stock Units — PSUs are granted to senior executives and certain employees, and are subject to both a service condition and a market condition.

Following the end of the measurement period, the recipients of PSUs who remain employed will vest in, and be issued a number of shares of the Company's class A common stock, generally ranging from 0 % to 200 % of the number of PSUs granted and determined based upon the performance of the Company's class A common stock relative to that of a specified peer group over a three -year measurement period (such

measurement metric the "total shareholder return").

In addition, recipients of PSUs whose employment is terminated after the first anniversary of their PSU grant are eligible to vest in a portion of the PSU award following the end of the measurement period based upon achievement of the total shareholder return metric applicable to the award.

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(2) Based upon the Company's expected annualized dividends.

Expected dividend yield is zero for the 2021 PSU award as the Company suspended common dividends beginning with the second quarter of 2020.

Expected dividend yield is zero for the 2022 and 2021 PSU award as the Company suspended common dividends beginning with the second quarter of 2020.

(3) Based upon the continuously compounded zero-coupon U.S.

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LTIP units issued have either (1) a service condition only, valued based upon the Company's class A common stock price on grant date;

or (2) both a service condition and a market condition based upon the Company's class A common stock achieving target prices over predetermined measurement periods, subject to continuous employment to the time of vesting, and valued using a Monte Carlo simulation.

or (2) both a service condition and a market condition based upon the Company's class A common stock achieving a target price over a predetermined measurement period, subject to continuous employment to the time of vesting, and valued using a Monte Carlo simulation.

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

2020 LTIP Grant 2019 LTIP Grant (1)

2019 LTIP Grant (1)

Expected volatility of the Company's class A common stock (2)

43.1 % 28.3 %

Expected dividend yield (3)

Risk-free rate (per annum) (4)

(1) Represents 10 million LTIP units granted to Marc Ganzi in connection with the Company's acquisition of Digital Bridge Holdings, LLC in July 2019, with vesting based upon achievement of the Company's class A common stock price closing at or above $ 10 over any 90 consecutive trading days prior to the fifth anniversary of the grant date.

(1) Represents 10 million LTIP units granted to the Company's Chief Executive Officer, Marc Ganzi, in connection with the Company's acquisition of Digital Bridge Holdings, LLC in July 2019, with vesting based upon achievement of the Company's class A common stock price closing at or above $ 10 over any 90 consecutive trading days prior to the fifth anniversary of the grant date.

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

(3) Based upon the Company's most recently issued dividend prior to grant date and closing price of the Company's class A common stock on grant date.

Expected dividend yield is zero for the 2020 LTIP award as the Company suspended common dividends beginning with the second quarter of 2020.

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

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DSUs awarded in lieu of annual base fees are fully vested on their grant date, while DSUs awarded in lieu of restricted stock awards vest one year from their grant date.

entitled to a dividend equivalent, in the form of additional DSUs based on dividends declared and paid on the Company's class A common stock, subject to the same restrictions and vesting conditions, where applicable.

DSUs are entitled to a dividend equivalent, in the form of additional DSUs based on dividends declared and paid on the Company's class A common stock, subject to the same restrictions and vesting conditions, where applicable.

Upon separation of service from the Company, vested DSUs will be settled in shares of the Company’s class A common stock.

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

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

Three Months Ended March 31,

(In thousands)

2021 2020 2021 2020

Compensation expense (including $ 37 and $ 1,064 related to dividend equivalent rights)

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Forfeited ( 13,676 ) — — — ( 2,138,743 ) ( 2,152,419 ) 1.82 5.79

Unvested shares and units at September 30, 2021

Unvested shares and units at March 31, 2022

8,893,723 10,000,000 101,748 9,589,564 7,857,438 36,442,473 4.46 2.87

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PSUs for which the total shareholder return was not met at the end of the performance period are forfeited.

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

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

Fair value of equity awards that vested, determined based upon their respective fair values at vesting date, was $ 33.4 million and $ 27.5 million for the three months ended March 31, 2022 and 2021, respectively.

At March 31, 2022, aggregate unrecognized compensation cost for all unvested equity awards was $ 53.1 million, which is expected to be recognized over a weighted average period of 2.4 years.

This excludes $ 25.1 million of unvested RSUs that are not currently probable of achieving their performance conditions and have a remaining performance measurement period of 2.1 years.

Awards Granted by Managed Companies

Prior to the termination of the Company’s management agreement with BRSP on April 30, 2021, BRSP granted restricted stock to the Company and certain of the Company's employees ("managed company awards") that typically vest over a three -year period, subject to a service condition.

Prior to the termination of the Company’s management agreement with BRSP on April 30, 2021, BRSP granted equity awards to the Company and certain of the Company's employees ("managed company awards") that typically vest over a three-year period, subject to service conditions.

Generally, the Company granted the managed company awards that it received in its capacity as manager to its employees with substantially the same terms and service requirements.

Such grants were made at the discretion of the Company, and the Company may consult with the board of directors or compensation committee of BRSP as to final allocation of awards to its employees.

Managed company awards granted to the Company, pending grant by the Company to its employees, are recognized based upon their fair value at grant date as other assets and other liabilities on the consolidated balance sheet.

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

The deferred revenue liability is amortized into other income as the awards vest to the Company.

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The other asset and other liability associated with managed company awards granted to employees are subject to adjustment to fair value at each reporting period, with changes reflected in equity-based compensation and other income, respectively.

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

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

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

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

The BRSP equity awards granted by the Company to its employees fully vested and accelerated upon termination of the management contract in April 2021.

Equity-based compensation expense related to managed company awards was $ 4.6 million in 2021, with a corresponding amount recognized in other income, all of which were reflected in discontinued operations (Note 12).

Transactions with Affiliates

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and (iii) directors, senior executives and employees of the Company (collectively, "employees").

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

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

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

(In thousands) March 31, 2022 December 31, 2021

Due from Affiliates

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$ 50,387 $ 49,230

Due to Affiliates

Employees and other affiliates

Significant transactions with affiliates include the following:

Fee Income —Fee income earned from investment vehicles that the Company manages and/or sponsors, and may have an equity interest or co-investment, are presented in Note 16, except for amounts included within discontinued operations (Note 12) and assets held for sale (Note 11).

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

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

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

Such cost reimbursements, included in other income, totaled $ 3.4 million and $ 0.5 million for the three months ended March 31, 2022 and 2021, respectively.

Separately, reimbursements of direct and indirect operating costs for managing the operations of BRSP prior to termination of the BRSP management agreement in April 2021 are reflected in other income within discontinued operations (Note 12) and related receivable is reflected as amounts due from affiliates within assets held for disposition (Note 11).

Recoverable Expenses— The Company pays organization and offering costs associated with the formation and capital raising of investment vehicles sponsored by the Company, for which the Company recovers from these investment vehicles up to specified thresholds, as applicable.

NorthStar Healthcare Credit Facility— The Company provided NorthStar Healthcare with an unsecured revolving credit facility at market terms with a maximum principal amount of $ 35.0 million.

In June 2021, the credit facility was extended from December 2022 to June 2023, with a six-month extension option.

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

The credit facility was fully drawn in April 2020, reflected as amounts due from affiliates within assets held for sale at December 31, 2020 (Note 11), and was fully repaid in July 2021.

Digital Real Estate Acquisitions— In connection with acquisition of Vantage SDC in July 2020 (Note 3), the Company entered into a series of agreements with Messrs.

Ganzi and Jenkins, and their respective affiliates, pursuant to which Messrs.

Ganzi and Jenkins invested $ 8.7 million and $ 2.1 million, respectively, in Vantage SDC alongside the Company and the co-investors on the same economic terms.

Such amounts invested represented 40 % of carried interest payments received by each of Messrs.

Ganzi and Jenkins in connection with the Vantage SDC acquisition as a result of their respective personal investments in Vantage made prior to the Company’s acquisition of DBH.

Payments to be made by the Company and its co-investors to the previous owners of Vantage SDC for future build-out of expansion capacity within the portfolio, including lease-up of the expanded capacity and existing inventory, will trigger additional carried interest payments to Messrs.

Ganzi and Jenkins.

Separately, DataBank acquired all of zColo's colocation business in December 2020 and February 2021 from Zayo, which is a portfolio company of DCP I and other co-invest vehicles sponsored and managed by the Company.

In the aforementioned transactions, t he Company took a series of steps to mitigate conflicts in the transactions, including receiving fairness opinions on the purchase price from a nationally recognized third party valuation firm.

Additionally, the transactions, specifically the related party aspects of the transactions, were subject to the approval of either the Company's board of directors or the audit committee of the board of directors.

Arrangements with Company-Sponsored Private Funds— The Company co-invests alongside its sponsored private funds through joint ventures between the Company and the sponsored private fund.

These co-investment joint ventures are consolidated by the Company.

The Company has capital commitments, as general partner, directly into the private funds and as an affiliate of the general partner, capital commitments satisfied through co-investment joint ventures.

In connection with the Company's commitments as an affiliate of the general partner, the Company is allocated a proportionate share of the costs of the private funds such as financing and administrative costs.

Such costs expensed in the periods presented were immaterial and relate primarily to the Company's share of the funds' operating costs and deferred financing costs on borrowings of the funds.

Equity Awards of BRSP —As discussed in Note 17, prior to termination of the Company’s management agreement with BRSP in April 2021, BRSP granted equity awards to the Company and certain of the Company's employees, either directly or indirectly through the Company, are recognized as a gross-up of equity-based compensation expense over the vesting period with a corresponding amount in other income, reflected in discontinued operations.

Digital Real Estate Acquisitions— Marc Ganzi, Chief Executive Officer of the Company, and Ben Jenkins, President and Chief Investment Officer of the Company, were former owners of Digital Bridge Holdings, LLC ("DBH") prior to its merger into the Company in July 2019.

Ganzi and Jenkins had retained their equity investments and general partner interests in the portfolio companies of DBH, which include DataBank and Vantage.

As a result of the personal investments made by Messrs.

Ganzi and Jenkins in DataBank and Vantage SDC prior to the Company’s acquisition of DBH, additional investments made by the Company in DataBank and Vantage SDC subsequent to their initial acquisitions may trigger future carried interest payments to Messrs.

Ganzi and Jenkins upon the occurrence of future realization events.

Such investments made by the Company include ongoing payments for the build-out of expansion capacity, including lease-up of the expanded capacity and existing inventory, in Vantage SDC (Note 3) and the acquisition of additional interest in DataBank from an existing investor in January 2022 (Note 10).

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

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Such carried interest allocation to Messrs.

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

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

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

Ganzi and Jenkins that are unrealized or realized but unpaid are included in noncontrolling interests on the balance sheet, in the amount of $ 21.6 million at March 31, 2022 and $ 20.8 million at December 31, 2021.

Carried interest allocated during the period is recorded as net income attributable to noncontrolling interests totaling $ 0.8 million for the three months ended March 31, 2022, with an immaterial allocation in the first quarter of 2021.

Investment in Managed Investment Vehicles —Subject to the Company's related party policies and procedures, senior management, investment professionals and certain other employees may invest on a discretionary basis in investment vehicles sponsored by the Company, either directly in the vehicle or indirectly through the general partner entity.

These investments are generally not subject to management fees, but otherwise bear their proportionate share of other operating expenses of the investment vehicles.

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

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

At March 31, 2022 and December 31, 2021, such investments in consolidated investment vehicles and general partner entities totaled $ 16.3 million and $ 19.5 million, respectively, reflected in redeemable noncontrolling interests and noncontrolling interests on the balance sheet.

Their share of net income was immaterial for the three months ended March 31, 2022 and 2021, respectively.

Aircraft— P ursuant to Mr.

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The Company reimbursed Mr.

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

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

Barrack, Jr., the Company's former Executive Chairman, was provided use of the Company’s aircraft for personal travel.

Pursuant to an agreement with a subsidiary of the Company, Mr.

Barrack paid the Company for personal usage based upon the incremental cost to the Company, including direct and indirect variable costs, but in no case more than the maximum reimbursement permitted by the Federal Aviation Regulations under the agreement.

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

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

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

Barrack's newly formed investment entity

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

Barrack from the Venture.

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

Ganzi $ 0.2 million and $ 1.1 million for the three months ended March 31, 2022 and 2021, respectively.

Advancement of Expenses— Effective April 1, 2021, Thomas J.

Barrack stepped down as Executive Chairman of the Company and in July 2021, resigned as a member of the Company's Board of Directors.

In October 2021, the Company entered into an Agreement Regarding Advancement of Certain Expenses ("Advancement Agreement") with Mr.

Barrack, which is generally consistent with the Company’s obligations and Mr.

Barrack’s rights regarding advancement of expenses under the terms of a January 2017 Indemnification Agreement between the Company and Mr.

Barrack, and under the Company’s Bylaws.

The Advancement Agreement (a) memorializes the parties’ disagreement as to the Company’s obligations and Mr.

Barrack’s rights under the earlier Indemnification Agreement and the Bylaws, and (b) obligates Mr.

Barrack to reimburse the Company for such advanced expenses under certain circumstances.

The Company expensed $ 5.6 million in the three months ended March 31, 2022 pursuant to the Advancement Agreement.

Segment Reporting

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.

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

The Company earns management fees, generally based on the amount of assets or capital managed in investment vehicles, and has the potential to earn carried interest based upon the performance of such investment vehicles, subject to achievement of minimum return hurdles.

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 Investment Management ("Digital IM")— This business represents a leading global digital infrastructure investment platform, managing capital on behalf of a diverse base of global investors.

The Company's flagship opportunistic strategy is conducted through its Digital Bridge Partners platform ("DBP") and separately capitalized vehicles, while other strategies, including digital credit, ventures and public equities, are conducted through other investment vehicles.

The Company earns management fees, generally based on the amount of assets or capital managed in investment vehicles, and has the potential to earn incentive fees and carried interest based upon the performance of such investment vehicles, subject to achievement of minimum return hurdles.

Earnings from our Digital IM segment are attributed 31.5% to Wafra, a significant investor in our Digital IM business, until such time Wafra's interest is redeemed by the Company (as discussed further in Note 10).

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

The Company currently owns interests in two companies:

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

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

DataBank, including zColo, an edge colocation data center business (DBRG ownership at 21.8% as of March 31, 2022, 20% as of December 31, 2021);

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

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

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

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

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

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

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

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

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

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

Such adjustments amounted to $ 0.8 million and $ 3.3 million for the three months ended March 31, 2022 and 2021, respectively.

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

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

Three Months Ended September 30, 2021

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

Property operating expense — 80,226 — 80,226

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

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

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

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

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

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

16,870 ( 12,142 ) ( 11,506 ) ( 6,778 )

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

Net income attributable to DigitalBridge Group, Inc.

Three Months Ended September 30, 2020

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

Property operating expense — 37,544 — 37,544

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

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

Impairment loss 3,832 — — 3,832

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

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

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

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

1,964 ( 5,082 ) ( 14,547 ) ( 17,665 )

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

Net loss attributable to DigitalBridge Group, Inc.

$ ( 187,267 )

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

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Total revenues $ 44,893 $ 202,522 $ 10,044 $ 257,459

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Depreciation and amortization 5,276 122,891 400 128,567

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

Equity method earnings (losses), including carried interest ( 31,062 ) — 19,190 ( 11,872 )

Income tax benefit (expense) ( 2,374 ) 330 9,457 7,413

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

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

Loss from continuing operations ( 9,143 ) ( 74,141 ) ( 153,002 ) ( 236,286 )

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

( 7,602 ) ( 12,824 ) ( 133,043 ) ( 153,469 )

2 unchanged sentences

$ ( 246,557 )

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

Total revenues $ 31,120 $ 189,202 $ 259 $ 220,581

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Depreciation and amortization 6,267 122,221 10,937 139,425

Impairment loss 3,832 — 12,297 16,129

Equity method earnings (losses), including carried interest 6,295 — ( 309,788 ) ( 303,493 )

Equity method losses, including carried interest ( 195 ) — ( 16,444 ) ( 16,639 )

Income tax benefit (expense) ( 2,645 ) 12,268 13,573 23,196

3 unchanged sentences

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

( 2,143,043 )

Net loss attributable to DigitalBridge Group, Inc.

$ ( 246,290 )

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

September 30, 2021 December 31, 2020

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

March 31, 2022 December 31, 2021

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

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Digital Operating 8,209,995 — 7,608,451 —

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

Other 2,274,430 546,453 2,257,598 533,069

11,080,850 655,069 10,521,201 673,096

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

As of September 30, 2021, the Company was not involved in any legal proceedings that are expected to have a material adverse effect on the Company’s results of operations, financial position or liquidity.

As of March 31, 2022, the Company was not involved in any legal proceedings that are expected to have a material adverse effect on the Company’s results of operations, financial position or liquidity.

Supplemental Disclosure of Cash Flow Information

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2022 2021

2 unchanged sentences

$ 70,065 $ 126,892

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

Cash received (paid) for income tax, net ( 328 ) 2,123

Operating lease payments 15,650 16,781

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Supplemental Disclosure of Cash Flows from Discontinued Operations

Net cash provided by operating activities of discontinued operations $ 165,178 $ 109,597

Net cash provided by investing activities of discontinued operations 676,579 65,735

Net cash used in operating activities of discontinued operations $ ( 5,488 ) $ ( 9,510 )

Net cash provided by (used in) investing activities of discontinued operations ( 86,387 ) 12,004

Net cash used in financing activities of discontinued operations ( 12,653 ) ( 18,984 )

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Dividends and distributions payable $ 15,759 $ 18,516

$ 16,899 $ 18,516

Improvements in operating real estate in accrued and other liabilities 9,910 6,268

29,324 19,806

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

Receivable from loan repayments and asset sales 14,009 —

Operating lease right-of-use assets and lease liabilities established 1,498 7,170

Finance lease payments accrued 5,401 —

Redemption of OP Units for common stock 2 16

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

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

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

Noncontrolling interests assumed in real estate acquisitions — 366,136

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

Exchange of notes into shares of Class A common stock 60,317 —

Seller Note received in sale of the equity of NRF Holdco 154,992 —

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

3,420,783 2,814,793

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

Assets of investment entities deconsolidated (2)

3,144,700 2,840,065

Noncontrolling interests of investment entities deconsolidated (1)

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

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

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

215,777 22,413

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

Subsequent Events

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The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

• the duration and severity of the current novel coronavirus (COVID-19) pandemic, and its impact on the global market, economic and environmental conditions generally and in the digital and communications technology, wellness infrastructure and hospitality real estate, other commercial real estate equity and debt, and investment management sectors;

• the duration and severity of the current novel coronavirus (COVID-19) pandemic, driven by, among other factors, the treatment developments and public adoption rates and effectiveness of COVID-19 vaccines against emerging variants of COVID-19 such as the Delta and Omicron variants;

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

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

• whether we will successfully execute our strategic transformation to become a digital infrastructure and real estate focused company within the timeframe contemplated or at all, and the impact of such transformation on the Company's legacy portfolios and assets, including whether such transformation will be consistent with the Company’s REIT status;

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

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

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

• the impact of completed or anticipated initiatives related to our digital transformation, including the strategic investment by Wafra and the formation of certain other investment management platforms, on our company's growth and earnings profile;

• the impact of initiatives related to our digital transformation, including the strategic investment by Wafra and the formation of certain other investment management platforms, on our growth and earnings profile;

• whether the transactions with Wafra and AMP Capital will be completed within the time frame and on the terms anticipated or at all, and whether we will realize any of the anticipated benefits from the transactions;

• whether we will realize any of the anticipated benefits of our strategic partnership with Wafra, including whether Wafra will make additional investments in our Digital IM and Digital Operating segments;

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

• the ability to realize anticipated strategic and financial benefits from terminating the management agreement with Brightspire Capital, Inc.

formerly, Colony Credit Real Estate, Inc.

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

• our ability to redeploy any proceeds received from the sale of our non-digital or other legacy assets within the timeframe and manner contemplated or at all;

• our ability to redeploy the proceeds received from the sale of our non-digital legacy assets within the timeframe and manner contemplated or at all;

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

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

• the impact of adverse conditions affecting a specific asset class in which we have investments;

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

3 unchanged sentences

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

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

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

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• our levels of leverage;

• adverse domestic or international economic conditions, including those resulting from the COVID-19 pandemic, and the impact on the commercial real estate or real-estate related sectors;

• adverse domestic or international economic conditions, including those resulting from the COVID-19 pandemic, supply chain difficulties and possible inflation;

• the impact of legislative, regulatory and competitive changes;

• actions, initiatives and policies of the U.S.

governments and changes to U.S.

government policies and the execution and impact of these actions, initiatives and policies, including regulations permitting or requiring forbearance of rent obligations and inhibiting the ability to pursue evictions and obtain late fees from non-paying tenants;

• whether we will maintain our qualification as a real estate investment trust for U.S.

federal income tax purposes and our ability to do so;

• the risks of transitions from a REIT to a C-corporation for tax purposes, and the related liability for corporate and other taxes;

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

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

10 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements