DigitalBridge Group, Inc. 10-Q

Item 1. Financial Statements. DigitalBridge Group, Inc. Consolidated Balance Sheets (In thousands, except per share data) March 31, 2022 (Unaudited) December 31, 2021 Assets Cash and cash equivalents $ 1,117,688 $ 1,602,102 Restricted cash 106,332 99,121 Real estate, net 5,628,072 4,972,284 Loans receivable (at fair value) 504,739 173,921 Equity investments ($ 242,915 and $ 201,912 at fair value) 940,601 935,153 Goodwill 761,368 761,368 Deferred leasing costs and intangible assets, net 1,225,487 1,187,627 Assets held for disposition 151,307 3,676,615 Other assets ($ 5,176 and $ 944 at fair value) 746,176 740,395 Due from affiliates 50,387 49,230 Total assets $ 11,232,157 $ 14,197,816 Liabilities Debt, net $ 5,123,246 $ 4,860,402 Accrued and other liabilities ($ 4,943 and $ 0 at fair value) 896,253 928,042 Intangible liabilities, net 34,459 33,301 Liabilities related to assets held for disposition 758 3,088,699 Dividends and distributions payable 15,759 15,759 Total liabilities 6,070,475 8,926,203 Commitments and contingencies (Note 20) Redeemable noncontrolling interests 1,038,739 359,223 Equity Stockholders’ equity: Preferred stock, $ 0.01 par value per share; $ 883,500 liquidation preference; 250,000 shares authorized; 35,340 shares issued and outstanding 854,232 854,232 Common stock, $ 0.01 par value per share Class A, 949,000 shares authorized; 597,480 and 568,577 shares issued and outstanding 5,974 5,685 Class B, 1,000 shares authorized; 666 shares issued and outstanding 7 7 Additional paid-in capital 7,356,363 7,820,807 Accumulated deficit ( 6,838,497 ) ( 6,576,180 ) Accumulated other comprehensive income 12,753 42,383 Total stockholders’ equity 1,390,832 2,146,934 Noncontrolling interests in investment entities 2,688,907 2,653,173 Noncontrolling interests in Operating Company 43,204 112,283 Total equity 4,122,943 4,912,390 Total liabilities, redeemable noncontrolling interests and equity $ 11,232,157 $ 14,197,816 The accompanying notes are an integral part of the consolidated financial statements. 4 Table of Contents DigitalBridge Group, Inc. Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended March 31, 2022 2021 Revenues Property operating income $ 202,511 $ 189,002 Interest income 5,166 854 Fee income (from affiliates) 42,837 29,443 Other income ($ 3,379 and $ 519 from affiliates) 6,945 1,282 Total revenues 257,459 220,581 Expenses Property operating expense 84,003 79,862 Interest expense 44,030 39,780 Investment expense 9,565 6,893 Transaction-related costs 165 1,618 Depreciation and amortization 128,567 139,425 Compensation expense—cash and equity-based 65,542 78,786 Compensation expense (reversal)—incentive fee and carried interest ( 20,352 ) ( 33 ) Administrative expenses 27,885 17,796 Total expenses 339,405 364,127 Other income (loss) Other loss, net ( 149,881 ) ( 9,350 ) Equity method earnings (losses) 19,207 ( 16,417 ) Equity method losses—carried interest ( 31,079 ) ( 222 ) Loss from continuing operations before income taxes ( 243,699 ) ( 169,535 ) Income tax benefit 7,413 23,196 Loss from continuing operations ( 236,286 ) ( 146,339 ) Loss from discontinued operations ( 107,398 ) ( 481,260 ) Net loss ( 343,684 ) ( 627,599 ) Net income (loss) attributable to noncontrolling interests: Redeemable noncontrolling interests ( 11,220 ) 2,449 Investment entities ( 63,045 ) ( 355,862 ) Operating Company ( 22,862 ) ( 27,896 ) Net loss attributable to DigitalBridge Group, Inc. ( 246,557 ) ( 246,290 ) Preferred stock dividends 15,759 18,516 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 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 loss attributable to common stockholders per common share—diluted $ ( 0.46 ) $ ( 0.56 ) Weighted average number of shares Basic 569,940 474,899 Diluted 569,940 474,899 The accompanying notes are an integral part of the consolidated financial statements. 5 Table of Contents DigitalBridge Group, Inc. Consolidated Statements of Comprehensive Income (Loss) (In thousands) (Unaudited) Three Months Ended March 31, 2022 2021 Net loss $ ( 343,684 ) $ ( 627,599 ) Changes in accumulated other comprehensive income (loss) related to: Equity method investments 2 ( 2,708 ) Available-for-sale debt securities ( 6,373 ) ( 3,309 ) Cash flow hedges — 1,285 Foreign currency translation ( 37,941 ) ( 59,618 ) Net investment hedges — 4,118 Other comprehensive income (loss) ( 44,312 ) ( 60,232 ) Comprehensive loss ( 387,996 ) ( 687,831 ) Comprehensive income (loss) attributable to noncontrolling interests: Redeemable noncontrolling interests ( 11,220 ) 2,449 Investment entities ( 75,056 ) ( 392,518 ) Operating Company ( 25,458 ) ( 30,329 ) Comprehensive loss attributable to stockholders $ ( 276,262 ) $ ( 267,433 ) The accompanying notes are an integral part of the consolidated financial statements. 6 Table of Contents DigitalBridge Group, Inc. Consolidated Statements of Equity (In thousands, except per share data) (Unaudited) 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 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 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 ) 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) — — ( 2,445 ) — 76 ( 2,369 ) 4,682 ( 2,313 ) — 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 Net loss — — — ( 246,557 ) — ( 246,557 ) ( 63,045 ) ( 22,862 ) ( 332,464 ) Other comprehensive loss — — — — ( 29,705 ) ( 29,705 ) ( 12,011 ) ( 2,596 ) ( 44,312 ) Exchange of notes for common stock (Note 8) — 256 177,562 — — 177,818 — — 177,818 Adjustment to fair value of redeemable noncontrolling interests (Note 10) — — ( 690,000 ) — — ( 690,000 ) — — ( 690,000 ) Deconsolidation of investment entities (Note 21) — — — — — — ( 176,856 ) — ( 176,856 ) Redemption of OP Units for class A common stock — — 2 — — 2 — ( 2 ) — 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 ) Acquisition of noncontrolling interest (Note 10) — — — — — — ( 32,076 ) — ( 32,076 ) Contributions from noncontrolling interests — — — — — — 343,006 — 343,006 Distributions to noncontrolling interests — — — — — — ( 26,018 ) — ( 26,018 ) Preferred stock dividends — — — ( 15,760 ) — ( 15,760 ) — — ( 15,760 ) Reallocation of equity (Notes 2 and 10) — — 45,099 — 75 45,174 — ( 45,174 ) — 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. 7 Table of Contents DigitalBridge Group, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three Months Ended March 31, 2022 2021 Cash Flows from Operating Activities Net loss $ ( 343,684 ) $ ( 627,599 ) Adjustments to reconcile net loss to net cash provided by operating activities: Paid-in-kind interest added to loan principal, net of interest received ( 1,144 ) ( 4,267 ) Straight-line rent income ( 4,530 ) 18,800 Amortization of above- and below-market lease values, net ( 132 ) 6,098 Amortization of deferred financing costs and debt discount and premium, net 96,279 43,729 Equity method (gains) losses ( 116 ) 111,519 Distributions of income from equity method investments — 520 Allowance for doubtful accounts — 205 Impairment of real estate and related intangibles and right-of-use asset 23,802 123,760 Depreciation and amortization 130,906 190,305 Equity-based compensation 18,719 19,319 Gain on sales of real estate, net — ( 45,750 ) Deferred income tax benefit ( 9,040 ) ( 34,480 ) Loss on extinguishment of exchangeable notes 133,173 — Other loss, net 17,332 213,661 (Increase) decrease in other assets and due from affiliates ( 4,186 ) ( 31,721 ) Increase (decrease) in accrued and other liabilities and due to affiliates ( 55,136 ) ( 7,460 ) Other adjustments, net ( 986 ) ( 576 ) 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 ) Return of capital from equity method investments 11,829 2,253 Acquisition of loans receivable and debt securities ( 101,607 ) ( 9,697 ) Net disbursements on originated loans ( 205,507 ) ( 3,631 ) Repayments of loans receivable 15,845 8,798 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 — Proceeds from sale of equity investments 194,524 90,509 Investment deposits ( 13,367 ) — Proceeds from sale of corporate fixed assets — 14,946 Net receipts on settlement of derivatives — 15,913 Other investing activities, net ( 875 ) — Net cash used in investing activities ( 1,102,149 ) ( 7,901 ) 8 Table of Contents DigitalBridge Group, Inc. Consolidated Statements of Cash Flows (Continued) (In thousands) (Unaudited) Three Months Ended March 31, 2022 2021 Cash Flows from Financing Activities Dividends paid to preferred stockholders $ ( 15,760 ) $ ( 18,516 ) Repayment or repurchase of senior notes ( 14,237 ) ( 31,502 ) Borrowings from secured debt 326,500 684,537 Repayment of secured debt ( 3,894 ) ( 600,082 ) Payment of deferred financing costs ( 6,999 ) ( 18,543 ) Contributions from noncontrolling interests 353,156 123,852 Distributions to and redemptions by noncontrolling interests ( 35,962 ) ( 32,857 ) 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 Effect of exchange rates on cash, cash equivalents and restricted cash ( 651 ) 4,050 Net increase (decrease) in cash, cash equivalents and restricted cash ( 542,225 ) 71,383 Cash, cash equivalents and restricted cash, beginning of period 1,766,245 963,008 Cash, cash equivalents and restricted cash, end of period $ 1,224,020 $ 1,034,391 Reconciliation of cash, cash equivalents and restricted cash to consolidated balance sheets Three Months Ended March 31, 2022 2021 Beginning of the period Cash and cash equivalents $ 1,602,102 $ 703,544 Restricted cash 99,121 67,772 Restricted cash included in assets held for disposition 65,022 191,692 Total cash, cash equivalents and restricted cash, beginning of period $ 1,766,245 $ 963,008 End of the period Cash and cash equivalents $ 1,117,688 $ 788,361 Restricted cash 106,332 90,101 Restricted cash included in assets held for disposition — 155,929 Total cash, cash equivalents and restricted cash, end of period $ 1,224,020 $ 1,034,391 The accompanying notes are an integral part of the consolidated financial statements. 9 Table of Contents DigitalBridge Group, Inc. Notes to Consolidated Financial Statements March 31, 2022 (Unaudited) 1. Business and Organization DigitalBridge Group, Inc. 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. Organization 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 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. 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 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). 10 Table of Contents 2. Summary of Significant Accounting Policies The significant accounting policies of the Company are described below. The accounting policies of the Company's unconsolidated ventures are substantially similar to those of the Company. Basis of Presentation The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. However, the results of operations for the interim period presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or any other future period. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in, or presented as exhibits to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The accompanying consolidated financial statements include the accounts of the Company and its controlled subsidiaries. All significant intercompany accounts and transactions have been eliminated. The portions of equity, net income and other comprehensive income of consolidated subsidiaries that are not attributable to the parent are presented separately as amounts attributable to noncontrolling interests in the consolidated financial statements. A substantial portion of noncontrolling interests represents interests held by private investment funds or other investment vehicles managed by the Company and which invest alongside the Company and membership interests in OP primarily held by certain employees of the Company. To the extent the Company consolidates a subsidiary that is subject to industry-specific guidance, the Company retains the industry-specific guidance applied by that subsidiary in its consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and assumptions. Principles of Consolidation The Company consolidates entities in which it has a controlling financial interest by first considering if an entity meets the definition of a variable interest entity ("VIE") for which the Company is deemed to be the primary beneficiary, or if the Company has the power to control an entity through a majority of voting interest or through other arrangements. Variable Interest Entities —A VIE is an entity that either (i) lacks sufficient equity to finance its activities without additional subordinated financial support from other parties; (ii) whose equity holders lack the characteristics of a controlling financial interest; and/or (iii) is established with non-substantive voting rights. 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. 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 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; the obligation or likelihood for the Company or the related party to fund operating losses of the VIE; 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, 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. The Company consolidates such entities when it has the power to control these entities through ownership of a majority of the entities' voting interests or through other arrangements. 11 Table of Contents At each reporting period, the Company reassesses whether changes in facts and circumstances cause a change in the status of an entity as a VIE or voting interest entity, and/or a change in the Company's consolidation assessment. Changes in consolidation status are applied prospectively. An entity may be consolidated as a result of this reassessment, in which case, the assets, liabilities and noncontrolling interest in the entity are recorded at fair value upon initial consolidation. Any existing equity interest held by the Company in the entity prior to the Company obtaining control will be remeasured at fair value, which may result in a gain or loss recognized upon initial consolidation. However, if the consolidation represents an asset acquisition of a voting interest entity, the Company's existing interest in the acquired assets, if any, is not remeasured to fair value but continues to be carried at historical cost. The Company may also deconsolidate a subsidiary as a result of this reassessment, which may result in a gain or loss recognized upon deconsolidation depending on the carrying values of deconsolidated assets and liabilities compared to the fair value of any interests retained. Noncontrolling Interests Redeemable Noncontrolling Interests —This represents noncontrolling interests in the Company's digital investment management business and in consolidated open-end funds sponsored by the Company. The noncontrolling interests either have redemption rights that will be triggered upon the occurrence of certain events (Note 10) or have the ability to withdraw all or a portion of their interests from the consolidated open-end funds in cash with advance notice. Redeemable noncontrolling interests is presented outside of permanent equity. Allocation of net income or loss to redeemable noncontrolling interests is based upon their ownership percentage during the period. The carrying amount of redeemable noncontrolling interests is adjusted to its redemption value at the end of each reporting period to an amount not less than its initial carrying value, except for amounts contingently redeemable which will be adjusted to redemption value only when redemption is probable. 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 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. Noncontrolling Interests in Operating Company —This represents membership interests in OP held primarily by certain employees of the Company. Noncontrolling interests in OP are allocated a share of net income or loss in OP based on their weighted average ownership interest in OP during the period. Noncontrolling interests in OP have the right to require OP to redeem part or all of such member’s membership units in OP ("OP Units") for cash based on the market value of an equivalent number of shares of class A common stock at the time of redemption, or at the Company's election as managing member of OP, through issuance of shares of class A common stock (registered or unregistered) on a one -for-one basis. At the end of each reporting 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, as applicable. Business Combinations Definition of a Business —The Company evaluates each purchase transaction to determine whether the acquired assets meet the definition of a business. If substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, then the set of transferred assets and activities is not a business. If not, for an acquisition to be considered a business, it would have to include an input and a substantive process that together significantly contribute to the ability to create outputs (i.e., there is a continuation of revenue before and after the transaction). A substantive process is not ancillary or minor, cannot be replaced without significant costs, effort or delay or is otherwise considered unique or scarce. To qualify as a business without outputs, the acquired assets would require an organized workforce with the necessary skills, knowledge and experience to perform a substantive process. Asset Acquisitions —For acquisitions that are not deemed to be businesses, the assets acquired are recognized based on their cost to the Company as the acquirer and no gain or loss is recognized. The cost of assets acquired in a group is allocated to individual assets within the group based on their relative fair values and does not give rise to goodwill. Transaction costs related to acquisition of assets are included in the cost basis of the assets acquired. Business Combinations —The Company accounts for acquisitions that qualify as business combinations by applying the acquisition method. 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 12 Table of Contents 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. Contingent Consideration —Contingent consideration is classified as a liability or equity, as applicable. Contingent consideration in connection with the acquisition of a business or a VIE is measured at fair value on acquisition date, and unless classified as equity, is remeasured at fair value each reporting period thereafter until the consideration is settled, with changes in fair value included in net income. Contingent consideration in connection with the acquisition of assets (and that is not a VIE) is generally recognized when the liability is considered both probable and reasonably estimable, as part of the basis of the acquired assets . Discontinued Operations If the disposition of a component, being an operating or reportable segment, business unit, subsidiary or asset group, represents a strategic shift that has or will have a major effect on the Company’s operations and financial results, the operating profits or losses of the component when classified as held for sale, and the gain or loss upon disposition of the component, are presented as discontinued operations in the statements of operations. 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 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). Discontinued operations in prior periods include investments in the respective segments that have been disposed or otherwise resolved in those periods. Reclassifications 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. These reclassifications did not affect the Company's financial position, results of operations or cash flows. Accounting Standards Adopted in 2022 Amendment to Lessor Accounting In July 2021, the FASB issued ASU No. 2021-5, Lessors—Certain Leases with Variable Lease Payments , which amends existing lease classification guidance for lessors to better reflect the economics of certain lease arrangements. The ASU requires a lease with variable lease payments that are not based upon a rate or index to be classified as an operating lease if classification as a direct financing lease or sales-type lease would have resulted in a loss to the lessor at lease commencement. A loss could have otherwise arisen even if the lease is expected to be profitable as the exclusion of these variable lease payments result in the recognition of a lower net investment in a lease relative to the carrying value of the underlying asset that is derecognized at the commencement of a direct financing or sales-type lease. Under the amended guidance, this uneconomic outcome is avoided because the classification as an operating lease does not result in a derecognition of the underlying asset by the lessor, and the recognition of variable lease payments earned and depreciation expense on the underlying asset will partially offset in earnings over time. The 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 13 Table of Contents 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. 3. Acquisitions Asset Acquisitions Vantage SDC Hyperscale Data Centers 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. Acquisitions by DataBank 2022 • 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. 2021 • 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. Allocation of Consideration Transferred 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, where applicable. 14 Table of Contents Asset Acquisitions 2022 2021 (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 Real estate $ 616,563 $ 30,736 $ 479,587 $ 38,500 $ 26,083 Intangible assets 77,885 5,485 82,603 — 8,702 Lease right-of-use ("ROU") and other assets 3,994 — — — 9,536 Intangible, lease and other liabilities ( 2,839 ) — ( 56,889 ) — ( 11,303 ) Fair value of net assets acquired $ 695,603 $ 36,221 $ 505,301 $ 38,500 $ 33,018 • Real estate was valued based upon (i) current replacement cost for buildings in an as-vacant state and improvements, estimated using construction cost guidelines; (ii) current replacement cost for data center infrastructure by applying an estimated cost per kilowatt based upon current capacity of each location and also considering the associated indirect costs such as design, engineering, construction and installation; (iii) recent comparable sales or current listings for land; and (iv) contracted price net of estimated selling costs for real estate held for 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: • In-place leases reflect the value of rental income forgone if the properties had been acquired vacant, and the leasing commissions, legal and marketing costs that would have been incurred to lease up the properties, with remaining lease terms ranging between 1 and 15 years. • Above- and below-market leases represent the rent differential for the remaining lease term between contractual rents of acquired leases and market rents at the time of acquisition, discounted at rates between 6.0 % and 11.25 % with remaining lease terms ranging between 1 and 4 years. • Tenant relationships represent the estimated net cash flows attributable to the likelihood of lease renewal by an existing tenant relative to the cost of obtaining a new lease, taking into consideration the estimated time it would require to execute a new lease or backfill a vacant space, discounted at rates between 5.5 % and 11.5 %, with estimated useful lives between 9 and 15 years. • 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. 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. Tower Assets 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. 15 Table of Contents 4. Real Estate 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 Buildings and improvements 1,520,535 1,295,204 Data center infrastructure 4,213,917 3,785,561 Construction in progress 111,017 77,014 6,099,102 5,364,367 Less: Accumulated depreciation ( 471,030 ) ( 392,083 ) Real estate assets, net $ 5,628,072 $ 4,972,284 Real Estate Depreciation 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 in the digital operating segment are as follows. Three Months Ended March 31, (In thousands) 2022 2021 Lease income: Fixed lease income $ 160,324 $ 150,429 Variable lease income 23,847 23,186 184,171 173,615 Data center service revenue 18,340 15,387 $ 202,511 $ 189,002 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. 5. Equity Investments The Company's equity investments, excluding investments held for disposition (Note 11), are represented by the following: (In thousands) March 31, 2022 December 31, 2021 Equity method investments BRSP (1) $ 291,695 $ 284,985 Company-sponsored private funds (2) 358,468 382,694 Other 4,906 5,417 655,069 673,096 Other equity investments 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) 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. 16 Table of Contents 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. The Company is not required to provide financial or other support in excess of its capital commitments, where applicable, and its exposure is limited to its investment balance. The Company evaluates its equity method investments for other-than-temporary impairment ("OTTI") at each reporting period. OTTI was recorded only on equity method investments held for disposition, as discussed in Note 11. BrightSpire Capital, Inc. (NYSE: BRSP) 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. 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 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 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. The impairment charges were applied to the Company's investment in BRSP as a whole and were not determined based upon an impairment assessment of individual assets held by BRSP. 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 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 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. 17 Table of Contents 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. 6. Goodwill, Deferred Leasing Costs and Other Intangibles Goodwill Goodwill balance by reportable segment at both March 31, 2022 and December 31, 2021 is as follows. (In thousands) Digital Investment Management (1) $ 298,248 Digital Operating 463,120 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. March 31, 2022 December 31, 2021 (In thousands) Carrying Amount (Net of Impairment) (1) Accumulated Amortization (1) Net Carrying Amount (1) Carrying Amount (Net of Impairment) (1) Accumulated Amortization (1) Net Carrying Amount (1) Deferred Leasing Costs and Intangible Assets Deferred leasing costs and lease-related intangible assets (2) $ 1,233,164 $ ( 292,479 ) $ 940,685 $ 1,148,441 $ ( 256,987 ) $ 891,454 Investment management intangibles (3) 164,189 ( 66,490 ) 97,699 164,189 ( 61,435 ) 102,754 Customer relationships and service contracts (4) 218,164 ( 49,335 ) 168,829 218,064 ( 44,496 ) 173,568 Trade names 26,400 ( 12,364 ) 14,036 26,400 ( 11,266 ) 15,134 Other (5) 6,818 ( 2,580 ) 4,238 6,818 ( 2,101 ) 4,717 Total deferred leasing costs and intangible assets $ 1,648,735 $ ( 423,248 ) $ 1,225,487 $ 1,563,912 $ ( 376,285 ) $ 1,187,627 Intangible Liabilities Lease intangible liabilities (2) $ 46,610 $ ( 12,151 ) $ 34,459 $ 44,076 $ ( 10,775 ) $ 33,301 __________ (1) Amounts are presented net of impairments and write-offs. (2) Lease intangible assets are composed of in-place leases, above-market leases and tenant relationships. Lease-intangible liabilities are composed of below-market leases. (3) Composed of investment management contracts and investor relationships. (4) In connection with data center services provided in the colocation data center business. (5) Represents primarily the value of an acquired domain name and assembled workforce in an asset acquisition. 18 Table of Contents Amortization of Intangible Assets and Liabilities 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 Net decrease to rental income (1) $ ( 131 ) $ ( 695 ) Amortization expense Deferred leasing costs and lease-related intangibles $ 33,707 $ 42,485 Investment management intangibles 5,055 6,114 Customer relationships and service contracts 4,914 9,837 Trade name 1,098 11,952 Other 477 464 $ 45,251 $ 70,852 __________ (1) Represents the net effect of amortizing above- and below-market leases. The following table presents the future amortization of deferred leasing costs and finite-lived intangible assets and intangible liabilities, excluding those related to assets and liabilities held for disposition. Year Ending December 31, (In thousands) Remaining 2022 2023 2024 2025 2026 2027 and thereafter Total 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 7. Restricted Cash, Other Assets and Other Liabilities Restricted Cash 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. Other Assets The following table summarizes the Company's other assets: (In thousands) March 31, 2022 December 31, 2021 Straight-line rents $ 29,214 $ 25,516 Investment deposits and pending deal costs 14,585 22,238 Prefunded capital expenditures for Vantage SDC 19,574 24,293 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 Finance lease right-of-use asset, net 128,997 131,909 Accounts receivable, net (2) 94,294 83,878 Prepaid expenses 25,078 20,303 Other assets 18,764 24,835 Fixed assets, net (3) 18,062 17,160 Total other assets $ 746,176 $ 740,395 __________ (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 . 19 Table of Contents Accrued and Other Liabilities The following table summarizes the Company's accrued and other liabilities: (In thousands) March 31, 2022 December 31, 2021 Deferred income (1) $ 45,398 $ 37,143 Interest payable 15,522 14,870 Derivative liabilities 4,943 — Current and deferred income tax liability 2,534 2,016 Operating lease liability 334,943 342,510 Finance lease liability 141,032 142,777 Accrued compensation 48,269 64,100 Accrued carried interest and incentive fee compensation 42,710 67,258 Accrued real estate and other taxes 13,393 10,523 Payable for Vantage SDC expansion capacity (Note 3) 57,707 55,896 Accounts payable and accrued expenses 114,682 121,931 Other liabilities 75,120 69,018 Accrued and other liabilities $ 896,253 $ 928,042 __________ (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 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. 8. Debt 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 Investment-Level Secured Debt Total Debt March 31, 2022 Debt at amortized cost Principal $ 300,000 $ 278,422 $ 4,609,175 $ 5,187,597 Premium (discount), net — ( 1,636 ) 15,900 14,264 Deferred financing costs ( 8,152 ) ( 1,020 ) ( 69,443 ) ( 78,615 ) $ 291,848 $ 275,766 $ 4,555,632 $ 5,123,246 December 31, 2021 Debt at amortized cost Principal $ 300,000 $ 338,739 $ 4,283,983 $ 4,922,722 Premium (discount), net — ( 3,091 ) 17,629 14,538 Deferred financing costs ( 8,606 ) ( 1,384 ) ( 66,868 ) ( 76,858 ) $ 291,394 $ 334,264 $ 4,234,744 $ 4,860,402 20 Table of Contents The following table summarizes certain key terms of the Company's debt. Fixed Rate Variable Rate Total ($ in thousands) Outstanding Principal Weighted Average Interest Rate (Per Annum) (1) Weighted Average Years Remaining to Maturity (2) Outstanding Principal Weighted Average Interest Rate (Per Annum) (1) Weighted Average Years Remaining to Maturity (2) Outstanding Principal Weighted Average Interest Rate (Per Annum) (1) Weighted Average Years Remaining to Maturity (2) March 31, 2022 Recourse Secured Fund Fee Revenue Notes (3) $ 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 Non-recourse 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 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 $ 4,223,330 $ 964,267 $ 5,187,597 December 31, 2021 Recourse Secured Fund Fee Revenue Notes (3) $ 300,000 3.93 % 4.7 $ — N/A N/A $ 300,000 3.93 % 4.7 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 Non-recourse 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 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 $ 4,285,205 $ 637,517 $ 4,922,722 __________ (1) Calculated based upon outstanding debt principal at balance sheet date. For variable rate debt, weighted average interest rate is calculated based upon the applicable index plus spread at balance sheet date. (2) Calculated based upon anticipated repayment dates for notes issued under securitization financing; 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 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 $ 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. The Series 2021-1 Notes are secured by investment management fees earned by subsidiaries of DBRG, equity interests in certain digital portfolio companies and limited partnership interests in certain digital funds managed by subsidiaries of DBRG, as collateral. 21 Table of Contents The Class A-2 Notes bear interest at a rate of 3.933 % per annum, payable quarterly. 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 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. 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; or 1 % of the outstanding principal of such Class A-2 Note that is being prepaid in connection with a disposition of collateral. 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 and the full $ 300 million under the VFN is available to be drawn. Convertible and Exchangeable Senior Notes Convertible and exchangeable senior notes (collectively, the senior notes) are composed of the following, each representing senior unsecured obligations of DigitalBridge Group, Inc. or a subsidiary as the respective issuers of the senior notes: Description Issuance Date Due Date Interest Rate (per annum) Conversion or Exchange Price (per share of common stock) Conversion or Exchange Ratio (in shares) (1) Conversion or Exchange Shares (in thousands) Earliest Redemption Date Outstanding Principal 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 Issued by DigitalBridge Operating Company, LLC 5.75% Exchangeable Senior Notes July 2020 July 15, 2025 5.750 % 2.30 434.7826 34,097 July 21, 2023 78,422 138,739 $ 278,422 $ 338,739 __________ (1) The conversion or exchange rate for the senior notes is subject to periodic adjustments to reflect certain carried-forward adjustments relating to common stock splits, reverse stock splits, common stock adjustments in connection with spin-offs and cumulative cash dividends paid on the Company's common stock since the issuances of the respective senior notes. The conversion or exchange ratios are presented in shares of common stock per $ 1,000 principal of each senior note. The senior notes mature on their respective due dates, unless earlier redeemed, repurchased, converted or exchanged, as applicable. The outstanding senior notes are convertible or exchangeable at any time by holders of such notes into shares of the Company’s common stock at the applicable conversion or exchange rate, which is subject to adjustment upon occurrence of certain events. To the extent certain trading conditions of the Company’s common stock are met, the senior notes are redeemable by the applicable issuer thereof in whole or in part for cash at any time on or after their respective earliest redemption dates at a redemption price equal to 100 % of the principal amount of such senior notes being redeemed, plus accrued and unpaid interest (if any) up to, but excluding, the redemption date. In 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. 22 Table of Contents 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. 23 Table of Contents 9. Stockholders' Equity The table below summarizes the share activities of the Company's preferred and common stock. Number of Shares (In thousands) Preferred Stock Class A Common Stock Class B Common Stock Shares outstanding at December 31, 2020 41,350 483,406 734 Shares issued upon redemption of OP Units — 5 — Equity awards issued, net of forfeitures — 4,839 — Shares canceled for tax withholding on vested equity awards — ( 1,147 ) — Shares outstanding at March 31, 2021 41,350 487,103 734 Shares outstanding at December 31, 2021 35,340 568,577 666 Exchange of notes for class A common stock — 25,557 — Shares issued upon redemption of OP Units — 1 — Equity awards issued, net of forfeitures — 4,992 — Shares canceled for tax withholding on vested equity awards — ( 1,647 ) — 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 March 31, 2022: Description Dividend Rate Per Annum Initial Issuance Date Shares Outstanding (in thousands) Par Value (in thousands) Liquidation Preference (in thousands) Earliest Redemption Date Series H 7.125 % April 2015 8,940 $ 89 $ 223,500 Currently redeemable Series I 7.15 % June 2017 13,800 138 345,000 June 5, 2022 Series J 7.125 % September 2017 12,600 126 315,000 September 22, 2022 35,340 $ 353 $ 883,500 All series of preferred stock are at parity with respect to dividends and distributions, including distributions upon liquidation, dissolution or winding up of the Company. Dividends on Series 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) prorated to their redemption dates, 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. In addition, certain changes to the terms of any series of preferred stock cannot be made without the affirmative vote of holders of at least two-thirds of the outstanding shares of each such series of preferred stock voting separately as a class for each series of preferred stock. Redemption of Preferred Stock The Company redeemed 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. 24 Table of Contents Common Stock 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. Class A common stock has one vote per share and class B common stock has thirty-six and one-half votes per share. This gives the holders of class B common stock a right to vote that reflects the aggregate outstanding non-voting economic interest in the Company (in the form of OP Units) attributable to class B common stock holders and therefore, does not provide any disproportionate voting rights. Class B common stock was issued as consideration in the Company's acquisition in April 2015 of the investment management business and operations of its former manager, which was previously controlled by the Company's former Executive Chairman. Each share of class B common stock shall convert automatically into one share of class A common stock if the former Executive Chairman or his beneficiaries directly or indirectly transfer beneficial ownership of class B common stock or OP Units held by them, other than to certain qualified transferees, which generally includes affiliates and employees. In addition, each holder of class B common stock has the right, at the holder’s option, to convert all or a portion of such holder’s class B common stock into an equal number of shares of class A common stock. The Company suspended dividends on its class A common stock beginning with the second quarter of 2020. 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 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 The Company's Dividend Reinvestment and Direct Stock Purchase Plan (the “DRIP Plan”) provides existing common stockholders and other investors the opportunity to purchase shares (or additional shares, as applicable) of the Company's class A common stock by reinvesting some or all of the cash dividends received on their shares of the Company's class A common stock or making optional cash purchases within specified parameters. The DRIP Plan involves the acquisition of the Company's class A common stock either in the open market, directly from the Company as newly issued common stock, or in privately negotiated transactions with third parties. 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) The following tables present the changes in each component of AOCI attributable to stockholders and noncontrolling interests in investment entities, net of immaterial tax effect. AOCI attributable to noncontrolling interests in Operating Company is immaterial. Changes in Components of AOCI—Stockholders (In thousands) Company's Share in AOCI of Equity Method Investments Unrealized Gain (Loss) on AFS Debt Securities Unrealized Gain (Loss) on Cash Flow Hedges Foreign Currency Translation Gain (Loss) Unrealized Gain (Loss) on Net Investment Hedges Total AOCI at December 31, 2020 $ 17,718 $ 6,072 $ ( 233 ) $ 52,832 $ 45,734 $ 122,123 Other comprehensive income (loss) before reclassifications ( 2,438 ) ( 2,992 ) — ( 19,631 ) 3,761 ( 21,300 ) Amounts reclassified from AOCI — — 233 — — 233 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 Other comprehensive income (loss) before reclassifications 217 — — ( 3,131 ) 25 ( 2,889 ) Amounts reclassified from AOCI ( 200 ) ( 5,861 ) — ( 20,680 ) — ( 26,741 ) AOCI at March 31, 2022 $ 2,351 $ — $ — $ 2,691 $ 7,711 $ 12,753 25 Table of Contents Changes in Components of AOCI—Noncontrolling Interests in Investment Entities (In thousands) Unrealized Gain (Loss) on Cash Flow Hedges Foreign Currency Translation Gain (Loss) Unrealized Gain (Loss) on Net Investment Hedges Total AOCI at December 31, 2020 $ ( 1,030 ) $ 83,845 $ 15,099 $ 97,914 Other comprehensive loss before reclassifications — ( 37,686 ) — ( 37,686 ) Amounts reclassified from AOCI 1,030 — — 1,030 AOCI at March 31, 2021 $ — $ 46,159 $ 15,099 $ 61,258 AOCI at December 31, 2021 $ — $ 11,057 $ — $ 11,057 Other comprehensive loss before reclassifications — ( 2,184 ) — ( 2,184 ) Amounts reclassified from AOCI — ( 9,827 ) — ( 9,827 ) AOCI at March 31, 2022 $ — $ ( 954 ) $ — $ ( 954 ) Reclassifications out of AOCI—Stockholders Information about amounts reclassified out of AOCI attributable to stockholders by component is presented below. Such amounts are included in other gain (loss) in both continuing and discontinued operations on the statements of operations, as applicable, except for amounts related to equity method investments, which are included in equity method losses in discontinued operations. (In thousands) 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 $ 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) 10. Noncontrolling Interests Redeemable Noncontrolling Interests The following table presents the activity in redeemable noncontrolling interests in the Company's digital investment management business, as discussed below, and in open-end funds sponsored and consolidated by the Company. Three Months Ended March 31, (In thousands) 2022 2021 Redeemable noncontrolling interests Beginning balance $ 359,223 $ 305,278 Contributions 10,150 10,640 Distributions and redemptions ( 9,414 ) ( 2,445 ) Net income (loss) ( 11,220 ) 2,449 Adjustment to estimated redemption value 690,000 — Ending balance $ 1,038,739 $ 315,922 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 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 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. 26 Table of Contents In addition, the Company issued Wafra five warrants to purchase up to an aggregate of 5 % of the Company’s class A common stock ( 5 % at the time of the transaction, on a fully-diluted, post-transaction basis). Each warrant entitles Wafra to purchase up to 5,352,000 shares of the Company's class A common stock, with staggered strike prices between $ 2.43 and $ 6.00 for each warrant, exercisable until July 17, 2026. No warrants have been exercised to-date. Wafra paid cash consideration of $ 253.6 million at closing in exchange for its investment in the Digital IM business and for the warrants. As previously agreed, Wafra paid additional consideration of $ 29.9 million in 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. 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. 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 %. 27 Table of Contents Noncontrolling Interests in Operating Company Certain current and former employees of the Company directly or indirectly own interests in OP, presented as noncontrolling interests in the Operating Company. Noncontrolling interests in OP have the right to require OP to redeem part or all of such member’s OP Units for cash based on the market value of an equivalent number of shares of class A common stock at the time of redemption, or at the Company's election as managing member of OP, through issuance of shares of class A common stock (registered or unregistered) on a one -for-one basis. At the end of each period, noncontrolling interests in OP is adjusted to reflect their ownership percentage in OP at the end of the period, through a reallocation between controlling and noncontrolling interests in OP. 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. 11. 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). 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 Assets Restricted cash $ — $ 65,022 Real estate, net — 3,079,416 Loans receivable — 55,878 Equity and debt investments 149,826 250,246 Deferred leasing costs and other intangible assets, net — 118,300 Other assets 1,481 100,720 Due from affiliates — 7,033 Total assets held for disposition $ 151,307 $ 3,676,615 Liabilities Debt, net (1) $ — $ 2,869,360 Lease intangibles and other liabilities 758 219,339 Total liabilities related to assets held for disposition $ 758 $ 3,088,699 __________ (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. 2022 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. 28 Table of Contents 2021 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. 29 Table of Contents 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 ( 194 ) — — 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 In earnings $ ( 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 195 — — 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 earnings $ — $ — $ — 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. 12. 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 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. 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 30 Table of Contents 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 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. Income (loss) from discontinued operations is presented below. Three Months Ended March 31, (In thousands) 2022 2021 Revenues Property operating income $ 69,202 $ 229,489 Interest income 1,025 5,953 Fee income 4,910 20,198 Other income 5,144 11,137 Revenues from discontinued operations 80,281 266,777 Expenses Property operating expense 36,669 178,484 Interest expense 112,947 110,722 Transaction-related costs and investment expense 3,347 9,971 Depreciation and amortization 2,339 50,880 Impairment loss 23,802 123,760 Compensation and administrative expense 22,051 28,759 Expenses from discontinued operations 201,155 502,576 Other income (loss) Gain on sale of real estate — 45,750 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 benefit 2,112 3,718 Loss from discontinued operations ( 107,398 ) ( 481,260 ) Loss from discontinued operations attributable to: Noncontrolling interests in investment entities ( 6,175 ) ( 303,851 ) Noncontrolling interests in Operating Company ( 8,135 ) ( 16,908 ) Loss from discontinued operations attributable to DigitalBridge Group, Inc. $ ( 93,088 ) $ ( 160,501 ) 13. Fair Value Recurring Fair Values 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. Level 2 —Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in non-active markets, or valuation techniques utilizing inputs that are derived principally from or corroborated by observable data directly or indirectly for substantially the full term of the financial instrument. 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. 31 Table of Contents Marketable Equity Securities 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 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. Derivatives 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 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. 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. Notwithstanding the conditions for right of offset may have been met, the Company presents derivative assets and liabilities with the same counterparty on a gross basis on the consolidated balance sheets. Realized and unrealized gains and losses on derivative instruments are recorded in other gain (loss) on the consolidated statement of operations, other than interest expense, as follows: Three Months Ended March 31, (In thousands) 2022 2021 Foreign currency contracts: Non-designated contracts Realized and unrealized gain (loss) in earnings $ 1,510 $ ( 245 ) Interest rate contracts: Designated contracts Interest expense (1) — 20 Realized loss transferred from AOCI to earnings — ( 1,292 ) 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 rate debt. The Company's foreign currency and interest rate contracts are generally traded over-the-counter, and are valued using a third-party service provider. Quotations on over-the-counter derivatives are not adjusted and are generally valued using observable inputs such as contractual cash flows, yield curve, foreign currency rates and credit spreads, and are classified as Level 2 of the fair value hierarchy. Although credit valuation adjustments, such as the risk of default, rely on Level 3 inputs, these inputs are not significant to the overall valuation of the derivatives. As a result, derivative valuations in their entirety are classified as Level 2 of the fair value hierarchy. Settlement Liability 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 32 Table of Contents 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. Pursuant to the arrangement, the Company contributed its class A common stock, valued at $ 14.7 million by the venture, and Blackwells contributed $ 1.47 million of cash that was then distributed to the Company, resulting in a net capital contribution of $ 13.23 million by the Company in the venture. All of the class A common stock held in the venture was repurchased by the Company in March 2020 (Note 9). Distributions from the joint venture arrangement upon dissolution effectively represent a settlement of the proxy contest with Blackwells. The initial fair value of the arrangement was recorded as a settlement loss on the statement of operations in March 2020, with a corresponding liability on the balance sheet, subject to remeasurement at each period end. The settlement liability represents the fair value of the disproportionate allocation of profits distribution to Blackwells pursuant to the joint venture arrangement. The profits are derived from dividend payments and appreciation in value of the Company's class A common stock, allocated between the Company and Blackwells based upon specified return hurdles. In June 2021, Blackwells terminated the arrangement and the joint venture was dissolved. 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. Fair Value Option The following discussion excludes loans receivable and equity method investments held for disposition which are addressed in Note 11. Loans Receivable 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. 33 Table of Contents 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) Loans Held for Investment Equity Method Investments Fair value at December 31, 2020 $ 36,798 $ 28,540 Change in accrued interest and capitalization of paid-in-kind interest ( 245 ) — 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, originations, drawdowns and contributions 360,990 — Paydowns, distributions and sales ( 112,500 ) — Change in accrued interest and capitalization of paid-in-kind interest ( 650 ) — 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 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. 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 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 March 31, 2022 Liabilities Debt at amortized cost Secured fund fee revenue notes $ — $ 285,001 $ — $ 285,001 $ 291,848 Convertible and exchangeable senior notes 457,991 — — 457,991 275,766 Investment-level secured debt — 3,422,265 966,890 4,389,155 4,555,632 December 31, 2021 Liabilities 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 Investment-level secured debt — 3,598,655 655,270 4,253,925 4,234,744 34 Table of Contents 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. 14. Variable Interest Entities A VIE is an entity that lacks sufficient equity to finance its activities without additional subordinated financial support from other parties, or whose equity holders lack the characteristics of a controlling financial interest. The following discusses the Company's involvement with VIEs where the Company is the primary beneficiary and consolidates the VIEs or where the Company is not the primary beneficiary and does not consolidate the VIEs. Operating Subsidiary The Company's operating subsidiary, OP, is a limited liability company that has governing provisions that are the functional equivalent of a limited partnership. The Company holds the majority of membership interest in OP, acts as the managing member of OP and exercises full responsibility, discretion and control over the day-to-day management of OP. The noncontrolling interests in OP do not have substantive liquidation rights, substantive kick-out rights without cause, or substantive participating rights that could be exercised by a simple majority of noncontrolling interest members (including by such a member unilaterally). The absence of such rights, which represent voting rights in a limited partnership equivalent structure, would render OP to be a VIE. The Company, as managing member, has the power to direct the core activities of OP that most significantly affect OP's performance, and through its majority interest in OP, has both the right to receive benefits from and the obligation to absorb losses of OP. Accordingly, the Company is the primary beneficiary of OP and consolidates OP. As the Company conducts its business and holds its assets and liabilities through OP, the total assets and liabilities of OP represent substantially all of the total consolidated assets and liabilities of the Company. 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 carried interest. These private funds are established as limited partnerships or equivalent structures. Limited partners of the private funds do not have either substantive liquidation rights, or substantive kick-out rights without cause, or substantive participating rights that could be exercised by a simple majority of limited partners or by a single limited partner. 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 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. Consolidated Company-Sponsored Private Funds —The Company currently consolidates sponsored private funds in which it has more than an insignificant equity interest in the fund as general partner. 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 $ 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 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. The Company may invest alongside certain of its sponsored private funds through joint ventures between the Company and these funds, or the Company may have capital commitments to its sponsored private funds that are satisfied directly through the co-investment joint ventures as an affiliate of the general partner. In these instances, the co-investment joint ventures are consolidated by the Company. As the Company's direct equity interests in its sponsored private funds as general partner absorb insignificant variability, the Company is considered to be acting in the capacity of an agent of these funds and is therefore not the primary beneficiary of these funds. 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 March 31, 35 Table of Contents 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 The Company previously securitized loans receivable and CRE debt securities using VIEs. 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 previously 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 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 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). Trusts 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) . 36 Table of Contents 15. Earnings per Share The following table provides the basic and diluted earnings per common share computations: Three Months Ended March 31, (In thousands, except per share data) 2022 2021 Net loss allocated to common stockholders Loss from continuing operations $ ( 236,286 ) $ ( 146,339 ) Loss from continuing operations attributable to noncontrolling interests 82,817 60,550 Loss from continuing operations attributable to DigitalBridge Group, Inc. $ ( 153,469 ) $ ( 85,789 ) Loss from discontinued operations attributable to DigitalBridge Group, Inc. ( 93,088 ) ( 160,501 ) Preferred dividends ( 15,759 ) ( 18,516 ) Net loss attributable to common stockholders ( 262,316 ) ( 264,806 ) Net income allocated to participating securities — — Net loss allocated to common stockholders—basic ( 262,316 ) ( 264,806 ) Interest expense attributable to convertible and exchangeable notes (1) — — 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 Weighted average effect of dilutive shares (1)(2)(3) — — Weighted average number of common shares outstanding—diluted 569,940 474,899 Loss per share—basic Loss from continuing operations $ ( 0.30 ) $ ( 0.22 ) 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 ) 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 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 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 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. 16. Fee Income 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 March 31, (In thousands) 2022 2021 Management fees $ 42,191 $ 27,739 Incentive fees 2 594 Other fees 644 1,110 Total fee income—affiliates $ 42,837 $ 29,443 37 Table of Contents 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. Other Fee Income —Other fees include primarily service fees for information technology, facilities and operational support provided to portfolio companies. 17. Equity-Based Compensation 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 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. Restricted stock is entitled to dividends declared and paid on the Company's class A common stock and such dividends are not forfeitable prior to vesting of the award. Restricted stock awards are valued based on the Company's class A common stock price on grant date and equity-based compensation expense is recognized on a straight-line basis over the requisite service period. Restricted Stock Units — RSUs in the Company's class A common stock are subject to a performance condition. Vesting of performance-based RSUs occur upon achievement of certain Company-specific metrics over a performance measurement period. Only vested RSUs are entitled to accrued dividends declared and paid on the Company's class A common stock during the time period the RSUs are outstanding. Fair value of RSUs are based on the Company's class A common stock price on grant date. Equity-based compensation expense is recognized when it becomes probable that the performance condition will be met. Performance Stock Units — PSUs are granted to senior executives and certain employees, and are subject to both a service condition and a market condition. Following the end of the measurement period, the recipients of PSUs who remain employed will vest in, and be issued a number of shares of the Company's class A common stock, generally ranging from 0 % to 200 % of the number of PSUs granted and determined based upon the performance of the Company's class A common stock relative to that of a specified peer group over a three-year measurement period (such measurement metric the "total shareholder return"). In addition, recipients of PSUs whose employment is terminated after the first anniversary of their PSU grant are eligible to vest in a portion of the PSU award following the end of the measurement period based upon achievement of the total shareholder return metric applicable to the award. PSUs also contain dividend equivalent rights which entitle the recipients to a payment equal to the amount of dividends that would have been paid on the shares that are ultimately issued at the end of the measurement period. Fair value of PSUs, including dividend equivalent rights, was determined using a Monte Carlo simulation under a risk-neutral premise, with the following assumptions: 2022 PSU Grants 2021 PSU Grants 2020 PSU Grants Expected volatility of the Company's class A common stock (1) 32.4 % 35.4 % 34.1 % Expected annual dividend yield (2) 0.0 % 0.0 % 9.3 % Risk-free rate (per annum) (3) 2.0 % 0.3 % 0.4 % __________ (1) Based upon the historical volatility of the Company's stock and those of a specified peer group. 38 Table of Contents (2) Based upon the Company's expected annualized dividends. 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. Treasury yield for the term coinciding with the remaining measurement period of the award as of valuation date. Fair value of PSU awards, excluding dividend equivalent rights, is recognized on a straight-line basis over their measurement period as compensation expense, and is not subject to reversal even if the market condition is not achieved. The dividend equivalent right is accounted for as a liability-classified award. The fair value of the dividend equivalent right is recognized as compensation expense on a straight-line basis over the measurement period, and is subject to adjustment to fair value at each reporting period. LTIP Units — LTIP units are units in the Operating Company that are designated as profits interests for federal income tax purposes. Unvested LTIP units that are subject to market conditions do not accrue distributions. Each vested LTIP unit is convertible, at the election of the holder (subject to capital account limitation), into one common OP Unit and upon conversion, subject to the redemption terms of OP Units (Note 9). 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 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: 2019 LTIP Grant (1) Expected volatility of the Company's class A common stock (2) 28.3 % Expected dividend yield (3) 8.1 % Risk-free rate (per annum) (4) 1.8 % __________ (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. (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. Equity-based compensation cost on LTIP units is recognized on a straight-line basis either over (1) the service period for awards with a service condition only; or (2) the derived service period for awards with both a service condition and a market condition, irrespective of whether the market condition is satisfied. The derived service period is a service period that is inferred from the application of the simulation technique used in the valuation of the award, and represents the median of the terms in the simulation in which the market condition is satisfied. Deferred Stock Units — Certain non-employee directors may elect to defer the receipt of annual base fees and/or restricted stock awards, and in lieu, receive awards of DSUs. DSUs awarded in lieu of annual base fees are fully vested on their grant date, while DSUs awarded in lieu of restricted stock awards vest one year from their grant date. DSUs are entitled to a dividend equivalent, in the form of additional DSUs based on dividends declared and paid on the Company's class A common stock, subject to the same restrictions and vesting conditions, where applicable. Upon separation of service from the Company, vested DSUs will be settled in shares of the Company’s class A common stock. Fair value of DSUs are determined based on the price of the Company's class A common stock on grant date and recognized immediately if fully vested upon grant, or on a straight-line basis over the vesting period as equity based compensation expense and equity. Equity-based compensation expense, excluding amounts related to businesses presented as discontinued operations (Note 12), is as follows: Three Months Ended March 31, (In thousands) 2022 2021 Compensation expense (including $ 37 and $ 1,064 related to dividend equivalent rights) $ 9,731 $ 15,906 39 Table of Contents Changes in the Company’s unvested equity awards are summarized below: Weighted Average Grant Date Fair Value Restricted Stock LTIP Units (1) DSUs RSUs (2) PSUs (3) Total PSUs All Other Awards Unvested shares and units at December 31, 2021 8,190,263 10,461,256 101,748 9,589,564 10,487,396 38,830,227 $ 3.69 $ 2.51 Granted 3,770,706 — — — 742,696 4,513,402 7.62 6.92 Vested ( 3,053,570 ) ( 461,256 ) — — ( 1,233,911 ) ( 4,748,737 ) 4.38 4.33 Forfeited ( 13,676 ) — — — ( 2,138,743 ) ( 2,152,419 ) 1.82 5.79 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 __________ (1) Represents the number of LTIP units granted subject to vesting upon achievement of market condition. LTIP units that do not meet the market condition within the measurement period will be forfeited. (2) Represents the number of RSUs granted subject to vesting upon achievement of performance condition. RSUs that do not meet the performance condition at the end of the measurement period will be forfeited. (3) Number of PSUs granted does not reflect potential increases or decreases that could result from the final outcome of the total shareholder return measured at the end of the performance period. PSUs for which the total shareholder return was not met at the end of the performance period are forfeited. Fair value of equity awards that vested, determined based upon their respective fair values at vesting date, was $ 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 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 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. Managed company awards granted to employees, either directly or through the Company, are recorded as other asset and other liability, and amortized on a straight-line basis as equity-based compensation expense and as other income, respectively, as the awards vest to the employees. 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. 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). 18. Transactions with Affiliates Affiliates include (i) private funds and other investment vehicles that the Company manages or sponsors, and in which the Company may have an equity interest or co-invests with; (ii) the Company's investments in unconsolidated ventures; and (iii) directors, senior executives and employees of the Company (collectively, "employees"). 40 Table of Contents 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 Investment vehicles, portfolio companies and unconsolidated ventures Fee income $ 41,596 $ 41,859 Cost reimbursements and recoverable expenses 8,641 7,317 Employees and other affiliates 150 54 $ 50,387 $ 49,230 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 disposition (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 $ 3.4 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. 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. Messrs. 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. Ganzi and Jenkins are invested in their capacity as former owners of DBH, and not in their capacity as employees of the Company, any carried interest allocation attributed to such investments by Messrs. Ganzi and Jenkins as general partner do not represent compensatory arrangements to the Company. Such carried interest allocation to Messrs. Ganzi and Jenkins that are unrealized 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 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. 41 Table of Contents Aircraft— P ursuant to Mr. Ganzi’s employment agreement, as amended, the Company has agreed to reimburse Mr. Ganzi for certain variable operational costs of business travel on a chartered or private jet (including any aircraft that Mr. Ganzi may partially or fully own), provided that the Company will not reimburse the allocable share (based on the number of passengers) of variable operational costs for any passenger on such flight who is not traveling on Company business. Additionally, the Company has also agreed to reimburse Mr. Ganzi for certain defined fixed costs of any aircraft owned by Mr. Ganzi. The fixed cost reimbursements will be made based on an allocable portion of an aircraft’s annual budgeted fixed cash operating costs, based on the number of hours the aircraft will be used for business purposes. At least once a year, the Company will reconcile the budgeted fixed operating costs with the actual fixed operating costs of the aircraft, and the Company or Mr. Ganzi, as applicable, will make a payment for any difference. The Company reimbursed Mr. 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. 19. Segment Reporting The Company conducts its business through two reportable segments as follows: • 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 (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. The Company's remaining investment activities and corporate level activities are presented as Corporate and Other. • Other investment activities are composed of the Company's equity interests in: (i) digital investment vehicles, the largest of which is in the 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. Outside of its general partner interests, the Company's other equity interests in its sponsored and/or managed digital investment vehicles are considered to be incidental to its digital investment management business. The primary economics to the Company are represented by fee income and carried interest as general partner and/or manager, rather than economics from its equity interest in the investment vehicles as a limited partner or equivalent. With respect to seed investments, these are not intended to be a long-term deployment of capital by the Company and are expected to be warehoused temporarily on the Company's balance sheet until sufficient third party capital has been raised. At this time, the remaining non-digital investments are not substantially available for immediate sale and are expected to be monetized over an extended period beyond the near term. These other investment activities generate largely equity method earnings or losses and to a lesser extent, revenues in the form of interest income or dividend income from warehoused investments and consolidated investment vehicles. Effective the third quarter of 2021, these activities are no longer presented separately as the Digital Other and Other segments, which is consistent with and reflects management's focus on its core digital operations and overall simplification of the Company's business. 42 Table of Contents • Corporate activities include corporate level cash and corresponding interest income, corporate level financing and related interest expense, corporate level transaction costs, costs in connection with unconsummated investments, income and expense related to cost reimbursement arrangements with affiliates, fixed assets for administrative use, compensation expense not directly attributable to reportable segments, corporate level administrative and overhead costs, and adjustments to eliminate intercompany fees. Costs which are directly attributable, or otherwise can be subjected to a reasonable and systematic allocation, have been allocated to each of the reportable segments. 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. Fee income in Digital IM and fee expense in Digital Operating and in Corporate and Other were previously eliminated within the respective segments. All changes in segment presentation are reflected for all prior periods presented. Segment Results of Operations The following table summarizes results of operations of the Company's reportable segments, including selected income and expense items, reconciled to the consolidated statement of operations. (In thousands) Digital Investment Management Digital Operating Corporate and Other Total Three Months Ended March 31, 2022 Total revenues $ 44,893 $ 202,522 $ 10,044 $ 257,459 Property operating expense — 84,003 — 84,003 Interest expense 2,502 36,184 5,344 44,030 Depreciation and amortization 5,276 122,891 400 128,567 Equity method earnings (losses), including carried interest ( 31,062 ) — 19,190 ( 11,872 ) Income tax benefit (expense) ( 2,374 ) 330 9,457 7,413 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 ) Net loss from discontinued operations attributable to DigitalBridge Group, Inc. ( 93,088 ) Net loss attributable to DigitalBridge Group, Inc. $ ( 246,557 ) Three Months Ended March 31, 2021 Total revenues $ 31,120 $ 189,202 $ 259 $ 220,581 Property operating expense — 79,862 — 79,862 Interest expense — 31,132 8,648 39,780 Depreciation and amortization 6,267 122,221 10,937 139,425 Equity method losses, including carried interest ( 195 ) — ( 16,444 ) ( 16,639 ) Income tax benefit (expense) ( 2,645 ) 12,268 13,573 23,196 Income (loss) from continuing operations 7,663 ( 64,260 ) ( 89,742 ) ( 146,339 ) Net income (loss) from continuing operations attributable to DigitalBridge Group, Inc. 6,879 ( 10,074 ) ( 82,594 ) ( 85,789 ) Net loss from discontinued operations attributable to DigitalBridge Group, Inc. ( 160,501 ) Net loss attributable to DigitalBridge Group, Inc. $ ( 246,290 ) 43 Table of Contents 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 Digital Investment Management $ 596,425 $ 108,616 $ 655,152 $ 140,027 Digital Operating 8,209,995 — 7,608,451 — Other 2,274,430 546,453 2,257,598 533,069 11,080,850 655,069 10,521,201 673,096 Assets held for disposition related to discontinued operations 151,307 147,514 3,676,615 182,552 $ 11,232,157 $ 802,583 $ 14,197,816 $ 855,648 20. Commitments and Contingencies Litigation The Company may be involved in litigation in the ordinary course of business. 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. 21. Supplemental Disclosure of Cash Flow Information Three Months Ended March 31, (In thousands) 2022 2021 Supplemental Disclosure of Cash Flow Information Cash paid for interest, net of amounts capitalized of $ 78 and $ 204 $ 70,065 $ 126,892 Cash received (paid) for income tax, net ( 328 ) 2,123 Operating lease payments 15,650 16,781 Finance lease payments 3,916 3,820 Supplemental Disclosure of Cash Flows from Discontinued Operations 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 ) Supplemental Disclosure of Noncash Investing and Financing Activities Dividends and distributions payable $ 15,759 $ 18,516 Improvements in operating real estate in accrued and other liabilities 9,910 6,268 Receivable from loan repayments and asset sales 14,009 — Operating lease right-of-use assets and lease liabilities established 1,498 7,170 Redemption of OP Units for common stock 2 16 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) 3,144,700 2,840,065 Noncontrolling interests of investment entities deconsolidated (1) 215,777 22,413 __________ (1) Represents deconsolidation of noncontrolling interests upon sale of the Company's equity interests in investment entities (Note 12). 22. Subsequent Events Other than as disclosed elsewhere, no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the accompanying notes. 44 Table of Contents FORWARD-LOOKING STATEMENTS Some of the statements contained in this Quarterly Report on Form 10-Q (this "Quarterly Report") constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we intend such statements to be covered by the safe harbor provisions contained therein. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. The forward-looking statements contained in this Quarterly Report reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. 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, 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; • 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 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 impact to our business operations and financial condition of realized or anticipated compensation and administrative savings through cost reduction programs; • 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; • BRSP's trading price and its impact on the carrying value of the Company's investment in BRSP, including whether the Company will recognize further other-than-temporary impairment on its investment in BRSP; • performance of our investments relative to our expectations and the impact on our actual return on invested equity, as well as the cash provided by these investments and available for distribution; • our ability to grow our business by raising capital for the companies that we manage; • our ability to deploy capital into new investments consistent with our digital business strategies, including the earnings profile of such new investments; 45 Table of Contents • the availability of, and competition for, attractive investment opportunities; • our ability to achieve any of the anticipated benefits of certain joint ventures, including any ability for such ventures to create and/or distribute new investment products; • our ability to satisfy and manage our capital requirements; • our expected hold period for our assets and the impact of any changes in our expectations on the carrying value of such assets; • the general volatility of the securities markets in which we participate; • changes in interest rates and the market value of our assets; • interest rate mismatches between our assets and any borrowings used to fund such assets; • effects of hedging instruments on our assets; • the impact of economic conditions on third parties on which we rely; • any litigation and contractual claims against us and our affiliates, including potential settlement and litigation of such claims; • our levels of leverage; • adverse domestic or international economic conditions, including those resulting from the COVID-19 pandemic, supply chain difficulties and possible inflation; • the impact of legislative, regulatory and competitive changes; • 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”); • changes in our board of directors or management team, and availability of qualified personnel; • our ability to make or maintain distributions to our stockholders; and • our understanding of our competition. While forward-looking statements reflect our good faith beliefs, assumptions and expectations, they are not guarantees of future performance. Furthermore, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Moreover, because we operate in a very competitive and rapidly changing environment, new risk factors are likely to emerge from time to time. We caution investors not to place undue reliance on these forward-looking statements and urge you to carefully review the disclosures we make concerning risks in Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report. Readers of this Quarterly Report should also read our other periodic filings made with the Securities and Exchange Commission (the "SEC") and other publicly filed documents for further discussion regarding such factors.