What changed in this filing

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Item 1. Financial Statements

2022-08-08 compared with 2022-05-09 · 402 added, 245 removed, 1220 unchanged (35% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

March 31, 2022

June 30, 2022

December 31, 2021

46 unchanged sentences

Accumulated other comprehensive income

12,753 42,383

Total stockholders’ equity 1,633,286 2,146,934

10 unchanged sentences

(In thousands, except per share data)

Three Months Ended March 31,

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

2022 2021 2022 2021

Property operating income $ 234,251 $ 188,985 $ 436,762 $ 377,987

Interest income 8,499 1,319 13,665 2,173

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

Fee income ($ 43,403 , $ 41,141 , $ 85,407 and $ 70,398 from affiliates)

44,318 45,157 87,155 74,600

Other income ($ 788 , $ 908 , $ 4,698 and $ 1,427 from affiliates)

2,341 1,726 9,286 3,008

Total revenues 289,409 237,187 546,868 457,768

5 unchanged sentences

Compensation expense—cash and equity-based 52,792 48,199 118,334 126,985

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

Compensation expense—incentive fee and carried interest 49,069 8,266 28,717 8,233

Administrative expenses 26,353 28,505 54,238 46,301

2 unchanged sentences

Other loss, net ( 46,256 ) ( 27,041 ) ( 196,137 ) ( 36,391 )

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

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

Equity method earnings 27,427 51,481 46,634 35,064

Equity method earnings—carried interest 110,779 11,169 79,700 10,947

Loss from continuing operations before income taxes

1 unchanged sentence

Income tax benefit 2,518 75,239 9,931 98,435

Loss from continuing operations ( 236,286 ) ( 146,339 )

Income (loss) from continuing operations ( 53,310 ) 3,823 ( 289,596 ) ( 142,516 )

Loss from discontinued operations ( 14,771 ) ( 98,906 ) ( 122,169 ) ( 580,166 )

21 unchanged sentences

(In thousands)

Three Months Ended March 31,

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

2022 2021 2022 2021

Net loss $ ( 68,081 ) $ ( 95,083 ) $ ( 411,765 ) $ ( 722,682 )

5 unchanged sentences

Net investment hedges 6,984 ( 4,202 ) 6,984 ( 84 )

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

Other comprehensive loss ( 20,044 ) ( 19,503 ) ( 64,356 ) ( 79,735 )

Comprehensive loss ( 88,125 ) ( 114,586 ) ( 476,121 ) ( 802,417 )

8 unchanged sentences

(In thousands, except per share data)

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

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

Balance at 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

15 unchanged sentences

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

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

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

Shares issued pursuant to settlement liability

— 60 46,982 — — 47,042 — — 47,042

Deconsolidation of investment entities (Note 21)

— — 2,028 — ( 1,482 ) 546 ( 202,887 ) — ( 202,341 )

Redemption of OP Units for class A common stock

— — 1 — — 1 — ( 1 ) —

Equity awards issued, net of forfeitures — 2 10,194 — — 10,196 308 1,067 11,571

Shares canceled for tax withholdings on vested equity awards — ( 13 ) ( 9,166 ) — — ( 9,179 ) — — ( 9,179 )

Contributions from noncontrolling interests

— — — — — — 24,540 — 24,540

Distributions to noncontrolling interests

— — — — — — ( 33,678 ) — ( 33,678 )

Preferred stock dividends

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

Reallocation of equity (Notes 2 and 10))

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

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

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

DigitalBridge Group, Inc.

Consolidated Statements of Equity (Continued)

(In thousands, except per share data)

Balance at 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

3 unchanged sentences

— 256 177,562 — — 177,818 — — 177,818

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

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

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

12 unchanged sentences

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

Net loss — — — ( 21,562 ) — ( 21,562 ) ( 29,102 ) ( 3,090 ) ( 53,754 )

Other comprehensive loss — — — — ( 11,346 ) ( 11,346 ) ( 7,772 ) ( 926 ) ( 20,044 )

Adjustment of redeemable noncontrolling interest and warrants to fair value (Note 10)

— — ( 35,026 ) — — ( 35,026 ) — — ( 35,026 )

Shares issued for redemption of redeemable noncontrolling interest (Note 10)

— 577 348,182 — — 348,759 — — 348,759

Transaction costs incurred in connection with redemption of redeemable noncontrolling interest — — ( 7,137 ) — — ( 7,137 ) — — ( 7,137 )

Reclassification of carried interest allocated to redeemable noncontrolling interest to noncontrolling interest in investment entities (Note 10)

— — — — — — 4,087 — 4,087

Deconsolidation of investment entities (Note 21)

— — — — — — 11,047 — 11,047

Redemption of OP Units for class A common stock

— 4 335 — — 339 ( 339 ) —

Equity awards issued, net of forfeitures — 9 7,508 — — 7,517 1,061 591 9,169

Shares canceled for tax withholdings on vested equity awards — ( 7 ) ( 5,060 ) — — ( 5,067 ) — — ( 5,067 )

Contributions from noncontrolling interests — — — — — — 215,790 — 215,790

Distributions to noncontrolling interests — — — — — — ( 13,490 ) — ( 13,490 )

Preferred stock dividends — — — ( 15,758 ) — ( 15,758 ) — — ( 15,758 )

Reallocation of equity (Notes 2 and 10)

— — ( 18,313 ) — 48 ( 18,265 ) — 18,265 —

Balance at June 30, 2022 $ 854,232 $ 6,564 $ 7,646,852 $ ( 6,875,817 ) $ 1,455 $ 1,633,286 $ 2,870,528 $ 57,705 $ 4,561,519

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

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows from Operating Activities

18 unchanged sentences

Other adjustments, net ( 763 ) ( 3,076 )

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

Net cash provided by operating activities 67,303 104,896

Cash Flows from Investing Activities

12 unchanged sentences

Proceeds from sale of corporate fixed assets — 14,946

Net receipts on settlement of derivatives — 15,913

Net (payments) receipts on settlement of derivatives ( 11,893 ) 17,123

Other investing activities, net ( 875 ) ( 84 )

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

Net cash (used in) provided by investing activities ( 2,145,642 ) 408,596

DigitalBridge Group, Inc.

1 unchanged sentence

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows from Financing Activities

1 unchanged sentence

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

Borrowings from corporate credit facility and securitized financing facility 270,000 45,000

Repayment of borrowings from corporate credit facility securitized financing facility ( 200,000 ) —

Borrowings from secured debt 690,082 698,135

2 unchanged sentences

Contributions from noncontrolling interests 568,946 178,767

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

Distributions to and redemptions of noncontrolling interests ( 450,337 ) ( 72,596 )

Shares canceled for tax withholdings on vested equity awards ( 16,477 ) ( 16,897 )

Acquisition of noncontrolling interest ( 32,076 ) —

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

Net cash provided by (used in) financing activities 760,345 ( 308,682 )

Effect of exchange rates on cash, cash equivalents and restricted cash ( 2,415 ) 6,305

Net increase (decrease) in cash, cash equivalents and restricted cash ( 542,225 ) 71,383

Net (decrease) increase in cash, cash equivalents and restricted cash ( 1,320,409 ) 211,115

Cash, cash equivalents and restricted cash, beginning of period 1,766,245 963,008

1 unchanged sentence

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

Three Months Ended March 31,

Six Months Ended June 30,

Beginning of the period

11 unchanged sentences

Notes to Consolidated Financial Statements

March 31, 2022

June 30, 2022

Business and Organization

3 unchanged sentences

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.

At June 30, 2022, the Company owned 93 % of the OP , as its sole managing member.

The remaining 7 % is owned primarily by certain current and former employees of the Company as noncontrolling interests.

5 unchanged sentences

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.

In the first quarter of 2022, the Company completed the disposition of substantially all 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.

5 unchanged sentences

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.

See Note 7 for additional information.

Digital Transformation

79 unchanged sentences

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

11 unchanged sentences

The ASU addresses the following inconsistencies:

(1) measurement of contract

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

(1) measurement of contract liability or deferred revenue at fair value that is typically lower than carrying value, reducing post-acquisition revenues;

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

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

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

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.

3 unchanged sentences

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

Future Accounting Standards

Contractual Sale Restriction on Equity Securities

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions , which amends Topic 820 Fair Value to clarify that a contractual sale restriction that is entity-specific is not part of the unit of account of an equity security and is therefore not considered in measuring the fair value of an equity security, in which case, a discount should not be applied.

The amendment further prohibits recognizing the contractual sale restriction as a separate unit of account, that is, as a contra asset or liability.

Sale restrictions that are characteristics of the holder of an equity security include, but are not limited to, lock-up agreements, market stand-off agreements, or specific provisions in agreements between shareholders.

In contrast, a legal restriction preventing a security from being sold on a national securities exchange or an over-the-counter market is a security-specific characteristic as the restriction would similarly apply to a market participant buyer in an assumed sale of the security.

This guidance also applies to issuers of equity securities that are subject to contractual sale restrictions, for example, equity securities issued as consideration in a business combination.

The ASU requires additional disclosures related to equity securities that are subject to contractual sale restrictions, specifically (1) the fair value of such equity securities, (2) the nature and remaining duration of the restrictions, and (3) any circumstances that could cause a lapse in restrictions.

The ASU is effective January 1, 2024, with early adoption permitted in the interim periods.

Transition is prospective with any fair value adjustments resulting from adoption recognized in earnings and the amount adjusted disclosed in the period of adoption.

For subsidiaries of the Company that are investment companies as defined in ASC 946, the ASU is applied prospectively to equity securities with contractual sale restrictions entered into or modified on or after the adoption date.

For equity securities with contractual sale restrictions entered into or modified before the adoption date, the existing accounting policy continues to be applied until the restrictions expire or are modified, and if the existing accounting policy differs from the amended guidance, the additional disclosure requirements under the ASU would be applicable.

The Company and its investment company subsidiaries do not currently have equity securities subject to contractual sale restrictions.

Asset Acquisitions

3 unchanged sentences

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.

As of June 30, 2022, the remaining consideration for the incremental lease-up acquisitions is estimated to be approximately $ 245 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.

Pursuant to this arrangement, Vantage SDC

had 8 new tenant leases that commenced in the six months ended June 30, 2022, and 11 new tenant leases that commenced in 2021 related to a portion of the expansion capacity, for aggregate consideration of $ 67.8 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

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

• In May 2022, the Company's subsidiary, DataBank, acquired a data center in Atlanta, Georgia for $ 10.9 million.

• In March 2022, 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.

3 unchanged sentences

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

In June 2022, the Company acquired the mobile telecommunications tower business (“TowerCo”) of Telenet Group Holding NV (Euronext Brussels:

TNET) for € 740.1 million or $ 791.3 million (including transaction costs) .

The assets acquired included owned tower sites, tower sites subject to third party leases, equipment, and customer relationships.

The third party leases give rise to right-of-use lease assets and corresponding lease liabilities.

The customer relationships intangible primarily relates to a master lease agreement with Telenet as lessee.

The acquisition was funded through $ 326.1 million of debt, $ 278.1 million of equity from the Company, and $ 213.8 million in third party equity.

In addition to the purchase price, the funds were used to finance transaction costs, debt issuance costs, working capital and as operating cash.

This investment is intended to be transferred to a new investment vehicle to be sponsored by the Company and is presented within Corporate and Other in Note 19.

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.

In an asset acquisition, the cost of assets acquired, which includes capitalized transaction costs, is allocated to individual assets within the group based on their relative fair values and does not give rise to goodwill.

Asset Acquisitions

(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

(In thousands) TowerCo 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

1 unchanged sentence

Intangible assets 673,218 77,885 10,407 82,603 — 8,702

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

ROU and other assets 234,462 3,994 — — — 9,536

Deferred tax liabilities ( 243,223 ) — — — — —

Intangible, lease and other liabilities ( 236,324 ) ( 2,839 ) — ( 56,889 ) — ( 11,303 )

2 unchanged sentences

(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.

(iii) current replacement cost for towers in consideration of their remaining economic life;

and (iv) recent comparable sales or

current listings for land.

Useful lives of real estate acquired range from 35 to 50 years for buildings and improvements, 15 to 20 years for site improvements, 11 to 71 years for towers and related equipment, 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.

• 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, discounted at 6.8 %, 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 5.5 % 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 5 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.

• Customer service contracts were valued based upon estimated net cash flows generated from the zColo customer service contracts that would have been forgone if such contracts were not in place, taking into consideration the time it would require to execute a new contract, with remaining term of the contracts ranging between 1 and 15 years.

• Customer relationship intangible assets for towers were valued as the estimated future cash flows to be generated over the life of the tenant relationships based upon rental rates, operating costs, expected renewal terms and attrition, discounted at 6.8 %, with estimated useful lives between 19 and 45 years.

• Deferred tax liabilities were recognized for the book-to-tax basis difference associated with the TowerCo acquisition.

• Other assets acquired and liabilities assumed include primarily lease ROU assets associated with leasehold data centers and ground space hosting tower communication sites, along with 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 acquiree entities.

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

Purchase Commitments

Purchase Commitment

Infrastructure Investment Management Platform

3 unchanged sentences

and (ii) a contingent amount of up to A$ 180 million (approximately $ 128 million), primarily based upon future fundraising for AMP Capital's global infrastructure funds.

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

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

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

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

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

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

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

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

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

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

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

(In thousands) June 30, 2022 December 31, 2021

Land $ 256,798 $ 206,588

1 unchanged sentence

Data center infrastructure 4,251,968 3,785,561

Towers and equipment 354,938 —

Construction in progress 208,233 77,014

3 unchanged sentences

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.

Depreciation of real estate held for investment was $ 87.3 million and $ 67.6 million for the three months ended June 30, 2022 and 2021, respectively, and $ 166.4 million and $ 135.7 million for the six months ended June 30, 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,

Components of property operating income are as follows.

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

(In thousands) 2022 2021 2022 2021

7 unchanged sentences

$ 234,251 $ 188,985 $ 436,762 $ 377,987

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.

For the six months ended June 30, 2022 and 2021, property operating income from a single customer accounted for approximately 18 % and 17 %, respectively, of the Company's total revenues from continuing operations, or approximately 8 % and 9 %, respectively, of the Company's share of total revenues from continuing operations, net of amounts attributable to noncontrolling interests in investment entities.

Equity Investments

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

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

(In thousands) June 30, 2022 December 31, 2021

Equity method investments

BrightSpire Capital, Inc.

$ 293,362 $ 284,985

11 unchanged sentences

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.

(2) Includes unrealized carried interest of $ 195.5 million at June 30, 2022 and $ 112.0 million at December 31, 2021 in connection with sponsored investment vehicles that are in the early stage of their lifecycle, of which a substantial portion is shared with certain employees.

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

4 unchanged sentences

BrightSpire Capital, Inc.

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

At June 30, 2022, the Company owned approximately 35.0 million shares in BRSP for a 27.1 % 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.

3 unchanged sentences

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.

OTTI —In the second quarter of 2022, the Company determined that the deficit between fair value of the Company's investment in BRSP, based upon BRSP's closing stock price at June 30, 2022, and its carrying value did not represent OTTI of its investment in BRSP as the Company has the intent and ability to hold its investment in BRSP to recovery.

Throughout 2021, the fair value of the Company's investment in BRSP 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.

3 unchanged sentences

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.

The Company increased its share of net earnings from BRSP by $ 1.7 million and $ 34.5 million for the three months ended June 30, 2022 and 2021, respectively, and $ 15.8 million and $ 59.2 million for the six months ended June 30, 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 June 30, 2022 was $ 151.5 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").

At June 30, 2022, the Company had unfunded commitments of $ 64.5 million, predominantly to the Company's sponsored funds in its flagship digital opportunistic strategy, DigitalBridge Partners, LP ("DBP I") and DigitalBridge Partners II, LP ("DBP II").

Loans Receivable

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

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

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

At June 30, 2022, the unfunded lending commitment was $ 24.2 million, of which the Company's share was $ 5.7 million, net of amounts attributable to noncontrolling interests in investment entities.

Warehoused Loans— At June 30, 2022, the Company had $ 14.3 million of unsettled trades and $ 9.8 million of unfunded lending commitments on loans receivable that are warehoused for future credit products.

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

Goodwill, Deferred Leasing Costs and Other Intangibles

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

Goodwill balance by reportable segment at both June 30, 2022 and December 31, 2021 is as follows.

(In thousands)

2 unchanged sentences

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.

(1) Remaining goodwill deductible for income tax purposes was $ 127.7 million at June 30, 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

June 30, 2022 December 31, 2021

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

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

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

(4) In connection with tower assets and 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.

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

Three Months Ended March 31,

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

(In thousands) 2022 2021 2022 2021

Net decrease to rental income (1)

Net increase (decrease) to rental income (1)

$ 306 $ ( 748 ) $ 175 $ ( 1,443 )

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The following table summarizes the Company's other assets:

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

(In thousands) June 30, 2022 December 31, 2021

Straight-line rents $ 34,065 $ 25,516

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Total other assets $ 991,382 $ 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.

(1) 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 .

(2) Net of accumulated depreciation of $ 21.7 million as of June 30, 2022 and $ 19.2 million as of December 31, 2021 .

Accrued and Other Liabilities

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

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

(In thousands) June 30, 2022 December 31, 2021

Deferred income (1)

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Current and deferred income tax liability

238,186 2,016

Contingent consideration payable (Note 10)

Warrants issued to Wafra (Note 10)

Operating lease liability 527,165 342,510

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(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 investment management fees of $ 4.3 million at June 30, 2022 and $ 6.0 million at December 31, 2021 are expected to be recognized as fee income over a weighted average period of 3.7 years and 3.2 years, respectively.

Deferred investment management fees recognized as income of $ 0.4 million and $ 0.1 million in the three months ended June 30, 2022 and 2021, respectively, and $ 2.8 million and $ 0.2 million in the six months ended June 30, 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.

As a result of the Company’s transition to a C-Corporation (as discussed in Note 1), a deferred tax asset was recognized as of January 1, 2022 related to the outside basis difference in the Company's investment in certain partnerships, and capital loss and NOL carryforwards.

Concurrently, a full valuation allowance was established on this deferred tax asset due to uncertainties in future realization of the tax benefits in consideration of the Company’s history of cumulative operating losses.

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

For the three and six months ended June 30, 2022, there was no change in the expected realizability of the net deferred tax asset, which remains subject to a full valuation allowance.

For the six months ended June 30, 2022, the net income tax benefit of $ 9.9 million reflects the tax effect of activities in the Company's previously designated TRS in the normal course of business.

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

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

March 31, 2022

June 30, 2022

Debt at amortized cost

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Weighted Average Years Remaining to Maturity (2)

March 31, 2022

June 30, 2022

Secured Fund Fee Revenue Notes (3)

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

$ 300,000 3.93 % 4.2 $ 70,000 4.80 % 4.2 $ 370,000 4.10 % 4.2

Convertible and exchangeable senior notes 278,422 5.21 % 1.4 — N/A N/A 278,422 5.21 % 1.4

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Digital Operating 3,643,351 2.43 % 3.6 833,767 6.06 % 3.0 4,477,118 3.11 % 3.5

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

Other 94,053 6.47 % 6.9 392,681 2.96 % 4.5 486,734 3.63 % 4.9

3,737,404 1,226,448 4,963,852

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(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”).

and (ii) up to $ 300 million (following 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.

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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 %.

The VFN bear interest generally based upon 1-month Adjusted 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.

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

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

As of the date of this filing, the Co-Issuers are in compliance with all of the financial covenants and the remaining $ 230 million under the VFN is available to be drawn.

Convertible and Exchangeable Senior Notes

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Issued by DigitalBridge Group, Inc.

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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.

Other —At June 30, 2022, $ 132.0 million in aggregate was available to be drawn from credit facilities used to fund the acquisition of loans that are warehoused for future credit products .

Stockholders' Equity

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Shares issued upon redemption of OP Units — 5 —

Shares issued pursuant to settlement liability (1)

Equity awards issued, net of forfeitures — 4,996 —

Shares canceled for tax withholding on vested equity awards — ( 2,439 ) —

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

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

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

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Shares issued upon redemption of OP Units — 401 —

Shares issued for redemption of redeemable noncontrolling interest (Note 10)

Equity awards issued, net of forfeitures — 5,880 —

Shares canceled for tax withholding on vested equity awards — ( 2,407 ) —

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

Shares outstanding at June 30, 2022 35,340 655,750 666

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

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

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:

The table below summarizes the preferred stock issued and outstanding at June 30, 2022:

Description Dividend Rate Per Annum Initial Issuance Date Shares Outstanding

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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 I 7.15 % June 2017 13,800 138 345,000 Currently redeemable

Series J 7.125 % September 2017 12,600 126 315,000 September 22, 2022

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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.

Reverse Stock Split

In July 2022, the Company announced that it expects to effectuate a reverse stock split in the third quarter of 2022 in which one share of class A common stock and class B common stock will be issued in exchange for every four shares of existing class A and class B common stock.

Stock Repurchase

In July 2022, the Company announced that its board of directors authorized a stock repurchase program pursuant to which the Company may repurchase up to $ 200 million of its outstanding shares of class A common stock and/or preferred stock through various methods, including open market repurchases, negotiated block transactions, accelerated share repurchases, open market solicitations and Rule 10b5-1 plans.

The stock repurchase program may be extended, modified, or discontinued at any time.

Accumulated Other Comprehensive Income (Loss)

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Amounts reclassified from AOCI — — 233 ( 20,221 ) ( 1,375 ) ( 21,363 )

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

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

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

1 unchanged sentence

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

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

AOCI at June 30, 2022 $ ( 127 ) $ — $ — $ ( 12,673 ) $ 14,255 $ 1,455

Changes in Components of AOCI—Noncontrolling Interests in Investment Entities

3 unchanged sentences

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

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

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

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

1 unchanged sentence

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

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

AOCI at June 30, 2022 $ — $ ( 8,726 ) $ — $ ( 8,726 )

Reclassifications out of AOCI—Stockholders

1 unchanged sentence

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.

For the three months ended June 30, 2022, there were no reclassifications out of AOCI into earnings.

(In thousands)

Three Months Ended March 31, Affected Line Item in the

Consolidated Statements of Operations

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

Component of AOCI reclassified into earnings 2022 2021 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)

Relief of basis of AFS debt securities $ — $ — $ 5,861 $ —

Release of foreign currency cumulative translation adjustments — 20,221 20,680 20,221

Realized gain on net investment hedges — 1,375 — 1,375

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

Release of equity in AOCI of equity method investments — — 200 —

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,

The following table presents the activity in redeemable noncontrolling interests in the Company's digital investment management business through redemption in May 2022, as discussed below, and in open-end funds sponsored and consolidated by the Company.

Six Months Ended June 30,

(In thousands) 2022 2021

2 unchanged sentences

Contributions 10,150 41,014

Distributions and redemptions ( 9,414 ) ( 2,445 )

Distributions paid and payable, including redemptions by limited partners in consolidated funds ( 19,078 ) ( 8,255 )

Net income (loss) ( 25,547 ) 8,474

Adjustment to estimated redemption value 690,000 —

Adjustment of Wafra's interest to redemption value and warrants held by Wafra to fair value 725,026 —

Redemption of Wafra's interest ( 862,276 ) —

Reclassification of warrants held by Wafra to liability in May 2022 (Note 7)

Reclassification of Wafra's carried interest allocation to noncontrolling interests in investment entities in May 2022 ( 4,087 ) —

Ending balance $ 102,011 $ 346,511

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(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.

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

In addition, the Company issued Wafra five warrants to purchase up to an aggregate of 5 % 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.

Each warrant entitles Wafra to purchase up to 5,352,000 shares of the Company's class A common stock at staggered strike prices between $ 2.43 and $ 6.00 each, exercisable through July 17, 2026.

No warrants have been exercised to-date.

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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.

Wafra had 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 were subject to triggering events, including key person or cause events under the governing documents of certain digital funds.

Redemption of Strategic Investment in 2022

On May 23, 2022, pursuant to a purchase and sale agreement ("PSA") entered into with Wafra in April 2022:

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

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

and (c) with certain limited exceptions, Wafra sold or gave up its right to invest in, or

receive carried interest from, future investment management products, but except as otherwise provided, retained its investment in and its allocation of carried interest from existing investment management products.

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

(i) an upfront payment of $ 388.5 million in cash (after certain net cash adjustments) and 57,741,599 shares of the Company's Class A common stock valued at $ 348.8 million based upon the closing price of the Company's class A common stock on May 23, 2022;

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

The carrying value of Wafra's redeemable noncontrolling interest was adjusted to fair value prior to redemption, initially based upon an estimate of consideration payable at March 31, 2022 when redemption was deemed to be probable, including the maximum potential contingent amount of $ 125 million.

This adjustment resulted in an allocation from additional paid-in capital to redeemable noncontrolling interests on the consolidated balance sheet.

Additionally, the unrealized carried interest earnings allocated to Wafra that was retained and no longer subject to redemption was reclassified in May 2022 to permanent equity, included in noncontrolling interests in investment entities.

In connection with the redemption, the terms of the warrants previously issued to Wafra were amended, among other things, to provide for net cash settlement upon exercise of the warrants, 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.

Inclusion of the cash settlement feature changed the classification of the warrants from equity to liability.

The warrants were remeasured to fair value prior to reclassification in May 2022, with the increase in value recorded in equity to reduce additional paid-in capital.

Subsequent changes in fair value of the warrant liability is recorded in earnings (Note 13).

Following the redemption, the Chief Investment Officer of Wafra, Adel Alderbas, will serve as a senior advisor to the Company for a period of three years.

Noncontrolling Interests in Investment Entities

1 unchanged sentence

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 %.

In June 2022, a definitive agreement was entered into to sell 27 % of the fully diluted equity interest in DataBank held by existing investors to a new investor for approximately $ 1.2 billion in cash.

The Company's share of proceeds from the sale will be approximately $ 230 million and the Company's ownership interest in DataBank will decrease from 21.8 % to 15.5 %.

Subject to closing conditions, including receipt of required regulatory approvals, the sale is expected to close in the third quarter of 2022.

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

Noncontrolling Interests in Operating Company

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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.

Redemption of OP Units —The Company redeemed 400,882 OP Units during the six months ended June 30, 2022 and 2,005,367 during the year ended December 31, 2021 through the issuance of an equal number of shares of class A common stock on a one -for-one basis.

Assets and Related Liabilities Held for Disposition

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

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

At June 30, 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

(In thousands) June 30, 2022 December 31, 2021

Restricted cash $ — $ 65,022

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(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.

At December 31, 2021 , 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

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

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

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

At June 30, 2022, there were no assets held for sale that were measured at fair value on a nonrecurring basis.

Impairment loss of $ 36.0 million was recorded in 2022 primarily based upon the final carrying value of net assets of the Wellness Infrastructure business upon closing of the disposition of NRF Holdco in February 2022.

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

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

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

For the three and six months ended June 30, 2021, impairment was $ 289.6 million and $ 304.9 million, respectively, on Wellness Infrastructure real estate held for disposition.

Other assets that had been impaired during 2021 pertained to real estate, equity investments and intangible assets of 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.

Equity Investments Carried at Net Asset Value ("NAV") —These include equity interest in a private fund and prior to its disposition as part of NRF Holdco in February 2022, investment in a Company-sponsored non-traded REIT, amounting to $ 2.2 million at June 30, 2022 and $ 31.2 million at December 31, 2021.

Equity Method Investments under Fair Value Option —Equity method investments under the fair value option of $ 76.7 million at June 30, 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 June 30, 2022.

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

The CDO bonds 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.

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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.

Prior to its sale, the fair value of N-Star CDO bonds represents 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.

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Realized and unrealized losses in earnings, net — 99,244 ( 22,097 )

Other comprehensive loss (1)

Deconsolidation of investment entities (Note 21)

— ( 73,059 ) —

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

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

Other comprehensive income (loss) (1)

( 1,953 ) 7,639 ( 3,612 )

Fair value at June 30, 2021 $ 35,899 $ 993,572 $ 120,397

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

$ — $ 98,719 $ ( 23,022 )

In other comprehensive loss $ ( 1,953 ) N/A N/A

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— — ( 6,731 )

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

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

Fair value at June 30, 2022 $ — $ — $ 76,573

Net unrealized gains (losses) on instruments held at June 30, 2022

$ — $ — $ 4,898

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.

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

Discontinued Operations

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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").

The sales price for 100 % of the equity of NRF Holdco was $ 281 million, composed of $ 126 million 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 Seller Note, which is classified as held for investment and carried at fair value under the fair value option, matures five years from closing of the sale, accruing paid-in-kind interest at 5.35 % per annum.

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

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

The OED investments and Other IM business are composed of various

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

The OED investments and Other IM business are composed of various non-digital real estate, real estate-related equity and debt investments, general partner interests and management rights with respect to these assets, and underlying compensation and administrative costs for managing these assets.

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

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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,

L oss from discontinued operations is presented below.

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

(In thousands) 2022 2021 2022 2021

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Gain on sale of real estate — 2,968 — 48,718

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

Other gain (loss), net 1,014 142,019 390 ( 58,024 )

Equity method earnings (losses) 14,697 30,627 26,685 ( 64,259 )

Loss from discontinued operations before income taxes ( 18,767 ) ( 75,001 ) ( 128,277 ) ( 559,979 )

Income tax benefit 2,112 3,718

Income tax benefit (expense) 3,996 ( 23,905 ) 6,108 ( 20,187 )

Loss from discontinued operations ( 14,771 ) ( 98,906 ) ( 122,169 ) ( 580,166 )

Loss from discontinued operations attributable to:

Income (loss) from discontinued operations attributable to:

Noncontrolling interests in investment entities 386 43,387 ( 5,789 ) ( 260,464 )

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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.

Marketable equity securities with long positions of $ 156.8 million at June 30, 2022 and $ 201.9 million at December 31, 2021 (Note 5) and short positions of $ 35.8 million at June 30, 2022 and $ 38.0 million at December 31, 2021, included in other liabilities (Note 7), 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.

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(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).

and (ii) interest rate caps and swaps to limit the exposure to changes in interest rates on various floating rate debt obligations (indexed to LIBOR or Euribor).

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.

Fair values were $ 28.8 million and $ 0.9 million at June 30, 2022 and December 31, 2021, respectively, for derivative assets, included in other assets, and $ 5.2 million at June 30, 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.

At June 30, 2022, $ 13.5 million of the derivative asset represents a net investment hedge, while all other derivative positions in both periods were non-designated hedges.

Derivative notional amounts aggregated to the equivalent of $ 754.3 million at June 30, 2022 and $ 182.3 million at December 31, 2021 for foreign exchange contracts, and $ 224.7 million at June 30, 2022 and $ 2.0 billion at December 31, 2021 for interest rate contracts.

The derivative instruments are subject to master netting arrangements with counterparties that allow the Company to offset the settlement of derivative assets and liabilities in the same currency by instrument type or, in the event of default by the counterparty, to offset all derivative assets and liabilities with the same counterparty.

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Realized and unrealized gains and losses on derivative instruments are recorded in other gain (loss) on the consolidated statement of operations, other than interest expense, as follows:

Three Months Ended March 31,

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

(In thousands) 2022 2021 2022 2021

Foreign currency contracts:

Designated contracts

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

Non-designated contracts

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As a result, derivative valuations in their entirety are classified as Level 2 of the fair value hierarchy.

As discussed in Note 10, the Company issued five warrants to Wafra.

Each warrant entitles Wafra to purchase up to 5,352,000 shares of the Company's class A common stock at staggered strike prices between $ 2.43 and $ 6.00 each, exercisable through July 17, 2026.

No warrants have been exercised to-date.

The warrants are carried at fair value effective May 2022 when they were reclassified from equity to liability, with subsequent changes in fair value recorded in earnings.

At June 30, 2022, the warrants, classified as Level 3 fair value, were valued at $ 56.4 million using a Black-Scholes option pricing model, applying the following inputs:

(a) estimated volatility for DBRG's class A common stock of 39.1 %;

(b) closing stock price of DBRG's class A common stock at June 30, 2022 of $ 4.88 per share;

(d) remaining term to expiration of the warrants;

free rate of 3.00 % per annum, derived from the daily U.S.

Treasury yield curve rates to correspond to the remaining term to expiration of the warrants.

Fair value of the warrants decreased $ 25.0 million from its initial remeasurement in May 2022, recorded as other gain on the consolidated statement of operations.

Settlement Liability

In March 2020, the Company entered into a cooperation agreement with Blackwells Capital LLC ("Blackwells"), a stockholder of the Company.

expiration of the agreement in March 2030 and voting in favor of the Board of Directors' recommendations until the third anniversary of the agreement.

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

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

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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).

At June 30, 2022, fair value of loans held for investment totaled $ 514.2 million ($ 173.9 million at December 31, 2021), with $ 213.6 million classified as Level 2 ($ 91.0 million at December 31, 2021) and $ 300.6 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.

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 7.6 % to 10.2 % at June 30, 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 June 30, 2022 and December 31, 2021.

As of June 30, 2022, one loan with fair value of $ 5.1 million and unpaid principal balance of $ 5.8 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.

At June 30, 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 is accounted for as a marketable equity security beginning May 2021 following a merger of the investee into a special purpose acquisition company.

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

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Fair value at December 31, 2020 $ 36,798 $ 28,540

Purchases, originations, drawdowns and contributions 15,274 —

Paydowns, distributions and sales ( 52 ) ( 9,174 )

Change in accounting method for equity interest — ( 27,626 )

Change in accrued interest and capitalization of paid-in-kind interest 810 —

Realized and unrealized gain in earnings, net ( 65 ) 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 June 30, 2021 $ 52,765 $ —

Net unrealized loss in earnings on instruments held at June 30, 2021 $ ( 224 ) $ —

Fair value at December 31, 2021 $ 82,930 $ —

Purchases, originations, drawdowns and contributions 360,990 —

Paydowns, distributions and sales

Purchases, originations and drawdowns 371,415 —

Paydowns and sales

( 133,268 ) —

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Realized and unrealized loss in earnings, net ( 21,676 ) —

Fair value at March 31, 2022 $ 327,955 $ —

Net unrealized loss in earnings on instruments held at March 31, 2022 $ ( 2,815 ) $ —

Fair value at June 30, 2022 $ 300,618 $ —

Net unrealized loss in earnings on instruments held at June 30, 2022 $ ( 21,676 ) $ —

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 Company has an investment in a non-traded healthcare REIT of $ 45.7 million at June 30, 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.

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Adjustments to fair value generally result from the application of lower of amortized cost or fair value accounting for assets held for disposition or otherwise, write-down of asset values due to impairment.

Impairment is discussed in Note 11 for real estate, Notes 5 and 11 for equity method investments, and Note 11 for intangible assets.

Impairment is discussed in Note 11 for assets held for disposition.

Fair Value of Financial Instruments Reported at Cost

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(In thousands) Level 1 Level 2 Level 3 Total

March 31, 2022

June 30, 2022

Debt at amortized cost

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As a result, the Company is considered to be acting in the capacity of a principal of the sponsored private fund and is therefore the primary beneficiary of the fund.

The Company’s exposure is limited to the value of its outstanding investment in the consolidated private funds of $ 51.0 million at March 31, 2022 and $ 53.1 million at December 31, 2021.

The Company’s exposure is limited to the value of its outstanding investment in the consolidated private funds of $ 46.3 million at June 30, 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.

At June 30, 2022 and December 31, 2021, the consolidated private funds had total assets of $ 219.6 million and $ 230.6 million, respectively, and total liabilities of $ 71.9 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.

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The Company accounts for its equity interests in unconsolidated sponsored private funds under the equity method.

The Company's maximum exposure to loss is limited to the carrying value of its investment in the unconsolidated sponsored private funds, totaling $ 362.4 million at March 31,

2022 and $ 382.7 million at December 31, 2021, included in equity investments, and $ 46.0 million at March 31, 2022 and $ 45.4 million at December 31, 2021, included within assets held for disposition.

The Company's maximum exposure to loss is limited to the carrying value of its investment in the unconsolidated sponsored private funds, totaling $ 515.6 million at June 30, 2022 and $ 382.7 million at December 31, 2021, included in equity investments, and $ 48.6 million at June 30, 2022 and $ 45.4 million at December 31, 2021, included within assets held for disposition.

Securitizations

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

Three Months Ended March 31,

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

(In thousands, except per share data) 2022 2021 2022 2021

Net loss allocated to common stockholders

Loss from continuing operations $ ( 236,286 ) $ ( 146,339 )

Income (loss) from continuing operations $ ( 53,310 ) $ 3,823 $ ( 289,596 ) $ ( 142,516 )

Loss from continuing operations attributable to noncontrolling interests 45,763 2,103 128,580 62,653

Loss from continuing operations attributable to DigitalBridge Group, Inc.

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

( 7,547 ) 5,926 ( 161,016 ) ( 79,863 )

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(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.

(a) for the three months ended June 30, 2022 and 2021, the effect of adding back $ 3.9 million and $ 7.9 million of interest expense, respectively, and 46,790,500 and 144,259,100 of weighted average dilutive common share equivalents, respectively;

and (b) for the six months ended June 30, 2022 and 2021, the effect of adding back $ 141.9 million of debt extinguishment loss (Note 8) and interest expense and $ 15.6 million of interest expense, respectively, and 56,502,800 and 144,416,700 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.

(a) class A common shares that are contingently issuable in relation to performance stock units (Note 17) with weighted average shares of 7,631,500 and 13,225,000 for the three months ended June 30, 2022 and 2021, respectively, and 8,144,400 and 11,810,500 for the six months ended June 30, 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 8,841,300 and 11,458,300 for the three months ended June 30, 2022 and 2021, respectively, and 10,424,500 and 9,670,500 for the six months ended June 30, 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.

At June 30, 2022 and 2021, 50,515,500 and 51,993,800 of OP Units, respectively, were not included in the computation of diluted earnings per share in the respective periods presented.

The Company's digital investment management platform manages capital on behalf of a diverse, global investor base, including but not limited to, sovereign wealth funds, public and private pensions, asset managers, insurance companies, and endowments, for which the Company earns fee income.

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

Three Months Ended March 31,

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

(In thousands) 2022 2021 2022 2021

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Incentive fees

Total fee income—affiliates $ 42,837 $ 29,443

— 4,489 2 5,083

759 941 1,403 2,051

Total fee income $ 44,318 $ 45,157 $ 87,155 $ 74,600

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.

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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.

Incentive Fees —The Company is entitled to incentive fees from sub-advisory accounts in its liquid securities strategy.

Incentive fees are determined based upon the performance of the respective accounts, subject to the achievement of specified return thresholds in accordance with the terms set out in their respective governing agreements.

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

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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.

At June 30, 2022, an aggregate 85.2 million shares of the Company's class A common stock were reserved for the issuance of awards under the Equity Incentive Plan.

Restricted Stock — Restricted stock awards in the Company's class A common stock are granted to senior executives, directors and certain employees, generally subject to a service condition only, with annual time-based vesting in equal tranches over a three-year period.

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Performance Stock Units — PSUs are granted to senior executives and certain employees, and are subject to both a service condition and a market condition.

Following the end of the measurement period, the recipients of PSUs who remain employed will vest in, and be issued a number of shares of the Company's class A common stock, generally ranging from 0 % to 200 % of the number of PSUs granted and determined based upon the performance of the Company's class A common stock relative to that of a specified peer group over a three-year measurement period (such measurement metric the "total shareholder return").

Following the end of the measurement period, the recipients of PSUs who remain employed will vest in, and be issued a number of shares of the Company's class A common stock, generally

ranging from 0 % to 200 % of the number of PSUs granted and determined based upon the performance of the Company's class A common stock relative to that of a specified peer group over a three-year measurement period (such measurement metric the "total shareholder return").

In addition, recipients of PSUs whose employment is terminated after the first anniversary of their PSU grant are eligible to vest in a portion of the PSU award following the end of the measurement period based upon achievement of the total shareholder return metric applicable to the award.

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(2) Based upon the Company's expected annualized dividends.

Expected dividend yield is zero for the 2022 and 2021 PSU award as the Company suspended common dividends beginning with the second quarter of 2020.

Expected dividend yield is zero for the 2022 and 2021 PSU awards as common dividends were suspended beginning with the second quarter of 2020.

(3) Based upon the continuously compounded zero-coupon U.S.

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The following assumptions were applied in the Monte Carlo model under a risk-neutral premise:

2019 LTIP Grant (1)

2022 LTIP Grant 2019 LTIP Grant (1)

Expected volatility of the Company's class A common stock (2)

34.0 % 28.3 %

Expected dividend yield (3)

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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 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.

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

Three Months Ended March 31,

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

(In thousands)

2022 2021 2022 2021

Compensation expense (including $ 176 , $ 50 , $ 213 and $ 1,114 related to dividend equivalent rights)

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Forfeited ( 31,497 ) — — — ( 2,141,391 ) ( 2,172,888 ) 1.83 5.59

Unvested shares and units at March 31, 2022

Unvested shares and units at June 30, 2022

7,542,631 10,500,000 106,872 9,589,564 7,558,347 35,297,414 4.46 2.83

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PSUs for which the total shareholder return was not met at the end of the performance period are forfeited.

Fair value of equity awards that vested, determined based upon their respective fair values at vesting date, was $ 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.

Fair value of equity awards that vested, determined based upon their respective fair values at vesting date, was $ 15.7 million and $ 26.1 million for the three months ended June 30, 2022 and 2021, respectively, and $ 49.1 million and $ 53.7 million for the six months ended June 30, 2022 and 2021, respectively.

At June 30, 2022, aggregate unrecognized compensation cost for all unvested equity awards was $ 50.0 million, which is expected to be recognized over a weighted average period of 2.3 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 1.9 years.

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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 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.

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Amounts due from and due to affiliates consist of the following, excluding amounts related to discontinued operations that are presented as assets held for disposition (Note 11):

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

(In thousands) June 30, 2022 December 31, 2021

Due from Affiliates

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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).

Substantially all fee income are from affiliates, other than incentive fees from sub-advisory accounts.

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.

Such cost reimbursements, included in other income, totaled $ 0.8 million and $ 0.9 million for the three months ended June 30, 2022 and 2021 and $ 4.7 million and $ 1.4 million for the six months ended June 30, 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.

Warehoused Investments— The Company may acquire and temporarily warehouse investments on behalf of prospective sponsored investment vehicles that are actively fundraising.

The warehoused investments are transferred to the investment vehicle when sufficient third party capital, including debt, is raised.

The Company is generally paid a fee by the investment vehicle, akin to an interest charge, typically calculated as a percentage of the acquisition price of the investment, to compensate the Company for its cost of holding the investment during the warehouse period.

The terms of such arrangements may differ for each sponsored investment vehicle or by investment.

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.

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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).

Such investments made by the Company include ongoing payments for the build-

out of expansion capacity, including lease-up of the expanded capacity and existing inventory, in Vantage SDC (Note 3) and the acquisition of additional interest in DataBank from an existing investor in January 2022 (Note 10).

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

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Such carried interest allocation to Messrs.

Ganzi and Jenkins that are unrealized 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.

Ganzi and Jenkins that are unrealized or realized but unpaid are included in noncontrolling interests on the balance sheet, in the amount of $ 50.5 million at June 30, 2022 and $ 20.8 million at December 31, 2021.

For the three months ended June 30, 2022 and 2021, carried interest allocated is recorded as net income attributable to noncontrolling interests totaling $ 28.9 million and $ 0.7 million, respectively.

For the six months ended June 30, 2022 and 2021, carried interest allocated is recorded as net income attributable to noncontrolling interests totaling $ 29.6 million and $ 0.6 million, respectively.

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.

At June 30, 2022 and December 31, 2021, such investments in consolidated investment vehicles and general partner entities totaled $ 16.0 million and $ 19.5 million, respectively, reflected in redeemable noncontrolling interests and noncontrolling interests on the balance sheet.

For the three months ended June 30, 2022 and 2021, their share of net loss was $ 0.1 million and net income was $ 0.4 million, respectively.

For the six months ended June 30, 2022 and 2021, their share of net loss was $ 0.3 million and net income was $ 0.5 million.

These amounts are reflected in net income (loss) attributable to noncontrolling interests and exclude their share of carried interest allocation, which is reflected in compensation expense (reversal)—carried interest.

Aircraft— P ursuant to Mr.

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The Company reimbursed Mr.

Ganzi $ 0.2 million and $ 1.1 million for the three months ended March 31, 2022 and 2021, respectively.

Ganzi $ 0.9 million in each of the three months ended June 30, 2022 and 2021, and $ 1.1 million and $ 2.0 million for the six months ended June 30, 2022 and 2021, respectively.

Advancement of Expenses— Effective April 1, 2021, Thomas J.

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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.

Pursuant to the Advancement Agreement, the Company expensed $ 4.1 million and $ 9.7 million in the three and six months ended June 30, 2022, respectively .

Segment Reporting

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• 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's flagship opportunistic strategy is conducted through its DigitalBridge 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).

Earnings from our Digital IM segment were attributed 31.5% to Wafra through the end of May 2022 when Wafra's investment in the Digital IM business was 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);

DataBank, including zColo, an edge colocation data center business (DBRG ownership at 21.8% as of June 30, 2022, 20% as of December 31, 2021);

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

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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.

This change in segment presentation is reflected retrospectively.

• 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.

As segment results are presented before elimination of intercompany fees, 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 $ 1.6 million for the three months ended June 30, 2022 and 2021, respectively, and $ 1.6 million and $ 3.3 million for the six months ended June 30, 2022 and 2021, respectively.

Segment Results of Operations

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

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Total revenues $ 46,115 $ 227,687 $ 15,607 $ 289,409

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Depreciation and amortization 5,375 145,817 4,160 155,352

Equity method earnings (losses), including carried interest ( 31,062 ) — 19,190 ( 11,872 )

Equity method earnings, including carried interest 111,795 — 26,411 138,206

Income tax benefit (expense) ( 2,006 ) ( 161 ) 4,685 2,518

Income (loss) from continuing operations 67,995 ( 85,428 ) ( 35,877 ) ( 53,310 )

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

21,269 ( 14,807 ) ( 14,009 ) ( 7,547 )

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

Net loss attributable to DigitalBridge Group, Inc.

Three Months Ended June 30, 2021

Total revenues $ 46,873 $ 189,093 $ 1,221 $ 237,187

Property operating expense — 77,140 — 77,140

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

Depreciation and amortization 6,299 126,227 5,703 138,229

Equity method earnings, including carried interest 11,202 — 51,448 62,650

Income tax benefit (expense) ( 2,236 ) 66,788 10,687 75,239

Income (loss) from continuing operations 15,786 ( 10,850 ) ( 1,113 ) 3,823

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

12,100 ( 376 ) ( 5,798 ) 5,926

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

Net loss attributable to DigitalBridge Group, Inc.

$ ( 122,744 )

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

Six Months Ended June 30, 2022

Total revenues $ 91,008 $ 430,209 $ 25,651 $ 546,868

Property operating expense — 178,747 2,546 181,293

Interest expense 5,287 73,417 11,714 90,418

Depreciation and amortization 10,651 268,708 4,560 283,919

Equity method earnings, including carried interest 80,733 — 45,601 126,334

Income tax benefit (expense) ( 4,380 ) 169 14,142 9,931

Loss from continuing operations 58,852 ( 159,569 ) ( 188,879 ) ( 289,596 )

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$ ( 268,119 )

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

Total revenues $ 77,993 $ 378,295 $ 1,480 $ 457,768

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Depreciation and amortization 12,566 248,448 16,640 277,654

Equity method losses, including carried interest ( 195 ) — ( 16,444 ) ( 16,639 )

Equity method earnings, including carried interest 11,007 — 35,004 46,011

Income tax benefit (expense) ( 4,881 ) 79,056 24,260 98,435

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

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

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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.

As of June 30, 2022, the Company was not involved in any legal proceedings that are expected to have a material adverse effect on the Company’s results of operations, financial position or liquidity.

Supplemental Disclosure of Cash Flow Information

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2022 2021

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$ 117,901 $ 214,698

Cash received (paid) for income tax, net ( 328 ) 2,123

Cash received for income tax refunds, net 676 3,279

Operating lease payments 29,933 34,121

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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) operating activities of discontinued operations $ ( 13,997 ) $ 123,548

Net cash provided by (used in) investing activities of discontinued operations ( 83,302 ) 584,255

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Operating lease right-of-use assets and lease liabilities established 1,126 36,320

Finance lease payments accrued — 3,796

Redemption of OP Units for common stock 341 17

Redemption of redeemable noncontrolling interest for common stock 348,759 —

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 —

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

Seller Note received in sale of NRF Holdco equity 154,992 —

Loan receivable relieved in exchange for equity investment acquired 20,676 —

Distribution payable to noncontrolling interest 2,850 —

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

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3,144,700 2,850,158

Assets of investment entities deconsolidated (1)

Noncontrolling interests of investment entities deconsolidated (1)

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The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

• the duration and severity of the current novel coronavirus (COVID-19) pandemic, 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;

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• 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;

• whether the transaction with 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 transaction;

• 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;

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• 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 raise new investment funds and vehicles and transfer warehoused investments;

• our ability to grow our business by raising capital for the companies that we manage;

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• our levels of leverage;

• adverse domestic or international economic conditions, including those resulting from the COVID-19 pandemic, supply chain difficulties and possible inflation;

• adverse domestic or international macroeconomic factors, including those resulting from the COVID-19 pandemic, supply chain difficulties, inflation, a potential economic slowdown or a recession;

• 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;

• the impact of our transition 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;

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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.

"Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 and in Part I, Item 2.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements