What changed in this filing

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Item 1. Financial Statements

2023-08-04 compared with 2023-05-05 · 422 added, 287 removed, 1245 unchanged (36% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

March 31, 2023 (unaudited)

June 30, 2023 (unaudited)

December 31, 2022

28 unchanged sentences

794,670 800,355

Common stock, $ 0.04 par value per share

Common stock, $ 0.01 and $ 0.04 par value per share

Class A, 237,250 shares authorized;

20 unchanged sentences

Investment Management Operating Corporate and Other

March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022

Cash and cash equivalents $ 68,548 $ 39,563 $ 72,087 $ 65,975 $ 286,248 $ 812,716

12 unchanged sentences

68,283 41,458 — — 2,866 3,902

Assets held for disposition (Note 2) (1)

— — 48,406 — — —

Liabilities (1)

$ 1,177,526 $ 875,422 $ 8,372,542 $ 8,149,171 $ 1,201,889 $ 1,728,390

Corporate debt (Note 8)

6 unchanged sentences

289,566 342,696 692,901 725,236 175,960 204,164

Liabilities related to assets held for disposition (Note 2) (1)

— — 12,788 — — —

$ 488,955 $ 541,373 $ 5,804,798 $ 5,411,945 $ 302,215 $ 504,742

Redeemable noncontrolling interests (Note 10)

2 unchanged sentences

187,018 136,668 2,310,897 2,463,559 140,413 113,390

(1) Exclude amounts related to assets held for disposition.

(1) Excludes amounts related to assets held for disposition in connection with discontinued operations.

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

2 unchanged sentences

(In thousands, except per share data)

Three Months Ended March 31,

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

2023 2022 2023 2022

Fee income ($ 63,227 , $ 43,403 , $ 119,616 and $ 85,407 from affiliates)

$ 65,742 $ 44,318 $ 124,868 $ 87,155

Carried interest allocation (reversal) ( 54,756 ) ( 31,079 )

Carried interest allocation 79,254 110,779 24,498 79,700

Principal investment income (loss) 30,409 16,444 33,971 22,898

7 unchanged sentences

Transaction-related costs 1,113 2,756 9,640 2,921

Placement fees 3,653 — 3,653 —

Depreciation and amortization 149,562 155,352 291,136 283,919

Compensation expense—cash and equity-based 82,992 52,792 157,642 118,334

Compensation expense (reversal)—incentive fee and carried interest ( 36,831 ) ( 20,352 )

Compensation expense—incentive fee and carried interest allocation 36,076 49,069 ( 755 ) 28,717

Administrative expenses 25,763 26,353 52,269 54,238

13 unchanged sentences

Preferred stock dividends 14,675 15,759 29,351 31,518

Preferred stock repurchases/redemptions (Note 9)

( 927 ) — ( 927 ) —

Net income (loss) attributable to common stockholders $ ( 22,411 ) $ ( 37,321 ) $ ( 234,884 ) $ ( 299,637 )

9 unchanged sentences

Dividends declared per common share

$ 0.01 $ — $ 0.02 $ —

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

3 unchanged sentences

Investment Management Operating Corporate and Other

Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31,

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

2023 2022 2023 2022 2023 2022

1 unchanged sentence

$ 66,631 $ 45,113 $ — $ — $ ( 889 ) $ ( 795 )

Carried interest allocation (reversal) ( 54,756 ) ( 31,079 ) — — — —

Carried interest allocation 79,254 110,779 — — — —

Principal investment income (loss) 1,604 1,016 — — 28,805 15,428

7 unchanged sentences

Transaction-related costs 613 1,898 — — 500 858

Placement fees 3,653 — — — — —

Depreciation and amortization 11,039 5,375 138,209 145,817 314 4,160

Compensation expense—cash and equity-based 45,798 23,230 26,435 20,229 10,759 9,333

Compensation expense (reversal)—incentive fee and carried interest ( 36,831 ) ( 20,352 ) — — — —

Compensation expense—incentive fee and carried interest allocation 36,076 49,069 — — — —

Administrative expenses 7,953 4,869 8,841 8,910 8,969 12,574

12 unchanged sentences

DigitalBridge Group, Inc.

Supplemental Schedule to Consolidated Statements of Operations

(In thousands)

Investment Management Operating Corporate and Other

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

2023 2022 2023 2022 2023 2022

Fee income (Note 14)

$ 126,729 $ 88,750 $ — $ — $ ( 1,861 ) $ ( 1,595 )

Carried interest allocation 24,498 79,700 — — — —

Principal investment income (loss) 1,922 1,033 — — 32,049 21,865

Property operating income (Note 5)

— — 465,680 430,157 — 6,605

Other income 2,773 2,258 1,043 52 22,260 20,641

Total revenues 155,922 171,741 466,723 430,209 52,448 47,516

Property operating expense — — 195,357 178,747 — 2,546

Interest expense 5,232 5,287 111,269 73,417 6,717 11,714

Investment expense 727 1,399 10,161 13,503 116 1,850

Transaction-related costs 5,805 1,898 — — 3,835 1,023

Placement fees 3,653 — — — — —

Depreciation and amortization 17,448 10,651 272,908 268,708 780 4,560

Compensation expense—cash and equity-based 73,980 48,038 53,614 40,185 30,048 30,111

Compensation expense—incentive fee and carried interest allocation ( 755 ) 28,717 — — — —

Administrative expenses 14,360 9,040 16,081 15,809 21,828 29,389

Total expenses 120,450 105,030 659,390 590,369 63,324 81,193

Other gain (loss), net ( 526 ) ( 3,479 ) 2,113 422 ( 155,869 ) ( 193,080 )

Income (loss) from continuing operations before income taxes 34,946 63,232 ( 190,554 ) ( 159,738 ) ( 166,745 ) ( 226,757 )

Income tax benefit (expense) ( 2,573 ) ( 4,380 ) ( 443 ) 169 ( 1,295 ) 14,142

Income (loss) from continuing operations 32,373 58,852 ( 190,997 ) ( 159,569 ) ( 168,040 ) ( 212,615 )

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

Redeemable noncontrolling interests 229 ( 3,219 ) — — 4,273 ( 22,328 )

Investment entities 34,176 47,280 ( 167,981 ) ( 129,610 ) 8,818 ( 4,028 )

Operating Company ( 143 ) 1,124 ( 1,718 ) ( 2,328 ) ( 15,186 ) ( 17,324 )

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

$ ( 1,889 ) $ 13,667 $ ( 21,298 ) $ ( 27,631 ) $ ( 165,945 ) $ ( 168,935 )

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

DigitalBridge Group, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

Three Months Ended March 31,

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

2023 2022 2023 2022

Net income (loss) $ ( 52,516 ) $ ( 68,081 ) $ ( 344,860 ) $ ( 411,765 )

3 unchanged sentences

Foreign currency translation 3,143 ( 24,340 ) 2,912 ( 62,281 )

Net investment hedges — 6,984 — 6,984

Other comprehensive income (loss) 3,143 ( 20,044 ) 3,230 ( 64,356 )

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

Other comprehensive income (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 18)

— — — — — — 11,047 — 11,047

Redemption of OP Units for class A common stock — 4 335 — — 339 — ( 339 ) —

Equity based compensation — 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.

DigitalBridge Group, Inc.

6 unchanged sentences

Other comprehensive income (loss) — — — — 33 33 35 19 87

Common stock repurchases ( 52 ) — — — — ( 52 ) — — ( 52 )

Preferred stock repurchases (Note 9)

( 52 ) — — — — ( 52 ) — — ( 52 )

Equity based compensation — 99 10,930 — — 11,029 5,542 41 16,612

8 unchanged sentences

Balance at March 31, 2023 $ 800,303 $ 6,480 $ 7,823,722 $ ( 7,176,706 ) $ ( 1,478 ) $ 1,452,321 $ 2,650,893 $ 48,598 $ 4,151,812

Net income (loss) — — — ( 8,663 ) — ( 8,663 ) ( 39,667 ) ( 1,745 ) ( 50,075 )

Other comprehensive income (loss) — — — — 2,582 2,582 360 201 3,143

Change in common stock par value (Note 9)

— ( 4,862 ) 4,862 — — — — — —

Preferred stock repurchases (Note 9)

( 5,633 ) — 927 — — ( 4,706 ) — — ( 4,706 )

Redemption of OP Units for class A common stock — 3 981 — — 984 — ( 984 ) —

Equity based compensation — 11 21,681 — — 21,692 4,232 41 25,965

Shares canceled for tax withholdings on vested equity awards — ( 6 ) ( 5,348 ) — — ( 5,354 ) — — ( 5,354 )

Contributions from noncontrolling interests — — — — — — 38,240 — 38,240

Distributions to noncontrolling interests — — — — — — ( 13,608 ) ( 124 ) ( 13,732 )

Preferred stock dividends — — — ( 14,660 ) — ( 14,660 ) — — ( 14,660 )

Common stock dividends declared ( 0.01 per share)

— — — ( 1,622 ) — ( 1,622 ) — — ( 1,622 )

Reallocation of equity (Note 2)

— — ( 385 ) — 18 ( 367 ) ( 844 ) 1,211 —

Balance at June 30, 2023 $ 794,670 $ 1,626 $ 7,846,440 $ ( 7,201,651 ) $ 1,122 $ 1,442,207 $ 2,639,606 $ 47,198 $ 4,129,011

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

1 unchanged sentence

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Paid-in-kind interest added to loan principal, net of interest received ( 544 ) ( 1,144 )

Paid-in-kind interest added to loan principal ( 544 ) ( 2,777 )

Straight-line rent income ( 3,798 ) ( 9,579 )

5 unchanged sentences

Distributions of income from equity method investments 3,677 —

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

Impairment of real estate and related intangibles and right-of-use ("ROU") asset — 35,985

Depreciation and amortization 291,136 286,258

17 unchanged sentences

Acquisition of and additions to real estate, related intangibles and leasing commissions ( 510,973 ) ( 1,787,317 )

Proceeds from sales of real estate, net of property level cash transferred to buyer — 96,660

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

Cash transferred to buyer in sale of real estate, net of proceeds received — ( 92,793 )

Investment deposits ( 1,669 ) 235

Net receipts on settlement of derivatives 3,401 —

Net receipt (payment) on settlement of derivatives 3,401 ( 11,893 )

Acquisition of InfraBridge, net of cash acquired (Note 3)

5 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows from Financing Activities

1 unchanged sentence

Dividends paid to common stockholders ( 3,214 ) —

Borrowings on corporate debt — 270,000

Repayments of corporate debt, including repurchase of senior notes ( 200,000 ) ( 214,237 )

7 unchanged sentences

Payment of contingent consideration to Wafra (Note 10)

Redemptions/repurchases of preferred stock ( 4,758 ) —

Shares canceled for tax withholdings on vested equity awards ( 10,217 ) ( 16,477 )

8 unchanged sentences

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

10 unchanged sentences

Notes to Consolidated Financial Statements

March 31, 2023

June 30, 2023

Business and Organization

7 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, 2023, the Company owned 93 % of the OP , as its sole managing member.

At June 30, 2023, 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.

17 unchanged sentences

• Segregation of the Investment Management segment allows for more clarity and visibility into the financial performance and financial position of the Company's core business;

• The Operating segment represents the consolidation of two data center portfolio companies for which the Company has direct co-investments of 13 % and 11 %, respectively, at both March 31, 2023 and December 31, 2022.

Although the Operating segment makes up a majority of the balances and activities on a consolidated basis, DBRG's exposure and entitlement are limited to its 13 % and 11 % interest in the two portfolio companies in the Operating segment.

The liabilities of the Operating segment are obligations of the respective portfolio companies of the Operating segment and may only be settled using assets of these respective portfolio companies.

The supplemental schedule to the consolidated balance sheets excludes assets and liabilities held for disposition, stockholders' equity and noncontrolling interests in OP, which are not specifically attributable to reportable segments.

The supplemental schedule to the consolidated statements of operations present by reportable segment the results from continuing operations attributable to DBRG, excluding discontinued operations and results attributable to common stockholders.

The supplemental schedule to the consolidated balance sheets excludes assets and liabilities held for disposition that are related to discontinued operations, and stockholders' equity and noncontrolling interests in OP, as these equity items are not specifically attributable to reportable segments.

The supplemental schedules to the consolidated statements of operations present by reportable segment the results from continuing operations attributable to DBRG, excluding discontinued operations and results attributable to common stockholders.

Additionally, fee income in the Investment Management segment is presented prior to elimination of fees earned from the Company's sponsored investment vehicles that are consolidated within the Operating segment and in Corporate and Other.

24 unchanged sentences

Any existing equity interest held by the Company in the entity prior to the Company obtaining control will be remeasured at fair value, which may result in a gain or loss recognized upon initial consolidation.

However, if the consolidation represents an asset acquisition of a voting interest entity, the Company's existing interest in the acquired assets, if any, is not remeasured to fair value but continues to be carried at historical cost.

The Company may also

deconsolidate a subsidiary as a result of this reassessment, which may result in a gain or loss recognized upon deconsolidation depending on the carrying values of deconsolidated assets and liabilities compared to the fair value of any interests retained.

However, if the consolidation represents an asset acquisition of a voting interest entity, the Company's existing interest in the acquired

assets, if any, is not remeasured to fair value but continues to be carried at historical cost.

The Company may also deconsolidate a subsidiary as a result of this reassessment, which may result in a gain or loss recognized upon deconsolidation depending on the carrying values of deconsolidated assets and liabilities compared to the fair value of any interests retained.

Noncontrolling Interests

24 unchanged sentences

The Company currently owns interests in two companies:

DataBank, an edge colocation data center business (DBRG ownership of 11% at March 31, 2023 and December 31, 2022);

and Vantage SDC, a stabilized hyperscale data center business (DBRG ownership of 13% at March 31, 2023 and December 31, 2022).

DataBank, an edge colocation data center business (DBRG ownership of 11% at June 30, 2023 and December 31, 2022);

and Vantage SDC, a stabilized hyperscale data center business (DBRG ownership of 13% at June 30, 2023 and December 31, 2022).

DataBank and Vantage SDC are portfolio companies managed by the Company under its Investment Management segment with respect to equity interests owned by third party capital.

1 unchanged sentence

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

(i) digital investment vehicles, the largest of which is in the DigitalBridge Partners ("DBP") flagship funds, and seed investments in liquid securities

and other potential new strategies;

(i) sponsored investment vehicles, primarily the DigitalBridge Partners ("DBP") flagship funds and InfraBridge funds, and seed investments in liquid securities and other potential new strategies;

and (ii) remaining non-digital investments.

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

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

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

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

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

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

Remaining non-digital investments are composed of a marketable equity security, and equity interest in a non-traded REIT that is not available for immediate sale (Note 11).

These other investment activities generate largely principal investment income or losses, and to a lesser extent, revenues in the form of dividend income from consolidated investment vehicles and non-digital investments.

• 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 attribution, have been attributed to each of the reportable segments.

The results of operations of the Company's reportable segments are presented in the supplemental schedule to the consolidated statements of operations and reconciled to the consolidated statements of operations as follows:

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022

The results of operations of the Company's reportable segments are presented in the supplemental schedules to the consolidated statements of operations and reconciled to the consolidated statements of operations as follows:

Three Months Ended June 30, 2023 Three Months Ended June 30, 2022

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

5 unchanged sentences

$ ( 8,663 ) $ ( 21,562 )

Business Combinations

Six Months Ended June 30, 2023 Six Months Ended June 30, 2022

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

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

$ ( 1,889 ) $ ( 21,298 ) $ ( 165,945 ) $ ( 189,132 ) $ 13,667 $ ( 27,631 ) $ ( 168,935 ) $ ( 182,899 )

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

( 17,328 ) ( 85,220 )

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

$ ( 206,460 ) $ ( 268,119 )

Definition of a Business —The Company evaluates each purchase transaction to determine whether the acquired assets meet the definition of a business.

2 unchanged sentences

A substantive process is not ancillary or minor, cannot be replaced without significant costs, effort or delay or is otherwise considered unique or scarce.

To qualify as a business without outputs, the acquired assets would require an organized workforce with the necessary skills, knowledge and experience to perform a substantive process.

To qualify as a business without outputs, the acquired assets

would require an organized workforce with the necessary skills, knowledge and experience to perform a substantive process.

Asset Acquisitions —For acquisitions that are not deemed to be businesses, the assets acquired are recognized based on their cost to the Company as the acquirer and no gain or loss is recognized.

7 unchanged sentences

With respect to contract assets and contract liabilities acquired in a business combination, these are not accounted for under the fair value basis at the time of acquisition.

Instead, the Company determines the value of these revenue

contracts as if it had originated the acquired contracts by evaluating the associated performance obligations, transaction price and relative stand-alone selling price at the original contract inception date or subsequent modification dates.

Instead, the Company determines the value of these revenue contracts as if it had originated the acquired contracts by evaluating the associated performance obligations, transaction price and relative stand-alone selling price at the original contract inception date or subsequent modification dates.

The estimated fair values and allocation of consideration are subject to adjustments during the measurement period, not to exceed one year, based upon new information obtained about facts and circumstances that existed at time of acquisition.

Contingent Consideration —Contingent consideration is classified as a liability or equity, as applicable.

8 unchanged sentences

Accordingly, for all prior periods presented, the equity method investment in BRSP is presented as assets held for disposition on the consolidated balance sheets and equity method earnings (loss) from BRSP is presented as loss from discontinued operations on the consolidated statements of operations.

Discontinued operations in 2023 primarily reflect a $ 9.7 million impairment of BRSP shares prior to its disposition, and activities associated with equity investments excluded from the December 2021 bulk sale of the Company's non-digital investment portfolio.

In addition to the above equity investments, discontinued operations in 2022 also included two months of operations of the Wellness Infrastructure business, along with other non-core assets held by a subsidiary, NRF Holdco, LLC ("NRF Holdco"), prior to the sale of all of the equity of NRF Holdco in February 2022.

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 promissory 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 ("PIK") interest at 5.35 % per annum (Note 11).

The disposition of NRF Holdco resulted in a write-off of unamortized deferred financing costs on the Wellness Infrastructure debt assumed by the buyer of $ 92.1 million and additional impairment loss based upon final carrying value of the Wellness Infrastructure net assets.

In 2023, discontinued operations primarily reflect a $ 9.7 million impairment of BRSP shares prior to its disposition, and activities associated with equity investments excluded from the December 2021 bulk sale of the Company's non-digital investment portfolio.

In addition to the above equity investments, in 2022, discontinued operations also included two months of operations of the Wellness Infrastructure business, along with other non-core assets held by a subsidiary, NRF Holdco, LLC ("NRF Holdco"), prior to the sale of all of the equity of NRF Holdco in February 2022.

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, which was fully written down in March 2023, as discussed in Note 11.

In 2022, the disposition of NRF Holdco resulted in a write-off of unamortized deferred financing costs on the Wellness Infrastructure debt assumed by the buyer of $ 92.1 million and additional impairment loss based upon final carrying value of the Wellness Infrastructure net assets.

Loss from discontinued operations is summarized as follows.

Three Months Ended March 31,

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

(In thousands) 2023 2022 2023 2022

4 unchanged sentences

Income (Loss) from discontinued operations ( 3,978 ) ( 3,788 ) ( 18,196 ) ( 98,433 )

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

Investment entities ( 25 ) 386 492 ( 5,789 )

3 unchanged sentences

Assets and Related Liabilities Held for Disposition

At March 31, 2023 and December 31, 2022, all assets and related liabilities held for disposition relate to discontinued operations.

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

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

Assets held for disposition of $ 11.3 million at March 31, 2023 consisted primarily of miscellaneous equity investments excluded from the December 2021 bulk sale of the Company's non-digital investment portfolio.

Assets held for disposition of $ 275.5 million at December 31, 2022 also included the Company's shares in BRSP of $ 218.0 million that were sold in March 2023 and an equity method investment carried under the fair value option of $ 44.5 million prior to a sale of its underlying assets and a return of capital to the Company in January 2023.

Assets and related liabilities held for disposition are summarized below.

Primarily, these are composed of:

(i) at June 30, 2023, DataBank's French portfolio of five colocation data centers which are classified as held for disposition effective April 2023;

and (ii) at December 31, 2022, shares in BRSP valued at $ 218.0 million that were sold in March 2023, and an equity method investment carried under the fair value option prior to a sale of the investee's underlying assets and a return of capital to the Company in January 2023.

Both periods also include miscellaneous equity investments excluded from the December 2021 bulk sale of the Company's non-digital investments.

Except for the DataBank portfolio, all assets and related liabilities held for disposition relate to discontinued operations.

(In thousands) June 30, 2023 December 31, 2022

Assets held for disposition

Real estate $ 30,399 $ —

Investments 5,108 275,381

Intangibles and other assets 18,007 139

$ 53,514 $ 275,520

Liabilities related to assets held for disposition

Lease intangibles and other liabilities $ 12,954 $ 380

Reclassifications

9 unchanged sentences

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.

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.

5 unchanged sentences

At the time of adoption, the Company and its investment company subsidiaries do not have equity securities subject to contractual sale restrictions.

Business Combination in 2023

Business Combination

In February 2023, the Company acquired the global infrastructure equity investment management business of AMP Capital Investors International Holdings Limited, which was rebranded as InfraBridge at closing.

Consideration for the acquisition consisted of a $ 313.2 million upfront cash consideration (net of cash assumed), subject to customary post-closing working capital adjustments, plus a contingent amount based upon achievement of future fundraising targets for InfraBridge's new global infrastructure funds.

Consideration for the acquisition consisted of $ 314.3 million cash consideration (net of cash assumed), subject to customary post-closing working capital adjustments, plus a contingent amount based upon achievement of future fundraising targets for InfraBridge's new global infrastructure funds.

The estimated fair value of the contingent consideration is subject to remeasurement each reporting period, as discussed in Note 11.

Asset Acquisitions in 2022

The following table summarizes the total consideration and allocation to assets acquired and liabilities assumed.

The initial cash consideration was determined, in part, based upon estimated net working capital of the acquired entities at closing.

The purchase price allocation is provisional and will be finalized through the one year measurement period.

In the second quarter of 2023, certain adjustments were identified that affected the provisional accounting, as presented below.

These were adjustments to net working capital and to the value of acquired interest in an InfraBridge fund based upon a revised net asset value ("NAV") of the fund, applying new information about facts and circumstances that existed at the time of acquisition.

(In thousands) As Reported

At March 31, 2023 Measurement Period Adjustments As Revised

At June 30, 2023

Consideration

Cash $ 364,338 $ 1,102 $ 365,440

Estimated fair value of contingent consideration 10,874 — 10,874

$ 375,212 $ 376,314

Assets acquired and liabilities assumed

Cash 51,174 — 51,174

Principal investments 130,810 ( 12,400 ) 118,410

Intangible assets 50,800 — 50,800

Other assets 27,682 8,517 36,199

Deferred tax liabilities ( 10,198 ) — ( 10,198 )

Other liabilities ( 21,625 ) ( 10,190 ) ( 31,815 )

Fair value of net assets acquired 228,643 214,570

Goodwill 146,569 15,175 161,744

$ 375,212 $ 376,314

• Principal investments represent acquired interests in InfraBridge funds, valued at their most recent NAV at closing.

• The investment management intangible assets of InfraBridge were composed of the following:

• Management contracts are valued based upon estimated net cash flows expected to be generated from the contracts, with remaining term of the contracts ranging between 1 and 4 years, discounted at 8.0 %.

• Investor relationships represent the fair value of potential investment management fees, net of operating costs, to be generated from repeat InfraBridge investors in future sponsored vehicles, with a weighted average estimated useful life of 12 years, discounted at 14.0 %.

• Deferred tax liabilities were recognized for the book-to-tax basis difference of identifiable intangible assets acquired, net of deferred tax asset assumed.

• Other assets acquired and liabilities assumed include management fee receivable and compensation payable associated with the pre-acquisition period, amounts due to InfraBridge funds and receivable from seller.

• Goodwill is the value of the business acquired that is not already captured in identifiable assets, largely represented by the synergies from combining the capital raising resources of DBRG and the mid-market infrastructure specialization of the InfraBridge team.

Asset Acquisitions

Acquisitions by DataBank were as follows:

• A building in Dallas, Texas in May 2023, for purchase price of $ 151.0 million, funded by a combination of $ 121.0 million of debt and $ 40.8 million of equity, of which the Company's share was $ 8.2 million.

In addition to the purchase price, the capital called was used to fund transaction costs, financing costs, and as working capital.

A substantial portion of the acquired building was previously leased by DataBank as a co-location data center and corporate office.

Upon termination of the DataBank lease concurrent with the acquisition, the associated ROU asset and lease liability were derecognized.

• Four colocation data centers in Houston, Texas in March 2022 for $ 678 million, funded by a combination of $ 262.5 million of debt and $ 415.5 million of equity, of which the Company's share was $ 88.7 million.

• A data center each in Atlanta, Georgia in May 2022 for $ 10.9 million, and in Denver, Colorado in February 2022 that was previously leased by its zColo subsidiary for $ 17.6 million.

Vantage SDC Hyperscale Data Centers

In connection with the Company's acquisition of Vantage SDC in July 2020 and an additional data center in September 2021, the Company and its co-investors 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, 2023, the remaining consideration for the incremental lease-up acquisitions is estimated to be approximately $ 185 million, of which $ 122 million is due by September 2024.

As of June 30, 2023, the remaining consideration for the incremental lease-up acquisitions is estimated to be approximately $ 185 million, of which $ 122 million is due by September 2024.

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

Pursuant to this arrangement, Vantage SDC had 15 new tenant leases related to a portion of the expansion capacity that commenced during 2022 for aggregate consideration of $ 161.3 million.

Pursuant to this arrangement, Vantage SDC had 15 new tenant leases related to a portion of the expansion capacity that commenced during 2022, respectively, for aggregate consideration of $ 161.3 million.

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

There were no new tenant leases that commenced in the first quarter of 2023.

Acquisitions by DataBank in 2022 were as follows:

• A data center each in Atlanta, Georgia in May 2022 for $ 10.9 million, and in Denver, Colorado in February 2022 that was previously leased by its zColo subsidiary for $ 17.6 million.

There were no new tenant leases that commenced in 2023.

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) .

In December 2022, our interest in the temporarily warehoused TowerCo investment was transferred to the Company's new sponsored fund (Note 16) and TowerCo was deconsolidated.

In December 2022, our interest in the temporarily warehoused TowerCo investment was transferred to the Company's new core equity fund and TowerCo was deconsolidated.

The TowerCo assets acquired had included owned tower sites, tower sites subject to third party leases that gave rise to right-of-use lease assets and corresponding lease liabilities, equipment, as well as customer relationships related primarily to a master lease agreement with Telenet as lessee.

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Prior to transfer, TowerCo was presented within Corporate and Other.

Allocation of Consideration Transferred

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

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.

With respect to business combinations, the estimated fair values and allocation of the consideration are subject to adjustments during the measurement period, not to exceed one year, based upon new information obtained about facts and circumstances that existed at time of acquisition.

Business Combination Asset Acquisitions

(In thousands) InfraBridge TowerCo Acquisitions by DataBank Vantage SDC Expansion Capacity

Consideration

Cash $ 364,338 $ 791,254 $ 706,514 $ 161,302

Estimated fair value of contingent consideration 10,874 — — —

375,212 791,254 706,514 161,302

Assets acquired and liabilities assumed

Cash 51,174 — — —

Principal investments 130,810 — — —

The following table summarizes the allocation of cash consideration to assets acquired, which includes capitalized transaction costs.

(In thousands) Acquisition by DataBank TowerCo Acquisitions by DataBank Vantage SDC Expansion Capacity

Purchase price allocation

Real estate $ 153,944 $ 363,121 $ 627,474 $ 140,140

Intangible assets 1,993 673,218 77,885 21,162

Lease right-of-use ("ROU") and other assets 27,682 234,462 3,994 —

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

Deferred tax liabilities — ( 243,223 ) — —

Intangible, lease and other liabilities ( 1,334 ) ( 236,324 ) ( 2,839 ) —

Fair value of net assets acquired 228,643 791,254 706,514 161,302

Goodwill $ 146,569 $ — $ — $ —

• Principal investments represent acquired interests in InfraBridge funds, valued at their most recent net asset value ("NAV") .

• Real estate was valued based upon (i) current replacement cost for buildings in an as-vacant state and improvements, estimated using construction cost guidelines;

$ 154,603 $ 791,254 $ 706,514 $ 161,302

• Real estate was valued based upon (i) current replacement cost for buildings (in an as-vacant state) and improvements, estimated using construction cost guidelines, or the income approach for a substantially leased building by discounting estimated future net operating income with terminal value determined using a terminal capitalization rate of 6.5 % and applying a discount rate of 7.25 %;

(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;

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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, 5 to 15 years for site improvements, 11 to 71 years for towers and related equipment, and 11 to 20 years for data center infrastructure.

• The investment management intangible assets of InfraBridge were composed of the following:

Useful lives of real estate acquired range from 35 to 55 years for buildings and improvements, 1 to 15 years for site improvements, 1 to 4 years for tenant improvements, 11 to 71 years for towers and related equipment, and 11 to 30 years for data center infrastructure.

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

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• Customer relationships 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 differences associated with the acquisitions of InfraBridge and TowerCo, net of deferred tax assets assumed where applicable.

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

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

Included in the InfraBridge acquisition were also management fee receivable and compensation payable associated with the pre-acquisition period.

The Company's equity and debt investments are represented by the following:

(In thousands) March 31, 2023 December 31, 2022

(In thousands) June 30, 2023 December 31, 2022

Investment Management

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Principal Investments

Principal investments totaling $ 567.3 million at March 31, 2023 and $ 410.5 million at December 31, 2022 represent investments in the Company's sponsored investment vehicles, accounted for as equity method investments as the Company exerts significant influence in its role as general partner.

Principal investments totaling $ 598.5 million at June 30, 2023 and $ 410.5 million at December 31, 2022 represent investments in the Company's sponsored investment vehicles, accounted for as equity method investments as the Company exerts significant influence in its role as general partner.

The Company typically has a small percentage interest in its sponsored funds as general partner (presented in the Investment Management segment).

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Carried Interest Allocation Distributed

There was immaterial carried interest allocation distributed and recognized in revenues in the first quarter of 2023.

No carried interest allocation was distributed in the first quarter of 2022.

There was immaterial carried interest allocation distributed and recognized in revenues in 2023.

No carried interest allocation was distributed in the first six months of 2022.

Clawback Obligation

The Company did not have a liability for clawback obligations on carried interest allocation distributed as of March 31, 2023 and December 31, 2022.

With respect to funds that have distributed carried interest allocation, if in the event all of their investments are deemed to have no value, the likelihood of which is remote, carried interest allocation distributed of $ 75.6 million would be subject to clawback as of March 31, 2023, of which $ 58.9 million would be the responsibility of the employee and former employee recipients.

The Company did not have a liability for clawback obligations on carried interest allocation distributed to-date as of June 30, 2023 and December 31, 2022.

With respect to funds that have distributed carried interest allocation, if in the event all of their investments are deemed to have no value, the likelihood of which is remote, carried interest allocation distributed of $ 75.6 million would be subject to clawback as of June 30, 2023, of which $ 59.2 million would be the responsibility of the employee and former employee recipients.

For this purpose, a portion of the carried interest allocation is generally held back from these recipients at the time of distribution.

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The Company consolidates sponsored funds in which it has more than an insignificant equity interest in the fund as general partner, as discussed in Note 12.

Equity investments of consolidated funds are composed of predominantly marketable equity securities held by funds in the liquid securities strategy, and an equity interest held by a credit fund in a pooling entity that invests in loan assets.

Equity investments of consolidated funds are composed of marketable equity securities held by funds in the liquid securities strategy, and equity interests held by a credit fund in pooling entities that invest in loan assets.

Equity investments of consolidated funds are carried at fair value with changes in fair value recorded in other gain (loss) on the consolidated statements of operations.

Other Equity Investments

Other equity investments totaling $ 103.7 million at March 31, 2023 and $ 115.0 million at December 31, 2022 include investments warehoused potentially for future sponsored funds, a marketable equity security and investment in a non-traded REIT (Note 11) (presented within Corporate and Other), as well as an investment in a managed account (presented in the Investment Management segment).

Other equity investments totaling $ 101.3 million at June 30, 2023 and $ 115.0 million at December 31, 2022 include investments warehoused potentially for future sponsored funds, a marketable equity security and equity interest in a non-traded REIT (Note 11) (presented within Corporate and Other), as well as an investment in a managed account (presented in the Investment Management segment).

These investments are generally carried at fair value or under the measurement alternative, which is at cost, adjusted for impairment and observable price changes.

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Debt Investments

Debt investments are composed of subordinated notes in a third party collateralized loan obligation ("CLO") and loans receivable.

Debt investments are composed of subordinated notes in a third party collateralized loan obligation ("CLO") and at December 31, 2022, loans receivable.

Interest income from debt investments are recorded in other income.

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(in thousands) Gains Losses Fair Value

At March 31, 2023 and December 31, 2022 $ 50,927 $ — $ — $ — $ 50,927

In estimating fair value of the CLO subordinated notes, the Company used a benchmarking approach by looking to the implied credit spreads derived from observed prices on comparable CLO issuances in the first quarter of 2023, and also considering the current size and diversification of the CLO collateral pool and projected return on the subordinated notes.

Based upon these data points, the Company determined that the issued price of the subordinated notes in September 2022 was a reasonable representation of their fair value at March 31, 2023 and December 31, 2022, classified as Level 3 of the fair value hierarchy.

At June 30, 2023 and December 31, 2022 $ 50,927 $ — $ — $ — $ 50,927

In estimating fair value of the CLO subordinated notes, the Company used a benchmarking approach by looking to the implied credit spreads derived from observed prices on recent comparable CLO issuances, and also considering the current size and diversification of the CLO collateral pool, and projected return on the subordinated notes.

Based upon these data points, the Company determined that the issued price of the subordinated notes in September 2022 was a reasonable representation of their fair value at June 30, 2023 and December 31, 2022, classified as Level 3 of the fair value hierarchy.

Loans Receivable

The Company elected fair value option for its loans receivable, which consisted of two unsecured promissory notes, one in connection with the sale of NRF Holdco (Note 2) and one held by DataBank at March 31, 2023 and December 31, 2022 .

The DataBank loan receivable was fully repaid in April 2023.

Changes in fair value and valuation methodology is discussed further in Note 11.

Investment Commitments

Sponsored Funds —At March 31, 2023, the Company had unfunded commitments to its sponsored funds as general partner and general partner affiliate totaling $ 126.5 million, including commitments to a consolidated fund.

Generally, the timing for funding of these commitments is not known and the commitments are callable on demand at any time prior to their respective expirations.

The following table summarizes the Company's real estate which is held by subsidiaries in the Operating segment.

(In thousands) March 31, 2023 December 31, 2022

At June 30, 2023, there was no outstanding balance on loans receivable.

Activities in the loans receivable balance is discussed further in Note 11.

The following table summarizes the Company's real estate held for investment by subsidiaries in the Operating segment.

(In thousands) June 30, 2023 December 31, 2022

Land $ 266,148 $ 257,588

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Real Estate Depreciation

Depreciation of real estate held for investment was $ 92.4 million and $ 79.1 million for the three months ended March 31, 2023 and 2022, respectively.

Depreciation of real estate held for investment was $ 94.3 million and $ 87.3 million for the three months ended June 30, 2023 and 2022, respectively, and $ 186.7 million and $ 166.4 million for the six months ended June 30, 2023 and 2022.

Property Operating Income

Components of property operating income are as follows.

Three Months Ended March 31,

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

(In thousands) 2023 2022 2023 2022

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Data center service revenue 20,193 19,642 39,998 37,978

Other property operating income 1,316 53 2,036 57

$ 234,753 $ 234,251 $ 465,680 $ 436,762

For the three months ended March 31, 2023 and 2022, property operating income from a single customer accounted for approximately 21 % and 20 %, respectively, of the Company's total revenues from continuing operations, or approximately 15 % for both periods 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, 2023 and 2022, property operating income from a single customer accounted for approximately 16 % and 15 %, respectively, of the Company's total revenues from continuing operations, or approximately 6 % and 7 %, respectively, of the Company's share of total revenues from continuing operations, net of amounts attributable to noncontrolling interests in investment entities.

Commitment for Tenant Allowance

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DataBank expects to fund its commitment through future debt drawdowns.

No amounts have been funded by DataBank to-date.

To-date, DataBank has funded $ 9.4 million.

Goodwill, Deferred Leasing Costs and Other Intangibles

The following table presents changes in goodwill by reportable segment.

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) Investment Management (1)

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Ending balance $ 459,992 $ 463,120 $ 923,112 $ 298,248 $ 463,120 $ 761,368

(1) Remaining goodwill deductible for income tax purposes was $ 119.7 million at March 31, 2023 and $ 122.4 million at December 31, 2022.

(1) Remaining goodwill deductible for income tax purposes was $ 117.1 million at June 30, 2023 and $ 122.4 million at December 31, 2022.

Deferred Leasing Costs, Other Intangible Assets and Intangible Liabilities

Deferred leasing costs and identifiable intangible assets and liabilities are as follows.

March 31, 2023 December 31, 2022

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

June 30, 2023 December 31, 2022

(In thousands) Carrying Amount (1)(2)

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$ 42,544 $ ( 14,097 ) $ 28,447 $ 46,636 $ ( 16,812 ) $ 29,824

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

(2) Current period amounts exclude intangible assets and liabilities that were fully amortized in the preceding year.

(1) Presented net of impairments and write-offs, if any.

(2) Exclude intangible assets and liabilities that were fully amortized in prior years.

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

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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) 2023 2022 2023 2022

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The following table summarizes the Company's other assets.

(In thousands) March 31, 2023 December 31, 2022

(In thousands) June 30, 2023 December 31, 2022

Straight-line rents $ 49,394 $ 42,721

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(1) Includes primarily receivables from tenants in the Operating segment.

(2) Net of accumulated depreciation of $ 15.1 million at March 31, 2023 and $ 17.9 million at December 31, 2022 .

(2) Net of accumulated depreciation of $ 16.5 million at June 30, 2023 and $ 17.9 million at December 31, 2022 .

Other Liabilities

The following table summarizes the Company's other liabilities:

(In thousands) March 31, 2023 December 31, 2022

(In thousands) June 30, 2023 December 31, 2022

Deferred investment management fees (1)

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Interest payable—investment level debt

Dividends payable 16,444 16,491

Common and preferred stock dividends payable 16,492 16,491

Securities sold short—consolidated funds

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Due to affiliates (Note 16)

14,454 12,451

Other liabilities 5,597 6,423

Other liabilities $ 1,158,427 $ 1,272,096

(1) Deferred investment management fees are expected to be recognized as fee income over a weighted average period of 3.8 years as of at March 31, 2023 and 2.9 years as of December 31, 2022.

Deferred investment management fees recognized as income of $ 1.4 million and $ 2.4 million in the three months ended March 31, 2023 and 2022 , respectively, pertain to the deferred management fee balance at the beginning of each respective period.

(1) Deferred investment management fees are expected to be recognized as fee income over a weighted average period of 2.7 years as of June 30, 2023 and 2.9 years as of December 31, 2022.

Deferred investment management fees recognized as income of $ 1.5 million and $ 0.4 million in the three months ended June 30, 2023 and 2022 , respectively, and $ 2.2 million and $ 2.8 million in the six months ended June 30, 2023 and 2022, respectively, pertain to the deferred management fee balance at the beginning of each respective period.

(2) Represents primarily prepaid rental income and upfront payment received for data center installation services in the Operating segment.

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The Company has significant deferred tax assets, related principally to capital loss carryforwards, outside basis difference in DBRG's interest in the OP, outside basis difference in investment in partnerships and net operating losses generated by a taxable U.S.

As of March 31, 2023 and December 31, 2022 , a full valuation allowance has been established as the realizability of these deferred tax assets did not meet the more-likely-than-not threshold.

As a result, income tax expense for the three months ended March 31, 2023, generally reflects the income tax effect of foreign subsidiaries.

As of June 30, 2023 and December 31, 2022 , a full valuation allowance has been established as the realizability of these deferred tax assets did not meet the more-likely-than-not threshold.

As a result, income tax expense in 2023 generally reflects the income tax effect of foreign subsidiaries.

Corporate Debt —This is composed of a securitized financing facility and senior notes issued by DigitalBridge Group, Inc.

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Corporate debt is presented within Corporate and Other, except that a portion of the securitized financing facility is allocated to the Investment Management and Operating segments consistent with the cash flows that service the debt and the underlying collateral that resides across the Company's various lines of business.

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

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

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

March 31, 2023

June 30, 2023

Debt at amortized cost

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Weighted Average Years Remaining to Maturity (2)

March 31, 2023

June 30, 2023

Corporate debt

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$ 300,000 3.93 % 3.2 $ — NA 3.2 $ 300,000 3.93 % 3.2

Convertible and exchangeable senior notes 278,422 5.21 % 0.7 — NA NA 278,422 5.21 % 0.7

Exchangeable senior notes 78,422 5.75 % 2.0 — NA NA 78,422 5.75 % 2.0

$ 378,422 $ — $ 378,422

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Corporate Debt — Convertible and Exchangeable Senior Notes

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

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

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

or the OP as issuers of the senior notes:

Description Issuance Date Due Date Interest Rate (per annum) Conversion or Exchange Price (per share of common stock) Conversion or Exchange Ratio

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Issued by DigitalBridge Group, Inc.

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Issued by DigitalBridge Operating Company, LLC

5.75% Exchangeable Senior Notes July 2020 July 15, 2025 5.75 % 9.20 108.6956 8,524 July 21, 2023 78,422 78,422

5.75 % Exchangeable Senior Notes

July 2020 July 15, 2025 5.75 % 9.20 108.6956 8,524 July 21, 2023 78,422 78,422

$ 78,422 $ 278,422

(1) The conversion or exchange rate for the senior notes is subject to periodic adjustments to reflect certain carried-forward adjustments relating to common stock splits, reverse stock splits, common stock adjustments in connection with spin-offs and cumulative cash dividends paid on the Company's common stock since the issuances of the respective senior notes.

The conversion or exchange ratios are presented in shares of common stock per $ 1,000 principal of each senior note.

(1) The conversion or exchange ratio for the senior notes is subject to periodic adjustments to reflect certain carried-forward adjustments relating to common stock splits, reverse stock splits, common stock adjustments in connection with spin-offs and cumulative cash dividends paid on the Company's common stock since the issuances of the senior notes.

The ratios are presented in shares of common stock per $ 1,000 principal of each senior note.

(2) Fully repaid in April 2023.

The senior notes mature on their respective due dates, unless earlier redeemed, repurchased, converted or exchanged, as applicable.

The outstanding senior notes are convertible or exchangeable at any time by holders of such notes into shares of the Company’s common stock at the applicable conversion or exchange rate, which is subject to adjustment upon occurrence of certain events.

To the extent certain trading conditions of the Company’s common stock are met, the senior notes are redeemable by the applicable issuer thereof in whole or in part for cash at any time on or after their respective earliest redemption dates at a redemption price equal to 100 % of the principal amount of such senior notes being redeemed, plus accrued and unpaid interest (if any) up to, but excluding, the redemption date.

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

The senior notes mature on their due dates, unless earlier redeemed, repurchased, or exchanged.

The outstanding senior notes are exchangeable at any time by holders of such notes into shares of the Company’s common stock at the applicable exchange rate, which is subject to adjustment upon occurrence of certain events.

To the extent certain trading conditions of the Company’s common stock are met, the senior notes are redeemable by the issuer in whole or in part for cash at any time on or after their earliest redemption dates at a redemption price equal to 100 % of the principal amount of such senior notes being redeemed, plus accrued and unpaid interest (if any) up to, but excluding, the redemption date.

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

Exchange of Senior Notes For Common Stock and Cash

There were no exchange transactions in the three months ended March 31, 2023.

There were no exchange transactions in 2023.

In March 2022, DBRG and the OP completed separate privately negotiated exchange transactions with certain noteholders of the 5.75 % exchangeable notes.

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These are investment level financing that are non-recourse to DBRG and are primarily secured by data center portfolios held by subsidiaries in the Operating segment.

At March 31, 2023, the subsidiaries in the Operating segment were in compliance with the financial covenants underlying their respective investment-level secured debt.

In 2023, subsidiaries in the Operating segment refinanced or raised additional debt through new securitization transactions, as follows.

At June 30, 2023, subsidiaries in the Operating segment were in compliance with the financial covenants underlying their respective investment-level secured debt.

In 2023, subsidiaries in the Operating segment refinanced or raised additional debt, primarily through new securitization transactions, as follows.

There were no securitization activities in 2022.

In February 2023, DataBank issued $ 715 million of securitized notes at fixed rate coupon of 5.12 % per annum ( 7.07 % per annum effective rate as the notes were issued at a discount) with a 5-year anticipated repayment date.

In April 2023, DataBank secured an additional $ 350 million credit facility.

Proceeds were applied principally to refinance the data center assets of its zColo subsidiary and to repay the outstanding balance on its variable funding notes.

Separately, DataBank secured a $ 350 million credit facility that may be drawn over time and obtained $ 121.0 million financing for a data center acquisition (Note 3).

Proceeds were also applied principally to refinance the data center assets of its zColo subsidiary and to repay the outstanding balance of its variable funding notes.

In March 2023, Vantage SDC issued $ 370 million of securitized notes at a fixed rate coupon of 6.32 % per annum with a 5-year anticipated repayment date.

Proceeds were applied principally to repay previously issued securitized notes which had an anticipated repayment date in November 2023 and the outstanding balance on its variable funding notes.

Proceeds were applied principally to repay previously issued securitized notes which had an anticipated repayment date in November 2023 and the outstanding balance of its variable funding notes.

These refinancing transactions resulted in a net loss from debt extinguishment totaling $ 12.0 million, representing prepayment penalty and accelerated amortization of deferred financing costs, debt discount and premium, recorded in interest expense .

Future Minimum Principal Payments

The following table summarizes future scheduled minimum principal payments of debt at March 31, 2023.

Future debt principal payments are presented based upon anticipated repayment dates for notes issued under securitization financing, or based upon initial maturity dates or extended maturity dates if extension criteria are met at March 31, 2023 for extensions that are at the option of the respective borrower entities.

The $ 200 million outstanding principal of the 5 % convertible senior notes that was due in April 2023 was fully repaid at maturity.

The following table summarizes future scheduled minimum principal payments of debt at June 30, 2023.

Future debt principal payments are presented based upon anticipated repayment dates for notes issued under securitization financing, or based upon initial maturity dates or extended maturity dates if extension criteria are met at June 30, 2023 for extensions that are at the option of the respective borrower entities.

(In thousands) Remaining 2023 2024 2025 2026 2027 2028 and thereafter Total

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Securitized financing facility $ — $ — $ — $ 300,000 $ — $ — $ 300,000

Convertible and exchangeable senior notes 200,000 — 78,422 — — — 278,422

Exchangeable senior notes — — 78,422 — — — 78,422

$ — $ — $ 78,422 $ 300,000 $ — $ — $ 378,422

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Exchange of notes for class A common stock — 6,389 —

Shares issued upon redemption of OP Units — 100 —

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

Equity awards issued, net of forfeitures — 1,470 —

Shares canceled for tax withholding on vested equity awards — ( 601 ) —

Shares outstanding at March 31, 2022 35,340 149,370 166

Shares outstanding at June 30, 2022 35,340 163,937 166

Shares outstanding at December 31, 2022 33,111 159,763 166

Stock repurchases ( 235 ) — —

Shares issued upon redemption of OP Units — 253 —

Equity awards issued, net of forfeitures — 3,330 —

Shares canceled for tax withholding on vested equity awards — ( 871 ) —

Shares outstanding at March 31, 2023 33,108 161,834 166

Shares outstanding at June 30, 2023 32,876 162,475 166

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, 2023:

The table below summarizes the preferred stock issued and outstanding at June 30, 2023:

Description Dividend Rate Per Annum Initial Issuance Date Shares Outstanding

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

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

Dividends are payable quarterly in arrears in January, April, July and October.

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

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Class B common stock was issued as consideration in the Company's acquisition in April 2015 of the investment management business and operations of its former manager, which was previously controlled by the Company's former Executive Chairman.

Each share of class B common stock shall convert automatically into one share of class A common stock if the former Executive Chairman or his beneficiaries directly or

indirectly transfer beneficial ownership of class B common stock or OP Units held by them, other than to certain qualified transferees, which generally includes affiliates and employees.

Each share of class B common stock shall convert automatically into one share of class A common stock if the former Executive Chairman or his beneficiaries directly or indirectly transfer beneficial ownership of class B common stock or OP Units held by them, other than to certain qualified transferees, which generally includes affiliates and employees.

In addition, each holder of class B common stock has the right, at the holder’s option, to convert all or a portion of such holder’s class B common stock into an equal number of shares of class A common stock.

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

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

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 August 2022, the Company effectuated a one-for-four reverse stock split of its outstanding shares of class A and class B common stock.

The number of authorized shares of common stock was not adjusted in connection with the reverse stock split, however, the Company intends to seek stockholder approval to make a proportional change to the number of authorized shares of class A and class B common stock at its next annual meeting of stockholders.

Par value of common stock was proportionately increased from $ 0.01 to $ 0.04 per share.

Common stock share and per share information, including OP Units and stock award units as well as the Company's senior note conversion or exchange ratio in common stock shares, have been revised for all periods presented in this Quarterly Report on Form 10-Q to give effect to the reverse stock split.

At that time, t he number of authorized shares of common stock was not concurrently adjusted and p ar value of common stock was proportionately increased from $ 0.01 to $ 0.04 per share.

Following stockholder approval in May 2023, the number of authorized shares of class A and class B common stock was proportionally decreased to 237,250,000 shares and 250,000 shares, respectively and p ar value of common stock was proportionately decreased from $ 0.04 to $ 0.01 per share, resulting in approximately $ 4.9 million increase in additional paid-in capital.

Common stock share and per share information, including OP Units and stock award units as well as the Company's senior note conversion or exchange ratio in common stock shares, have been revised for all prior periods presented in this Quarterly Report on Form 10-Q to give effect to the reverse stock split.

Stock Repurchases

Pursuant to a $ 200 million stock repurchase program announced in July 2022, during the three months ended March 31, 2023, the Company repurchased 2,738 shares in aggregate across Series H, I and J preferred stock for approximately $ 52,000 , or a weighted average price of $ 18.89 per share.

In April 2023, an additional 232,485 shares of preferred stock were repurchased for $ 4.7 million, or a weighted average price of $ 20.20 per share.

In 2022, the Company repurchased (i) 2,228,805 shares in aggregate across Series H, I and J preferred stock at a discount for $ 52.6 million, or a weighted average price of $ 23.62 per share;

Pursuant to a $ 200 million stock repurchase program announced in July 2022 that expired in June 2023:

• In 2023, the Company repurchased 235,223 shares in aggregate across Series H, I and J preferred stock for approximately $ 4.7 million, or a weighted average price of $ 20.18 per share.

• In 2022, the Company repurchased (i) 2,228,805 shares in aggregate across Series H, I and J preferred stock for $ 52.6 million, or a weighted average price of $ 23.62 per share;

and (ii) 4,195,020 shares of class A common stock for $ 54.9 million, or a weighted average price of $ 13.09 per share.

The stock repurchase program expires on June 30, 2023 and may be extended, modified, or discontinued at any time by the Company's Board of Directors.

The excess or deficit of the repurchase price over the carrying value of the preferred stock results in a decrease or increase to net income attributable to common stockholders, respectively.

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss) ("AOCI")

The following tables present the changes in each component of AOCI attributable to stockholders and noncontrolling interests in investment entities, net of immaterial tax effect.

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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

AOCI at December 31, 2022 $ ( 295 ) $ — $ ( 1,214 ) $ — $ ( 1,509 )

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Amounts reclassified from AOCI 296 — ( 618 ) — ( 322 )

AOCI at March 31, 2023 $ — $ — $ ( 1,478 ) $ — $ ( 1,478 )

AOCI at June 30, 2023 $ — $ — $ 1,122 $ — $ 1,122

Changes in Components of AOCI—Noncontrolling Interests in Investment Entities

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AOCI at December 31, 2021 $ 11,057

Other comprehensive loss before reclassifications ( 2,184 )

Other comprehensive income (loss) before reclassifications ( 9,956 )

Amounts reclassified from AOCI ( 9,827 )

AOCI at March 31, 2022 $ ( 954 )

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

AOCI at December 31, 2022 $ ( 3,015 )

Other comprehensive loss before reclassifications 503

Other comprehensive income (loss) before reclassifications 863

Amounts reclassified from AOCI ( 468 )

AOCI at March 31, 2023 $ ( 2,980 )

AOCI at June 30, 2023 $ ( 2,620 )

Reclassifications out of AOCI—Stockholders

Information about amounts reclassified out of AOCI attributable to stockholders by component is presented below.

Such amounts are included in other gain (loss) in both continuing and discontinued operations on the statements of operations, as applicable, except for amounts related to equity method investments, which are included in equity method losses in discontinued operations.

Such amounts are included in other gain (loss) in continuing and discontinued operations on the consolidated 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,

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

Component of AOCI reclassified into earnings 2023 2022 2023 2022

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Redeemable Noncontrolling Interests

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

Three Months Ended March 31,

The following table presents the activities in redeemable noncontrolling interests in the Company's investment management business through its redemption in May 2022 as discussed below, and in open-end funds in the liquid securities strategy consolidated by the Company.

Six Months Ended June 30,

(In thousands) 2023 2022

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

Balance at March 31 $ 107,413 $ 1,038,739

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 )

Balance at June 30 $ 31,920 $ 102,011

Redeemable Noncontrolling Interest in Investment Management

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(i) an upfront payment of $ 388.5 million in cash and 14,435,399 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) Wafra's right to earn a contingent amount up to $ 125 million if the Company raises fee earning equity under management (as defined in the PSA) up to $ 6 billion during the period from December 31, 2021 to December 31, 2023, payable in March 2023 for portion earned in 2022 and March 2024 for any remaining portion earned in 2023, with up to 50 % payable in shares of the Company's Class A common stock at the Company's election.

remaining portion earned in 2023, with up to 50 % payable in shares of the Company's Class A common stock at the Company's election.

The Company paid Wafra in cash $ 90 million of the contingent amount in March 2023.

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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 —No OP Units were redeemed in the three months ended March 31, 2023.

The Company redeemed 100,220 OP Units during the year ended December 31, 2022 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 OP Units totaling 253,084 in 2023 and 100,220 in 2022 through issuance of an equal number of shares of class A common stock on a one -for-one basis.

Recurring Fair Values

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Marketable Equity Securities

Marketable equity securities with long positions of $ 166.0 million at March 31, 2023 and $ 155.9 million at December 31, 2022, included within equity investments of Corporate and Other (Note 4), and short positions of $ 45.6 million at March 31, 2023 and $ 40.9 million at December 31, 2022, included in other liabilities (Note 7), consist of

publicly traded equity securities held predominantly by sponsored liquid strategy funds consolidated by the Company.

Marketable equity securities with long positions of $ 96.5 million at June 30, 2023 and $ 155.9 million at December 31, 2022, included within equity investments of Corporate and Other (Note 4), and short positions of $ 45.6 million at June 30, 2023 and $ 40.9 million at December 31, 2022, included in other liabilities (Note 7), consist of publicly traded equity securities held predominantly by sponsored liquid strategy funds consolidated by the Company.

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

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Equity Investment of Consolidated Fund

A consolidated credit fund has equity interest in a pooling entity, invested alongside other affiliated managed funds, that holds a portfolio of loans.

The fund's equity interest in the pooling entity had a fair value of $ 62.5 million at March 31, 2023 and $ 46.8 million at December 31, 2022, classified as Level 3 of the fair value hierarchy.

Fair value of the fund's equity interest in the pooling entity is based upon its share of expected cash flows from the loan assets held by the pooling entity.

In estimating the fair value of its underlying loans, the pooling entity considered the prevailing market yields at which a third party might expect to receive on equivalent loans with similar credit risk.

Based upon the comparison to market yields, it was determined that the transacted price on the loans held by the pooling entity approximate their fair value at March 31, 2023 and at December 31, 2022 .

A consolidated credit fund has equity interests in pooling entities that hold a portfolio of loans, invested alongside other managed credit funds.

The fund's equity interests in the pooling entities had a fair value of $ 95.4 million at June 30, 2023 and $ 46.8 million at December 31, 2022, classified as Level 3 of the fair value hierarchy.

Fair value of the fund's equity interests in the pooling entities is based upon its share of expected cash flows from the loan assets held by the pooling entities.

In estimating fair value of the underlying loans, the pooling entities considered the prevailing market yields at which a third party might expect to receive on equivalent loans with similar credit risk.

Based upon a comparison to market yields, it was determined that the transacted price or par value of the loans held by the pooling entities approximated their fair value at June 30, 2023 and at December 31, 2022 .

The Company's derivative instruments generally consist of:

(i) foreign currency put options, forward contracts and costless collars to hedge the foreign currency exposure of certain foreign-denominated investments or investments in foreign subsidiaries (in GBP and EUR), with notional amounts and termination dates based upon the anticipated return of capital from these investments;

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

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

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

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Notwithstanding the conditions for right of offset may have been met, the Company presents derivative assets and liabilities with the same counterparty on a gross basis on the consolidated balance sheets.

The Company had no outstanding derivatives at March 31, 2023.

At December 31, 2022, the fair value of derivative assets was $ 11.8 million, included in other assets, and there were no derivatives in a liability position.

The Company had no outstanding derivatives at June 30, 2023.

At December 31, 2022, fair value of derivative assets was $ 11.8 million, included in other assets, and there were no derivatives in a liability position.

All derivative positions were non-designated hedges.

Derivative notional amounts for foreign exchange contracts aggregated to the equivalent of $ 321.1 million at December 31, 2022, and there were no outstanding interest rate contracts.

At December 31, 2022, derivative notional amounts aggregated to the equivalent of $ 321.1 million for foreign exchange contracts, and there were no outstanding interest rate contracts.

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

Three Months Ended March 31,

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

(In thousands) 2023 2022 2023 2022

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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 other gain (loss) on the consolidated statements of operations.

The warrants were valued at $ 22.2 million at March 31, 2023 and $ 17.7 million at December 31, 2022 using a Black-Scholes option pricing model, applying the following inputs:

The warrants were valued at $ 29.0 million at June 30, 2023 and $ 17.7 million at December 31, 2022 using a Black-Scholes option pricing model, applying the following inputs:

(a) estimated volatility for DBRG's class A common stock of 37.3 % ( 40.8 % at December 31, 2022);

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

Fair value of the warrant liability, classified as Level 3 fair value, increased $ 4.5 million during the three months ended March 31, 2023.

Fair value of the warrant liability, classified as Level 3 fair value, increased $ 11.3 million during the six months ended June 30, 2023.

Contingent Consideration

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In measuring the contingent consideration, the Company applied a probability-weighted approach to the likelihood of meeting various fundraising targets and discounted the estimated future contingent consideration payment at 4.9 % to derive a present value amount.

The contingent consideration of $ 10.9 million at March 31, 2023 is classified as Level 3 of the fair value hierarchy, with changes in fair value recorded in other gain (loss).

The contingent consideration of $ 11.1 million at June 30, 2023 is classified as Level 3 of the fair value hierarchy, with increase in fair value of $ 0.2 million during the six months ended June 30, 2023 recorded in other gain (loss).

Fair Value Option

Loans Receivable

Loans receivable are carried at fair value under the fair value option, which consisted of two unsecured promissory notes, one in connection with the 2022 sale of the Company's Wellness Infrastructure business (Note 2) and one held by DataBank, presented within Corporate and Other and in the Operating segment, respectively.

Both loans receivable have a bullet repayment of principal and accrue PIK interest.

Accrued interest forms part of the fair value of loans receivable and is recorded in other income.

Changes in fair value of loans receivable are recorded in other gain (loss).

At March 31, 2023, fair value of loans receivable was $ 6.8 million ($ 137.9 million at December 31, 2022), with unpaid principal balance, inclusive of PIK interest, of $ 168.8 million ($ 167.8 million at December 31, 2022), classified as Level 3 in the fair value hierarchy.

At March 31, 2023, the Wellness Infrastructure note was fully written down, taking into consideration an impending foreclosure of certain assets within the Wellness Infrastructure portfolio by its mezzanine lender.

The DataBank note was carried at par plus accrued PIK interest as it was fully repaid in April 2023.

At December 31, 2022, loan fair values were based upon a discounted cash flow projection of principal and interest expected to be collected, applying discount rates of 10.0 % and 10.5 %.

At June 30, 2023, there was no outstanding balance on loans receivable, which had been carried at fair value under the fair value option.

Previously, loans receivable consisted of two unsecured promissory notes, one in connection with the 2022 sale of the Company's Wellness Infrastructure business (Note 2) and one held by DataBank, presented within Corporate and Other and in the Operating segment, respectively.

Both loans receivable had bullet repayment of principal and accrued paid-in-kind ("PIK") interest.

Fair value of loans receivable included accrued interest, which was recorded in other income, while changes in fair value was recorded in other gain (loss).

At December 31, 2022, fair value of loans receivable was $ 137.9 million, with unpaid principal balance, inclusive of PIK interest, of $ 167.8 million, classified as Level 3 in the fair value hierarchy.

In March 2023, the Wellness Infrastructure note was fully written down, taking into consideration foreclosure of certain assets within the Wellness Infrastructure portfolio by its mezzanine lender.

In April 2023, the DataBank note was fully repaid.

At December 31, 2022, loan fair

values were based upon a discounted cash flow projection of principal and interest, which at the time of valuation, were expected to be collected, discounted at 10.0 % and 10.5 %.

Changes in Level 3 Fair Value

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Originations and drawdowns 371,415 —

Paydowns ( 112,500 ) —

Change in accrued interest and capitalization of paid-in-kind interest 1,217 —

Paydowns ( 133,268 ) —

Unrealized gain (loss) in earnings, net ( 21,676 ) —

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

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

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

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

Fair value at December 31, 2022 $ 137,945 $ 46,770

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Change in consolidated fund's share of equity investment (1)

Paydowns of underlying loan assets held by equity investment of consolidated fund

Change in accrued interest and capitalization of paid-in-kind interest 545 —

Unrealized gain (loss) in earnings, net (2)

Capitalization of paid-in-kind interest 544 —

Paydown of loan receivable or underlying loan assets held by equity investment of consolidated fund

( 6,804 ) ( 2,294 )

Fair value at March 31, 2023 $ 6,804 $ 62,508

Net unrealized gain (loss) in earnings on instruments held at March 31, 2023 $ ( 131,686 ) $ 11

Unrealized and realized gain (loss) in earnings, net ( 131,685 ) 832

Fair value at June 30, 2023 $ — $ 95,383

Net unrealized gain (loss) in earnings on instruments held at June 30, 2023 $ ( 133,307 ) $ 832

(1) Represents reallocation of investment value when relative ownership of the pooling entity across its fund owners change following additional capital contributions.

(2) With respect to equity investment of the consolidated fund, represents remeasurement of a foreign currency denominated loan asset held by the pooling entity of the consolidated fund.

Investment Carried at Fair Value Using Net Asset Value

The Company holds an investment in a non-traded healthcare REIT, valued at $ 34.5 million at March 31, 2023 and at December 31, 2022, presented within Corporate and Other in Note 4.

The Company holds an investment in a non-traded healthcare REIT, valued at $ 34.5 million at June 30, 2023 and at December 31, 2022, presented within Corporate and Other in Note 4.

The Company has no commitment for any further investment in the non-traded REIT in the future.

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and (ii) when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable.

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

Other than the assets and liabilities acquired in the InfraBridge business combination discussed in Note 3, there were no assets held for investment carried at nonrecurring fair value at March 31, 2023 and December 31, 2022.

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

There were no assets carried at nonrecurring fair value at June 30, 2023 and December 31, 2022.

Fair Value of Financial Instruments Reported at Cost

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(In thousands) Level 1 Level 2 Level 3 Total

March 31, 2023

June 30, 2023

Corporate debt

Secured fund fee revenue notes $ — $ 250,547 $ — $ 250,547 $ 293,219

Convertible and exchangeable senior notes 325,098 — — 325,098 277,076

Exchangeable senior notes — 124,117 — 124,117 77,242

Non-recourse investment-level debt — 4,183,782 515,828 4,699,610 5,025,845

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Debt —Senior notes and secured fund fee revenue notes were valued using their last traded price.

Fair value of investment-level debt were estimated by either discounting expected future cash outlays at interest rates available to the respective borrower subsidiaries for similar instruments or for securitized debt, based upon indicative bond prices quoted by brokers in the secondary market.

Fair value of investment-level debt were estimated by either discounting expected future cash outlays at interest rates available to the respective borrower subsidiaries for similar instruments, or with respect to securitized debt, based upon indicative bond prices quoted by brokers in the secondary market.

Other —The carrying values of cash and cash equivalents, accounts receivable, due from and to affiliates, interest payable and accounts payable generally approximate fair value due to their short term nature, and credit risk, if any, is negligible.

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As the Company conducts its business and holds its assets and liabilities through OP, the total assets and liabilities, earnings (losses), and cash flows of OP represent substantially all of the total consolidated assets and liabilities, earnings (losses), and cash flows of the Company.

Company-Sponsored Private Funds

The Company sponsors private funds and other investment vehicles as general partner for the purpose of providing investment management services in exchange for management fees and carried interest.

These private funds are established as limited partnerships or equivalent structures.

Limited partners of the private funds do not have either substantive liquidation rights, or substantive kick-out rights without cause, or substantive participating rights that could be exercised by a simple majority of limited partners or by a single limited partner.

Accordingly, the absence of such rights, which represent voting rights in a limited partnership, results in the private funds being considered VIEs.

The nature of the Company's involvement with its sponsored funds comprise fee arrangements and general partner and limited partner

equity interests.

Company-Sponsored Funds

The Company sponsors funds and other investment vehicles as general partner for the purpose of providing investment management services in exchange for management fees and carried interest.

These funds are established as limited partnerships or equivalent structures.

Limited partners of the funds do not have either substantive liquidation rights, or substantive kick-out rights without cause, or substantive participating rights that could be exercised by a simple majority of limited partners or by a single limited partner.

Accordingly, the absence of such rights, which represent voting rights in a limited partnership, results in the funds being considered VIEs.

The nature of the Company's involvement with its sponsored funds comprise fee arrangements and equity interests in its capacity as general partner and general partner

The fee arrangements are commensurate with the level of management services provided by the Company, and contain terms and conditions that are customary to similar at-market fee arrangements.

Consolidated Company-Sponsored Private Funds —The Company currently consolidates sponsored private funds in which it has more than an insignificant equity interest in the fund as general partner.

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

The Company’s exposure is limited to the value of its outstanding investment in the consolidated private funds of $ 112.6 million at March 31, 2023 and $ 94.7 million at December 31, 2022.

The liabilities of the consolidated funds

may only be settled using assets of the consolidated funds, and the Company, as general partner, is not obligated to provide any financial support to the consolidated private funds.

Consolidated Company-Sponsored Funds —The Company currently consolidates sponsored funds in which it has more than an insignificant equity interest in the fund as general partner.

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

The Company’s exposure is limited to its capital account balance in the consolidated funds of $ 120.3 million at June 30, 2023 and $ 94.7 million at December 31, 2022.

The liabilities of the consolidated funds may only be settled using assets of the consolidated funds, and the Company, as general partner, is not obligated to provide any financial support to the consolidated funds.

At June 30, 2023, the Company had unfunded equity commitment to a consolidated fund of $ 39.3 million.

The following table presents the assets and liabilities of the consolidated funds, which are presented within Corporate and Other in the supplemental schedule to the consolidated balance sheets.

(In thousands) March 31, 2023 December 31, 2022

(In thousands) June 30, 2023 December 31, 2022

Cash and cash equivalents $ 65,987 $ 86,433

Investments—marketable equity securities and equity interest in credit pooling entity (Note 11)

Investments—marketable equity securities and equity interests in credit pooling entities (Note 11)

172,403 185,845

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$ 87,480 $ 79,584

Unconsolidated Company-Sponsored Private Funds —The Company does not consolidate its sponsored private funds where it has insignificant direct equity interests or capital commitments to these funds as general partner.

The Company may invest alongside certain of its sponsored private funds through joint ventures between the Company and these funds, or the Company may have capital commitments to its sponsored private funds that are satisfied directly through the co-investment joint ventures as an affiliate of the general partner.

In these instances, the co-investment joint ventures are consolidated by the Company.

As the Company's direct equity interests in its sponsored private funds as general partner absorb insignificant variability, the Company is considered to be acting in the capacity of an agent of these funds and is therefore not the primary beneficiary of these funds.

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

The Company's maximum exposure to loss is limited to the carrying value of its investment in the unconsolidated sponsored private funds, totaling $ 853.8 million at March 31, 2023 and $ 752.3 million at December 31, 2022, included in equity investments, and $ 0.8 million at March 31, 2023 and $ 1.0 million at December 31, 2022, included within assets held for disposition.

Unconsolidated Company-Sponsored Funds —The Company does not consolidate its sponsored funds where it has insignificant equity interests in these funds as general partner.

As such interests absorb insignificant variability from the fund, the Company is considered to be acting in the capacity of an agent of the fund and is therefore not the primary beneficiary of these funds.

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

The Company's maximum exposure to loss is limited to the outstanding balance of its investment in the unconsolidated funds (Note 4) of $ 964.3 million at June 30, 2023 and $ 752.3 million at December 31, 2022.

The Company also has receivables from its unconsolidated funds for fee income and reimbursable or recoverable costs, as discussed in Note 16.

At June 30, 2023, the Company's unfunded equity commitments to its unconsolidated funds as general partner and general partner affiliate totaled $ 93.0 million.

Generally, the timing for funding of these commitments is not known and the commitments are callable on demand at any time prior to their respective expirations.

Earnings per Share

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) 2023 2022 2023 2022

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( 8,663 ) ( 21,562 ) ( 206,460 ) ( 268,119 )

Preferred stock repurchases/redemptions (Note 9)

Preferred dividends ( 14,675 ) ( 15,759 ) ( 29,351 ) ( 31,518 )

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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, 2023 and 2022, the effect of adding back interest expense of $ 4.0 million and $ 4.8 million, respectively, and 11,697,600 and 16,580,800 of weighted average dilutive common share equivalents, respectively.

Also excluded from the calculation of diluted earnings per share was $ 133.2 million of debt extinguishment loss (Note 8) for the three months ended March 31, 2022.

(a) for the three months ended June 30, 2023 and 2022, the effect of adding back interest expense of $ 1.7 million and $ 3.9 million, respectively, and 9,047,200 and 11,697,600 of weighted average dilutive common share equivalents, respectively;

and (b) for the six months ended June 30, 2023 and 2022, the effect of adding back $ 5.6 million and $ 8.7 million of interest expense, respectively, and 9,749,200 and 14,125,700 of weighted average dilutive common share equivalents, respectively.

Also excluded from the calculation of diluted earnings per share was $ 133.2 million of debt extinguishment loss (Note 8) for the six months ended June 30, 2022.

(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 15) with weighted average shares of 32,400 and 2,164,300 for the three months ended March 31, 2023 and 2022, respectively;

and (b) class A common shares that are issuable to net settle the exercise of warrants (Note 10) with weighted average shares of 362,800 and 2,937,600 for the three months ended March 31, 2023 and 2022, respectively.

(a) class A common shares that are contingently issuable in relation to performance stock units (Note 15) with weighted average shares of 635,600 and 1,907,900 for the three months ended June 30, 2023 and 2022, respectively;

and, 317,800 and 2,036,100 for the six months ended June 30, 2022, respectively;

and (b) class A common shares that are issuable to net settle the exercise of warrants (Note 10) with weighted average shares of 307,800 and 2,210,300 for the three months ended June 30, 2023 and 2022, respectively, and 335,600 and 2,606,100 for the six months ended June 30, 2023 and 2022, 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, 2023 and 2022, 12,628,900 and 12,728,900 of OP Units, respectively, were not included in the computation of diluted earnings per share in the respective periods presented.

At June 30, 2023 and 2022, 12,375,800 and 12,628,900 of OP Units, respectively, were not included in the computation of diluted earnings per share in the respective periods presented.

The following table presents the Company's fee income by type.

Three Months Ended March 31,

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

(In thousands) 2023 2022 2023 2022

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Incentive fees

171 — 1,040 —

827 759 1,926 1,405

Total fee income $ 65,742 $ 44,318 $ 124,868 $ 87,155

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Management fees are calculated generally at contractual rates ranging from 0.2 % per annum to 1.5 % per annum of investors' committed capital during the commitment period of the vehicle, and thereafter, contributed or invested capital;

or net asset value for vehicles in the liquid securities strategy.

or NAV for vehicles in the liquid securities strategy.

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.

Other Fee Income —Other fees include primarily service fees for information technology, facilities and operational support provided to portfolio companies, and on a non-recurring basis, loan origination fees.

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

Equity-Based Compensation

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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, 2023, an aggregate 24.5 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, 2023, an aggregate 24.5 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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In addition, recipients of PSUs whose employment is terminated after the first anniversary of their PSU grant are eligible to vest in a portion of the PSU award following the end of the measurement period based upon achievement of the total shareholder return metric applicable to the award.

PSUs also contain dividend equivalent rights which entitle the recipients to a payment equal to the amount of dividends that would have been paid on the shares that are ultimately issued at the end of the measurement period.

contain dividend equivalent rights which entitle the recipients to a payment equal to the amount of dividends that would have been paid on the shares that are ultimately issued at the end of the measurement period.

Fair value of PSUs, including dividend equivalent rights, was determined using a Monte Carlo simulation under a risk-neutral premise, with the following assumptions:

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Risk-free rate (per annum) (4)

(1) Represents 2.5 million LTIP units granted to the Company's Chief Executive Officer, Marc Ganzi, in connection with the Company's acquisition of Digital Bridge Holdings, LLC in July 2019, with vesting based upon achievement of the Company's class A common stock price closing at or above $ 40 over any 90 consecutive trading days prior to the fifth anniversary of the grant date.

(1) Represents 2.5 million LTIP units granted to the Company's Chief Executive Officer, Marc Ganzi, in connection with the Company's acquisition of Digital Bridge Holdings, LLC in July 2019, with vesting based upon the Company's class A common stock price closing at or above $ 40 over any 90 consecutive trading days prior to the fifth anniversary of the grant date.

(2) Based upon historical volatility of the Company's stock and those of a specified peer group.

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Upon separation of service from the Company, vested DSUs will be settled in shares of the Company’s class A common stock.

Fair value of DSUs are determined based on the price of the Company's class A common stock on grant date and recognized immediately if fully vested upon grant, or on a straight-line basis over the vesting period as equity based compensation expense and equity.

Equity-based compensation cost pursuant to DBRG's Equity Incentive Plan is included in the following line items on the consolidated statement of operations.

Three Months Ended March 31,

Fair value of

DSUs are determined based on the price of the Company's class A common stock on grant date and recognized immediately if fully vested upon grant, or on a straight-line basis over the vesting period as equity based compensation expense and equity.

Equity-based compensation cost pursuant to DBRG's Equity Incentive Plan is presented on the consolidated statement of operations, as follows.

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

(In thousands)

2023 2022 2023 2022

Compensation expense (including $ 0 , $ 176 , $ 0 and $ 213 expense related to dividend equivalent rights)

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Forfeited ( 9,479 ) — — — ( 424,065 ) ( 433,544 ) 26.92 12.99

Unvested shares and units at March 31, 2023

Unvested shares and units at June 30, 2023

2,885,446 2,625,000 64,044 1,198,695 1,226,858 8,000,043 7.98 10.04

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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, as shown above, determined based upon their respective fair values at vesting date, was $ 20.9 million and $ 33.4 million for the three months ended March 31, 2023 and 2022, respectively.

At March 31, 2023, aggregate unrecognized compensation cost for all unvested equity awards pursuant to DBRG's Equity Incentive Plan was $ 55.5 million, which is expected to be recognized over a weighted average period of 2.2 years.

This excludes $ 18.8 million of unvested RSUs that are not currently probable of achieving their performance conditions and have a remaining performance measurement period of 1.1 years.

Fair value of equity awards that vested, as shown above, determined based upon their respective fair values at vesting date, was $ 13.7 million and $ 15.7 million for the three months ended June 30, 2023 and 2022, respectively, and $ 34.6 million and $ 49.1 million for the six months ended June 30, 2023 and 2022, respectively.

At June 30, 2023, aggregate unrecognized compensation cost for all unvested equity awards pursuant to DBRG's Equity Incentive Plan was $ 50.1 million, which is expected to be recognized over a weighted average period of 2.0 years.

This excludes $ 6.3 million of unvested RSUs that are not currently probable of achieving their performance condition and have a remaining performance measurement period of approximately one year .

Transactions with Affiliates

Affiliates include (i) private funds and other investment vehicles that the Company manages or sponsors, and in which the Company may have an equity interest or co-invests with;

(ii) the Company's investments in unconsolidated ventures;

and (iii) directors, senior executives and employees of the Company (collectively, "employees").

Affiliates include (i) investment vehicles that the Company sponsors and/or manages, and in which the Company may have an equity interest;

(ii) portfolio companies of sponsored funds;

(iii) the Company's other equity investments outside of sponsored funds;

and (iv) directors and employees of the Company (collectively, "employees").

Amounts due from and due to affiliates consist of the following:

(In thousands) March 31, 2023 December 31, 2022

(In thousands) June 30, 2023 December 31, 2022

Due from Affiliates

Investment vehicles, portfolio companies and unconsolidated ventures

Investment vehicles, portfolio companies and other equity investments

Fee income $ 62,046 $ 35,010

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Investment vehicles—Derivative obligation $ — $ 11,793

Investment vehicles, employees and other affiliates 860 658

Investment vehicles—InfraBridge working capital (Note 3)

Employees and other affiliates 3,331 658

$ 14,454 $ 12,451

Significant transactions with affiliates include the following:

Fee Income —Fee income earned from investment vehicles that the Company manages and/or sponsors, and may have an equity interest or co-investment, are presented in Note 14.

Fee Income —Fee income earned from investment vehicles that the Company manages and/or sponsors, and may have an equity interest, are presented in Note 14.

Substantially all fee income are from affiliates, except for management fees and incentive fee from sub-advisory accounts and generally, other fee income.

Cost Reimbursements and Recoverable Expenses— The Company receives reimbursements and recovers certain costs paid on behalf of investment vehicles sponsored by the Company, which include:

(i) organization and offering costs related to the formation and capital raising of the investment vehicles up to specified thresholds;

(i) organization and offering costs related to formation and capital raising of the investment vehicles up to specified thresholds;

(ii) costs incurred in performing investment due diligence;

and (iii) direct and indirect operating costs for managing the operations of certain investment vehicles.

Such cost reimbursements and recoverable expenses, included in other income, totaled $ 1.3 million and $ 3.4 million for the three months ended March 31, 2023 and 2022, respectively.

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

Such cost reimbursements and recoverable expenses, included in other income, totaled $ 1.4 million and $ 0.8 million for the three months ended June 30, 2023 and 2022, respectively, and $ 2.6 million and $ 4.7 million for the six months ended June 30, 2023 and 2022, respectively.

Warehoused Investments— The Company may acquire and temporarily warehouse investments on behalf of prospective sponsored investment vehicles that are actively fundraising (Note 4).

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.

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

Derivative Obligations of Sponsored Fund— In the third quarter of 2022, the Company, in its capacity as general partner and for the benefit of its sponsored fund, entered into foreign currency forward contracts to economically hedge the foreign currency exposure of an investment commitment of its sponsored fund (Note 11).

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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 $ 71.8 million at March 31, 2023 and $ 70.4 million at December 31, 2022.

Carried interest allocated is recorded as net income attributable to noncontrolling interests totaling $ 2.2 million and $ 0.8 million for the three months ended March 31, 2023 and 2022, respectively.

Ganzi and Jenkins that are unrealized or realized but unpaid are included in noncontrolling interests on the balance sheet in the Investment Management segment, in the amount of $ 91.0 million at June 30, 2023 and $ 70.4 million at December 31, 2022.

Carried interest allocated is recorded as net income attributable to noncontrolling interests in the Investment Management segment totaling $ 19.2 million and $ 28.9 million for the three months ended June 30, 2023 and 2022, respectively, and $ 21.4 million and $ 29.6 million for the six months ended June 30, 2023 and 2022 respectively.

Additionally, in connection with the DataBank recapitalization (Note 10) in the second half of 2022, Messrs.

Ganzi and Jenkins received realized carried interest in the form of equity interest in vehicles that invest in DataBank, of which $ 86.1 million in aggregate is not deemed a compensatory arrangement.

Ganzi and Jenkins received realized carried interest in the form of equity interest in vehicles that invest in DataBank, of which $ 86.1 million in aggregate was not deemed a compensatory arrangement.

Such equity interest represent noncontrolling interests in DataBank.

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Ganzi and Jenkins in connection with the recapitalization transaction.

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.

Investment in Managed Investment Vehicles —Subject to the Company's related party policies and procedures, certain employees may invest on a discretionary basis in investment vehicles sponsored by the Company, either directly in the vehicle or indirectly through the Company's 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.

Such investments in consolidated investment vehicles and general partner entities totaled $ 18.3 million at March 31, 2023 and $ 17.7 million at December 31, 2022, reflected in redeemable noncontrolling interests and noncontrolling interests on the balance sheet.

Their share of net income (loss) was $ 0.6 million for the three months ended March 31, 2023 and immaterial for the three months ended March 31, 2022.

Such 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.

Such investments in consolidated investment vehicles and general partner entities totaled $ 19.8 million at June 30, 2023 and $ 17.7 million at December 31, 2022, reflected in redeemable noncontrolling interests and noncontrolling interests on the balance sheet in the Investment Management segment.

The employees' share of earnings was a net income of $ 1.5 million and a net loss of $ 0.1 million for the three months ended June 30, 2023 and 2022, respectively, and net income of $ 2.1 million and net loss of $ 0.3 million for the six months ended June 30, 2023 and 2022, respectively.

Such amounts are reflected in net income (loss) attributable to noncontrolling interests on the consolidated statement of operations in the Investment Management segment and exclude their share of carried interest allocation, which is reflected in compensation expense—incentive fee and carried interest allocation.

Aircraft— P ursuant to Mr.

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Additionally, the Company has also agreed to reimburse Mr.

Ganzi for certain defined fixed costs of any aircraft owned by

Ganzi for certain defined fixed costs of any aircraft owned by Mr.

The fixed cost reimbursements will be made based on an allocable portion of an aircraft’s annual budgeted fixed cash operating costs, based on the number of hours the aircraft will be used for business purposes.

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The Company reimbursed Mr.

Ganzi $ 1.8 million and $ 0.2 million for the three months ended March 31, 2023 and 2022, respectively.

Ganzi $ 0.8 million and $ 0.9 million for the three months ended June 30, 2023 and 2022, respectively, and $ 2.6 million and $ 1.1 million for the six months ended June 30, 2023 and 2022 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.

Pursuant to the Advancement Agreement, the Company expensed $ 0.3 million and $ 5.6 million in the three months ended March 31, 2023 and 2022, respectively, and $ 33.5 million since inception of the arrangement in 2021.

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, with immaterial expenses in 2023.

The Company believes it has met all of its financial obligations under the Advancement Agreement and does not expect to make any further advances to Mr.

Barrack thereunder.

Commitments and Contingencies

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

As of March 31, 2023, 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, 2023, 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) 2023 2022

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Receivables from asset sales 2,143 9,648

Operating lease right-of-use assets and lease liabilities established 11,693 1,498

Operating lease ROU assets and lease liabilities established 27,086 1,126

Contingent consideration for acquisition of InfraBridge 10,874 —

Preferred stock repurchase payable 52 —

Exchange of notes into shares of Class A common stock — 60,317

ROU asset and lease liability derecognized upon purchase of leased real estate (Note 3)

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

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

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

Redemption of OP Units for common stock 984 341

Distribution payable to noncontrolling interest — 2,850

Assets disposed in sale of equity of investment entities

Liabilities disposed in sale of equity of investment entities

Noncontrolling interests of investment entities sold or deconsolidated (1)

(1) Represents deconsolidation of noncontrolling interests upon sale of the Company's equity interests in investment entities (Note 2).

Noncontrolling interests of investment entities sold (1)

Exchange of notes for class A common shares — 60,317

(1) Represents deconsolidation of noncontrolling interests in connection with sale of the Wellness Infrastructure business.

Subsequent Events

Other than as disclosed elsewhere, no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the accompanying notes.

No subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the accompanying notes.

FORWARD-LOOKING STATEMENTS

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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