Regular quarterly common dividend expected to
begin in third quarter 2022
DigitalBridge Group, Inc. (NYSE: DBRG) and subsidiaries
(collectively, “DigitalBridge,” or the “Company”) today announced
financial results for the first quarter ended March 31, 2022.
A First Quarter 2022 Earnings Presentation and a Supplemental
Financial Report are available in the Events & Presentations
and Financial Information sections, respectively, of the
Shareholders tab on the Company’s website at www.digitalbridge.com.
This information has also been furnished to the U.S. Securities and
Exchange Commission in a Current Report on Form 8-K.
“We’re off to a great start to the year, already delivering on
many of our key 2022 objectives,” said Marc Ganzi, CEO of
DigitalBridge. “We’ve announced two important strategic
transactions that accelerate and scale our high-performance
investment management platform, putting us in a strong position to
outperform our financial targets. We also made great progress with
new core, credit, and ventures investments that advance our
progress towards building a full-stack digital infrastructure
investor.”
The Company reported first quarter 2022 total revenues of $257
million, GAAP net loss attributable to common stockholders of
$(262) million, or $(0.46) per share, and Distributable Earnings
(“DE”) and AFFO of $1.6 million.
Preferred Dividends
On February 16, 2022, the Company’s Board declared cash
dividends with respect to each series of the Company’s cumulative
redeemable perpetual preferred stock in accordance with the terms
of such series, as follows: Series H preferred stock: $0.4453125
per share; Series I preferred stock: $0.446875 per share; and
Series J preferred stock: $0.4453125 per share. Such dividends were
paid on April 15, 2022 to the respective stockholders of record on
April 12, 2022.
On May 4, 2022, the Company’s Board declared cash dividends with
respect to each series of the Company’s cumulative redeemable
perpetual preferred stock in accordance with the terms of such
series, as follows: Series H preferred stock: $0.4453125 per share;
Series I preferred stock: $0.446875 per share; and Series J
preferred stock: $0.4453125 per share. Such dividends will be paid
on July 15, 2022 to the respective stockholders of record on July
11, 2022.
First Quarter 2022 Conference Call
The Company will conduct an earnings presentation and conference
call to discuss the financial results on Thursday, May 5, 2022 at
10:00 a.m. ET. The earnings presentation will be broadcast live
over the Internet and can be accessed on the Shareholders section
of the Company’s website at ir.digitalbridge.com/events. A webcast
of the presentation and conference call will be available on the
Company’s website. To participate in the event by telephone, please
dial (877) 407-4018 ten minutes prior to the start time (to allow
time for registration). International callers should dial (201)
689-8471.
For those unable to participate during the live call, a replay
will be available starting May 5, 2022, at 1:00 p.m. ET. To access
the replay, dial (844) 512-2921 (U.S.), and use passcode 13728587.
International callers should dial (412) 317-6671 and enter the same
conference ID number.
About DigitalBridge Group, Inc.
DigitalBridge (NYSE: DBRG) is a leading global digital
infrastructure firm. With a heritage of over 25 years investing in
and operating businesses across the digital ecosystem including
cell towers, data centers, fiber, small cells, and edge
infrastructure, the DigitalBridge team manages a $47 billion
portfolio of digital infrastructure assets on behalf of its limited
partners and shareholders. Headquartered in Boca Raton,
DigitalBridge has key offices in New York, Los Angeles, London, and
Singapore. For more information, visit: www.digitalbridge.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release may contain forward-looking statements within
the meaning of the federal securities laws. Forward-looking
statements relate to expectations, beliefs, projections, future
plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts. In
some cases, you can identify forward-looking statements by the use
of forward-looking terminology such as “may,” “will,” “should,”
“expects,” “intends,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” or “potential” or the negative of these
words and phrases or similar words or phrases which are predictions
of or indicate future events or trends and which do not relate
solely to historical matters. You can also identify forward-looking
statements by discussions of strategy, plans or intentions.
Forward-looking statements involve known and unknown risks,
uncertainties, assumptions and contingencies, many of which are
beyond the Company’s control, and may cause the Company’s actual
results to differ significantly from those expressed in any
forward-looking statement. Factors that might cause such a
difference include, without limitation, the duration and severity
of the current novel coronavirus (COVID-19) pandemic, driven by,
among other factors, the treatment developments and public adoption
rates and effectiveness of COVID-19 vaccines against emerging
variants of COVID-19 such as the Delta and Omicron variants; the
impact of the COVID-19 pandemic on the global market, economic and
environmental conditions generally and in the digital and
communications technology and investment management sectors; the
effect of COVID-19 on the Company's operating cash flows, debt
service obligations and covenants, liquidity position and
valuations of its real estate investments, as well as the increased
risk of claims, litigation and regulatory proceedings and
uncertainty that may adversely affect the Company; our status as an
owner, operator and investment manager of digital infrastructure
and real estate and our ability to manage any related conflicts of
interest; our ability to obtain and maintain financing
arrangements, including securitizations, on favorable or comparable
terms or at all; the impact of initiatives related to our digital
transformation, including the strategic investment by Wafra and the
formation of certain other investment management platforms, on our
growth and earnings profile; whether the transactions with Wafra
and AMP Capital will be completed within the time frame and on the
terms anticipated or at all, and whether we will realize any of the
anticipated benefits from the transactions; whether we will realize
any of the anticipated benefits of our strategic partnership with
Wafra, including whether Wafra will make additional investments in
our Digital IM and Digital Operating segments; our ability to
integrate and maintain consistent standards and controls, including
our ability to manage our acquisitions in the digital industry
effectively; the impact to our business operations and financial
condition of realized or anticipated compensation and
administrative savings through cost reduction programs; our ability
to redeploy the proceeds received from the sale of our non-digital
legacy assets within the timeframe and manner contemplated or at
all; our business and investment strategy, including the ability of
the businesses in which we have a significant investment (such as
BRSP) to execute their business strategies; BRSP's trading price
and its impact on the carrying value of the Company's investment in
BRSP, including whether the Company will recognize further
other-than-temporary impairment on its investment in BRSP;
performance of our investments relative to our expectations and the
impact on our actual return on invested equity, as well as the cash
provided by these investments and available for distribution; our
ability to grow our business by raising capital for the companies
that we manage; our ability to deploy capital into new investments
consistent with our digital business strategies, including the
earnings profile of such new investments; the availability of, and
competition for, attractive investment opportunities; our ability
to achieve any of the anticipated benefits of certain joint
ventures, including any ability for such ventures to create and/or
distribute new investment products; our ability to satisfy and
manage our capital requirements; our expected hold period for our
assets and the impact of any changes in our expectations on the
carrying value of such assets; the general volatility of the
securities markets in which we participate; changes in interest
rates and the market value of our assets; interest rate mismatches
between our assets and any borrowings used to fund such assets;
effects of hedging instruments on our assets; the impact of
economic conditions on third parties on which we rely; any
litigation and contractual claims against us and our affiliates,
including potential settlement and litigation of such claims; our
levels of leverage; adverse domestic or international economic
conditions, including those resulting from the COVID-19 pandemic,
supply chain difficulties and possible inflation; the impact of
legislative, regulatory and competitive changes; the risks of the
transition from a REIT to a C-corporation for tax purposes, and the
related liability for corporate and other taxes; whether we will be
able to utilize existing tax attributes to offset taxable income to
the extent contemplated; our ability to maintain our exemption from
registration as an investment company under the Investment Company
Act of 1940, as amended (the “1940 Act”); changes in our board of
directors or management team, and availability of qualified
personnel; our ability to make or maintain distributions to our
stockholders; and our understanding of our competition; and other
risks and uncertainties, including those detailed in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2021, each under the heading “Risk Factors,” as such factors may be
updated from time to time in the Company’s subsequent periodic
filings with the U.S. Securities and Exchange Commission (“SEC”).
All forward-looking statements reflect the Company’s good faith
beliefs, assumptions and expectations, but they are not guarantees
of future performance. Additional information about these and other
factors can be found in the Company’s reports filed from time to
time with the SEC.
The Company cautions investors not to unduly rely on any
forward-looking statements. The forward-looking statements speak
only as of the date of this press release. The Company is under no
duty to update any of these forward-looking statements after the
date of this press release, nor to conform prior statements to
actual results or revised expectations, and the Company does not
intend to do so.
CONSOLIDATED BALANCE
SHEETS
(In thousands, except per
share data)
March 31, 2022
December 31, 2021
(unaudited)
Assets
Cash and cash equivalents
$
1,117,688
$
1,602,102
Restricted cash
106,332
99,121
Real estate, net
5,628,072
4,972,284
Loans receivable
504,739
173,921
Equity and debt investments
940,601
935,153
Goodwill
761,368
761,368
Deferred leasing costs and intangible
assets, net
1,225,487
1,187,627
Assets held for disposition
151,307
3,676,615
Other assets
746,176
740,395
Due from affiliates
50,387
49,230
Total assets
$
11,232,157
$
14,197,816
Liabilities
Debt, net
$
5,123,246
$
4,860,402
Accrued and other liabilities
896,253
928,042
Intangible liabilities, net
34,459
33,301
Liabilities related to assets held for
disposition
758
3,088,699
Dividends and distributions payable
15,759
15,759
Total liabilities
6,070,475
8,926,203
Commitments and contingencies
Redeemable noncontrolling
interests
1,038,739
359,223
Equity
Stockholders’ equity:
Preferred stock, $0.01 par value per
share; $883,500 liquidation preference; 250,000 shares authorized;
35,340 shares issued and outstanding
854,232
854,232
Common stock, $0.01 par value per
share
Class A, 949,000 shares authorized;
597,480 and 568,577 shares issued and outstanding
5,974
5,685
Class B, 1,000 shares authorized; 666
shares issued and outstanding
7
7
Additional paid-in capital
7,356,363
7,820,807
Accumulated deficit
(6,838,497
)
(6,576,180
)
Accumulated other comprehensive income
12,753
42,383
Total stockholders’ equity
1,390,832
2,146,934
Noncontrolling interests in investment
entities
2,688,907
2,653,173
Noncontrolling interests in Operating
Company
43,204
112,283
Total equity
4,122,943
4,912,390
Total liabilities, redeemable
noncontrolling interests and equity
$
11,232,157
$
14,197,816
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per
share data, unaudited)
Three Months Ended March
31,
2022
2021
Revenues
Property operating income
$
202,511
$
189,002
Interest income
5,166
854
Fee income
42,837
29,443
Other income
6,945
1,282
Total revenues
257,459
220,581
Expenses
Property operating expense
84,003
79,862
Interest expense
44,030
39,780
Investment expense
9,565
6,893
Transaction-related costs
165
1,618
Depreciation and amortization
128,567
139,425
Compensation expense
Cash and equity-based compensation
65,542
78,786
Carried interest and incentive fee
compensation
(20,352
)
(33
)
Administrative expenses
27,885
17,796
Total expenses
339,405
364,127
Other income (loss)
Other gain (loss), net
(149,881
)
(9,350
)
Equity method earnings (losses)
19,207
(16,417
)
Equity method earnings (losses) - carried
interest
(31,079
)
(222
)
Income (loss) before income
taxes
(243,699
)
(169,535
)
Income tax benefit (expense)
7,413
23,196
Income (loss) from continuing
operations
(236,286
)
(146,339
)
Income (loss) from discontinued
operations
(107,398
)
(481,260
)
Net income (loss)
(343,684
)
(627,599
)
Net income (loss) attributable to
noncontrolling interests:
Redeemable noncontrolling interests
(11,220
)
2,449
Investment entities
(63,045
)
(355,862
)
Operating Company
(22,862
)
(27,896
)
Net income (loss) attributable to
DigitalBridge Group, Inc.
(246,557
)
(246,290
)
Preferred stock redemption
—
—
Preferred stock dividends
15,759
18,516
Net income (loss) attributable to
common stockholders
$
(262,316
)
$
(264,806
)
Loss per share—basic
Loss from continuing operations per
share—basic
$
(0.30
)
$
(0.22
)
Net loss attributable to common
stockholders per share—basic
$
(0.46
)
$
(0.56
)
Loss per share—diluted
Loss from continuing operations per
share—diluted
$
(0.30
)
$
(0.22
)
Net loss attributable to common
stockholders per share—diluted
$
(0.46
)
$
(0.56
)
Weighted average number of
shares
Basic
569,940
474,899
Diluted
569,940
474,899
FUNDS FROM OPERATIONS, CORE
FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS
(In thousands, except per
share data, unaudited)
Three Months Ended
March 31,
2022
March 31,
2021
Net loss attributable to common
stockholders
$
(262,316
)
$
(264,806
)
Adjustments for FFO attributable to common
interests in Operating Company and common stockholders:
Net loss attributable to noncontrolling
common interests in Operating Company
(22,862
)
(27,896
)
Real estate depreciation and
amortization
121,744
184,762
Impairment of real estate
23,799
106,077
Loss (gain) from sales of real estate
3
(38,102
)
Less: Adjustments attributable to
noncontrolling interests in investment entities
(113,537
)
(188,496
)
FFO attributable to common interests in
Operating Company and common stockholders
(253,169
)
(228,461
)
Additional adjustments for Core FFO
attributable to common interests in Operating Company and common
stockholders:
Adjustment to BRSP cash dividend
(9,089
)
55,648
Equity-based compensation expense
18,720
19,299
Straight-line rent revenue and expense
(2,548
)
17,225
Amortization of acquired above- and
below-market lease values, net
(248
)
6,005
Debt prepayment penalties and amortization
of deferred financing costs and debt premiums and discounts
98,465
45,627
Non-real estate fixed asset depreciation,
amortization and impairment
11,132
20,563
Restructuring and transaction-related
charges(1)
24,668
34,482
Non-real estate (gains) losses, excluding
realized gains or losses of digital assets within the Corporate and
Other segment
130,224
267,812
Net unrealized carried interest
13,078
189
Deferred taxes and tax effect on certain
of the foregoing adjustments
(589
)
(17,657
)
Less: Adjustments attributable to
noncontrolling interests in investment entities
(18,700
)
(218,328
)
Less: Core FFO from discontinued
operations
(9,003
)
(12,391
)
Core FFO attributable to common interests
in Operating Company and common stockholders
$
2,941
$
(9,987
)
Additional adjustments for AFFO
attributable to common interests in Operating Company and common
stockholders:
Less: recurring capital expenditures
(1,372
)
(226
)
AFFO and DE attributable to common
interests in Operating Company and common stockholders
$
1,569
$
(10,213
)
Core FFO per common share / common OP
unit(2)
$
—
$
(0.02
)
Core FFO per common share / common OP
unit—diluted(2)(3)
$
—
$
(0.02
)
AFFO and DE per common share / common OP
unit(2)
$
—
$
(0.02
)
AFFO and DE per common share / common OP
unit—diluted(2)(3)
$
—
$
(0.02
)
Weighted average number of common OP units
outstanding used for Core FFO, AFFO and DE per common share and OP
unit(2)
628,991
537,033
Weighted average number of common OP units
outstanding used for Core FFO, AFFO and DE per common share and OP
unit—diluted (2)(3)
649,399
537,033
__________
(1)
Transaction-related costs primarily
represent costs and charges incurred as a result of corporate
restructuring and reorganization to implement the digital
evolution. These costs and charges include severance, retention,
relocation, transition, shareholder settlement and other related
restructuring costs, which are not reflective of the Company’s core
operating performance.
(2)
Calculated based on weighted average
shares outstanding including participating securities and assuming
the exchange of all common OP units outstanding for common
shares.
(3)
For the three months ended March 31, 2022,
included in the calculations of diluted Core FFO, AFFO and DE per
share are Class A common stock or OP units issuable in connection
with performance stock units, performance based restricted stock
units and Wafra’s warrants, of which the issuance and/or vesting
are subject to the performance of the Company's stock price or the
achievement of certain Company specific metrics. For the three
months ended March 31, 2022, excluded from the calculations of
diluted Core FFO, AFFO and DE per share are the effects of adding
back interest expense associated with convertible senior notes and
weighted average dilutive common share equivalents for the assumed
conversion of the convertible senior notes as the effect of
including such interest expense and common share equivalents would
be antidilutive. For the three months ended March 31, 2021,
excluded from the calculations of diluted Core FFO, AFFO and DE per
share are Class A common stock or OP units issuable in connection
with performance stock units, performance based restricted stock
units and Wafra’s warrants, of which the issuance and/or vesting
are subject to the performance of the Company's stock price or the
achievement of certain Company specific metrics, and the effect of
adding back interest expense associated with convertible senior
notes and weighted average dilutive common share equivalents for
the assumed conversion of the convertible senior notes as the
effect of including such interest expense and common share
equivalents would be antidilutive.
Funds From Operations (FFO), Core Funds From Operations (Core
FFO), Adjusted Funds From Operations (AFFO) and Distributable
Earnings (DE)
The Company calculates funds from operations (FFO) in accordance
with standards established by the National Association of Real
Estate Investment Trusts, which defines FFO as net income or loss
calculated in accordance with GAAP, excluding (i) real
estate-related depreciation and amortization; (ii) impairment of
depreciable real estate and impairment of investments in
unconsolidated ventures directly attributable to decrease in value
of depreciable real estate held by the venture; (iii) gain from
sale of depreciable real estate; (iv) gain or loss from a change in
control in connection with interests in depreciable real estate or
in-substance real estate; and (v) adjustments to reflect the
Company's share of FFO from investments in unconsolidated ventures.
Included in FFO are gains and losses from sales of assets which are
not depreciable real estate such as loans receivable, equity
investments, and debt securities, as applicable.
The Company computes core funds from operations (Core FFO) by
adjusting FFO for the following items, including the Company’s
share of these items recognized by its unconsolidated partnerships
and joint ventures: (i) equity-based compensation expense; (ii)
effects of straight-line rent revenue and expense; (iii)
amortization of acquired above- and below-market lease values; (iv)
debt prepayment penalties and amortization of deferred financing
costs and debt premiums and discounts; (v) non-real estate
depreciation, amortization and impairment; (vi) restructuring and
transaction-related charges; (vii) non-real estate loss (gain),
fair value loss (gain) on interest rate and foreign currency
hedges, and foreign currency remeasurements except realized gain
and loss from digital assets within the Corporate and Other
segment; (viii) net unrealized carried interest; and (ix) tax
effect on certain of the foregoing adjustments. The Company’s Core
FFO from its interest in BrightSpire Capital, Inc. (NYSE: BRSP)
represented the cash dividends declared in the reported period. The
Company excluded results from discontinued operations in its
calculation of Core FFO and applied this exclusion to prior
periods.
The Company computes adjusted funds from operations (AFFO) by
adjusting Core FFO for recurring capital expenditures necessary to
maintain the operating performance of its properties. The Company's
calculation of AFFO is equivalent to Distributable Earnings (DE),
the alternative asset manager industry standard metric, which the
Company is adopting following its conversion from a REIT to a
C-Corp.
The Company uses FFO, Core FFO and AFFO as supplemental
performance measures because, in excluding real estate depreciation
and amortization and gains and losses, it provides a performance
measure that captures trends in occupancy rates, rental rates, and
operating costs, and such a measure is useful to investors as it
excludes periodic gains and losses from sales of investments that
are not representative of its ongoing operations and assesses the
Company's ability to meet distribution requirements. The Company
also believes that, as widely recognized measures of the
performance of REITs, FFO, Core FFO and AFFO will be used by
investors as a basis to compare its operating performance and
ability to meet distribution requirements with that of other REITs.
However, because FFO, Core FFO and AFFO exclude depreciation and
amortization and do not capture changes in the value of the
Company’s properties that resulted from use or market conditions,
which have real economic effect and could materially impact the
Company’s results from operations, the utility of FFO, Core FFO and
AFFO as measures of the Company’s performance is limited.
FFO, Core FFO and AFFO should not be considered alternatives to
GAAP net income as indications of operating performance, or to cash
flows from operating activities as measures of liquidity, nor as
indications of the availability of funds for our cash needs,
including funds available to make distributions. FFO, Core FFO and
AFFO should be considered only as supplements to GAAP net income as
measures of the Company’s performance and to cash flows from
operating activities computed in accordance with GAAP.
Additionally, Core FFO and AFFO exclude the impact of certain fair
value fluctuations, which, if they were to be realized, could have
a material impact on the Company’s operating performance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220505005422/en/
Investor Contacts: Severin White Managing Director, Head
of Public Investor Relations severin.white@digitalbridge.com
212-547-2777
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