DigitalBridge Group, Inc. (NYSE: DBRG) and subsidiaries
(collectively, “DigitalBridge,” or the “Company”) today announced
financial results for the fourth quarter and full-year ended
December 31, 2022.
A Fourth 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.
Marc Ganzi, CEO of DigitalBridge, said "We are pleased to report
a solid quarter of fundamental performance to close out 2022. Last
year, we exceeded our fundraising targets for the year, firmly
established the asset management platform as our growth driver
through a series of strategic transactions, and most importantly,
continued to support the growth of our resilient portfolio
companies. As we look ahead to 2023, we remain focused on forming
capital around the best investment opportunities in digital
infrastructure and finalizing the simplification of our business
profile to a scalable, asset-light investment manager levered to
the powerful secular tailwinds in digital infra."
The Company reported fourth quarter 2022 total revenues of $301
million, GAAP net loss attributable to common stockholders of $(19)
million, or $(0.12) per share, and Distributable Earnings of $(11)
million, or $(0.07) per share, and full-year 2022 total revenues of
$1.1 billion, GAAP net loss attributable to common stockholders of
$(382) million, or $(2.47) per share, and Distributable Earnings of
$37 million, or $0.22 per share.
Fourth quarter 2022 net loss and DE included a $53 million
non-cash valuation allowance against deferred tax assets (“DTAs”)
of a subsidiary of the Company.
Common and Preferred Dividends
On January 17, 2023, the Company paid a cash dividend of $0.01
per common share to shareholders of record at the close of business
on December 31, 2022; and paid 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, to the respective stockholders of record on
January 10, 2023.
On February 17, 2023, the Company’s Board of Directors declared
a cash dividend of $0.01 per common share to be paid on April 17,
2023 to shareholders of record at the close of business on March
31, 2023; and 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, which will be paid on April 17, 2023 to the respective
stockholders of record on April 12, 2023.
Fourth Quarter & Full-Year 2022 Conference Call
The Company will conduct an earnings conference call and
presentation to discuss the Fourth Quarter & Full-Year 2022
financial results on Friday, February 24, 2023, at 10:00 a.m.
Eastern Time (ET). The earnings presentation will be broadcast live
over the Internet and a webcast link can be accessed on the
Shareholders section of the Company’s website at
ir.digitalbridge.com/events. 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 February 24, 2023, at 3:00 p.m. ET. To
access the replay, dial (844) 512-2921 (U.S.), and use passcode
13735816. 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 $53 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,
Luxembourg and Singapore. For more information, visit:
www.digitalbridge.com.
Fourth Quarter 2022 Valuation Allowance
Accounting Standards Codification (ASC) 740, Income Taxes,
provides a framework for evaluating whether the establishment of a
valuation allowance against DTAs is necessary. Following this
guidance, the Company evaluated positive and negative evidence, to
which more weight is given to evidence which can be objectively
verified, and the more negative evidence that exists, the more
positive evidence is necessary and the more difficult it is to
support a conclusion that a valuation allowance is not required. A
significant piece of objective negative evidence is the cumulative
net operating loss the Company incurred over the three-year period
ended December 31, 2022, which was largely a product of the prior
three-year transition in the Company's business to an investment
manager focused on digital infrastructure. The Company’s historical
cumulative net operating loss and the absence of tax planning
strategies represented objective evidence which limited the ability
of the Company to consider other subjective evidence, such as the
Company’s projections for growth and earnings in future years.
In future periods, this valuation allowance will be reversed as
a deferred tax benefit when the realizability of all or some
portion of these DTAs are achieved.
As of December 31, 2022, the Company had $359 million gross, or
$88 million tax-effected, in U.S. NOL carryforwards attributable to
U.S. federal losses incurred after December 31, 2017 which can be
carried forward indefinitely.
Given the availability of significant capital loss and NOL
carryforwards, the Company’s transition from a REIT to a taxable C
Corporation, in and of itself, did not result in significant
incremental current income tax expense in 2022. The Company's
primary source of income subject to tax remains its investment
management business, which was already subject to tax previously
through its taxable REIT subsidiary.
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, our ability to grow our
business by raising capital for our funds and the companies that we
manage; our position as an owner, operator and investment manager
of digital infrastructure and our ability to manage any related
conflicts of interest; adverse changes in general economic and
political conditions, including those resulting from supply chain
difficulties, inflation, interest rate increases, a potential
economic slowdown or a recession; our exposure to business risks in
Europe, Asia and other foreign markets; our ability to obtain and
maintain financing arrangements, including securitizations, on
favorable or comparable terms or at all; the ability of our managed
companies to attract and retain key customers and to provide
reliable services without disruption; the reliance of our managed
companies on third-party suppliers for power, network connectivity
and certain other services; our ability to increase assets under
management ("AUM") and expand our existing and new investment
strategies; our ability to integrate and maintain consistent
standards and controls, including our ability to manage our
acquisitions in the digital infrastructure and investment
management industries effectively; our business and investment
strategy, including the ability of the businesses in which we have
significant investments to execute their business strategies;
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 deploy capital into new investments consistent with our
investment management strategies; the availability of, and
competition for, attractive investment opportunities and the
earnings profile of such new investments; 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 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; 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; the impact of any security incident or deficiency affecting
our systems or network or the system and network of any of our
managed companies or service providers; any litigation and
contractual claims against us and our affiliates, including
potential settlement and litigation of such claims; our levels of
leverage; the impact of legislative, regulatory and competitive
changes, including those related to privacy and data protection;
the impact of our transition from a real estate investment trust
("REIT") to a taxable 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 and ability to successfully
navigate the competitive landscape in which we and our managed
companies operate 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 and Quarterly Reports on Form
10-Q for the fiscal quarters ended March 31, 2022, June 30, 2022
and September 30, 2022, 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 presentation. 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)
December 31, 2022
December 31, 2021
(unaudited)
Assets
Cash and cash equivalents
$
918,254
$
1,602,102
Restricted cash
118,485
99,121
Real estate, net
5,921,298
4,972,284
Equity and debt investments
1,322,050
935,153
Loans receivable
137,945
173,921
Goodwill
761,368
761,368
Deferred leasing costs and intangible
assets, net
1,092,167
1,187,627
Other assets
654,050
740,395
Due from affiliates
45,360
49,230
Assets held for disposition
57,526
3,676,615
Total assets
$
11,028,503
$
14,197,816
Liabilities
Debt, net
$
5,156,140
$
4,860,402
Accrued and other liabilities
1,272,096
943,801
Intangible liabilities, net
29,824
33,301
Liabilities related to assets held for
disposition
380
3,088,699
Total liabilities
6,458,440
8,926,203
Commitments and contingencies
Redeemable noncontrolling
interests
100,574
359,223
Equity
Stockholders’ equity:
Preferred stock, $0.01 par value per
share; $827,779 and $883,500 liquidation preference; 250,000 shares
authorized; 33,111 and 35,340 shares issued and outstanding
800,355
854,232
Common stock, $0.04 par value per
share
Class A, 949,000 shares authorized;
159,763 and 142,144 shares issued and outstanding
6,390
5,685
Class B, 1,000 shares authorized; 166
shares issued and outstanding
7
7
Additional paid-in capital
7,818,068
7,820,807
Accumulated deficit
(6,962,613
)
(6,576,180
)
Accumulated other comprehensive income
(loss)
(1,509
)
42,383
Total stockholders’ equity
1,660,698
2,146,934
Noncontrolling interests in investment
entities
2,743,896
2,653,173
Noncontrolling interests in Operating
Company
64,895
112,283
Total equity
4,469,489
4,912,390
Total liabilities, redeemable
noncontrolling interests and equity
$
11,028,503
$
14,197,816
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per
share data)
Three Months Ended December
31,
Twelve Months Ended December
31,
2022
2021
2022
2021
(unaudited)
(unaudited)
(unaudited)
Revenues
Property operating income
$
246,408
$
189,909
$
927,506
$
762,750
Fee income
44,255
56,000
172,673
180,826
Interest income
7,717
3,532
30,107
8,791
Other income
2,701
6,416
14,286
13,432
Total revenues
301,081
255,857
1,144,572
965,799
Expenses
Property operating expense
102,165
78,950
389,445
316,178
Interest expense
55,048
69,336
198,498
186,949
Investment expense
7,625
8,230
33,887
28,257
Transaction-related costs
3,329
3,163
10,129
5,781
Depreciation and amortization
147,398
132,855
576,911
539,695
Compensation expense
Cash and equity-based compensation
61,379
53,067
245,257
235,985
Carried interest and incentive fee
compensation
92,738
25,921
202,286
65,890
Administrative expenses
39,037
34,256
123,184
109,490
Total expenses
508,719
405,778
1,779,597
1,488,225
Other income (loss)
Other gain (loss), net
(326
)
10,322
(170,555
)
(21,412
)
Equity method earnings
25,160
85,219
19,412
127,270
Equity method earnings - carried
interest
176,944
29,878
378,342
99,207
Loss before income taxes
(5,860
)
(24,502
)
(407,826
)
(317,361
)
Income tax benefit (expense)
(31,239
)
(8,870
)
(13,467
)
100,538
Income (loss) from continuing
operations
(37,099
)
(33,372
)
(421,293
)
(216,823
)
Income (loss) from discontinued
operations
(146
)
(9,493
)
(148,704
)
(600,088
)
Net income (loss)
(37,245
)
(42,865
)
(569,997
)
(816,911
)
Net income (loss) attributable to
noncontrolling interests:
Redeemable noncontrolling interests
5,211
18,934
(26,778
)
34,677
Investment entities
(36,283
)
(57,433
)
(189,053
)
(500,980
)
Operating Company
(1,583
)
(1,946
)
(32,369
)
(40,511
)
Net income (loss) attributable to
DigitalBridge Group, Inc.
(4,590
)
(2,420
)
(321,797
)
(310,097
)
Preferred stock redemption
—
2,127
(1,098
)
4,992
Preferred stock dividends
14,766
16,139
61,567
70,627
Net income (loss) attributable to
common stockholders
$
(19,356
)
$
(20,686
)
$
(382,266
)
$
(385,716
)
Income (loss) per share—basic
Income (loss) from continuing operations
per share—basic
$
(0.20
)
$
(0.03
)
$
(1.76
)
$
(1.21
)
Net income (loss) attributable to common
stockholders per share—basic
$
(0.12
)
$
(0.15
)
$
(2.47
)
$
(3.14
)
Income (loss) per share—diluted
Income (loss) from continuing operations
per share—diluted
$
(0.20
)
$
(0.03
)
$
(1.76
)
$
(1.21
)
Net income (loss) attributable to common
stockholders per share—diluted
$
(0.12
)
$
(0.15
)
$
(2.47
)
$
(3.14
)
Weighted average number of
shares
Basic
158,837
131,241
154,495
122,864
Diluted
158,837
131,241
154,495
122,864
Distributable Earnings
(DE)
(In thousands, except per
share data, unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2022
December 31, 2021
December 31, 2022
December 31, 2021
Net income (loss) attributable to common
stockholders
$
(19,356
)
$
(20,686
)
$
(382,266
)
$
(385,716
)
Net income (loss) attributable to
noncontrolling common interests in Operating Company
(1,583
)
(1,946
)
(32,369
)
(40,511
)
Net income (loss) attributable to
common interests in Operating Company and common
stockholders
(20,939
)
(22,632
)
(414,635
)
(426,227
)
Adjustments for Distributable Earnings
(DE):
Transaction-related and restructuring
charges(1)
23,772
29,977
100,989
89,134
Non-real estate (gains) losses, excluding
realized gains or losses of digital assets within the Corporate and
Other segment
(16,050
)
(52,611
)
178,769
74,747
Net unrealized carried interest
(70,541
)
(7,375
)
(117,466
)
(41,624
)
Equity-based compensation expense
7,549
19,416
54,232
59,395
Depreciation and amortization
151,666
147,137
589,582
663,026
Straight-line rent revenue and expense
(7,063
)
(1,986
)
(21,462
)
11,005
Amortization of acquired above- and
below-market lease values, net
100
(333
)
(78
)
4,002
Impairment reversal (loss)
—
(40,732
)
35,983
300,038
(Gain) loss from sales of real estate
—
(197
)
3
(41,782
)
Non-revenue enhancing capital
expenditures
(14,774
)
(1,097
)
(40,515
)
(3,436
)
Debt prepayment penalties and amortization
of deferred financing costs and debt premiums and discounts
5,572
36,685
114,902
100,159
Adjustment to reflect BRSP cash dividend
declared
4,122
(28,243
)
574
(3,282
)
Preferred share redemption (gain) loss
—
2,127
—
4,992
Income tax effect on certain of the
foregoing adjustments
55
8,195
(534
)
(50,335
)
Adjustments attributable to noncontrolling
interests in investment entities
(69,810
)
(105,150
)
(430,061
)
(610,382
)
DE from discontinued operations
(5,070
)
11,467
(13,223
)
(149,873
)
After-tax DE
$
(11,411
)
$
(5,352
)
$
37,060
$
(20,443
)
DE per common share / common OP
unit(2)
$
(0.07
)
$
(0.04
)
$
0.22
$
(0.15
)
DE per common share / common OP
unit—diluted(2)(3)
$
(0.07
)
$
(0.04
)
$
0.22
$
(0.15
)
Weighted average number of common OP units
outstanding used for DE per common share and OP unit(2)
173,182
146,276
169,042
138,141
Weighted average number of common OP units
outstanding used for DE per common share and OP unit—diluted
(2)(3)
173,182
146,276
172,083
138,141
_________
(1)
Restructuring charges 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 December 31,
2022, and three and twelve months ended December 31, 2021, excluded
from the calculation of diluted 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. For the twelve months ended December 31, 2022,
included in the calculation of diluted 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 excluded from the calculation
of diluted DE per share is 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.
Distributable Earnings (DE)
DE is an after-tax measure that differs from GAAP net income or
loss from continuing operations as a result of the following
adjustments, including adjustment for our share of similar items
recognized by our equity method investments: transaction-related
and restructuring charges; realized and unrealized gains and
losses, except realized gains and losses from digital assets in
Corporate and Other; depreciation, amortization and impairment
charges; debt prepayment penalties, and amortization of deferred
financing costs, debt premiums and debt discounts; our share of
unrealized carried interest, net of associated compensation
expense; equity-based compensation expense; equity method earnings
from BrightSpire Capital, Inc. (BRSP) which is replaced with
dividends declared by BRSP; effect of straight-line lease income
and expense; impairment of equity investments directly attributable
to decrease in value of depreciable real estate held by the
investee; non-revenue enhancing capital expenditures; income tax
effect on certain of the foregoing adjustments. Income taxes
included in DE reflect the benefit of deductions arising from
certain expenses that are excluded from the calculation of DE, such
as equity-based compensation, as these deductions do decrease
actual income tax paid or payable by the Company in any one period.
There are no differences in the Company’s measurement of DE and
AFFO. Therefore, previously reported AFFO is the equivalent to DE
and prior period information has not been recast. DE is presented
on a reportable segment basis and for the Company in total.
We believe that DE is a meaningful supplemental measure as it
reflects the ongoing operating performance of our core business by
generally excluding items that are non-core in nature and allows
for better comparability of operating results period-over-period
and to other companies in similar lines of business.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230224005110/en/
Investor Contacts: Severin White Managing Director, Head
of Public Investor Relations severin.white@digitalbridge.com
212-547-2777
DigitalBridge (NYSE:DBRG)
Historical Stock Chart
Von Nov 2024 bis Dez 2024
DigitalBridge (NYSE:DBRG)
Historical Stock Chart
Von Dez 2023 bis Dez 2024
