DigitalBridge Group, Inc. (NYSE: DBRG) and subsidiaries
(collectively, “DigitalBridge,” or the “Company”) today announced
financial results for the first quarter ended March 31, 2023.
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the full release here:
https://www.businesswire.com/news/home/20230503005323/en/
"We made steady progress during the
quarter on our key strategic priorities for 2023, putting us on
track to achieve our capital formation and corporate simplification
goals," said Marc Ganzi, CEO of DigitalBridge. "We see increasingly
compelling opportunities to deploy capital in a more rational
market environment as well as supporting the continued growth of
our portfolio companies as they build next generation networks to
meet growing demand for connectivity and compute." (Graphic:
Business Wire)
A First Quarter 2023 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 made steady progress during the quarter on our key strategic
priorities for 2023, putting us on track to achieve our capital
formation and corporate simplification goals," said Marc Ganzi, CEO
of DigitalBridge. "We see increasingly compelling opportunities to
deploy capital in a more rational market environment as well as
supporting the continued growth of our portfolio companies as they
build next generation networks to meet growing demand for
connectivity and compute."
The Company reported first quarter 2023 total revenues of $250
million, GAAP net loss attributable to common stockholders of
$(212) million, or $(1.34) per share, and Distributable Earnings of
$(3) million, or $(0.02) per share.
Common and Preferred Dividends
On April 27, 2023, the Company’s Board of Directors declared a
cash dividend of $0.01 per common share to be paid on July 17, 2023
to shareholders of record at the close of business on June 30,
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 July 17, 2023 to the respective
stockholders of record on July 11, 2023.
First Quarter 2023 Conference Call
The Company will conduct an earnings conference call and
presentation to discuss the First Quarter 2023 financial results on
Wednesday, May 3, 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 May 3, 2023, at 3:00 p.m. ET. To access
the replay, dial (844) 512-2921 (U.S.), and use passcode 13737618.
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 $69 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.
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 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, 2022 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, 2023
December 31, 2022
(unaudited)
Assets
Cash and cash equivalents
$
668,524
$
918,254
Restricted cash
155,690
118,485
Investments
1,226,952
1,242,001
Real estate
5,964,807
5,921,298
Goodwill
907,937
761,368
Deferred leasing costs and intangible
assets
1,098,520
1,092,167
Other assets
642,451
654,050
Due from affiliates
67,285
45,360
Assets held for disposition
11,263
275,520
Total assets
$
10,743,429
$
11,028,503
Liabilities
Corporate debt
$
569,771
$
568,912
Non-recourse investment-level debt
4,752,050
4,587,228
Intangible liabilities
28,441
29,824
Other liabilities
1,133,568
1,272,096
Liabilities related to assets held for
disposition
374
380
Total liabilities
6,484,204
6,458,440
Commitments and contingencies
Redeemable noncontrolling
interests
107,413
100,574
Equity
Stockholders’ equity:
Preferred stock, $0.01 par value per
share; $827,711 and $827,779 liquidation preference; 250,000 shares
authorized; 33,108 and 33,111 shares issued and outstanding
800,303
800,355
Common stock, $0.04 par value per
share
Class A, 949,000 shares authorized;
161,834 and 159,763 shares issued and outstanding
6,473
6,390
Class B, 1,000 shares authorized; 166
shares issued and outstanding
7
7
Additional paid-in capital
7,823,722
7,818,068
Accumulated deficit
(7,176,706
)
(6,962,613
)
Accumulated other comprehensive income
(loss)
(1,478
)
(1,509
)
Total stockholders’ equity
1,452,321
1,660,698
Noncontrolling interests in investment
entities
2,650,893
2,743,896
Noncontrolling interests in Operating
Company
48,598
64,895
Total equity
4,151,812
4,469,489
Total liabilities, redeemable
noncontrolling interests and equity
$
10,743,429
$
11,028,503
Supplemental Schedule to
Consolidated Balance Sheets
(In thousands,
unaudited)
Investment Management
Operating
Corporate and Other
March 31, 2023
December 31, 2022
March 31, 2023
December 31, 2022
March 31, 2023
December 31, 2022
Assets
Cash and cash equivalents
$
56,943
$
39,563
$
65,097
$
65,975
$
546,484
$
812,716
Restricted cash
2,324
2,298
152,262
114,442
1,104
1,745
Investments
345,826
395,327
6,804
4,638
874,322
842,036
Real estate
—
—
5,964,807
5,921,298
—
—
Goodwill
444,817
298,248
463,120
463,120
—
—
Deferred leasing costs and intangible
assets
128,973
85,172
969,036
1,006,469
511
526
Other assets
15,966
13,356
581,848
573,229
44,637
67,465
Due from affiliates
61,455
41,458
—
—
5,830
3,902
$
1,056,304
$
875,422
$
8,202,974
$
8,149,171
$
1,472,888
$
1,728,390
Liabilities
Corporate debt
$
199,033
$
198,677
$
70,246
$
70,120
$
300,492
$
300,115
Non-recourse investment-level debt
—
—
4,751,701
4,586,765
349
463
Intangible liabilities
—
—
28,441
29,824
—
—
Other liabilities
218,712
342,696
721,319
725,236
193,537
204,164
$
417,745
$
541,373
$
5,571,707
$
5,411,945
$
494,378
$
504,742
Redeemable noncontrolling
interests
1,098
680
—
—
106,315
99,894
Noncontrolling interests in investment
entities (excluding assets held for disposition)
151,985
136,668
2,369,836
2,463,559
127,770
113,390
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per
share data, unaudited)
Three Months Ended March
31,
2023
2022
Revenues
Fee income
$
59,126
$
42,837
Carried interest allocation (reversal)
(54,756
)
(31,079
)
Principal investment income (loss)
3,562
6,454
Property operating income
230,927
202,511
Other income
11,301
12,111
Total revenues
250,160
232,834
Expenses
Property operating expense
97,126
84,003
Interest expense
67,196
44,030
Investment expense
5,751
9,565
Transaction-related costs
8,527
165
Depreciation and amortization
141,574
128,567
Compensation expense - cash and
equity-based
74,650
65,542
Compensation expense (reversal) - carried
interest and incentive fee
(36,831
)
(20,352
)
Administrative expenses
26,506
27,885
Total expenses
384,499
339,405
Other income (loss)
Other gain (loss), net
(142,745
)
(149,881
)
Income (loss) before income
taxes
(277,084
)
(256,452
)
Income tax benefit (expense)
(1,042
)
7,413
Income (loss) from continuing
operations
(278,126
)
(249,039
)
Income (loss) from discontinued
operations
(14,218
)
(94,645
)
Net income (loss)
(292,344
)
(343,684
)
Net income (loss) attributable to
noncontrolling interests:
Redeemable noncontrolling interests
6,943
(11,220
)
Investment entities
(84,828
)
(63,045
)
Operating Company
(16,662
)
(22,862
)
Net income (loss) attributable to
DigitalBridge Group, Inc.
(197,797
)
(246,557
)
Preferred stock dividends
14,676
15,759
Net income (loss) attributable to
common stockholders
$
(212,473
)
$
(262,316
)
Income (loss) per share—basic
Income (loss) from continuing operations
per share—basic
$
(1.25
)
$
(1.27
)
Net income (loss) attributable to common
stockholders per share—basic
$
(1.34
)
$
(1.84
)
Income (loss) per share—diluted
Income (loss) from continuing operations
per share—diluted
$
(1.25
)
$
(1.27
)
Net income (loss) attributable to common
stockholders per share—diluted
$
(1.34
)
$
(1.84
)
Weighted average number of
shares
Basic
158,446
142,485
Diluted
158,446
142,485
Supplemental Schedule to
Consolidated Statements of Operations
(In thousands,
unaudited)
Investment Management
Operating
Corporate and Other
Three Months Ended March
31,
Three Months Ended March
31,
Three Months Ended March
31,
2023
2022
2023
2022
2023
2022
Revenues
Fee income
$
60,098
$
43,637
$
—
$
—
$
(972
)
$
(800
)
Carried interest allocation
(54,756
)
(31,079
)
—
—
—
—
Principal investment income (loss)
318
17
—
—
3,244
6,437
Property operating income
—
—
230,927
202,511
—
—
Other income
1,169
1,256
737
11
9,395
10,844
Total revenues
6,829
13,831
231,664
202,522
11,667
16,481
Expenses
Property operating expense
—
—
97,126
84,003
—
—
Interest expense
2,603
2,502
59,984
36,184
4,609
5,344
Investment expense
536
1,140
5,203
8,016
12
409
Transaction-related costs
5,192
—
—
—
3,335
165
Depreciation and amortization
6,409
5,276
134,699
122,891
466
400
Compensation expense—cash and
equity-based
28,182
24,808
27,179
19,956
19,289
20,778
Compensation expense (reversal)—incentive
fee and carried interest
(36,831
)
(20,352
)
—
—
—
—
Administrative expenses
6,407
4,171
7,240
6,899
12,859
16,815
Total expenses
12,498
17,545
331,431
277,949
40,570
43,911
Other gains (losses), net
3,082
(3,055
)
1,769
956
(147,596
)
(147,782
)
Losses from continuing operations
before income taxes
(2,587
)
(6,769
)
(97,998
)
(74,471
)
(176,499
)
(175,212
)
Income tax benefit (expense)
(217
)
(2,374
)
56
330
(881
)
9,457
Loss from continuing operations
(2,804
)
(9,143
)
(97,942
)
(74,141
)
(177,380
)
(165,755
)
Income (loss) from continuing operations
attributable to noncontrolling interests:
Redeemable noncontrolling interests
418
(3,266
)
—
—
6,525
(7,954
)
Investment entities
(857
)
2,349
(86,254
)
(60,196
)
1,766
977
Operating Company
(167
)
(624
)
(899
)
(1,121
)
(14,522
)
(14,007
)
Loss from continuing operations
attributable to DigitalBridge Group, Inc.
$
(2,198
)
$
(7,602
)
$
(10,789
)
$
(12,824
)
$
(171,149
)
$
(144,771
)
Distributable Earnings
(DE)
(In thousands, except per
share data, unaudited)
Three Months Ended
March 31, 2023
March 31, 2022
Net income (loss) attributable to common
stockholders
$
(212,473
)
$
(262,316
)
Net income (loss) attributable to
noncontrolling common interests in Operating Company
(16,662
)
(22,862
)
Net income (loss) attributable to
common interests in Operating Company and common
stockholders
(229,135
)
(285,178
)
Adjustments for Distributable Earnings
(DE):
Transaction-related and restructuring
charges(1)
18,391
24,668
Other (gain) loss, net (excluding realized
gain or loss related to digital assets and fund investments in
Corporate and Other)
141,229
130,224
Unrealized carried interest (allocation)
reversal, net of associated compensation (expense) reversal
18,240
13,078
Compensation expense - equity-based
16,339
18,720
Depreciation and amortization
141,220
130,597
Straight-line rent revenue and expense
(1,727
)
(2,548
)
Amortization of acquired above- and
below-market lease values, net
26
(248
)
Impairment reversal (loss)
—
23,802
Non-revenue enhancing capital
expenditures
(8,564
)
(1,372
)
Finance lease interest expense, debt
prepayment penalties and amortization of deferred financing costs,
debt premiums and discounts
15,523
98,465
Income tax effect on certain of the
foregoing adjustments
—
(589
)
Adjustments attributable to noncontrolling
interests in investment entities
(118,563
)
(132,237
)
DE from discontinued operations(4)
3,656
(22,446
)
After-tax DE
$
(3,365
)
$
(5,064
)
DE per common share / common OP
unit(2)
$
(0.02
)
$
(0.03
)
DE per common share / common OP
unit—diluted(2)(3)
$
(0.02
)
$
(0.03
)
Weighted average number of common OP units
outstanding used for DE per common share and OP unit(2)
173,127
157,248
Weighted average number of common OP units
outstanding used for DE per common share and OP unit—diluted
(2)(3)
173,127
157,248
_________
(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 March 31, 2023 and March 31, 2022,
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.
(4)
During the first quarter of 2023, the Company sold all of its
equity investment in BrightSpire Capital, Inc. (NYSE: BRSP). The
Company's investment in BRSP qualified as held for sale and
discontinued operations in March 2023. 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. This change is reflected retrospectively.
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, where applicable:
transaction-related costs; restructuring charges (primarily
severance and retention costs); realized and unrealized gains or
losses, except realized gains or losses related to digital assets,
including fund investments, in Corporate and Other; depreciation,
amortization and impairment charges; interest expense on finance
leases; debt prepayment penalties and amortization of deferred
financing costs, debt premiums and discounts; our share of
unrealized carried interest allocation, net of associated
compensation expense; equity-based compensation costs; 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 necessary to maintain operating real estate;
and 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 our operating results to be more comparable period-over-period
and relative to other companies in similar lines of business.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230503005323/en/
Investor Contacts: Severin White Managing Director, Head
of Public Investor Relations severin.white@digitalbridge.com
212-547-2777
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