| | |
| Cautionary Statement Regarding Forward-Looking Statements |
|
This presentation 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 investor 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 and Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2023 and June 30, 2023 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 presentation, nor to conform prior statements to actual results or revised expectations, and the Company does not intend to do so.
This presentation is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company. This information is not intended to be indicative of future results. Actual performance of the Company may vary materially.
The appendices herein contain important information that is material to an understanding of this presentation and you should read this presentation only with and in context of the appendices.
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DigitalBridge | Supplemental Financial Report | | |
| | |
| Important Note Regarding Non-GAAP Financial Measures |
|
This financial supplemental package includes certain non-GAAP financial measures and operating metrics that are not defined by generally accepted accounting principles, or GAAP.
DigitalBridge conducts its business through two reportable segments: (i) Investment Management; and (ii) Operating, the Company's direct co-investment in digital infrastructure assets held by its portfolio companies. In order to enhance a full understanding of the business, the Company presents certain non-GAAP measures that allow for comparability with companies that operate in each of these two reportable segments. The Company reports the following non-GAAP financial measures attributable to the Operating Company: Distributable Earnings (“DE”) and Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) on a Company-wide basis, and specific to the Company's Investment Management segment, Fee Related Earnings (“FRE”) and FRE before the effects of new investment strategies, as represented by Investment Management Adjusted EBITDA. DE and FRE are the most common metrics utilized in the investment management sector, which represents the Company''s core business while presenting Adjusted EBITDA allows for some measure of comparability against companies that hold digital infrastructure assets similar to assets in the Company's Operating segment.
The Company believes these non-GAAP financial measures supplement and enhance the overall understanding of its underlying financial performance and trends, and facilitate comparison among current, past and future periods and to other companies in similar lines of business. The Company uses these non-GAAP financial measures in evaluating the Company’s ongoing business performance and in making operating decisions. For the same reasons, the Company believes these non-GAAP measures are useful to the Company’s investors and analysts. As the Company evaluates profitability based upon continuing operations, these non-GAAP measures exclude results from discontinued operations.
These non-GAAP financial measures should be considered as a supplement to and not an alternative or in lieu of GAAP net income (loss) as measures of operating performance, or to cash flows from operating activities as indicators of liquidity. The Company's calculation of these non-GAAP measures may differ from methodologies utilized by other companies for similarly titled performance measures and, as a result, may not be fully comparable to those calculated by the Company's peers.
In evaluating the information presented throughout this supplemental financial report, refer to the appendices to this presentation for definitions and reconciliations of non-GAAP financial measures to GAAP measures. For purposes of comparability, historical information in this presentation may reflect certain adjustments to information reported in prior periods.
DE:
DE generally represents the net realized earnings of the Company and is an indicative measure used by the Company to assess ongoing operating performance and in making decisions related to distributions and reinvestments. Accordingly, the Company believes DE provides investors and analysts transparency into the measure of performance used by the Company in its decision making. DE reflects the ongoing operating performance of the Company’s core business by generally excluding non-cash expenses, income (loss) items that are unrealized and items that may not be indicative of core operating results. This allows the Company, and its investors and analysts to assess its operating results on a more comparable basis period-over-period.
DE is calculated as an after-tax measure that differs from GAAP net income (loss) from continuing operations as a result of the following adjustments to net income (loss): transaction-related costs; restructuring charges; other gain (loss); unrealized principal investment income (loss); non-cash depreciation, amortization and impairment charges; 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; non-cash equity-based compensation costs; preferred stock redemption gain (loss); straight-line adjustment to lease income and expense; interest expense on finance leases in the Operating segment, amortization of above and below market leases in the Operating segment; straight-line adjustment to lease income and expense in the Operating segment, non-revenue enhancing capital expenditures necessary to maintain operating real estate in the Operating segment; and income tax effect on certain of the foregoing adjustments. Transaction-related costs are incurred in connection with acquisitions and include costs of unconsummated transactions, while restructuring charges are related primarily to severance and retention costs. These costs, along with other gain (loss) amounts, are excluded from DE as they are related to discrete items, are not considered part of our ongoing operating cost structure, and are not reflective of our core operating performance. Other items excluded from DE are generally non-cash in nature, including income (loss) items that are unrealized, or otherwise do not represent current or future cash obligations such as amortization of deferred financing costs and straight-line lease adjustment. These items are excluded from DE as they do not contribute to the measurement of DE as a net realized earnings measure that is used in decision making related to distributions and reinvestments. Generally, the income tax effect associated with income and expense items excluded from the calculation of DE are similarly excluded from DE. However, where the resulting income tax liability or benefit arising from these excluded items increase or decrease actual income tax paid or payable by the Company in any one period, the income tax effect of these items are included in DE (for example, equity-based compensation). In connection with our Operating segment, non-revenue enhancing capital expenditures are excluded as these are not recurring capital expenditures and are not incurred to maintain and extend the useful life of operating digital assets that support the generation of revenues. The items we have excluded from DE are generally consistent with the exclusions made by our peers, which we believe allows for better comparability to the DE presented by our peers.
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DigitalBridge | Supplemental Financial Report | | |
| | |
| Important Note Regarding Non-GAAP Financial Measures |
|
Adjusted EBITDA:
Adjusted EBITDA is a supplemental measure derived from DE and generally presents the Company’s core operating performance on a pre-tax basis, based upon recurring revenues and independent of our capital structure and leverage. The Company views Adjusted EBITDA as particularly helpful in evaluating the relative contribution of our Operating segment, absent the effects of leverage, as the consolidated portfolio companies in the Operating segment have higher leverage relative to the Company’s own capital structure. The Company believes Adjusted EBITDA is useful to investors as an indicative measure of the Company’s profitability that is recurring and sustainable and allows for better comparability of the Company’s performance relative to its peers independent of capital structure and leverage. However, because Adjusted EBITDA is calculated without the effects of certain recurring cash charges, including interest expense, preferred stock dividends, income taxes, capital expenditures or other recurring cash requirements, its usefulness as a performance measure may be limited.
Adjusted EBITDA is calculated as DE adjusted to generally exclude the following items attributable to the Operating Company that are included in DE: interest expense as included in DE and income tax benefit (expense) as included in DE consistent with an EBITDA measure, preferred stock dividends, placement fee expense, our share of incentive fees and distributed carried interest net of associated compensation expense, and capital expenditures in the Operating segment as deducted in DE. Items excluded from Adjusted EBITDA include preferred stock dividends as Adjusted EBITDA removes the effects to earnings associated with the Company's capital structure, and placement fees as they are inconsistent in amount and frequency depending upon timing of fundraising for our funds. Additionally, Adjusted EBITDA excludes incentive fees and distributed carried interest net of associated compensation expense to be consistent with the FRE measure for our Investment Management segment, as discussed further below.
Investment Management Fee Related Earnings (IM FRE):
Investment Management FRE is presented as Investment Management Adjusted EBITDA, further adjusted to exclude FRE associated with new investment strategies, as discussed below. Investment Management FRE is used to assess the extent to which direct base compensation and core operating expenses are covered by recurring fee revenues in a stabilized investment management business. Investment Management FRE is measured as recurring fee income that is not subject to future realization events and other income (inclusive of cost reimbursements associated with administrative expenses), net of the following: compensation expense (excluding non-cash equity-based compensation, and incentive and carried interest compensation expense), administrative expense (excluding placement fee expense and straight-line adjustment to lease expense) and FRE associated with new investment strategies.
In reconciling Investment Management FRE to GAAP net income (loss), adjustments are made to first arrive at Investment Management Adjusted EBITDA, which generally excludes the following: our share of incentive fees and carried interest net of associated compensation expense; unrealized principal investment income (loss); other gain (loss); transaction-related and restructuring charges; non-cash equity-based compensation costs; straight-line adjustment to lease expense; placement fee expense; investment expense; and in line with an EBITDA measure, non-cash depreciation and amortization expense, interest expense, and income tax (benefit) expense. Consistent with an FRE measure, Investment Management Adjusted EBITDA excludes incentive fees and carried interest net of associated compensation expense, as these are not recurring fee income and are subject to variability given that they are performance-based and/or dependent upon future realization events. In calculating Investment Management FRE which reflects the Company’s Investment Management segment as a stabilized business, Investment Management Adjusted EBITDA is further adjusted to exclude Start-Up FRE. Start-Up FRE is FRE associated with new investment strategies that have 1) not yet held a first close raising FEEUM; or 2) not yet achieved break-even Adjusted EBITDA only for investment products that may be terminated solely at the Company’s discretion. The Company evaluates new investment strategies on a regular basis and excludes Start- Up FRE from Investment Management FRE until such time as a new strategy is determined to form part of the Company’s core investment management business.
The Company believes that Investment Management FRE and Investment Management Adjusted EBITDA are useful measures to investors as they reflect the Company’s profitability based upon recurring fee streams that are not subject to future realization events, and without the effects of income taxes, leverage, non-cash expenses, income (loss) items that are unrealized and other items that may not be indicative of core operating results. This allows for better comparability of the profitability of the Company’s investment management business on a recurring and sustainable basis.
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DigitalBridge | Supplemental Financial Report | | |
| | |
| Note Regarding DBRG Reportable Segments / Consolidated and OP Share of Consolidated Amounts |
|
This presentation includes supplemental financial information for the following segments:
Investment Management (IM)
This segment represents the Company's global investment management platform, deploying and managing capital on behalf of a diverse base of global institutional investors. The Company's investment management platform is composed of a growing number of long-duration, private investment funds designed to provide institutional investors access to investments across different segments of the digital infrastructure ecosystem. In addition to its flagship value-add digital infrastructure equity offerings, the Company's investment offerings have expanded to include core equity, credit and liquid securities. The Company earns management fees based upon the assets or capital managed in investment vehicles, and may earn incentive fees and carried interest based upon the performance of such investment vehicles, subject to achievement of minimum return hurdles. The amount of incentive fees and carried interest recognized, a portion of which is allocated to employees and former employees, may be highly variable from period to period. Through the end of May 2022, earnings from the Investment Management segment were attributed 31.5% to Wafra, a private investment firm, prior to the Company's redemption of Wafra's interest in the investment management business.
Operating
This segment is composed of balance sheet equity interests in digital infrastructure portfolio companies, which generally earn rental income from providing use of digital asset space and/or capacity through leases, services and other agreements. The Company owned interests in two portfolio companies: Vantage SDC, a stabilized hyperscale data center business, and through mid-September 2023, DataBank, an edge colocation data center business. 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.
Corporate and Other
This segment is composed of the Company's other investment activities and corporate activities.
Other investment activities are composed of the Company's equity interests in: (i) digital investment vehicles, including the DBP flagship funds and InfraBridge GIF funds, and seed investments in various strategies such as digital core, liquid and credit; and (ii) remaining non-digital investments. Outside of its general partner interests, the Company's other equity interests in its sponsored and/or managed digital investment vehicles are considered to be incidental to its digital investment management business. The primary economics to the Company are represented by fee income and carried interest 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. These other investment activities generate largely principal investment earnings or losses and to a lesser extent, revenues in the form of interest income or dividend income from warehoused investments and consolidated investment vehicles. Effective the third quarter of 2021, these activities are no longer presented separately as the Digital Other and Other segments, which is consistent with and reflects management's focus on its core digital operations and overall simplification of the Company's business. This change in segment presentation is reflected retrospectively. 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.
Corporate activities include corporate level cash and corresponding interest income, corporate level financing and related interest expense, corporate level transaction costs, costs in connection with unconsummated investments, income and expense related to cost reimbursement arrangements with affiliates, fixed assets for administrative use, compensation expense not directly attributable to reportable segments, corporate level administrative and overhead costs, and adjustments to eliminate intercompany fees. Costs which are directly attributable, or otherwise can be subjected to a reasonable and systematic allocation, have been allocated to each of the reportable segments. As segment results are presented before elimination of intercompany fees, elimination adjustment pertains to fee income earned by the IM segment from third party capital in investment vehicles managed by the Company and consolidated within the Operating segment and in Corporate and Other.
Throughout this presentation, consolidated figures represent the interest of both the Company (and its subsidiary DigitalBridge Operating Company, LLC (the Operating Company" or “DBRG OP”)) and noncontrolling interests. Figures labeled as DBRG OP share represent the Company’s pro-rata share.
Fund Performance Metrics:
Certain performance metrics for our key investment funds from inception through September 30, 2023 are presented in this financial supplemental presentation. Excluded are funds with less than one year of performance history as of September 30, 2023, funds and separately managed accounts in the liquid strategy, co-investment vehicles and separately capitalized portfolio companies. The historical performance of these funds is not indicative of their future performance nor indicative of the performance of our other existing investment vehicles or of any of our future funds. An investment in DigitalBridge Group, Inc. is not an investment in any of our funds and these fund performance metrics are not indicative of the performance of DigitalBridge Group, Inc.
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DigitalBridge | Supplemental Financial Report | | |
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| | | Page |
| I. | Financial Overview | |
| a. | | 7 |
| b. | | 8-9 |
| II. | Financial Results | |
| a. | | 10-11 |
| b. | | 12 |
| c. | | 13 |
| d. | | 14-15 |
| III. | Capitalization | |
| a. | Debt Summary | 16 |
| b. | Secured Fund Fee Revenue Notes and Variable Funding Notes | 17 |
| c. | Convertible/Exchangeable Notes & Perpetual Preferred Stock | 18 |
| IV. | Operating | 19-20 |
| V. | Other | 21 |
| VI. | Cash G&A Expense | 22 |
| | | |
| Appendices | |
| Reconciliations of IM FRE and Operating Adjusted EBITDA to Net Income (Loss) | 24 |
| Reconciliations of DE and Adjusted EBITDA and to Net Income (Loss) | 25-26 |
| Definitions | 27 |
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DigitalBridge | Supplemental Financial Report | | 6 | |
| | |
| Ia. Summary Financial Metrics |
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| | | | | | | | | | | | | | | | | | | | | | | | | | |
| ($ and shares in thousands, except per share data and as noted) (Unaudited) | 9/30/2023 - 3Q23 | 6/30/2023 - 2Q23 | 3/31/2023 - 1Q23 | 12/31/2022 - 4Q22 | 9/30/2022 - 3Q22 | 6/30/2022 - 2Q22 | 3/31/2022 - 1Q22 | 12/31/2021 - 4Q21 |
| Financial Data | | | | | | | | |
| Total Company | | | | | | | | |
| Net income (loss) attributable to common stockholders | $ | 261,828 | $ | (22,411) | $ | (212,473) | $ | (19,356) | $ | (63,273) | $ | (37,321) | $ | (262,316) | $ | (20,686) |
Net income (loss) attributable to common stockholders per basic share(1) | 1.60 | (0.14) | (1.34) | (0.12) | (0.39) | (0.24) | (1.84) | (0.16) |
| Distributable Earnings ("DE") | 35,048 | 10,012 | (3,365) | (18,393) | 32,335 | 603 | (5,064) | (11,636) |
DE per basic share(1) | 0.20 | 0.06 | (0.02) | (0.11) | 0.18 | — | (0.03) | (0.08) |
| Adjusted EBITDA | 33,591 | 42,884 | 25,626 | 27,759 | 29,097 | 30,928 | 20,494 | 20,957 |
| | | | | | | | |
| Investment Management | | | | | | | | |
| Total Assets Under Management ("AUM") (in billions) | $ | 74.6 | $ | 72.2 | $ | 69.3 | $ | 52.8 | $ | 50.3 | $ | 47.9 | $ | 46.6 | $ | 45.3 |
| Fee Earning Equity Under Management ("FEEUM") (in billions) | $ | 29.9 | $ | 29.1 | $ | 27.7 | $ | 22.2 | $ | 20.5 | $ | 19.0 | $ | 18.8 | $ | 18.3 |
| IM management fee income - DBRG OP share | 66,058 | 66,460 | 59,229 | 45,272 | 42,039 | 36,948 | 29,921 | 38,396 |
| IM FRE - DBRG OP share | 29,202 | 34,398 | 34,512 | 24,228 | 21,498 | 20,759 | 16,989 | 23,757 |
| IM FRE margin % | 44.2% | 51.8% | 58.3% | 53.5% | 51.1% | 56.2% | 56.8% | 61.9% |
| Net realized carried interest and incentive fees | 27,927 | (883) | 243 | 12,377 | 20,258 | — | (1,172) | 1,092 |
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| Balance Sheet and Capitalization | | | | | | | | |
| Consolidated assets | $ | 6,872,091 | $ | 10,757,065 | $ | 10,743,429 | $ | 11,028,503 | $ | 11,740,829 | $ | 11,877,288 | $ | 11,232,157 | $ | 14,197,816 |
Consolidated debt(2) | 3,184,830 | 5,527,422 | 5,449,950 | 5,212,657 | 5,394,134 | 5,612,274 | 5,187,597 | 4,922,722 |
| DBRG OP Share: | | | | | | | | |
| Total Assets | 2,888,793 | 2,868,093 | 3,001,644 | 3,334,288 | 3,755,231 | 4,177,806 | 3,561,501 | 6,233,158 |
| Corporate debt | 378,422 | 378,422 | 578,422 | 578,422 | 578,422 | 648,422 | 578,422 | 638,739 |
| Investment-level debt | 369,221 | 630,488 | 596,085 | 568,230 | 775,358 | 1,097,943 | 880,464 | 727,789 |
Total Debt(2) | 747,643 | 1,008,910 | 1,174,507 | 1,146,652 | 1,353,780 | 1,746,365 | 1,458,886 | 1,366,528 |
| | | | | | | | |
| Corporate cash | 230,300 | 204,508 | 449,368 | 733,382 | 423,441 | 55,628 | 813,237 | 986,197 |
| Corporate cash & VFN / Revolver borrowing availability | 530,300 | 504,508 | 749,368 | 1,033,382 | 723,441 | 285,628 | 1,013,237 | 1,186,197 |
| | | | | | | | |
| Perpetual Preferred Equity, $25 per share liquidation preference | 821,899 | 821,899 | 827,711 | 827,779 | 827,779 | 883,500 | 883,500 | 883,500 |
| | | | | | | | |
Basic shares and OP units outstanding(1)(3) | 175,806 | 175,017 | 174,235 | 172,712 | 175,918 | 176,930 | 162,461 | 155,138 |
Diluted shares and OP units outstanding(1)(3) | 186,166 | 184,485 | 183,154 | 181,692 | 186,911 | 189,572 | 176,087 | 184,359 |
| Common dividend per share | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | — | $ | — | $ | — |
Notes:
(1) In August 2022, the Company effectuated a 1-for-4 reverse stock split of its shares of class A and B common stock. All prior period common share and per share information is presented after giving effect to the reverse stock split.
(2) Represents principal balance and excludes debt issuance costs, discounts and premiums.
(3) Basic shares and OP units outstanding for the respective quarters represent the shares/units outstanding at quarter end of Class A and Class B common stock, inclusive of unvested restricted stock, OP units, and vested deferred stock units. For the purpose of calculating basic DE per share, the basic shares and OP units represent the weighted average number of share/units during the respective quarters. Diluted shares and OP units outstanding for the respective quarters represent the number of basic shares and OP units outstanding at quarter end, adjusted to include the effect of potentially dilutive share equivalents which are common stock issuable in connection with performance stock units, exchangeable senior notes and in-the-money warrants issued to Wafra.
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DigitalBridge | Supplemental Financial Report | | 7 | |
| | |
| Ib. Investment Management |
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| ($ in millions) | | | | | | | | | | |
| Investment Management FEEUM | | 9/30/23 Annual IM Fee Rate | 9/30/23 | 6/30/23 | 3/31/23 | 12/31/22 | 9/30/22 | 6/30/22 | 3/31/22 | 12/31/21 |
| DigitalBridge Partners I (DBP I) | | 1.10% | $ | 3,345 | | $ | 3,311 | | $ | 3,180 | | $ | 3,165 | | $ | 2,802 | | $ | 3,048 | | $ | 3,034 | | $ | 3,215 | |
| DigitalBridge Partners II (DBP II) | | 1.18% | 7,996 | | 7,996 | | 7,996 | | 7,996 | | 7,996 | | 7,996 | | 7,996 | | 8,001 | |
| Separately Capitalized Portfolio Companies | | 0.75% | 2,402 | | 2,267 | | 2,187 | | 2,512 | | 2,370 | | 2,401 | | 2,372 | | 2,148 | |
| InfraBridge Global Infrastructure Funds (GIF) & Other | | 1.17% | 5,083 | | 5,112 | | 5,083 | | — | | — | | — | | — | | — | |
| Co-Investment (Sidecar) Capital | | 0.47% | 8,519 | | 7,990 | | 7,000 | | 6,525 | | 6,310 | | 4,651 | | 4,370 | | 4,105 | |
| Digital Core, Liquid and Credit Strategies | | 0.61% | 2,591 | | 2,383 | | 2,248 | | 2,036 | | 1,021 | | 933 | | 1,013 | | 786 | |
| IM FEEUM | | 0.88% | $ | 29,936 | | $ | 29,059 | | $ | 27,694 | | $ | 22,234 | | $ | 20,499 | | $ | 19,029 | | $ | 18,785 | | $ | 18,255 | |
| | | | | | | | | | |
| ($ in thousands) | | | | | | | | | | |
| IM FRE | | | 3Q23 | 2Q23 | 1Q23 | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 |
| Fee income | | | $ | 65,935 | | $ | 65,812 | | $ | 58,600 | | $ | 44,371 | | $ | 41,353 | | $ | 44,758 | | $ | 43,155 | | $ | 43,145 | |
Fee income, other (1) | | | 123 | | 648 | | 629 | | 901 | | 686 | | 355 | | 523 | | 8,787 | |
| Other income | | | 420 | | 1,051 | | 492 | | 535 | | 386 | | 530 | | 251 | | 273 | |
| Compensation expense—cash | | | (29,695) | | (26,286) | | (19,795) | | (17,805) | | (18,876) | | (17,725) | | (17,675) | | (16,275) | |
| Administrative expenses | | | (8,736) | | (7,992) | | (6,329) | | (6,417) | | (4,450) | | (4,794) | | (4,012) | | (3,446) | |
| Exclude: Start-up FRE of certain new strategies | | | 1,155 | | 1,165 | | 915 | | 2,643 | | 2,399 | | 2,335 | | 2,362 | | 2,306 | |
IM FRE (2) | | | $ | 29,202 | | $ | 34,398 | | $ | 34,512 | | $ | 24,228 | | $ | 21,498 | | $ | 25,459 | | $ | 24,604 | | $ | 34,790 | |
| | | | | | | | | | |
DBRG OP share of IM FRE(3) | | | $ | 29,202 | | $ | 34,398 | | $ | 34,512 | | $ | 24,228 | | $ | 21,498 | | $ | 20,759 | | $ | 16,989 | | $ | 23,757 | |
Notes:
(1) Includes service fee income and one time catch-up fees earned, which are customary fees paid on newly raised 3rd party capital as if it were raised on the first closing date.
(2) For a reconciliation of net income / (loss) to IM FRE, please refer to the Appendices section of this presentation.
(3) In May 2022, DigitalBridge acquired Wafra’s 31.5% ownership in the Company's investment management business that Wafra initially acquired in July 2020, which resulted in 100% of the Company's IM FRE becoming entitled to DigitalBridge.
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DigitalBridge | Supplemental Financial Report | | 8 | |
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| ($ in millions) | | | | | | | | | | | | |
| | Inception date(2) | | Commitments | | Invested Capital(3) | | Available Capital(4) | | Investment Value | | MOIC |
Fund(1) | | | Total | | Unfunded | | | | Unrealized | | Realized(5) | | Total(6) | | Gross(7) | | Net(8) |
| Value-Add | | | | | | | | | | | | | | | | | | | | |
| DigitalBridge Partners, LP | | March-18 | | $ | 4,059 | | | $ | 494 | | | $ | 4,584 | | | $ | 494 | | | $ | 5,991 | | | $ | 1,139 | | | $ | 7,130 | | | 1.6x | | 1.4x |
| DigitalBridge Partners II, LP | | November-20 | | 8,286 | | | 974 | | | 7,681 | | | 979 | | | 8,340 | | | 662 | | | 9,002 | | | 1.2x | | 1.1x |
| InfraBridge | | | | | | | | | | | | | | | | | | | | |
| Global Infrastructure Fund I, LP | | March-15 | | 1,411 | | | 406 | | | 1,479 | | | 406 | | | 1,125 | | | 1,055 | | | 2,180 | | | 1.5x | | 1.3x |
| Global Infrastructure Fund II, LP | | January-18 | | 3,382 | | | 106 | | | 2,993 | | | 106 | | | 2,773 | | | 64 | | | 2,837 | | | 0.9x | | 0.9x |
(1) Listed herein are main fund vehicles. Performance metrics are presented in aggregate for main fund vehicle, its parallel vehicles and alternative investment vehicles.
(2) First close date of the fund. InfraBridge funds were acquired in Feb-2023.
(3) Invested capital represents the original cost and subsequent fundings to investments. Invested capital includes financing costs and investment related expenses which are capitalized. With respect to Infrabridge funds, such costs are expensed during the period and excluded from their determination of invested capital.
(4) Available capital includes recallable capital.
(5) Realized value represents proceeds from dispositions that have closed and all earnings from both realized and unrealized investments, including interest, dividend and ticking fees.
(6) Total value is the sum of unrealized fair value and realized value of investments.
(7) Total investment gross multiple of invested capital (MOIC) is calculated as unrealized fair value and realized value of investments divided by invested capital, without giving effect to allocation of expenses and general partner carried interest. Excludes capital attributable to the general partner, general partner affiliate and any other capital that is not subject to fees and/or carried interest. Gross MOIC is calculated at the fund level and does not reflect gross MOIC at the individual investor level.
(8) Total investment net MOIC is calculated as unrealized fair value and realized value of investments divided by invested capital, after giving effect to allocation of management fee expense, other fund expenses and general partner carried interest (both distributed and unrealized carried interest). Excludes capital attributable to the general partner, general partner affiliate and any other capital that is not subject to fees and/or carried interest. Net MOIC is calculated at the fund level and does not reflect net MOIC at the individual investor level.
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 9 | |
| | |
| IIa. Financial Results - Balance Sheet |
|
| | | | | | | | | | | | | | |
| ($ in thousands, except per share data) (unaudited) | | As of September 30, 2023 |
| | Consolidated | | Noncontrolling Interests' Share |
| Assets | | | | |
| Cash and cash equivalents | | $ | 434,044 | | | $ | 83,354 | |
| Restricted cash | | 104,626 | | | 84,480 | |
| Investments | | 1,879,981 | | | 575,899 | |
| Real estate | | 3,050,577 | | | 2,650,036 | |
| Goodwill | | 466,092 | | | — | |
| Deferred leasing costs and intangible assets | | 697,754 | | | 509,916 | |
| Other assets | | 165,340 | | | 79,518 | |
| Due from affiliates | | 69,695 | | | — | |
| Assets held for disposition | | 3,982 | | | 95 | |
| Total assets | | $ | 6,872,091 | | | $ | 3,983,298 | |
| Liabilities | | | | |
| Corporate debt | | $ | 371,121 | | | $ | — | |
| Non-recourse investment-level debt | | 2,786,052 | | | 2,419,543 | |
| Intangible liabilities | | 20,833 | | | 18,098 | |
| Other liabilities | | 668,572 | | | 276,923 | |
| Liabilities related to assets held for disposition | | 175 | | | — | |
| | | | |
| | | | |
| | | | |
| Total liabilities | | 3,846,753 | | | 2,714,564 | |
| Commitments and contingencies | | | | |
| Redeemable noncontrolling interests | | 27,178 | | | 27,178 | |
| Equity | | | | |
| Stockholders’ equity: | | | | |
| Preferred stock, $0.01 par value per share; $821,899 liquidation preference; 250,000 shares authorized; 32,876 shares issued and outstanding | | 794,670 | | | — | |
| Common stock, $0.01 par value per share | | | | |
| Class A, 237,250 shares authorized; 163,264 shares issued and outstanding | | 1,632 | | | — | |
| Class B, 250 shares authorized; 166 shares issued and outstanding | | 2 | | | — | |
| Additional paid-in capital | | 7,835,826 | | | — | |
| Accumulated deficit | | (6,941,470) | | | — | |
| Accumulated other comprehensive income (loss) | | 113 | | | — | |
| Total stockholders’ equity | | 1,690,773 | | | — | |
| Noncontrolling interests in investment entities | | 1,241,556 | | | 1,241,556 | |
| Noncontrolling interests in Operating Company | | 65,831 | | | — | |
| Total equity | | 2,998,160 | | | 1,241,556 | |
| Total liabilities, redeemable noncontrolling interests and equity | | $ | 6,872,091 | | | $ | 3,983,298 | |
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 10 | |
| | |
| IIa. Financial Results - Balance Sheet |
|
Supplemental Schedule to Consolidated Balance Sheets
| | | | | | | | | | | | | | | | | | | | |
| ($ in thousands) (unaudited) | | As of September 30, 2023 |
| | Investment Management | | Operating | | Corporate and Other |
| Assets | | | | | | |
| Cash and cash equivalents | | $ | 62,212 | | | $ | 59,982 | | | $ | 311,850 | |
| Restricted cash | | 4,116 | | | 98,701 | | | 1,809 | |
| Investments | | 568,892 | | | — | | | 1,311,089 | |
| Real estate | | — | | | 3,050,577 | | | — | |
| Goodwill | | 466,092 | | | — | | | — | |
| Deferred leasing costs and intangible assets | | 110,287 | | | 586,987 | | | 480 | |
| Other assets | | 29,771 | | | 89,234 | | | 46,335 | |
| Due from affiliates | | 67,424 | | | — | | | 2,271 | |
| | | | | | |
| Total assets | | $ | 1,308,794 | | | $ | 3,885,481 | | | $ | 1,673,834 | |
| Liabilities | | | | | | |
| Corporate debt | | $ | 199,745 | | | $ | 70,499 | | | $ | 100,877 | |
| Non-recourse investment-level debt | | — | | | 2,781,637 | | | 4,415 | |
| Intangible liabilities | | — | | | 20,833 | | | — | |
| Other liabilities | | 369,772 | | | 118,977 | | | 179,823 | |
| | | | | | |
| Total liabilities | | 569,517 | | | 2,991,946 | | | 285,115 | |
| Redeemable noncontrolling interests | | 909 | | | — | | | 26,269 | |
| Noncontrolling interests in investment entities | | 228,838 | | | 837,793 | | | 173,838 | |
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 11 | |
| | |
| IIb. Financial Results - Consolidated Segment Operating Results |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2023 |
| ($ in thousands) (unaudited) | Investment Management | | Operating | | Corporate and Other | | Discontinued Operations | | Total |
| Revenues | | | | | | | | | |
| Fee income | $ | 66,058 | | | $ | — | | | $ | (818) | | | $ | — | | | $ | 65,240 | |
| Carried interest allocation | 168,891 | | | — | | | — | | | — | | | 168,891 | |
| Principal investment income (loss) | 1,451 | | | — | | | 16,492 | | | — | | | 17,943 | |
| Property operating income | — | | | 214,058 | | | — | | | — | | | 214,058 | |
| Other income | 1,255 | | | 319 | | | 9,374 | | | — | | | 10,948 | |
| Total revenues | 237,655 | | | 214,377 | | | 25,048 | | | — | | | 477,080 | |
| Expenses | | | | | | | | | |
| Property operating expense | — | | | 94,481 | | | — | | | — | | | 94,481 | |
| Interest expense | 2,651 | | | 45,305 | | | 1,938 | | | — | | | 49,894 | |
| Investment expense | 409 | | | 5,084 | | | 235 | | | — | | | 5,728 | |
| Transaction-related costs | 881 | | | — | | | 15 | | | — | | | 896 | |
| Placement fees | 15 | | | — | | | — | | | — | | | 15 | |
| Depreciation and amortization | 9,003 | | | 118,681 | | | 316 | | | — | | | 128,000 | |
| | | | | | | | | |
| Compensation expense | | | | | | | | | |
| Compensation expense - cash and equity-based | 39,760 | | | 21,598 | | | 13,356 | | | — | | | 74,714 | |
| Compensation expense - incentive fee and carried interest allocation | 72,865 | | | — | | | — | | | — | | | 72,865 | |
| Administrative expenses | 9,410 | | | 7,525 | | | 7,142 | | | — | | | 24,077 | |
| Total expenses | 134,994 | | | 292,674 | | | 23,002 | | | — | | | 450,670 | |
| Other income (loss) | | | | | | | | | |
| | | | | | | | | |
| Other gain (loss), net | (2,662) | | | (1,612) | | | 259,101 | | | — | | | 254,827 | |
| Income (loss) from continuing operations before income taxes | 99,999 | | | (79,909) | | | 261,147 | | | — | | | 281,237 | |
| Income tax benefit (expense) | 15 | | | 202 | | | (74) | | | — | | | 143 | |
| Income (loss) from continuing operations | 100,014 | | | (79,707) | | | 261,073 | | | — | | | 281,380 | |
| Income (loss) from discontinued operations | — | | | — | | | — | | | (2,603) | | | (2,603) | |
| Net income (loss) | 100,014 | | | (79,707) | | | 261,073 | | | (2,603) | | | 278,777 | |
| Net income (loss) attributable to noncontrolling interests: | | | | | | | | | |
| Redeemable noncontrolling interests | — | | | — | | | 132 | | | — | | | 132 | |
| Investment entities | 43,666 | | | (68,743) | | | 7,386 | | | (55) | | | (17,746) | |
| Operating Company | 3,957 | | | (773) | | | 16,913 | | | (179) | | | 19,918 | |
| Net income (loss) attributable to DigitalBridge Group, Inc. | 52,391 | | | (10,191) | | | 236,642 | | | (2,369) | | | 276,473 | |
| | | | | | | | | |
| Preferred stock dividends | — | | | — | | | 14,645 | | | — | | | 14,645 | |
| Net income (loss) attributable to common stockholders | $ | 52,391 | | | $ | (10,191) | | | $ | 221,997 | | | $ | (2,369) | | | $ | 261,828 | |
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 12 | |
| | |
| IIc. Financial Results - Noncontrolling Interests’ Share Segment Operating Results |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2023 |
| ($ in thousands) (unaudited) | Investment Management | | Operating | | Corporate and Other | | Discontinued Operations | | Total |
| Revenues | | | | | | | | | |
| Fee income | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| Carried interest allocation | 42,439 | | | — | | | — | | | — | | | 42,439 | |
| Principal investment income (loss) | 1,227 | | | — | | | 5,346 | | | — | | | 6,573 | |
| Property operating income | $ | — | | | $ | 188,466 | | | $ | — | | | $ | — | | | 188,466 | |
| Other income | — | | | 184 | | | 2,410 | | | — | | | 2,594 | |
| Total revenues | 43,666 | | | 188,650 | | | 7,756 | | | — | | | 240,072 | |
| Expenses | | | | | | | | | |
| Property operating expense | — | | | 83,206 | | | — | | | — | | | 83,206 | |
| Interest expense | — | | | 39,047 | | | 243 | | | — | | | 39,290 | |
| Investment expense | — | | | 4,424 | | | 5 | | | — | | | 4,429 | |
| | | | | | | | | |
| Depreciation and amortization | — | | | 104,374 | | | — | | | — | | | 104,374 | |
| | | | | | | | | |
| Compensation expense | | | | | | | | | |
| Compensation expense - cash and equity-based | — | | | 19,220 | | | — | | | — | | | 19,220 | |
| | | | | | | | | |
| Administrative expenses | — | | | 6,519 | | | 337 | | | — | | | 6,856 | |
| Total expenses | — | | | 256,790 | | | 585 | | | — | | | 257,375 | |
| Other income (loss) | | | | | | | | | |
| | | | | | | | | |
| Other gain (loss), net | — | | | (603) | | | 347 | | | — | | | (256) | |
| Income (loss) from continuing operations before income taxes | 43,666 | | | (68,743) | | | 7,518 | | | — | | | (17,559) | |
| Income tax benefit (expense) | — | | | 179 | | | — | | | — | | | 179 | |
| Income (loss) from continuing operations | 43,666 | | | (68,564) | | | 7,518 | | | — | | | (17,380) | |
| Income (loss) from discontinued operations | — | | | — | | | — | | | (55) | | | (55) | |
| Net income (loss) | 43,666 | | | (68,564) | | | 7,518 | | | (55) | | | (17,435) | |
| Non-pro rata allocation of income (loss) to noncontrolling interests | — | | | (179) | | | — | | | — | | | (179) | |
| Net income (loss) attributable to noncontrolling interests | $ | 43,666 | | | $ | (68,743) | | | $ | 7,518 | | | $ | (55) | | | $ | (17,614) | |
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 13 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| OP pro rata share by segment | | Amounts
attributable to
noncontrolling interests | | DBRG consolidated as reported |
| ($ in thousands; for the three months ended September 30, 2023; and unaudited) | IM | | Operating | | Corporate and Other | | Discontinued Operations | | Total OP pro rata share | | |
| Net income (loss) attributable to common stockholders | $ | 52,391 | | | $ | (10,191) | | | $ | 221,997 | | | $ | (2,369) | | | $ | 261,828 | | | $ | — | | | $ | 261,828 | |
| Net income (loss) attributable to noncontrolling common interests in Operating Company | 3,957 | | | (773) | | | 16,913 | | | (179) | | | 19,918 | | | — | | | 19,918 | |
| Net income (loss) attributable to common interests in Operating Company and common stockholders | 56,348 | | | (10,964) | | | 238,910 | | | (2,548) | | | 281,746 | | | — | | | 281,746 | |
| | | | | | | | | | | | | |
| Adjustments for Distributable Earnings (DE): | | | | | | | | | | | | | |
Transaction-related and restructuring charges(1) | 4,239 | | | 150 | | | 2,344 | | | 188 | | | 6,921 | | | 601 | | | 7,522 | |
| Unrealized other (gain) loss, net | 1,503 | | | 191 | | | (258,454) | | | 97 | | | (256,663) | | | 1,926 | | | (254,737) | |
| Unrealized principal investment income | (1,034) | | | — | | | (11,154) | | | — | | | (12,188) | | | (5,755) | | | (17,943) | |
| Unrealized carried interest allocation, net of associated compensation expense allocation | (24,874) | | | — | | | — | | | — | | | (24,874) | | | (43,225) | | | (68,099) | |
| Compensation expense - equity-based | 7,218 | | | 424 | | | 7,122 | | | 24 | | | 14,788 | | | 3,833 | | | 18,621 | |
| Depreciation and amortization | 9,003 | | | 14,462 | | | 317 | | | — | | | 23,782 | | | 104,374 | | | 128,156 | |
| Straight-line rent revenue and expense | 511 | | | (269) | | | (579) | | | — | | | (337) | | | (1,832) | | | (2,169) | |
| Amortization of acquired above- and below-market lease values, net | — | | | (11) | | | — | | | — | | | (11) | | | (130) | | | (141) | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Non-revenue enhancing capital expenditures | — | | | (1,372) | | | — | | | — | | | (1,372) | | | (10,024) | | | (11,396) | |
| Finance lease interest expense, debt prepayment penalties and amortization of deferred financing costs, debt premiums and discounts | 356 | | | 480 | | | 178 | | | — | | | 1,014 | | | 2,731 | | | 3,745 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Adjustments attributable to noncontrolling interests in investment entities | — | | | — | | | — | | | — | | | — | | | (52,496) | | | (52,496) | |
| DE from discontinued operations | — | | | — | | | — | | | 2,239 | | | 2,239 | | | — | | | 2,239 | |
| After-tax DE | $ | 53,270 | | | $ | 3,091 | | | $ | (21,316) | | | $ | — | | | $ | 35,045 | | | $ | 3 | | | $ | 35,048 | |
Notes:
(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.
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 14 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| OP pro rata share by segment | |
| ($ in thousands; for the three months ended September 30, 2023; and unaudited) | IM | | Operating | | Corporate and Other | | Discontinued Operations | | Total OP pro rata share | |
| After-tax DE | $ | 53,270 | | | $ | 3,091 | | | $ | (21,316) | | | $ | — | | | $ | 35,045 | | |
| Interest expense included in DE | 2,295 | | | 5,711 | | | 1,518 | | | — | | | 9,524 | | |
| Income tax expense (benefit) included in DE | (15) | | | (22) | | | 74 | | | — | | | 37 | | |
| Preferred dividends | — | | | — | | | 14,645 | | | — | | | 14,645 | | |
| | | | | | | | | | |
| Placement fee expense | 15 | | | — | | | — | | | — | | | 15 | | |
| Realized carried interest allocation, net of associated compensation expense allocation | (27,927) | | | — | | | — | | | — | | | (27,927) | | |
| Investment costs and non-revenue enhancing capital expenditures in DE | 409 | | | 1,840 | | | — | | | — | | | 2,249 | | |
| Adjusted EBITDA | $ | 28,047 | | | $ | 10,620 | | | $ | (5,079) | | | $ | — | | | $ | 33,588 | | |
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 15 | |
| | |
| IIIa. Capitalization - Debt Summary |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ($ in thousands; as of September 30, 2023) | | | | | | | | | | | | | | |
| Consolidated debt | Payments due by period(1) | | | |
| 2023 | | 2024 | | 2025 | | 2026 | | 2027 and after | | Total | | | |
| Investment-level debt: | | | | | | | | | | | | | | |
| Operating - Fixed | $ | 995 | | | $ | 600,753 | | | $ | 700,000 | | | $ | 530,000 | | | $ | 970,000 | | | $ | 2,801,748 | | | | |
| | | | | | | | | | | | | | |
| Other - Variable | — | | | 4,660 | | | — | | | — | | | — | | | 4,660 | | | | |
| | | | | | | | | | | | | | |
| Total Investment-level debt | 995 | | | 605,413 | | | 700,000 | | | 530,000 | | | 970,000 | | | 2,806,408 | | | | |
| Corporate debt: | | | | | | | | | | | | | | |
| 2021-1, A-1 Variable Funding Notes | — | | | — | | | — | | | — | | | — | | | — | | | | |
| 2021-1, Class A-2 Term Notes | — | | | — | | | — | | | 300,000 | | | — | | | 300,000 | | | | |
| Convertible/exchangeable senior notes | — | | | — | | | 78,422 | | | — | | | — | | | 78,422 | | | | |
| Total debt - consolidated | $ | 995 | | | $ | 605,413 | | | $ | 778,422 | | | $ | 830,000 | | | $ | 970,000 | | | $ | 3,184,830 | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | Fixed/Variable | WA Interest Rate | WA Remaining Term |
| DBRG OP share of debt | Payments due by period(1) |
| 2023 | | 2024 | | 2025 | | 2026 | | 2027 and after | | Total |
| Investment-level debt: | | | | | | | | | | | | | | |
| Operating - Fixed | $ | 131 | | | $ | 78,879 | | | $ | 91,910 | | | $ | 69,589 | | | $ | 127,361 | | | $ | 367,870 | | Fixed | 2.8% | 2.7 |
| | | | | | | | | | | | | | |
| Other - Variable | — | | | 1,351 | | | — | | | — | | | — | | | 1,351 | | Variable | 6.9% | 0.9 |
| | | | | | | | | | | | | | |
| Total Investment-level debt | 131 | | | 80,230 | | | 91,910 | | | 69,589 | | | 127,361 | | | 369,221 | | | | |
| Corporate debt: | | | | | | | | | | | | | | |
| 2021-1, A-1 Variable Funding Notes | — | | | — | | | — | | | — | | | — | | | — | | Variable | n/a | 3.0 |
| 2021-1, Class A-2 Term Notes | — | | | — | | | — | | | 300,000 | | | — | | | 300,000 | | Fixed | 3.9% | 3.0 |
| Convertible/exchangeable senior notes | — | | | — | | | 78,422 | | | — | | | — | | | 78,422 | | Fixed | 5.8% | 1.8 |
| Total debt - DBRG OP share | $ | 131 | | | $ | 80,230 | | | $ | 170,332 | | | $ | 369,589 | | | $ | 127,361 | | | $ | 747,643 | | | | |
| | | | | | | | | | | | | | |
| Net corporate debt | | | | | | | | | | | | | | |
| Cash and cash equivalents - consolidated | | | | | | | | | | | $ | 434,044 | | | | |
| less: Noncontrolling interests | | | | | | | | | | | (83,354) | | | | |
| less: Investment level cash - DBRG OP share | | | | | | | | | | | (120,390) | | | | |
| Corporate cash - DBRG OP share | | | | | | | | | | | 230,300 | | | | |
| Corporate debt - DBRG OP share | | | | | | | | | | | (378,422) | | | | |
| Corporate Cash (Debt) Position - DBRG OP share | | | | | | | | | | | $ | (148,122) | | | | |
Notes:
(1) Maturity dates are based on initial maturity dates or extended maturity dates, where applicable, the extension option is at the Company’s discretion and if the criteria to extend have been met as of the reporting date.
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 16 | |
| | |
| IIIb. Capitalization - DBRG Series 2021-1 |
|
| | | | | | | | | | | |
| ($ in thousands, as of September 30, 2023) | | | |
| Class A-2 Term Notes | | | |
| Amount outstanding | | $ | 300,000 | | |
| Interest rate | | 3.933 | % | |
| Anticipated Repayment Date (ARD) | | September 25, 2026 | |
| Kroll Rating | | BBB | |
| | | |
| Class A-1 Variable Funding Notes | | | |
| Maximum Available | | $ | 300,000 | | (1) |
| Amount outstanding | | $ | — | | |
| Interest Rate | | 1M Term SOFR + 3.00% | (1) |
Fully extended Anticipated Repayment Date (ARD)(2) | | September 25, 2026 | |
| | | |
| Financial covenants: | | Covenant level | |
Debt Service Coverage Ratio(3) | | Minimum 1.75x | |
Loan to Value Ratio(4) | | Less than 35.0% | |
Investment Management Expense Ratio(5) | | Less than 60.0% | |
| Company status: As of October 31, 2023, DBRG is meeting all required covenant threshold levels. |
Notes:
(1) Effective April 1, 2022, the maximum principal amount of the Series 2021-1 Class A-1 Variable Funding Notes increased to $300 million and Term SOFR replaced LIBOR as the benchmark for accruing interest on the Series 2021-1 Class A-1 Variable Funding Notes. 1 month term SOFR is adjusted to include 0.11448% as defined in the Amendment No.1 to Class A-1 Note Purchase Agreement.
(2) Anticipated Repayment Date is September 25, 2026 including two 1-year extension options subject to 1) either rating agency confirmation and consent of VFN noteholders are obtained or DSCR exceeding 1.75x, 2) term notes rating not less than BBB- 3) the payment of a 0.05% extension fee and 4) other customary conditions.
(3) Debt service coverage ratio covenant thresholds: minimum of 1.75x for ability to borrow from the VFN; below 1.75x to 1.50x = 50% cash trap; below 1.50x to 1.20x = 100% cash trap; and below 1.20x = cash sweep.
(4) 100% cash sweep until LTV is less than 35%.
(5) 50% cash sweep until ratio is less than 60%.
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 17 | |
| | |
| IIIc. Capitalization - Convertible/Exchangeable Notes & Perpetual Preferred Stock |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ($ in thousands; except per share data; as of September 30, 2023) |
| Convertible/exchangeable debt | | | | | | | | | | | | |
| Description | | Outstanding principal | | Final due date(1) | | Interest rate | | Conversion price (per share of common stock) | | Conversion ratio | | Conversion shares |
| 5.75% Exchangeable senior notes | | $ | 78,422 | | | July 15, 2025 | | 5.75% fixed | | $ | 9.20 | | | 108.6956 | | | 8,524 | |
| Total convertible debt | | $ | 78,422 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Perpetual preferred stock | | | | | | |
| Description | | Liquidation
preference | | Shares outstanding (In thousands) | | Callable period |
| Series H 7.125% cumulative redeemable perpetual preferred stock | | 209,870 | | | 8,395 | | | Callable |
| Series I 7.15% cumulative redeemable perpetual preferred stock | | 321,668 | | | 12,867 | | | Callable |
| Series J 7.125% cumulative redeemable perpetual preferred stock | | 290,361 | | | 11,614 | | | Callable |
| Total preferred stock | | $ | 821,899 | | | 32,876 | | | |
Notes:
(1) Callable at principal amount only if DBRG common stock has traded at least 130% of the conversion price for 20 of 30 consecutive trading days on or after July 21, 2023.
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 18 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Portfolio Net Carrying Value ($ in millions) | | 9/30/23 | 6/30/23 | 3/31/23 | 12/31/22 | 9/30/22 | 6/30/22 | 3/31/22 | 12/31/21 |
| Consolidated amount | | | | | | | | | |
Asset(1) | | $ | 4,508 | | $ | 9,246 | | $ | 8,920 | | $ | 8,704 | | $ | 8,515 | | $ | 8,429 | | $ | 8,397 | | $ | 7,624 | |
Debt(2) | | (2,802) | | (5,123) | | (4,870) | | (4,634) | | (4,506) | | (4,477) | | (4,479) | | (4,217) | |
Net Carrying Value - Consolidated(4) | | $ | 1,706 | | $ | 4,123 | | $ | 4,050 | | $ | 4,070 | | $ | 4,009 | | $ | 3,952 | | $ | 3,918 | | $ | 3,407 | |
| | | | | | | | | |
| DBRG OP share of consolidated amount | | | | | | | | | |
Asset(1) | | $ | 592 | | $ | 1,113 | | $ | 1,077 | | $ | 1,052 | | $ | 1,133 | | $ | 1,466 | | $ | 1,460 | | $ | 1,233 | |
Debt(2) | | (368) | | (623) | | (596) | | (568) | | (598) | | (746) | | (746) | | (661) | |
Net Carrying Value - DBRG OP share(4) | | $ | 224 | | $ | 490 | | $ | 481 | | $ | 484 | | $ | 535 | | $ | 720 | | $ | 714 | | $ | 572 | |
| | | | | | | | | |
| DBRG net carrying value % interest | | 13 | % | 12 | % | 12 | % | 12 | % | 13 | % | 18 | % | 18 | % | 17 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Operating Adjusted EBITDA ($ in thousands) | | 3Q23 | 2Q23 | 1Q23 | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 |
| Consolidated amount | | | | | | | | | |
| Total revenues | | $ | 214,377 | | $ | 235,059 | | $ | 231,664 | | $ | 229,278 | | $ | 225,387 | | $ | 227,687 | | $ | 202,522 | | $ | 189,938 | |
| Property operating expenses | | (94,481) | | (98,231) | | (97,126) | | (97,457) | | (100,051) | | (94,744) | | (84,003) | | (78,950) | |
| Compensation and administrative expenses | | (29,123) | | (35,276) | | (34,419) | | (27,452) | | (37,974) | | (29,139) | | (26,855) | | (28,879) | |
| Investment expenses | | (5,084) | | (4,958) | | (5,203) | | (5,547) | | (5,288) | | (5,487) | | (8,016) | | (5,153) | |
| Straight-line rent expenses and amortization of above- and below-market lease intangibles | | (2,031) | | (678) | | (1,221) | | (1,749) | | (2,827) | | (236) | | (377) | | 370 | |
| Compensation expense—equity-based | | 3,968 | | 4,926 | | 5,275 | | (95) | | 10,852 | | 752 | | 752 | | 1,918 | |
| Installation services | | — | | — | | — | | — | | — | | — | | — | | 2,097 | |
| Transaction-related and restructuring charges | | 1,250 | | 1,328 | | 184 | | 1,574 | | 1,105 | | 2,400 | | 4,636 | | 3,188 | |
Operating Adjusted EBITDA - Consolidated (3)(4) | | $ | 88,876 | | $ | 102,170 | | $ | 99,154 | | $ | 98,552 | | $ | 91,204 | | $ | 101,233 | | $ | 88,659 | | $ | 84,529 | |
| | | | | | | | | |
| DBRG OP share of consolidated amount | | | | | | | | | |
| Total revenues | | $ | 25,629 | | $ | 27,841 | | $ | 27,481 | | $ | 27,927 | | $ | 38,305 | | $ | 41,448 | | $ | 36,882 | | $ | 32,464 | |
| Property operating expenses | | (11,253) | | (11,597) | | (11,487) | | (11,794) | | (17,096) | | (17,649) | | (15,614) | | (13,740) | |
| Compensation and administrative expenses | | (3,456) | | (3,872) | | (3,787) | | (3,106) | | (7,348) | | (6,246) | | (5,752) | | (5,457) | |
| Investment expenses | | (605) | | (647) | | (674) | | (716) | | (729) | | (793) | | (1,169) | | (732) | |
| Straight-line rent expenses and amortization of above- and below-market lease intangibles | | (269) | | (129) | | (198) | | (263) | | (227) | | 246 | | 195 | | 244 | |
| Compensation expense—equity-based | | 424 | | 542 | | 581 | | (11) | | 2,092 | | 164 | | 164 | | 384 | |
| Installation services | | — | | — | | — | | — | | — | | — | | — | | 419 | |
| Transaction-related and restructuring charges | | 150 | | 159 | | 32 | | 77 | | 175 | | 473 | | 791 | | 618 | |
Operating Adjusted EBITDA - DBRG OP share(4) | | $ | 10,620 | | $ | 12,297 | | $ | 11,948 | | $ | 12,114 | | $ | 15,172 | | $ | 17,643 | | $ | 15,497 | | $ | 14,200 | |
Notes:
(1) Includes all components related to real estate assets, including tangible real estate and lease-related intangibles and cash. Represents cost of investment and additional capital expenditures less real estate impairments.
(2) Represents unpaid principal balance.
(3) For a reconciliation of net income/(loss) to Adjusted EBITDA, please refer to the Appendices section of this presentation.
(4) In mid-September 2023, the Company completed the recapitalization of DataBank which resulted in its ownership interest decreasing from 11% to 9.87% and the deconsolidation of this portfolio from DBRG’s financial statements. Following the closing, earnings results of the Company's remaining 9.87% interest in DataBank is presented within the Corporate and Other segment.
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 19 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Capital Expenditures | | | | | | | | | |
| Consolidated amount | | 3Q23 | 2Q23 | 1Q23 | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 |
| Non-revenue enhancing capital expenditures | | $ | 11,396 | $ | 8,284 | $ | 8,564 | $ | 14,775 | $ | 10,992 | $ | 13,377 | $ | 7,418 | $ | 6,410 |
| Revenue enhancing capital expenditures | | 156,194 | 163,767 | 129,710 | 135,506 | 147,046 | 101,100 | 84,668 | 94,018 |
| Total capital expenditures | | $ | 167,590 | $ | 172,051 | $ | 138,274 | $ | 150,281 | $ | 158,038 | $ | 114,477 | $ | 92,086 | $ | 100,428 |
| | | | | | | | | |
| Leasing Commissions | | $ | 3,180 | $ | 5,409 | $ | 2,204 | $ | 2,194 | $ | 2,146 | $ | 2,660 | $ | 1,266 | $ | 1,535 |
| | | | | | | | | |
| DBRG OP share of consolidated amount | | | | | | | | | |
| Non-revenue enhancing capital expenditures | | $ | 1,372 | $ | 946 | $ | 1,054 | $ | 1,746 | $ | 1,878 | $ | 2,571 | $ | 1,372 | $ | 1,097 |
| Revenue enhancing capital expenditures | | 17,239 | 18,153 | 14,337 | 15,053 | 25,118 | 21,249 | 17,578 | 18,090 |
| Total capital expenditures | | $ | 18,611 | $ | 19,099 | $ | 15,391 | $ | 16,799 | $ | 26,996 | $ | 23,820 | $ | 18,950 | $ | 19,187 |
| | | | | | | | | |
| Leasing Commissions | | $ | 359 | $ | 612 | $ | 243 | $ | 244 | $ | 367 | $ | 489 | $ | 308 | $ | 307 |
| | | | | | | | | |
| Operating Metrics | | 9/30/2023 - 3Q23 (1) | 6/30/2023 - 2Q23 | 3/31/2023 - 1Q23 | 12/31/2022 - 4Q22 | 9/30/2022 - 3Q22 | 6/30/2022 - 2Q22 | 3/31/2022 - 1Q22 | 12/31/2021 - 4Q21 |
| Number of Data Centers | | 78 | 83 | 83 | 84 | 82 | 82 | 78 | 78 |
| Max Critical I.T. Square Feet | | 2,353,009 | 2,429,574 | 2,405,353 | 2,405,387 | 2,349,827 | 2,317,827 | 1,980,317 | 1,949,144 |
| Leased Square Feet | | 1,917,642 | 1,945,147 | 1,913,007 | 1,887,659 | 1,852,321 | 1,817,101 | 1,608,378 | 1,552,517 |
| % Utilization Rate | | 81.5% | 80.1% | 79.5% | 78.5% | 78.8% | 78.4% | 81.2% | 79.7% |
| MRR (Annualized) | | $ | 960.5 | $ | 931.0 | $ | 907.4 | $ | 913.4 | $ | 889.0 | $ | 892.0 | $ | 812.3 | $ | 790.4 |
| Bookings (Annualized) | | $ | 50.0 | $ | 85.9 | $ | 20.6 | $ | 18.2 | $ | 22.4 | $ | 56.5 | $ | 14.2 | $ | 15.3 |
| Quarterly Churn (% of Prior Quarter MRR) | | 1.7% | 1.8% | 1.7% | 1.3% | 1.0% | 1.7% | 0.9% | 1.9% |
Notes:
(1) Includes DataBank metrics as of 9/30/2023 and for the full third quarter 2023. In mid-September 2023, the Company completed the recapitalization of DataBank which resulted in its ownership interest decreasing from 11% to 9.87% and the deconsolidation of this portfolio from DBRG’s financial statements. Following the closing, the Company's remaining 9.87% interest in DataBank is presented within the Corporate and Other segment.
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 20 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ($ in thousands) | | | | | | | | | |
| Consolidated amount | | 3Q23 | 2Q23 | 1Q23 | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 |
| GP affiliated investment in DBP Series | | $ | 388,169 | | $ | 374,139 | | $ | 345,719 | | $ | 343,137 | | $ | 277,450 | | $ | 284,282 | | $ | 248,663 | | $ | 242,856 | |
| GP affiliated investment in GIF Series | | 134,011 | | 135,857 | | 142,280 | | — | | — | | — | | — | | — | |
| GP affiliated investment in DataBank | | 434,465 | | — | | — | | — | | — | | — | | — | | — | |
| Other GP affiliated investments and warehoused/seed investments (Credit, Core, Liquid, Ventures) | | 296,914 | | 272,564 | | 346,774 | | 316,299 | | 769,431 | | 906,076 | | 423,467 | | 290,113 | |
| Total investments | | $ | 1,253,559 | | $ | 782,560 | | $ | 834,773 | | $ | 659,436 | | $ | 1,046,881 | | $ | 1,190,358 | | $ | 672,130 | | $ | 532,969 | |
| | | | | | | | | |
| DBRG OP share of consolidated amount | | | | | | | | | |
| GP affiliated investment in DBP Series | | $ | 303,127 | | $ | 294,031 | | $ | 272,395 | | $ | 270,400 | | $ | 215,872 | | $ | 217,504 | | $ | 187,247 | | $ | 183,612 | |
| GP affiliated investment in GIF Series | | 134,011 | | 135,857 | | 142,280 | | — | | — | | — | | — | | — | |
| GP affiliated investment in DataBank | | 434,465 | | — | | — | | — | | — | | — | | — | | — | |
| Other GP affiliated investments and warehoused/seed investments (Credit, Core, Liquid, Ventures) | | 186,444 | | 188,325 | | 184,938 | | 178,379 | | 467,014 | | 591,066 | | 308,578 | | 174,566 | |
| Total investments | | $ | 1,058,047 | | $ | 618,213 | | $ | 599,613 | | $ | 448,779 | | $ | 682,886 | | $ | 808,570 | | $ | 495,825 | | $ | 358,178 | |
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 21 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ($ in thousands) | | | | | | | | | |
| | 3Q23 | 2Q23 | 1Q23 | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 |
| Investment Management Cash G&A | | | | | | | | | |
| Cash and equity-based compensation | | $ | 39,760 | | $ | 45,798 | | $ | 28,182 | | $ | 30,829 | | $ | 22,566 | | $ | 23,230 | | $ | 24,808 | | $ | 20,802 | |
| Administrative expenses | | 9,410 | | 7,953 | | 6,407 | | 7,958 | | 4,517 | | 4,869 | | 4,171 | | 4,387 | |
| Compensation expense—equity-based | | (7,218) | | (17,099) | | (3,898) | | (7,939) | | (2,654) | | (3,361) | | (3,190) | | (2,011) | |
| Administrative expenses—straight-line rent | | (511) | | 39 | | (77) | | (66) | | (68) | | (76) | | (159) | | (75) | |
| Transaction-related and restructuring charges | | (3,010) | | (2,413) | | (4,490) | | (6,560) | | (1,035) | | (2,143) | | (3,943) | | (3,382) | |
| Investment Management Cash G&A | | 38,431 | | 34,278 | | 26,124 | | 24,222 | | 23,326 | | 22,519 | | 21,687 | | 19,721 | |
| | | | | | | | | |
| Corporate & Other Cash G&A | | | | | | | | | |
| Cash and equity-based compensation | | 13,356 | | 10,759 | | 19,289 | | 10,804 | | 12,404 | | 9,333 | | 20,778 | | 12,084 | |
| Administrative expenses | | 7,142 | | 8,969 | | 12,859 | | 23,373 | | 17,992 | | 12,574 | | 16,815 | | 21,171 | |
| Compensation expense—equity-based | | (7,122) | | (3,593) | | (6,872) | | 329 | | (5,171) | | (4,840) | | (5,878) | | (3,837) | |
| Administrative expenses—straight-line rent | | 579 | | 532 | | 352 | | 485 | | 660 | | 741 | | 856 | | 1,195 | |
| Administrative expenses—noncontrolling interests | | (337) | | (170) | | (289) | | (248) | | (338) | | (327) | | (302) | | (377) | |
| Transaction-related and restructuring charges | | (2,950) | | (4,282) | | (6,273) | | (18,443) | | (10,549) | | (2,828) | | (14,352) | | (14,229) | |
| Corporate & Other Cash G&A | | 10,668 | | 12,215 | | 19,066 | | 16,300 | | 14,998 | | 14,653 | | 17,917 | | 16,007 | |
| | | | | | | | | |
| DBRG Cash G&A excluding Portfolio Company G&A | | $ | 49,099 | | $ | 46,493 | | $ | 45,190 | | $ | 40,522 | | $ | 38,324 | | $ | 37,172 | | $ | 39,604 | | $ | 35,728 | |
| | | | | | | | | |
| Corporate & Other Adjusted EBITDA | | | | | | | | | |
| EBITDA, excluding Cash G&A | | $ | 5,589 | | $ | 9,569 | | $ | (853) | | $ | 10,360 | | $ | 9,825 | | $ | 9,414 | | $ | 8,162 | | $ | 1,273 | |
| Cash G&A | | (10,668) | | (12,215) | | (19,066) | | (16,300) | | (14,998) | | (14,653) | | (17,917) | | (16,007) | |
| Corporate & Other Adjusted EBITDA | | $ | (5,079) | | $ | (2,646) | | $ | (19,919) | | $ | (5,940) | | $ | (5,173) | | $ | (5,239) | | $ | (9,755) | | $ | (14,734) | |
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 22 | |
Appendices
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 23 | |
| | |
| Reconciliations of IM FRE and Operating Adjusted EBITDA to Net Income (Loss) |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ($ in thousands) | | 3Q23 | 2Q23 | 1Q23 | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 |
| IM net income (loss) | | 100,014 | | 35,177 | | (2,804) | | 81,167 | | 46,065 | | 67,995 | | (9,143) | | 28,194 | |
| Adjustments: | | | | | | | | | |
| Interest expense (income) | | 2,128 | | 2,268 | | 2,411 | | 2,200 | | 2,906 | | 2,771 | | 2,500 | | 2,499 | |
| Investment expense, net of reimbursement | | 97 | | — | | 51 | | 156 | | 230 | | (200) | | 138 | | (12) | |
| Depreciation and amortization | | 9,003 | | 11,039 | | 6,409 | | 6,135 | | 5,369 | | 5,375 | | 5,276 | | 5,928 | |
| Compensation expense—equity-based | | 7,218 | | 17,099 | | 3,898 | | 6,639 | | 2,654 | | 3,361 | | 3,191 | | 2,011 | |
| Compensation expense—carried interest and incentive | | (96,026) | | (43,349) | | 17,056 | | (84,206) | | (40,867) | | (61,710) | | 10,767 | | 20,201 | |
| Administrative expenses—straight-line rent | | 511 | | (39) | | 77 | | 1,541 | | 68 | | 76 | | 159 | | 75 | |
| Administrative expenses—placement agent fee | | 15 | | 3,653 | | — | | — | | — | | — | | — | | 880 | |
| Transaction-related and restructuring charges | | 3,891 | | 3,025 | | 9,682 | | 8,101 | | 2,317 | | 4,042 | | 3,942 | | 2,516 | |
| | | | | | | | | |
| Principal investment income (loss) | | (1,451) | | (1,604) | | (318) | | (2,072) | | (1,016) | | (1,016) | | (17) | | (31,608) | |
| Other (gain) loss, net | | 2,662 | | 3,608 | | (3,082) | | (248) | | 110 | | 424 | | 3,055 | | (52) | |
| Income tax (benefit) expense | | (15) | | 2,356 | | 217 | | 2,172 | | 1,263 | | 2,006 | | 2,374 | | 1,852 | |
| IM Adjusted EBITDA | | $ | 28,047 | | $ | 33,233 | | $ | 33,597 | | $ | 21,585 | | $ | 19,099 | | $ | 23,124 | | $ | 22,242 | | $ | 32,484 | |
| Exclude: Start-up FRE of certain new strategies | | 1,155 | | 1,165 | | 915 | | 2,643 | | 2,399 | | 2,335 | | 2,362 | | 2,306 | |
| IM FRE | | $ | 29,202 | | $ | 34,398 | | $ | 34,512 | | $ | 24,228 | | $ | 21,498 | | $ | 25,459 | | $ | 24,604 | | $ | 34,790 | |
| Wafra’s 31.5% ownership | | — | | — | | — | | — | | — | | (4,700) | | (7,615) | | (11,033) | |
| DBRG OP share of IM FRE | | $ | 29,202 | | $ | 34,398 | | $ | 34,512 | | $ | 24,228 | | $ | 21,498 | | $ | 20,759 | | $ | 16,989 | | $ | 23,757 | |
| | | | | | | | | |
| | 3Q23 | 2Q23 | 1Q23 | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 |
| Operating net income (loss) from continuing operations | | (79,707) | | (93,055) | | (97,942) | | (76,990) | | (93,772) | | (85,428) | | (74,141) | | (83,909) | |
| Adjustments: | | | | | | | | | |
| Interest expense | | 45,305 | | 51,285 | | 59,984 | | 45,222 | | 40,770 | | 37,233 | | 36,184 | | 35,144 | |
| Income tax (benefit) expense | | (202) | | 499 | | (56) | | 509 | | (5) | | 161 | | (330) | | (1,941) | |
| Depreciation and amortization | | 118,681 | | 138,209 | | 134,699 | | 133,269 | | 130,663 | | 145,817 | | 122,891 | | 126,436 | |
| Straight-line rent expenses and amortization of above- and below-market lease intangibles | | (2,031) | | (678) | | (1,221) | | (1,749) | | (2,827) | | (236) | | (377) | | 370 | |
| Compensation expense—equity-based | | 3,968 | | 4,926 | | 5,275 | | (95) | | 10,852 | | 752 | | 752 | | 1,918 | |
| Installation services | | — | | — | | — | | — | | — | | — | | — | | 2,097 | |
| Transaction-related and restructuring charges | | 1,250 | | 1,328 | | 184 | | 1,574 | | 1,105 | | 2,400 | | 4,636 | | 3,188 | |
| Other gain/loss, net | | 1,612 | | (344) | | (1,769) | | (3,188) | | 4,418 | | 534 | | (956) | | 1,226 | |
| Operating Adjusted EBITDA | | $ | 88,876 | | $ | 102,170 | | $ | 99,154 | | $ | 98,552 | | $ | 91,204 | | $ | 101,233 | | $ | 88,659 | | $ | 84,529 | |
| | | | | | | | | | | |
DigitalBridge | Supplemental Financial Report | | 24 | |
| | |
| Reconciliations of DE and Adjusted EBITDA to Net Income (Loss) |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ($ in thousands) | | 3Q23 | 2Q23 | 1Q23 | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 |
| Net income (loss) attributable to common stockholders | | $ | 261,828 | | $ | (22,411) | | $ | (212,473) | | $ | (19,356) | | $ | (63,273) | | $ | (37,321) | | $ | (262,316) | | $ | (20,686) | |
| Net income (loss) attributable to noncontrolling common interests in Operating Company | | 19,918 | | (1,745) | | (16,662) | | (1,583) | | (4,834) | | (3,090) | | (22,862) | | (1,946) | |
| Net income (loss) attributable to common interests in Operating Company and common stockholders | | 281,746 | | (24,156) | | (229,135) | | (20,939) | | (68,107) | | (40,411) | | (285,178) | | (22,632) | |
| | | | | | | | | |
| Adjustments for Distributable Earnings (DE): | | | | | | | | | |
| Transaction-related and restructuring charges | | 7,522 | | 7,823 | | 18,391 | | 23,772 | | 23,249 | | 29,300 | | 24,668 | | 29,977 | |
| Unrealized other (gain) loss, net | | (254,737) | | 14,419 | | 144,791 | | 4,393 | | (9,880) | | 31,577 | | 136,613 | | (42,495) | |
| Unrealized principal investment income | | (17,943) | | (30,409) | | (3,562) | | (20,443) | | 2,669 | | (16,443) | | (6,389) | | (10,116) | |
| Unrealized carried interest allocation, net of associated compensation expense | | (68,099) | | (43,791) | | 18,240 | | (70,541) | | (1,228) | | (58,775) | | 13,078 | | (7,375) | |
| Compensation expense - equity-based | | 18,621 | | 25,937 | | 16,339 | | 7,549 | | 18,619 | | 9,344 | | 18,720 | | 19,416 | |
| Depreciation and amortization | | 128,156 | | 149,263 | | 141,220 | | 148,508 | | 146,810 | | 153,548 | | 130,597 | | 145,031 | |
| Straight-line rent revenue and expense | | (2,169) | | (1,860) | | (1,727) | | (7,063) | | (8,895) | | (2,956) | | (2,548) | | (1,986) | |
| Amortization of acquired above- and below-market lease values, net | | (141) | | 370 | | 26 | | 100 | | 80 | | (10) | | (248) | | (333) | |
| Impairment loss | | — | | — | | — | | — | | — | | 12,184 | | 23,802 | | (40,732) | |
| Gain from sales of real estate | | — | | — | | — | | — | | — | | — | | — | | (197) | |
| Non-revenue enhancing capital expenditures | | (11,396) | | (8,284) | | (8,564) | | (14,774) | | (10,992) | | (13,377) | | (1,372) | | (1,097) | |
| Finance lease interest expense, debt prepayment penalties and amortization of deferred financing costs, debt premiums and discounts | | 3,745 | | 7,578 | | 15,523 | | 5,572 | | 5,627 | | 5,238 | | 98,465 | | 36,685 | |
| Preferred share redemption (gain) loss | | — | | (927) | | — | | — | | — | | — | | — | | 2,127 | |
| Income tax effect on certain of the foregoing adjustments | | — | | — | | — | | 55 | | — | | — | | (589) | | 8,195 | |
| Adjustments attributable to noncontrolling interests in investment entities | | (52,496) | | (88,604) | | (118,563) | | (69,810) | | (136,338) | | (91,676) | | (132,237) | | (105,150) | |
| DE from discontinued operations | | 2,239 | | 2,653 | | 3,656 | | (4,772) | | 70,721 | | (16,940) | | (22,446) | | (20,954) | |
| After-tax DE | | $ | 35,048 | | $ | 10,012 | | $ | (3,365) | | $ | (18,393) | | $ | 32,335 | | $ | 603 | | $ | (5,064) | | $ | (11,636) | |
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DigitalBridge | Supplemental Financial Report | | 25 | |
| | |
| Reconciliations of DE and Adjusted EBITDA to Net Income (Loss) |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ($ in thousands) | | 3Q23 | 2Q23 | 1Q23 | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 |
| After-tax DE | | $ | 35,048 | | $ | 10,012 | | $ | (3,365) | | $ | (18,393) | | $ | 32,335 | | $ | 603 | | $ | (5,064) | | $ | (11,636) | |
| Interest expense included in DE | | 9,524 | | 10,130 | | 12,549 | | 13,756 | | 16,348 | | 14,142 | | 13,280 | | 13,775 | |
| Income tax expense (benefit) included in DE | | 37 | | 2,825 | | 1,092 | | 30,616 | | (7,839) | | (2,662) | | (6,849) | | 631 | |
| Preferred dividends | | 14,645 | | 14,675 | | 14,676 | | 14,765 | | 15,283 | | 15,759 | | 15,759 | | 16,139 | |
| Principal Investment Income (Loss) | | — | | — | | (277) | | (1,860) | | (9,303) | | — | | (58) | | (157) | |
| Placement fee expense | | 15 | | 3,653 | | — | | — | | — | | — | | — | | 603 | |
| Realized carried interest (allocation) reversal, net of associated compensation (expense) reversal | | (27,927) | | 883 | | (243) | | (12,377) | | (20,258) | | — | | 1,172 | | (1,092) | |
| Investment costs and non-revenue enhancing capital expenditures in DE | | 2,249 | | 706 | | 1,194 | | 1,252 | | 2,531 | | 3,086 | | 2,023 | | 2,463 | |
| Non pro-rata allocation of income (loss) to noncontrolling interests | | — | | — | | — | | — | | — | | — | | 231 | | 231 | |
| Adjusted EBITDA | | $ | 33,591 | | $ | 42,884 | | $ | 25,626 | | $ | 27,759 | | $ | 29,097 | | $ | 30,928 | | $ | 20,494 | | $ | 20,957 | |
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DigitalBridge | Supplemental Financial Report | | 26 | |
Assets Under Management (“AUM”)
AUM represents the total capital for which we provide investment management services. AUM is generally composed of (a) third party capital managed by the Company and its affiliates, including capital that is not yet fee earning, or not subject to fees and/or carried interest; and (b) assets invested using the Company's own balance sheet capital and managed on behalf of the Company's shareholders (composed of the Company's fund investments as GP affiliate, warehoused investments, and the Company's interest in portfolio companies consolidated in the Operating segment). Third party AUM is based upon invested capital as of the reporting date, including capital funded through third party financing, and committed capital for funds in their commitment stage. Balance sheet AUM is based upon the carrying value of the Company's balance sheet investments as of the reporting date (on an undepreciated basis as it relates to the Company's interest in portfolio companies consolidated in the Operating segment). The Company's calculations of AUM may differ from the calculations of other asset managers, and as a result, this measure may not be comparable to similar measures presented by other asset managers.
Contracted Revenue Growth (“Bookings”)
The Company defines Bookings as either (1) a new data center customer contract for new or additional services over and above any services already being provided as well as (2) an increase in contracted rates on the same services when a contract renews. In both instances a booking is considered to be generated when a new contract is signed with the recognition of new revenue to occur when the new contract begins billing.
Churn
The Company calculates Churn as the percentage of MRR lost during the period divided by the prior period’s MRR. Churn is intended to represent data center customer contracts which are terminated during the period and not renewed.
DigitalBridge Operating Company, LLC ("Operating Company" or “DBRG OP”)
The operating partnership through which the Company conducts all of its activities and holds substantially all of its assets and liabilities. DBRG OP share excludes noncontrolling interests in investment entities.
Fee-Earning Equity Under Management (“FEEUM”)
FEEUM represents the total capital managed by the Company and its affiliates which earns management fees and/or incentive fees or carried interest. FEEUM may be based upon committed capital, invested capital, net asset value ("NAV") or gross asset value ("GAV"), pursuant to the terms of each underlying investment management agreement.The Company's calculations of FEEUM may differ materially from the calculations of other asset managers, and as a result, this measure may not be comparable to similar measures presented by other asset managers.
Fee Related Earnings Margin % ("FRE Margin %")
FRE Margin % represents IM FRE divided by management fee revenues, excluding one-time catch-up fees and/or incentives fees.
Non-revenue Enhancing Capital Expenditures
Represents capitalized expenditures needed to maintain operating real estate which are not expected to generate incremental revenue.
Revenue Enhancing Capital Expenditures
Represents capitalized expenditures including major capital improvements for expansions, transformations and incremental improvements to the operating portfolio intended to result in increased revenues and Adjusted EBITDA at the property.
Max Critical I.T. Square Feet
Amount of total rentable square footage.
Monthly Recurring Revenue (“MRR”)
The Company defines MRR as revenue from ongoing services that is generally fixed in price and contracted for longer than 30 days.
UPB: Unpaid Principal Balance
% Utilization Rate: Amount of leased square feet divided by max critical I.T. square feet.
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DigitalBridge | Supplemental Financial Report | | 27 | |
