DigitalBridge (US:DBRG)2022-08-07 16:00PART I. FINANCIAL INFORMATION Financial Statements The unaudited consolidated financial statements detail the company's financial position as of June 30, 2022 Consolidated Balance Sheets Total assets decreased to $11.9 billion due to the disposition of non-digital assets, with a corresponding drop in liabilities Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2022 (Unaudited) | December 31, 2021 | | :--- | :--- | :--- | | Total Assets | $11,877,288 | $14,197,816 | | Assets held for disposition | $156,672 | $3,676,615 | | Real estate, net | $6,047,928 | $4,972,284 | | Total Liabilities | $7,213,758 | $8,926,203 | | Liabilities related to assets held for disposition | $719 | $3,088,699 | | Debt, net | $5,539,732 | $4,860,402 | | Total Equity | $4,561,519 | $4,912,390 | Consolidated Statements of Operations Total revenues increased year-over-year, while the net loss attributable to common stockholders significantly improved Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $289,409 | $237,187 | $546,868 | $457,768 | | Income (Loss) from Continuing Operations | ($53,310) | $3,823 | ($289,596) | ($142,516) | | Loss from Discontinued Operations | ($14,771) | ($98,906) | ($122,169) | ($580,166) | | Net Loss Attributable to Common Stockholders | ($37,321) | ($141,260) | ($299,637) | ($406,066) | | Net Loss Per Share—Basic | ($0.06) | ($0.29) | ($0.51) | ($0.85) | Consolidated Statements of Cash Flows Net cash from operations was positive, while significant investing outflows were funded by financing inflows Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $67,303 | $104,896 | | Net cash (used in) provided by investing activities | ($2,145,642) | $408,596 | | Net cash provided by (used in) financing activities | $760,345 | ($308,682) | | Net (decrease) increase in cash | ($1,320,409) | $211,115 | Notes to Consolidated Financial Statements Key disclosures cover the C-Corp transition, digital asset sales, significant acquisitions, and the Wafra stake redemption - The company completed its digital transformation in February 2022 by disposing of its non-digital businesses, now classified as discontinued operations3648 - Effective for the 2022 taxable year, the company discontinued its REIT status and will operate as a C-Corporation3584 - In May 2022, the company acquired Wafra's 31.5% interest in the Digital IM business for $388.5 million in cash, 57.7 million shares, and contingent payments117118 - Significant H1 2022 acquisitions include four data centers for $670 million and a mobile tower business for €740.1 million ($791.3 million)5657 Management's Discussion and Analysis of Financial Condition and Results of Operations Management details the company's strategic transition, segment performance, and key non-GAAP financial metrics - As of June 30, 2022, the company has $48 billion of assets under management (AUM), with Fee Earning Equity Under Management (FEEUM) increasing to $19.0 billion203205219 - The company redeemed Wafra's 31.5% interest in the Digital IM business, resulting in 100% of fee cash flows accruing to the company212 - An agreement was made to acquire AMP Capital's infrastructure business, expected to add $5.5 billion in FEEUM upon closing214220 Q2 2022 Non-GAAP Measures (Attributable to Operating Company, in thousands) | Measure | Amount | | :--- | :--- | | Distributable Earnings (DE) | $7,585 | | Adjusted EBITDA | $30,928 | | Digital IM FRE | $20,759 | Quantitative and Qualitative Disclosures About Market Risk The company's primary market risks include interest rate, foreign currency, and equity price exposures - A hypothetical 100 basis point increase in interest rates would increase annualized interest expense by $2.4 million attributable to the company302 - Foreign currency risk is limited and generally mitigated through economic hedges like forward contracts303305 - Incentive fees and carried interest are subject to market risk from fluctuations in underlying investment values306 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2022 - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2022310 - No material changes to internal control over financial reporting occurred during the quarter311 PART II. OTHER INFORMATION Legal Proceedings The company was not involved in any material legal proceedings as of the reporting date - The Company was not involved in any material legal proceedings as of June 30, 2022315 Risk Factors No material changes were reported to the risk factors previously disclosed in the 2021 Form 10-K - No material changes from the risk factors previously disclosed in the 2021 Form 10-K and Q1 2022 Form 10-Q were reported316 Unregistered Sales of Equity Securities and Use of Proceeds The company issued shares of class A common stock to Wafra and former employees during the quarter - On May 23, 2022, 57,741,599 shares of class A common stock were issued to Wafra in connection with the redemption of its interest in the Digital IM business317 - In Q2 2022, 400,000 shares of class A common stock were issued to former employees in satisfaction of OP Unit redemption requests317 Defaults Upon Senior Securities None reported Mine Safety Disclosures Not applicable Other Information None reported Exhibits This section lists exhibits filed with the Form 10-Q, including key transaction agreements and certifications