0001465128FALSE00014651282024-11-062024-11-06
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 6, 2024
Starwood Property Trust, Inc.
(Exact name of registrant as specified in its charter)
| | | | | | | | | | | | | | |
| | | | |
| Maryland | | 001-34436 | | 27-0247747 |
(State or other jurisdiction
of incorporation) | | (Commission
File Number) | | (IRS Employer
Identification No.) |
| | | | | | | | |
| | |
591 West Putnam Avenue Greenwich, CT | | 06830 |
| (Address of principal | | (Zip Code) |
| executive offices) | | |
Registrant’s telephone number,
including area code:
(203) 422-7700
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
| | |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common stock, $0.01 par value per share | STWD | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 6, 2024, Starwood Property Trust, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2024. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| | | | | |
| |
Exhibit Number |
Description |
| |
| 99.1 | |
| |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
EXHIBIT INDEX
| | | | | |
| |
Exhibit
Number | Description |
| |
| 99.1 | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | |
Dated: November 6, 2024 | STARWOOD PROPERTY TRUST, INC. |
| |
| | By: | /s/ RINA PANIRY |
| | Name: | Rina Paniry |
| | Title: | Chief Financial Officer, Treasurer, Chief Accounting Officer and Principal Financial Officer |
For Immediate Release
Starwood Property Trust Reports Results for
Quarter Ended September 30, 2024
– Quarterly GAAP Earnings of $0.23 and Distributable Earnings (DE) of $0.48 per Diluted Share –
– Originated or Acquired $2.1 Billion of Assets in the Quarter and $3.5 Billion Year-To-Date –
– Received Repayments of $1.6 Billion in the Quarter and $3.7 Billion Year-To-Date –
– Raised $800 Million of Capital Bringing Liquidity to a Record $1.8 Billion –
– Undepreciated Book Value Per Share of $20.22 –
– Paid Dividend of $0.48 per Share –
GREENWICH, Conn., November 6, 2024 /PRNewswire/ -- Starwood Property Trust, Inc. (NYSE: STWD) today announced operating results for the fiscal quarter ended September 30, 2024. The Company’s third quarter 2024 GAAP net income was $76.1 million, inclusive of a $66.4 million credit loss provision, and Distributable Earnings (a non-GAAP financial measure) was $159.0 million.
“STWD’s differentiated multi-cylinder business model, created exactly to help us weather storms, has served us well. To date, we are the only company in the United States categorized as a commercial mortgage REIT that did not reduce its dividend, either in the pandemic or because of the Fed’s rapid increase in rates. While we remain among the dominant large real estate loan lenders in the nation, our commercial lending book is roughly 60% of our total assets today. Our other cylinders, particularly infrastructure lending, conduit and special servicing, have contributed an increasing share to our performance. We also used this period to significantly reduce our leverage, which is a full turn or more below many of our peers. Like most of our peers, we have had, and are likely to continue to have, restructurings in our loan book as the cycle moves on, but it is gratifying that knowing this, we are still able to move to full offense again,” commented Barry Sternlicht, Chairman and CEO of Starwood Property Trust.
“After successfully accessing the equity and debt markets for the third time this year, which were met with record demand, we have $1.8 billion of liquidity, our highest level ever, and a leverage ratio of just 2.1x. We invested over $2.0 billion in the quarter, our highest volume since the Fed began raising rates in 2022. With record liquidity and a robust pipeline, along with additional access to capital via our $4.6 billion of unencumbered assets and over $4.00 per share of unrealized gains in our property book, we are well positioned to increase our investment pace as transaction volumes return to the real estate markets,” added Jeffrey DiModica, President of Starwood Property Trust.
Supplemental Schedules
The Company has published supplemental earnings schedules on its website in order to provide additional disclosure and financial information for the benefit of the Company’s stakeholders. Specifically, these materials can be found on the Company’s website in the Investor Relations section under “Quarterly Results” at www.starwoodpropertytrust.com.
Webcast and Conference Call Information
The Company will host a live webcast and conference call on Wednesday, November 6, 2024, at 10:00 a.m. Eastern Time. To listen to a live broadcast, access the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. The webcast is available at www.starwoodpropertytrust.com in the Investor Relations section of the website. The Company encourages use of the webcast due to potential extended wait times to access the conference call via dial-in.
To Participate via Telephone Conference Call:
Dial in at least 15 minutes prior to start time.
Domestic: 1-877-407-9039
International: 1-201-689-8470
Conference Call Playback:
Domestic: 1-844-512-2921
International: 1-412-317-6671
Passcode: 13742861
The playback can be accessed through November 20, 2024.
About Starwood Property Trust, Inc.
Starwood Property Trust (NYSE: STWD), an affiliate of global private investment firm Starwood Capital Group, is a leading diversified finance company with a core focus on the real estate and infrastructure sectors. As of September 30, 2024, the Company has successfully deployed over $100 billion of capital since inception and manages a portfolio of $26 billion across debt and equity investments. Starwood Property Trust’s investment objective is to generate attractive and stable returns for shareholders, primarily through dividends, by leveraging a premiere global organization to identify and execute on the best risk adjusted returning investments across its target assets. Additional information can be found at www.starwoodpropertytrust.com.
Forward-Looking Statements
Statements in this press release which are not historical fact may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are developed by combining currently available information with our beliefs and assumptions and are generally identified by the words “believe,” “expect,” “anticipate” and other similar expressions. Although Starwood Property Trust, Inc. believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company’s expectations include, but are not limited to, completion of pending investments and financings, continued ability to acquire additional investments, competition within the finance and real estate industries, availability of financing, and other risks detailed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as well as other risks and uncertainties set forth from time to time in the Company’s reports filed with the SEC, including its Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.
In light of these risks and uncertainties, there can be no assurances that the results referred to in the forward-looking statements contained herein will in fact occur. Except to the extent required by applicable law or regulation, we undertake no obligation to, and expressly disclaim any such obligation to, update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, changes to future results over time or otherwise.
Additional information can be found on the Company’s website at www.starwoodpropertytrust.com.
Contact:
Zachary Tanenbaum
Starwood Property Trust
Phone: 203-422-7788
Email: ztanenbaum@starwood.com
Starwood Property Trust, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations by Segment
For the three months ended September 30, 2024
(Amounts in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial and
Residential
Lending
Segment | | Infrastructure
Lending
Segment | | Property
Segment | | Investing
and Servicing
Segment | | Corporate | | Subtotal | | Securitization
VIEs | | Total |
| Revenues: | | | | | | | | | | | | | | | |
| Interest income from loans | $ | 349,589 | | | $ | 63,910 | | | $ | — | | | $ | 5,258 | | | $ | — | | | $ | 418,757 | | | $ | — | | | $ | 418,757 | |
| Interest income from investment securities | 29,392 | | | 123 | | | — | | | 24,882 | | | — | | | 54,397 | | | (37,170) | | | 17,227 | |
| Servicing fees | 109 | | | — | | | — | | | 15,448 | | | — | | | 15,557 | | | (3,730) | | | 11,827 | |
| Rental income | 4,267 | | | — | | | 16,352 | | | 5,360 | | | — | | | 25,979 | | | — | | | 25,979 | |
| Other revenues | 2,149 | | | 1,410 | | | 212 | | | 1,338 | | | 641 | | | 5,750 | | | — | | | 5,750 | |
| Total revenues | 385,506 | | | 65,443 | | | 16,564 | | | 52,286 | | | 641 | | | 520,440 | | | (40,900) | | | 479,540 | |
| Costs and expenses: | | | | | | | | | | | | | | | |
| Management fees | 185 | | | — | | | — | | | — | | | 27,254 | | | 27,439 | | | — | | | 27,439 | |
| Interest expense | 209,464 | | | 38,381 | | | 10,375 | | | 10,160 | | | 69,687 | | | 338,067 | | | (208) | | | 337,859 | |
| General and administrative | 14,430 | | | 4,440 | | | 1,236 | | | 24,249 | | | 3,699 | | | 48,054 | | | — | | | 48,054 | |
| Costs of rental operations | 3,140 | | | — | | | 6,057 | | | 2,936 | | | — | | | 12,133 | | | — | | | 12,133 | |
| Depreciation and amortization | 2,264 | | | 14 | | | 5,914 | | | 1,745 | | | 251 | | | 10,188 | | | — | | | 10,188 | |
| Credit loss provision, net | 65,021 | | | 1,406 | | | — | | | — | | | — | | | 66,427 | | | — | | | 66,427 | |
| Other expense | 15 | | | 175 | | | — | | | 285 | | | — | | | 475 | | | — | | | 475 | |
| Total costs and expenses | 294,519 | | | 44,416 | | | 23,582 | | | 39,375 | | | 100,891 | | | 502,783 | | | (208) | | | 502,575 | |
| Other income (loss): | | | | | | | | | | | | | | | |
| Change in net assets related to consolidated VIEs | — | | | — | | | — | | | — | | | — | | | — | | | 16,570 | | | 16,570 | |
| Change in fair value of servicing rights | — | | | — | | | — | | | 975 | | | — | | | 975 | | | (1,316) | | | (341) | |
| Change in fair value of investment securities, net | 2,913 | | | — | | | — | | | (29,277) | | | — | | | (26,364) | | | 25,586 | | | (778) | |
| Change in fair value of mortgage loans, net | 95,747 | | | — | | | — | | | 19,124 | | | — | | | 114,871 | | | — | | | 114,871 | |
| Loss from affordable housing fund investments | — | | | — | | | (5,590) | | | — | | | — | | | (5,590) | | | — | | | (5,590) | |
| Earnings (loss) from unconsolidated entities | 1,277 | | | (963) | | | — | | | 183 | | | — | | | 497 | | | (148) | | | 349 | |
| Gain on sale of investments and other assets, net | — | | | — | | | — | | | 8,316 | | | — | | | 8,316 | | | — | | | 8,316 | |
| (Loss) gain on derivative financial instruments, net | (108,436) | | | (104) | | | (546) | | | (3,592) | | | 28,737 | | | (83,941) | | | — | | | (83,941) | |
| Foreign currency gain (loss), net | 58,930 | | | 546 | | | (55) | | | — | | | — | | | 59,421 | | | — | | | 59,421 | |
| Loss on extinguishment of debt | (142) | | | — | | | — | | | (100) | | | — | | | (242) | | | — | | | (242) | |
| Other (loss) income, net | (2,146) | | | — | | | (879) | | | 44 | | | — | | | (2,981) | | | — | | | (2,981) | |
| Total other income (loss) | 48,143 | | | (521) | | | (7,070) | | | (4,327) | | | 28,737 | | | 64,962 | | | 40,692 | | | 105,654 | |
| Income (loss) before income taxes | 139,130 | | | 20,506 | | | (14,088) | | | 8,584 | | | (71,513) | | | 82,619 | | | — | | | 82,619 | |
| Income tax (provision) benefit | (7,422) | | | 156 | | | — | | | (3,183) | | | — | | | (10,449) | | | — | | | (10,449) | |
| Net income (loss) | 131,708 | | | 20,662 | | | (14,088) | | | 5,401 | | | (71,513) | | | 72,170 | | | — | | | 72,170 | |
| Net (income) loss attributable to non-controlling interests | (3) | | | — | | | (3,148) | | | 7,049 | | | — | | | 3,898 | | | — | | | 3,898 | |
| Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 131,705 | | | $ | 20,662 | | | $ | (17,236) | | | $ | 12,450 | | | $ | (71,513) | | | $ | 76,068 | | | $ | — | | | $ | 76,068 | |
| | | | | | | | | | | | | | | |
Definition of Distributable Earnings
Distributable Earnings, a non-GAAP financial measure, is used to compute the Company’s incentive fees to its external manager and is an appropriate supplemental disclosure for a mortgage REIT. For the Company’s purposes, Distributable Earnings is defined as GAAP net income (loss) excluding non-cash equity compensation expense, the incentive fee due to the Company’s external manager, acquisition costs for successful acquisitions, depreciation and amortization of real estate and associated intangibles, any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period and, to the extent deducted from net income (loss), distributions payable with respect to equity securities of subsidiaries issued in exchange for properties or interests therein. The amount is adjusted to exclude one-time events pursuant to changes in GAAP and certain other non-cash adjustments as determined by the Company’s external manager and approved by a majority of the Company’s independent directors. Refer to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 for additional information regarding Distributable Earnings.
Reconciliation of Net Income to Distributable Earnings
For the three months ended September 30, 2024
(Amounts in thousands except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial and
Residential
Lending
Segment | | Infrastructure
Lending
Segment | | Property
Segment | | Investing
and Servicing
Segment | | Corporate | | Total |
| Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 131,705 | | | $ | 20,662 | | | $ | (17,236) | | | $ | 12,450 | | | $ | (71,513) | | | $ | 76,068 | |
| Add / (Deduct): | | | | | | | | | | | |
| Non-controlling interests attributable to Woodstar II Class A Units | — | | | — | | | 4,659 | | | — | | | — | | | 4,659 | |
| Non-controlling interests attributable to unrealized gains/losses | — | | | — | | | (5,065) | | | (13,975) | | | — | | | (19,040) | |
| Non-cash equity compensation expense | 2,582 | | | 521 | | | 103 | | | 1,624 | | | 5,958 | | | 10,788 | |
| Management incentive fee | — | | | — | | | — | | | — | | | — | | | — | |
| Depreciation and amortization | 2,409 | | | 5 | | | 6,004 | | | 1,839 | | | — | | | 10,257 | |
| Interest income adjustment for securities | 4,943 | | | — | | | — | | | 8,342 | | | — | | | 13,285 | |
| | | | | | | | | | | |
| Consolidated income tax provision (benefit) associated with fair value adjustments | 7,422 | | | (156) | | | — | | | 3,183 | | | — | | | 10,449 | |
| Other non-cash items | 3 | | | — | | | 282 | | | (471) | | | — | | | (186) | |
| Reversal of GAAP unrealized and realized (gains) / losses on: | | | | | | | | | | | |
| Loans | (95,747) | | | — | | | — | | | (19,124) | | | — | | | (114,871) | |
| Credit loss provision, net | 65,021 | | | 1,406 | | | — | | | — | | | — | | | 66,427 | |
| Securities | (2,913) | | | — | | | — | | | 29,277 | | | — | | | 26,364 | |
| Woodstar Fund investments | — | | | — | | | 5,590 | | | — | | | — | | | 5,590 | |
| Derivatives | 108,436 | | | 104 | | | 546 | | | 3,592 | | | (28,737) | | | 83,941 | |
| Foreign currency | (58,930) | | | (546) | | | 55 | | | — | | | — | | | (59,421) | |
| (Earnings) loss from unconsolidated entities | (1,277) | | | 963 | | | — | | | (183) | | | — | | | (497) | |
| Sales of properties | — | | | — | | | — | | | (8,316) | | | — | | | (8,316) | |
| | | | | | | | | | | |
| Recognition of Distributable realized gains / (losses) on: | | | | | | | | | | | |
| Loans | (1,551) | | | — | | | — | | | 19,841 | | | — | | | 18,290 | |
| | | | | | | | | | | |
| Securities | (10) | | | — | | | — | | | 817 | | | — | | | 807 | |
| Woodstar Fund investments | — | | | — | | | 19,043 | | | — | | | — | | | 19,043 | |
| | | | | | | | | | | |
| Derivatives | 30,099 | | | 85 | | | (129) | | | (4,354) | | | (11,425) | | | 14,276 | |
| Foreign currency | (3,534) | | | 67 | | | (55) | | | — | | | — | | | (3,522) | |
| Earnings (loss) from unconsolidated entities | 1,278 | | | (297) | | | — | | | 350 | | | — | | | 1,331 | |
| Sales of properties | — | | | — | | | — | | | 3,237 | | | — | | | 3,237 | |
| Distributable Earnings (Loss) | $ | 189,936 | | | $ | 22,814 | | | $ | 13,797 | | | $ | 38,129 | | | $ | (105,717) | | | $ | 158,959 | |
| Distributable Earnings (Loss) per Weighted Average Diluted Share | $ | 0.57 | | | $ | 0.07 | | | $ | 0.04 | | | $ | 0.12 | | | $ | (0.32) | | | $ | 0.48 | |
| | | | | | | | | | | |
Starwood Property Trust, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations by Segment
For the nine months ended September 30, 2024
(Amounts in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial and
Residential
Lending
Segment | | Infrastructure
Lending
Segment | | Property
Segment | | Investing
and Servicing
Segment | | Corporate | | Subtotal | | Securitization
VIEs | | Total |
| Revenues: | | | | | | | | | | | | | | | |
| Interest income from loans | $ | 1,102,810 | | | $ | 194,526 | | | $ | — | | | $ | 12,345 | | | $ | — | | | $ | 1,309,681 | | | $ | — | | | $ | 1,309,681 | |
| Interest income from investment securities | 90,170 | | | 391 | | | — | | | 70,663 | | | — | | | 161,224 | | | (108,791) | | | 52,433 | |
| Servicing fees | 361 | | | — | | | — | | | 48,512 | | | — | | | 48,873 | | | (11,324) | | | 37,549 | |
| Rental income | 11,819 | | | — | | | 52,863 | | | 15,603 | | | — | | | 80,285 | | | — | | | 80,285 | |
| Other revenues | 4,455 | | | 2,690 | | | 574 | | | 2,836 | | | 1,951 | | | 12,506 | | | — | | | 12,506 | |
| Total revenues | 1,209,615 | | | 197,607 | | | 53,437 | | | 149,959 | | | 1,951 | | | 1,612,569 | | | (120,115) | | | 1,492,454 | |
| Costs and expenses: | | | | | | | | | | | | | | | |
| Management fees | 569 | | | — | | | — | | | — | | | 103,401 | | | 103,970 | | | — | | | 103,970 | |
| Interest expense | 662,124 | | | 115,229 | | | 35,325 | | | 26,952 | | | 199,200 | | | 1,038,830 | | | (626) | | | 1,038,204 | |
| General and administrative | 49,003 | | | 14,625 | | | 3,701 | | | 71,407 | | | 11,063 | | | 149,799 | | | — | | | 149,799 | |
| Costs of rental operations | 8,577 | | | — | | | 17,309 | | | 8,661 | | | — | | | 34,547 | | | — | | | 34,547 | |
| Depreciation and amortization | 6,349 | | | 43 | | | 17,695 | | | 5,289 | | | 754 | | | 30,130 | | | — | | | 30,130 | |
| Credit loss provision, net | 142,993 | | | 1,982 | | | — | | | — | | | — | | | 144,975 | | | — | | | 144,975 | |
| Other expense | 771 | | | 175 | | | 35 | | | 453 | | | — | | | 1,434 | | | — | | | 1,434 | |
| Total costs and expenses | 870,386 | | | 132,054 | | | 74,065 | | | 112,762 | | | 314,418 | | | 1,503,685 | | | (626) | | | 1,503,059 | |
| Other income (loss): | | | | | | | | | | | | | | | |
| Change in net assets related to consolidated VIEs | — | | | — | | | — | | | — | | | — | | | — | | | 43,836 | | | 43,836 | |
| Change in fair value of servicing rights | — | | | — | | | — | | | (1,521) | | | — | | | (1,521) | | | 2,303 | | | 782 | |
| Change in fair value of investment securities, net | (4,352) | | | — | | | — | | | (69,445) | | | — | | | (73,797) | | | 74,301 | | | 504 | |
| Change in fair value of mortgage loans, net | 102,781 | | | — | | | — | | | 47,498 | | | — | | | 150,279 | | | — | | | 150,279 | |
| Income from affordable housing fund investments | — | | | — | | | 10,304 | | | — | | | — | | | 10,304 | | | — | | | 10,304 | |
| Earnings (loss) from unconsolidated entities | 10,293 | | | (694) | | | — | | | 1,046 | | | — | | | 10,645 | | | (951) | | | 9,694 | |
| (Loss) gain on sale of investments and other assets, net | (41) | | | — | | | 92,003 | | | 8,316 | | | — | | | 100,278 | | | — | | | 100,278 | |
| Gain on derivative financial instruments, net | 11,636 | | | 59 | | | 1,442 | | | 129 | | | 5,718 | | | 18,984 | | | — | | | 18,984 | |
| Foreign currency gain (loss), net | 23,970 | | | 479 | | | (13) | | | — | | | — | | | 24,436 | | | — | | | 24,436 | |
| Gain (loss) on extinguishment of debt | 173 | | | (620) | | | (2,254) | | | (100) | | | — | | | (2,801) | | | — | | | (2,801) | |
| Other (loss) income, net | (7,337) | | | 40 | | | (1,156) | | | 50 | | | — | | | (8,403) | | | — | | | (8,403) | |
| Total other income (loss) | 137,123 | | | (736) | | | 100,326 | | | (14,027) | | | 5,718 | | | 228,404 | | | 119,489 | | | 347,893 | |
| Income (loss) before income taxes | 476,352 | | | 64,817 | | | 79,698 | | | 23,170 | | | (306,749) | | | 337,288 | | | — | | | 337,288 | |
| Income tax (provision) benefit | (18,930) | | | 414 | | | — | | | (9,017) | | | — | | | (27,533) | | | — | | | (27,533) | |
| Net income (loss) | 457,422 | | | 65,231 | | | 79,698 | | | 14,153 | | | (306,749) | | | 309,755 | | | — | | | 309,755 | |
| Net (income) loss attributable to non-controlling interests | (10) | | | — | | | (15,010) | | | 13,555 | | | — | | | (1,465) | | | — | | | (1,465) | |
| Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 457,412 | | | $ | 65,231 | | | $ | 64,688 | | | $ | 27,708 | | | $ | (306,749) | | | $ | 308,290 | | | $ | — | | | $ | 308,290 | |
| | | | | | | | | | | | | | | |
Reconciliation of Net Income to Distributable Earnings
For the nine months ended September 30, 2024
(Amounts in thousands except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial and
Residential
Lending
Segment | | Infrastructure
Lending
Segment | | Property
Segment | | Investing
and Servicing
Segment | | Corporate | | Total |
| Net income (loss) attributable to Starwood Property Trust, Inc. | $ | 457,412 | | | $ | 65,231 | | | $ | 64,688 | | | $ | 27,708 | | | $ | (306,749) | | | $ | 308,290 | |
| Add / (Deduct): | | | | | | | | | | | |
| Non-controlling interests attributable to Woodstar II Class A Units | — | | | — | | | 13,978 | | | — | | | — | | | 13,978 | |
| Non-controlling interests attributable to unrealized gains/losses | — | | | — | | | (9,028) | | | (25,498) | | | — | | | (34,526) | |
| Non-cash equity compensation expense | 7,320 | | | 1,485 | | | 288 | | | 4,797 | | | 17,612 | | | 31,502 | |
| Management incentive fee | — | | | — | | | — | | | — | | | 22,593 | | | 22,593 | |
| Depreciation and amortization | 6,793 | | | 15 | | | 17,955 | | | 5,570 | | | — | | | 30,333 | |
| Interest income adjustment for securities | 15,891 | | | — | | | — | | | 25,603 | | | — | | | 41,494 | |
| | | | | | | | | | | |
Consolidated income tax provision (benefit} associated with fair value adjustments | 18,930 | | | (414) | | | — | | | 9,017 | | | — | | | 27,533 | |
| Other non-cash items | 10 | | | — | | | 834 | | | (823) | | | — | | | 21 | |
| Reversal of GAAP unrealized and realized (gains) / losses on: | | | | | | | | | | | |
| Loans | (102,781) | | | — | | | — | | | (47,498) | | | — | | | (150,279) | |
| Credit loss provision, net | 142,993 | | | 1,982 | | | — | | | — | | | — | | | 144,975 | |
| Securities | 4,352 | | | — | | | — | | | 69,445 | | | — | | | 73,797 | |
| Woodstar Fund investments | — | | | — | | | (10,304) | | | — | | | — | | | (10,304) | |
| Derivatives | (11,636) | | | (59) | | | (1,442) | | | (129) | | | (5,718) | | | (18,984) | |
| Foreign currency | (23,970) | | | (479) | | | 13 | | | — | | | — | | | (24,436) | |
| (Earnings) loss from unconsolidated entities | (10,293) | | | 694 | | | — | | | (1,046) | | | — | | | (10,645) | |
| Sales of properties | — | | | — | | | (92,003) | | | (8,316) | | | — | | | (100,319) | |
| | | | | | | | | | | |
| Recognition of Distributable realized gains / (losses) on: | | | | | | | | | | | |
| Loans | (4,949) | | | — | | | — | | | 47,261 | | | — | | | 42,312 | |
| Realized credit loss | — | | | (1,546) | | | — | | | — | | | — | | | (1,546) | |
| Securities | (9,302) | | | — | | | — | | | (37,078) | | | — | | | (46,380) | |
| Woodstar Fund investments | — | | | — | | | 54,246 | | | — | | | — | | | 54,246 | |
| | | | | | | | | | | |
| Derivatives | 101,184 | | | 269 | | | 8,694 | | | 1,019 | | | (31,750) | | | 79,416 | |
| Foreign currency | (12,209) | | | 55 | | | (13) | | | — | | | — | | | (12,167) | |
| Earnings (loss) from unconsolidated entities | 4,272 | | | (326) | | | — | | | 1,033 | | | — | | | 4,979 | |
| Sales of properties | — | | | — | | | 39,150 | | | 3,237 | | | — | | | 42,387 | |
| Distributable Earnings (Loss) | $ | 584,017 | | | $ | 66,907 | | | $ | 87,056 | | | $ | 74,302 | | | $ | (304,012) | | | $ | 508,270 | |
| Distributable Earnings (Loss) per Weighted Average Diluted Share | $ | 1.78 | | | $ | 0.20 | | | $ | 0.26 | | | $ | 0.23 | | | $ | (0.92) | | | $ | 1.55 | |
| | | | | | | | | | | |
Starwood Property Trust, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet by Segment
As of September 30, 2024
(Amounts in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial and
Residential
Lending
Segment | | Infrastructure
Lending
Segment | | Property
Segment | | Investing
and Servicing
Segment | | Corporate | | Subtotal | | Securitization
VIEs | | Total |
| Assets: | | | | | | | | | | | | | | | |
| Cash and cash equivalents | $ | 11,235 | | | $ | 174,581 | | | $ | 35,527 | | | $ | 13,692 | | | $ | 122,818 | | | $ | 357,853 | | | $ | — | | | $ | 357,853 | |
| Restricted cash | 93,839 | | | 19,825 | | | 1,057 | | | 4,627 | | | 32,935 | | | 152,283 | | | — | | | 152,283 | |
| Loans held-for-investment, net | 13,713,603 | | | 2,415,162 | | | — | | | — | | | — | | | 16,128,765 | | | — | | | 16,128,765 | |
| Loans held-for-sale | 2,540,411 | | | — | | | — | | | 232,968 | | | — | | | 2,773,379 | | | — | | | 2,773,379 | |
| Investment securities | 1,094,588 | | | 17,275 | | | — | | | 1,189,930 | | | — | | | 2,301,793 | | | (1,585,991) | | | 715,802 | |
| Properties, net | 476,951 | | | — | | | 659,351 | | | 58,288 | | | — | | | 1,194,590 | | | — | | | 1,194,590 | |
| | | | | | | | | | | | | | | |
| Investments of consolidated affordable housing fund | — | | | — | | | 1,984,822 | | | — | | | — | | | 1,984,822 | | | — | | | 1,984,822 | |
| Investments in unconsolidated entities | 26,407 | | | 51,997 | | | — | | | 27,270 | | | — | | | 105,674 | | | (14,665) | | | 91,009 | |
| Goodwill | — | | | 119,409 | | | — | | | 140,437 | | | — | | | 259,846 | | | — | | | 259,846 | |
| Intangible assets | 11,373 | | | — | | | 22,770 | | | 61,577 | | | — | | | 95,720 | | | (35,561) | | | 60,159 | |
| Derivative assets | 67,220 | | | — | | | 544 | | | 1,799 | | | 5,076 | | | 74,639 | | | — | | | 74,639 | |
| Accrued interest receivable | 179,174 | | | 16,572 | | | 224 | | | 964 | | | 212 | | | 197,146 | | | — | | | 197,146 | |
| Other assets | 150,882 | | | 7,247 | | | 52,816 | | | 8,646 | | | 73,571 | | | 293,162 | | | — | | | 293,162 | |
| VIE assets, at fair value | — | | | — | | | — | | | — | | | — | | | — | | | 39,950,395 | | | 39,950,395 | |
| Total Assets | $ | 18,365,683 | | | $ | 2,822,068 | | | $ | 2,757,111 | | | $ | 1,740,198 | | | $ | 234,612 | | | $ | 25,919,672 | | | $ | 38,314,178 | | | $ | 64,233,850 | |
| Liabilities and Equity | | | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | | | |
| Accounts payable, accrued expenses and other liabilities | $ | 184,956 | | | $ | 63,422 | | | $ | 12,584 | | | $ | 44,583 | | | $ | 89,689 | | | $ | 395,234 | | | $ | — | | | $ | 395,234 | |
| Related-party payable | — | | | — | | | — | | | — | | | 25,542 | | | 25,542 | | | — | | | 25,542 | |
| Dividends payable | — | | | — | | | — | | | — | | | 163,669 | | | 163,669 | | | — | | | 163,669 | |
| Derivative liabilities | 90,530 | | | — | | | — | | | 69 | | | 27,562 | | | 118,161 | | | — | | | 118,161 | |
| Secured financing agreements, net | 8,628,342 | | | 796,183 | | | 479,138 | | | 639,323 | | | 1,332,072 | | | 11,875,058 | | | (20,440) | | | 11,854,618 | |
| Collateralized loan obligations and single asset securitization, net | 2,163,968 | | | 1,138,281 | | | — | | | — | | | — | | | 3,302,249 | | | — | | | 3,302,249 | |
| Unsecured senior notes, net | — | | | — | | | — | | | — | | | 2,757,146 | | | 2,757,146 | | | — | | | 2,757,146 | |
| | | | | | | | | | | | | | | |
| VIE liabilities, at fair value | — | | | — | | | — | | | — | | | — | | | — | | | 38,334,618 | | | 38,334,618 | |
| Total Liabilities | 11,067,796 | | | 1,997,886 | | | 491,722 | | | 683,975 | | | 4,395,680 | | | 18,637,059 | | | 38,314,178 | | | 56,951,237 | |
Temporary Equity: Redeemable non-controlling interests | — | | | — | | | 410,799 | | | — | | | — | | | 410,799 | | | — | | | 410,799 | |
| Permanent Equity: | | | | | | | | | | | | | | | |
| Starwood Property Trust, Inc. Stockholders’ Equity: | | | | | | | | | | | | | | | |
| Common stock | — | | | — | | | — | | | — | | | 3,447 | | | 3,447 | | | — | | | 3,447 | |
| Additional paid-in capital | 1,309,195 | | | 586,273 | | | (391,883) | | | (652,611) | | | 5,460,889 | | | 6,311,863 | | | — | | | 6,311,863 | |
| Treasury stock | — | | | — | | | — | | | — | | | (138,022) | | | (138,022) | | | — | | | (138,022) | |
| Retained earnings (accumulated deficit) | 5,972,318 | | | 237,909 | | | 2,039,228 | | | 1,584,106 | | | (9,487,382) | | | 346,179 | | | — | | | 346,179 | |
| Accumulated other comprehensive income | 16,256 | | | — | | | — | | | — | | | — | | | 16,256 | | | — | | | 16,256 | |
| Total Starwood Property Trust, Inc. Stockholders’ Equity | 7,297,769 | | | 824,182 | | | 1,647,345 | | | 931,495 | | | (4,161,068) | | | 6,539,723 | | | — | | | 6,539,723 | |
| Non-controlling interests in consolidated subsidiaries | 118 | | | — | | | 207,245 | | | 124,728 | | | — | | | 332,091 | | | — | | | 332,091 | |
| Total Permanent Equity | 7,297,887 | | | 824,182 | | | 1,854,590 | | | 1,056,223 | | | (4,161,068) | | | 6,871,814 | | | — | | | 6,871,814 | |
| Total Liabilities and Equity | $ | 18,365,683 | | | $ | 2,822,068 | | | $ | 2,757,111 | | | $ | 1,740,198 | | | $ | 234,612 | | | $ | 25,919,672 | | | $ | 38,314,178 | | | $ | 64,233,850 | |
| | | | | | | | | | | | | | | |
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