0001558370-17-008476.txt : 20171108 0001558370-17-008476.hdr.sgml : 20171108 20171108070430 ACCESSION NUMBER: 0001558370-17-008476 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20171108 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20171108 DATE AS OF CHANGE: 20171108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STARWOOD PROPERTY TRUST, INC. CENTRAL INDEX KEY: 0001465128 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 270247747 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-34436 FILM NUMBER: 171185040 BUSINESS ADDRESS: STREET 1: C/O STARWOOD CAPITAL GROUP STREET 2: 591 WEST PUTNAM AVENUE CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: (203) 422-7700 MAIL ADDRESS: STREET 1: C/O STARWOOD CAPITAL GROUP STREET 2: 591 WEST PUTNAM AVENUE CITY: GREENWICH STATE: CT ZIP: 06830 8-K 1 f8-k.htm 8-K stwd_Current folio_8K

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 8, 2017

 

Starwood Property Trust, Inc.

(Exact name of registrant as specified in its charter)

 

Maryland
(State or other jurisdiction
of incorporation)

 

001-34436
(Commission
File Number)

 

27-0247747
(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 CAR 230.425)

 

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CAR 240.14a-12)

 

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CAR 240.14d-2(b))

 

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CAR 240.13e-4(c))

 

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 8, 2017, Starwood Property Trust, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2017. 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

Press Release, dated November 8, 2017

 

2

 

 

EXHIBIT INDEX

 

 

 

Exhibit
Number

Description

 

 

99.1

Press Release, dated November 8, 2017

 

3

 

 

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.

 

Dated: November 8, 2017

STARWOOD PROPERTY TRUST, INC.

 

 

 

By:

/s/ ANDREW J. SOSSEN

 

Name:

Andrew J. Sossen

 

Title:

Chief Operating Officer

 

4

 

EX-99.1 2 ex-99d1.htm EX-99.1 stwd_Current folio_Press Release

 

Exhibit 99.1

C:\Users\105621\Desktop\Starwood_Logo.jpg

For Immediate Release

Starwood Property Trust Reports Results for the

Quarter Ended September 30, 2017

 

– Quarterly GAAP Earnings of $0.33 and Core Earnings of $0.65 per Diluted Common Share –

– Deploys $2.1 Billion, including $1.1 Billion in Lending Segment and $553 Million on a Single-Tenant Triple Net Lease Acquisition –

– Completes Sale of Majority of Investment in Ten-X for Proceeds of $66 Million –

– Declares Dividend of $0.48 per share for the Fourth Quarter of 2017 –

 

GREENWICH, Conn., November 8, 2017 /PRNewswire/ -- Starwood Property Trust, Inc. (NYSE: STWD) today announced operating results for the fiscal quarter ended September 30, 2017.  The Company’s third quarter 2017 GAAP net income was $88.4 million, or $0.33 per diluted share, and Core Earnings (a non-GAAP financial measure) was $170.9 million, or $0.65 per diluted share. Third quarter GAAP net income and Core Earnings included $0.05 and $0.13 per diluted share, respectively, from the sale of the Company’s investment in Ten-X.

“Our third quarter results were strong and were highlighted by over $2 billion of capital deployment across all of our business segments and the continued expansion of our borrowing capacity. We also completed the sale of our investment in Ten-X which resulted in proceeds of $66 million,” stated Barry Sternlicht, Chairman and CEO of Starwood Property Trust.

“With our pipeline, the tremendous credit profile of our book and excellent liquidity position, we remain well positioned for the future.”

Dividend

On November 8, 2017, the Company’s Board of Directors declared a dividend of $0.48 per share of common stock for the quarter ending December 31, 2017. The dividend is payable on January 15, 2018 to common stockholders of record as of December 29, 2017. 

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 at the Company’s website in the Investor Relations section under “Quarterly Earnings” at www.starwoodpropertytrust.com.  

 

 

 

 

 

 

Conference Call and Webcast Information 

The Company will host a webcast and conference call on Wednesday, November 8, 2017, at 10:00 a.m. Eastern Time to discuss third quarter financial results and recent events.  A webcast will be available on the Company’s website at www.starwoodpropertytrust.com.  To listen to a live broadcast, access the site at least 15 minutes prior to the scheduled start time in order to register and download and install any necessary audio software.

To Participate in the Telephone Conference Call:

Dial in at least five minutes prior to start time.

 

Domestic:  1-888-430-8709

International:  1-719-325-4874

 

Conference Call Playback:

Domestic:  1-844-512-2921

International:  1-412-317-6671

Passcode:  3775308

 

The playback can be accessed through November 22, 2017.

 

About Starwood Property Trust, Inc.

Starwood Property Trust (NYSE: STWD), an affiliate of global private investment firm Starwood Capital Group, is the largest commercial mortgage real estate investment trust in the United States. The Company’s core business focuses on originating, acquiring, financing and managing commercial mortgage loans and other commercial real estate debt and equity investments. Through its subsidiary LNR Property, LLC, Starwood Property Trust also operates as the largest commercial mortgage special servicer in the United States. With total capital deployed since inception of over $37 billion, Starwood Property Trust continues to solidify its position as one of the premier real estate finance companies in the country.

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.  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 completion of pending investments, continued ability to acquire additional investments, competition within the finance and real estate industries, economic conditions, availability of financing and other risks detailed from time to time in the Company's reports filed with the SEC.

 

2

 

 

 

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations by Segment

For the three months ended September 30, 2017

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

Investing

    

 

    

 

    

Investing

    

 

 

 

Lending

 

Property

 

and Servicing

 

 

 

 

 

and Servicing

 

 

 

 

Segment

 

Segment

 

Segment

 

Corporate

 

Subtotal

 

VIEs

 

Total

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income from loans

  

$

134,149

  

$

 —

  

$

4,450

  

$

 —

  

$

138,599

  

$

 —

  

$

138,599

Interest income from investment securities

 

 

11,540

  

 

 —

 

 

31,740

 

 

 —

 

 

43,280

 

 

(30,829)

 

 

12,451

Servicing fees

 

 

142

  

 

 —

 

 

23,093

 

 

 —

 

 

23,235

 

 

(8,393)

 

 

14,842

Rental income

 

 

 —

 

 

47,663

 

 

12,490

 

 

 —

 

 

60,153

 

 

 —

 

 

60,153

Other revenues

 

 

181

 

 

164

 

 

441

 

 

 —

 

 

786

 

 

(64)

 

 

722

Total revenues 

 

 

146,012

 

 

47,827

 

 

72,214

 

 

 —

 

 

266,053

 

 

(39,286)

 

 

226,767

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management fees

 

 

482

 

 

 —

 

 

18

 

 

30,370

 

 

30,870

 

 

110

 

 

30,980

Interest expense

 

 

27,929

 

 

11,360

 

 

5,710

 

 

31,709

 

 

76,708

 

 

(277)

 

 

76,431

General and administrative

 

 

5,302

 

 

1,090

 

 

24,167

 

 

2,251

 

 

32,810

 

 

82

 

 

32,892

Acquisition and investment pursuit costs

 

 

807

 

 

245

 

 

(28)

 

 

 —

 

 

1,024

 

 

 —

 

 

1,024

Costs of rental operations

 

 

 —

 

 

18,660

 

 

5,139

 

 

 —

 

 

23,799

 

 

 —

 

 

23,799

Depreciation and amortization

 

 

17

 

 

17,852

 

 

5,002

 

 

 —

 

 

22,871

 

 

 —

 

 

22,871

Loan loss allowance, net

 

 

(171)

 

 

 —

 

 

 —

 

 

 —

 

 

(171)

 

 

 —

 

 

(171)

Other expense

 

 

72

 

 

97

 

 

207

 

 

 —

 

 

376

 

 

 —

 

 

376

Total costs and expenses 

 

 

34,438

 

 

49,304

 

 

40,215

 

 

64,330

 

 

188,287

 

 

(85)

 

 

188,202

Income (loss) before other income (loss), income taxes and non-controlling interests

 

 

111,574

 

 

(1,477)

 

 

31,999

 

 

(64,330)

 

 

77,766

 

 

(39,201)

 

 

38,565

Other income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in net assets related to consolidated VIEs

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

56,177

 

 

56,177

Change in fair value of servicing rights

 

 

 —

 

 

 —

 

 

(5,652)

 

 

 —

 

 

(5,652)

 

 

785

 

 

(4,867)

Change in fair value of investment securities, net

 

 

276

 

 

 —

 

 

13,962

 

 

 —

 

 

14,238

 

 

(14,635)

 

 

(397)

Change in fair value of mortgage loans held-for-sale, net

 

 

(397)

 

 

 —

 

 

19,882

 

 

 —

 

 

19,485

 

 

 —

 

 

19,485

Earnings (loss) from unconsolidated entities

 

 

848

 

 

(33,731)

 

 

30,225

 

 

 —

 

 

(2,658)

 

 

(2,031)

 

 

(4,689)

Gain on sale of investments and other assets, net

 

 

 —

 

 

 —

 

 

11,877

 

 

 —

 

 

11,877

 

 

 —

 

 

11,877

Loss on derivative financial instruments, net

 

 

(10,813)

 

 

(11,276)

 

 

(2,135)

 

 

 —

 

 

(24,224)

 

 

 —

 

 

(24,224)

Foreign currency gain (loss), net

 

 

10,657

 

 

(1)

 

 

 4

 

 

 —

 

 

10,660

 

 

 —

 

 

10,660

Other income, net

 

 

 —

 

 

 —

 

 

28

 

 

 —

 

 

28

 

 

 —

 

 

28

Total other income (loss)

 

 

571

 

 

(45,008)

 

 

68,191

 

 

 —

 

 

23,754

 

 

40,296

 

 

64,050

Income (loss) before income taxes 

 

 

112,145

 

 

(46,485)

 

 

100,190

 

 

(64,330)

 

 

101,520

 

 

1,095

 

 

102,615

Income tax benefit (provision)

 

 

11

 

 

 —

 

 

(9,827)

 

 

 —

 

 

(9,816)

 

 

 —

 

 

(9,816)

Net income (loss) 

 

 

112,156

 

 

(46,485)

 

 

90,363

 

 

(64,330)

 

 

91,704

 

 

1,095

 

 

92,799

Net income attributable to non-controlling interests

 

 

(357)

 

 

 —

 

 

(2,919)

 

 

 —

 

 

(3,276)

 

 

(1,095)

 

 

(4,371)

Net income (loss) attributable to Starwood Property Trust, Inc.  

 

$

111,799

 

$

(46,485)

 

$

87,444

 

$

(64,330)

 

$

88,428

 

$

 —

 

$

88,428

 

 

3

 

 

 

Definition of Core Earnings

Core 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, Core 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 from successful acquisitions, depreciation and amortization of real estate and associated intangibles and any unrealized gains, losses or other non-cash items recorded in net income for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income. 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. 

 

Reconciliation of Net Income to Core Earnings

For the three months ended September 30, 2017

(Amounts in thousands except per share data) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

   

 

   

Investing

   

 

   

 

 

 

 

Lending

 

Property

 

and Servicing

 

 

 

 

 

 

 

Segment

 

Segment

 

Segment

 

Corporate

 

Total

Net income (loss) attributable to Starwood Property Trust, Inc.

 

$

111,799

 

$

(46,485)

 

 $

87,444

 

$

(64,330)

 

 $

88,428

Add / (Deduct):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash equity compensation expense

 

 

783

 

 

33

 

 

1,015

 

 

3,379

 

 

5,210

Management incentive fee

 

 

 —

 

 

 —

 

 

 —

 

 

10,378

 

 

10,378

Acquisition and investment pursuit costs

 

 

74

 

 

151

 

 

49

 

 

 —

 

 

274

Depreciation and amortization

 

 

17

 

 

18,102

 

 

4,600

 

 

 —

 

 

22,719

Loan loss allowance, net

 

 

(171)

 

 

 —

 

 

 —

 

 

 —

 

 

(171)

Interest income adjustment for securities

 

 

(225)

 

 

 —

 

 

5,071

 

 

 —

 

 

4,846

Income tax adjustment for discrete transactions

 

 

 —

 

 

 —

 

 

(9,356)

 

 

 —

 

 

(9,356)

Other non-cash items

 

 

 —

 

 

(496)

 

 

187

 

 

 —

 

 

(309)

Reversal of unrealized (gains) / losses on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held-for-sale

 

 

397

 

 

 —

 

 

(19,882)

 

 

 —

 

 

(19,485)

Securities

 

 

(276)

 

 

 —

 

 

(13,962)

 

 

 —

 

 

(14,238)

Derivatives

 

 

10,394

 

 

11,291

 

 

1,555

 

 

 —

 

 

23,240

Foreign currency

 

 

(10,657)

 

 

 1

 

 

(4)

 

 

 —

 

 

(10,660)

Earnings from unconsolidated entities

 

 

(848)

 

 

33,731

 

 

(30,225)

 

 

 —

 

 

2,658

Purchases and sales of properties

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Recognition of realized gains / (losses) on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held-for-sale

 

 

(397)

 

 

 —

 

 

19,330

 

 

 —

 

 

18,933

Securities

 

 

 —

 

 

 —

 

 

(2,657)

 

 

 —

 

 

(2,657)

Derivatives

 

 

(290)

 

 

(140)

 

 

(500)

 

 

(247)

 

 

(1,177)

Foreign currency

 

 

549

 

 

 —

 

 

(240)

 

 

 —

 

 

309

Earnings from unconsolidated entities

 

 

849

 

 

 —

 

 

52,921

 

 

 —

 

 

53,770

Purchases and sales of properties

 

 

 —

 

 

 —

 

 

(1,838)

 

 

 —

 

 

(1,838)

Core Earnings (Loss)

 

$

111,998

 

$

16,188

 

$

93,508

 

$

(50,820)

 

$

170,874

Core Earnings (Loss) per Weighted Average Diluted Share

 

$

0.43

 

$

0.06

 

$

0.36

 

$

(0.20)

 

$

0.65

 

 

4

 

 

 

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations by Segment

For the nine months ended September 30, 2017

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

Investing

    

 

    

 

    

Investing

    

 

 

 

Lending

 

Property

 

and Servicing

 

 

 

 

 

and Servicing

 

 

 

 

Segment

 

Segment

 

Segment

 

Corporate

 

Subtotal

 

VIEs

 

Total

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income from loans

  

$

360,188

  

$

 —

  

$

10,906

  

$

 —

  

$

371,094

  

$

 —

  

$

371,094

Interest income from investment securities

 

 

35,870

  

 

 —

 

 

104,768

 

 

 —

 

 

140,638

 

 

(100,593)

 

 

40,045

Servicing fees

 

 

568

  

 

 —

 

 

86,837

 

 

 —

 

 

87,405

 

 

(39,833)

 

 

47,572

Rental income

 

 

 —

 

 

138,795

 

 

37,366

 

 

 —

 

 

176,161

 

 

 —

 

 

176,161

Other revenues

 

 

553

 

 

430

 

 

1,450

 

 

 —

 

 

2,433

 

 

(249)

 

 

2,184

Total revenues 

 

 

397,179

 

 

139,225

 

 

241,327

 

 

 —

 

 

777,731

 

 

(140,675)

 

 

637,056

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management fees

 

 

1,405

 

 

 —

 

 

54

 

 

78,328

 

 

79,787

 

 

210

 

 

79,997

Interest expense

 

 

72,372

 

 

32,466

 

 

14,924

 

 

94,667

 

 

214,429

 

 

(821)

 

 

213,608

General and administrative

 

 

14,872

 

 

3,471

 

 

69,536

 

 

7,719

 

 

95,598

 

 

243

 

 

95,841

Acquisition and investment pursuit costs

 

 

1,707

 

 

516

 

 

 9

 

 

 —

 

 

2,232

 

 

 —

 

 

2,232

Costs of rental operations

 

 

 —

 

 

51,843

 

 

15,858

 

 

 —

 

 

67,701

 

 

 —

 

 

67,701

Depreciation and amortization

 

 

50

 

 

52,288

 

 

14,793

 

 

 —

 

 

67,131

 

 

 —

 

 

67,131

Loan loss allowance, net

 

 

(3,170)

 

 

 —

 

 

 —

 

 

 —

 

 

(3,170)

 

 

 —

 

 

(3,170)

Other expense

 

 

72

 

 

63

 

 

1,141

 

 

 —

 

 

1,276

 

 

 —

 

 

1,276

Total costs and expenses 

 

 

87,308

 

 

140,647

 

 

116,315

 

 

180,714

 

 

524,984

 

 

(368)

 

 

524,616

Income (loss) before other income (loss), income taxes and non-controlling interests

 

 

309,871

 

 

(1,422)

 

 

125,012

 

 

(180,714)

 

 

252,747

 

 

(140,307)

 

 

112,440

Other income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in net assets related to consolidated VIEs

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

203,108

 

 

203,108

Change in fair value of servicing rights

 

 

 —

 

 

 —

 

 

(28,956)

 

 

 —

 

 

(28,956)

 

 

7,655

 

 

(21,301)

Change in fair value of investment securities, net

 

 

299

 

 

 —

 

 

45,263

 

 

 —

 

 

45,562

 

 

(49,623)

 

 

(4,061)

Change in fair value of mortgage loans held-for-sale, net

 

 

(549)

 

 

 —

 

 

46,033

 

 

 —

 

 

45,484

 

 

 —

 

 

45,484

Earnings (loss) from unconsolidated entities

 

 

2,548

 

 

(28,782)

 

 

67,134

 

 

 —

 

 

40,900

 

 

(13,137)

 

 

27,763

(Loss) gain on sale of investments and other assets, net

 

 

(59)

 

 

77

 

 

16,986

 

 

 —

 

 

17,004

 

 

 —

 

 

17,004

Loss on derivative financial instruments, net

 

 

(30,274)

 

 

(32,268)

 

 

(3,617)

 

 

 —

 

 

(66,159)

 

 

 —

 

 

(66,159)

Foreign currency gain, net

 

 

28,402

 

 

16

 

 

16

 

 

 —

 

 

28,434

 

 

 —

 

 

28,434

OTTI

 

 

(109)

 

 

 —

 

 

 —

 

 

 —

 

 

(109)

 

 

 —

 

 

(109)

Loss on extinguishment of debt

 

 

 —

 

 

 —

 

 

 —

 

 

(5,916)

 

 

(5,916)

 

 

 —

 

 

(5,916)

Other income, net

 

 

 —

 

 

 —

 

 

1,097

 

 

 —

 

 

1,097

 

 

(613)

 

 

484

Total other income (loss)

 

 

258

 

 

(60,957)

 

 

143,956

 

 

(5,916)

 

 

77,341

 

 

147,390

 

 

224,731

Income (loss) before income taxes 

 

 

310,129

 

 

(62,379)

 

 

268,968

 

 

(186,630)

 

 

330,088

 

 

7,083

 

 

337,171

Income tax provision

 

 

(331)

 

 

 —

 

 

(17,954)

 

 

 —

 

 

(18,285)

 

 

 —

 

 

(18,285)

Net income (loss) 

 

 

309,798

 

 

(62,379)

 

 

251,014

 

 

(186,630)

 

 

311,803

 

 

7,083

 

 

318,886

Net income attributable to non-controlling interests

 

 

(1,064)

 

 

 —

 

 

(2,573)

 

 

 —

 

 

(3,637)

 

 

(7,083)

 

 

(10,720)

Net income (loss) attributable to Starwood Property Trust, Inc.  

 

$

308,734

 

$

(62,379)

 

$

248,441

 

$

(186,630)

 

$

308,166

 

$

 —

 

$

308,166

 

 

5

 

 

 

Reconciliation of Net Income to Core Earnings

For the nine months ended September 30, 2017

(Amounts in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

   

 

   

Investing

   

 

   

 

 

 

Lending

 

Property

 

and Servicing

 

 

 

 

 

 

Segment

 

Segment

 

Segment

 

Corporate

 

Total

Net income (loss) attributable to Starwood Property Trust, Inc.

 

 $

308,734

 

$ 

(62,379)

 

$

248,441

 

$

(186,630)

 

 $

308,166

Add / (Deduct):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash equity compensation expense

 

 

2,353

 

 

82

 

 

2,491

 

 

8,340

 

 

13,266

Management incentive fee

 

 

 —

 

 

 —

 

 

 —

 

 

20,183

 

 

20,183

Acquisition and investment pursuit costs

 

 

74

 

 

162

 

 

91

 

 

 —

 

 

327

Depreciation and amortization

 

 

50

 

 

52,982

 

 

13,441

 

 

 —

 

 

66,473

Loan loss allowance, net

 

 

(3,170)

 

 

 —

 

 

 —

 

 

 —

 

 

(3,170)

Interest income adjustment for securities

 

 

(697)

 

 

 —

 

 

9,436

 

 

 —

 

 

8,739

Income tax adjustment for discrete transactions

 

 

 —

 

 

 —

 

 

555

 

 

 —

 

 

555

Other non-cash items

 

 

 —

 

 

(1,665)

 

 

1,005

 

 

5,916

 

 

5,256

Reversal of unrealized (gains) / losses on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held-for-sale

 

 

549

 

 

 —

 

 

(46,033)

 

 

 —

 

 

(45,484)

Securities

 

 

(189)

 

 

 —

 

 

(45,263)

 

 

 —

 

 

(45,452)

Derivatives

 

 

28,897

 

 

31,510

 

 

2,056

 

 

 —

 

 

62,463

Foreign currency

 

 

(28,402)

 

 

(16)

 

 

(16)

 

 

 —

 

 

(28,434)

Earnings from unconsolidated entities

 

 

(2,548)

 

 

28,782

 

 

(67,134)

 

 

 —

 

 

(40,900)

Purchases and sales of properties

 

 

 —

 

 

 —

 

 

(613)

 

 

 —

 

 

(613)

Recognition of realized gains / (losses) on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held-for-sale

 

 

(549)

 

 

 —

 

 

48,950

 

 

 —

 

 

48,401

Securities

 

 

 —

 

 

 —

 

 

8,332

 

 

 —

 

 

8,332

Derivatives

 

 

14,567

 

 

(18)

 

 

(1,251)

 

 

(493)

 

 

12,805

Foreign currency

 

 

(12,655)

 

 

16

 

 

(1,138)

 

 

 —

 

 

(13,777)

Earnings from unconsolidated entities

 

 

2,529

 

 

3,563

 

 

55,774

 

 

 —

 

 

61,866

Purchases and sales of properties

 

 

 —

 

 

(153)

 

 

611

 

 

 —

 

 

458

Core Earnings (Loss)

 

$

309,543

 

$

52,866

 

$

229,735

 

$

(152,684)

 

$

439,460

Core Earnings (Loss) per Weighted Average Diluted Share

 

$

1.18

 

$

0.20

 

$

0.88

 

$

(0.58)

 

$

1.68

 

 

6

 

 

 

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet by Segment

As of September 30, 2017

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

Investing

    

 

    

 

    

Investing

    

 

 

 

Lending

 

Property

 

and Servicing

 

 

 

 

 

and Servicing

 

 

 

 

Segment

 

Segment

 

Segment

 

Corporate

 

Subtotal

 

VIEs

 

Total

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

43,513

 

$

8,581

 

$

58,584

 

$

298,006

 

$

408,684

 

$

5,161

 

$

413,845

Restricted cash

 

 

22,527

 

 

20,189

 

 

11,875

 

 

 —

 

 

54,591

 

 

 —

 

 

54,591

Loans held-for-investment, net

 

 

6,378,468

 

 

 —

 

 

3,903

 

 

 —

 

 

6,382,371

 

 

 —

 

 

6,382,371

Loans held-for-sale

 

 

418,618

 

 

 —

 

 

190,006

 

 

 —

 

 

608,624

 

 

 —

 

 

608,624

Loans transferred as secured borrowings

 

 

74,339

 

 

 —

 

 

 —

 

 

 —

 

 

74,339

 

 

 —

 

 

74,339

Investment securities

 

 

677,977

 

 

 —

 

 

1,026,634

 

 

 —

 

 

1,704,611

 

 

(1,002,793)

 

 

701,818

Properties, net

 

 

 —

 

 

2,234,646

 

 

286,696

 

 

 —

 

 

2,521,342

 

 

 —

 

 

2,521,342

Intangible assets

 

 

 —

 

 

116,856

 

 

91,591

 

 

 —

 

 

208,447

 

 

(26,582)

 

 

181,865

Investment in unconsolidated entities

 

 

36,831

 

 

109,607

 

 

117,772

 

 

 —

 

 

264,210

 

 

(20,760)

 

 

243,450

Goodwill

 

 

 —

 

 

 —

 

 

140,437

 

 

 —

 

 

140,437

 

 

 —

 

 

140,437

Derivative assets

 

 

13,513

 

 

22,480

 

 

2,300

 

 

 —

 

 

38,293

 

 

 —

 

 

38,293

Accrued interest receivable

 

 

34,569

 

 

 —

 

 

478

 

 

 —

 

 

35,047

 

 

 —

 

 

35,047

Other assets

 

 

10,286

 

 

40,705

 

 

61,787

 

 

2,293

 

 

115,071

 

 

(2,806)

 

 

112,265

VIE assets, at fair value

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

51,197,981

 

 

51,197,981

Total Assets

 

$

7,710,641

 

$

2,553,064

 

$

1,992,063

 

$

300,299

 

$

12,556,067

 

$

50,150,201

 

$

62,706,268

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable, accrued expenses and other liabilities

 

$

27,821

 

$

71,726

 

$

78,398

 

$

24,739

 

$

202,684

 

$

1,098

 

$

203,782

Related-party payable

 

 

 —

 

 

 —

 

 

43

 

 

29,946

 

 

29,989

 

 

 —

 

 

29,989

Dividends payable

 

 

 —

 

 

 —

 

 

 —

 

 

125,674

 

 

125,674

 

 

 —

 

 

125,674

Derivative liabilities

 

 

14,105

 

 

8,784

 

 

 1

 

 

 —

 

 

22,890

 

 

 —

 

 

22,890

Secured financing agreements, net

 

 

3,223,863

 

 

1,501,006

 

 

516,933

 

 

296,593

 

 

5,538,395

 

 

(23,700)

 

 

5,514,695

Unsecured senior notes, net

 

 

 —

 

 

 —

 

 

 —

 

 

2,044,523

 

 

2,044,523

 

 

 —

 

 

2,044,523

Secured borrowings on transferred loans, net

 

 

74,200

 

 

 —

 

 

 —

 

 

 —

 

 

74,200

 

 

 —

 

 

74,200

VIE liabilities, at fair value

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

50,150,781

 

 

50,150,781

Total Liabilities

 

 

3,339,989

 

 

1,581,516

 

 

595,375

 

 

2,521,475

 

 

8,038,355

 

 

50,128,179

 

 

58,166,534

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Starwood Property Trust, Inc. Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

 —

 

 

 —

 

 

 —

 

 

2,654

 

 

2,654

 

 

 —

 

 

2,654

Additional paid-in capital

 

 

1,808,624

 

 

981,129

 

 

747,298

 

 

1,167,993

 

 

4,705,044

 

 

 —

 

 

4,705,044

Treasury stock

 

 

 —

 

 

 —

 

 

 —

 

 

(92,104)

 

 

(92,104)

 

 

 —

 

 

(92,104)

Accumulated other comprehensive income (loss)

 

 

55,687

 

 

9,668

 

 

(84)

 

 

 —

 

 

65,271

 

 

 —

 

 

65,271

Retained earnings (accumulated deficit)

 

 

2,495,536

 

 

(19,249)

 

 

639,359

 

 

(3,299,719)

 

 

(184,073)

 

 

 —

 

 

(184,073)

Total Starwood Property Trust, Inc. Stockholders’ Equity

 

 

4,359,847

 

 

971,548

 

 

1,386,573

 

 

(2,221,176)

 

 

4,496,792

 

 

 —

 

 

4,496,792

Non-controlling interests in consolidated subsidiaries

 

 

10,805

 

 

 —

 

 

10,115

 

 

 —

 

 

20,920

 

 

22,022

 

 

42,942

Total Equity

 

 

4,370,652

 

 

971,548

 

 

1,396,688

 

 

(2,221,176)

 

 

4,517,712

 

 

22,022

 

 

4,539,734

Total Liabilities and Equity

 

$

7,710,641

 

$

2,553,064

 

$

1,992,063

 

$

300,299

 

$

12,556,067

 

$

50,150,201

 

$

62,706,268

 

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

 

7

 

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