Attached files
| file | filename |
|---|---|
| 8-K - 8-K - STARWOOD PROPERTY TRUST, INC. | f8-k.htm |
Exhibit 99.1
For Immediate Release
Starwood Property Trust Reports Results for the
Quarter Ended September 30, 2018
– Quarterly GAAP Earnings of $0.31 and Core Earnings of $0.53 per Diluted Common Share –
– Year-to-Date Capital Deployed of $8.9 Billion, Up 77% Versus 2017 –
– Deploys $2.5 Billion for the Acquisition of Infrastructure Finance Platform and Portfolio and $1.3 Billion in the Commercial and Residential Lending Segment –
– Moody’s Revises Rating Outlook to Positive from Stable –
– Declares Dividend of $0.48 per share for the Fourth Quarter of 2018 –
GREENWICH, Conn., November 9, 2018 /PRNewswire/ -- Starwood Property Trust, Inc. (NYSE: STWD) today announced operating results for the fiscal quarter ended September 30, 2018. The Company’s third quarter 2018 GAAP net income was $84.5 million, or $0.31 per diluted share, and Core Earnings (a non-GAAP financial measure) was $148.4 million, or $0.53 per diluted share. This includes $6.9 million, or $0.03 per diluted share, and $3.0 million, or $0.01 per diluted share, of acquisition costs associated with the infrastructure finance platform and portfolio for GAAP and Core Earnings, respectively.
“We are excited to have completed another successful quarter which was highlighted by record levels of capital deployment including the acquisition of our new infrastructure finance platform,” commented Barry Sternlicht, Chairman and CEO of Starwood Property Trust. “We continue to see the benefits of a multi-cylinder approach as we execute on attractive investments across our existing businesses. During the quarter, our asset base and commercial loan portfolio both reached record levels, with assets of $16.0 billion and commercial loans of $7.5 billion.”
“We intend to capitalize on attractive opportunities to expand our infrastructure finance platform as we continue to execute on the prudent allocation of capital across our cylinders allowing us to achieve the best risk-adjusted returns for our shareholders.”
Dividend
On November 9, 2018, the Company’s Board of Directors declared a dividend of $0.48 per share of common stock for the quarter ending December 31, 2018. The dividend is payable on January 15, 2019 to common stockholders of record as of December 31, 2018.
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.
Conference Call and Webcast Information
The Company will host a webcast and conference call on Friday, November 9, 2018, at 10:00 a.m. Eastern Time to discuss the quarter’s 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: 1-877-407-9039
International: 1-201-689-8470
Conference Call Playback:
Domestic: 1-844-512-2921
International: 1-412-317-6671
Passcode: 13684083
The playback can be accessed through November 23, 2018.
About Starwood Property Trust, Inc.
Starwood Property Trust (NYSE: STWD), is a leading diversified finance company with a core focus on the real estate and infrastructure sectors. An affiliate of global private investment firm Starwood Capital Group, the Company has successfully deployed over $48 billion of capital since inception and manages a portfolio in excess of $15 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. 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.
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
2
Starwood Property Trust, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations by Segment
For the three months ended September 30, 2018
(Amounts in thousands)
|
|
|
Commercial and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Residential |
|
Infrastructure |
|
|
|
Investing |
|
|
|
|
|
|
|
|
||||||||
|
|
|
Lending |
|
Lending |
|
Property |
|
and Servicing |
|
|
|
|
|
Securitization |
|
|
||||||||
|
|
|
Segment |
|
Segment |
|
Segment |
|
Segment |
|
Corporate |
|
Subtotal |
|
VIEs |
|
Total |
||||||||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income from loans |
|
$ |
147,913 |
|
$ |
3,053 |
|
$ |
— |
|
$ |
3,535 |
|
$ |
— |
|
$ |
154,501 |
|
$ |
— |
|
$ |
154,501 |
|
Interest income from investment securities |
|
|
10,320 |
|
|
107 |
|
|
— |
|
|
34,477 |
|
|
— |
|
|
44,904 |
|
|
(33,396) |
|
|
11,508 |
|
Servicing fees |
|
|
98 |
|
|
— |
|
|
— |
|
|
34,100 |
|
|
— |
|
|
34,198 |
|
|
(6,374) |
|
|
27,824 |
|
Rental income |
|
|
— |
|
|
— |
|
|
76,067 |
|
|
15,065 |
|
|
— |
|
|
91,132 |
|
|
— |
|
|
91,132 |
|
Other revenues |
|
|
265 |
|
|
44 |
|
|
169 |
|
|
229 |
|
|
89 |
|
|
796 |
|
|
(42) |
|
|
754 |
|
Total revenues |
|
|
158,596 |
|
|
3,204 |
|
|
76,236 |
|
|
87,406 |
|
|
89 |
|
|
325,531 |
|
|
(39,812) |
|
|
285,719 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees |
|
|
453 |
|
|
— |
|
|
— |
|
|
18 |
|
|
25,937 |
|
|
26,408 |
|
|
111 |
|
|
26,519 |
|
Interest expense |
|
|
43,322 |
|
|
2,258 |
|
|
19,483 |
|
|
7,396 |
|
|
30,475 |
|
|
102,934 |
|
|
(276) |
|
|
102,658 |
|
General and administrative |
|
|
7,016 |
|
|
537 |
|
|
1,680 |
|
|
19,131 |
|
|
2,753 |
|
|
31,117 |
|
|
86 |
|
|
31,203 |
|
Acquisition and investment pursuit costs |
|
|
341 |
|
|
6,725 |
|
|
— |
|
|
(539) |
|
|
— |
|
|
6,527 |
|
|
— |
|
|
6,527 |
|
Costs of rental operations |
|
|
— |
|
|
— |
|
|
23,052 |
|
|
7,139 |
|
|
— |
|
|
30,191 |
|
|
— |
|
|
30,191 |
|
Depreciation and amortization |
|
|
17 |
|
|
— |
|
|
28,448 |
|
|
5,828 |
|
|
— |
|
|
34,293 |
|
|
— |
|
|
34,293 |
|
Loan loss allowance, net |
|
|
929 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
929 |
|
|
— |
|
|
929 |
|
Other expense |
|
|
76 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
76 |
|
|
— |
|
|
76 |
|
Total costs and expenses |
|
|
52,154 |
|
|
9,520 |
|
|
72,663 |
|
|
38,973 |
|
|
59,165 |
|
|
232,475 |
|
|
(79) |
|
|
232,396 |
|
Income (loss) before other income (loss), income taxes and non-controlling interests |
|
|
106,442 |
|
|
(6,316) |
|
|
3,573 |
|
|
48,433 |
|
|
(59,076) |
|
|
93,056 |
|
|
(39,733) |
|
|
53,323 |
|
Other income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in net assets related to consolidated VIEs |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
33,289 |
|
|
33,289 |
|
Change in fair value of servicing rights |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,994) |
|
|
— |
|
|
(1,994) |
|
|
1,020 |
|
|
(974) |
|
Change in fair value of investment securities, net |
|
|
238 |
|
|
— |
|
|
— |
|
|
(4,966) |
|
|
— |
|
|
(4,728) |
|
|
5,029 |
|
|
301 |
|
Change in fair value of mortgage loans held-for-sale, net |
|
|
1,343 |
|
|
— |
|
|
— |
|
|
2,597 |
|
|
— |
|
|
3,940 |
|
|
— |
|
|
3,940 |
|
Earnings (loss) from unconsolidated entities |
|
|
514 |
|
|
— |
|
|
1,988 |
|
|
(134) |
|
|
— |
|
|
2,368 |
|
|
257 |
|
|
2,625 |
|
Gain on sale of investments and other assets, net |
|
|
47 |
|
|
— |
|
|
— |
|
|
1,415 |
|
|
— |
|
|
1,462 |
|
|
— |
|
|
1,462 |
|
Gain (loss) on derivative financial instruments, net |
|
|
7,278 |
|
|
455 |
|
|
5,895 |
|
|
3,076 |
|
|
(4,969) |
|
|
11,735 |
|
|
— |
|
|
11,735 |
|
Foreign currency loss, net |
|
|
(3,546) |
|
|
(531) |
|
|
(1) |
|
|
— |
|
|
— |
|
|
(4,078) |
|
|
— |
|
|
(4,078) |
|
Loss on extinguishment of debt |
|
|
(730) |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,810) |
|
|
(2,540) |
|
|
— |
|
|
(2,540) |
|
Other income (loss), net |
|
|
(1) |
|
|
— |
|
|
2 |
|
|
(1,422) |
|
|
— |
|
|
(1,421) |
|
|
— |
|
|
(1,421) |
|
Total other income (loss) |
|
|
5,143 |
|
|
(76) |
|
|
7,884 |
|
|
(1,428) |
|
|
(6,779) |
|
|
4,744 |
|
|
39,595 |
|
|
44,339 |
|
Income (loss) before income taxes |
|
|
111,585 |
|
|
(6,392) |
|
|
11,457 |
|
|
47,005 |
|
|
(65,855) |
|
|
97,800 |
|
|
(138) |
|
|
97,662 |
|
Income tax provision |
|
|
(314) |
|
|
— |
|
|
(125) |
|
|
(7,842) |
|
|
— |
|
|
(8,281) |
|
|
— |
|
|
(8,281) |
|
Net income (loss) |
|
|
111,271 |
|
|
(6,392) |
|
|
11,332 |
|
|
39,163 |
|
|
(65,855) |
|
|
89,519 |
|
|
(138) |
|
|
89,381 |
|
Net (income) loss attributable to non-controlling interests |
|
|
(365) |
|
|
— |
|
|
(4,769) |
|
|
151 |
|
|
— |
|
|
(4,983) |
|
|
138 |
|
|
(4,845) |
|
Net income (loss) attributable to Starwood Property Trust, Inc. |
|
$ |
110,906 |
|
$ |
(6,392) |
|
$ |
6,563 |
|
$ |
39,314 |
|
$ |
(65,855) |
|
$ |
84,536 |
|
$ |
— |
|
$ |
84,536 |
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 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.
Reconciliation of Net Income to Core Earnings
For the three months ended September 30, 2018
(Amounts in thousands except per share data)
|
|
|
Commercial and |
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Residential |
|
Infrastructure |
|
|
|
Investing |
|
|
|
|
||||||
|
|
|
Lending |
|
Lending |
|
Property |
|
and Servicing |
|
|
|
|
||||||
|
|
|
Segment |
|
Segment |
|
Segment |
|
Segment |
|
Corporate |
|
Total |
||||||
|
Net income (loss) attributable to Starwood Property Trust, Inc. |
|
$ |
110,906 |
|
$ |
(6,392) |
|
$ |
6,563 |
|
$ |
39,314 |
|
$ |
(65,855) |
|
$ |
84,536 |
|
Add / (Deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests attributable to Woodstar II Class A Units |
|
|
— |
|
|
— |
|
|
4,769 |
|
|
— |
|
|
— |
|
|
4,769 |
|
Non-cash equity compensation expense |
|
|
750 |
|
|
13 |
|
|
98 |
|
|
1,321 |
|
|
3,769 |
|
|
5,951 |
|
Management incentive fee |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,299 |
|
|
4,299 |
|
Acquisition and investment pursuit costs |
|
|
45 |
|
|
3,770 |
|
|
(89) |
|
|
(129) |
|
|
— |
|
|
3,597 |
|
Depreciation and amortization |
|
|
17 |
|
|
— |
|
|
28,780 |
|
|
5,456 |
|
|
— |
|
|
34,253 |
|
Loan loss allowance, net |
|
|
929 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
929 |
|
Interest income adjustment for securities |
|
|
(137) |
|
|
— |
|
|
— |
|
|
6,573 |
|
|
— |
|
|
6,436 |
|
Extinguishment of debt, net |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(922) |
|
|
(922) |
|
Other non-cash items |
|
|
— |
|
|
— |
|
|
(632) |
|
|
1,622 |
|
|
986 |
|
|
1,976 |
|
Reversal of GAAP unrealized (gains) / losses on: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held-for-sale |
|
|
(1,343) |
|
|
— |
|
|
— |
|
|
(2,597) |
|
|
— |
|
|
(3,940) |
|
Securities |
|
|
(338) |
|
|
— |
|
|
— |
|
|
4,966 |
|
|
— |
|
|
4,628 |
|
Derivatives |
|
|
(7,497) |
|
|
(455) |
|
|
(4,779) |
|
|
(3,424) |
|
|
5,248 |
|
|
(10,907) |
|
Foreign currency |
|
|
3,546 |
|
|
531 |
|
|
1 |
|
|
— |
|
|
— |
|
|
4,078 |
|
Earnings from unconsolidated entities |
|
|
(514) |
|
|
— |
|
|
(1,988) |
|
|
134 |
|
|
— |
|
|
(2,368) |
|
Recognition of Core realized gains / (losses) on: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held-for-sale |
|
|
3,558 |
|
|
— |
|
|
— |
|
|
4,415 |
|
|
— |
|
|
7,973 |
|
Securities |
|
|
100 |
|
|
— |
|
|
— |
|
|
1,673 |
|
|
— |
|
|
1,773 |
|
Derivatives |
|
|
6 |
|
|
— |
|
|
(230) |
|
|
1,048 |
|
|
— |
|
|
824 |
|
Foreign currency |
|
|
225 |
|
|
(8) |
|
|
— |
|
|
— |
|
|
— |
|
|
217 |
|
Earnings from unconsolidated entities |
|
|
581 |
|
|
— |
|
|
— |
|
|
613 |
|
|
— |
|
|
1,194 |
|
Sales of properties |
|
|
— |
|
|
— |
|
|
— |
|
|
(928) |
|
|
— |
|
|
(928) |
|
Core Earnings (Loss) |
|
$ |
110,834 |
|
$ |
(2,541) |
|
$ |
32,493 |
|
$ |
60,057 |
|
$ |
(52,475) |
|
$ |
148,368 |
|
Core Earnings (Loss) per Weighted Average Diluted Share |
|
$ |
0.40 |
|
$ |
(0.01) |
|
$ |
0.12 |
|
$ |
0.21 |
|
$ |
(0.19) |
|
$ |
0.53 |
4
Starwood Property Trust, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations by Segment
For the nine months ended September 30, 2018
(Amounts in thousands)
|
|
|
Commercial and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Residential |
|
Infrastructure |
|
|
|
Investing |
|
|
|
|
|
|
|
|
||||||||
|
|
|
Lending |
|
Lending |
|
Property |
|
and Servicing |
|
|
|
|
|
Securitization |
|
|
||||||||
|
|
|
Segment |
|
Segment |
|
Segment |
|
Segment |
|
Corporate |
|
Subtotal |
|
VIEs |
|
Total |
||||||||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income from loans |
|
$ |
431,153 |
|
$ |
3,053 |
|
$ |
— |
|
$ |
9,619 |
|
$ |
— |
|
$ |
443,825 |
|
$ |
— |
|
$ |
443,825 |
|
Interest income from investment securities |
|
|
33,689 |
|
|
107 |
|
|
— |
|
|
99,348 |
|
|
— |
|
|
133,144 |
|
|
(95,577) |
|
|
37,567 |
|
Servicing fees |
|
|
313 |
|
|
— |
|
|
— |
|
|
92,221 |
|
|
— |
|
|
92,534 |
|
|
(21,328) |
|
|
71,206 |
|
Rental income |
|
|
— |
|
|
— |
|
|
217,178 |
|
|
43,955 |
|
|
— |
|
|
261,133 |
|
|
— |
|
|
261,133 |
|
Other revenues |
|
|
683 |
|
|
44 |
|
|
351 |
|
|
973 |
|
|
227 |
|
|
2,278 |
|
|
(147) |
|
|
2,131 |
|
Total revenues |
|
|
465,838 |
|
|
3,204 |
|
|
217,529 |
|
|
246,116 |
|
|
227 |
|
|
932,914 |
|
|
(117,052) |
|
|
815,862 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees |
|
|
1,396 |
|
|
— |
|
|
— |
|
|
54 |
|
|
82,895 |
|
|
84,345 |
|
|
310 |
|
|
84,655 |
|
Interest expense |
|
|
110,169 |
|
|
2,258 |
|
|
55,397 |
|
|
18,298 |
|
|
96,132 |
|
|
282,254 |
|
|
(821) |
|
|
281,433 |
|
General and administrative |
|
|
19,962 |
|
|
537 |
|
|
5,510 |
|
|
64,006 |
|
|
8,602 |
|
|
98,617 |
|
|
256 |
|
|
98,873 |
|
Acquisition and investment pursuit costs |
|
|
2,253 |
|
|
6,725 |
|
|
(46) |
|
|
(467) |
|
|
— |
|
|
8,465 |
|
|
— |
|
|
8,465 |
|
Costs of rental operations |
|
|
— |
|
|
— |
|
|
72,531 |
|
|
20,250 |
|
|
— |
|
|
92,781 |
|
|
— |
|
|
92,781 |
|
Depreciation and amortization |
|
|
50 |
|
|
— |
|
|
86,655 |
|
|
16,482 |
|
|
— |
|
|
103,187 |
|
|
— |
|
|
103,187 |
|
Loan loss allowance, net |
|
|
27,726 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
27,726 |
|
|
— |
|
|
27,726 |
|
Other expense |
|
|
230 |
|
|
— |
|
|
— |
|
|
447 |
|
|
— |
|
|
677 |
|
|
— |
|
|
677 |
|
Total costs and expenses |
|
|
161,786 |
|
|
9,520 |
|
|
220,047 |
|
|
119,070 |
|
|
187,629 |
|
|
698,052 |
|
|
(255) |
|
|
697,797 |
|
Income (loss) before other income (loss), income taxes and non-controlling interests |
|
|
304,052 |
|
|
(6,316) |
|
|
(2,518) |
|
|
127,046 |
|
|
(187,402) |
|
|
234,862 |
|
|
(116,797) |
|
|
118,065 |
|
Other income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in net assets related to consolidated VIEs |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
129,888 |
|
|
129,888 |
|
Change in fair value of servicing rights |
|
|
— |
|
|
— |
|
|
— |
|
|
(14,417) |
|
|
— |
|
|
(14,417) |
|
|
5,426 |
|
|
(8,991) |
|
Change in fair value of investment securities, net |
|
|
16 |
|
|
— |
|
|
— |
|
|
24,123 |
|
|
— |
|
|
24,139 |
|
|
(16,285) |
|
|
7,854 |
|
Change in fair value of mortgage loans held-for-sale, net |
|
|
(165) |
|
|
— |
|
|
— |
|
|
26,738 |
|
|
— |
|
|
26,573 |
|
|
— |
|
|
26,573 |
|
Earnings from unconsolidated entities |
|
|
3,761 |
|
|
— |
|
|
1,406 |
|
|
2,916 |
|
|
— |
|
|
8,083 |
|
|
(1,450) |
|
|
6,633 |
|
Gain on sale of investments and other assets, net |
|
|
461 |
|
|
— |
|
|
6,883 |
|
|
18,215 |
|
|
— |
|
|
25,559 |
|
|
— |
|
|
25,559 |
|
Gain (loss) on derivative financial instruments, net |
|
|
15,927 |
|
|
455 |
|
|
27,734 |
|
|
7,720 |
|
|
(24,338) |
|
|
27,498 |
|
|
— |
|
|
27,498 |
|
Foreign currency loss, net |
|
|
(3,260) |
|
|
(531) |
|
|
— |
|
|
(2) |
|
|
— |
|
|
(3,793) |
|
|
— |
|
|
(3,793) |
|
Loss on extinguishment of debt |
|
|
(730) |
|
|
— |
|
|
— |
|
|
(186) |
|
|
(1,810) |
|
|
(2,726) |
|
|
— |
|
|
(2,726) |
|
Other income (loss), net |
|
|
42 |
|
|
— |
|
|
508 |
|
|
(1,365) |
|
|
— |
|
|
(815) |
|
|
— |
|
|
(815) |
|
Total other income (loss) |
|
|
16,052 |
|
|
(76) |
|
|
36,531 |
|
|
63,742 |
|
|
(26,148) |
|
|
90,101 |
|
|
117,579 |
|
|
207,680 |
|
Income (loss) before income taxes |
|
|
320,104 |
|
|
(6,392) |
|
|
34,013 |
|
|
190,788 |
|
|
(213,550) |
|
|
324,963 |
|
|
782 |
|
|
325,745 |
|
Income tax provision |
|
|
(2,981) |
|
|
— |
|
|
(1,997) |
|
|
(9,502) |
|
|
— |
|
|
(14,480) |
|
|
— |
|
|
(14,480) |
|
Net income (loss) |
|
|
317,123 |
|
|
(6,392) |
|
|
32,016 |
|
|
181,286 |
|
|
(213,550) |
|
|
310,483 |
|
|
782 |
|
|
311,265 |
|
Net income attributable to non-controlling interests |
|
|
(1,087) |
|
|
— |
|
|
(11,906) |
|
|
(3,792) |
|
|
— |
|
|
(16,785) |
|
|
(782) |
|
|
(17,567) |
|
Net income (loss) attributable to Starwood Property Trust, Inc. |
|
$ |
316,036 |
|
$ |
(6,392) |
|
$ |
20,110 |
|
$ |
177,494 |
|
$ |
(213,550) |
|
$ |
293,698 |
|
$ |
— |
|
$ |
293,698 |
5
Reconciliation of Net Income to Core Earnings
For the nine months ended September 30, 2018
(Amounts in thousands except per share data)
|
|
|
Commercial and |
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Residential |
|
Infrastructure |
|
|
|
Investing |
|
|
|
|
||||||
|
|
|
Lending |
|
Lending |
|
Property |
|
and Servicing |
|
|
|
|
||||||
|
|
|
Segment |
|
Segment |
|
Segment |
|
Segment |
|
Corporate |
|
Total |
||||||
|
Net income (loss) attributable to Starwood Property Trust, Inc. |
|
$ |
316,036 |
|
$ |
(6,392) |
|
$ |
20,110 |
|
$ |
177,494 |
|
$ |
(213,550) |
|
$ |
293,698 |
|
Add / (Deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests attributable to Woodstar II Class A Units |
|
|
— |
|
|
— |
|
|
11,906 |
|
|
— |
|
|
— |
|
|
11,906 |
|
Non-cash equity compensation expense |
|
|
2,079 |
|
|
13 |
|
|
228 |
|
|
3,613 |
|
|
10,635 |
|
|
16,568 |
|
Management incentive fee |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
19,620 |
|
|
19,620 |
|
Acquisition and investment pursuit costs |
|
|
1,430 |
|
|
3,770 |
|
|
(249) |
|
|
(215) |
|
|
— |
|
|
4,736 |
|
Depreciation and amortization |
|
|
50 |
|
|
— |
|
|
87,648 |
|
|
15,253 |
|
|
— |
|
|
102,951 |
|
Loan loss allowance, net |
|
|
27,726 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
27,726 |
|
Interest income adjustment for securities |
|
|
(531) |
|
|
— |
|
|
— |
|
|
8,206 |
|
|
— |
|
|
7,675 |
|
Extinguishment of debt, net |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
8,586 |
|
|
8,586 |
|
Other non-cash items |
|
|
— |
|
|
— |
|
|
(2,406) |
|
|
2,194 |
|
|
2,762 |
|
|
2,550 |
|
Reversal of GAAP unrealized (gains) / losses on: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held-for-sale |
|
|
165 |
|
|
— |
|
|
— |
|
|
(26,738) |
|
|
— |
|
|
(26,573) |
|
Securities |
|
|
(259) |
|
|
— |
|
|
— |
|
|
(24,123) |
|
|
— |
|
|
(24,382) |
|
Derivatives |
|
|
(16,665) |
|
|
(455) |
|
|
(25,228) |
|
|
(8,788) |
|
|
26,797 |
|
|
(24,339) |
|
Foreign currency |
|
|
3,260 |
|
|
531 |
|
|
— |
|
|
2 |
|
|
— |
|
|
3,793 |
|
Earnings from unconsolidated entities |
|
|
(3,761) |
|
|
— |
|
|
(1,406) |
|
|
(2,916) |
|
|
— |
|
|
(8,083) |
|
Recognition of Core realized gains / (losses) on: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held-for-sale |
|
|
1,487 |
|
|
— |
|
|
— |
|
|
28,285 |
|
|
— |
|
|
29,772 |
|
Securities |
|
|
242 |
|
|
— |
|
|
— |
|
|
(4,419) |
|
|
— |
|
|
(4,177) |
|
Derivatives |
|
|
(5,848) |
|
|
— |
|
|
(938) |
|
|
7,197 |
|
|
— |
|
|
411 |
|
Foreign currency |
|
|
8,136 |
|
|
(8) |
|
|
— |
|
|
(42) |
|
|
— |
|
|
8,086 |
|
Earnings from unconsolidated entities |
|
|
3,986 |
|
|
— |
|
|
— |
|
|
2,875 |
|
|
— |
|
|
6,861 |
|
Sales of properties |
|
|
— |
|
|
— |
|
|
(365) |
|
|
(4,374) |
|
|
— |
|
|
(4,739) |
|
Core Earnings (Loss) |
|
$ |
337,533 |
|
$ |
(2,541) |
|
$ |
89,300 |
|
$ |
173,504 |
|
$ |
(145,150) |
|
$ |
452,646 |
|
Core Earnings (Loss) per Weighted Average Diluted Share |
|
$ |
1.24 |
|
$ |
(0.01) |
|
$ |
0.33 |
|
$ |
0.63 |
|
$ |
(0.53) |
|
$ |
1.66 |
6
Starwood Property Trust, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet by Segment
As of September 30, 2018
(Amounts in thousands)
|
|
|
Commercial and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Residential |
|
Infrastructure |
|
|
|
Investing |
|
|
|
|
|
|
|
|
||||||||
|
|
|
Lending |
|
Lending |
|
Property |
|
and Servicing |
|
|
|
|
|
Securitization |
|
|
||||||||
|
|
|
Segment |
|
Segment |
|
Segment |
|
Segment |
|
Corporate |
|
Subtotal |
|
VIEs |
|
Total |
||||||||
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
15,217 |
|
$ |
8 |
|
$ |
23,496 |
|
$ |
44,771 |
|
$ |
180,946 |
|
$ |
264,438 |
|
$ |
1,319 |
|
$ |
265,757 |
|
Restricted cash |
|
|
34,325 |
|
|
28,222 |
|
|
18,239 |
|
|
14,508 |
|
|
28,970 |
|
|
124,264 |
|
|
— |
|
|
124,264 |
|
Loans held-for-investment, net |
|
|
7,004,938 |
|
|
1,492,276 |
|
|
— |
|
|
3,460 |
|
|
— |
|
|
8,500,674 |
|
|
— |
|
|
8,500,674 |
|
Loans held-for-sale |
|
|
719,781 |
|
|
320,270 |
|
|
— |
|
|
286,786 |
|
|
— |
|
|
1,326,837 |
|
|
— |
|
|
1,326,837 |
|
Loans transferred as secured borrowings |
|
|
74,281 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
74,281 |
|
|
— |
|
|
74,281 |
|
Investment securities |
|
|
718,262 |
|
|
65,060 |
|
|
— |
|
|
1,027,554 |
|
|
— |
|
|
1,810,876 |
|
|
(1,047,426) |
|
|
763,450 |
|
Properties, net |
|
|
— |
|
|
— |
|
|
2,620,220 |
|
|
268,517 |
|
|
— |
|
|
2,888,737 |
|
|
— |
|
|
2,888,737 |
|
Properties held-for-sale |
|
|
— |
|
|
— |
|
|
31,928 |
|
|
20,374 |
|
|
— |
|
|
52,302 |
|
|
— |
|
|
52,302 |
|
Intangible assets |
|
|
— |
|
|
— |
|
|
96,348 |
|
|
80,420 |
|
|
— |
|
|
176,768 |
|
|
(22,820) |
|
|
153,948 |
|
Investment in unconsolidated entities |
|
|
34,334 |
|
|
— |
|
|
112,110 |
|
|
43,804 |
|
|
— |
|
|
190,248 |
|
|
(21,460) |
|
|
168,788 |
|
Goodwill |
|
|
— |
|
|
115,988 |
|
|
— |
|
|
140,437 |
|
|
— |
|
|
256,425 |
|
|
— |
|
|
256,425 |
|
Derivative assets |
|
|
15,232 |
|
|
481 |
|
|
41,461 |
|
|
2,633 |
|
|
— |
|
|
59,807 |
|
|
— |
|
|
59,807 |
|
Accrued interest receivable |
|
|
42,080 |
|
|
6,356 |
|
|
269 |
|
|
1,090 |
|
|
3,243 |
|
|
53,038 |
|
|
(127) |
|
|
52,911 |
|
Other assets |
|
|
38,604 |
|
|
8,398 |
|
|
99,412 |
|
|
49,882 |
|
|
2,399 |
|
|
198,695 |
|
|
(7) |
|
|
198,688 |
|
VIE assets, at fair value |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
48,034,610 |
|
|
48,034,610 |
|
Total Assets |
|
$ |
8,697,054 |
|
$ |
2,037,059 |
|
$ |
3,043,483 |
|
$ |
1,984,236 |
|
$ |
215,558 |
|
$ |
15,977,390 |
|
$ |
46,944,089 |
|
$ |
62,921,479 |
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other liabilities |
|
$ |
23,681 |
|
$ |
10,889 |
|
$ |
71,253 |
|
$ |
80,353 |
|
$ |
28,600 |
|
$ |
214,776 |
|
$ |
126 |
|
$ |
214,902 |
|
Related-party payable |
|
|
— |
|
|
— |
|
|
— |
|
|
74 |
|
|
25,212 |
|
|
25,286 |
|
|
— |
|
|
25,286 |
|
Dividends payable |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
132,549 |
|
|
132,549 |
|
|
— |
|
|
132,549 |
|
Derivative liabilities |
|
|
3,015 |
|
|
381 |
|
|
2,276 |
|
|
251 |
|
|
29,463 |
|
|
35,386 |
|
|
— |
|
|
35,386 |
|
Secured financing agreements, net |
|
|
4,117,051 |
|
|
1,507,073 |
|
|
1,929,596 |
|
|
759,012 |
|
|
297,655 |
|
|
8,610,387 |
|
|
(23,700) |
|
|
8,586,687 |
|
Unsecured senior notes, net |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2,024,570 |
|
|
2,024,570 |
|
|
— |
|
|
2,024,570 |
|
Secured borrowings on transferred loans, net |
|
|
74,148 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
74,148 |
|
|
— |
|
|
74,148 |
|
VIE liabilities, at fair value |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
46,945,674 |
|
|
46,945,674 |
|
Total Liabilities |
|
|
4,217,895 |
|
|
1,518,343 |
|
|
2,003,125 |
|
|
839,690 |
|
|
2,538,049 |
|
|
11,117,102 |
|
|
46,922,100 |
|
|
58,039,202 |
|
Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Starwood Property Trust, Inc. Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2,793 |
|
|
2,793 |
|
|
— |
|
|
2,793 |
|
Additional paid-in capital |
|
|
1,481,943 |
|
|
525,108 |
|
|
809,734 |
|
|
270,045 |
|
|
1,876,231 |
|
|
4,963,061 |
|
|
— |
|
|
4,963,061 |
|
Treasury stock |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(104,194) |
|
|
(104,194) |
|
|
— |
|
|
(104,194) |
|
Accumulated other comprehensive income (loss) |
|
|
60,811 |
|
|
— |
|
|
7,171 |
|
|
(62) |
|
|
— |
|
|
67,920 |
|
|
— |
|
|
67,920 |
|
Retained earnings (accumulated deficit) |
|
|
2,926,015 |
|
|
(6,392) |
|
|
5,775 |
|
|
863,580 |
|
|
(4,097,321) |
|
|
(308,343) |
|
|
— |
|
|
(308,343) |
|
Total Starwood Property Trust, Inc. Stockholders’ Equity |
|
|
4,468,769 |
|
|
518,716 |
|
|
822,680 |
|
|
1,133,563 |
|
|
(2,322,491) |
|
|
4,621,237 |
|
|
— |
|
|
4,621,237 |
|
Non-controlling interests in consolidated subsidiaries |
|
|
10,390 |
|
|
— |
|
|
217,678 |
|
|
10,983 |
|
|
— |
|
|
239,051 |
|
|
21,989 |
|
|
261,040 |
|
Total Equity |
|
|
4,479,159 |
|
|
518,716 |
|
|
1,040,358 |
|
|
1,144,546 |
|
|
(2,322,491) |
|
|
4,860,288 |
|
|
21,989 |
|
|
4,882,277 |
|
Total Liabilities and Equity |
|
$ |
8,697,054 |
|
$ |
2,037,059 |
|
$ |
3,043,483 |
|
$ |
1,984,236 |
|
$ |
215,558 |
|
$ |
15,977,390 |
|
$ |
46,944,089 |
|
$ |
62,921,479 |
7