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Section 1: 8-K (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 2, 2016

 

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))

 

 


 

Item 2.02. Results of Operations and Financial Condition.

 

On November 2, 2016, Starwood Property Trust, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2016. 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 2, 2016

 

2

 


 

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 2, 2016

STARWOOD PROPERTY TRUST, INC.

 

 

 

By:

/s/ ANDREW J. SOSSEN

 

Name:

Andrew J. Sossen

 

Title:

Chief Operating Officer

 

3

 


 

EXHIBIT INDEX

 

Exhibit
Number

Description

 

 

99.1

Press Release, dated November 2, 2016

 

 

4

 


(Back To Top)

Section 2: EX-99.1 (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, 2016

– Quarterly GAAP Earnings of $0.44 and Core Earnings of $0.59 per Diluted Common Share –

– Deploys $1.3 Billion of Capital During the Quarter –

– Declares Dividend of $0.48 per Share for the Fourth Quarter of 2016 –

– Commits to Acquire Medical Office Portfolio for $837.9 Million with Expected Close by Year-End –

 

GREENWICH, Conn., November 2, 2016 /PRNewswire/ -- Starwood Property Trust, Inc. (NYSE: STWD) today announced operating results for the fiscal quarter ended September 30, 2016.  The Company’s third quarter 2016 GAAP net income was $105.8 million, or $0.44 per diluted share, and Core Earnings (a non-GAAP financial measure) was $141.1 million, or $0.59 per diluted share.    

“Our results this quarter were driven by contributions from across our businesses, demonstrating the strength of our multi-cylinder platform,” stated Barry Sternlicht, Chairman and Chief Executive Officer of Starwood Property Trust. “We deployed over $1.3 billion of capital this quarter and $3.8 billion year-to-date through volatile market conditions. The credit quality of our $9.1 billion portfolio remains strong, with an LTV on our loan book of just 63%. Since our move into long duration equity assets, we have reviewed countless property investments. This quarter, we identified an investment that met our objectives of long-term stable and rising cash flows, with attractive current cash-on-cash yields. We are under contract to close this investment, an exceptionally high quality medical office portfolio consisting of 38 buildings throughout the U.S. The portfolio is positioned to benefit from growth in the medical sector, high industry-wide tenant retention rates, minimal new supply and favorable demographic trends. By adding a resilient income stream that extends the duration of our overall book, we continue to build a portfolio that can withstand various market cycles.”

Mr. Sternlicht continued, “We continue to utilize our global scale and the deep industry relationships of both Starwood Property Trust and its manager, Starwood Capital Group, to identify unique investment opportunities.  In doing so, we have developed a portfolio of both debt and equity investments with attractive in-place cash flows, strong underlying fundamentals and moderate risk profiles, which continues to drive the best risk-adjusted returns for our shareholders.”

1

 


 

 

Dividend

On November 2, 2016, the Company’s Board of Directors declared a dividend of $0.48 per share of common stock for the quarter ending December 31, 2016. The dividend is payable on January 13, 2017 to common stockholders of record as of December 30, 2016. 

Supplemental Schedules

Starting this quarter, all of the quarterly disclosure by business segment that was previously contained in the Company’s earnings press release can be found in the Company’s supplemental earnings schedules, which the Company has published 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 “Financial Information” at www.starwoodpropertytrust.com.  

Conference Call and Webcast Information 

The Company will host a webcast and conference call on Wednesday, November 2, 2016 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 five 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:  1-888-891-7634

International:  1-719-325-2201

 

Conference Call Playback:

Domestic:  1-877-870-5176

International:  1-858-384-5517

Passcode:  8035266

 

The playback can be accessed through November 16, 2016.

 

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 $29 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, 2016

(Amounts in thousands)

 

    

 

   

Investing

   

 

   

 

   

 

   

Investing

   

 

 

 

Lending

 

and Servicing

 

Property

 

 

 

 

 

and Servicing

 

 

 

 

Segment

 

Segment

 

Segment

 

Corporate

 

Subtotal

 

VIEs

 

Total

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income from loans

  

$

114,506

  

$

6,719

  

$

 —

  

$

 —

  

$

121,225

  

$

 —

  

$

121,225

Interest income from investment securities

 

 

13,301

  

 

35,274

 

 

 —

 

 

 —

 

 

48,575

 

 

(29,400)

 

 

19,175

Servicing fees

 

 

195

  

 

37,678

 

 

 —

 

 

 —

 

 

37,873

 

 

(14,955)

 

 

22,918

Rental income

 

 

 —

 

 

10,516

 

 

29,226

 

 

 —

 

 

39,742

 

 

 —

 

 

39,742

Other revenues

 

 

99

 

 

1,692

 

 

11

 

 

 —

 

 

1,802

 

 

(157)

 

 

1,645

Total revenues 

 

 

128,101

 

 

91,879

 

 

29,237

 

 

 —

 

 

249,217

 

 

(44,512)

 

 

204,705

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management fees

 

 

525

 

 

24

 

 

 —

 

 

27,183

 

 

27,732

 

 

48

 

 

27,780

Interest expense

 

 

22,678

 

 

4,877

 

 

5,536

 

 

26,181

 

 

59,272

 

 

(190)

 

 

59,082

General and administrative

 

 

5,067

 

 

43,711

 

 

867

 

 

1,651

 

 

51,296

 

 

174

 

 

51,470

Acquisition and investment pursuit costs

 

 

322

 

 

416

 

 

759

 

 

12

 

 

1,509

 

 

 —

 

 

1,509

Costs of rental operations

 

 

 —

 

 

4,872

 

 

13,139

 

 

 —

 

 

18,011

 

 

 —

 

 

18,011

Depreciation and amortization

 

 

 —

 

 

4,482

 

 

10,870

 

 

 —

 

 

15,352

 

 

 —

 

 

15,352

Loan loss allowance, net

 

 

2,127

 

 

 —

 

 

 —

 

 

 —

 

 

2,127

 

 

 —

 

 

2,127

Total costs and expenses 

 

 

30,719

 

 

58,382

 

 

31,171

 

 

55,027

 

 

175,299

 

 

32

 

 

175,331

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

 

 

97,382

 

 

33,497

 

 

(1,934)

 

 

(55,027)

 

 

73,918

 

 

(44,544)

 

 

29,374

Other income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in net assets related to consolidated VIEs

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

47,848

 

 

47,848

Change in fair value of servicing rights

 

 

 —

 

 

(14,006)

 

 

 —

 

 

 —

 

 

(14,006)

 

 

(277)

 

 

(14,283)

Change in fair value of investment securities, net

 

 

207

 

 

620

 

 

 —

 

 

 —

 

 

827

 

 

(3,613)

 

 

(2,786)

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

 

 

 —

 

 

49,996

 

 

 —

 

 

 —

 

 

49,996

 

 

 —

 

 

49,996

Earnings from unconsolidated entities

 

 

852

 

 

617

 

 

2,455

 

 

 —

 

 

3,924

 

 

381

 

 

4,305

Gain on sale of investments and other assets, net

 

 

10

 

 

 —

 

 

 —

 

 

 —

 

 

10

 

 

 —

 

 

10

Gain (loss) on derivative financial instruments, net

 

 

4,982

 

 

(2,590)

 

 

(4,720)

 

 

 —

 

 

(2,328)

 

 

 —

 

 

(2,328)

Foreign currency (loss) gain, net

 

 

(3,839)

 

 

632

 

 

(7)

 

 

 —

 

 

(3,214)

 

 

 —

 

 

(3,214)

OTTI

 

 

 —

 

 

(198)

 

 

(513)

 

 

 —

 

 

(711)

 

 

 —

 

 

(711)

Other income, net

 

 

 —

 

 

35

 

 

 —

 

 

234

 

 

269

 

 

 —

 

 

269

Total other income (loss)

 

 

2,212

 

 

35,106

 

 

(2,785)

 

 

234

 

 

34,767

 

 

44,339

 

 

79,106

Income (loss) before income taxes 

 

 

99,594

 

 

68,603

 

 

(4,719)

 

 

(54,793)

 

 

108,685

 

 

(205)

 

 

108,480

Income tax provision

 

 

 —

 

 

(2,667)

 

 

 —

 

 

 —

 

 

(2,667)

 

 

 —

 

 

(2,667)

Net income (loss) 

 

 

99,594

 

 

65,936

 

 

(4,719)

 

 

(54,793)

 

 

106,018

 

 

(205)

 

 

105,813

Net (income) loss attributable to non-controlling interests

 

 

(352)

 

 

100

 

 

 —

 

 

 —

 

 

(252)

 

 

205

 

 

(47)

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

 

$

99,242

 

$

66,036

 

$

(4,719)

 

$

(54,793)

 

$

105,766

 

$

 —

 

$

105,766

 

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,  losses on debt extinguishment 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, 2016

(Amounts in thousands except per share data)

 

    

 

    

Investing

    

 

    

 

    

 

 

 

 

Lending

 

and Servicing

 

Property

 

 

 

 

 

 

 

Segment

 

Segment

 

Segment

 

Corporate

 

Total

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

 

99,242

 

$

66,036

 

$

(4,719)

 

$  

(54,793)

 

$

105,766

Add / (Deduct):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash equity compensation expense

 

 

824

 

 

1,298

 

 

27

 

 

5,986

 

 

8,135

Management incentive fee

 

 

 —

 

 

 —

 

 

 —

 

 

6,303

 

 

6,303

Acquisition and investment pursuit costs

 

 

 —

 

 

89

 

 

727

 

 

12

 

 

828

Depreciation and amortization

 

 

 —

 

 

3,791

 

 

10,908

 

 

 —

 

 

14,699

Loan loss allowance, net

 

 

2,127

 

 

 —

 

 

 —

 

 

 —

 

 

2,127

Interest income adjustment for securities

 

 

(236)

 

 

3,874

 

 

 —

 

 

 —

 

 

3,638

Other non-cash items

 

 

 —

 

 

230

 

 

(108)

 

 

 —

 

 

122

Reversal of unrealized (gains) / losses on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held-for-sale

 

 

 —

 

 

(49,996)

 

 

 —

 

 

 —

 

 

(49,996)

Securities

 

 

(207)

 

 

(620)

 

 

 —

 

 

 —

 

 

(827)

Derivatives

 

 

(5,624)

 

 

1,932

 

 

4,720

 

 

 —

 

 

1,028

Foreign currency

 

 

3,839

 

 

(632)

 

 

7

 

 

 —

 

 

3,214

Earnings from unconsolidated entities

 

 

(852)

 

 

(617)

 

 

(2,455)

 

 

 —

 

 

(3,924)

Recognition of realized gains / (losses) on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held-for-sale

 

 

 —

 

 

52,919

 

 

 —

 

 

 —

 

 

52,919

Securities

 

 

 —

 

 

(3,259)

 

 

 —

 

 

 —

 

 

(3,259)

Derivatives

 

 

7,436

 

 

(6,042)

 

 

44

 

 

 —

 

 

1,438

Foreign currency

 

 

(6,145)

 

 

632

 

 

(7)

 

 

 —

 

 

(5,520)

Earnings from unconsolidated entities

 

 

852

 

 

1,100

 

 

2,487

 

 

 —

 

 

4,439

Core Earnings (Loss)

 

$

101,256

 

$

70,735

 

$

11,631

 

$

(42,492)

 

$

141,130

Core Earnings (Loss) per Weighted Average Diluted Share

 

$

0.42

 

$

0.30

 

$

0.05

 

$

(0.18)

 

$

0.59

 

4

 


 

 

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations by Segment

For the nine months ended September 30, 2016

(Amounts in thousands)

 

 

 

   

Investing

   

 

   

 

   

 

   

Investing

   

 

 

 

Lending

 

and Servicing

 

Property

 

 

 

 

 

and Servicing

 

 

 

 

Segment

 

Segment

 

Segment

 

Corporate

 

Subtotal

 

VIEs

 

Total

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income from loans

  

$

348,460

  

$

12,854

  

$

 —

  

$

 —

  

$

361,314

  

$

 —

  

$

361,314

Interest income from investment securities

 

 

33,975

  

 

115,335

 

 

 —

 

 

 —

 

 

149,310

 

 

(95,431)

 

 

53,879

Servicing fees

 

 

560

  

 

111,145

 

 

 —

 

 

 —

 

 

111,705

 

 

(40,784)

 

 

70,921

Rental income

 

 

 —

 

 

25,214

 

 

85,048

 

 

 —

 

 

110,262

 

 

 —

 

 

110,262

Other revenues

 

 

180

 

 

4,110

 

 

35

 

 

 —

 

 

4,325

 

 

(511)

 

 

3,814

Total revenues 

 

 

383,175

 

 

268,658

 

 

85,083

 

 

 —

 

 

736,916

 

 

(136,726)

 

 

600,190

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management fees

 

 

1,295

 

 

54

 

 

 —

 

 

75,015

 

 

76,364

 

 

146

 

 

76,510

Interest expense

 

 

67,585

 

 

11,443

 

 

16,163

 

 

78,236

 

 

173,427

 

 

(190)

 

 

173,237

General and administrative

 

 

13,529

 

 

95,726

 

 

2,259

 

 

7,631

 

 

119,145

 

 

532

 

 

119,677

Acquisition and investment pursuit costs

 

 

1,602

 

 

1,551

 

 

1,517

 

 

1,012

 

 

5,682

 

 

 —

 

 

5,682

Costs of rental operations

 

 

 —

 

 

11,595

 

 

34,923

 

 

 —

 

 

46,518

 

 

 —

 

 

46,518

Depreciation and amortization

 

 

 —

 

 

11,263

 

 

41,922

 

 

 —

 

 

53,185

 

 

 —

 

 

53,185

Loan loss allowance, net

 

 

3,395

 

 

 —

 

 

 —

 

 

 —

 

 

3,395

 

 

 —

 

 

3,395

Other expense

 

 

 —

 

 

100

 

 

 —

 

 

 —

 

 

100

 

 

 —

 

 

100

Total costs and expenses 

 

 

87,406

 

 

131,732

 

 

96,784

 

 

161,894

 

 

477,816

 

 

488

 

 

478,304

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

 

 

295,769

 

 

136,926

 

 

(11,701)

 

 

(161,894)

 

 

259,100

 

 

(137,214)

 

 

121,886

Other (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in net assets related to consolidated VIEs

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

94,388

 

 

94,388

Change in fair value of servicing rights

 

 

 —

 

 

(33,710)

 

 

 —

 

 

 —

 

 

(33,710)

 

 

497

 

 

(33,213)

Change in fair value of investment securities, net

 

 

(37)

 

 

(43,449)

 

 

 —

 

 

 —

 

 

(43,486)

 

 

42,772

 

 

(714)

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

 

 

 —

 

 

70,122

 

 

 —

 

 

 —

 

 

70,122

 

 

 —

 

 

70,122

Earnings from unconsolidated entities

 

 

2,544

 

 

3,280

 

 

7,313

 

 

 —

 

 

13,137

 

 

(288)

 

 

12,849

Gain on sale of investments and other assets, net

 

 

165

 

 

 —

 

 

 —

 

 

 —

 

 

165

 

 

 —

 

 

165

Gain (loss) on derivative financial instruments, net

 

 

17,824

 

 

(17,780)

 

 

(6,837)

 

 

 —

 

 

(6,793)

 

 

 —

 

 

(6,793)

Foreign currency (loss) gain, net

 

 

(23,501)

 

 

2,962

 

 

(41)

 

 

 —

 

 

(20,580)

 

 

 —

 

 

(20,580)

OTTI

 

 

 —

 

 

(198)

 

 

(513)

 

 

 —

 

 

(711)

 

 

 —

 

 

(711)

Other income, net

 

 

 —

 

 

112

 

 

9,102

 

 

1,784

 

 

10,998

 

 

 —

 

 

10,998

Total other (loss) income

 

 

(3,005)

 

 

(18,661)

 

 

9,024

 

 

1,784

 

 

(10,858)

 

 

137,369

 

 

126,511

Income (loss) before income taxes 

 

 

292,764

 

 

118,265

 

 

(2,677)

 

 

(160,110)

 

 

248,242

 

 

155

 

 

248,397

Income tax provision

 

 

(75)

 

 

(3,392)

 

 

 —

 

 

 —

 

 

(3,467)

 

 

 —

 

 

(3,467)

Net income (loss) 

 

 

292,689

 

 

114,873

 

 

(2,677)

 

 

(160,110)

 

 

244,775

 

 

155

 

 

244,930

Net (income) loss attributable to non-controlling interests

 

 

(1,050)

 

 

171

 

 

 —

 

 

 —

 

 

(879)

 

 

(155)

 

 

(1,034)

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

 

$

291,639

 

$

115,044

 

$

(2,677)

 

$

(160,110)

 

$

243,896

 

$

 —

 

$

243,896

 

5

 


 

 

Reconciliation of Net Income to Core Earnings

For the nine months ended September 30, 2016

(Amounts in thousands except per share data)

 

    

 

    

Investing

    

 

    

 

    

 

 

 

Lending

 

and Servicing

 

Property

 

 

 

 

 

 

Segment

 

Segment

 

Segment

 

Corporate

 

Total

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

 

$

291,639

 

$

115,044

 

$

(2,677)

 

$

(160,110)

 

$

243,896

Add / (Deduct):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash equity compensation expense

 

 

2,110

 

 

3,785

 

 

89

 

 

16,893

 

 

22,877

Management incentive fee

 

 

 —

 

 

 —

 

 

 —

 

 

13,770

 

 

13,770

Acquisition and investment pursuit costs

 

 

 —

 

 

904

 

 

1,421

 

 

12

 

 

2,337

Depreciation and amortization

 

 

 —

 

 

8,918

 

 

41,997

 

 

 —

 

 

50,915

Loan loss allowance, net

 

 

3,395

 

 

 —

 

 

 —

 

 

 —

 

 

3,395

Interest income adjustment for securities

 

 

(740)

 

 

10,620

 

 

 —

 

 

 —

 

 

9,880

Other non-cash items

 

 

 —

 

 

247

 

 

(10,922)

 

 

 —

 

 

(10,675)

Reversal of unrealized (gains) / losses on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held-for-sale

 

 

 —

 

 

(70,122)

 

 

 —

 

 

 —

 

 

(70,122)

Securities

 

 

37

 

 

43,449

 

 

 —

 

 

 —

 

 

43,486

Derivatives

 

 

(19,807)

 

 

16,330

 

 

6,837

 

 

 —

 

 

3,360

Foreign currency

 

 

23,501

 

 

(2,962)

 

 

41

 

 

 —

 

 

20,580

Earnings from unconsolidated entities

 

 

(2,544)

 

 

(3,280)

 

 

(7,313)

 

 

 —

 

 

(13,137)

Recognition of realized gains / (losses) on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held-for-sale

 

 

 —

 

 

71,390

 

 

 —

 

 

 —

 

 

71,390

Securities

 

 

 —

 

 

(11,136)

 

 

 —

 

 

 —

 

 

(11,136)

Derivatives

 

 

33,311

 

 

(15,858)

 

 

(26)

 

 

 —

 

 

17,427

Foreign currency

 

 

(31,916)

 

 

2,825

 

 

(41)

 

 

 —

 

 

(29,132)

Earnings from unconsolidated entities

 

 

3,148

 

 

2,855

 

 

4,820

 

 

 —

 

 

10,823

Core Earnings (Loss)

 

$

302,134

 

$

173,009

 

$

34,226

 

$

(129,435)

 

$

379,934

Core Earnings (Loss) per Weighted Average Diluted Share

 

$

1.26

 

$

0.73

 

$

0.14

 

$

(0.54)

 

$

1.59

 

6

 


 

 

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet by Segment

As of September 30, 2016

(Amounts in thousands)

 

 

    

 

    

Investing

    

 

    

 

    

 

    

Investing

    

 

 

 

Lending

 

and Servicing

 

Property

 

 

 

 

 

and Servicing

 

 

 

 

Segment

 

Segment

 

Segment

 

Corporate

 

Subtotal

 

VIEs

 

Total

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

136,096

 

$

73,779

 

$

6,222

 

$

284,325

 

$

500,422

 

$

1,135

 

$

501,557

Restricted cash

 

 

26,963

 

 

16,301

 

 

8,471

 

 

 —

 

 

51,735

 

 

 —

 

 

51,735

Loans held-for-investment, net

 

 

5,207,092

 

 

25,139

 

 

 —

 

 

 —

 

 

5,232,231

 

 

 —

 

 

5,232,231

Loans held-for-sale

 

 

 —

 

 

347,490

 

 

 —

 

 

 —

 

 

347,490

 

 

 —

 

 

347,490

Loans transferred as secured borrowings

 

 

100,978

 

 

 —

 

 

 —

 

 

 —

 

 

100,978

 

 

 —

 

 

100,978

Investment securities

 

 

795,882

 

 

1,029,205

 

 

 —

 

 

 —

 

 

1,825,087

 

 

(970,420)

 

 

854,667

Properties, net

 

 

 —

 

 

225,608

 

 

1,012,271

 

 

 —

 

 

1,237,879

 

 

 —

 

 

1,237,879

Intangible assets

 

 

 —

 

 

137,746

 

 

47,495

 

 

 —

 

 

185,241

 

 

(29,849)

 

 

155,392

Investment in unconsolidated entities

 

 

30,838

 

 

41,453

 

 

120,970

 

 

 —

 

 

193,261

 

 

(7,513)

 

 

185,748

Goodwill

 

 

 —

 

 

140,437

 

 

 —

 

 

 —

 

 

140,437

 

 

 —

 

 

140,437

Derivative assets

 

 

29,818

 

 

1,399

 

 

3,092

 

 

 —

 

 

34,309

 

 

 —

 

 

34,309

Accrued interest receivable

 

 

25,771

 

 

973

 

 

 —

 

 

 —

 

 

26,744

 

 

 —

 

 

26,744

Other assets

 

 

6,947

 

 

89,097

 

 

32,250

 

 

2,519

 

 

130,813

 

 

(2,521)

 

 

128,292

VIE assets, at fair value

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

73,923,699

 

 

73,923,699

Total Assets

 

$

6,360,385

 

$

2,128,627

 

$

1,230,771

 

$

286,844

 

$

10,006,627

 

$

72,914,531

 

$

82,921,158

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable, accrued expenses and other liabilities

 

$

21,410

 

$

87,324

 

$

46,530

 

$

18,025

 

$

173,289

 

$

835

 

$

174,124

Related-party payable

 

 

 —

 

 

279

 

 

 —

 

 

23,622

 

 

23,901

 

 

 —

 

 

23,901

Dividends payable

 

 

 —

 

 

 —

 

 

 —

 

 

115,190

 

 

115,190

 

 

 —

 

 

115,190

Derivative liabilities

 

 

12,002

 

 

455

 

 

296

 

 

 —

 

 

12,753

 

 

 —

 

 

12,753

Secured financing agreements, net

 

 

2,269,960

 

 

494,213

 

 

737,796

 

 

644,570

 

 

4,146,539

 

 

(23,700)

 

 

4,122,839

Convertible senior notes, net

 

 

 —

 

 

 —

 

 

 —

 

 

1,339,853

 

 

1,339,853

 

 

 —

 

 

1,339,853

Secured borrowings on transferred loans

 

 

102,365

 

 

 —

 

 

 —

 

 

 —

 

 

102,365

 

 

 —

 

 

102,365

VIE liabilities, at fair value

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

72,924,751

 

 

72,924,751

Total Liabilities

 

 

2,405,737

 

 

582,271

 

 

784,622

 

 

2,141,260

 

 

5,913,890

 

 

72,901,886

 

 

78,815,776

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Starwood Property Trust, Inc. Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

 —

 

 

 —

 

 

 —

 

 

2,430

 

 

2,430

 

 

 —

 

 

2,430

Additional paid-in capital

 

 

1,814,902

 

 

1,205,686

 

 

438,512

 

 

771,477

 

 

4,230,577

 

 

 —

 

 

4,230,577

Treasury stock

 

 

 —

 

 

 —

 

 

 —

 

 

(92,104)

 

 

(92,104)

 

 

 —

 

 

(92,104)

Accumulated other comprehensive income (loss)

 

 

45,762

 

 

(7,696)

 

 

2,182

 

 

 —

 

 

40,248

 

 

 —

 

 

40,248

Retained earnings (accumulated deficit)

 

 

2,082,734

 

 

335,727

 

 

5,455

 

 

(2,536,219)

 

 

(112,303)

 

 

 —

 

 

(112,303)

Total Starwood Property Trust, Inc. Stockholders’ Equity

 

 

3,943,398

 

 

1,533,717

 

 

446,149

 

 

(1,854,416)

 

 

4,068,848

 

 

 —

 

 

4,068,848

Non-controlling interests in consolidated subsidiaries

 

 

11,250

 

 

12,639

 

 

 —

 

 

 —

 

 

23,889

 

 

12,645

 

 

36,534

Total Equity

 

 

3,954,648

 

 

1,546,356

 

 

446,149

 

 

(1,854,416)

 

 

4,092,737