22. Segment Data

In its operation of the business, management, including our chief operating decision maker, who is our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements prepared on a basis prior to the impact of consolidating securitization VIEs under ASC 810. The segment information within this note is reported on that basis.

The table below presents our results of operations for the three months ended June 30, 2017 by business segment (amounts in thousands):


			Investing								Investing
	Lending		and Servicing		Property						and Servicing
	Segment		Segment		Segment		Corporate		Subtotal		VIEs		Total
Revenues:
Interest income from loans	$	116,993	$	3,619	$	—	$	—	$	120,612	$	—	$	120,612
Interest income from investment securities		11,611		38,192		—		—		49,803		(37,433)		12,370
Servicing fees		216		33,663		—		—		33,879		(15,251)		18,628
Rental income		—		12,687		46,279		—		58,966		—		58,966
Other revenues		293		545		221		—		1,059		(66)		993
Total revenues		129,113		88,706		46,500		—		264,319		(52,750)		211,569
Costs and expenses:
Management fees		469		18		—		24,096		24,583		50		24,633
Interest expense		24,486		4,856		10,899		31,351		71,592		(275)		71,317
General and administrative		5,359		22,789		1,000		3,298		32,446		74		32,520
Acquisition and investment pursuit costs		385		53		99		—		537		—		537
Costs of rental operations		—		5,232		17,792		—		23,024		—		23,024
Depreciation and amortization		16		4,737		17,279		—		22,032		—		22,032
Loan loss allowance, net		(2,694)		—		—		—		(2,694)		—		(2,694)
Other expense		—		176		(34)		—		142		—		142
Total costs and expenses		28,021		37,861		47,035		58,745		171,662		(151)		171,511
Income (loss) before other income (loss), income taxes and non-controlling interests		101,092		50,845		(535)		(58,745)		92,657		(52,599)		40,058
Other income (loss):
Change in net assets related to consolidated VIEs		—		—		—		—		—		77,761		77,761
Change in fair value of servicing rights		—		(13,667)		—		—		(13,667)		5,666		(8,001)
Change in fair value of investment securities, net		(149)		12,256		—		—		12,107		(14,600)		(2,493)
Change in fair value of mortgage loans held-for-sale, net		(152)		15,558		—		—		15,406		—		15,406
Earnings from unconsolidated entities		1,230		35,892		2,488		—		39,610		(10,145)		29,465
(Loss) gain on sale of investments and other assets, net		(3)		5,109		77		—		5,183		—		5,183
Loss on derivative financial instruments, net		(14,926)		(2,179)		(20,481)		—		(37,586)		—		(37,586)
Foreign currency gain, net		12,882		11		17		—		12,910		—		12,910
OTTI		(109)		—		—		—		(109)		—		(109)
Other income, net		—		704		—		—		704		(613)		91
Total other income (loss)		(1,227)		53,684		(17,899)		—		34,558		58,069		92,627
Income (loss) before income taxes		99,865		104,529		(18,434)		(58,745)		127,215		5,470		132,685
Income tax provision		(127)		(9,325)		—		—		(9,452)		—		(9,452)
Net income (loss)		99,738		95,204		(18,434)		(58,745)		117,763		5,470		123,233
Net income attributable to non-controlling interests		(353)		(30)		—		—		(383)		(5,470)		(5,853)
Net income (loss) attributable to Starwood Property Trust, Inc.	$	99,385	$	95,174	$	(18,434)	$	(58,745)	$	117,380	$	—	$	117,380

The table below presents our results of operations for the three months ended June 30, 2016 by business segment (amounts in thousands):


			Investing								Investing
	Lending		and Servicing		Property						and Servicing
	Segment		Segment		Segment		Corporate		Subtotal		VIEs		Total
Revenues:
Interest income from loans	$	119,296	$	3,261	$	—	$	—	$	122,557	$	—	$	122,557
Interest income from investment securities		11,046		32,435		—		—		43,481		(28,180)		15,301
Servicing fees		206		37,249		—		—		37,455		(14,143)		23,312
Rental income		—		8,223		29,620		—		37,843		—		37,843
Other revenues		58		1,076		18		—		1,152		(173)		979
Total revenues		130,606		82,244		29,638		—		242,488		(42,496)		199,992
Costs and expenses:
Management fees		395		12		—		23,304		23,711		56		23,767
Interest expense		22,572		3,328		5,678		26,057		57,635		—		57,635
General and administrative		4,540		26,721		837		3,130		35,228		181		35,409
Acquisition and investment pursuit costs		942		780		166		1,000		2,888		—		2,888
Costs of rental operations		—		3,661		12,191		—		15,852		—		15,852
Depreciation and amortization		—		3,730		15,343		—		19,073		—		19,073
Loan loss allowance, net		2,029		—		—		—		2,029		—		2,029
Total costs and expenses		30,478		38,232		34,215		53,491		156,416		237		156,653
Income (loss) before other income (loss), income taxes and non-controlling interests		100,128		44,012		(4,577)		(53,491)		86,072		(42,733)		43,339
Other income (loss):
Change in net assets related to consolidated VIEs		—		—		—		—		—		50,707		50,707
Change in fair value of servicing rights		—		(11,034)		—		—		(11,034)		(1,157)		(12,191)
Change in fair value of investment securities, net		(30)		7,459		—		—		7,429		(6,110)		1,319
Change in fair value of mortgage loans held-for-sale, net		—		13,235		—		—		13,235		—		13,235
Earnings from unconsolidated entities		1,224		1,286		2,429		—		4,939		(460)		4,479
Loss on sale of investments and other assets, net		(90)		—		—		—		(90)		—		(90)
Gain (loss) on derivative financial instruments, net		15,868		(3,945)		8,330		—		20,253		—		20,253
Foreign currency (loss) gain, net		(17,840)		870		(18)		—		(16,988)		—		(16,988)
Other income, net		—		34		8,680		—		8,714		—		8,714
Total other income (loss)		(868)		7,905		19,421		—		26,458		42,980		69,438
Income (loss) before income taxes		99,260		51,917		14,844		(53,491)		112,530		247		112,777
Income tax provision		—		(706)		—		—		(706)		—		(706)
Net income (loss)		99,260		51,211		14,844		(53,491)		111,824		247		112,071
Net income attributable to non-controlling interests		(348)		(3)		—		—		(351)		(247)		(598)
Net income (loss) attributable to Starwood Property Trust, Inc.	$	98,912	$	51,208	$	14,844	$	(53,491)	$	111,473	$	—	$	111,473

The table below presents our results of operations for the six months ended June 30, 2017 by business segment (amounts in thousands):


			Investing								Investing
	Lending		and Servicing		Property						and Servicing
	Segment		Segment		Segment		Corporate		Subtotal		VIEs		Total
Revenues:
Interest income from loans	$	226,039	$	6,456	$	—	$	—	$	232,495	$	—	$	232,495
Interest income from investment securities		24,330		73,028		—		—		97,358		(69,764)		27,594
Servicing fees		426		63,744		—		—		64,170		(31,440)		32,730
Rental income		—		24,876		91,132		—		116,008		—		116,008
Other revenues		372		1,009		266		—		1,647		(185)		1,462
Total revenues		251,167		169,113		91,398		—		511,678		(101,389)		410,289
Costs and expenses:
Management fees		923		36		—		47,958		48,917		100		49,017
Interest expense		44,443		9,214		21,106		62,958		137,721		(544)		137,177
General and administrative		9,570		45,369		2,381		5,468		62,788		161		62,949
Acquisition and investment pursuit costs		900		37		271		—		1,208		—		1,208
Costs of rental operations		—		10,719		33,183		—		43,902		—		43,902
Depreciation and amortization		33		9,791		34,436		—		44,260		—		44,260
Loan loss allowance, net		(2,999)		—		—		—		(2,999)		—		(2,999)
Other expense		—		934		(34)		—		900		—		900
Total costs and expenses		52,870		76,100		91,343		116,384		336,697		(283)		336,414
Income (loss) before other income (loss), income taxes and non-controlling interests		198,297		93,013		55		(116,384)		174,981		(101,106)		73,875
Other income (loss):
Change in net assets related to consolidated VIEs		—		—		—		—		—		146,931		146,931
Change in fair value of servicing rights		—		(23,304)		—		—		(23,304)		6,870		(16,434)
Change in fair value of investment securities, net		23		31,301		—		—		31,324		(34,988)		(3,664)
Change in fair value of mortgage loans held-for-sale, net		(152)		26,151		—		—		25,999		—		25,999
Earnings from unconsolidated entities		1,700		36,909		4,949		—		43,558		(11,106)		32,452
(Loss) gain on sale of investments and other assets, net		(59)		5,109		77		—		5,127		—		5,127
Loss on derivative financial instruments, net		(19,461)		(1,482)		(20,992)		—		(41,935)		—		(41,935)
Foreign currency gain, net		17,745		12		17		—		17,774		—		17,774
OTTI		(109)		—		—		—		(109)		—		(109)
Loss on extinguishment of debt		—		—		—		(5,916)		(5,916)		—		(5,916)
Other income, net		—		1,069		—		—		1,069		(613)		456
Total other income (loss)		(313)		75,765		(15,949)		(5,916)		53,587		107,094		160,681
Income (loss) before income taxes		197,984		168,778		(15,894)		(122,300)		228,568		5,988		234,556
Income tax provision		(342)		(8,127)		—		—		(8,469)		—		(8,469)
Net income (loss)		197,642		160,651		(15,894)		(122,300)		220,099		5,988		226,087
Net (income) loss attributable to non-controlling interests		(707)		346		—		—		(361)		(5,988)		(6,349)
Net income (loss) attributable to Starwood Property Trust, Inc.	$	196,935	$	160,997	$	(15,894)	$	(122,300)	$	219,738	$	—	$	219,738

The table below presents our results of operations for the six months ended June 30, 2016 by business segment (amounts in thousands):


			Investing								Investing
	Lending		and Servicing		Property						and Servicing
	Segment		Segment		Segment		Corporate		Subtotal		VIEs		Total
Revenues:
Interest income from loans	$	233,954	$	6,135	$	—	$	—	$	240,089	$	—	$	240,089
Interest income from investment securities		20,674		80,061		—		—		100,735		(66,031)		34,704
Servicing fees		365		73,467		—		—		73,832		(25,829)		48,003
Rental income		—		14,698		55,822		—		70,520		—		70,520
Other revenues		81		2,418		24		—		2,523		(354)		2,169
Total revenues		255,074		176,779		55,846		—		487,699		(92,214)		395,485
Costs and expenses:
Management fees		770		30		—		47,832		48,632		98		48,730
Interest expense		44,907		6,566		10,627		52,055		114,155		—		114,155
General and administrative		8,462		52,015		1,392		5,980		67,849		358		68,207
Acquisition and investment pursuit costs		1,280		1,135		758		1,000		4,173		—		4,173
Costs of rental operations		—		6,723		21,784		—		28,507		—		28,507
Depreciation and amortization		—		6,781		31,052		—		37,833		—		37,833
Loan loss allowance, net		1,268		—		—		—		1,268		—		1,268
Other expense		—		100		—		—		100		—		100
Total costs and expenses		56,687		73,350		65,613		106,867		302,517		456		302,973
Income (loss) before other income (loss), income taxes and non-controlling interests		198,387		103,429		(9,767)		(106,867)		185,182		(92,670)		92,512
Other income (loss):
Change in net assets related to consolidated VIEs		—		—		—		—		—		46,540		46,540
Change in fair value of servicing rights		—		(19,704)		—		—		(19,704)		774		(18,930)
Change in fair value of investment securities, net		(244)		(44,069)		—		—		(44,313)		46,385		2,072
Change in fair value of mortgage loans held-for-sale, net		—		20,126		—		—		20,126		—		20,126
Earnings from unconsolidated entities		1,692		2,663		4,858		—		9,213		(669)		8,544
Gain on sale of investments and other assets, net		155		—		—		—		155		—		155
Gain (loss) on derivative financial instruments, net		12,842		(15,190)		(2,117)		—		(4,465)		—		(4,465)
Foreign currency (loss) gain, net		(19,662)		2,330		(34)		—		(17,366)		—		(17,366)
Loss on extinguishment of debt		—		—		—		—		—		—		—
Other income, net		—		77		9,102		1,550		10,729		—		10,729
Total other income (loss)		(5,217)		(53,767)		11,809		1,550		(45,625)		93,030		47,405
Income (loss) before income taxes		193,170		49,662		2,042		(105,317)		139,557		360		139,917
Income tax provision		(75)		(725)		—		—		(800)		—		(800)
Net income (loss)		193,095		48,937		2,042		(105,317)		138,757		360		139,117
Net (income) loss attributable to non-controlling interests		(698)		71		—		—		(627)		(360)		(987)
Net income (loss) attributable to Starwood Property Trust, Inc.	$	192,397	$	49,008	$	2,042	$	(105,317)	$	138,130	$	—	$	138,130

The table below presents our condensed consolidated balance sheet as of June 30, 2017 by business segment (amounts in thousands):


			Investing								Investing
	Lending		and Servicing		Property						and Servicing
	Segment		Segment		Segment		Corporate		Subtotal		VIEs		Total
Assets:
Cash and cash equivalents	$	664	$	36,185	$	12,744	$	207,719	$	257,312	$	4,582	$	261,894
Restricted cash		15,573		14,846		12,880		—		43,299		—		43,299
Loans held-for-investment, net		6,207,067		4,008		—		—		6,211,075		—		6,211,075
Loans held-for-sale		318,634		291,482		—		—		610,116		—		610,116
Investment securities		735,086		1,009,151		—		—		1,744,237		(995,303)		748,934
Properties, net		—		285,190		1,675,308		—		1,960,498		—		1,960,498
Intangible assets		—		97,727		121,007		—		218,734		(27,368)		191,366
Investment in unconsolidated entities		31,261		89,211		127,795		—		248,267		(18,728)		229,539
Goodwill		—		140,437		—		—		140,437		—		140,437
Derivative assets		16,538		3,372		26,168		—		46,078		—		46,078
Accrued interest receivable		32,866		480		—		—		33,346		—		33,346
Other assets		46,365		59,345		58,932		1,768		166,410		(2,762)		163,648
VIE assets, at fair value		—		—		—		—		—		53,902,715		53,902,715
Total Assets	$	7,404,054	$	2,031,434	$	2,034,834	$	209,487	$	11,679,809	$	52,863,136	$	64,542,945
Liabilities and Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	23,813	$	56,451	$	67,088	$	23,126	$	170,478	$	971	$	171,449
Related-party payable		—		90		—		22,688		22,778		—		22,778
Dividends payable		—		—		—		126,171		126,171		—		126,171
Derivative liabilities		6,742		328		981		—		8,051		—		8,051
Secured financing agreements, net		2,700,190		550,704		1,227,402		296,327		4,774,623		(23,700)		4,750,923
Unsecured senior notes, net		—		—		—		2,039,086		2,039,086		—		2,039,086
VIE liabilities, at fair value		—		—		—		—		—		52,864,038		52,864,038
Total Liabilities		2,730,745		607,573		1,295,471		2,507,398		7,141,187		52,841,309		59,982,496
Equity:
Starwood Property Trust, Inc. Stockholders’ Equity:
Common stock		—		—		—		2,652		2,652		—		2,652
Additional paid-in capital		2,226,923		861,556		707,726		901,292		4,697,497		—		4,697,497
Treasury stock		—		—		—		(92,104)		(92,104)		—		(92,104)
Accumulated other comprehensive income (loss)		51,734		(155)		4,402		—		55,981		—		55,981
Retained earnings (accumulated deficit)		2,383,738		551,915		27,235		(3,109,751)		(146,863)		—		(146,863)
Total Starwood Property Trust, Inc. Stockholders’ Equity		4,662,395		1,413,316		739,363		(2,297,911)		4,517,163		—		4,517,163
Non-controlling interests in consolidated subsidiaries		10,914		10,545		—		—		21,459		21,827		43,286
Total Equity		4,673,309		1,423,861		739,363		(2,297,911)		4,538,622		21,827		4,560,449
Total Liabilities and Equity	$	7,404,054	$	2,031,434	$	2,034,834	$	209,487	$	11,679,809	$	52,863,136	$	64,542,945

The table below presents our condensed consolidated balance sheet as of December 31, 2016 by business segment (amounts in thousands):


			Investing								Investing
	Lending		and Servicing		Property						and Servicing
	Segment		Segment		Segment		Corporate		Subtotal		VIEs		Total
Assets:
Cash and cash equivalents	$	7,085	$	38,798	$	7,701	$	560,790	$	614,374	$	1,148	$	615,522
Restricted cash		17,885		8,202		9,146		—		35,233		—		35,233
Loans held-for-investment, net		5,827,553		20,442		—		—		5,847,995		—		5,847,995
Loans held-for-sale		—		63,279		—		—		63,279		—		63,279
Loans transferred as secured borrowings		35,000		—		—		—		35,000		—		35,000
Investment securities		776,072		990,570		—		—		1,766,642		(959,024)		807,618
Properties, net		—		277,612		1,667,108		—		1,944,720		—		1,944,720
Intangible assets		—		125,327		128,159		—		253,486		(34,238)		219,248
Investment in unconsolidated entities		30,874		56,376		124,977		—		212,227		(7,622)		204,605
Goodwill		—		140,437		—		—		140,437		—		140,437
Derivative assets		45,282		1,186		42,893		—		89,361		—		89,361
Accrued interest receivable		25,831		2,393		—		—		28,224		—		28,224
Other assets		13,470		59,503		29,569		1,866		104,408		(2,645)		101,763
VIE assets, at fair value		—		—		—		—		—		67,123,261		67,123,261
Total Assets	$	6,779,052	$	1,784,125	$	2,009,553	$	562,656	$	11,135,386	$	66,120,880	$	77,256,266
Liabilities and Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	20,769	$	68,603	$	81,873	$	26,003	$	197,248	$	886	$	198,134
Related-party payable		—		440		—		37,378		37,818		—		37,818
Dividends payable		—		—		—		125,075		125,075		—		125,075
Derivative liabilities		3,388		516		—		—		3,904		—		3,904
Secured financing agreements, net		2,258,462		426,683		1,196,830		295,851		4,177,826		(23,700)		4,154,126
Unsecured senior notes, net		—		—		—		2,011,544		2,011,544		—		2,011,544
Secured borrowings on transferred loans		35,000		—		—		—		35,000		—		35,000
VIE liabilities, at fair value		—		—		—		—		—		66,130,592		66,130,592
Total Liabilities		2,317,619		496,242		1,278,703		2,495,851		6,588,415		66,107,778		72,696,193
Equity:
Starwood Property Trust, Inc. Stockholders’ Equity:
Common stock		—		—		—		2,639		2,639		—		2,639
Additional paid-in capital		2,218,671		883,761		696,049		892,699		4,691,180		—		4,691,180
Treasury stock		—		—		—		(92,104)		(92,104)		—		(92,104)
Accumulated other comprehensive income (loss)		44,903		(437)		(8,328)		—		36,138		—		36,138
Retained earnings (accumulated deficit)		2,186,727		390,994		43,129		(2,736,429)		(115,579)		—		(115,579)
Total Starwood Property Trust, Inc. Stockholders’ Equity		4,450,301		1,274,318		730,850		(1,933,195)		4,522,274		—		4,522,274
Non-controlling interests in consolidated subsidiaries		11,132		13,565		—		—		24,697		13,102		37,799
Total Equity		4,461,433		1,287,883		730,850		(1,933,195)		4,546,971		13,102		4,560,073
Total Liabilities and Equity	$	6,779,052	$	1,784,125	$	2,009,553	$	562,656	$	11,135,386	$	66,120,880	$	77,256,266