Segment Data (Tables)

9 Months Ended

Sep. 30, 2017

Segment Data

Schedule of results of operations by business segment

The table below presents our results of operations for the three months ended September 30, 2017 by business segment (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

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

					Investing						Investing
	Lending		Property		and Servicing						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		—		29,226		10,516		—		39,742		—		39,742
Other revenues		99		11		1,692		—		1,802		(157)		1,645
Total revenues		128,101		29,237		91,879		—		249,217		(44,512)		204,705
Costs and expenses:
Management fees		525		—		24		27,183		27,732		48		27,780
Interest expense		22,678		5,536		4,877		26,181		59,272		(190)		59,082
General and administrative		5,067		867		43,711		1,651		51,296		174		51,470
Acquisition and investment pursuit costs		322		759		416		12		1,509		—		1,509
Costs of rental operations		—		13,139		4,872		—		18,011		—		18,011
Depreciation and amortization		—		10,870		4,482		—		15,352		—		15,352
Loan loss allowance, net		2,127		—		—		—		2,127		—		2,127
Other expense		—		513		198		—		711		—		711
Total costs and expenses		30,719		31,684		58,580		55,027		176,010		32		176,042
Income (loss) before other income (loss), income taxes and non-controlling interests		97,382		(2,447)		33,299		(55,027)		73,207		(44,544)		28,663
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		2,455		617		—		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		(4,720)		(2,590)		—		(2,328)		—		(2,328)
Foreign currency (loss) gain, net		(3,839)		(7)		632		—		(3,214)		—		(3,214)
Other income, net		—		—		35		234		269		—		269
Total other income (loss)		2,212		(2,272)		35,304		234		35,478		44,339		79,817
Income (loss) before income taxes		99,594		(4,719)		68,603		(54,793)		108,685		(205)		108,480
Income tax provision		—		—		(2,667)		—		(2,667)		—		(2,667)
Net income (loss)		99,594		(4,719)		65,936		(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	$	(4,719)	$	66,036	$	(54,793)	$	105,766	$	—	$	105,766

The table below presents our results of operations for the nine months ended September 30, 2017 by business segment (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

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

					Investing						Investing
	Lending		Property		and Servicing						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		—		85,048		25,214		—		110,262		—		110,262
Other revenues		180		35		4,110		—		4,325		(511)		3,814
Total revenues		383,175		85,083		268,658		—		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		16,163		11,443		78,236		173,427		(190)		173,237
General and administrative		13,529		2,259		95,726		7,631		119,145		532		119,677
Acquisition and investment pursuit costs		1,602		1,517		1,551		1,012		5,682		—		5,682
Costs of rental operations		—		34,923		11,595		—		46,518		—		46,518
Depreciation and amortization		—		41,922		11,263		—		53,185		—		53,185
Loan loss allowance, net		3,395		—		—		—		3,395		—		3,395
Other expense		—		513		298		—		811		—		811
Total costs and expenses		87,406		97,297		131,930		161,894		478,527		488		479,015
Income (loss) before other income (loss), income taxes and non-controlling interests		295,769		(12,214)		136,728		(161,894)		258,389		(137,214)		121,175
Other income (loss):
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		7,313		3,280		—		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		(6,837)		(17,780)		—		(6,793)		—		(6,793)
Foreign currency (loss) gain, net		(23,501)		(41)		2,962		—		(20,580)		—		(20,580)
Other income, net		—		9,102		112		1,784		10,998		—		10,998
Total other income (loss)		(3,005)		9,537		(18,463)		1,784		(10,147)		137,369		127,222
Income (loss) before income taxes		292,764		(2,677)		118,265		(160,110)		248,242		155		248,397
Income tax provision		(75)		—		(3,392)		—		(3,467)		—		(3,467)
Net income (loss)		292,689		(2,677)		114,873		(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	$	(2,677)	$	115,044	$	(160,110)	$	243,896	$	—	$	243,896

Schedule of condensed consolidated balance sheet by business segment

The table below presents our condensed consolidated balance sheet as of September 30, 2017 by business segment (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

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

					Investing						Investing
	Lending		Property		and Servicing						and Servicing
	Segment		Segment		Segment		Corporate		Subtotal		VIEs		Total
Assets:
Cash and cash equivalents	$	7,085	$	7,701	$	38,798	$	560,790	$	614,374	$	1,148	$	615,522
Restricted cash		17,885		9,146		8,202		—		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		—		1,667,108		277,612		—		1,944,720		—		1,944,720
Intangible assets		—		128,159		125,327		—		253,486		(34,238)		219,248
Investment in unconsolidated entities		30,874		124,977		56,376		—		212,227		(7,622)		204,605
Goodwill		—		—		140,437		—		140,437		—		140,437
Derivative assets		45,282		42,893		1,186		—		89,361		—		89,361
Accrued interest receivable		25,831		—		2,393		—		28,224		—		28,224
Other assets		13,470		29,569		59,503		1,866		104,408		(2,645)		101,763
VIE assets, at fair value		—		—		—		—		—		67,123,261		67,123,261
Total Assets	$	6,779,052	$	2,009,553	$	1,784,125	$	562,656	$	11,135,386	$	66,120,880	$	77,256,266
Liabilities and Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	20,769	$	81,873	$	68,603	$	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		1,196,830		426,683		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		1,278,703		496,242		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		696,049		883,761		892,699		4,691,180		—		4,691,180
Treasury stock		—		—		—		(92,104)		(92,104)		—		(92,104)
Accumulated other comprehensive income (loss)		44,903		(8,328)		(437)		—		36,138		—		36,138
Retained earnings (accumulated deficit)		2,186,727		43,129		390,994		(2,736,429)		(115,579)		—		(115,579)
Total Starwood Property Trust, Inc. Stockholders’ Equity		4,450,301		730,850		1,274,318		(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		730,850		1,287,883		(1,933,195)		4,546,971		13,102		4,560,073
Total Liabilities and Equity	$	6,779,052	$	2,009,553	$	1,784,125	$	562,656	$	11,135,386	$	66,120,880	$	77,256,266