Segment Data (Tables)

6 Months Ended

Jun. 30, 2019

Segment Data

Schedule of results of operations by business segment

The table below presents our results of operations for the three months ended June 30, 2019 by business segment (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	$	163,071	$	25,291	$	—	$	3,104	$	—	$	191,466	$	—	$	191,466
Interest income from investment securities		24,367		868		—		31,163		—		56,398		(33,853)		22,545
Servicing fees		90		—		—		15,880		—		15,970		(6,962)		9,008
Rental income		—		—		72,326		14,971		—		87,297		—		87,297
Other revenues		252		7		88		515		6		868		(3)		865
Total revenues		187,780		26,166		72,414		65,633		6		351,999		(40,818)		311,181
Costs and expenses:
Management fees		353		—		—		18		22,107		22,478		45		22,523
Interest expense		58,564		16,258		19,132		8,515		27,821		130,290		(164)		130,126
General and administrative		6,754		4,830		1,706		20,177		4,019		37,486		92		37,578
Acquisition and investment pursuit costs		160		14		—		(100)		—		74		—		74
Costs of rental operations		741		—		23,125		6,789		—		30,655		—		30,655
Depreciation and amortization		285		—		23,076		5,191		—		28,552		—		28,552
Loan loss provision, net		2,096		422		—		—		—		2,518		—		2,518
Other expense		76		—		1,173		194		—		1,443		—		1,443
Total costs and expenses		69,029		21,524		68,212		40,784		53,947		253,496		(27)		253,469
Other income (loss):
Change in net assets related to consolidated VIEs		—		—		—		—		—		—		55,158		55,158
Change in fair value of servicing rights		—		—		—		(1,159)		—		(1,159)		243		(916)
Change in fair value of investment securities, net		(948)		—		—		15,815		—		14,867		(14,200)		667
Change in fair value of mortgage loans held-for-sale, net		5,363		—		—		16,528		—		21,891		—		21,891
Earnings from unconsolidated entities		5,492		—		1,044		2,754		—		9,290		(473)		8,817
Gain on sale of investments and other assets, net		239		2,276		—		—		—		2,515		—		2,515
Gain (loss) on derivative financial instruments, net		5,592		(2,833)		(11,147)		(6,953)		15,309		(32)		—		(32)
Foreign currency (loss) gain, net		(6,927)		(83)		(8)		1		—		(7,017)		—		(7,017)
Loss on extinguishment of debt		—		(2,816)		—		—		—		(2,816)		—		(2,816)
Total other income (loss)		8,811		(3,456)		(10,111)		26,986		15,309		37,539		40,728		78,267
Income (loss) before income taxes		127,562		1,186		(5,909)		51,835		(38,632)		136,042		(63)		135,979
Income tax (provision) benefit		(1,832)		186		—		(1,887)		—		(3,533)		—		(3,533)
Net income (loss)		125,730		1,372		(5,909)		49,948		(38,632)		132,509		(63)		132,446
Net income attributable to non-controlling interests		(21)		—		(5,355)		(117)		—		(5,493)		63		(5,430)
Net income (loss) attributable to Starwood Property Trust, Inc.	$	125,709	$	1,372	$	(11,264)	$	49,831	$	(38,632)	$	127,016	$	—	$	127,016

The table below presents our results of operations for the three months ended June 30, 2018 by business segment (amounts in thousands):

	Commercial and
	Residential				Investing
	Lending		Property		and Servicing						Securitization
	Segment		Segment		Segment		Corporate		Subtotal		VIEs		Total
Revenues:
Interest income from loans	$	148,268	$	—	$	3,436	$	—	$	151,704	$	—	$	151,704
Interest income from investment securities		8,930		—		30,472		—		39,402		(28,612)		10,790
Servicing fees		50		—		24,687		—		24,737		(7,422)		17,315
Rental income		—		74,401		14,490		—		88,891		—		88,891
Other revenues		224		81		516		86		907		(51)		856
Total revenues		157,472		74,482		73,601		86		305,641		(36,085)		269,556
Costs and expenses:
Management fees		463		—		18		26,907		27,388		106		27,494
Interest expense		34,826		19,380		5,807		31,854		91,867		(275)		91,592
General and administrative		6,251		1,971		23,855		3,367		35,444		84		35,528
Acquisition and investment pursuit costs		1,692		(52)		(79)		—		1,561		—		1,561
Costs of rental operations		—		25,991		6,906		—		32,897		—		32,897
Depreciation and amortization		16		31,738		5,396		—		37,150		—		37,150
Loan loss provision, net		25,259		—		—		—		25,259		—		25,259
Other expense		77		—		420		—		497		—		497
Total costs and expenses		68,584		79,028		42,323		62,128		252,063		(85)		251,978
Other income (loss):
Change in net assets related to consolidated VIEs		—		—		—		—		—		43,946		43,946
Change in fair value of servicing rights		—		—		(3,255)		—		(3,255)		1,052		(2,203)
Change in fair value of investment securities, net		482		—		15,110		—		15,592		(7,890)		7,702
Change in fair value of mortgage loans held-for-sale, net		184		—		14,649		—		14,833		—		14,833
Earnings (loss) from unconsolidated entities		1,803		2,933		1,454		—		6,190		(720)		5,470
Gain on sale of investments and other assets, net		135		2,941		10,361		—		13,437		—		13,437
Gain (loss) on derivative financial instruments, net		19,467		19,920		(398)		(6,367)		32,622		—		32,622
Foreign currency (loss) gain, net		(13,264)		(1)		1		—		(13,264)		—		(13,264)
Loss on extinguishment of debt		—		—		(186)		—		(186)		—		(186)
Other income, net		—		489		9		—		498		—		498
Total other income (loss)		8,807		26,282		37,745		(6,367)		66,467		36,388		102,855
Income (loss) before income taxes		97,695		21,736		69,023		(68,409)		120,045		388		120,433
Income tax provision		(1,720)		(611)		(1,012)		—		(3,343)		—		(3,343)
Net income (loss)		95,975		21,125		68,011		(68,409)		116,702		388		117,090
Net income attributable to non-controlling interests		(361)		(4,684)		(2,427)		—		(7,472)		(388)		(7,860)
Net income (loss) attributable to Starwood Property Trust, Inc.	$	95,614	$	16,441	$	65,584	$	(68,409)	$	109,230	$	—	$	109,230

The table below presents our results of operations for the six months ended June 30, 2019 by business segment (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	$	317,666	$	52,206	$	—	$	5,010	$	—	$	374,882	$	—	$	374,882
Interest income from investment securities		44,275		1,753		—		55,456		—		101,484		(61,307)		40,177
Servicing fees		213		—		—		43,123		—		43,336		(9,895)		33,441
Rental income		—		—		142,847		28,283		—		171,130		—		171,130
Other revenues		456		693		166		711		26		2,052		(21)		2,031
Total revenues		362,610		54,652		143,013		132,583		26		692,884		(71,223)		621,661
Costs and expenses:
Management fees		764		—		—		36		45,095		45,895		94		45,989
Interest expense		120,168		34,835		38,122		16,261		55,736		265,122		(324)		264,798
General and administrative		13,522		9,309		3,224		39,028		7,245		72,328		180		72,508
Acquisition and investment pursuit costs		409		30		—		(23)		—		416		—		416
Costs of rental operations		760		—		46,062		13,484		—		60,306		—		60,306
Depreciation and amortization		356		—		46,972		10,478		—		57,806		—		57,806
Loan loss provision, net		2,085		1,196		—		—		—		3,281		—		3,281
Other expense		153		—		1,307		194		—		1,654		—		1,654
Total costs and expenses		138,217		45,370		135,687		79,458		108,076		506,808		(50)		506,758
Other income (loss):
Change in net assets related to consolidated VIEs		—		—		—		—		—		—		102,994		102,994
Change in fair value of servicing rights		—		—		—		(1,674)		—		(1,674)		(9)		(1,683)
Change in fair value of investment securities, net		(2,642)		—		—		33,955		—		31,313		(30,584)		729
Change in fair value of mortgage loans held-for-sale, net		6,749		—		—		26,408		—		33,157		—		33,157
Earnings (loss) from unconsolidated entities		6,069		—		(42,761)		3,348		—		(33,344)		(1,039)		(34,383)
Gain on sale of investments and other assets, net		2,994		3,066		—		940		—		7,000		—		7,000
(Loss) gain on derivative financial instruments, net		(3,705)		(3,228)		(9,857)		(10,385)		24,936		(2,239)		—		(2,239)
Foreign currency (loss) gain, net		(1,688)		217		1		—		—		(1,470)		—		(1,470)
(Loss) gain on extinguishment of debt		—		(6,120)		—		—		6		(6,114)		—		(6,114)
Other loss, net		—		—		—		—		(73)		(73)		—		(73)
Total other income (loss)		7,777		(6,065)		(52,617)		52,592		24,869		26,556		71,362		97,918
Income (loss) before income taxes		232,170		3,217		(45,291)		105,717		(83,181)		212,632		189		212,821
Income tax (provision) benefit		(1,584)		271		(258)		(2,296)		—		(3,867)		—		(3,867)
Net income (loss)		230,586		3,488		(45,549)		103,421		(83,181)		208,765		189		208,954
Net (income) loss attributable to non-controlling interests		(392)		—		(11,072)		98		—		(11,366)		(189)		(11,555)
Net income (loss) attributable to Starwood Property Trust, Inc.	$	230,194	$	3,488	$	(56,621)	$	103,519	$	(83,181)	$	197,399	$	—	$	197,399

The table below presents our results of operations for the six months ended June 30, 2018 by business segment (amounts in thousands):

	Commercial and
	Residential				Investing
	Lending		Property		and Servicing						Securitization
	Segment		Segment		Segment		Corporate		Subtotal		VIEs		Total
Revenues:
Interest income from loans	$	283,240	$	—	$	6,084	$	—	$	289,324	$	—	$	289,324
Interest income from investment securities		23,369		—		64,871		—		88,240		(62,181)		26,059
Servicing fees		215		—		58,121		—		58,336		(14,954)		43,382
Rental income		—		141,111		28,890		—		170,001		—		170,001
Other revenues		418		182		744		138		1,482		(105)		1,377
Total revenues		307,242		141,293		158,710		138		607,383		(77,240)		530,143
Costs and expenses:
Management fees		943		—		36		56,958		57,937		199		58,136
Interest expense		66,847		35,914		10,902		65,657		179,320		(545)		178,775
General and administrative		12,946		3,830		44,875		5,849		67,500		170		67,670
Acquisition and investment pursuit costs		1,912		(46)		72		—		1,938		—		1,938
Costs of rental operations		—		49,479		13,111		—		62,590		—		62,590
Depreciation and amortization		33		58,207		10,654		—		68,894		—		68,894
Loan loss provision, net		26,797		—		—		—		26,797		—		26,797
Other expense		154		—		447		—		601		—		601
Total costs and expenses		109,632		147,384		80,097		128,464		465,577		(176)		465,401
Other income (loss):
Change in net assets related to consolidated VIEs		—		—		—		—		—		96,599		96,599
Change in fair value of servicing rights		—		—		(12,423)		—		(12,423)		4,406		(8,017)
Change in fair value of investment securities, net		(222)		—		29,089		—		28,867		(21,314)		7,553
Change in fair value of mortgage loans held-for-sale, net		(1,508)		—		24,141		—		22,633		—		22,633
Earnings (loss) from unconsolidated entities		3,247		(582)		3,050		—		5,715		(1,707)		4,008
Gain on sale of investments and other assets, net		414		6,883		16,800		—		24,097		—		24,097
Gain (loss) on derivative financial instruments, net		8,649		21,839		4,644		(19,369)		15,763		—		15,763
Foreign currency gain (loss), net		286		1		(2)		—		285		—		285
Loss on extinguishment of debt		—		—		(186)		—		(186)		—		(186)
Other income, net		43		506		57		—		606		—		606
Total other income (loss)		10,909		28,647		65,170		(19,369)		85,357		77,984		163,341
Income (loss) before income taxes		208,519		22,556		143,783		(147,695)		227,163		920		228,083
Income tax provision		(2,667)		(1,872)		(1,660)		—		(6,199)		—		(6,199)
Net income (loss)		205,852		20,684		142,123		(147,695)		220,964		920		221,884
Net income attributable to non-controlling interests		(722)		(7,137)		(3,943)		—		(11,802)		(920)		(12,722)
Net income (loss) attributable to Starwood Property Trust, Inc.	$	205,130	$	13,547	$	138,180	$	(147,695)	$	209,162	$	—	$	209,162

Schedule of condensed consolidated balance sheet by business segment

The table below presents our condensed consolidated balance sheet as of June 30, 2019 by business segment (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	$	21,709	$	126	$	30,493	$	27,082	$	253,779	$	333,189	$	1,099	$	334,288
Restricted cash		34,070		111,076		21,598		15,166		—		181,910		—		181,910
Loans held-for-investment, net		7,406,274		1,356,511		—		1,431		—		8,764,216		—		8,764,216
Loans held-for-sale		1,156,778		214,501		—		215,620		—		1,586,899		—		1,586,899
Investment securities		957,783		55,332		—		1,015,379		—		2,028,494		(1,178,922)		849,572
Properties, net		27,150		—		2,476,175		268,635		—		2,771,960		—		2,771,960
Intangible assets		—		—		80,840		72,720		—		153,560		(24,083)		129,477
Investment in unconsolidated entities		36,336		—		71,601		34,536		—		142,473		(22,597)		119,876
Goodwill		—		119,409		—		140,437		—		259,846		—		259,846
Derivative assets		21,604		357		17,857		44		13,814		53,676		—		53,676
Accrued interest receivable		42,644		5,512		350		366		13,277		62,149		(769)		61,380
Other assets		15,048		4,645		71,166		66,564		9,222		166,645		10		166,655
VIE assets, at fair value		—		—		—		—		—		—		57,667,606		57,667,606
Total Assets	$	9,719,396	$	1,867,469	$	2,770,080	$	1,857,980	$	290,092	$	16,505,017	$	56,442,344	$	72,947,361
Liabilities and Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	33,625	$	4,099	$	61,947	$	68,021	$	53,666	$	221,358	$	76	$	221,434
Related-party payable		—		—		—		11		21,133		21,144		—		21,144
Dividends payable		—		—		—		—		136,424		136,424		—		136,424
Derivative liabilities		5,966		435		—		2,490		—		8,891		—		8,891
Secured financing agreements, net		5,177,123		1,237,526		1,882,956		702,781		298,451		9,298,837		(13,950)		9,284,887
Unsecured senior notes, net		—		—		—		—		1,924,711		1,924,711		—		1,924,711
VIE liabilities, at fair value		—		—		—		—		—		—		56,446,619		56,446,619
Total Liabilities		5,216,714		1,242,060		1,944,903		773,303		2,434,385		11,611,365		56,432,745		68,044,110
Equity:
Starwood Property Trust, Inc. Stockholders’ Equity:
Common stock		—		—		—		—		2,864		2,864		—		2,864
Additional paid-in capital		1,203,757		624,494		625,962		49,768		2,599,790		5,103,771		—		5,103,771
Treasury stock		—		—		—		—		(104,194)		(104,194)		—		(104,194)
Accumulated other comprehensive income (loss)		53,050		—		4,139		(65)		—		57,124		—		57,124
Retained earnings (accumulated deficit)		3,245,875		915		(43,051)		1,017,156		(4,642,753)		(421,858)		—		(421,858)
Total Starwood Property Trust, Inc. Stockholders’ Equity		4,502,682		625,409		587,050		1,066,859		(2,144,293)		4,637,707		—		4,637,707
Non-controlling interests in consolidated subsidiaries		—		—		238,127		17,818		—		255,945		9,599		265,544
Total Equity		4,502,682		625,409		825,177		1,084,677		(2,144,293)		4,893,652		9,599		4,903,251
Total Liabilities and Equity	$	9,719,396	$	1,867,469	$	2,770,080	$	1,857,980	$	290,092	$	16,505,017	$	56,442,344	$	72,947,361

The table below presents our condensed consolidated balance sheet as of December 31, 2018 by business segment (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	$	14,385	$	13	$	27,408	$	31,449	$	164,015	$	237,270	$	2,554	$	239,824
Restricted cash		28,324		175,659		25,144		11,679		7,235		248,041		—		248,041
Loans held-for-investment, net		7,072,220		1,456,779		—		3,357		—		8,532,356		—		8,532,356
Loans held-for-sale		670,155		469,775		—		47,622		—		1,187,552		—		1,187,552
Loans transferred as secured borrowings		74,346		—		—		—		—		74,346		—		74,346
Investment securities		1,050,920		60,768		—		998,820		—		2,110,508		(1,204,040)		906,468
Properties, net		—		—		2,512,847		272,043		—		2,784,890		—		2,784,890
Intangible assets		—		—		90,889		78,219		—		169,108		(24,075)		145,033
Investment in unconsolidated entities		35,274		—		114,362		44,129		—		193,765		(22,000)		171,765
Goodwill		—		119,409		—		140,437		—		259,846		—		259,846
Derivative assets		18,174		1,066		32,733		718		—		52,691		—		52,691
Accrued interest receivable		39,862		6,982		359		616		13,177		60,996		(641)		60,355
Other assets		13,958		20,472		67,098		49,363		2,057		152,948		(26)		152,922
VIE assets, at fair value		—		—		—		—		—		—		53,446,364		53,446,364
Total Assets	$	9,017,618	$	2,310,923	$	2,870,840	$	1,678,452	$	186,484	$	16,064,317	$	52,198,136	$	68,262,453
Liabilities and Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	26,508	$	26,476	$	67,415	$	75,655	$	21,467	$	217,521	$	142	$	217,663
Related-party payable		—		—		—		53		43,990		44,043		—		44,043
Dividends payable		—		—		—		—		133,466		133,466		—		133,466
Derivative liabilities		1,290		477		37		1,423		12,188		15,415		—		15,415
Secured financing agreements, net		4,405,599		1,524,551		1,884,187		585,258		297,920		8,697,515		(13,950)		8,683,565
Unsecured senior notes, net		—		—		—		—		1,998,831		1,998,831		—		1,998,831
Secured borrowings on transferred loans		74,239		—		—		—		—		74,239		—		74,239
VIE liabilities, at fair value		—		—		—		—		—		—		52,195,042		52,195,042
Total Liabilities		4,507,636		1,551,504		1,951,639		662,389		2,507,862		11,181,030		52,181,234		63,362,264
Equity:
Starwood Property Trust, Inc. Stockholders’ Equity:
Common stock		—		—		—		—		2,808		2,808		—		2,808
Additional paid-in capital		1,430,503		761,992		645,561		87,779		2,069,321		4,995,156		—		4,995,156
Treasury stock		—		—		—		—		(104,194)		(104,194)		—		(104,194)
Accumulated other comprehensive income (loss)		53,516		—		5,208		(64)		—		58,660		—		58,660
Retained earnings (accumulated deficit)		3,015,676		(2,573)		13,570		913,642		(4,289,313)		(348,998)		—		(348,998)
Total Starwood Property Trust, Inc. Stockholders’ Equity		4,499,695		759,419		664,339		1,001,357		(2,321,378)		4,603,432		—		4,603,432
Non-controlling interests in consolidated subsidiaries		10,287		—		254,862		14,706		—		279,855		16,902		296,757
Total Equity		4,509,982		759,419		919,201		1,016,063		(2,321,378)		4,883,287		16,902		4,900,189
Total Liabilities and Equity	$	9,017,618	$	2,310,923	$	2,870,840	$	1,678,452	$	186,484	$	16,064,317	$	52,198,136	$	68,262,453