Segment Data

3 Months Ended

Mar. 31, 2020

Segment Data

Segment Data

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 March 31, 2020 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	$	192,381	$	22,413	$	—	$	2,633	$	—	$	217,427	$	—	$	217,427
Interest income from investment securities		18,628		701		—		24,800		—		44,129		(28,889)		15,240
Servicing fees		172		—		—		6,442		—		6,614		(1,821)		4,793
Rental income		78		—		63,961		10,107		—		74,146		—		74,146
Other revenues		178		143		122		513		—		956		(2)		954
Total revenues		211,437		23,257		64,083		44,495		—		343,272		(30,712)		312,560
Costs and expenses:
Management fees		351		—		—		239		40,107		40,697		31		40,728
Interest expense		53,950		13,117		17,121		7,194		28,805		120,187		(162)		120,025
General and administrative		8,132		4,423		1,078		20,684		4,301		38,618		84		38,702
Acquisition and investment pursuit costs		860		17		12		20		—		909		—		909
Costs of rental operations		778		—		22,852		4,584		—		28,214		—		28,214
Depreciation and amortization		415		70		19,288		4,207		—		23,980		—		23,980
Credit loss provision, net		40,217		8,452		—		—		—		48,669		—		48,669
Other expense		77		—		311		—		—		388		—		388
Total costs and expenses		104,780		26,079		60,662		36,928		73,213		301,662		(47)		301,615
Other (loss) income:
Change in net assets related to consolidated VIEs		—		—		—		—		—		—		(45,493)		(45,493)
Change in fair value of servicing rights		—		—		—		318		—		318		(711)		(393)
Change in fair value of investment securities, net		(27,879)		—		—		(47,216)		—		(75,095)		77,599		2,504
Change in fair value of mortgage loans, net		(35,517)		—		—		19,383		—		(16,134)		—		(16,134)
Earnings (loss) from unconsolidated entities		51		—		—		620		—		671		(574)		97
Gain on sale of investments and other assets, net		—		296		—		—		—		296		—		296
Gain (loss) on derivative financial instruments, net		30,805		(1,001)		(30,223)		(19,106)		29,235		9,710		—		9,710
Foreign currency (loss) gain, net		(34,001)		(473)		(19)		7		—		(34,486)		—		(34,486)
Loss on extinguishment of debt		—		(170)		—		—		—		(170)		—		(170)
Other income, net		—		—		50		76		—		126		—		126
Total other (loss) income		(66,541)		(1,348)		(30,192)		(45,918)		29,235		(114,764)		30,821		(83,943)
Income (loss) before income taxes		40,116		(4,170)		(26,771)		(38,351)		(43,978)		(73,154)		156		(72,998)
Income tax benefit		4,422		145		—		2,162		—		6,729		—		6,729
Net income (loss)		44,538		(4,025)		(26,771)		(36,189)		(43,978)		(66,425)		156		(66,269)
Net (income) loss attributable to non-controlling interests		(3)		—		(5,111)		4,770		—		(344)		(156)		(500)
Net income (loss) attributable to Starwood Property Trust, Inc.	$	44,535	$	(4,025)	$	(31,882)	$	(31,419)	$	(43,978)	$	(66,769)	$	—	$	(66,769)

The table below presents our results of operations for the three months ended March 31, 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	$	154,595	$	26,915	$	—	$	1,906	$	—	$	183,416	$	—	$	183,416
Interest income from investment securities		19,908		885		—		24,293		—		45,086		(27,454)		17,632
Servicing fees		123		—		—		27,243		—		27,366		(2,933)		24,433
Rental income		—		—		70,521		13,312		—		83,833		—		83,833
Other revenues		204		686		78		196		20		1,184		(18)		1,166
Total revenues		174,830		28,486		70,599		66,950		20		340,885		(30,405)		310,480
Costs and expenses:
Management fees		411		—		—		18		22,988		23,417		49		23,466
Interest expense		61,604		18,577		18,990		7,746		27,915		134,832		(160)		134,672
General and administrative		6,768		4,479		1,518		18,851		3,226		34,842		88		34,930
Acquisition and investment pursuit costs		249		16		—		77		—		342		—		342
Costs of rental operations		19		—		22,937		6,695		—		29,651		—		29,651
Depreciation and amortization		71		—		23,896		5,287		—		29,254		—		29,254
Credit loss provision, net		(11)		774		—		—		—		763		—		763
Other expense		77		—		134		—		—		211		—		211
Total costs and expenses		69,188		23,846		67,475		38,674		54,129		253,312		(23)		253,289
Other income (loss):
Change in net assets related to consolidated VIEs		—		—		—		—		—		—		47,836		47,836
Change in fair value of servicing rights		—		—		—		(515)		—		(515)		(252)		(767)
Change in fair value of investment securities, net		(1,694)		—		—		18,140		—		16,446		(16,384)		62
Change in fair value of mortgage loans, net		1,386		—		—		9,880		—		11,266		—		11,266
Earnings (loss) from unconsolidated entities		577		—		(43,805)		594		—		(42,634)		(566)		(43,200)
Gain on sale of investments and other assets, net		2,755		790		—		940		—		4,485		—		4,485
(Loss) gain on derivative financial instruments, net		(9,297)		(395)		1,290		(3,432)		9,627		(2,207)		—		(2,207)
Foreign currency gain (loss), net		5,239		300		9		(1)		—		5,547		—		5,547
(Loss) gain on extinguishment of debt		—		(3,304)		—		—		6		(3,298)		—		(3,298)
Other loss, net		—		—		—		—		(73)		(73)		—		(73)
Total other income (loss)		(1,034)		(2,609)		(42,506)		25,606		9,560		(10,983)		30,634		19,651
Income (loss) before income taxes		104,608		2,031		(39,382)		53,882		(44,549)		76,590		252		76,842
Income tax benefit (provision)		248		85		(258)		(409)		—		(334)		—		(334)
Net income (loss)		104,856		2,116		(39,640)		53,473		(44,549)		76,256		252		76,508
Net (income) loss attributable to non-controlling interests		(371)		—		(5,717)		215		—		(5,873)		(252)		(6,125)
Net income (loss) attributable to Starwood Property Trust, Inc.	$	104,485	$	2,116	$	(45,357)	$	53,688	$	(44,549)	$	70,383	$	—	$	70,383

The table below presents our condensed consolidated balance sheet as of March 31, 2020 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	$	22,910	$	40	$	28,137	$	36,913	$	719,222	$	807,222	$	4,434	$	811,656
Restricted cash		50,331		43,679		7,362		18,365		—		119,737		—		119,737
Loans held-for-investment, net		9,106,441		1,381,271		—		1,224		—		10,488,936		—		10,488,936
Loans held-for-sale		886,076		101,895		—		186,963		—		1,174,934		—		1,174,934
Investment securities		955,614		44,141		—		1,095,990		—		2,095,745		(1,317,773)		777,972
Properties, net		26,585		—		2,014,007		212,478		—		2,253,070		—		2,253,070
Intangible assets		—		—		45,331		63,632		—		108,963		(26,958)		82,005
Investment in unconsolidated entities		50,017		25,862		—		31,321		—		107,200		(19,866)		87,334
Goodwill		—		119,409		—		140,437		—		259,846		—		259,846
Derivative assets		57,238		6		98		2,250		41,856		101,448		—		101,448
Accrued interest receivable		49,942		4,949		—		1,047		3,357		59,295		(758)		58,537
Other assets		61,109		5,108		76,776		52,119		8,812		203,924		(15)		203,909
VIE assets, at fair value		—		—		—		—		—		—		61,157,805		61,157,805
Total Assets	$	11,266,263	$	1,726,360	$	2,171,711	$	1,842,739	$	773,247	$	17,780,320	$	59,796,869	$	77,577,189
Liabilities and Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	33,645	$	11,933	$	48,748	$	48,090	$	79,178	$	221,594	$	75	$	221,669
Related-party payable		—		—		—		5		39,261		39,266		—		39,266
Dividends payable		—		—		—		—		137,529		137,529		—		137,529
Derivative liabilities		3,740		1,292		—		86		—		5,118		—		5,118
Secured financing agreements, net		5,611,239		1,190,995		1,698,044		692,941		510,414		9,703,633		(13,950)		9,689,683
Collateralized loan obligations, net		928,683		—		—		—		—		928,683		—		928,683
Unsecured senior notes, net		—		—		—		—		1,930,584		1,930,584		—		1,930,584
VIE liabilities, at fair value		—		—		—		—		—		—		59,807,306		59,807,306
Total Liabilities		6,577,307		1,204,220		1,746,792		741,122		2,696,966		12,966,407		59,793,431		72,759,838
Equity:
Starwood Property Trust, Inc. Stockholders’ Equity:
Common stock		—		—		—		—		2,894		2,894		—		2,894
Additional paid-in capital		1,159,771		531,986		229,223		(200,489)		3,438,578		5,159,069		—		5,159,069
Treasury stock		—		—		—		—		(133,024)		(133,024)		—		(133,024)
Accumulated other comprehensive income (loss)		35,948		—		—		(64)		—		35,884		—		35,884
Retained earnings (accumulated deficit)		3,493,119		(9,846)		(31,451)		1,163,580		(5,232,167)		(616,765)		—		(616,765)
Total Starwood Property Trust, Inc. Stockholders’ Equity		4,688,838		522,140		197,772		963,027		(1,923,719)		4,448,058		—		4,448,058
Non-controlling interests in consolidated subsidiaries		118		—		227,147		138,590		—		365,855		3,438		369,293
Total Equity		4,688,956		522,140		424,919		1,101,617		(1,923,719)		4,813,913		3,438		4,817,351
Total Liabilities and Equity	$	11,266,263	$	1,726,360	$	2,171,711	$	1,842,739	$	773,247	$	17,780,320	$	59,796,869	$	77,577,189

The table below presents our condensed consolidated balance sheet as of December 31, 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	$	26,278	$	2,209	$	30,123	$	61,693	$	356,864	$	477,167	$	1,221	$	478,388
Restricted cash		36,135		41,967		7,171		10,370		—		95,643		—		95,643
Loans held-for-investment, net		9,187,332		1,397,448		—		1,294		—		10,586,074		—		10,586,074
Loans held-for-sale		605,384		119,528		—		159,238		—		884,150		—		884,150
Investment securities		992,974		45,153		—		1,177,148		—		2,215,275		(1,405,037)		810,238
Properties, net		26,834		—		2,029,024		210,582		—		2,266,440		—		2,266,440
Intangible assets		—		—		47,303		64,644		—		111,947		(26,247)		85,700
Investment in unconsolidated entities		46,921		25,862		—		32,183		—		104,966		(20,637)		84,329
Goodwill		—		119,409		—		140,437		—		259,846		—		259,846
Derivative assets		14,718		7		3		7		14,208		28,943		—		28,943
Accrued interest receivable		45,996		3,134		133		2,388		13,242		64,893		(806)		64,087
Other assets		59,170		6,101		82,910		54,238		8,911		211,330		(7)		211,323
VIE assets, at fair value		—		—		—		—		—		—		62,187,175		62,187,175
Total Assets	$	11,041,742	$	1,760,818	$	2,196,667	$	1,914,222	$	393,225	$	17,306,674	$	60,735,662	$	78,042,336
Liabilities and Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	30,594	$	6,443	$	48,370	$	73,021	$	53,494	$	211,922	$	84	$	212,006
Related-party payable		—		—		—		5		40,920		40,925		—		40,925
Dividends payable		—		—		—		—		137,427		137,427		—		137,427
Derivative liabilities		7,698		750		—		292		—		8,740		—		8,740
Secured financing agreements, net		5,038,876		1,217,066		1,698,334		574,507		391,215		8,919,998		(13,950)		8,906,048
Collateralized loan obligations, net		928,060		—		—		—		—		928,060		—		928,060
Unsecured senior notes, net		—		—		—		—		1,928,622		1,928,622		—		1,928,622
VIE liabilities, at fair value		—		—		—		—		—		—		60,743,494		60,743,494
Total Liabilities		6,005,228		1,224,259		1,746,704		647,825		2,551,678		12,175,694		60,729,628		72,905,322
Equity:
Starwood Property Trust, Inc. Stockholders’ Equity:
Common stock		—		—		—		—		2,874		2,874		—		2,874
Additional paid-in capital		1,522,360		529,668		208,650		(123,210)		2,995,064		5,132,532		—		5,132,532
Treasury stock		—		—		—		—		(104,194)		(104,194)		—		(104,194)
Accumulated other comprehensive income (loss)		50,996		—		—		(64)		—		50,932		—		50,932
Retained earnings (accumulated deficit)		3,463,158		6,891		5,431		1,194,998		(5,052,197)		(381,719)		—		(381,719)
Total Starwood Property Trust, Inc. Stockholders’ Equity		5,036,514		536,559		214,081		1,071,724		(2,158,453)		4,700,425		—		4,700,425
Non-controlling interests in consolidated subsidiaries		—		—		235,882		194,673		—		430,555		6,034		436,589
Total Equity		5,036,514		536,559		449,963		1,266,397		(2,158,453)		5,130,980		6,034		5,137,014
Total Liabilities and Equity	$	11,041,742	$	1,760,818	$	2,196,667	$	1,914,222	$	393,225	$	17,306,674	$	60,735,662	$	78,042,336