EX-99.1 2 stwd_pressrelease-ye2022.htm EX-99.1 Document
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Exhibit 99.1
For Immediate Release
Starwood Property Trust Reports Results for the
Quarter and Year Ended December 31, 2022
– Quarterly GAAP Earnings of $0.44 and Distributable Earnings (DE) of $0.50 per Diluted Share –
– Undepreciated Book Value Per Share Increased $0.96 Year-over-Year to $21.70 –
– $10.7 Billion of Investment Activity in 2022, Including $5.3 Billion in CRE Lending –
– $1.2 Billion of Investment Activity in the Fourth Quarter –
– Largest Commercial Mortgage REIT Balance Sheet with Total Assets of $28.3 Billion –
– Liquidity of $1.1 Billion –
– Paid Dividend of $0.48 per Share –
GREENWICH, Conn., March 1, 2023 /PRNewswire/ -- Starwood Property Trust, Inc. (NYSE: STWD) today announced operating results for the fiscal quarter and year ended December 31, 2022. The Company’s fourth quarter 2022 GAAP net income was $140.0 million, or $0.44 per diluted share. Distributable Earnings (a non-GAAP financial measure) was $160.5 million, or $0.50 per diluted share. The Company's full year 2022 GAAP net income was $871.5 million, or $2.74 per diluted share, and Distributable Earnings was $726.3 million, or $2.28 per diluted share.
“We built our unique multi-cylinder platform to perform through economic cycles. We have the most diversified asset and liability structure in our sector, which enabled us to once again generate consistent returns in 2022. Our results were highlighted by continued income growth in our Woodstar Fund investments, which increased in fair value by $555.0 million this year alone and contributed to record book value growth of 26% over the last two years,” commented Barry Sternlicht, Chairman and CEO of Starwood Property Trust.
“We are well-positioned to take advantage of outsized investment opportunities across our business lines in 2023, with strong liquidity levels and access to significant sources of capital, including $3.9 billion of unencumbered assets which allow for incremental debt capacity and $1.5 billion of unrealized gains in our property portfolio which are available to be harvested to create incremental liquidity. As we evaluate investing into these outsized opportunities, we remain laser focused on protecting our low leverage balance sheet,” added Jeffrey DiModica, President of Starwood Property Trust.
Supplemental Schedules
The Company has published supplemental earnings schedules on its website in order to provide additional disclosure and financial information for the benefit of the Company’s stakeholders. Specifically, these materials can be found on the Company’s website in the Investor Relations section under “Quarterly Results” at www.starwoodpropertytrust.com.
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Webcast and Conference Call Information
The Company will host a live webcast and conference call on Wednesday, March 1, 2023, at 10:00 a.m. Eastern Time.  To listen to a live broadcast, access the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. The webcast is available at www.starwoodpropertytrust.com in the Investor Relations section of the website. The Company encourages use of the webcast due to potential extended wait times to access the conference call via dial-in. 
To Participate via Telephone Conference Call:
Dial in at least 15 minutes prior to start time.
Domestic: 1-877-407-9039
International: 1-201-689-8470
Conference Call Playback:
Domestic: 1-844-512-2921
International: 1-412-317-6671
Passcode: 13735050
The playback can be accessed through March 15, 2023.
About Starwood Property Trust, Inc.
Starwood Property Trust (NYSE: STWD), an affiliate of global private investment firm Starwood Capital Group, is a leading diversified finance company with a core focus on the real estate and infrastructure sectors. As of December 31, 2022, the Company has successfully deployed $94 billion of capital since inception and manages a portfolio of over $28 billion across debt and equity investments. Starwood Property Trust’s investment objective is to generate attractive and stable returns for shareholders, primarily through dividends, by leveraging a premiere global organization to identify and execute on the best risk adjusted returning investments across its target assets. Additional information can be found at www.starwoodpropertytrust.com.
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.  Forward-looking statements are developed by combining currently available information with our beliefs and assumptions and are generally identified by the words “believe,” “expect,” “anticipate” and other similar expressions.  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, but are not limited to, completion of pending investments and financings, continued ability to acquire additional investments, competition within the finance and real estate industries, availability of financing, the duration and extent of the ongoing effects of the COVID-19 pandemic (including variants and resurgences) and other risks detailed under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as well as other risks and uncertainties set forth from time to time in the Company's reports filed with the SEC.
In light of these risks and uncertainties, there can be no assurances that the results referred to in the forward-looking statements contained herein will in fact occur. Except to the extent required by applicable law or regulation, we undertake no obligation to, and expressly disclaim any such obligation to, update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, changes to future results over time or otherwise.
Additional information can be found on the Company’s website at www.starwoodpropertytrust.com.

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Contact:
Zachary Tanenbaum
Starwood Property Trust
Phone: 203-422-7788
Email: ztanenbaum@starwood.com
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Starwood Property Trust, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations by Segment
For the three months ended December 31, 2022
(Amounts in thousands)
Commercial and
Residential
Lending
Segment		Infrastructure
Lending
Segment		Property
Segment		Investing
and Servicing
Segment		CorporateSubtotalSecuritization
VIEs		Total
Revenues:
Interest income from loans$344,104 $50,133 $— $1,161 $— $395,398 $— $395,398 
Interest income from investment securities30,138 557 — 23,079 — 53,774 (37,024)16,750 
Servicing fees138 — — 13,319 — 13,457 (4,070)9,387 
Rental income1,793 — 23,708 6,726 — 32,227 — 32,227 
Other revenues253 164 93 259 66 835 — 835 
Total revenues376,426 50,854 23,801 44,544 66 495,691 (41,094)454,597 
Costs and expenses:
Management fees(166)— — — 41,442 41,276 — 41,276 
Interest expense199,191 29,706 11,517 7,484 47,947 295,845 (216)295,629 
General and administrative12,796 3,457 1,105 18,875 4,423 40,656 23 40,679 
Acquisition and investment pursuit costs1,233 — — 15 — 1,248 — 1,248 
Costs of rental operations2,855 — 5,858 3,308 — 12,021 — 12,021 
Depreciation and amortization1,614 77 8,155 2,949 — 12,795 — 12,795 
Credit loss provision (reversal), net26,753 (219)— — — 26,534 — 26,534 
Other expense— — — 1 — 1 — 1 
Total costs and expenses244,276 33,021 26,635 32,632 93,812 430,376 (193)430,183 
Other income (loss):
Change in net assets related to consolidated VIEs— — — — — — 51,733 51,733 
Change in fair value of servicing rights— — — (2,734)— (2,734)2,510 (224)
Change in fair value of investment securities, net16,837 — — (4,326)— 12,511 (13,032)(521)
Change in fair value of mortgage loans, net(24,669)— — 5,184 — (19,485)— (19,485)
Income from affordable housing fund investments— — 97,003 — — 97,003 — 97,003 
(Loss) earnings from unconsolidated entities(8,644)1,351 — 370 — (6,923)(311)(7,234)
Gain on sale of investments and other assets, net72 — — 25,480 — 25,552 — 25,552 
(Loss) gain on derivative financial instruments, net(126,837)7 1,919 (2,027)(968)(127,906)— (127,906)
Foreign currency gain (loss), net116,021 253 (29)— — 116,245 — 116,245 
Loss on extinguishment of debt(3)— — (147)— (150)— (150)
Other loss, net(1,644)— (1,103)— — (2,747)— (2,747)
Total other income (loss)(28,867)1,611 97,790 21,800 (968)91,366 40,900 132,266 
Income (loss) before income taxes103,283 19,444 94,956 33,712 (94,714)156,681 (1)156,680 
Income tax benefit11,517 5 — 1,002 — 12,524 — 12,524 
Net income (loss)114,800 19,449 94,956 34,714 (94,714)169,205 (1)169,204 
Net income attributable to non-controlling interests(4)— (24,219)(4,955)— (29,178)1 (29,177)
Net income (loss) attributable to Starwood Property Trust, Inc.$114,796 $19,449 $70,737 $29,759 $(94,714)$140,027 $— $140,027 
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Definition of Distributable Earnings
Distributable 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, Distributable 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 for successful acquisitions, depreciation and amortization of real estate and associated intangibles, any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period and, to the extent deducted from net income (loss), distributions payable with respect to equity securities of subsidiaries issued in exchange for properties or interests therein. 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. Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2022 for additional information regarding Distributable Earnings.
Reconciliation of Net Income to Distributable Earnings
For the three months ended December 31, 2022
(Amounts in thousands except per share data)
Commercial and
Residential
Lending
Segment		Infrastructure
Lending
Segment		Property
Segment		Investing
and Servicing
Segment		CorporateTotal
Net income (loss) attributable to Starwood Property Trust, Inc.$114,796 $19,449 $70,737 $29,759 $(94,714)$140,027 
Add / (Deduct):
Non-controlling interests attributable to Woodstar II Class A Units— — 4,691 — — 4,691 
Non-controlling interests attributable to unrealized gains/losses— — 17,713 (1,788)— 15,925 
Non-cash equity compensation expense1,853 266 76 1,459 6,828 10,482 
Management incentive fee— — — — 14,465 14,465 
Acquisition and investment pursuit costs(22)— (82)(223)— (327)
Depreciation and amortization1,728 67 8,231 3,071 — 13,097 
Interest income adjustment for securities4,434 — — 7,601 — 12,035 
Extinguishment of debt, net— — — — (247)(247)
Income tax benefit associated with unrealized fair value adjustments(11,517)(5)— (1,001)— (12,523)
Other non-cash items3 — 362 77 — 442 
Reversal of GAAP unrealized and realized (gains) / losses on:
Loans24,669 — — (5,184)— 19,485 
Credit loss provision (reversal), net26,753 (219)— — — 26,534 
Securities(16,837)— — 4,326 — (12,511)
Woodstar Fund investments— — (97,003)— — (97,003)
Derivatives126,837 (7)(1,919)2,027 968 127,906 
Foreign currency(116,021)(253)29 — — (116,245)
Loss (earnings) from unconsolidated entities8,644 (1,351)— (370)— 6,923 
Sales of properties— — — (25,480)— (25,480)
Recognition of Distributable realized gains / (losses) on:
Loans(385)— — 5,197 — 4,812 
Securities— — — (10,715)— (10,715)
Woodstar Fund investments— — 10,887 — — 10,887 
Derivatives15,279 64 3,240 (1,181)(4,792)12,610 
Foreign currency222 34 (29)— — 227 
(Loss) earnings from unconsolidated entities(8,616)— — 478 — (8,138)
Sales of properties— — — 23,167 — 23,167 
Distributable Earnings (Loss)$171,820 $18,045 $16,933 $31,220 $(77,492)$160,526 
Distributable Earnings (Loss) per Weighted Average Diluted Share$0.53 $0.06 $0.05 $0.10 $(0.24)$0.50 
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Starwood Property Trust, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations by Segment
For the year ended December 31, 2022
(Amounts in thousands)
Commercial and
Residential
Lending
Segment		Infrastructure
Lending
Segment		Property
Segment		Investing
and Servicing
Segment		CorporateSubtotalSecuritization
VIEs		Total
Revenues:
Interest income from loans$1,058,326 $150,230 $— $9,965 $— $1,218,521 $— $1,218,521 
Interest income from investment securities102,125 3,681 — 99,043 — 204,849 (139,791)65,058 
Servicing fees558 — — 54,836 — 55,394 (15,035)40,359 
Rental income6,467 — 91,587 30,209 — 128,263 — 128,263 
Other revenues504 451 245 11,258 69 12,527 (12)12,515 
Total revenues1,167,980 154,362 91,832 205,311 69 1,619,554 (154,838)1,464,716 
Costs and expenses:
Management fees592 — — — 154,959 155,551 — 155,551 
Interest expense501,126 79,137 33,938 26,686 157,097 797,984 (863)797,121 
General and administrative52,701 14,187 4,069 85,478 18,777 175,212 288 175,500 
Acquisition and investment pursuit costs3,634 3 7 (244)— 3,400 — 3,400 
Costs of rental operations7,833 — 21,868 14,414 — 44,115 — 44,115 
Depreciation and amortization4,720 387 32,714 11,472 — 49,293 — 49,293 
Credit loss provision, net39,780 6,877 — — — 46,657 — 46,657 
Other expense1,251 — 55 8 — 1,314 — 1,314 
Total costs and expenses611,637 100,591 92,651 137,814 330,833 1,273,526 (575)1,272,951 
Other income (loss):
Change in net assets related to consolidated VIEs— — — — — — 124,001 124,001 
Change in fair value of servicing rights— — — (2,051)— (2,051)3,061 1,010 
Change in fair value of investment securities, net11,818 — — (43,179)— (31,361)29,157 (2,204)
Change in fair value of mortgage loans, net(352,412)— — 6,190 — (346,222)— (346,222)
Income from affordable housing fund investments— — 755,736 — — 755,736 — 755,736 
(Loss) earnings from unconsolidated entities(11,242)3,982 — 2,871 — (4,389)(1,934)(6,323)
Gain on sale of investments and other assets, net86,532 — — 51,079 — 137,611 — 137,611 
Gain (loss) on derivative financial instruments, net338,994 1,235 35,081 41,692 (82,987)334,015 — 334,015 
Foreign currency (loss) gain, net(96,651)(317)12 — — (96,956)— (96,956)
Loss on extinguishment of debt(209)(469)— (507)— (1,185)— (1,185)
Other (loss) income, net(92,632)— (1,103)— — (93,735)25 (93,710)
Total other income (loss)(115,802)4,431 789,726 56,095 (82,987)651,463 154,310 805,773 
Income (loss) before income taxes440,541 58,202 788,907 123,592 (413,751)997,491 47 997,538 
Income tax benefit (provision)69,199 12 — (7,688)— 61,523 — 61,523 
Net income (loss)509,740 58,214 788,907 115,904 (413,751)1,059,014 47 1,059,061 
Net income attributable to non-controlling interests(14)— (172,598)(14,927)— (187,539)(47)(187,586)
Net income (loss) attributable to Starwood Property Trust, Inc.$509,726 $58,214 $616,309 $100,977 $(413,751)$871,475 $— $871,475 
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Reconciliation of Net Income to Distributable Earnings
For the year ended December 31, 2022
(Amounts in thousands except per share data)
Commercial and
Residential
Lending
Segment		Infrastructure
Lending
Segment		Property
Segment		Investing
and Servicing
Segment		CorporateTotal
Net income (loss) attributable to Starwood Property Trust, Inc.509,726 58,214 616,309 100,977 (413,751)871,475 
Add / (Deduct):
Non-controlling interests attributable to Woodstar II Class A Units— — 18,764 — — 18,764 
Non-controlling interests attributable to unrealized gains/losses— — 143,769 (5,161)— 138,608 
Non-cash equity compensation expense7,966 1,246 285 5,616 25,072 40,185 
Management incentive fee— — — — 49,586 49,586 
Acquisition and investment pursuit costs(381)— (324)(392)— (1,097)
Depreciation and amortization4,919 348 33,005 11,959 — 50,231 
Interest income adjustment for securities10,777 — — 12,362 — 23,139 
Extinguishment of debt, net— — — — (986)(986)
Income tax benefit associated with unrealized fair value adjustments(64,616)(7)— 3,345 — (61,278)
Other non-cash items88,194 — 1,498 355 — 90,047 
Reversal of GAAP unrealized and realized (gains) / losses on:
Loans352,412 — — (6,190)— 346,222 
Credit loss provision, net39,780 6,877 — — — 46,657 
Securities(11,818)— — 43,179 — 31,361 
Woodstar Fund investments— — (755,736)— — (755,736)
Derivatives(338,994)(1,235)(35,081)(41,692)82,987 (334,015)
Foreign currency96,651 317 (12)— — 96,956 
Loss (earnings) from unconsolidated entities11,242 (3,982)— (2,871)— 4,389 
Sales of properties(86,610)— — (51,079)— (137,689)
Recognition of Distributable realized gains / (losses) on:
Loans(73,406)— — 5,467 — (67,939)
Securities(3,102)— — (20,443)— (23,545)
Woodstar Fund investments— — 56,576 — — 56,576 
Derivatives97,444 5 2,138 32,591 214 132,392 
Foreign currency(4,652)58 12 — — (4,582)
(Loss) earnings from unconsolidated entities(10,798)2,632 — 4,236 — (3,930)
Sales of properties84,738 — 35,768 — 120,506 
Distributable Earnings (Loss)$709,472 $64,473 $81,203 $128,027 $(256,878)$726,297 
Distributable Earnings (Loss) per Weighted Average Diluted Share$2.22 $0.20 $0.26 $0.40 $(0.80)$2.28 


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Starwood Property Trust, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet by Segment
As of December 31, 2022
(Amounts in thousands)
Commercial and
Residential
Lending
Segment		Infrastructure
Lending
Segment		Property
Segment		Investing
and Servicing
Segment		CorporateSubtotalSecuritization
VIEs		Total
Assets:
Cash and cash equivalents$68,593 $31,153 $31,194 $39,023 $91,098 $261,061 $— $261,061 
Restricted cash18,556 31,133 981 5,259 65,143 121,072 — 121,072 
Loans held-for-investment, net16,038,930 2,352,932 — 9,577 — 18,401,439 — 18,401,439 
Loans held-for-sale2,763,458 — — 21,136 — 2,784,594 — 2,784,594 
Investment securities1,250,893 66,204 — 1,165,628 — 2,482,725 (1,666,921)815,804 
Properties, net463,492 — 864,778 121,716 — 1,449,986 — 1,449,986 
Investments of consolidated affordable housing fund— — 1,761,002 — — 1,761,002 — 1,761,002 
Investments in unconsolidated entities25,326 47,078 — 33,030 — 105,434 (13,542)91,892 
Goodwill— 119,409 — 140,437 — 259,846 — 259,846 
Intangible assets11,908 — 29,613 66,310 — 107,831 (39,058)68,773 
Derivative assets101,082 122 1,803 5,614 — 108,621 — 108,621 
Accrued interest receivable151,852 9,856 863 1,105 5,120 168,796 (275)168,521 
Other assets170,177 3,614 54,313 12,929 56,444 297,477 — 297,477 
VIE assets, at fair value— — — — — — 52,453,041 52,453,041 
Total Assets$21,064,267 $2,661,501 $2,744,547 $1,621,764 $217,805 $28,309,884 $50,733,245 $79,043,129 
Liabilities and Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities$146,897 $20,656 $11,716 $46,377 $73,353 $298,999 $— $298,999 
Related-party payable— — — — 41,186 41,186 — 41,186 
Dividends payable— — — — 151,511 151,511 — 151,511 
Derivative liabilities21,523 105 — — 69,776 91,404 — 91,404 
Secured financing agreements, net10,804,970 1,042,679 789,719 543,256 1,342,074 14,522,698 (21,166)14,501,532 
Collateralized loan obligations and single asset securitization, net2,862,211 814,013 — — — 3,676,224 — 3,676,224 
Unsecured senior notes, net— — — — 2,329,211 2,329,211 — 2,329,211 
VIE liabilities, at fair value— — — — — — 50,754,355 50,754,355 
Total Liabilities13,835,601 1,877,453 801,435 589,633 4,007,111 21,111,233 50,733,189 71,844,422 
Temporary Equity: Redeemable non-controlling interests
— — 362,790 — — 362,790 — 362,790 
Permanent Equity:
Starwood Property Trust, Inc. Stockholders’ Equity:
Common stock— — — — 3,181 3,181 — 3,181 
Additional paid-in capital2,124,496 683,258 (405,955)(646,662)4,051,950 5,807,087 — 5,807,087 
Treasury stock— — — — (138,022)(138,022)— (138,022)
Retained earnings (accumulated deficit)5,083,100 100,790 1,777,643 1,514,119 (7,706,415)769,237 — 769,237 
Accumulated other comprehensive income20,955 — — — — 20,955 — 20,955 
Total Starwood Property Trust, Inc. Stockholders’ Equity7,228,551 784,048 1,371,688 867,457 (3,789,306)6,462,438 — 6,462,438 
Non-controlling interests in consolidated subsidiaries115 — 208,634 164,674 — 373,423 56 373,479 
Total Permanent Equity7,228,666 784,048 1,580,322 1,032,131 (3,789,306)6,835,861 56 6,835,917 
Total Liabilities and Equity$21,064,267 $2,661,501 $2,744,547 $1,621,764 $217,805 $28,309,884 $50,733,245 $79,043,129 
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