Segment Data

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Data

Segment DataIn 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 September 30, 2023 by business segment (amounts in thousands):

	Commercial and Residential Lending Segment		Infrastructure Lending Segment		Property Segment		Investing and Servicing Segment		Corporate		Subtotal		Securitization VIEs		Total
Revenues:
Interest income from loans	$	397,045	$	58,628	$	—	$	1,626	$	—	$	457,299	$	—	$	457,299
Interest income from investment securities	36,178		155		—		25,133		—		61,466		(41,333)		20,133
Servicing fees	147		—		—		11,228		—		11,375		(2,745)		8,630
Rental income	2,470		—		23,567		7,054		—		33,091		—		33,091
Other revenues	822		469		193		407		503		2,394		—		2,394
Total revenues	436,662		59,252		23,760		45,448		503		565,625		(44,078)		521,547
Costs and expenses:
Management fees	199		—		—		—		26,944		27,143		—		27,143
Interest expense	247,727		34,887		14,161		8,448		63,346		368,569		(212)		368,357
General and administrative	15,659		3,822		1,021		21,365		4,824		46,691		—		46,691
Acquisition and investment pursuit costs	207		4		—		—		—		211		—		211
Costs of rental operations	2,475		—		6,039		3,263		—		11,777		—		11,777
Depreciation and amortization	1,912		27		7,930		2,402		—		12,271		—		12,271
Credit loss provision, net	51,487		1,147		—		—		—		52,634		—		52,634
Other expense	516		—		—		—		—		516		—		516
Total costs and expenses	320,182		39,887		29,151		35,478		95,114		519,812		(212)		519,600
Other income (loss):
Change in net assets related to consolidated VIEs	—		—		—		—		—		—		43,763		43,763
Change in fair value of servicing rights	—		—		—		(983)		—		(983)		915		(68)
Change in fair value of investment securities, net	21,456		—		—		(20,753)		—		703		(420)		283
Change in fair value of mortgage loans, net	(68,450)		—		—		1,644		—		(66,806)		—		(66,806)
Income from affordable housing fund investments	—		—		16,908		—		—		16,908		—		16,908
Earnings (loss) from unconsolidated entities	1,142		(2,459)		—		400		—		(917)		(392)		(1,309)
(Loss) gain on sale of investments and other assets, net	(52)		—		—		10,668		—		10,616		—		10,616
Gain (loss) on derivative financial instruments, net	99,735		98		557		4,116		(9,623)		94,883		—		94,883
Foreign currency (loss) gain, net	(56,309)		(382)		45		—		—		(56,646)		—		(56,646)
Loss on extinguishment of debt	(757)		—		—		(315)		—		(1,072)		—		(1,072)
Other (loss) income, net	(2,527)		(6)		—		12		—		(2,521)		—		(2,521)
Total other income (loss)	(5,762)		(2,749)		17,510		(5,211)		(9,623)		(5,835)		43,866		38,031
Income (loss) before income taxes	110,718		16,616		12,119		4,759		(104,234)		39,978		—		39,978
Income tax benefit	9,823		243		—		1,333		—		11,399		—		11,399
Net income (loss)	120,541		16,859		12,119		6,092		(104,234)		51,377		—		51,377
Net income attributable to non-controlling interests	(3)		—		(7,812)		3,873		—		(3,942)		—		(3,942)
Net income (loss) attributable to Starwood Property Trust, Inc.	$	120,538	$	16,859	$	4,307	$	9,965	$	(104,234)	$	47,435	$	—	$	47,435

The table below presents our results of operations for the three months ended September 30, 2022 by business segment (amounts in thousands):

	Commercial and Residential Lending Segment		Infrastructure Lending Segment		Property Segment		Investing and Servicing Segment		Corporate		Subtotal		Securitization VIEs		Total
Revenues:
Interest income from loans	$	284,197	$	43,018	$	—	$	1,139	$	—	$	328,354	$	—	$	328,354
Interest income from investment securities	28,560		1,204		—		27,585		—		57,349		(38,330)		19,019
Servicing fees	142		—		—		11,830		—		11,972		(3,545)		8,427
Rental income	1,944		—		22,886		8,102		—		32,932		—		32,932
Other revenues	138		129		54		1,491		—		1,812		(3)		1,809
Total revenues	314,981		44,351		22,940		50,147		—		432,419		(41,878)		390,541
Costs and expenses:
Management fees	227		—		—		—		27,129		27,356		—		27,356
Interest expense	145,107		22,500		9,266		6,601		39,166		222,640		(217)		222,423
General and administrative	16,458		3,588		933		20,046		4,384		45,409		86		45,495
Acquisition and investment pursuit costs	1,164		2		—		47		—		1,213		—		1,213
Costs of rental operations	2,633		—		5,793		3,780		—		12,206		—		12,206
Depreciation and amortization	1,629		101		8,161		2,720		—		12,611		—		12,611
Credit loss provision, net	8,401		6,942		—		—		—		15,343		—		15,343
Total costs and expenses	175,619		33,133		24,153		33,194		70,679		336,778		(131)		336,647
Other income (loss):
Change in net assets related to consolidated VIEs	—		—		—		—		—		—		37,146		37,146
Change in fair value of servicing rights	—		—		—		357		—		357		158		515
Change in fair value of investment securities, net	16,398		—		—		(21,412)		—		(5,014)		4,931		(83)
Change in fair value of mortgage loans, net	(90,159)		—		—		2,685		—		(87,474)		—		(87,474)
Income from affordable housing fund investments	—		—		117,527		—		—		117,527		—		117,527
(Loss) earnings from unconsolidated entities	(4,044)		1,892		—		602		—		(1,550)		(494)		(2,044)
(Loss) gain on sale of investments and other assets, net	(288)		—		—		13,741		—		13,453		—		13,453
Gain (loss) on derivative financial instruments, net	220,296		331		10,262		6,849		(31,668)		206,070		—		206,070
Foreign currency (loss) gain, net	(107,087)		(253)		22		—		—		(107,318)		—		(107,318)
Loss on extinguishment of debt	—		—		—		(212)		—		(212)		—		(212)
Other loss, net	(56,391)		—		—		—		—		(56,391)		—		(56,391)
Total other income (loss)	(21,275)		1,970		127,811		2,610		(31,668)		79,448		41,741		121,189
Income (loss) before income taxes	118,087		13,188		126,598		19,563		(102,347)		175,089		(6)		175,083
Income tax benefit (provision)	53,099		2		—		(4,346)		—		48,755		—		48,755
Net income (loss)	171,186		13,190		126,598		15,217		(102,347)		223,844		(6)		223,838
Net income attributable to non-controlling interests	(3)		—		(28,486)		(793)		—		(29,282)		6		(29,276)
Net income (loss) attributable to Starwood Property Trust, Inc.	$	171,183	$	13,190	$	98,112	$	14,424	$	(102,347)	$	194,562	$	—	$	194,562

The table below presents our results of operations for the nine months ended September 30, 2023 by business segment (amounts in thousands):

	Commercial and Residential Lending Segment		Infrastructure Lending Segment		Property Segment		Investing and Servicing Segment		Corporate		Subtotal		Securitization VIEs		Total
Revenues:
Interest income from loans	$	1,166,758	$	172,969	$	—	$	4,329	$	—	$	1,344,056	$	—	$	1,344,056
Interest income from investment securities	102,462		1,658		—		69,521		—		173,641		(115,952)		57,689
Servicing fees	441		—		—		30,472		—		30,913		(8,685)		22,228
Rental income	6,410		—		70,587		20,690		—		97,687		—		97,687
Other revenues	2,007		995		494		1,302		1,172		5,970		—		5,970
Total revenues	1,278,078		175,622		71,081		126,314		1,172		1,652,267		(124,637)		1,527,630
Costs and expenses:
Management fees	629		—		—		—		97,032		97,661		—		97,661
Interest expense	724,452		103,188		40,229		24,752		175,002		1,067,623		(633)		1,066,990
General and administrative	42,117		11,520		2,966		62,052		13,300		131,955		—		131,955
Acquisition and investment pursuit costs	665		17		—		(57)		—		625		—		625
Costs of rental operations	7,505		—		17,034		10,371		—		34,910		—		34,910
Depreciation and amortization	5,262		84		24,061		7,603		—		37,010		—		37,010
Credit loss provision, net	200,439		17,314		—		—		—		217,753		—		217,753
Other expense	1,451		—		23		16		—		1,490		—		1,490
Total costs and expenses	982,520		132,123		84,313		104,737		285,334		1,589,027		(633)		1,588,394
Other income (loss):
Change in net assets related to consolidated VIEs	—		—		—		—		—		—		139,024		139,024
Change in fair value of servicing rights	—		—		—		(2,684)		—		(2,684)		3,082		398
Change in fair value of investment securities, net	62,766		—		—		(46,213)		—		16,553		(16,200)		353
Change in fair value of mortgage loans, net	(125,390)		—		—		14,143		—		(111,247)		—		(111,247)
Income from affordable housing fund investments	—		—		253,696		—		—		253,696		—		253,696
Earnings (loss) from unconsolidated entities	3,563		1,324		—		8,393		—		13,280		(1,902)		11,378
(Loss) gain on sale of investments and other assets, net	(140)		—		—		15,626		—		15,486		—		15,486
Gain (loss) on derivative financial instruments, net	132,686		244		4,448		4,469		(23,416)		118,431		—		118,431
Foreign currency (loss) gain, net	(18,118)		(225)		50		—		—		(18,293)		—		(18,293)
Loss on extinguishment of debt	(1,822)		—		—		(434)		—		(2,256)		—		(2,256)
Other (loss) income, net	(31,693)		—		(5)		12		—		(31,686)		—		(31,686)
Total other income (loss)	21,852		1,343		258,189		(6,688)		(23,416)		251,280		124,004		375,284
Income (loss) before income taxes	317,410		44,842		244,957		14,889		(307,578)		314,520		—		314,520
Income tax benefit	15,981		581		—		2,435		—		18,997		—		18,997
Net income (loss)	333,391		45,423		244,957		17,324		(307,578)		333,517		—		333,517
Net income attributable to non-controlling interests	(10)		—		(65,149)		(106)		—		(65,265)		—		(65,265)
Net income (loss) attributable to Starwood Property Trust, Inc.	$	333,381	$	45,423	$	179,808	$	17,218	$	(307,578)	$	268,252	$	—	$	268,252

The table below presents our results of operations for the nine months ended September 30, 2022 by business segment (amounts in thousands):

	Commercial and Residential Lending Segment		Infrastructure Lending Segment		Property Segment		Investing and Servicing Segment		Corporate		Subtotal		Securitization VIEs		Total
Revenues:
Interest income from loans	$	714,222	$	100,097	$	—	$	8,804	$	—	$	823,123	$	—	$	823,123
Interest income from investment securities	71,987		3,124		—		75,964		—		151,075		(102,767)		48,308
Servicing fees	420		—		—		41,517		—		41,937		(10,965)		30,972
Rental income	4,674		—		67,879		23,483		—		96,036		—		96,036
Other revenues	251		287		152		10,999		3		11,692		(12)		11,680
Total revenues	791,554		103,508		68,031		160,767		3		1,123,863		(113,744)		1,010,119
Costs and expenses:
Management fees	758		—		—		—		113,517		114,275		—		114,275
Interest expense	301,935		49,431		22,421		19,202		109,150		502,139		(647)		501,492
General and administrative	39,905		10,730		2,964		66,603		14,354		134,556		265		134,821
Acquisition and investment pursuit costs	2,401		3		7		(259)		—		2,152		—		2,152
Costs of rental operations	4,978		—		16,010		11,106		—		32,094		—		32,094
Depreciation and amortization	3,106		310		24,559		8,523		—		36,498		—		36,498
Credit loss provision, net	13,027		7,096		—		—		—		20,123		—		20,123
Other expense	1,251		—		55		7		—		1,313		—		1,313
Total costs and expenses	367,361		67,570		66,016		105,182		237,021		843,150		(382)		842,768
Other income (loss):
Change in net assets related to consolidated VIEs	—		—		—		—		—		—		72,268		72,268
Change in fair value of servicing rights	—		—		—		683		—		683		551		1,234
Change in fair value of investment securities, net	(5,019)		—		—		(38,853)		—		(43,872)		42,189		(1,683)
Change in fair value of mortgage loans, net	(327,743)		—		—		1,006		—		(326,737)		—		(326,737)
Income from affordable housing fund investments	—		—		658,733		—		—		658,733		—		658,733
(Loss) earnings from unconsolidated entities	(2,598)		2,631		—		2,501		—		2,534		(1,623)		911
Gain on sale of investments and other assets, net	86,460		—		—		25,599		—		112,059		—		112,059
Gain (loss) on derivative financial instruments, net	465,831		1,228		33,162		43,719		(82,019)		461,921		—		461,921
Foreign currency (loss) gain, net	(212,672)		(570)		41		—		—		(213,201)		—		(213,201)
Loss on extinguishment of debt	(206)		(469)		—		(360)		—		(1,035)		—		(1,035)
Other (loss) income, net	(90,988)		—		—		—		—		(90,988)		25		(90,963)
Total other income (loss)	(86,935)		2,820		691,936		34,295		(82,019)		560,097		113,410		673,507
Income (loss) before income taxes	337,258		38,758		693,951		89,880		(319,037)		840,810		48		840,858
Income tax benefit (provision)	57,682		7		—		(8,690)		—		48,999		—		48,999
Net income (loss)	394,940		38,765		693,951		81,190		(319,037)		889,809		48		889,857
Net income attributable to non-controlling interests	(10)		—		(148,379)		(9,972)		—		(158,361)		(48)		(158,409)
Net income (loss) attributable to Starwood Property Trust, Inc.	$	394,930	$	38,765	$	545,572	$	71,218	$	(319,037)	$	731,448	$	—	$	731,448

The table below presents our consolidated balance sheet as of September 30, 2023 by business segment (amounts in thousands):

	Commercial and Residential Lending Segment		Infrastructure Lending Segment		Property Segment		Investing and Servicing Segment		Corporate		Subtotal		Securitization VIEs		Total
Assets:
Cash and cash equivalents	$	7,078	$	35,247	$	37,281	$	9,840	$	105,873	$	195,319	$	—	$	195,319
Restricted cash	29,474		22,178		997		4,746		178,556		235,951		—		235,951
Loans held-for-investment, net	14,950,568		2,274,318		—		9,319		—		17,234,205		—		17,234,205
Loans held-for-sale	2,499,681		—		—		102,584		—		2,602,265		—		2,602,265
Investment securities	1,237,362		19,582		—		1,106,436		—		2,363,380		(1,641,787)		721,593
Properties, net	469,343		—		851,713		84,735		—		1,405,791		—		1,405,791
Investments of consolidated affordable housing fund	—		—		1,979,184		—		—		1,979,184		—		1,979,184
Investments in unconsolidated entities	25,207		48,224		—		33,050		—		106,481		(14,557)		91,924
Goodwill	—		119,409		—		140,437		—		259,846		—		259,846
Intangible assets	14,153		—		26,375		61,435		—		101,963		(35,974)		65,989
Derivative assets	123,662		134		2,640		6,580		—		133,016		—		133,016
Accrued interest receivable	160,815		9,574		1,298		1,770		88		173,545		(285)		173,260
Other assets	394,099		6,306		51,914		19,533		54,590		526,442		—		526,442
VIE assets, at fair value	—		—		—		—		—		—		44,668,904		44,668,904
Total Assets	$	19,911,442	$	2,534,972	$	2,951,402	$	1,580,465	$	339,107	$	27,317,388	$	42,976,301	$	70,293,689
Liabilities and Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	266,031	$	21,885	$	12,724	$	35,998	$	71,077	$	407,715	$	—	$	407,715
Related-party payable	—		—		—		—		24,282		24,282		—		24,282
Dividends payable	—		—		—		—		152,737		152,737		—		152,737
Derivative liabilities	15,901		—		—		—		69,756		85,657		—		85,657
Secured financing agreements, net	9,974,212		935,043		791,461		539,820		1,338,203		13,578,739		(20,858)		13,557,881
Collateralized loan obligations and single asset securitization, net	2,702,506		815,768		—		—		—		3,518,274		—		3,518,274
Unsecured senior notes, net	—		—		—		—		2,456,583		2,456,583		—		2,456,583
VIE liabilities, at fair value	—		—		—		—		—		—		42,997,104		42,997,104
Total Liabilities	12,958,650		1,772,696		804,185		575,818		4,112,638		20,223,987		42,976,246		63,200,233
Temporary Equity: Redeemable non-controlling interests	—		—		409,659		—		—		409,659		—		409,659
Permanent Equity:
Starwood Property Trust, Inc. Stockholders’ Equity:
Common stock	—		—		—		—		3,205		3,205		—		3,205
Additional paid-in capital	1,522,081		616,063		(428,536)		(680,659)		4,827,013		5,855,962		—		5,855,962
Treasury stock	—		—		—		—		(138,022)		(138,022)		—		(138,022)
Retained earnings (accumulated deficit)	5,416,479		146,213		1,957,453		1,531,338		(8,465,727)		585,756		—		585,756
Accumulated other comprehensive income	14,114		—		—		—		—		14,114		—		14,114
Total Starwood Property Trust, Inc. Stockholders’ Equity	6,952,674		762,276		1,528,917		850,679		(3,773,531)		6,321,015		—		6,321,015
Non-controlling interests in consolidated subsidiaries	118		—		208,641		153,968		—		362,727		55		362,782
Total Permanent Equity	6,952,792		762,276		1,737,558		1,004,647		(3,773,531)		6,683,742		55		6,683,797
Total Liabilities and Equity	$	19,911,442	$	2,534,972	$	2,951,402	$	1,580,465	$	339,107	$	27,317,388	$	42,976,301	$	70,293,689

The table below presents our consolidated balance sheet as of December 31, 2022 by business segment (amounts in thousands):

	Commercial and Residential Lending Segment		Infrastructure Lending Segment		Property Segment		Investing and Servicing Segment		Corporate		Subtotal		Securitization VIEs		Total
Assets:
Cash and cash equivalents	$	68,593	$	31,153	$	31,194	$	39,023	$	91,098	$	261,061	$	—	$	261,061
Restricted cash	18,556		31,133		981		5,259		65,143		121,072		—		121,072
Loans held-for-investment, net	16,038,930		2,352,932		—		9,577		—		18,401,439		—		18,401,439
Loans held-for-sale	2,763,458		—		—		21,136		—		2,784,594		—		2,784,594
Investment securities	1,250,893		66,204		—		1,165,628		—		2,482,725		(1,666,921)		815,804
Properties, net	463,492		—		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 entities	25,326		47,078		—		33,030		—		105,434		(13,542)		91,892
Goodwill	—		119,409		—		140,437		—		259,846		—		259,846
Intangible assets	11,908		—		29,613		66,310		—		107,831		(39,058)		68,773
Derivative assets	101,082		122		1,803		5,614		—		108,621		—		108,621
Accrued interest receivable	151,852		9,856		863		1,105		5,120		168,796		(275)		168,521
Other assets	170,177		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 liabilities	21,523		105		—		—		69,776		91,404		—		91,404
Secured financing agreements, net	10,804,970		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, net	2,862,211		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 Liabilities	13,835,601		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 capital	2,124,496		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 income	20,955		—		—		—		—		20,955		—		20,955
Total Starwood Property Trust, Inc. Stockholders’ Equity	7,228,551		784,048		1,371,688		867,457		(3,789,306)		6,462,438		—		6,462,438
Non-controlling interests in consolidated subsidiaries	115		—		208,634		164,674		—		373,423		56		373,479
Total Permanent Equity	7,228,666		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