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Starwood Property Trust NYSE: STWD-N

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Starwood Property Trust Reports Results for the Quarter Ended June 30, 2021

PR Newswire - PRF - Thu Aug 5, 6:00AM CDT
  

GREENWICH, Conn. , Aug. 5, 2021 /PRNewswire/ -- Starwood Property Trust, Inc. (NYSE:STWD) today announced operating results for the fiscal quarter ended June 30 , 2021.  The Company's second quarter 2021 GAAP net income was $116.3 million , or $0.40 per diluted share, and Distributable Earnings (a non-GAAP financial measure) was $153.2 million , or $0.51 per diluted share.

"We are pleased to report another very active quarter growing our total portfolio to a record of $19.3 billion . Our diversified business remains extremely well positioned with strong asset performance across our cylinders and a growing investment pipeline. We executed two CLOs totaling $1.8 billion during the quarter, further reducing our mark to market financing exposure in an effort to build a fortress balance sheet. With continued recovery in the commercial real estate markets, the unrealized gains across our owned real estate portfolio have reached a record level of over $4.00 a share, providing stability, liquidity and power to invest opportunistically," commented Barry Sternlicht , Chairman and CEO 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 .

Webcast and Conference Call Information  

The Company will host a live webcast and conference call on Thursday, August 5, 2021 , 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:  13720976 The playback can be accessed through August 12, 2021 .

About Starwood Property Trust, Inc.

Starwood Property Trust (NYSE:STWD) is a leading diversified finance company with a core focus on the real estate and infrastructure sectors. An affiliate of global private investment firm Starwood Capital Group, the Company has successfully deployed over $72 billion of capital since inception and manages a portfolio of over $19 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, the severity and duration of economic disruption caused by the COVID-19 global pandemic (including the emergence of new strains of the virus), completion of pending investments and financings, continued ability to acquire additional investments, competition within the finance and real estate industries, availability of financing and other risks detailed under the heading "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 , 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 .

Contact: Zachary Tanenbaum Starwood Property Trust Phone: 203-422-7788 Email: ztanenbaum@starwood.com

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations by Segment

For the three months ended June 30, 2021

(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

$

165,697



$

21,171



$



$

2,404



$



$

189,272



$



$

189,272


Interest income from investment securities

17,190



555





25,668





43,413



(32,765)



10,648


Servicing fees

110







16,365





16,475



(5,611)



10,864


Rental income

1,419





65,410



10,290





77,119





77,119


Other revenues

74



69



44



2,777





2,964





2,964


Total revenues

184,490



21,795



65,454



57,504





329,243



(38,376)



290,867


Costs and expenses:
















Management fees

300







224



28,716



29,240



10



29,250


Interest expense

48,356



9,694



16,863



5,789



29,171



109,873



(220)



109,653


General and administrative

10,411



3,532



1,028



25,720



4,489



45,180



85



45,265


Acquisition and investment pursuit costs

179



249





(21)





407





407


Costs of rental operations

433





25,922



4,376





30,731





30,731


Depreciation and amortization

311



100



17,901



4,165





22,477





22,477


Credit loss (reversal) provision, net

(12,447)



603









(11,844)





(11,844)


Other expense
















Total costs and expenses

47,543



14,178



61,714



40,253



62,376



226,064



(125)



225,939


Other income (loss):
















Change in net assets related to consolidated VIEs













12,509



12,509


Change in fair value of servicing rights







460





460



839



1,299


Change in fair value of investment securities, net

(9,402)







(12,585)





(21,987)



23,495



1,508


Change in fair value of mortgage loans, net

12,329







33,538





45,867





45,867


Earnings (loss) from unconsolidated entities

1,996



(70)





(507)





1,419



807



2,226


(Loss) gain on sale of investments and other assets, net

(1,019)



27





9,723





8,731





8,731


(Loss) gain on derivative financial instruments, net

(4,945)



112



(372)



(5,731)



927



(10,009)





(10,009)


Foreign currency gain (loss), net

2,715



(62)



(25)



(1)





2,627





2,627


Loss on extinguishment of debt

(221)



(939)





(22)





(1,182)





(1,182)


Other (loss) income, net

(5,504)



2





29





(5,473)





(5,473)


Total other income (loss)

(4,051)



(930)



(397)



24,904



927



20,453



37,650



58,103


Income (loss) before income taxes

132,896



6,687



3,343



42,155



(61,449)



123,632



(601)



123,031


Income tax benefit (provision)

8,043



(58)





(4,632)





3,353





3,353


Net income (loss)

140,939



6,629



3,343



37,523



(61,449)



126,985



(601)



126,384


Net (income) loss attributable to non-controlling interests

(4)





(4,914)



(5,757)





(10,675)



601



(10,074)


Net income (loss) attributable to Starwood Property Trust, Inc.

$

140,935



$

6,629



$

(1,571)



$

31,766



$

(61,449)



$

116,310



$



$

116,310


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 from successful acquisitions, depreciation and amortization of real estate and associated intangibles and any unrealized gains, losses or other non-cash items recorded in net income for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income 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. 

Reconciliation of Net Income to Distributable Earnings

For the three months ended June 30, 2021

(Amounts in thousands except per share data)



Commercial and

Residential

Lending

Segment


Infrastructure

Lending

Segment


Property

Segment


Investing

and Servicing

Segment


Corporate


Total

Net income (loss) attributable to Starwood Property Trust, Inc.

$

140,935



$

6,629



$

(1,571)



$

31,766



$

(61,449)



$

116,310


Add / (Deduct):












Non-controlling interests attributable to Woodstar II Class A Units





4,914







4,914


Non-cash equity compensation expense

1,859



440



57



1,190



6,051



9,597


Management incentive fee









5,031



5,031


Acquisition and investment pursuit costs

(196)





(88)



(58)





(342)


Depreciation and amortization

251



90



17,969



3,812





22,122


Credit loss (reversal) provision, net

(12,447)



603









(11,844)


Interest income adjustment for securities

(861)







3,662





2,801


Extinguishment of debt, net









(247)



(247)


Other non-cash items

6





(262)



205





(51)


Reversal of GAAP unrealized (gains) / losses on:












Loans

(12,329)







(33,538)





(45,867)


Securities

9,402







12,585





21,987


Derivatives

3,594



(173)



(1,401)



4,927



1,532



8,479


Foreign currency

(2,715)



62



25



1





(2,627)


(Earnings) loss from unconsolidated entities

(1,996)



70





507





(1,419)


Sales of properties







(9,723)





(9,723)


Recognition of Distributable realized gains / (losses) on:












Loans

11,062







30,623





41,685


Securities

(18,088)







(2,779)





(20,867)


Derivatives

(2,546)





(34)



(718)





(3,298)


Foreign currency

6,518



(31)



(25)



(1)





6,461


Earnings (loss) from unconsolidated entities

4,444



(70)





776





5,150


Sales of properties







4,975





4,975


Distributable Earnings (Loss)

$

126,893



$

7,620



$

19,584



$

48,212



$

(49,082)



$

153,227


Distributable Earnings (Loss) per Weighted Average Diluted Share

$

0.42



$

0.02



$

0.07



$

0.16



$

(0.16)



$

0.51


 

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations by Segment

For the six months ended June 30, 2021

(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

$

336,290



$

39,979



$



$

3,578



$



$

379,847



$



$

379,847


Interest income from investment securities

35,575



1,119





46,608





83,302



(61,044)



22,258


Servicing fees

234







28,821





29,055



(9,789)



19,266


Rental income

2,758





130,514



20,185





153,457





153,457


Other revenues

164



162



84



2,859





3,269





3,269


Total revenues

375,021



41,260



130,598



102,051





648,930



(70,833)



578,097


Costs and expenses:
















Management fees

615







446



66,904



67,965



21



67,986


Interest expense

92,651



18,535



32,695



11,238



58,319



213,438



(411)



213,027


General and administrative

21,744



6,974



2,051



44,160



8,800



83,729



172



83,901


Acquisition and investment pursuit costs

364



249





(21)





592





592


Costs of rental operations

910





49,882



8,684





59,476





59,476


Depreciation and amortization

618



200



36,001



8,132





44,951





44,951


Credit loss (reversal) provision, net

(12,976)



1,176









(11,800)





(11,800)


Other expense

31





583



71





685





685


Total costs and expenses

103,957



27,134



121,212



72,710



134,023



459,036



(218)



458,818


Other income (loss):
















Change in net assets related to consolidated VIEs













52,254



52,254


Change in fair value of servicing rights







1,205





1,205



(702)



503


Change in fair value of investment securities, net

(11,452)







(5,415)





(16,867)



18,069



1,202


Change in fair value of mortgage loans, net

1,615







34,774





36,389





36,389


Earnings (loss) from unconsolidated entities

3,749



(324)





82





3,507



453



3,960


Gain on sale of investments and other assets, net

16,674



27





9,723





26,424





26,424


Gain (loss) on derivative financial instruments, net

21,196



796



4,352



3,552



(5,916)



23,980





23,980


Foreign currency loss, net

(8,879)



(111)





(64)





(9,054)





(9,054)


Loss on extinguishment of debt

(289)



(1,246)



(141)



(22)





(1,698)





(1,698)


Other (loss) income, net

(5,504)



23





29





(5,452)





(5,452)


Total other income (loss)

17,110



(835)



4,211



43,864



(5,916)



58,434



70,074



128,508


Income (loss) before income taxes

288,174



13,291



13,597



73,205



(139,939)



248,328



(541)



247,787


Income tax benefit (provision)

6,538



(150)





(5,265)





1,123





1,123


Net income (loss)

294,712



13,141



13,597



67,940



(139,939)



249,451



(541)



248,910


Net (income) loss attributable to non-controlling interests

(7)





(9,991)



(11,765)





(21,763)



541



(21,222)


Net income (loss) attributable to Starwood Property Trust, Inc.

$

294,705



$

13,141



$

3,606



$

56,175



$

(139,939)



$

227,688



$



$

227,688


 

Reconciliation of Net Income to Distributable Earnings

For the six months ended June 30, 2021

(Amounts in thousands except per share data)



Commercial and

Residential

Lending

Segment


Infrastructure

Lending

Segment


Property

Segment


Investing

and Servicing

Segment


Corporate


Total

Net income (loss) attributable to Starwood Property Trust, Inc.

$

294,705



$

13,141



$

3,606



$

56,175



$

(139,939)



$

227,688


Add / (Deduct):












Non-controlling interests attributable to Woodstar II Class A Units





9,991







9,991


Non-cash equity compensation expense

3,640



740



88



2,071



13,368



19,907


Management incentive fee









18,154



18,154


Acquisition and investment pursuit costs

(360)





(177)



(58)





(595)


Depreciation and amortization

498



181



36,130



7,415





44,224


Credit loss (reversal) provision, net

(12,976)



1,176









(11,800)


Interest income adjustment for securities

(2,161)







7,657





5,496


Extinguishment of debt, net









(493)



(493)


Income tax (provision) benefit associated with realized (gains) losses

(6,495)







405





(6,090)


Other non-cash items

9





(599)



412



415



237


Reversal of GAAP unrealized (gains) / losses on:












Loans

(1,615)







(34,774)





(36,389)


Securities

11,452







5,415





16,867


Derivatives

(23,577)



(918)



(7,847)



(4,792)



10,845



(26,289)


Foreign currency

8,879



111





64





9,054


(Earnings) loss from unconsolidated entities

(3,749)



324





(82)





(3,507)


Sales of properties

(17,693)







(9,723)





(27,416)


Recognition of Distributable realized gains / (losses) on:












Loans

25,615







35,295





60,910


Realized credit loss

(7,757)











(7,757)


Securities

(20,949)







(1,003)





(21,952)


Derivatives

(596)





(69)



877





212


Foreign currency

11,302



(41)





(64)





11,197


Earnings (loss) from unconsolidated entities

7,662



(324)





1,740





9,078


Sales of properties

8,298







4,975





13,273


Distributable Earnings (Loss)

$

274,132



$

14,390



$

41,123



$

72,005



$

(97,650)



$

304,000


Distributable Earnings (Loss) per Weighted Average Diluted Share

$

0.92



$

0.05



$

0.14



$

0.24



$

(0.33)



$

1.02


 

Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet by Segment

As of June 30, 2021

(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

$

60,651



$

31,695



$

28,088



$

22,618



$

110,904



$

253,956



$

611



$

254,567


Restricted cash

60,416



25,840



6,681



13,072





106,009





106,009


Loans held-for-investment, net

11,068,406



1,694,109





857





12,763,372





12,763,372


Loans held-for-sale

494,113



85,875





381,689





961,677





961,677


Investment securities

951,036



33,881





1,145,485





2,130,402



(1,456,836)



673,566


Properties, net

124,916





1,941,500



177,153





2,243,569





2,243,569


Intangible assets





37,361



69,910





107,271



(42,078)



65,193


Investment in unconsolidated entities

43,717



24,770





42,954





111,441



(14,652)



96,789


Goodwill



119,409





140,437





259,846





259,846


Derivative assets

12,472





124



92



22,927



35,615





35,615


Accrued interest receivable

102,086



5,307





495



6,031



113,919



(119)



113,800


Other assets

81,621



11,497



91,158



42,237



14,977



241,490



13



241,503


VIE assets, at fair value













63,493,796



63,493,796


Total Assets

$

12,999,434



$

2,032,383



$

2,104,912



$

2,036,999



$

154,839



$

19,328,567



$

61,980,735



$

81,309,302


Liabilities and Equity
















Liabilities:
















Accounts payable, accrued expenses and other liabilities

$

38,973



$

8,464



$

45,231



$

40,245



$

49,260



$

182,173



$

53



$

182,226


Related-party payable









26,393



26,393



38



26,431


Dividends payable









139,457



139,457





139,457


Derivative liabilities

31,530



1,118





413





33,061





33,061


Secured financing agreements, net

5,751,375



957,605



1,872,043



742,811



630,578



9,954,412



(21,750)



9,932,662


Collateralized loan obligations, net

2,000,073



404,599









2,404,672





2,404,672


Unsecured senior notes, net









1,737,383



1,737,383





1,737,383


VIE liabilities, at fair value













62,001,710



62,001,710


Total Liabilities

7,821,951



1,371,786



1,917,274



783,469



2,583,071



14,477,551



61,980,051



76,457,602


Equity:
















Starwood Property Trust, Inc. Stockholders' Equity:
















Common stock









2,952



2,952





2,952


Additional paid-in capital

878,471



629,130



16,967



(218,645)



3,942,567



5,248,490





5,248,490


Treasury stock









(138,022)



(138,022)





(138,022)


Accumulated other comprehensive income

41,310











41,310





41,310


Retained earnings (accumulated deficit)

4,257,587



31,467



(47,694)



1,316,994



(6,235,729)



(677,375)





(677,375)


Total Starwood Property Trust, Inc. Stockholders' Equity

5,177,368



660,597



(30,727)



1,098,349



(2,428,232)



4,477,355





4,477,355


Non-controlling interests in consolidated subsidiaries

115





218,365



155,181





373,661



684



374,345


Total Equity

5,177,483



660,597



187,638



1,253,530



(2,428,232)



4,851,016



684



4,851,700


Total Liabilities and Equity

$

12,999,434



$

2,032,383



$

2,104,912



$

2,036,999



$

154,839



$

19,328,567



$

61,980,735



$

81,309,302


 

Cision View original content: https://www.prnewswire.com/news-releases/starwood-property-trust-reports-results-for-the-quarter-ended-june-30-2021-301349045.html

SOURCE Starwood Property Trust, Inc.

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