8-K

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

​

CURRENT REPORT

​ Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

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Date of Report (Date of earliest event reported): February 25, 2021

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Starwood Property Trust, Inc.

(Exact name of registrant as specified in its charter)

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Maryland<br>(State or other jurisdiction <br>of incorporation)	001-34436<br>(Commission<br>File Number)	27-0247747<br>(IRS Employer<br>Identification No.)

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​<br><br>​
591 West Putnam Avenue<br><br>Greenwich , CT	06830
(Address of principal	(Zip Code)
executive offices)

Registrant’s telephone number,including area code:(203) 422-7700

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(Former name or former address, if changed since last report.)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value per share	STWD	New York Stock Exchange

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02. Results of Operations and Financial Condition.

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On February 25, 2021, Starwood Property Trust, Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2020. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

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(d)Exhibits

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​	​<br><br>​
Exhibit<br><br>Number	​<br><br>Description
​	​
99.1	Press Release, dated February 25, 2021
​	​
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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2

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EXHIBIT INDEX

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Exhibit<br>Number	Description
​	​
99.1	Press Release, dated February 25, 2021

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3

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SIGNATURE

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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Dated: February 25, 2021	STARWOOD PROPERTY TRUST, INC.
​	​
	By:	/s/ ANDREW J. SOSSEN
	Name:	Andrew J. Sossen
	Title:	Chief Operating Officer

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4

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Exhibit 99.1

​

For Immediate Release

Starwood Property Trust Reports Results for the

Quarter and Year Ended December 31, 2020

– Quarterly GAAP Earnings of $0.37 and Distributable Earnings of $0.50 per Diluted Share –

– Originated or Acquired $1.2 Billion of Assets in Q4 –

– Originated or Acquired $4.6 Billion of Assets in 2020, Including $3.0 Billion after Q1 –

– Paid Fourth Quarter Dividend of $0.48 per Share –

– Subsequent to Quarter End, Priced $500 Million Inaugural Infrastructure CLO –

GREENWICH, Conn., February 25, 2021 /PRNewswire/ -- Starwood Property Trust, Inc. (NYSE: STWD) today announced operating results for the fiscal quarter and year ended December 31, 2020.  The Company’s fourth quarter 2020 GAAP net income was $107.0 million, or $0.37 per diluted share, and Distributable Earnings (a non-GAAP financial measure) was $148.4 million, or $0.50 per diluted share.  The Company’s full year 2020 GAAP net income was $331.7 million, or $1.16 per diluted share, and Distributable Earnings was $585.3 million, or $1.98 per diluted share.

“At no time other than 2020 was the power and strength of the company we built from a blind pool of capital over a decade ago more evident. We have proven that we are more than a portfolio of real estate mortgage loans, as good as our book has proven to be.  The pandemic presented us with one of the most challenging market cycles and opportunities we have seen since our inception.  Given our superior liquidity position, we never contemplated distressed asset sales or capital raises that would have been dilutive to our fair value in order to navigate the immense challenges of 2020. Our multiple business cylinders allowed us to generate excess liquidity, while unlocking accretive avenues to deploy that capital. Once we felt the worst had passed, we among our peers uniquely deployed $3.0 billion of capital in multiple business lines after the first quarter, including $2.3 billion in commercial and residential lending.

We enter 2021 in a position of significant strength, with access to multiple sources of liquidity, a robust commercial lending pipeline and an increasingly large array of investment opportunities across business lines,” 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, February 25, 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.

1

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​ 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

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Conference Call Playback:

Domestic: 1-844-512-2921

International: 1-412-317-6671

Passcode: 13715683

The playback can be accessed through March 4, 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 $66 billion of capital since inception and manages a portfolio of over $18 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, 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.

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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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2

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​ Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations by Segment

For the three months ended December 31, 2020

(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	​	$	173,014	​	$	18,477	​	$	—	​	$	2,518	​	$	—	​	$	194,009	​	$	—		​	$	194,009
Interest income from investment securities	​		21,132	​		618	​		—	​		20,512	​	​	—	​		42,262	​		(29,920)		​		12,342
Servicing fees	​		125	​		—	​		—	​		13,024	​	​	—	​		13,149	​		(4,514)		​		8,635
Rental income	​	​	1,924	​	​	—	​	​	64,000	​	​	9,070	​	​	—	​	​	74,994	​	​	—		​	​	74,994
Other revenues	​		114	​		155	​		65	​		248	​	​	—	​		582	​		—		​		582
Total revenues	​	****	196,309	​	****	19,250	​	****	64,065	​	****	45,372	​	****	—	​	****	324,996	​	****	(34,434)		​	****	290,562
Costs and expenses:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​		​	​	​
Management fees	​		(191)	​		—	​		—	​		221	​		40,115	​		40,145	​		12		​		40,157
Interest expense	​		41,987	​		9,204	​		16,147	​		5,507	​	​	29,643	​		102,488	​		(224)		​		102,264
General and administrative	​		12,742	​		3,345	​		1,089	​		25,549	​	​	4,207	​		46,932	​		85		​		47,017
Acquisition and investment pursuit costs	​		211	​		4	​		—	​		(26)	​	​	—	​		189	​		—		​		189
Costs of rental operations	​	​	777	​	​	—	​	​	25,279	​	​	4,252	​	​	—	​	​	30,308	​	​	—		​	​	30,308
Depreciation and amortization	​		433	​		96	​		18,675	​		4,219	​	​	—	​		23,423	​		—		​		23,423
Credit loss reversal, net	​		(5,037)	​		(7,094)	​		—	​		—	​	​	—	​		(12,131)	​		—		​		(12,131)
Other expense	​		77	​		—	​		99	​		—	​	​	—	​		176	​		—		​		176
Total costs and expenses	​	****	50,999	​	****	5,555	​	****	61,289	​	****	39,722	​	​	73,965	​	****	231,530	​	****	(127)		​	****	231,403
Other income (loss):	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​		​	​	​
Change in net assets related to consolidated VIEs	​		—	​		—	​		—	​		—	​		—	​		—	​		13,905		​		13,905
Change in fair value of servicing rights	​		—	​		—	​		—	​		1,809	​	​	—	​		1,809	​		(3,196)		​		(1,387)
Change in fair value of investment securities, net	​		(6,294)	​		—	​		—	​		(15,377)	​	​	—	​		(21,671)	​		23,932		​		2,261
Change in fair value of mortgage loans, net	​		20,002	​		—	​		—	​		33,422	​	​	—	​		53,424	​		—		​		53,424
Earnings (loss) from unconsolidated entities	​	​	4,804	​	​	431	​		—	​		341	​	​	—	​		5,576	​	​	(324)		​		5,252
Gain on sale of investments and other assets, net	​	​	—	​	​	10	​		—	​		532	​	​	—	​		542	​	​	—		​		542
(Loss) gain on derivative financial instruments, net	​		(49,156)	​		(171)	​		758	​		1,627	​	​	(751)	​		(47,693)	​		—		​		(47,693)
Foreign currency gain (loss), net	​		43,962	​		260	​		39	​		(5)	​	​	—	​		44,256	​		—		​		44,256
Loss on extinguishment of debt	​		—	​		(789)	​	​	—	​	​	—	​	​	(488)	​	​	(1,277)	​		—		​	​	(1,277)
Other (loss) income, net	​		—	​		—	​		(406)	​		—	​	​	—	​		(406)	​		—		​		(406)
Total other income (loss)	​	****	13,318	​	****	(259)	​	****	391	​	****	22,349	​	​	(1,239)	​	****	34,560	​	****	34,317		​	****	68,877
Income (loss) before income taxes	​	****	158,628	​	****	13,436	​	****	3,167	​	****	27,999	​	​	(75,204)	​	****	128,026	​	****	10		​	****	128,036
Income tax provision	​		(5,556)	​		(120)	​		—	​		(7,705)	​	​	—	​		(13,381)	​		—		​		(13,381)
Net income (loss)	​	****	153,072	​	****	13,316	​	****	3,167	​	****	20,294	​	​	(75,204)	​	****	114,645	​	****	10		​	****	114,655
Net income attributable to non-controlling interests	​		(4)	​		—	​		(5,100)	​		(2,573)	​	​	—	​		(7,677)	​		(10)		​		(7,687)
Net income (loss) attributable to Starwood Property Trust, Inc.	​	$	153,068	​	$	13,316	​	$	(1,933)	​	$	17,721	​	$	(75,204)	​	$	106,968	​	$	—		​	$	106,968

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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 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.

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Reconciliation of Net Income to Distributable Earnings

For the three months ended December 31, 2020

(Amounts in thousands except per share data)

(Amounts in thousands except per share data)	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	****	Commercial		****	​		****	​		****	​		****	​		****	​
​	​	and		​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Residential		​	Infrastructure		​	​		​	Investing		​	​		​	​
​	​	Lending		​	Lending		​	Property		​	and Servicing		​	​		​	​
​	​	Segment		​	Segment		​	Segment		​	Segment		​	Corporate		​	Total
Net income (loss) attributable to Starwood Property Trust, Inc.	​	$	153,068	​	$	13,316	​	$	(1,933)	​	$	17,721	​	$	(75,204)	​	$	106,968
Add / (Deduct):	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Non-controlling interests attributable to Woodstar II Class A Units	​	​	—	​	​	—	​	​	5,100	​	​	—	​	​	—	​	​	5,100
Non-cash equity compensation expense	​	​	891	​	​	299	​	​	34	​	​	869	​	​	6,707	​	​	8,800
Management incentive fee	​	​	—	​	​	—	​	​	—	​	​	—	​	​	14,974	​		14,974
Acquisition and investment pursuit costs	​	​	(278)	​	​	—	​	​	(89)	​	​	—	​	​	—	​	​	(367)
Depreciation and amortization	​	​	372	​	​	86	​	​	18,736	​	​	3,832	​	​	—	​	​	23,026
Credit loss reversal, net	​	​	(5,037)	​	​	(7,094)	​	​	—	​	​	—	​	​	—	​	​	(12,131)
Interest income adjustment for securities	​	​	(1,102)	​	​	—	​	​	—	​	​	5,245	​	​	—	​	​	4,143
Extinguishment of debt, net	​	​	—	​	​	—	​	​	—	​	​	—	​	​	(247)	​	​	(247)
Income tax provision associated with fair value adjustments	​	​	4,883	​	​	—	​	​	—	​	​	550	​	​	—	​	​	5,433
Other non-cash items	​	​	4	​	​	—	​	​	(374)	​	​	239	​	​	161	​	​	30
Reversal of GAAP unrealized (gains) / losses on:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Loans	​	​	(20,002)	​	​	—	​	​	—	​	​	(33,422)	​	​	—	​	​	(53,424)
Securities	​	​	6,294	​	​	—	​	​	—	​	​	15,377	​	​	—	​	​	21,671
Derivatives	​	​	48,046	​	​	105	​	​	(2,480)	​	​	(2,218)	​	​	3,945	​	​	47,398
Foreign currency	​	​	(43,962)	​	​	(260)	​	​	(39)	​	​	5	​	​	—	​	​	(44,256)
Earnings from unconsolidated entities	​	​	(4,804)	​	​	(431)	​	​	—	​	​	(341)	​	​	—	​	​	(5,576)
Recognition of Distributable realized gains / (losses) on:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Loans	​	​	2,461	​	​	—	​	​	—	​	​	32,528	​	​	—	​	​	34,989
Securities	​	​	398	​	​	—	​	​	—	​	​	(9,389)	​	​	—	​	​	(8,991)
Derivatives	​	​	(3,858)	​	​	—	​	​	(34)	​	​	20	​	​	—	​	​	(3,872)
Foreign currency	​	​	631	​	​	14	​	​	39	​	​	(5)	​	​	—	​	​	679
Earnings from unconsolidated entities	​	​	2,914	​	​	431	​	​	—	​	​	745	​	​	—	​	​	4,090
Distributable Earnings (Loss)	​	$	140,919	​	$	6,466	​	$	18,960	​	$	31,756	​	$	(49,664)	​	$	148,437
Distributable Earnings (Loss) per Weighted Average Diluted Share	​	$	0.47	​	$	0.02	​	$	0.07	​	$	0.11	​	$	(0.17)	​	$	0.50

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4

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​ Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations by Segment

For the year ended December 31, 2020

(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	​	$	665,503	​	$	77,851	​	$	—	​	$	8,589	​	$	—	​	$	751,943	​	$	—	​	$	751,943
Interest income from investment securities	​		78,490	​		2,637	​		—	​		93,823	​	​	—	​		174,950	​		(120,538)	​		54,412
Servicing fees	​		549	​		—	​		—	​		41,806	​	​	—	​		42,355	​		(12,721)	​		29,634
Rental income	​	​	4,706	​	​	—	​	​	255,452	​	​	37,670	​	​	—	​	​	297,828	​	​	—	​	​	297,828
Other revenues	​		412	​		499	​		293	​		1,139	​	​	—	​		2,343	​		(5)	​		2,338
Total revenues	​	****	749,660	​	****	80,987	​	****	255,745	​	****	183,027	​	****	—	​	****	1,269,419	​	****	(133,264)	​	****	1,136,155
Costs and expenses:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Management fees	​		796	​		—	​		—	​		901	​		125,372	​		127,069	​		58	​		127,127
Interest expense	​		176,230	​		40,913	​		65,390	​		24,303	​	​	113,313	​		420,149	​		(386)	​		419,763
General and administrative	​		41,972	​		15,673	​		4,542	​		80,039	​	​	15,312	​		157,538	​		336	​		157,874
Acquisition and investment pursuit costs	​		2,406	​		1,183	​		12	​		(29)	​	​	—	​		3,572	​		—	​		3,572
Costs of rental operations	​	​	3,186	​	​	—	​	​	97,136	​	​	17,354	​	​	—	​	​	117,676	​	​	—	​	​	117,676
Depreciation and amortization	​		1,708	​		342	​		76,246	​		16,109	​	​	—	​		94,405	​		—	​		94,405
Credit loss provision (reversal), net	​		47,256	​		(4,103)	​		—	​		—	​	​	—	​		43,153	​		—	​		43,153
Other expense	​		307	​		—	​		531	​		—	​	​	—	​		838	​		—	​		838
Total costs and expenses	​	****	273,861	​	****	54,008	​	****	243,857	​	****	138,677	​	​	253,997	​	****	964,400	​	****	8	​	****	964,408
Other income (loss):	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Change in net assets related to consolidated VIEs	​		—	​		—	​		—	​		—	​		—	​		—	​		78,258	​		78,258
Change in fair value of servicing rights	​		—	​		—	​		—	​		11,415	​	​	—	​		11,415	​		(15,130)	​		(3,715)
Change in fair value of investment securities, net	​		(15,108)	​		—	​		—	​		(51,403)	​	​	—	​		(66,511)	​		71,904	​		5,393
Change in fair value of mortgage loans, net	​		76,897	​		—	​		—	​		56,227	​	​	—	​		133,124	​		—	​		133,124
Earnings (loss) from unconsolidated entities	​		8,779	​		(767)	​		—	​		30,845	​	​	—	​		38,857	​		(1,540)	​		37,317
(Loss) gain on sale of investments and other assets, net	​		(961)	​		306	​		—	​		7,965	​	​	—	​		7,310	​		—	​		7,310
(Loss) gain on derivative financial instruments, net	​		(58,664)	​		(1,499)	​		(34,392)	​		(21,269)	​	​	33,646	​		(82,178)	​		—	​		(82,178)
Foreign currency gain (loss), net	​		42,205	​		207	​		(14)	​		(3)	​	​	—	​		42,395	​		—	​		42,395
Loss on extinguishment of debt	​	​	(22)	​	​	(959)	​	​	(2,185)	​	​	—	​	​	(488)	​	​	(3,654)	​	​	—	​	​	(3,654)
Other (loss) income, net	​		—	​		—	​		(166)	​		447	​	​	—	​		281	​		—	​		281
Total other income (loss)	​	****	53,126	​	****	(2,712)	​	****	(36,757)	​	****	34,224	​	​	33,158	​	****	81,039	​	****	133,492	​	****	214,531
Income (loss) before income taxes	​	****	528,925	​	****	24,267	​	****	(24,869)	​	****	78,574	​	​	(220,839)	​	****	386,058	​	****	220	​	****	386,278
Income tax (provision) benefit	​		(21,091)	​		(117)	​		—	​		1,011	​	​	—	​		(20,197)	​		—	​		(20,197)
Net income (loss)	​	****	507,834	​	****	24,150	​	****	(24,869)	​	****	79,585	​	​	(220,839)	​	****	365,861	​	****	220	​	****	366,081
Net income attributable to non-controlling interests	​		(14)	​		—	​		(20,394)	​		(13,764)	​	​	—	​		(34,172)	​		(220)	​		(34,392)
Net income (loss) attributable to Starwood Property Trust, Inc.	​	$	507,820	​	$	24,150	​	$	(45,263)	​	$	65,821	​	$	(220,839)	​	$	331,689	​	$	—	​	$	331,689

​

​

​

​

5

​

​ Reconciliation of Net Income to Distributable Earnings

For the year ended December 31, 2020

(Amounts in thousands except per share data)

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	****	Commercial		****	​		****	​		****	​		****	​		****	​
​	​	and		​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Residential		​	Infrastructure		​	​		​	Investing		​	​		​	​
​	​	Lending		​	Lending		​	Property		​	and Servicing		​	​		​	​
​	​	Segment		​	Segment		​	Segment		​	Segment		​	Corporate		​	Total
Net income (loss) attributable to Starwood Property Trust, Inc.	​	$ ****	507,820	​	$	24,150	​	$ ****	(45,263)	​	$	65,821	​	$	(220,839)	​	$ ****	331,689
Add / (Deduct):	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Non-controlling interests attributable to Woodstar II Class A Units	​	​	—	​	​	—	​	​	20,394	​	​	—	​	​	—	​		20,394
Non-cash equity compensation expense	​		4,454	​	​	1,120	​	​	219	​	​	4,594	​	​	20,854	​	​	31,241
Management incentive fee	​		—	​	​	—	​	​	—	​	​	—	​	​	30,773	​	​	30,773
Acquisition and investment pursuit costs	​	​	123	​	​	—	​	​	(355)	​	​	(72)	​	​	—	​	​	(304)
Depreciation and amortization	​		1,467	​	​	294	​	​	76,544	​	​	14,501	​	​	—	​	​	92,806
Credit loss provision (reversal), net	​		46,215	​	​	(4,103)	​	​	—	​	​	—	​	​	—	​	​	42,112
Interest income adjustment for securities	​		(864)	​	​	—	​	​	—	​	​	15,101	​	​	—	​	​	14,237
Extinguishment of debt, net	​	​	—	​	​	—	​	​	—	​	​	—	​	​	(986)	​	​	(986)
Income tax provision (benefit) associated with fair value adjustments	​	​	6,495	​	​	—	​	​	—	​	​	(405)	​	​	—	​	​	6,090
Other non-cash items	​	​	14	​	​	—	​	​	(2,063)	​	​	942	​	​	631	​	​	(476)
Reversal of GAAP unrealized (gains) / losses on:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Loans	​		(76,897)	​	​	—	​	​	—	​	​	(56,227)	​	​	—	​	​	(133,124)
Securities	​		15,108	​	​	—	​	​	—	​	​	51,403	​	​	—	​	​	66,511
Derivatives	​		56,862	​	​	1,365	​	​	30,113	​	​	19,768	​	​	(19,564)	​	​	88,544
Foreign currency	​		(42,205)	​	​	(207)	​	​	14	​	​	3	​	​	—	​	​	(42,395)
(Earnings) loss from unconsolidated entities	​		(8,779)	​	​	767	​	​	—	​	​	(30,845)	​	​	—	​	​	(38,857)
Recognition of Distributable realized gains / (losses) on:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Loans	​		48,203	​	​	(62)	​	​	—	​	​	55,287	​	​	—	​	​	103,428
Securities	​		398	​	​	—	​	​	—	​	​	(18,100)	​	​	—	​	​	(17,702)
Derivatives	​		(7,711)	​	​	118	​	​	(473)	​	​	(13,418)	​	​	—	​	​	(21,484)
Foreign currency	​		(4,810)	​	​	(133)	​	​	(14)	​	​	(3)	​	​	—	​	​	(4,960)
Earnings (loss) from unconsolidated entities	​		5,686	​	​	(382)	​	​	—	​	​	18,247	​	​	—	​	​	23,551
Sales of properties	​		—	​	​	—	​	​	—	​	​	(5,789)	​	​	—	​	​	(5,789)
Distributable Earnings (Loss)	​	$	551,579	​	$	22,927	​	$	79,116	​	$	120,808	​	$	(189,131)	​	$	585,299
Distributable Earnings (Loss) per Weighted Average Diluted Share	​	$	1.86	​	$	0.08	​	$	0.27	​	$	0.41	​	$	(0.64)	​	$	1.98

​

​

​

6

​

​ Starwood Property Trust, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet by Segment

As of December 31, 2020

(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	​	$	160,007	​	$	4,440	​	$	32,080	​	$	19,546	​	$	346,372	​	$	562,445	​	$	772	​	$	563,217
Restricted cash	​		93,445	​		45,113	​		7,192	​		13,195	​		—	​		158,945	​		—	​		158,945
Loans held-for-investment, net	​		9,673,625	​		1,412,440	​		—	​		1,008	​		—	​		11,087,073	​		—	​		11,087,073
Loans held-for-sale	​		841,963	​		120,540	​		—	​		90,332	​		—	​		1,052,835	​		—	​		1,052,835
Investment securities	​		1,014,402	​		35,681	​		—	​		1,112,145	​		—	​		2,162,228	​		(1,425,570)	​		736,658
Properties, net	​	​	103,896	​	​	—	​	​	1,969,414	​	​	197,843	​	​	—	​	​	2,271,153	​	​	—	​	​	2,271,153
Intangible assets	​		—	​		—	​		40,370	​		71,123	​		—	​		111,493	​		(41,376)	​		70,117
Investment in unconsolidated entities	​		54,407	​		25,095	​		—	​		44,664	​		—	​		124,166	​		(16,112)	​		108,054
Goodwill	​		—	​		119,409	​		—	​		140,437	​		—	​		259,846	​		—	​		259,846
Derivative assets	​		6,595	​		—	​		41	​		147	​		33,772	​		40,555	​		—	​		40,555
Accrued interest receivable	​		87,922	​		2,091	​		—	​		123	​		5,978	​		96,114	​		(134)	​		95,980
Other assets	​		61,638	​		4,531	​		69,859	​		44,579	​		10,148	​		190,755	​		(7)	​		190,748
VIE assets, at fair value	​		—	​		—	​		—	​		—	​		—	​		—	​		64,238,328	​		64,238,328
Total Assets	​	$	12,097,900	​	$	1,769,340	​	$	2,118,956	​	$	1,735,142	​	$	396,270	​	$	18,117,608	​	$	62,755,901	​	$	80,873,509
Liabilities and Equity	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Liabilities:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Accounts payable, accrued expenses and other liabilities	​	$	41,104	​	$	12,144	​	$	43,630	​	$	45,309	​	$	64,583	​	$	206,770	​	$	75	​	$	206,845
Related-party payable	​		—	​		—	​		—	​		5	​		39,165	​		39,170	​		—	​		39,170
Dividends payable	​		—	​		—	​		—	​		—	​		137,959	​		137,959	​		—	​		137,959
Derivative liabilities	​		39,082	​		1,718	​		—	​		524	​		—	​		41,324	​		—	​		41,324
Secured financing agreements, net	​		5,893,999	​		1,240,763	​		1,794,609	​		606,100	​		632,719	​		10,168,190	​		(22,000)	​		10,146,190
Collateralized loan obligations, net	​	​	930,554	​	​	—	​	​	—	​		—	​		—	​		930,554	​	​	—	​	​	930,554
Unsecured senior notes, net	​		—	​		—	​		—	​		—	​		1,732,520	​		1,732,520	​		—	​		1,732,520
VIE liabilities, at fair value	​		—	​		—	​		—	​		—	​		—	​		—	​		62,776,371	​		62,776,371
Total Liabilities	​	****	6,904,739	​	****	1,254,625	​	****	1,838,239	​	****	651,938	​	****	2,606,946	​	****	13,256,487	​	****	62,754,446	​	****	76,010,933
Equity:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Starwood Property Trust, Inc. Stockholders’ Equity:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Common stock	​		—	​		—	​		—	​		—	​		2,921	​		2,921	​		—	​		2,921
Additional paid-in capital	​		1,192,584	​		496,387	​		98,882	​		(322,992)	​		3,744,878	​		5,209,739	​		—	​		5,209,739
Treasury stock	​		—	​		—	​		—	​		—	​		(138,022)	​		(138,022)	​		—	​		(138,022)
Accumulated other comprehensive income (loss)	​		44,057	​		—	​		—	​		(64)	​		—	​		43,993	​		—	​		43,993
Retained earnings (accumulated deficit)	​		3,956,405	​		18,328	​		(44,832)	​		1,260,819	​		(5,820,453)	​		(629,733)	​		—	​		(629,733)
Total Starwood Property Trust, Inc. Stockholders’ Equity	​		5,193,046	​		514,715	​		54,050	​		937,763	​		(2,210,676)	​		4,488,898	​		—	​		4,488,898
Non-controlling interests in consolidated subsidiaries	​		115	​		—	​		226,667	​		145,441	​		—	​		372,223	​		1,455	​		373,678
Total Equity	​	****	5,193,161	​	****	514,715	​	****	280,717	​	****	1,083,204	​	****	(2,210,676)	​	****	4,861,121	​	****	1,455	​	****	4,862,576
Total Liabilities and Equity	​	$	12,097,900	​	$	1,769,340	​	$	2,118,956	​	$	1,735,142	​	$	396,270	​	$	18,117,608	​	$	62,755,901	​	$	80,873,509

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7

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