Starwood Property Trust(STWD) - 2024 Q4 - Annual Report

Financial Performance - Total revenues for the year ended December 31, 2024, were $1,946,843, a decrease of 5.0$2,049,908 in 2023[508]. - Net income attributable to Starwood Property Trust, Inc. for 2024 was $359,933, compared to$339,213 in 2023, reflecting an increase of 6.4%[508]. - Net income for the year ended December 31, 2024, was $380,577,000, a decrease of 9.0$418,157,000 in 2023[515]. - Comprehensive income attributable to Starwood Property Trust, Inc. was $358,175 in 2024, compared to$333,610 in 2023, an increase of 7.4%[510]. - Earnings per share (EPS) for 2024 was $1.10, consistent with the EPS of$1.07 in 2023[508]. - Total costs and expenses decreased to $1,982,072 in 2024 from$2,098,318 in 2023, a reduction of 5.6%[508]. Asset and Liability Management - As of December 31, 2024, total assets decreased to $62.56 billion from$69.50 billion in 2023, representing a decline of approximately 10.5%[506]. - Total liabilities decreased to $55.36 billion in 2024 from$62.48 billion in 2023, a decrease of around 11.3%[506]. - The Company reported a decrease in retained earnings to $235.32 million in 2024 from$505.88 million in 2023, a decline of approximately 53.7%[506]. - The Company’s total stockholders' equity increased to $6.44 billion in 2024 from$6.25 billion in 2023, an increase of about 3.0%[506]. - Cash and cash equivalents increased significantly to $377.83 million in 2024, up from$194.66 million in 2023, marking an increase of approximately 94.2%[506]. Loan and Investment Performance - Loans held-for-investment net of credit loss allowances decreased to $15.44 billion in 2024 from$17.57 billion in 2023, a reduction of about 12.1%[506]. - The total net loans as of December 31, 2024, were $17,953,021, down from$20,219,886 in 2023[608]. - The total gross loans decreased to $18,401,316 in 2024 from$20,528,925 in 2023[608]. - The company reported a credit loss provision of $165,489 thousand for the year ended December 31, 2024, compared to$232,712 thousand in 2023, indicating a reduction of approximately 29%[634]. - The credit loss allowance for funded loans increased to $436.8 million by December 31, 2024, up from$298.8 million in 2023[631]. Risk Management - The company is exposed to interest rate risk, with a series of derivative transactions entered into during 2024 to manage this risk[469]. - The company’s loans and investments are subject to credit risk, with regular monitoring of borrower performance to mitigate this risk[466]. - The estimated fair value of fixed-rate investments is expected to decrease in a rising interest rate environment, impacting overall asset valuation[476]. - Credit deterioration is evaluated quarterly, with significant declines in credit quality leading to different risk assessments and potential adjustments to credit loss allowances[560]. Foreign Currency and Hedging - Foreign currency assets in GBP, EUR, AUD, and CHF totaled £1.504 billion, €748.130 million, A$1.645 billion, and Fr. 65.995 million as of December 31, 2024[480]. - The company has hedged substantially all net asset exposure to GBP, EUR, AUD, and CHF with foreign currency forward contracts as of December 31, 2024[481]. - The foreign currency translation loss was$189,925 thousand for the year ended December 31, 2024, compared to a gain of $153,472 thousand in 2023[634]. Investment and Property Management - The company is focused on originating, acquiring, financing, and managing mortgage loans and other real estate investments across the U.S., Europe, and Australia[520]. - The company established the Woodstar Fund, managing 59 properties with 15,057 units in Florida, raising an initial aggregate subscription price of$216.0 million, adjusted to $214.2 million post-closing[565]. - The company reported total acquisitions/originations/additional funding of$4,781,916 thousand in 2024, compared to $3,474,242 thousand in 2023, reflecting an increase of about 37.5$646,586,000 in 2024, up 22.4% from $528,597,000 in 2023[515]. - The company distributed$619,996,000 in dividends in 2024, slightly up from $601,192,000 in 2023[517]. - The company declared dividends of$1.92 per share for 2024, consistent with the previous year[512]. Property Sales and Acquisitions - On February 29, 2024, the company sold 16 retail properties for a gross sale price of $387.1 million, resulting in a net proceeds of$188.0 million after selling costs and a recognized gain of $92.0 million[604]. - The company sold an operating property within the REIS Equity Portfolio for$18.2 million, recognizing a gain of $8.3 million[605]. - The company acquired an operating property from a CMBS trust for a purchase price of$7.7 million during the year ended December 31, 2024[603]. Financial Reporting and Compliance - The Company maintained effective internal control over financial reporting as of December 31, 2024, according to the independent auditor's opinion[498]. - The company is required to distribute at least 90% of its taxable income annually to maintain REIT qualification, which constrains cash flow accumulation[468]. - The company has elected to be taxed as a REIT, allowing a deduction for dividends paid to stockholders, thus subjecting distributed net income to taxation at the stockholder level only[591].