Starwood Property Trust,Inc. (NYSE:STWD) Files An 8-K Regulation FD DisclosureItem 7.01 Regulation FD Disclosure.
Starwood Property Trust,Inc., a Maryland corporation (the “Company”), is disclosing under this Item 7.01 certain information that was included in the preliminary offering memorandum prepared in connection with the private offering described below under Item 7.01. This information has not previously been made publicly available by the Company.
The information contained in this Item 7.01 is being “furnished” and shall not be deemed “filed” with the Securities and Exchange Commission for purposes of Section18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under such section. Furthermore, such information shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, unless specifically identified as being incorporated by reference therein.
Preliminary Financial Information. The Company has not yet completed its December31, 2017 financial statements. As of the date of this report, the Company expects the following financial information as of December31, 2017:
· ratio of total debt to total equity of between approximately 1.7x and 1.8x; and
· ratio of total debt to undepreciated equity of between approximately 1.6x and 1.7x.
Because the financial statements for the Company’s fiscal year ended December31, 2017 have not yet been finalized, the foregoing information (which is based upon the Company’s financial statements) is subject to change, and actual figures may differ materially from this preliminary financial information and may be outside the estimated ranges. In addition, preliminary financial information as of December31, 2017 is not necessarily indicative of similar information that may be expected as of the year ending December31, 2018 or any other future period.
The Company has provided ranges, rather than specific amounts, for the preliminary ratio financial information described above primarily because its closing procedures for the year ended December31, 2017 are not yet complete and, as a result, the Company’s final results upon completion of the closing procedures may vary from the preliminary estimates. These estimates, which are the responsibility of the Company’s management, were prepared by the Company’s management and are based upon a number of assumptions. Additional items that may require adjustments to the preliminary financial information may be identified and could result in material changes to the Company’s estimated preliminary financial information. Estimates of this financial information are inherently uncertain and the Company undertakes no obligation to update this information. Deloitte& Touche LLP has not audited, reviewed, compiled or performed any procedures with respect to this preliminary financial information. Accordingly, Deloitte& Touche LLP does not express an opinion or provide any form of assurance with respect thereto.
Estimated Reduction of Deferred Tax Assets. On December22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “TCJA”). The TCJA makes substantial changes to the Internal Revenue Code of 1986, as amended. Among those changes are a significant permanent reduction in the generally applicable corporate tax rate, changes in the taxation of individuals and other non-corporate taxpayers that generally but not universally reduce their taxes on a temporary basis subject to “sunset” provisions, the elimination or modification of various currently allowed deductions (including additional limitations on the deductibility of business interest and net operating losses, and substantial limitation of the deduction for personal state and local taxes imposed on individuals), changes in the international tax rulesand preferential taxation of income derived by non-corporate taxpayers from “pass-through” entities.
U.S. generally accepted accounting principles require companies to re-value their deferred tax assets and liabilities as of the date of enactment, with the resulting tax effects accounted for in the reporting period of enactment. Based on currently available information, the Company estimates that the value of its net deferred tax assets will be reduced by approximately $10 million, which will be recorded in the Company’s 2017 fourth quarter core earnings. However, the Company’s actual net deferred tax asset reduction may vary from this estimate due to a number of uncertainties and factors, including the completion of the Company’s December31, 2017 financial