Company: RWT-PA
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0000930236-25-000037
Chunk: 104

Company: REDWOOD TRUST INC
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 1
Chunk 104
---
036)Total Strategic Investments Income, Net$1,097 $(2,033)(1)Represents net equity method earnings from our Strategic investments that are accounted for under the equity method.(2)Includes Investment fair value changes related to our Strategic investments that are accounted for under the measurement alternative for equity securities without readily determinable fair values. For the three and nine months ended September 30, 2025, includes Investment fair value earnings of $0.3 million and $1 million, respectively, under the measurement alternative. For the three and nine months ended September 30, 2024, we recognized net equity method losses of $0.2 million and $1 million, respectively, under the measurement alternative.  Depending on the terms of the strategic investments, we may account for these investments under the fair value option, as non-marketable equity securities under the equity method of accounting or the measurement alternative for equity securities without readily determinable fair values. Refer to Note 6 for further information on the inputs into the fair valuation of these components. Refer to Note 11 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information regarding these components and related transactions.Joint VenturesWe have established joint ventures with institutional investment managers to invest in residential investor bridge loans and term loans originated by our CoreVest subsidiary and directly by us. As of September 30, 2025, the carrying values of our investments in these joint ventures were $1 million and $8 million, respectively. We account for these investments under the equity method of accounting, reflecting our approximately 20% non-controlling interests and our ability to exert significant influence over the operations of the joint ventures. The carrying values are adjusted quarterly to reflect our share of earnings or losses, dividends received, or returns of capital. For the three and nine months ended September 30, 2025, we recognized net equity method earnings of $0.1 million and $0.1 million, respectively, for one joint venture, and net equity method losses of $1 million and net equity method earnings of $1 million, respectively, for the other. These amounts are recorded within “Other income, net” in our Consolidated Statements of Income.

37

REDWOOD TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025(Unaudited) Note