12. EQUITY

Balance Sheet Activity

Total equity increased $650.0 million during the first nine months of 2013 to $803.5 million. This increase was primarily driven by the issuance of additional shares of our class A common stock in our May 2013 equity offering. See below for further discussion on the share issuance.

Accumulated Other Comprehensive Loss

We did not have any accumulated other comprehensive income or loss as of September 30, 2013. The following table details the primary components of accumulated other comprehensive loss as of September 30, 2012, and significant activity for the nine months ended September 30, 2012 ($ in thousands):


Accumulated Other Comprehensive Loss	Mark-to-Market on Interest Rate Hedges			Deferred Gains on Settled Hedges			Other-than- Temporary Impairments			Unrealized Gains on Securities			Total
Total as of December 31, 2011	($	27,423	)	$	56		($	16,578	)	$	3,361		($	40,584	)

Unrealized gain on derivative financial instruments		5,853			—			—			—			5,853
Ineffective portion of cash flow hedges ⁽¹⁾		2,481			—			—			—			2,481
Amortization of net unrealized gains on securities		—			—			—			(770	)		(770	)
Amortization of net deferred gains on settlement of swaps		—			(56	)		—			—			(56	)
Other-than-temporary impairments of securities ⁽²⁾		—			—			409			—			409
Deconsolidation of CT Legacy Assets ⁽³⁾		—			—			3,879			(2,586	)		1,293

Total as of September 30, 2012	($	19,089	)	$	—		($	12,290	)	$	5		($	31,374	)

(1)	As a result of the deconsolidation of CT Legacy Assets in the first quarter of 2012, the balance of accumlated other comprehensive loss related to cash flow hedges of CT Legacy Assets was reclassified to interest expense.

(2)	Represents other-than-temporary impairments of securities in excess of credit losses, including amortization of prior other-than-temporary impairments of $248,000.

Non-controlling Interests

The non-controlling interests included on our consolidated balance sheet represent the equity interests in CT Legacy Partners that are not owned by us, as described in Note 8. CT Legacy Partners’ outstanding common stock includes class A-1 common shares, class A-2 common shares, and subordinate class B common shares. A portion of CT Legacy Partners’ consolidated equity and results of operations are allocated to these non-controlling interests based on their pro rata ownership of CT Legacy Partners.

The following table details the components of non-controlling interests in CT Legacy Partners as of September 30, 2013 ($ in thousands):


Gross investment in CT Legacy Partners
Restricted cash	$	76,396
Loans receivable, at fair value		66,063
Accrued interest receivable, prepaid expenses, and other assets		21,054
Accounts payable, accrued expenses and other liabilities		(412	)

	$	163,101

Equity interests owned by Blackstone Mortgage Trust, Inc.		(72,886	)

Non-controlling interests in CT Legacy Partners	$	90,215

Share and Share Equivalents

Authorized Capital

We have the authority to issue up to 200,000,000 shares of stock, consisting of 100,000,000 shares of class A common stock and 100,000,000 shares of preferred stock. Subject to applicable NYSE listing requirements, our board of directors is authorized to cause us to issue additional shares of authorized stock without stockholder approval. In addition, to the extent not issued, currently authorized stock may be reclassified between class A common stock and preferred stock.

Reverse Stock Split

On April 26, 2013, our board of directors approved a one-for-ten reverse stock split of our class A common stock which we effected on May 6, 2013. As a result of the reverse stock split, the number of outstanding shares of our class A common stock was reduced to 2,926,651. In addition, there was a reclassification of $263,000 from the par value of our class A common stock to additional paid-in capital to reflect the impact of the reverse stock split.

Class A Common Stock and Deferred Stock Units

Holders of shares of class A common stock are entitled to vote on all matters submitted to a vote of stockholders, subject to the voting rights of any outstanding shares of preferred stock. Holders of record of shares of class A common stock on the record date fixed by our board of directors are entitled to receive such dividends as may be authorized by our board of directors and declared by us, subject to the rights of the holders of any shares of outstanding preferred stock. On May 29, 2013, we issued 25,875,000 shares of class A common stock at a public offering price of $25.50 per share. We generated net proceeds from the issuance of $633.8 million after underwriting discounts and other offering expenses.

In addition to our class A common stock, we also issue deferred stock units to certain members of our board of directors in lieu of cash compensation for services rendered. These deferred stock units are non-voting, but carry the right to receive dividends in the form of additional deferred stock units in an amount equivalent to the cash dividends paid to holders of shares of class A common stock.

A total of 28,898,165 shares of class A common stock and stock units were issued and outstanding as of September 30, 2013.

The following table details the movement in our outstanding shares of class A common stock, restricted class A common stock, and deferred stock units:


	Nine Months Ended September 30,
Common Stock Outstanding ^(1)(2)(3)	2013		2012
Beginning balance		3,016,407		2,277,344
Issuance of class A common stock		25,875,000		—
Transactions related to stock-based incentive plans
Issuance of restricted class A common stock, net		—		36,400
Issuance of deferred stock units		6,758		5,418

Ending balance		28,898,165		2,319,162

(1)	Includes shares of our class A common stock, restricted class A common stock, and deferred stock units.

(2)	Deferred stock units held by members of our board of directors totaled 96,514, and 61,652 as of September 30, 2013 and 2012, respectively.

(3)	Share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

Preferred Stock

We have not issued any shares of preferred stock since we repurchased all of our previously issued and outstanding preferred stock in 2001.

Dividends

We generally intend to distribute each year substantially all of our taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to our stockholders to comply with the REIT provisions of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code.

Our dividend policy remains subject to revision at the discretion of our board of directors. All distributions will be made at the discretion of our board of directors and will depend upon our taxable income, our financial condition, our maintenance of REIT status, applicable law, and other factors as our board of directors deems relevant.

On September 10, 2013, we declared a dividend of $7.8 million, or $0.27 per share, which was paid on October 15, 2013 to class A common stockholders of record as of September 30, 2013.

Earnings Per Share

The following table sets forth the calculation of basic and diluted net income per share of class A common stock based on the weighted-average of both restricted and unrestricted class A common stock outstanding, for the indicated periods ($ in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Net income	$	8,320	$	6,999	$	7,953	$	75,835

Weighted-average shares outstanding ⁽¹⁾		28,894,515		2,317,343		14,865,530		2,296,910
Warrants and options outstanding for the purchase of class A common stock		—		144,260		—		147,296

Weighted-average shares outstanding, diluted		28,894,515		2,461,603		14,865,530		2,444,206
Per share amount, basic	$	0.29	$	3.02	$	0.53	$	33.02

Per share amount, diluted	$	0.29	$	2.84	$	0.53	$	31.03

(1)	Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

Refer to Note 19 for a breakdown of our results of operations for each of our operating segments.

The following table sets forth the calculation of basic and diluted income from continuing operations per share of class A common stock based on the weighted-average of both restricted and unrestricted class A common stock outstanding ($ in thousands, except per share data):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Income from continuing operations	$	10,526		$	12,849		$	15,696		$	157,736
Net income attributable to non-controlling interests		(2,206	)		(5,901	)		(7,743	)		(81,038	)

Income from continuing operations attributable to Blackstone Mortgage Trust, Inc.	$	8,320		$	6,948		$	7,953		$	76,698

Weighted-average shares outstanding ⁽¹⁾		28,894,515			2,317,343			14,865,530			2,296,910
Warrants and options outstanding for the purchase of class A common stock		—			144,260			—			147,296

Weighted-average shares outstanding, diluted		28,894,515			2,461,603			14,865,530			2,444,206
Per share amount, basic	$	0.29		$	3.00		$	0.53		$	33.39

Per share amount, diluted	$	0.29		$	2.82		$	0.53		$	31.40

(1)	Share and per share amounts have been retroactively updated to reflect the one-for-ten reverse stock split which we effected as of May 6, 2013. See above for further discussion.

Refer to Note 19 for a breakdown of our results of operations for each of our operating segments.