13. EQUITY

Balance Sheet Activity

Total equity increased $603.3 million during the year ended December 31, 2013 to $756.8 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

As of and during the year ended December 31, 2013, total accumulated other comprehensive income was $798,000 representing the currency translation adjustment on assets denominated in a foreign currency. The following table details the primary components of accumulated other comprehensive loss as of, and for the years ended, December 31, 2012 and 2011($ 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, 2010	$	(37,914	)	$	165		$	(16,800	)	$	4,087		$	(50,462	)
Consolidation of additional securitization vehicles⁽¹⁾		—			—			538			—			538
Unrealized gain on derivative financial instruments		5,453			—			—			—			5,453
Ineffective portion of cash flow hedges⁽²⁾		5,038			—			—			—			5,038
Amortization of net unrealized gains on securities		—			—			—			(908	)		(908	)
Amortization of net deferred gains on settlement of swaps		—			(109	)		—			—			(109	)
Other-than-temporary impairments of securities⁽³⁾		—			—			(326	)		—			(326	)
Allocation to non-controlling interest		—			—			10			182			192

Total as of December 31, 2011		(27,423	)		56			(16,578	)		3,361			(40,584	)

Unrealized gain on derivative financial instruments		8,367			—			—			—			8,367
Ineffective portion of cash flow hedges⁽⁴⁾		2,481			—			—			—			2,481
Amortization of net unrealized gains on securities		—			—			—			(775	)		(775	)
Amortization of net deferred gains on settlement of swaps		—			(56	)		—			—			(56	)
Other-than-temporary impairments of securities⁽³⁾		—			—			678			—			678
Deconsolidation of subsidiaries⁽⁵⁾		16,575			—			15,900			(2,586	)		29,889

Total as of December 31, 2012	$	—		$	—		$	—		$	—		$	—

(1)

We began consolidating an additional securitization vehicle in the third quarter of 2011, which was previously accounted for as part of our legacy securities portfolio. This security had previously been other-than-temporarily impaired, a portion of which was recorded in accumulated other comprehensive income, and was therefore eliminated in consolidation.

(2)

As a result of significant floating rate debt obligation repayments, a portion of our legacy portfolio interest rate swaps was deemed ineffective in the second quarter of 2011 and these were no longer designated as hedging instruments. As a result, a portion of accumulated other comprehensive income was reclassified into earnings each period to reflect the non-hedge designation.

(3)	Represents other-than-temporary impairments of securities in excess of credit losses, including amortization of prior other-than-temporary impairments.

(4)	As a result of the deconsolidation of CT Legacy Asset in the first quarter of 2012, the balance of accumulated other comprehensive income related to cash flow hedges of CT Legacy Asset was reclassified to interest expense.

(5)	As further described in Note 1, we deconsolidated various subsidiaries during 2012. As a result, the balances of accumulated other comprehensive income related to these subsidiaries are no longer included in our consolidated financial statements.

Non-controlling Interests

The non-controlling interests included on our consolidated balance sheets 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 ($ in thousands):


	December 31, 2013
Restricted cash	$	10,096
Loans receivable, at fair value		40,665
Accrued interest receivable, prepaid expenses, and other assets		16,118
Accounts payable, accrued expenses, and other liabilities		(378	)

CT Legacy Partners equity	$	66,501

Equity interests owned by Blackstone Mortgage Trust, Inc.		(27,660	)

Non-controlling interests in CT Legacy Partners	$	38,841

In October and November of 2013, CT Legacy Partners made aggregate distributions totaling $100.0 million to its class A-1, class A-2, and class B common stockholders, including $46.6 million to us and $53.4 million to the non-controlling stockholders.

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 our 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 our 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 29,602,884 shares of class A common stock, restricted class A common stock, and stock units were issued and outstanding as of December 31, 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:


	Year Ended December 31,
Common Stock Outstanding^(1)(2)(3)	2013		2012		2011
Beginning balance		3,016,407		2,277,344		2,243,490
Issuance of class A common stock		25,875,000		669,047		—
Transactions related to stock-based incentive plans
Issuance of restricted class A common stock, net		700,000		36,493		26,161
Issuance of deferred stock units		11,477		33,523		7,693

Ending balance		29,602,884		3,016,407		2,277,344

(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 totalled 101,233, 89,754, and 56,234 as of December 31, 2013, 2012, and 2011, 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.

During 2013, we declared dividends of $21.1 million, or $0.72 per share, to class A common stockholders. During 2012, we declared a special dividend of $49.8 million, or $20.00 per share. No dividends were declared during 2011.

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):


	Year Ended December 31,
	2013		2012		2011
Net income	$	15,032	$	181,024	$	258,142
Weighted-average shares outstanding⁽¹⁾		18,520,052		2,345,943		2,266,043
Warrants and options outstanding for the purchase of class A common stock⁽²⁾		—		129,351		129,000
Weighted-average shares outstanding, diluted		18,520,052		2,475,294		2,395,043
Per share amount, basic	$	0.81	$	77.16	$	113.92

Per share amount, diluted	$	0.81	$	73.13	$	107.78

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

(2)	As of December 31, 2013, Diluted EPS excludes potential shares issuable upon conversion of our convertible notes, which were not dilutive for the period.

Refer to Note 21 for the allocation 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 for the indicated periods ($ in thousands, except per share data):


	Year Ended December 31,
	2013			2012			2011
Income from continuing operations	$	25,424		$	282,213		$	253,209
Net income attributable to non-controlling interests		(10,392	)		(98,780	)		5,823

Income from continuing operations attributable to Blackstone Mortgage Trust, Inc.		15,032			183,433			259,032
Weighted-average shares outstanding⁽¹⁾		18,520,052			2,345,943			2,266,043
Warrants and options outstanding for the purchase of class A common stock⁽²⁾		—			129,351			129,000

Weighted-average shares outstanding, diluted		18,520,052			2,475,294			2,395,043
Per share amount, basic	$	0.81		$	78.19		$	114.31

Per share amount, diluted	$	0.81		$	74.16		$	108.17

(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.

(2)	As of December 31, 2013, Diluted EPS excludes potential shares issuable upon conversion of our convertible notes, which were not dilutive for the period.