UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2019

 OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 FOR THE TRANSITION PERIOD FROM                      TO                     

 Commission File Number: 001-14788

   

Blackstone Mortgage Trust, Inc.

(Exact name of Registrant as specified in its charter)

Maryland	94-6181186
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

345 Park Avenue, 42nd Floor

New York, New York 10154

(Address of principal executive offices)(Zip Code)

(212) 655-0220

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.01 per share	BXMT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

The number of the registrant’s outstanding shares of class A common stock, par value $0.01 per share, outstanding as of October 16, 2019 was 134,288,919.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	2
	Consolidated Financial Statements (Unaudited):
	Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018	2
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 and 2018	3
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2019 and 2018	4
	Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2019 and 2018	5
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018	7
	Notes to Consolidated Financial Statements	9
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	41
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	60
ITEM 4.	CONTROLS AND PROCEDURES	63
PART II.	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	64
ITEM 1A.	RISK FACTORS	64
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	64
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	64
ITEM 4.	MINE SAFETY DISCLOSURES	64
ITEM 5.	OTHER INFORMATION	64
ITEM 6.	EXHIBITS	65
SIGNATURES		66

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Blackstone Mortgage Trust, Inc.

Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)

	September 30,			December 31,
	2019			2018
Assets
Cash and cash equivalents	$	84,289		$	105,662
Loans receivable, net		14,755,072			14,191,200
Other assets		243,055			170,513
Total Assets	$	15,082,416		$	14,467,375
Liabilities and Equity
Secured debt agreements, net	$	8,790,604		$	8,974,756
Loan participations sold, net		—			94,418
Securitized debt obligations, net		1,288,389			1,285,471
Secured term loan, net		490,659			—
Convertible notes, net		612,263			609,911
Other liabilities		139,884			128,212
Total Liabilities		11,321,799			11,092,768
Commitments and contingencies		—			—
Equity
Class A common stock, $0.01 par value, 200,000,000 shares authorized, 134,288,584 and 123,435,738 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		1,343			1,234
Additional paid-in capital		4,362,476			3,966,540
Accumulated other comprehensive loss		(33,394	)		(34,222	)
Accumulated deficit		(587,632	)		(569,428	)
Total Blackstone Mortgage Trust, Inc. stockholders’ equity		3,742,793			3,364,124
Non-controlling interests		17,824			10,483
Total Equity		3,760,617			3,374,607
Total Liabilities and Equity	$	15,082,416		$	14,467,375

____________

Note: The consolidated balance sheets as of September 30, 2019 and December 31, 2018 include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations of each respective VIE, and liabilities of consolidated VIEs for which creditors do not have recourse to Blackstone Mortgage Trust, Inc. As of both September 30, 2019 and December 31, 2018, assets of the consolidated VIEs totaled $1.5 billion and liabilities of the consolidated VIEs totaled $1.3 billion. Refer to Note 16 for additional discussion of the VIEs.

See accompanying notes to consolidated financial statements.

2

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Income from loans and other investments
Interest and related income	$	213,873		$	203,107		$	662,001		$	550,011
Less: Interest and related expenses		111,957			97,955			347,536			255,677
Income from loans and other investments, net		101,916			105,152			314,465			294,334
Other expenses
Management and incentive fees		17,502			18,368			58,276			56,248
General and administrative expenses		9,741			8,443			28,951			25,897
Total other expenses		27,243			26,811			87,227			82,145
Income before income taxes		74,673			78,341			227,238			212,189
Income tax (benefit) provision		(721	)		48			(573	)		272
Net income		75,394			78,293			227,811			211,917
Net income attributable to non-controlling interests		(497	)		(128	)		(1,176	)		(481	)
Net income attributable to Blackstone Mortgage Trust, Inc.	$	74,897		$	78,165		$	226,635		$	211,436
Net income per share of common stock basic and diluted	$	0.56		$	0.67		$	1.76		$	1.90
Weighted-average shares of common stock outstanding, basic and diluted		134,536,683			116,203,140			128,485,701			111,251,864

See accompanying notes to consolidated financial statements.

3

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net income	$	75,394		$	78,293		$	227,811		$	211,917
Other comprehensive income
Unrealized loss on foreign currency translation		(39,961	)		(2,416	)		(44,125	)		(26,766	)
Realized and unrealized gain on derivative financial instruments		35,987			1,703			44,953			23,623
Other comprehensive (loss) income		(3,974	)		(713	)		828			(3,143	)
Comprehensive income		71,420			77,580			228,639			208,774
Comprehensive income attributable to non-controlling interests		(497	)		(128	)		(1,176	)		(481	)
Comprehensive income attributable to Blackstone Mortgage Trust, Inc.	$	70,923		$	77,452		$	227,463		$	208,293

See accompanying notes to consolidated financial statements.

4

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Changes in Equity (Unaudited)

(in thousands)

	Blackstone Mortgage Trust, Inc.
	Class A Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Stockholders’ Equity			Non-controlling Interests			Total Equity
Balance at December 31, 2018	$	1,234	$	3,966,540	$	(34,222	)	$	(569,428	)	$	3,364,124		$	10,483		$	3,374,607
Shares of class A common stock issued, net		23		65,358		—			—			65,381			—			65,381
Restricted class A common stock earned		—		7,639		—			—			7,639			—			7,639
Dividends reinvested		—		143		—			(132	)		11			—			11
Deferred directors’ compensation		—		125		—			—			125			—			125
Other comprehensive income		—		—		3,466			—			3,466			—			3,466
Net income		—		—		—			76,565			76,565			302			76,867
Dividends declared on common stock, $0.62 per share		—		—		—			(77,913	)		(77,913	)		—			(77,913	)
Contributions from non-controlling interests		—		—		—			—			—			1,470			1,470
Distributions to non-controlling interests		—		—		—			—			—			(64	)		(64	)
Balance at March 31, 2019	$	1,257	$	4,039,805	$	(30,756	)	$	(570,908	)	$	3,439,398		$	12,191		$	3,451,589
Shares of class A common stock issued, net		86		306,866		—			—			306,952			—			306,952
Restricted class A common stock earned		—		7,629		—			—			7,629			—			7,629
Dividends reinvested		—		146		—			(138	)		8			—			8
Deferred directors’ compensation		—		125		—			—			125			—			125
Other comprehensive income		—		—		1,336			—			1,336			—			1,336
Net income		—		—		—			75,174			75,174			377			75,551
Dividends declared on common stock, $0.62 per share		—		—		—			(83,259	)		(83,259	)		—			(83,259	)
Contributions from non-controlling interests		—		—		—			—			—			17,158			17,158
Distributions to non-controlling interests		—		—		—			—			—			(664	)		(664	)
Balance at June 30, 2019	$	1,343	$	4,354,571	$	(29,420	)	$	(579,131	)	$	3,747,363		$	29,062		$	3,776,425
Shares of class A common stock issued, net		—		—		—			—			—			—			—
Restricted class A common stock earned		—		7,629		—			—			7,629			—			7,629
Dividends reinvested		—		151		—			(139	)		12			—			12
Deferred directors’ compensation		—		125		—			—			125			—			125
Other comprehensive loss		—		—		(3,974	)		—			(3,974	)		—			(3,974	)
Net income		—		—		—			74,897			74,897			497			75,394
Dividends declared on common stock, $0.62 per share		—		—		—			(83,259	)		(83,259	)		—			(83,259	)
Contributions from non-controlling interests		—		—		—			—			—			8,093			8,093
Distributions to non-controlling interests		—		—		—			—			—			(19,828	)		(19,828	)
Balance at September 30, 2019	$	1,343	$	4,362,476	$	(33,394	)	$	(587,632	)	$	3,742,793		$	17,824		$	3,760,617

See accompanying notes to consolidated financial statements.

5

Blackstone Mortgage Trust, Inc.

Consolidated Statements of Changes in Equity (Unaudited)

(in thousands)

	Blackstone Mortgage Trust, Inc.
	Class A Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Stockholders’ Equity		Non-controlling Interests		Total Equity
Balance at December 31, 2017	$	1,079	$	3,506,861	$	(29,706	)	$	(567,168	)	$	2,911,066	$	6,340	$	2,917,406
Shares of class A common stock issued, net		3		—		—			—			3		—		3
Restricted class A common stock earned		—		6,848		—			—			6,848		—		6,848
Issuance of convertible notes		—		1,462		—			—			1,462		—		1,462
Dividends reinvested		—		122		—			(108	)		14		—		14
Deferred directors’ compensation		—		125		—			—			125		—		125
Other comprehensive income		—		—		7,803			—			7,803		—		7,803
Net income		—		—		—			60,958			60,958		158		61,116
Dividends declared on common stock, $0.62 per share		—