BLACKSTONE MORTGAGE TRUST, INC. - FORM 8-K - EX-99.3 - July 26, 2013

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8-K - FORM 8-K - BLACKSTONE MORTGAGE TRUST, INC.d576101d8k.htm
EX-99.1 - EX-99.1 - BLACKSTONE MORTGAGE TRUST, INC.d576101dex991.htm
EX-99.2 - EX-99.2 - BLACKSTONE MORTGAGE TRUST, INC.d576101dex992.htm
EX-23.1 - EX-23.1 - BLACKSTONE MORTGAGE TRUST, INC.d576101dex231.htm
EX-23.2 - EX-23.2 - BLACKSTONE MORTGAGE TRUST, INC.d576101dex232.htm

Exhibit 99.3

UNAUDITED PRO FORMA FINANCIAL INFORMATION

Except where the context suggests otherwise, the terms “company,” “we,” “us,” “our,” and “Blackstone Mortgage Trust” refer to Blackstone Mortgage Trust, Inc., a Maryland corporation, formerly known as Capital Trust, Inc., and its subsidiaries; “Manager” refers to BXMT Advisors L.L.C., a Delaware limited liability company, formerly known as BREDS/CT Advisors L.L.C., our external manager; “Blackstone” refers to The Blackstone Group L.P., a Delaware limited partnership, and its subsidiaries; and “Prospectus” refers to the prospectus filed by the company with the Securities and Exchange Commission pursuant to Rule 424(b)(4) in connection with the company’s May 2013 public offering of its class A common stock. The information and assumptions contained herein is accurate only as of the date of the Prospectus, and has not been updated for known events which have occurred subsequent to the date of the Prospectus.

The following unaudited pro forma statements of operations for the year ended December 31, 2012 and the three months ended March 31, 2013 have been prepared to give pro forma effect to: (1) the sale of our investment management and servicing business and certain other assets to an affiliate of Blackstone on December 19, 2012, including the de-consolidation of certain collateralized debt obligations (“CDOs”) which are no longer consolidated as a result thereof; (2) our entry into a management agreement with our Manager; and (3) the May 2013 offering based on the assumptions herein and use of proceeds thereof, together with the proceeds of related repurchase financing in originating and purchasing the loans in our initial portfolio, in each case as if they occurred on January 1, 2012. The unaudited pro forma statement of operations has been adjusted to reflect the one-for-ten reverse stock split that we effected prior to the consummation of the May 2013 offering. The following unaudited pro forma balance sheet as of March 31, 2013 has been prepared to give pro forma effect to the May 2013 offering based on the assumptions herein and use of proceeds thereof, together with the proceeds of related repurchase financing, in originating and purchasing the loans in our initial portfolio, in each case as if they occurred on March 31, 2013. The following pro forma statements of operations and balance sheet are presented for illustrative purposes only and are not necessarily indicative of the operating results or financial position that would have occurred if the relevant transactions had been consummated on the date indicated, nor is it indicative of future operating results.

You should read the following information together with the information contained under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited and unaudited consolidated financial statements and the notes thereto incorporated by reference into the Prospectus.

 

Blackstone Mortgage Trust, Inc. and Subsidiaries

Pro Forma Consolidated Statement of Operations

Year Ended December 31, 2012

(in thousands, except share and per share data)

(unaudited)

 

    Actual     Pro Forma Adjustments     Pro Forma  
    CTIMCO Sale
Transaction		     CDO
De-Consolidation		     Common Stock
Offering, Initial
Portfolio, and Related
Financing Agreements		    

Income from loans and other investments:

          

Interest and related income

    $               34,939        $                   —          $             (21,458) (b)     $                       37,878  (c)     $             51,359     

Less: Interest and related expenses

     38,138         —           (17,735) (b)      8,341  (d)      28,744     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Loss) income from loans and other investments, net

     (3,199)        —           (3,723)        29,537         22,615     

Other expenses:

          

General and administrative

     10,369         54  (a)      —           8,613  (e)      19,036     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total other expenses

     10,369         54         —           8,613         19,036     

Total other-than-temporary impairments of securities

     —           —           —           —           —       

Portion of other-than-temporary impairments of securities recognized in other comprehensive income

     (160)        —           160  (b)      —           —       
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net impairments recognized in earnings

     (160)        —           160         —           —       

Recovery of provision for loan losses

     36,147         —           (8) (b)      —           36,139     

Fair value adjustment on investment in CT Legacy Assets

     51,904         —           —           —           51,904     

Gain on deconsolidation of subsidiary

     200,283         —           —           —           200,283     

Gain on sale of investments

     6,000         —           —           —           6,000     

Income from equity investments

     1,781         (1,781)  (a)      —           —           —       
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

     282,387         (1,835)        (3,571)        20,924         297,905     

Income tax provision

     174         —           —           —           174     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income from continuing operations

     282,213         (1,835)        (3,571)        20,924         297,731     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income attributable to noncontrolling interests

     (98,780)        —           558  (b)      —           (98,222)    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income from continuing operations attributable to Blackstone Mortgage Trust, Inc.

    $ 183,433        $ (1,835)        $ (3,013)       $ 20,924        $ 199,509     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

    Actual     Pro Forma Adjustments      Pro Forma  
    CTIMCO Sale
Transaction		    CDO
De-Consolidation		   Common Stock
Offering,
Initial
Portfolio, and
Related
Financing
Agreements		     

Per share information:

            

Income from continuing operations per share of common stock

            

Basic

    $ 78.19                $ 8.03   (f) 
 

 

 

            

 

 

  

Diluted

    $ 74.16                $ 7.99   (f) 
 

 

 

            

 

 

  

Weighted average shares of common stock outstanding

            

Basic

     2,345,943       —    —     22,500,000          24,845,943   (f) 
 

 

 

    

 

   

 

  

 

 

     

 

 

  

Diluted

     2,475,294       —    —     22,500,000          24,975,294   (f) 
 

 

 

    

 

   

 

  

 

 

     

 

 

  

 

  (a) The pro forma balance excludes the accounts of our investment management and special servicing business, which was sold to an affiliate of Blackstone on December 19, 2012. In addition, all amounts related to discontinued operations have been excluded from the pro forma consolidated statement of operations.
  (b) The pro forma balance excludes the accounts of CT CDO II, CT CDO IV, and MSC 2007-XLCA, which are no longer consolidated as a result of the sale of our investment management and special servicing business and certain other assets to an affiliate of Blackstone on December 19, 2012.
  (c) Represents the interest income, including amortization of origination fees, generated by our initial portfolio, assuming an investment date of January 1, 2012 and LIBOR of 0.20%, which was the rate as of March 31, 2013. For further detail regarding the terms of the loans in our initial portfolio, see “Business—Our Initial Portfolio” in the Prospectus.
  (d) Represents the interest expense, including amortization of deferred financing costs, incurred under repurchase facilities, assuming (i) borrowing $310.0 million on January 1, 2012, (ii) a weighted-average coupon of LIBOR+2.40% per annum, and (iii) LIBOR of 0.20%, which was the rate as of March 31, 2013.
  (e) Represents the additional base management fees payable during the period, assuming net offering proceeds of $550.1 million on January 1, 2012. For further detail regarding the terms of the management agreement with our Manager, see “Our Manager and the Management Agreement—Management Agreement” in the Prospectus.
  (f) Pro forma earnings per share amounts are calculated by dividing the applicable pro forma income or loss by the pro forma weighted average shares of common stock outstanding. Pro forma weighted average shares of common stock outstanding includes (i) the actual weighted average shares outstanding during the period and (ii) the number of shares issued in the May 2013 offering, assuming they were issued on January 1, 2012.

 

Blackstone Mortgage Trust, Inc. and Subsidiaries

Pro Forma Consolidated Balance Sheet

as of March 31, 2013

(in thousands, except per share data)

(unaudited)

 

     Actual      Pro Forma
Adjustments		     Pro Forma  
Assets        

Cash and cash equivalents

     $ 15,361         $ 50,928  (a)     $ 66,289    

Restricted cash

      12,719          —           12,719    

Securities, at fair value

      11,702          —           11,702    

Loans receivable, at fair value

      150,332          —           150,332    

Loans receivable, net

      139,500          807,855  (b)      947,355    

Loans held-for-sale, net

      1,800          —           1,800    

Equity investments in unconsolidated subsidiaries

      20,046          —           20,046    

Accrued interest receivable, prepaid expenses, and other assets

      13,693          1,325  (c)      15,018    
  

 

 

     

 

 

    

 

 

  

Total assets

     $ 365,153         $ 860,108        $ 1,225,261    
  

 

 

     

 

 

    

 

 

  
Liabilities & Equity        

Liabilities:

        

Accounts payable, accrued expenses and other liabilities

     $ 30,760         $ —          $ 30,760    

Secured notes

      8,671          —           8,671    

Repurchase obligations

      20,214          310,000  (c)      330,214    

Securitized debt obligations

      136,944          —           136,944    

Interest rate swap liabilities

      6,119          —           6,119    
  

 

 

     

 

 

    

 

 

  

Total liabilities

     $ 202,708         $ 310,000        $ 512,708    
  

 

 

     

 

 

    

 

 

  

Equity:

        

Class A common stock, $0.01 par value

      293          225  (d)      518    

Additional paid-in capital

      609,040          549,883  (d)      1,158,923    

Accumulated deficit

      (533,238)         —           (533,238)   
  

 

 

     

 

 

    

 

 

  

Total Blackstone Mortgage Trust, Inc. stockholders’ equity

      76,095          550,108         626,203    

Noncontrolling interests

      86,350          —           86,350    
  

 

 

     

 

 

    

 

 

  

Total equity

      162,445          550,108         712,553    
  

 

 

     

 

 

    

 

 

  

Total liabilities and equity

     $         365,153         $     860,108        $      1,225,261    
  

 

 

     

 

 

    

 

 

  

 

(a) Increase in cash and cash equivalents is comprised of the following:

 

Net proceeds from the offering, see (d) below

     $         550,108    

Net borrowings under repurchase facilities, see (c) below

      308,675    

Investments in loans receivable, see (b) below

      (807,855)   
  

 

 

  
    $       50,928    
  

 

 

  

 

(b)

Represents the expected amount invested in our initial loan portfolio of $811.3 million, offset by the related origination fees of $3.5 million. For further detail regarding the terms of the loans in our initial portfolio, see “Business—Our Initial Portfolio” in the Prospectus.

 

(c) Represents borrowings under repurchase facilities in connection with our investment in our initial portfolio and the associated deferred financing costs. For purposes of the pro forma balance sheet and our pro forma statements of operations, we are assuming that $499.2 million of the net proceeds of the May 2013 offering will initially be invested in the origination and purchase of our initial loan portfolio, with the balance of the amount invested in that portfolio to be funded by borrowings under repurchase facilities. We expect our leverage to increase over time to, on a debt-to-equity basis, a ratio of up to 3-to-1.
(d) Represents the May 2013 offering, reflecting gross proceeds of $573.8 million, based on the sale of 22,500,000 shares at the public offering price of $25.50 per share. Net proceeds will be used to acquire the remaining 83.333% of our joint venture with an affiliate of Blackstone, to originate and acquire the loans in our initial portfolio and our target assets in a manner consistent with our investment strategies and investment guidelines and for working capital and general corporate purposes.

 

Blackstone Mortgage Trust, Inc. and Subsidiaries

Pro Forma Consolidated Statements of Operations

Three Months Ended March 31, 2013

(in thousands, except share and per share data)

(Unaudited)

 

     Actual      Pro Forma
Adjustments 		    Pro Forma  

Income from loans and other investments:

        

Interest and related income

     $                   1,456         $                 9,469  (a)     $               10,925    

Less: Interest and related expenses

      777          2,085  (b)      2,862    
  

 

 

     

 

 

    

 

 

  

Income from loans and other investments, net

      679          7,384         8,063    

Other expenses:

        

General and administrative

      2,038          2,140  (c)      4,178    
  

 

 

     

 

 

    

 

 

  

Total other expenses

      2,038          2,140         4,178    

Valuation allowance on loans held-for-sale

      (200)         —           (200)   
  

 

 

     

 

 

    

 

 

  

(Loss) income before income taxes

      (1,559)         5,244         3,685    

Income tax provision

      38          —           38    
  

 

 

     

 

 

    

 

 

  

Net (loss) income

     $ (1,597)        $ 5,244        $ 3,647    
  

 

 

     

 

 

    

 

 

  

Net income attributable to noncontrolling interests

      (1,518)         —           (1,518)   
  

 

 

     

 

 

    

 

 

  

Net (loss) income attributable to Blackstone Mortgage Trust, Inc.

     $ (3,115)        $ 5,244        $ 2,129    
  

 

 

     

 

 

    

 

 

  

Per share information:

        

Net (loss) income per share of common stock:

        

Basic

     $ (1.03)          $ 0.08  (d) 
  

 

 

       

 

 

  

Diluted

     $ (1.03)          $ 0.08  (d) 
  

 

 

       

 

 

  

Weighted average shares of common stock outstanding:

        

Basic

      3,016,425          22,500,000         25,516,425  (d) 
  

 

 

     

 

 

    

 

 

  

Diluted

      3,016,425          22,500,000         25,516,425  (d) 
  

 

 

     

 

 

    

 

 

  

 

(a) Represents the interest income, including amortization of origination fees, generated by our initial portfolio, assuming an investment date of January 1, 2012 and LIBOR of 0.20%, which was the rate as of March 31, 2013. For further detail regarding the terms of the loans in our initial portfolio, see “Business—Our Initial Portfolio” in the Prospectus.
(b) Represents the interest expense, including amortization of deferred financing costs, incurred under repurchase facilities, assuming (i) borrowing $310.0 million on January 1, 2012, (ii) a weighted-average coupon of LIBOR+2.40% per annum, and (iii) LIBOR of 0.20%, which was the rate as of March 31, 2013.
(c) Represents the additional base management fees payable during the period, assuming net offering proceeds of $550.1 million on January 1, 2012. For further detail regarding the terms of the management agreement with our Manager, see “Our Manager and the Management Agreement—Management Agreement” in the Prospectus.
(d) Pro forma earnings per share amounts are calculated by dividing pro forma net income attributable to Blackstone Mortgage Trust, Inc. by the pro forma weighted average shares of common stock outstanding. Pro forma weighted average shares of common stock outstanding includes (i) the actual weighted average shares outstanding during the period and (ii) the number of shares issued in this offering, assuming they were issued on January 1, 2012.

 

BLACKSTONE MORTGAGE TRUST, INC. Reports