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Stockholders' Equity | 3 Months Ended
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Mar. 31, 2023
Equity [Abstract] |
Stockholders' Equity | Stockholders' Equity Common Stock The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the three months ended March 31, 2023 and the twelve months ended December 31, 2022:
| THREE MONTHS ENDED MARCH 31, 2023 | TWELVE MONTHS ENDED DECEMBER 31, 2022
Balance, beginning of period | 380,589,894 |  | 150,457,433 |
Issuance of common stock | 3,130 |  | 229,618,304 |
Non-vested share-based awards, net of withheld shares | 223,405 |  | 514,157 |
Balance, end of period | 380,816,429 |  | 380,589,894 |
At-The-Market Equity Offering Program The Company has equity distribution agreements with various sales agents with respect to the at-the-market (“ATM”) offering program of common stock with an aggregate sales amount of up to $750.0 million. As of March 31, 2023, $750.0 million remained available for issuance under our current ATM offering program. During the three months ended March 31, 2023, the Company did not sell any shares or enter into any forward sale agreements to sell shares of common stock through its ATM offering program. Common Stock Dividends During the three months ended March 31, 2023, the Company declared and paid common stock dividends totaling $0.31 per share. On May 2, 2023, the Company declared a quarterly common stock dividend in the amount of $0.31 per share payable on June 2, 2023 to stockholders of record on May 16, 2023. Earnings Per Common Share The Company uses the two-class method of computing net earnings per common shares. The Company's non-vested share-based awards are considered participating securities pursuant to the two-class method. The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2023 and 2022.
| THREE MONTHS ENDED MARCH 31, |
Dollars in thousands, except per share data | 2023 | 2022 |  |
Weighted average common shares outstanding |  |  |  |
Weighted average common shares outstanding | 380,796,773 |  | 150,834,888 |  |  |
Non-vested shares | (1,956,353) |  | (1,871,858) |  |  |
Weighted average common shares outstanding - basic | 378,840,420 |  | 148,963,030 |  |  |
Weighted average common shares outstanding - basic | 378,840,420 |  | 148,963,030 |  |  |
Dilutive effect of employee stock purchase plan | — |  | 88,234 |  |  |
Weighted average common shares outstanding - diluted | 378,840,420 |  | 149,051,264 |  |  |
Net (loss) income attributable to common stockholders | $ | (87,125) |  | $ | 42,227 |  |  |
Dividends paid on nonvested share-based awards | (605) |  | (605) |  |  |
Net (loss) income applicable to common stockholders - basic | $ | (87,730) |  | $ | 41,622 |  |  |
Basic earnings per common share - net income | $ | (0.23) |  | $ | 0.28 |  |  |
Diluted earnings per common share - net income | $ | (0.23) |  | $ | 0.28 |  |  |
The effect of OP units totaling 4,042,993 shares, non-vested stock awards totaling 401,937 shares, and options under the Company's Employee Stock Purchase Plan (the "ESPP") to purchase the Company's common stock totaling 49,322 shares for the three months ended March 31, 2023 were excluded from the calculation of diluted loss per common share because the effect was anti-dilutive due to the loss from continuing operations incurred during that period. Incentive Plans Restricted Common Shares During the three months ended March 31, 2023, the Company granted non-vested stock awards to its named executive officers and other members of senior management and employees with a grant date fair value of $5.4 million, which consisted of an aggregate of 270,494 non-vested shares with vesting periods ranging from three to eight years. A summary of the activity under the Company's share-based incentive plans for the three months ended March 31, 2023 and 2022 is included in the table below.
| THREE MONTHS ENDED MARCH 31, |
| 2023 | 2022 |  |
Share-based awards, beginning of period | 1,795,128 |  | 1,562,028 |  |  |
Granted | 282,540 |  | 415,184 |  |  |
Vested | (101,720) |  | (24,365) |  |  |
Forfeited | (20,503) |  | (1,296) |  |  |
Share-based awards, end of period | 1,955,445 |  | 1,951,551 |  |  |
During the three months ended March 31, 2023 and 2022, the Company withheld 38,632 and 6,727 shares of common stock, respectively, from participants to pay estimated withholding taxes related to shares that vested. Restricted Stock Units Prior to 2022, the Company granted long-term incentive awards, comprised of restricted stock, based on backward-looking performance measured at the end of the calendar year. The Company adopted a new incentive compensation structure effective January 2022, comprised of restricted stock and restricted stock units ("RSUs"). The RSUs are granted at the beginning of the year with three-year forward-looking performance targets. On January 4, 2023, the Company granted RSUs to members of senior management, with a grant date fair value of $3.7 million, which consisted of an aggregate 165,174 RSUs with a five-year vesting period. Approximately 43% of the RSUs vest based on two market performance conditions. Relative and absolute total shareholder return ("TSR") awards containing these market performance conditions were valued using independent specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair values of $24.23 for the absolute TSR component and $27.84 for the relative TSR component for the January 2023 grant using the following assumptions:
|  | THREE MONTHS ENDED MARCH 31,
Volatility |  |  | 34.0 | %
Dividend assumption |  |  | Accrued
Expected term |  |  | 3 years
Risk-free rate |  |  | 4.42 | %
Stock price (per share) |  |  | $20.21
The remaining 57% of the RSUs vest based upon certain operating performance conditions. With respect to the operating performance conditions of the January 4, 2023 grant, the grant date fair value was $20.21 based on the Company's share price on the date of grant. The combined weighted average grant date fair value of the January RSUs was $22.55 per share. The following is a summary of the RSU activity during the three months ended March 31, 2023:
| Restricted Stock Units | Weighted Average Grant Date Fair Value |  |
Non-vested, beginning of period | 294,932 |  | $ | 33.04 |  |  |
Granted | 165,174 |  | 22.55 |  |  |
Vested/Forfeited | (17,606) |  | 33.04 |  |  |
Probability adjustment of 2022 RSUs | (79,250) |  | 31.68 |  |  |
Non-vested, end of period | 363,250 |  | $ | 28.57 |  |  |
LTIP Series C Units In January 2023, the Company modified its incentive compensation structure to award LTIP Series C units ("LTIP-C units) in the OP to named executive officers in lieu of RSUs. The LTIP-C units are granted with three-year forward-looking performance targets, with a grant date fair value of $7.1 million, which consisted of an aggregate 448,249 LTIP-C units with a five-year vesting period. Approximately 43% of the LTIP-C units vest based on two market performance conditions. Relative and absolute TSR awards containing these market performance conditions were valued using independent specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair values of $12.24 for the absolute TSR component and $13.98 for the relative TSR component for the January 2023 grant using the following assumptions:
|  | THREE MONTHS ENDED MARCH 31,
Volatility |  |  | 34.0 | %
Dividend assumption |  |  | Accrued
Expected term |  |  | 3 years
Risk-free rate |  |  | 4.42 | %
Stock price (per share) |  |  | $20.21
The remaining 57% of the LTIP-C units vest based upon certain operating performance conditions. With respect to the operating performance conditions of the January 4, 2023 grant, the grant date fair value was $20.21 based on the Company's share price on the date of grant. The combined weighted average grant date fair value of the January LTIP-C units was $15.85 per share. Employee Stock Purchase Plan Legacy HR maintained an ESPP prior to the completion of the Merger. The outstanding options to purchase shares of the common stock of Legacy HR became options to purchase class A common stock of the Company upon completion of the Merger. No new options will be granted under the ESPP. A summary of the activity under the ESPP for the three months ended March 31, 2023 and 2022 is included in the table below.
| THREE MONTHS ENDED MARCH 31, |
| 2023 | 2022 |  |
Outstanding and exercisable, beginning of period | 340,976 |  | 348,514 |  |  |
Granted | — |  | 255,960 |  |  |
Exercised | (3,130) |  | (10,553) |  |  |
Forfeited | (21,421) |  | (25,486) |  |  |
Expired | (132,999) |  | (140,633) |  |  |
Outstanding and exercisable, end of period | 183,426 |  | 427,802 |  |  |
The following table represents expected amortization of the Company's non-vested shares issued as of March 31, 2023:
Dollars in millions | FUTURE AMORTIZATION of non-vested shares
2023 | $ | 10.5 |
2024 | 12.5 |
2025 | 10.8 |
2026 | 8.1 |
2027 | 2.4 |
2028 and thereafter | 0.5 |
Total | $ | 44.8 |

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI https://asc.fasb.org/topic&trid=2208762 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (g) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (h) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 16 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (i) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 6 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008 + Details
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