Shareholders' Equity, Noncontrolling Interests and Other Comprehensive Income

12 Months Ended

Dec. 31, 2018

Stockholders Equity Including Portion Attributable To Noncontrolling Interest [Abstract]

Shareholders' Equity, Noncontrolling Interests and Other Comprehensive Income

10. Shareholders’ Equity, Noncontrolling Interests and Other Comprehensive Income

Common Shares and Units

The Company completed the following transactions in its common shares during the year ended December 31, 2018:

•

The Company withheld 3,288 Restricted Shares to pay the employees’ statutory minimum income taxes due on the value of the portion of their Restricted Shares that vested.

•

The Company recognized Common Share and Common OP Unit-based compensation totaling $8.4 million in connection with Restricted Shares and Units (Note 13).

The Company completed the following transactions in its common shares during the year ended December 31, 2017:

•

The Company withheld 4,314 Restricted Shares to pay the employees’ statutory minimum income taxes due on the value of the portion of their Restricted Shares that vested.

•

The Company recognized Common Share and Common OP Unit-based compensation totaling $8.4 million in connection with Restricted Shares and Units (Note 13).

•

At the May 10 Shareholder Meeting, Shareholders approved an amendment to the Company’s Declaration of Trust to increase the authorized share capital of the Company from 100 million shares of beneficial interest to 200 million shares which became effective on July 24, 2017.

Share Repurchases

During 2018, the Company revised its share repurchase program. The new share repurchase program authorizes management, at its discretion, to repurchase up to $200.0 million of its outstanding Common Shares. The program may be discontinued or extended at any time. The Company repurchased 2,294,235 shares for $55.1 million, inclusive of $0.1 million of fees, during the year ended December 31, 2018. The Company did not repurchase any shares during the year ended December 31, 2017. As of December 31, 2018, management may repurchase up to approximately $144.9 million of the Company’s outstanding Common Shares under this program.

Dividends and Distributions

On November 13, 2018, the Board of Trustees declared an increase of $0.01 to the $0.28 per Common Share regular quarterly cash dividend, which was paid on January 15, 2019 to holders of record as of December 31, 2018.

On August 7, 2018, the Board of Trustees declared a regular quarterly cash dividend of $0.27 per Common Share, which was paid on October 15, 2018 to the holders of record as of September 28, 2018.

On May 11, 2018, the Board of Trustees declared a regular quarterly cash dividend of $0.27 per Common Share, which was paid on July 13, 2018 to holders of record as of June 29, 2018.

On February 27, 2018, the Board of Trustees declared a regular quarterly cash dividend of $0.27 per Common Share, which was paid on April 13, 2018 to holders of record as of March 30, 2018.

On November 8, 2017, the Board of Trustees declared an increase of $0.01 to the $0.27 per Common Share regular quarterly cash dividend, which was paid on January 13, 2018 to holders of record as of December 29, 2017.

Accumulated Other Comprehensive Income

The following table sets forth the activity in accumulated other comprehensive income for the years ended December 31, 2018, 2017 and 2016 (in thousands):

	Gains or Losses on Derivative Instruments
Balance at January 1, 2018	$	2,614

Other comprehensive loss before reclassifications		(2,659	)
Reclassification of realized interest on swap agreements		71
Net current period other comprehensive loss		(2,588	)
Net current period other comprehensive loss attributable to noncontrolling interests		490
Balance at December 31, 2018	$	516

Balance at January 1, 2017	$	(798	)

Other comprehensive income before reclassifications		634
Reclassification of realized interest on swap agreements		3,317
Net current period other comprehensive income		3,951
Net current period other comprehensive income attributable to noncontrolling interests		(539	)
Balance at December 31, 2017	$	2,614

Balance at January 1, 2016	$	(4,463	)

Other comprehensive loss before reclassifications		(646	)
Reclassification of realized interest on swap agreements		4,576
Net current period other comprehensive income		3,930
Net current period other comprehensive income attributable to noncontrolling interests		(265	)
Balance at December 31, 2016	$	(798	)

Noncontrolling Interests

The following table summarizes the change in the noncontrolling interests for the years ended December 31, 2018, 2017 and 2016 (dollars in thousands):

	Noncontrolling Interests in Operating Partnership ^(a)			Noncontrolling Interests in Partially-Owned Affiliates ^(b)			Total
Balance at January 1, 2018	$	102,921		$	545,519		$	648,440
Distributions declared of $1.09 per Common OP Unit		(6,888	)		—			(6,888	)
Net income (loss) for the year ended December 31, 2018		2,572			(49,709	)		(47,137	)
Conversion of 117,978 Common OP Units to Common Shares by limited partners of the Operating Partnership		(2,068	)		—			(2,068	)
Other comprehensive loss - unrealized loss on valuation of swap agreements		(129	)		(681	)		(810	)
Reclassification of realized interest expense on swap agreements		(3	)		323			320
Noncontrolling interest contributions		—			47,560			47,560
Noncontrolling interest distributions		—			(24,793	)		(24,793	)
Employee Long-term Incentive Plan Unit Awards		12,374			—			12,374
Rebalancing adjustment ^(c)		(4,556	)		—			(4,556	)
Balance at December 31, 2018	$	104,223		$	518,219		$	622,442

Balance at January 1, 2017	$	95,422		$	494,126		$	589,548
Distributions declared of $1.05 per Common OP Unit		(6,453	)		—			(6,453	)
Net income (loss) for the year ended December 31, 2017		4,159			(1,321	)		2,838
Conversion of 81,453 Common OP Units and 5,000 Preferred OP Units to Common Shares by limited partners of the Operating Partnership		(1,541	)		—			(1,541	)
Other comprehensive income (loss) - unrealized gain (loss) on valuation of swap agreements		85			(232	)		(147	)
Reclassification of realized interest expense on swap agreements		141			545			686
Noncontrolling interest contributions		—			85,206			85,206
Noncontrolling interest distributions		—			(32,805	)		(32,805	)
Employee Long-term Incentive Plan Unit Awards		10,457			—			10,457
Rebalancing adjustment ^(c)		651			—			651
Balance at December 31, 2017	$	102,921		$	545,519		$	648,440

Balance at January 1, 2016	$	96,340		$	324,526		$	420,866
Distributions declared of $1.16 per Common OP Unit		(6,753	)		—			(6,753	)
Net income for the year ended December 31, 2016		5,002			56,814			61,816
Conversion of 351,250 Common OP Units to Common Shares by limited partners of the Operating Partnership		(7,892	)		—			(7,892	)
Issuance of Common and Preferred OP Units to acquire real estate		31,429			—			31,429
Acquisition of noncontrolling interests		—			(25,925	)		(25,925	)
Other comprehensive loss - unrealized loss on valuation of swap agreements		(43	)		(289	)		(332	)
Change in control of previously unconsolidated investment		—			(75,713	)		(75,713	)
Reclassification of realized interest expense on swap agreements		223			374			597
Noncontrolling interest contributions		—			295,108			295,108
Noncontrolling interest distributions		—			(80,769	)		(80,769	)
Employee Long-term Incentive Plan Unit Awards		12,768			—			12,768
Rebalancing adjustment ^(c)		(35,652	)		—			(35,652	)
Balance at December 31, 2016	$	95,422		$	494,126		$	589,548

(a)

Noncontrolling interests in the Operating Partnership are comprised of (i) the limited partners’ 3,329,640, 3,328,873 and 3,308,875 Common OP Units at December 31, 2018, 2017 and 2016, respectively; (ii) 188 Series A Preferred OP Units at December 31, 2018, 2017 and 2016; (iii) 136,593 Series C Preferred OP Units at December 31, 2018, 2017 and 2016; and (iv) 2,569,044, 2,274,147 and 1,997,099 LTIP units at December 31, 2018, 2017 and 2016, respectively, as discussed in Share Incentive Plan (). Distributions declared for Preferred OP Units are reflected in net income (loss) in the table above.

(b)	Noncontrolling interests in partially-owned affiliates comprise third-party interests in Funds II, III, IV and V, and Mervyns I and II, and six other subsidiaries.

(c)	Adjustment reflects the difference between the fair value of the consideration received or paid and the book value of the Common Shares, Common OP Units, Preferred OP Units, and LTIP Units involving changes in ownership (the “Rebalancing”).

Preferred OP Units

There were no issuances of Preferred OP Units during the year ended December 31, 2018.

In 1999 the Operating Partnership issued 1,580 Series A Preferred OP Units in connection with the acquisition of a property, which have a stated value of $1,000 per unit, and are entitled to a preferred quarterly distribution of the greater of (i) $22.50 ( 9% annually) per Series A Preferred OP Unit or (ii) the quarterly distribution attributable to a Series A Preferred OP Unit if such unit was converted into a Common OP Unit. Through December 31, 2018, 1,392 Series A Preferred OP Units were converted into 185,600 Common OP Units and then into Common Shares. The 188 remaining Series A Preferred OP Units are currently convertible into Common OP Units based on the stated value divided by $7.50. Either the Company or the holders can currently call for the conversion of the Series A Preferred OP Units at the lesser of $7.50 or the market price of the Common Shares as of the conversion date.

During 2016, the Operating Partnership issued 442,478 Common OP Units and 141,593 Series C Preferred OP Units to a third party to acquire Gotham Plaza (Note 4). The Series C Preferred OP Units have a value of $100.00 per unit and are entitled to a preferred quarterly distribution of $0.9375 per unit and are convertible into Common OP Units at a rate based on the share price at the time of conversion. If the share price is below $28.80 on the conversion date, each Series C Preferred OP Unit will be convertible into 3.4722 Common OP Units. If the share price is between $28.80 and $35.20 on the conversion date, each Series C Preferred OP Unit will be convertible into a number of Common OP Units equal to $100.00 divided by the closing share price. If the share price is above $35.20 on the conversion date, each Series C Preferred OP Unit will be convertible into 2.8409 Common OP Units. The Series C Preferred OP Units have a mandatory conversion date of December 31, 2025, at which time all units that have not been converted will automatically be converted into Common OP Units based on the same calculations. Through December 31, 2018, 5,000 Series C Preferred OP Units were converted into 17,165 Common OP Units and then into Common Shares.