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Equity | 12 Months Ended
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Dec. 31, 2019
Equity |
Equity | Note 17—Equity Preferred Stock. The Series A, B and C preferred stock outstanding are redeemable by us. Common Stock. In December 2019, we completed a public offering in which we sold 7,475,000 shares of our common stock (which includes the underwriter's exercised over-allotment option of 975,000 shares) for $13.93 per share, and received net proceeds of $104.0 million after deducting the underwriter's discount and other offering expenses. The proceeds were used to make investments related to our business and for general corporate purposes. We also used a portion of the net proceeds to purchase, in February 2020, an aggregate of 747,500 shares of our common stock and OP Units from our chief executive officer and ACM at the same price the underwriters paid to purchase the shares. In May 2019, we completed a public offering in which we sold 9,200,000 shares of our common stock (which includes the underwriter's exercised over-allotment option of 1,200,000 shares) for $12.58 per share, and received net proceeds of $115.6 million after deducting the underwriter's discount and other offering expenses. The proceeds were used to make investments related to our business and for general corporate purposes. We also used a portion of the net proceeds to purchase an aggregate of 920,000 shares of our common stock from our chief executive officer and ACM at the same price the underwriters paid to purchase the shares. In August 2019, we amended our “At-The-Market” equity offering sales agreement with JMP Securities LLC (“JMP”). In connection with the amendment we are entitled to issue and sell up to 7,500,000 shares of our common stock through JMP by means of ordinary brokers’ transactions or otherwise at market prices prevailing at the time of sale, or at negotiated prices. During 2019, we sold an aggregate of 3,162,000 shares under the JMP agreement for net proceeds of $41.0 million. As of February 7, 2020, we had approximately 3,000,000 shares available under this agreement. During 2019, we issued approximately 4,700,000 shares of our common stock in connection with the exchanges and subsequent settlements of our 5.25% convertible notes, 5.375% convertible notes and 6.50% convertible notes. In December 2018, our Board of Directors declared a special dividend of $0.15 per common share, which was paid in January 2019 with a combination of $2.5 million of cash and 901,432 common shares. As of December 31, 2019, we had $137.9 million available under our $500.0 million shelf registration statement that was declared effective by the SEC in June 2018. Noncontrolling Interest. Noncontrolling interest relates to the OP Units issued to satisfy a portion of the purchase price in connection with the Acquisition. Each of these OP Units are paired with one share of our special voting preferred shares having a par value of $0.01 per share and is entitled to one vote each on any matter submitted for stockholder approval. The OP Units are entitled to receive distributions if and when our Board of Directors authorizes and declares common stock distributions. The OP Units are also redeemable for cash, or at our option, for shares of our common stock on a one-for-one basis. In 2019, we redeemed 391,156 OP Units with a combination of cash totaling $1.7 million and 258,677 common shares. We also redeemed 577,185 OP Units in 2018 for cash totaling $6.8 million. In addition, our Board of Directors declared a special dividend of $0.15 per common share in December 2018, which was paid to the OP Unit holders in a combination of $0.6 million of cash and 221,666 OP Units in January 2019. At December 31, 2019, there were 20,484,094 OP Units outstanding, which represented 15.7% of the voting power of our outstanding stock. Distributions. Dividends declared (on a per share basis) for the year ended December 31, 2019 are as follows:
Common Stock |  | Preferred Stock
|  |  |  |  |  |  | Dividend (1)
Declaration Date |  | Dividend |  | Declaration Date |  | Series A |  | Series B |  | Series C
February 13, 2019 |  | $ | 0.27 |  | February 1, 2019 |  | $ | 0.515625 |  | $ | 0.484375 |  | $ | 0.53125
May 1, 2019 |  | $ | 0.28 |  | May 1, 2019 |  | $ | 0.515625 |  | $ | 0.484375 |  | $ | 0.53125
July 31, 2019 |  | $ | 0.29 |  | July 31, 2019 |  | $ | 0.515625 |  | $ | 0.484375 |  | $ | 0.53125
October 30, 2019 |  | $ | 0.30 |  | October 30, 2019 |  | $ | 0.515625 |  | $ | 0.484375 |  | $ | 0.53125
| (1) |  | The dividend declared on February 1, 2019 was for December 1, 2018 through February 28, 2019. The dividend declared on May 1, 2019 was for March 1, 2019 through May 31, 2019. The dividend declared on July 31, 2019 was for June 1, 2019 through August 31, 2019. The dividend declared on October 30, 2019 was for September 1, 2019 through November 30, 2019.
Common Stock–On February 13, 2020, the Board of Directors declared a cash dividend of $0.30 per share of common stock. The dividend is payable on March 17, 2020 to common stockholders of record as of the close of business on February 28, 2020. Preferred Stock –On January 31, 2020, the Board of Directors declared a cash dividend of $0.515625 per share of 8.25% Series A preferred stock; a cash dividend of $0.484375 per share of 7.75% Series B preferred stock; and a cash dividend of $0.53125 per share of 8.50% Series C preferred stock. These amounts reflect dividends from December 1, 2019 through February 29, 2020 and are payable on March 2, 2020 to preferred stockholders of record on February 15, 2020. We have determined that 100% of the common stock and preferred stock dividends paid during 2019, 2018 and 2017 represented ordinary income to our stockholders for income tax purposes. Pursuant to Internal Revenue Code Section 59(d), alternative minimum tax (“AMT”) could be apportioned between a REIT and its stockholders’ to the extent the REIT distributes its regular taxable income. However, among the numerous provisions included in the Tax Reform enacted in December 2017, the AMT was repealed for corporate taxpayers. Therefore, the apportionment of AMT between a REIT and its stockholders is no longer applicable for tax years beginning after December 31, 2017. Deferred Compensation. We have a stock incentive plan under which the Board of Directors has the authority to issue shares of stock to certain employees, officers, directors and, prior to May 31, 2017, employees of our Former Manager. In 2019, 2018 and 2017, we granted 333,884 shares, 265,444 shares and 299,750 shares, respectively, of restricted common stock with a total grant date fair value of $4.2 million, $2.3 million and $2.4 million, respectively, to certain employees of ours and our Former Manager. One third of the shares vested as of the grant date and one third will vest on each of the first and second anniversaries of the grant date. In 2019, 2018 and 2017, we granted 55,244 shares, 67,002 shares and 74,375 shares, respectively, of fully vested common stock with a grant date fair value of $0.7 million, $0.6 million and $0.6 million, respectively, to the independent members of our Board of Directors. In July 2019, we also issued 124,069 shares of restricted common stock to an employee with a total grant date fair value of $1.5 million. One quarter of the shares vested as of the grant date and one quarter will vest on each of the first, second and third anniversaries of the grant date. In 2019, 2018 and 2017, we granted our chief executive officer 58,738 shares 63,584 shares 74,830 shares, respectively, of restricted common stock with a grant date fair value of $0.7 million, $0.6 million and $0.6 million, respectively, and up to 352,427, 381,503 and 448,980, respectively, of performance-based restricted stock units with a grant date fair value of $1.7 million, $0.8 million and $1.0 million, respectively. One quarter of the restricted common stock vested on the grant date and one quarter will vest on each of the first, second and third anniversaries of the grant date. The performance-based restricted stock units vest at the end of a four-year performance period based on our achievement of certain total stockholder return objectives. To date, our chief executive officer was granted in the aggregate up to 2,050,023 performance-based restricted stock units, of which 421,348 units and 445,765 units fully vested based on achieving the performance objectives for the four-year periods ended December 31, 2019 and 2018, respectively. The 445,765 fully vested units were net settled for 203,492 common shares in 2019. In 2019, 2018 and 2017, we also granted our chief executive officer 246,508 shares, 294,985 shares and 357,569 shares, respectively, of performance-based restricted stock with a grant date fair value of $3.0 million, $3.4 million and $2.7 million, respectively, as a result of achieving goals related to the integration of the Acquisition. The performance-based restricted stock vests in full three years after the grant date. During 2019, 2018 and 2017, we recorded total stock-based compensation expense of $8.8 million, $5.4 million and $3.2 million, respectively, to employee compensation and benefits and $0.7 million, $0.6 million and $1.7 million, respectively, to selling and administrative expense. During 2019, a total of 900,092 shares of restricted stock and restricted stock units with a grant date fair value of $5.9 million vested. As of December 31, 2019 and 2018, there were 1,379,615 shares and 1,033,616 shares, respectively, of unvested restricted common stock with a grant date fair value of $14.8 million and $9.5 million, respectively. At December 31, 2019, total unrecognized compensation cost related to unvested restricted common stock was $7.0 million, which is expected to be recognized ratably over the remaining weighted-average vesting period of 1.8 years. Earnings Per Share. Basic EPS is calculated by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period inclusive of unvested restricted stock with full dividend participation rights. Diluted EPS is calculated by dividing net income by the weighted average number of shares of common stock outstanding plus the additional dilutive effect of common stock equivalents during each period using the treasury stock method. Our common stock equivalents include the weighted average dilutive effect of performance-based restricted stock units granted to our chief executive officer, OP Units and convertible senior unsecured notes. A reconciliation of the numerator and denominator of our basic and diluted EPS computations ($ in thousands, except share and per share data) is as follows:
|  | Year Ended December 31,
|  | 2019 |  | 2018 |  | 2017
|  | Basic |  | Diluted |  | Basic |  | Diluted |  | Basic |  | Diluted
Net income attributable to common stockholders (1) |  | $ | 121,074 |  | $ | 121,074 |  | $ | 108,312 |  | $ | 108,312 |  | $ | 65,835 |  | $ | 65,835
Net income attributable to noncontrolling interest (2) |  |  | — |  |  | 26,610 |  |  | — |  |  | 32,185 |  |  | — |  |  | 24,120
Net income attributable to common stockholders and noncontrolling interest |  | $ | 121,074 |  | $ | 147,684 |  | $ | 108,312 |  | $ | 140,497 |  | $ | 65,835 |  | $ | 89,955
Weighted average shares outstanding |  |  | 92,851,327 |  |  | 92,851,327 |  |  | 70,208,165 |  |  | 70,208,165 |  |  | 57,890,574 |  |  | 57,890,574
Dilutive effect of OP Units (2) |  |  | — |  |  | 20,502,128 |  |  | — |  |  | 21,033,103 |  |  | — |  |  | 21,230,769
Dilutive effect of restricted stock units (3) |  |  | — |  |  | 1,421,528 |  |  | — |  |  | 1,476,653 |  |  | — |  |  | 1,092,072
Dilutive effect of convertible notes (4) |  |  | — |  |  | 1,417,968 |  |  | — |  |  | 908,861 |  |  | — |  |  | 97,837
Dilutive effect of stock dividend (5) |  |  | — |  |  | — |  |  | — |  |  | 15,386 |  |  | — |  |  | —
Weighted average shares outstanding |  |  | 92,851,327 |  |  | 116,192,951 |  |  | 70,208,165 |  |  | 93,642,168 |  |  | 57,890,574 |  |  | 80,311,252
Net income per common share (1) |  | $ | 1.30 |  | $ | 1.27 |  | $ | 1.54 |  | $ | 1.50 |  | $ | 1.14 |  | $ | 1.12
| (1) |  | Net of preferred stock dividends.
| (2) |  | We consider OP Units to be common stock equivalents as the holders have voting rights, the right to distributions and the right to redeem the OP Units for the cash value of a corresponding number of shares of common stock or a corresponding number of shares of common stock, at our election.
| (3) |  | Mr. Kaufman is granted restricted stock units annually, which vest at the end of a four-year performance period based upon our achievement of total stockholder return objectives.
| (4) |  | The convertible senior unsecured notes impact diluted earnings per share if the average price of our common stock exceeds the conversion price, as calculated in accordance with the terms of the indenture.
| (5) |  | Represents the dilutive effect of the portion of the special dividend that was paid with common shares.

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