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Equity | 9 Months Ended
--- | ---
Sep. 30, 2018
Equity |
Equity | 7.Equity Common Stock. We have an equity distribution agreement to issue and sell, from time to time, up to $200,000,000 in aggregate offering price of our company common shares. During the nine months ended September 30, 2018 and 2017, under our equity distribution agreement, we sold 22,244 shares of common stock for $1,005,000 in net proceeds and 312,881 shares of common stock for $14,578,000 in net proceeds, respectively. In conjunction with the sale of common stock, during the nine months ended September 30, 2018 and 2017, we paid $18,000 and $260,000, respectively, as compensation to our sales agents and we reclassified $76,000 and $49,000, respectively, of accumulated costs associated with this agreement to capital in excess of par value. At September 30, 2018, and 2017, we had $184,139,000 and $185,162,000, respectively, available under our equity distribution agreement. During the nine months ended September 30, 2018 and 2017, we acquired 31,326 shares and 41,592 shares, respectively, of common stock held by employees who tendered owned shares to satisfy tax withholding obligations. Non-controlling Interests. During 2018 and 2017, we entered into partnerships to develop and/or own real estate. Given that our limited members do not have the substantive kick-out rights, liquidation rights, or participation rights, we have concluded that the partnerships are VIEs. And since we exercise power over and receive benefits from the VIEs, we are considered the primary beneficiary. Accordingly, we consolidate the VIEs and record the non-controlling interests at cost. As of September 30, 2018, we have the following consolidated VIEs (dollar amounts in thousands):
|  |  |  |  |  |  |  |  | Gross |  |  |  |
Investment |  |  |  | Property |  |  |  |  | Consolidated |  |  | Non-Controlling |
Year |  | Purpose |  | Type |  | State |  |  | Assets |  |  | Interests |
2018 |  | Owned real estate |  | ILF |  | OR |  | $ | 14,400 | (1) | $ | 2,857 | (1)
2018 |  | Owned real estate and development |  | UDP |  | OR |  |  | 2,881 | (1) |  | 1,081 | (1)
2017 |  | Owned real estate and development |  | UDP |  | WI |  |  | 10,316 | (2) |  | 2,272 | (2)
2017 |  | Owned real estate |  | ALF |  | SC |  |  | 10,571 |  |  | 1,241 |
Total |  |  |  |  |  |  |  | $ | 38,168 |  | $ | 7,451 |
| (1) |  | We entered into a joint venture (“JV”) to develop, purchase and own senior housing properties. During the second quarter of 2018, the JV purchased land for the development of a 78-unit ALF/MC for a total anticipated project cost of $18,108. The non-controlling partner contributed $1,081 of cash and we committed to fund the remaining $17,027 project cost. During the third quarter of 2018, in a sale-leaseback transaction, the JV purchased an existing operational 89-unit ILF adjacent to the 78-unit ALF/MC we are developing for $14,400. The non-controlling partner contributed $2,857 of equity and we contributed $11,543 in cash. Upon completion of the development project, our combined economic interest in the JV will be approximately 88%. We account for the JV on a consolidated basis.
| (2) |  | We entered into a partnership to own the real estate and develop a 110-unit ILF/ALF/MC community in Wisconsin. The commitment totals approximately $22,471.
Available Shelf Registrations. We have an automatic shelf registration statement on file with the SEC, and currently have the ability to file additional automatic shelf registration statements, to provide us with capacity to publicly offer an indeterminate amount of common stock, preferred stock, warrants, debt, depositary shares, or units. We may from time to time raise capital under our automatic shelf registration statement in amounts, at prices, and on terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of the offering. Distributions. We declared and paid the following cash dividends (in thousands):
|  | Nine Months Ended September 30, |
|  | 2018 |  | 2017 |  |
|  | Declared |  | Paid |  | Declared |  | Paid |  |
Common Stock |  | $ | 67,768 | (1) | $ | 67,768 | (1) | $ | 67,664 | (1) | $ | 67,664 | (1) |
| (1) |  | Represents $0.19 per share per month for the nine months ended September 30, 2018 and 2017.
In October 2018, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December 2018, payable on October 31, November 30, and December 31, 2018, respectively, to stockholders of record on October 23, November 21, and December 21, 2018, respectively. Stock-Based Compensation. Under our 2015 Equity Participation Plan (“the 2015 Plan”), 1,400,000 shares of common stock have been reserved for awards, including nonqualified stock option grants and restricted stock grants to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2015 Plan are set by our compensation committee at its discretion. During the nine months ended September 30, 2018 and 2017, no stock options were granted. The stock options exercised during the nine months ended September 30, 2018 and 2017 were as follows:
|  |  |  | Weighted |  |  |  |  |  |  |
|  |  |  | Average |  |  |  |  |  |  |
|  | Options |  | Exercise |  | Option |  | Market |
|  | Exercised |  | Price |  | Value |  | Value (1) |
2018 |  | 5,000 |  | $ | 24.65 |  | $ | 123,000 |  | $ | 205,000 |
2017 |  | 8,334 |  | $ | 24.31 |  | $ | 202,566 |  | $ | 410,797 |
| (1) |  | As of exercise date.
At September 30, 2018, we had 20,000 stock options outstanding and exercisable. Compensation expense related to the vesting of stock options was $0 and $2,000 for the nine months ended September 30, 2018 and 2017, respectively. The following table summarizes our restricted stock and performance-based stock units activity for the nine months ended September 30, 2018 and 2017:
|  | Nine months ended September 30, |
|  | 2018 |  | 2017 |
Outstanding, January 1 |  |  | 244,181 |  |  | 210,573 |
Granted |  |  | 156,718 |  |  | 143,057 |
Vested |  |  | (75,149) |  |  | (84,363) |
Cancelled |  |  | — |  |  | (24,106) |
Outstanding, September 30 |  |  | 325,750 |  |  | 245,161 |
During the nine months ended September 30, 2018 and 2017, we granted restricted stock and performance-based stock units under the 2015 Plan as follows:
|  | No. of |  | Price per |  |  |
Year |  | Shares/Units |  | Share |  | Vesting Period |
2018 |  | 81,819 |  | $ | 38.18 |  | ratably over 3 years |
|  | 66,171 |  | $ | 38.18 |  | TSR targets (1) |
|  | 8,728 |  | $ | 41.25 |  | ratably over 1 year |
|  | 156,718 |  |  |  |  |  |
2017 |  | 74,760 |  | $ | 45.76 |  | ratably over 3 years |
|  | 57,881 |  | $ | 45.76 |  | TSR targets (1) |
|  | 7,416 |  | $ | 48.55 |  | ratably over 1 year |
|  | 3,000 |  | $ | 50.55 |  | ratably over 3 years |
|  | 143,057 |  |  |  |  |  |
| (1) |  | Vesting is based on achieving certain total shareholder return (“TSR”) targets in 4 years with acceleration opportunity in 3 years.
Compensation expense recognized related to the vesting of restricted common stock and performance-based stock units for the nine months ended September 30, 2018 and 2017 were $4,384,000 and $3,965,000, respectively. At September 30, 2018, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows:
|  | Remaining
|  | Compensation
Vesting Date |  | Expense
2018 |  | $ | 1,486,000
2019 |  |  | 4,250,000
2020 |  |  | 2,210,000
2021 |  |  | 238,000
Total |  | $ | 8,184,000

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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 http://asc.fasb.org/topic&trid=2208762 + Details
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