Shareholders' Equity

12 Months Ended

Dec. 31, 2019

8.Shareholders’ Equity

Preferred Shares

At December 31, 2019 and 2018, we had the following series of Cumulative Preferred Shares (“Preferred Shares”) outstanding:


			At December 31, 2019			At December 31, 2018
Series	Earliest Redemption Date	Dividend Rate	Shares Outstanding	Liquidation Preference		Shares Outstanding	Liquidation Preference

			(Dollar amounts in thousands)
Series U	6/15/2017	5.625%	-	$	-	11,500	$	287,500
Series V	9/20/2017	5.375%	19,800		495,000	19,800		495,000
Series W	1/16/2018	5.200%	20,000		500,000	20,000		500,000
Series X	3/13/2018	5.200%	9,000		225,000	9,000		225,000
Series Y	3/17/2019	6.375%	-		-	11,400		285,000
Series Z	6/4/2019	6.000%	-		-	11,500		287,500
Series A	12/2/2019	5.875%	-		-	7,600		190,000
Series B	1/20/2021	5.400%	12,000		300,000	12,000		300,000
Series C	5/17/2021	5.125%	8,000		200,000	8,000		200,000
Series D	7/20/2021	4.950%	13,000		325,000	13,000		325,000
Series E	10/14/2021	4.900%	14,000		350,000	14,000		350,000
Series F	6/2/2022	5.150%	11,200		280,000	11,200		280,000
Series G	8/9/2022	5.050%	12,000		300,000	12,000		300,000
Series H	3/11/2024	5.600%	11,400		285,000	-		-
Series I	9/12/2024	4.875%	12,650		316,250	-		-
Series J	11/15/2024	4.700%	10,350		258,750	-		-
Series K	12/20/2024	4.750%	9,200		230,000	-		-
Total Preferred Shares			162,600	$	4,065,000	161,000	$	4,025,000

The holders of our Preferred Shares have general preference rights with respect to liquidation, quarterly distributions and any accumulated unpaid distributions. Except as noted below, holders of the Preferred Shares do not have voting rights. In the event of a cumulative arrearage equal to six quarterly dividends, holders of all outstanding series of preferred shares (voting as a single class without regard to series) will have the right to elect two additional members to serve on our board of trustees (our “Board”) until the arrearage has been cured. At December 31, 2019, there were no dividends in arrears. The affirmative vote of at least 66.67% of the outstanding shares of a series of Preferred Shares is required for any material and adverse amendment to the terms of such series. The affirmative vote of at least 66.67% of the outstanding shares of all of our Preferred Shares, voting as a single class, is required to issue shares ranking senior to our Preferred Shares.

Except under certain conditions relating to the Company’s qualification as a REIT, the Preferred Shares are not redeemable prior to the dates indicated on the table above. On or after the respective dates, each of the series of Preferred Shares is redeemable at our option, in whole or in part, at $25.00 per depositary share, plus accrued and unpaid dividends. Holders of the Preferred Shares cannot require us to redeem such shares.

Upon issuance of our Preferred Shares, we classify the liquidation value as preferred equity on our balance sheet with any issuance costs recorded as a reduction to Paid-in capital.

In 2019, we redeemed our Series U, Series Y, Series Z and Series A Preferred Shares, at par, for a total of $1.05 billion in cash, before payment of accrued dividends.

In 2019, we issued an aggregate 43.6 million depositary shares, each representing 0.001 of a share of our Series H, Series I, Series J and Series K Preferred Shares, at an issuance price of $25.00 per depositary share, for a total of $1.09 billion in gross proceeds, and we incurred $30.8 million in issuance costs.

In 2017, we redeemed our Series S and Series T Preferred Shares, at par, for a total of $922.5 million in cash, before payment of accrued dividends.

In 2017, we issued an aggregate 23.2 million depositary shares, each representing 0.001 of a share of our Series F and Series G Preferred Shares, at an issuance price of $25.00 per depositary share, for a total of $580.0 million in gross proceeds, and we incurred $18.8 million in issuance costs.

In 2019 and 2017, we recorded $32.7 million and $29.3 million, respectively, in EITF D-42 allocations of income from our common shareholders to the holders of our Preferred Shares in connection with redemptions of Preferred Shares.

Common Shares

During 2019, 2018 and 2017, activity with respect to the issuance of our common shares was as follows (dollar amounts in thousands):


	2019				2018				2017
		Shares		Amount		Shares		Amount		Shares		Amount
Employee stock-based compensation and
exercise of stock options (Note 10)		287,734	$	33,564		277,511	$	12,525		564,583	$	42,500

Our Board previously authorized the repurchase from time to time of up to 35.0 million of our common shares on the open market or in privately negotiated transactions. Through December 31, 2019, we repurchased approximately 23.7 million shares pursuant to this authorization; none of which were repurchased during the three years ended December 31, 2019.

At December 31, 2019 and 2018, we had 2,958,817 and 3,138,618, respectively, of common shares reserved in connection with our share-based incentive plans (see Note 10), and 231,978 shares reserved for the conversion of partnership units owned by Noncontrolling Interests.

The unaudited characterization of dividends for U.S. federal income tax purposes is made based upon earnings and profits of the Company, as defined by the Code. Common share dividends including amounts paid to our restricted share unitholders totaled $1.399 billion ($8.00 per share), $1.396 billion ($8.00 per share) and $1.394 billion ($8.00 per share) for the years ended December 31, 2019, 2018 and 2017, respectively. Preferred share dividends totaled $210.2 million, $216.3 million and $236.5 million for the years ended December 31, 2019, 2018 and 2017, respectively.

For the tax year ended December 31, 2019, distributions for the common shares and all the various series of preferred shares were classified as follows:


	2019 (unaudited)
		1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Ordinary Income		100.00	%	100.00	%	100.00	%	100.00	%
Long-Term Capital Gain		0.00	%	0.00	%	0.00	%	0.00	%
Total		100.00	%	100.00	%	100.00	%	100.00	%

The ordinary income dividends distributed for the tax year ended December 31, 2019 are not qualified dividends under the Internal Revenue Code, however, they are subject to the 20% deduction under IRS Section 199A.