Shareholders' equity

6 Months Ended

Jun. 30, 2014

Shareholders' equity

Shareholders' equity

Note 8. Shareholders' equity

Issuance of 5.50% Series C Participating Preferred Shares

        On May 2, 2014, the Company issued 7,600,000 5.50% Series C participating preferred shares in an underwritten public offering and concurrent private placement, raising gross proceeds of $190.0 million before offering costs of $9.7 million.

Distributions

        In May 2014, our board of trustees declared a quarterly distribution of $0.05 per common share. Total quarterly distributions of approximately $9.3 million were paid on June 30, 2014 to common stockholders of record on June 15, 2014 and included in distributions to common shareholders in the accompanying condensed consolidated statement of equity.

        In May 2014, our board of trustees declared a quarterly distribution of $0.15113 per Series C Convertible Unit payable on July 10, 2014 to shareholders of record on June 30, 2014. Accordingly, a distribution payable to Series C Convertible Unit holders of $4.7 million has been recorded within amounts payable to affiliates in the accompanying condensed consolidated balance sheet as of June 30, 2014 (see Note 9), and included in distributions to noncontrolling interests in the accompanying condensed consolidated statement of equity.

        In May 2014, our board of trustees declared quarterly distributions of $0.3125 per share, $0.3125 per share and $0.225347 per share on our 5.0% Series A participating preferred shares, 5.0% Series B participating preferred shares and 5.5% Series C participating preferred shares, respectively. Total quarterly distributions of approximately $1.6 million, $1.4 million and $1.7 million on our 5.0% Series A participating preferred shares, 5.0% Series B participating preferred shares and 5.5% Series C participating preferred shares, respectively, which were paid on June 30, 2014 to shareholders of record on June 15, 2014, have been included in distributions to preferred shareholders in the accompanying condensed consolidated statement of equity.

Noncontrolling interest

        Noncontrolling interest as reflected in the Company's condensed consolidated balance sheet primarily consists of the interest held by the Sponsor in units in the Company's Operating Partnership. As of June 30, 2014 and December 31, 2013, the Sponsor owned 13,787,292, or approximately 6.9%, of the total 199,320,336 Class A units in the Operating Partnership. Additionally, the Sponsor owned all 31,085,974 Series C convertible units and all 4,375,000 Series D convertible units in the Operating Partnership as of June 30, 2014, and December 31, 2013. Also included in noncontrolling interest are outside ownership interests in certain consolidated subsidiaries of the Company.

        Noncontrolling interest as reflected in the Company's condensed consolidated statements of operations for the three and six months ended June 30, 2014 primarily consisted of $4.7 million and $9.2 million, respectively, of preferred income allocated to Series C convertible units, $0.6 million and $1.3 million, respectively, of net loss allocated to Class A units, and $0.07 million net income and $0.02 million net loss, respectively, of net loss allocated to noncontrolling interests in certain of the Company's consolidated subsidiaries.

        Noncontrolling interest as reflected in the Company's condensed consolidated statements of operations for the three and six months ended June 30, 2013 primarily consisted of $4.7 million and $5.5 million, respectively, of preferred income allocated to Series C convertible units and $0.1 million and $0.2 million, respectively, of net income allocated to 3.5% convertible perpetual preferred units (prior to conversion of such units into Class A units on June 14, 2013).

2012 Equity Incentive Plan

        During the six months ended June 30, 2014, the Company granted stock options for 1,220,000 Class A common shares and 92,000 restricted stock units to certain employees of the Company under the 2012 Equity Incentive Plan. The options and restricted stock units granted during the six months ended June 30, 2014 vest over four years and expire 10 years from the date of grant.

        The following table summarizes stock option activity under the plan for the six months ended June 30, 2014 and 2013:

	For the Six Months Ended
	June 30, 2014					June 30, 2013
	Stock Options			Weighted Average Exercise Price		Stock Options			Weighted Average Exercise Price
Outstanding at beginning of the period		1,190,000		$	15.48		700,000		$	15.00
Granted		1,220,000			16.74		—			—
Exercised		(28,750	)		15.00		—			—
Forfeited		(216,250	)		15.70		(30,000	)		15.00
Outstanding at end of the period		2,165,000		$	16.17		670,000		$	15.00
Exercisable at end of the period		131,250		$	15.00		—		$	—

        The following table summarizes the Black-Scholes Option Pricing Model inputs used for valuation of the stock options for Class A common shares issued during the six months ended June 30, 2014:

Weighted average fair value	$	4.89
Weighted average remaining life (years)		9.7
Expected term (years)		7.0
Dividend Yield		3	%
Volatility		37.3	%
Risk-free interest rate		2.2	%

        Total non-cash share-based compensation expense related to stock options and restricted stock units was $0.6 million and $1.1 million for the three and six months ended June 30, 2014, respectively, and $0.3 million and $0.5 million for the three and six months ended June 30, 2013, respectively. During the six months ended June 30, 2014, stock options for 216,250 Class A common shares and 2,000 restricted stock units were forfeited and stock options for 2,165,000 Class A common shares and 90,000 restricted stock units remained outstanding as of June 30, 2014.