Shareholders' Equity, Noncontrolling Interests and Other Comprehensive Loss

6 Months Ended

Jun. 30, 2022

Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]

Shareholders' Equity, Noncontrolling Interests and Other Comprehensive Loss

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

Common Shares and Units

In addition to the ATM Program activity discussed below, the Company completed the following transactions in its Common Shares during the six months ended June 30, 2022:

•The Company withheld 3,235 restricted shares of its Common Shares (“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 expense in connection with Restricted Shares and Units (Note 13) totaling $2.2 million and $2.3 million for the three months ended June 30, 2022 and 2021, and $3.2 million and $4.7 million for the six months ended June 30, 2022 and 2021, respectively.

In addition to the ATM Program activity discussed below, the Company completed the following transactions in its Common Shares during the year ended December 31, 2021:

•The Company withheld 3,050 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 expense totaling $9.4 million in connection with Restricted Shares and Units (Note 13).
 

ATM Program

The Company has an at-the-market equity issuance program (“ATM Program”) that provides the Company an efficient and low-cost vehicle for raising public equity capital to fund its needs. The Company entered into its current $250.0 million ATM Program, which includes an optional “forward purchase” component, in the first quarter of 2022. The Company sold 374,587 Common Shares under its ATM Program during the three months ended June 30, 2022 generating $8.3 million of gross proceeds and $8.0 million of net proceeds after related issuance costs at a weighted-average price per share of $22.25 and $21.67, respectively. The Company sold 5,525,419 Common Shares under its ATM Program during the six months ended June 30, 2022 generating $123.9 million of gross proceeds and $119.5 million of net proceeds after related issuance costs at a weighted-average price per share of $22.43 and $21.65, respectively. The Company did not sell or issue any Common Shares on a forward basis for the six months ended June 30, 2022 or the year ended December 31, 2021 and at June 30, 2022 had approximately $222.3 million of availability under the ATM program.

Share Repurchase Program

During 2018, the Company’s board of trustees (the “Board”) approved a new share repurchase program, which authorizes management, at its discretion, to repurchase up to $200.0 million of its outstanding Common Shares. The program does not obligate the Company to repurchase any specific number of Common Shares and may be discontinued or extended at any time. The Company did not repurchase any shares during the six months ended June 30, 2022 or 2021. Under the share repurchase program $122.6 million remains available as of June 30, 2022.

Dividends and Distributions

The following table sets forth the distributions declared and/or paid during the periods presented:

Date Declared	Amount Per Share		Record Date	Payment Date
March 15, 2021	$	0.15	March 31, 2021	April 15, 2021
May 5, 2021	$	0.15	June 30, 2021	July 15, 2021
August 5, 2021	$	0.15	September 30, 2021	October 15, 2021
November 3, 2021	$	0.15	December 31, 2021	January 14, 2022
February 15, 2022	$	0.18	March 31, 2022	April 14, 2022
May 4, 2022	$	0.18	June 30, 2022	July 15, 2022

Accumulated Other Comprehensive Income (Loss)

The following tables set forth the activity in accumulated other comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Gains or Losses on Derivative Instruments
Balance at April 1, 2022	$	(5,724	)
Other comprehensive income before reclassifications - swap agreements		17,050
Reclassification of realized interest on swap agreements		4,211
Net current period other comprehensive income		21,261
Net current period other comprehensive income attributable to noncontrolling    interests		(4,297	)
Balance at June 30, 2022	$	11,240
Balance at April 1, 2021	$	(41,962	)
Other comprehensive loss before reclassifications - swap agreements		(10,069	)
Reclassification of realized interest on swap agreements		5,272
Net current period other comprehensive loss		(4,797	)
Net current period other comprehensive income attributable to noncontrolling    interests		(1,150	)
Balance at June 30, 2021	$	(47,909	)

	Acadia's Share
Balance at January 1, 2022	$	(36,214	)
Other comprehensive income before reclassifications - swap agreements		52,784
Reclassification of realized interest on swap agreements		9,261
Net current period other comprehensive income		62,045
Net current period other comprehensive income attributable to noncontrolling    interests		(14,591	)
Balance at June 30, 2022	$	11,240
Balance at January 1, 2021	$	(74,891	)
Other comprehensive income before reclassifications - swap agreements		23,487
Reclassification of realized interest on swap agreements		10,540
Net current period other comprehensive income		34,027
Net current period other comprehensive income attributable to noncontrolling    interests		(7,045	)
Balance at June 30, 2021	$	(47,909	)

Noncontrolling Interests

The following tables summarize the change in the noncontrolling interests for the three and six months ended June 30, 2022 and 2021 (dollars in thousands):

	Noncontrolling Interests in Operating Partnership (a)			Noncontrolling Interests in Partially-Owned Affiliates (b)			Total
Balance at April 1, 2022	$	101,355		$	645,238		$	746,593
Distributions declared of $0.18 per Common OP Unit and distributions on Preferred OP Units		(1,286	)		—			(1,286	)
Net income (loss) for the three months ended June 30, 2022		151			(15,602	)		(15,451	)
Conversion of 15,701 Common OP Units to Common Shares by limited partners of the Operating Partnership		(243	)		—			(243	)
Other comprehensive income - unrealized gain on valuation of swap agreements		937			2,033			2,970
Reclassification of realized interest expense on swap agreements		29			1,298			1,327
Acquisition of noncontrolling interest (c)		—			(41,376	)		(41,376	)
Noncontrolling interest contributions		—			723			723
Noncontrolling interest distributions		—			(24,776	)		(24,776	)
Employee Long-term Incentive Plan Unit Awards		2,283			—			2,283
Reallocation of noncontrolling interests (d)		(158	)		—			(158	)
Balance at June 30, 2022	$	103,068		$	567,538		$	670,606
Balance at April 1, 2021	$	94,930		$	524,651		$	619,581
Distributions declared of $0.15 per Common OP Unit and distributions on Preferred OP Units		(1,052	)		—			(1,052	)
Net income (loss) for the three months ended June 30, 2021		398			(3,657	)		(3,259	)
Conversion of 7,173 Common OP Units to Common Shares by limited partners of the Operating Partnership		(115	)		—			(115	)
Other comprehensive loss - unrealized loss on valuation of swap agreements		(406	)		(253	)		(659	)
Reclassification of realized interest expense on swap agreements		53			1,756			1,809
Noncontrolling interest contributions		—			5,868			5,868
Noncontrolling interest distributions		—			(4,355	)		(4,355	)
Employee Long-term Incentive Plan Unit Awards		2,399			—			2,399
Reallocation of noncontrolling interests (d)		(1,119	)		—			(1,119	)
Balance at June 30, 2021	$	95,088		$	524,010		$	619,098

	Noncontrolling Interests in Operating Partnership (a)			Noncontrolling Interests in Partially-Owned Affiliates (b)			Total
Balance at January 1, 2022	$	94,120		$	534,202		$	628,322
Distributions declared of $0.36 per Common OP Unit and distributions on Preferred OP Units		(2,569	)		—			(2,569	)
Net income for the six months ended June 30, 2022		1,274			10,534			11,808
Conversion of 51,307 Common OP Units to Common Shares by limited partners of the Operating Partnership		(815	)		—			(815	)
Other comprehensive income - unrealized gain on valuation of swap agreements		2,635			8,963			11,598
Reclassification of realized interest expense on swap agreements		74			2,919			2,993
Acquisition of noncontrolling interest (c)		—			(41,376	)		(41,376	)
Noncontrolling interest contributions		—			99,852			99,852
Noncontrolling interest distributions		—			(47,556	)		(47,556	)
Employee Long-term Incentive Plan Unit Awards		5,671			—			5,671
Reallocation of noncontrolling interests (d)		2,678			—			2,678
Balance at June 30, 2022	$	103,068		$	567,538		$	670,606
Balance at January 1, 2021	$	89,431		$	519,734		$	609,165
Distributions declared of $0.30 per Common OP Unit		(2,100	)		—			(2,100	)
Net income (loss) for the six months ended June 30, 2021		868			(8,247	)		(7,379	)
Conversion of 25,973 Common OP Units to Common Shares by limited partners of the Operating Partnership		(409	)		—			(409	)
Other comprehensive income - unrealized gain on valuation of swap agreements		1,494			1,890			3,384
Reclassification of realized interest expense on swap agreements		106			3,555			3,661
Noncontrolling interest contributions		—			17,109			17,109
Noncontrolling interest distributions		—			(10,031	)		(10,031	)
Employee Long-term Incentive Plan Unit Awards		6,448			—			6,448
Reallocation of noncontrolling interests (d)		(750	)		—			(750	)
Balance at June 30, 2021	$	95,088		$	524,010		$	619,098

(a)Noncontrolling interests in the Operating Partnership are comprised of (i) the limited partners’ 3,062,108 and 3,101,958 Common OP Units at June 30, 2022 and 2021, respectively; (ii) 188 Series A Preferred OP Units at each of June 30, 2022 and 2021; (iii) 126,593 Series C Preferred OP Units at each of June 30, 2022 and 2021; and (iv) 3,732,125 and 3,434,894 LTIP units at June 30, 2022 and 2021, respectively, as discussed in Share Incentive Plan (Note 13). 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 II, and six other subsidiaries.

(c)Represents the acquisition of the 11.67% noncontrolling interest in Fund II and Mervyns II acquired on June 27, 2022 (Note 1) for $18.5 million.

(d)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.

Preferred OP Units

There were no issuances of Preferred OP Units during the six months ended June 30, 2022 or the year ended December 31, 2021.

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 June 30, 2022, 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 June 30, 2022, 15,000 Series C Preferred OP Units were converted into 51,887 Common OP Units and then into Common Shares.