Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

v3.22.4
Stockholders' Equity
12 Months Ended
Dec. 31, 2022
Equity [Abstract]  
Stockholders' Equity Stockholders' Equity
Preferred stock
On July 21, 2022, the Company issued 125 shares of preferred stock, par value $0.01 per share, designated as the 12% Series A Redeemable Preferred Stock (the “Series A Preferred Stock”), for an aggregate cash amount of $500. The issuance of the Series A Preferred Stock was made in a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
As of December 31, 2022 and December 31, 2021, the Company had the following series of preferred stock outstanding:
Predecessor Successor
Series Issuance Date Earliest Potential Redemption Date Dividend Rate Shares outstanding as of December 31, 2021 Activity Shares Outstanding as of December 31, 2022
Series X1
September 2017 September 2022 5.250  % 9,200  (5,953) 3,247 
Series Y1
December 2017 December 2022 5.200  % 8,000  (5,757) 2,243 
Series Z1
November 2019 November 2024 4.875  % 13,000  (9,729) 3,271 
Series A2
July 2022
N/A2
12.000  % —  125  125 
Total 30,200  (21,314) 8,886 
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1 Refer to Note 15 — Subsequent Events.
2 The Company, at its option, may redeem shares of the Series A Preferred Stock, by resolutions of the Board, in whole or in part, at any time or from time to time, for cash at a redemption price equal to $4,000 per share plus an amount equal to all accrued and unpaid dividends thereon to and including the date fixed for redemption. The redemption is within the Company’s control, and thus the preferred equity arrangements are classified as permanent equity in the Consolidated Financial Statements. The preferred stock was issued in 2022 and therefore the balance as of December 31, 2021 was $—.
On November 22, 2022, the Company commenced offers (the “Offers”) to purchase for cash any and all outstanding Series X Preferred Shares, at $15.29 per share, Series Y Preferred Shares, at $15.33 per share, and Series Z Preferred Shares, at $14.34 per share. The Company accepted for purchase 5,953,898 Series X Preferred Shares, 5,756,691 Series Y Preferred Shares and 9,728,688 Series Z Preferred Shares (the shares repurchased being Depository shares each representing 1/1000 of a Share of the respective Preferred Share counts included in the above table detailing preferred stock activity). The offers were completed on December 23, 2022 and the Preferred Shares purchased were cancelled by the Company. As a result of the Preferred Shares repurchase, we recorded a gain of $76,459, recorded in the line item Preferred securities redemption in the Consolidated Statements of Operations, representing the Preferred Shares carrying value of $399,174 less the Preferred Shares offer price of $318,795 and transaction costs of $3,920.
On November 2, 2022, the board of directors of the Company (the “Board of Directors”) authorized a quarterly dividend on each series of the Company’s preferred stock underlying the Preferred Shares payable on December 31, 2022 (the “December Dividend”) to holders of record of such underlying preferred stock at the close of business on December 15, 2022 for distribution to the holders of the Preferred Shares. All holders of the Preferred Shares at the close of business on the December 15, 2022
record date received the December Dividend for the applicable series of Preferred Shares regardless of whether they participated in the Offers since the December 15, 2022 record date occurred prior to the consummation of the Offers.
As market conditions warrant, we and our majority equity holders, Blackstone and its affiliates, may from time to time seek to repurchase the remaining outstanding Preferred Shares in open market or privately negotiated purchases, by tender offer or otherwise or to redeem our preferred stock pursuant to the terms of their respective governing documents. The size of such repurchases may be material and may impact the liquidity and trading price of such preferred stock.
The Company paid $19,186, $19,160, $46,624, and $48,186 in distributions to its preferred stockholders for the period from July 20, 2022 through December 31, 2022, the period from January 1, 2022 through July 19, 2022, the year ended December 31, 2021, and the year ended December 31, 2020, respectively.
The holders of the Company’s preferred stock have general preference rights with respect to liquidation, quarterly distributions and any accumulated unpaid distributions. Holders of the Company’s preferred stock will not be entitled to vote on most matters, except under certain conditions. In the event of a cumulative arrearage equal to six quarterly dividends, the holders of the Company’s preferred stock will have the right to elect two additional members to serve on the Company’s Board of Directors (the “Board”) until all events of default have been cured. At December 31, 2022, there were no dividends in arrears.
Except under certain conditions relating to the Company’s qualification as a REIT, the Company’s preferred stock is not redeemable prior to the redemption dates noted above. On or after the respective redemption dates, the respective series of preferred stock will be redeemable, at the option of the Company, in whole or in part, at $25.00 per depositary share, plus any accrued and unpaid dividends. The redemption is within the Company’s control, and thus the preferred equity arrangements are classified as permanent equity in the Consolidated Financial Statements.
Pursuant to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Company Merger Effective Time”), each share of the 5.250% Series X Cumulative Preferred Stock of the Company, par value $0.01 per share, 5.200% Series Y Cumulative Preferred Stock of the Company, par value $0.01 per share, and 4.875% Series Z Cumulative Preferred Stock of the Company, par value $0.01 per share (collectively, the “Existing Preferred Stock”), issued and outstanding immediately prior to the Company Merger Effective Time and each depositary share issued pursuant to the deposit agreements for the Existing Preferred Stock, representing one-thousandth of one share of Existing Preferred Stock issued and outstanding immediately prior to the Company Merger Effective Time, was unaffected by the Merger and remained outstanding in accordance with their respective terms.
Common stock and units
The following table summarizes the Company’s distributions to common stockholders and common unit holders:
Successor Predecessor
Period from July 20, 2022 through December 31, 2022 Period from January 1, 2022 through July 19, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020
Distributions to common stockholders $ 112,379  $ 209,079  $ 242,595  $ 115,396 
Distributions to common unit holders $ —  $ 55,358  $ 64,364  $ 30,823 
Pursuant to the terms and conditions of the Merger Agreement, at Company Merger Effective Time, each share of common stock of the Company, par value $0.01 per share (“Common Stock”), issued and outstanding immediately prior to the Company Merger Effective Time was automatically converted into the right to receive an amount in cash equal to $182.25 per share, without interest and less any applicable withholding taxes, representing $187.50 per share of Common Stock as reduced by the $5.25 per share Closing Cash Dividend.
The following table summarizes the Company’s distribution taxability to preferred stockholders and common stockholders (unaudited):
Successor Predecessor
Period from July 20, 2022 through December 31, 2022 Period from January 1, 2022 through July 19, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020
Common
Portion of distributions classified as ordinary income 28.1  % 33.2  % 35.0  % 100.0  %
Portion of distributions classified as long-term capital gain income —  % 55.4  % 65.0  % —  %
Portion of distributions classified as nondividend distributions 71.9  % 11.4  % —  % —  %
Preferred - Series X, Y, Z
Portion of distributions classified as ordinary income 47.8  % 47.8  % 35.0  % 100.0  %
Portion of distributions classified as long-term capital gain income 52.2  % 52.2  % 65.0  % —  %
Preferred - Series A
Portion of distributions classified as ordinary income 100.0  % —  % —  % —  %