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Stock-Based Compensation and Equity
 6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
Stock-Based Compensation and Equity Stock-Based Compensation and Equity

Stock-Based Compensation

We maintain several stock-based compensation plans, which are more fully described in the 2019 Annual Report. There have been no significant changes to the terms and conditions of any of our stock-based compensation plans or arrangements during the six months ended June 30, 2020. We recorded stock-based compensation expense of $2.9 million and $4.9 million during the three months ended June 30, 2020 and 2019, respectively, and $5.6 million and $9.1 million during the six months ended June 30, 2020 and 2019, respectively, which was included in Stock-based compensation expense in the consolidated financial statements.

Restricted and Conditional Awards
 
Nonvested restricted share awards (“RSAs”), restricted share units (“RSUs”), and performance share units (“PSUs”) at June 30, 2020 and changes during the six months ended June 30, 2020 were as follows:
 
RSA and RSU Awards
 
PSU Awards
 
Shares
 
Weighted-Average
Grant Date
Fair Value
 
Shares
 
Weighted-Average
Grant Date
Fair Value
Nonvested at January 1, 2020
283,977

 
$
68.51

 
331,242

 
$
80.90

Granted (a)
123,944

 
83.26

 
90,518

 
104.65

Vested (b)
(144,520
)
 
68.46

 
(156,838
)
 
80.42

Forfeited
(5,555
)
 
71.69

 
(6,715
)
 
88.94

Adjustment (c)
—

 
—

 
(25,522
)
 
62.86

Nonvested at June 30, 2020 (d)
257,846

 
$
75.56

 
232,685

 
$
91.42

__________
(a)
The grant date fair value of RSAs and RSUs reflect our stock price on the date of grant on a one-for-one basis. The grant date fair value of PSUs was determined utilizing (i) a Monte Carlo simulation model to generate an estimate of our future stock price over the three-year performance period and (ii) future financial performance projections. To estimate the fair value of PSUs granted during the six months ended June 30, 2020, we used a risk-free interest rate of 1.6%, an expected volatility rate of 15.2%, and assumed a dividend yield of zero.
(b)
The grant date fair value of shares vested during the six months ended June 30, 2020 was $22.5 million. Employees have the option to take immediate delivery of the shares upon vesting or defer receipt to a future date pursuant to previously made deferral elections. At June 30, 2020 and December 31, 2019, we had an obligation to issue 986,859 and 893,713 shares, respectively, of our common stock underlying such deferred awards, which is recorded within Total stockholders’ equity as a Deferred compensation obligation of $42.0 million and $37.3 million, respectively.
(c)
Vesting and payment of the PSUs is conditioned upon certain company and/or market performance goals being met during the relevant three-year performance period. The ultimate number of PSUs to be vested will depend on the extent to which the performance goals are met and can range from zero to three times the original awards. As a result, we recorded adjustments at June 30, 2020 to reflect the number of shares expected to be issued when the PSUs vest.
(d)
At June 30, 2020, total unrecognized compensation expense related to these awards was approximately $26.1 million, with an aggregate weighted-average remaining term of 2.1 years.

Earnings Per Share
 
Under current authoritative guidance for determining earnings per share, all nonvested share-based payment awards that contain non-forfeitable rights to dividends are considered to be participating securities and therefore are included in the computation of earnings per share under the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common shares and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. During the prior year period, certain of our nonvested RSUs contained rights to receive non-forfeitable dividend equivalents or dividends, respectively, and therefore we apply the two-class method of computing earnings per share. The calculation of earnings per share below excludes the income attributable to the nonvested participating RSUs from the numerator and such nonvested shares in the denominator. The following table summarizes basic and diluted earnings (in thousands, except share amounts):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Net income attributable to W. P. Carey
$
105,300

 
$
66,038

 
$
171,390

 
$
134,532

Net income attributable to nonvested participating RSUs
—

 
(17
)
 
—

 
(35
)
Net income — basic and diluted
$
105,300

 
$
66,021

 
$
171,390

 
$
134,497

 
 
 
 
 
 
 
 
Weighted-average shares outstanding — basic
173,401,749

 
171,304,112

 
173,325,493

 
169,280,360

Effect of dilutive securities
71,006

 
186,513

 
189,401

 
240,148

Weighted-average shares outstanding — diluted
173,472,755

 
171,490,625

 
173,514,894

 
169,520,508


 
For the three and six months ended June 30, 2020 and 2019, potentially dilutive securities excluded from the computation of diluted earnings per share were insignificant.

ATM Program

During the three and six months ended June 30, 2020, we did not issue any shares of our common stock under our ATM Program, which is discussed in the 2019 Annual Report. During the three and six months ended June 30, 2019, we issued 1,116,217 and 5,169,840 shares, respectively, of our common stock under our former ATM Program at a weighted-average price of $80.33 and $77.06 per share, respectively, for net proceeds of $88.3 million and $392.1 million, respectively. As of June 30, 2020, $616.6 million remained available for issuance under our current ATM Program.

Forward Equity Offering

On June 17, 2020, we entered into an underwriting agreement, as well as certain forward sale agreements, with a syndicate of banks acting as underwriters, forward sellers, and/or forward purchasers in connection with an underwritten public offering of 4,750,000 shares of common stock at an initial forward sale price of $68.35 per share. The underwriters were granted a 30-day option to purchase up to an additional 712,500 shares of common stock at the initial forward sale price, which they fully exercised on June 18, 2020. Therefore, at closing on June 22, 2020, the forward purchasers borrowed from third parties and sold to the underwriters an aggregate of 5,462,500 shares of common stock, which the underwriters sold at a gross offering price of $70.00 per share, for gross proceeds of approximately $382.4 million. As a result of this forward construct, we did not receive any proceeds from the sale of such shares at closing.

On June 29, 2020, we settled a portion of the equity forwards by physically delivering 1,463,500 shares of common stock to a forward purchaser for net proceeds of $99.9 million, which were primarily used to partially pay down amounts outstanding under our Unsecured Revolving Credit Facility. As of June 30, 2020, 3,999,000 shares remained outstanding under the forward sale agreements. We expect to settle the forward sale agreements within 18 months of the offering date via physical delivery of the outstanding shares of common stock in exchange for cash proceeds, although we may elect cash settlement or net share settlement for all or a portion of our obligations under the forward sale agreements, subject to certain conditions. The forward sale price that we will receive upon physical settlement of the agreements will be (i) subject to adjustment on a daily basis based on a floating interest rate factor equal to a specified daily rate less a spread (i.e., if the specified daily rate is less than the spread on any day, the interest rate factor will result in a daily reduction of the applicable forward sale price) and (ii) decreased based on amounts related to expected dividends on shares of our common stock during the term of the forward sale agreements.

We determined that the forward sale agreements meet the criteria for equity classification and are therefore exempt from derivative accounting. We recorded the forward sale agreements at fair value at inception, which we determined to be zero. Subsequent changes to fair value are not required under equity classification.

Reclassifications Out of Accumulated Other Comprehensive Loss

The following tables present a reconciliation of changes in Accumulated other comprehensive loss by component for the periods presented (in thousands):
 
Three Months Ended June 30, 2020
 
Gains and (Losses) on Derivative Instruments
 
Foreign Currency Translation Adjustments
 
Gains and (Losses) on Investments
 
Total
Beginning balance
$
25,897

 
$
(320,915
)
 
$
—

 
$
(295,018
)
Other comprehensive income before reclassifications
(5,076
)
 
13,847

 
—

 
8,771

Amounts reclassified from accumulated other comprehensive loss to:
 
 
 
 
 
 
 
Other gains and (losses)
(4,834
)
 
—

 
—

 
(4,834
)
Interest expense
468

 
—

 
—

 
468

Total
(4,366
)
 
—

 
—

 
(4,366
)
Net current period other comprehensive income
(9,442
)
 
13,847

 
—

 
4,405

Ending balance
$
16,455

 
$
(307,068
)
 
$
—

 
$
(290,613
)

 
Three Months Ended June 30, 2019
 
Gains and (Losses) on Derivative Instruments
 
Foreign Currency Translation Adjustments
 
Gains and (Losses) on Investments
 
Total
Beginning balance
$
16,051

 
$
(269,264
)
 
$
530

 
$
(252,683
)
Other comprehensive loss before reclassifications
(1,548
)
 
(4,187
)
 
(541
)
 
(6,276
)
Amounts reclassified from accumulated other comprehensive loss to:
 
 
 
 
 
 
 
Other gains and (losses)
(3,405
)
 
—

 
—

 
(3,405
)
Interest expense
1,547

 
—

 
—

 
1,547

Total
(1,858
)
 
—

 
—

 
(1,858
)
Net current period other comprehensive loss
(3,406
)
 
(4,187
)
 
(541
)
 
(8,134
)
Ending balance
$
12,645

 
$
(273,451
)
 
$
(11
)
 
$
(260,817
)

 
Six Months Ended June 30, 2020
 
Gains and (Losses) on Derivative Instruments
 
Foreign Currency Translation Adjustments
 
Gains and (Losses) on Investments
 
Total
Beginning balance
$
13,048

 
$
(268,715
)
 
$
—

 
$
(255,667
)
Other comprehensive loss before reclassifications
11,318

 
(38,353
)
 
—

 
(27,035
)
Amounts reclassified from accumulated other comprehensive loss to:
 
 
 
 
 
 
 
Other gains and (losses)
(8,617
)
 
—

 
—

 
(8,617
)
Interest expense
706

 
—

 
—

 
706

Total
(7,911
)
 
—

 
—

 
(7,911
)
Net current period other comprehensive loss
3,407

 
(38,353
)
 
—

 
(34,946
)
Ending balance
$
16,455

 
$
(307,068
)
 
$
—

 
$
(290,613
)
 
Six Months Ended June 30, 2019
 
Gains and (Losses) on Derivative Instruments
 
Foreign Currency Translation Adjustments
 
Gains and (Losses) on Investments
 
Total
Beginning balance
$
14,102

 
$
(269,091
)
 
$
(7
)
 
$
(254,996
)
Other comprehensive loss before reclassifications
3,856

 
(4,360
)
 
(4
)
 
(508
)
Amounts reclassified from accumulated other comprehensive loss to:
 
 
 
 
 
 
 
Other gains and (losses)
(6,927
)
 
—

 
—

 
(6,927
)
Interest expense
1,614

 
—

 
—

 
1,614

Total
(5,313
)
 
—

 
—

 
(5,313
)
Net current period other comprehensive loss
(1,457
)
 
(4,360
)
 
(4
)
 
(5,821
)
Ending balance
$
12,645

 
$
(273,451
)
 
$
(11
)
 
$
(260,817
)


See Note 9 for additional information on our derivatives activity recognized within Other comprehensive income (loss) for the periods presented.

Dividends Declared

During the second quarter of 2020, our Board declared a quarterly dividend of $1.042 per share, which was paid on July 15, 2020 to stockholders of record as of June 30, 2020.

During the six months ended June 30, 2020, we declared dividends totaling $2.082 per share.