Common and Preferred Shares

Common Shares

The Board of Trustees declared cash dividends totaling $4.32 and $4.08 per common share for the years ended December 31, 2018 and 2017, respectively.

Of the total distributions calculated for tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for cash distributions paid per common share for the years ended December 31, 2018 and 2017 are as follows:



	Cash Distributions Per Share
	2018		2017
Taxable ordinary income (1)	$	4.1253	$	3.5434
Return of capital	—		0.2762
Long-term capital gain (2)	0.1747		0.2404
Totals	$	4.3000	$	4.0600

(1) Of the taxable ordinary income, $4.1253 qualified as 199A distributions for the year ended December 31, 2018 and none qualified as 199A distributions for the year ended December 31, 2017.

(2) Of the long-term capital gain, $0.0102 and $0.0972 were unrecaptured section 1250 gains for the years ended December 31, 2018 and 2017, respectively.

During the year ended December 31, 2017, the Company issued an aggregate of 1,382,730 common shares under the direct share purchase component of its Dividend Reinvestment and Direct Share Purchase Plan (DSPP) for net proceeds of $98.2 million.

During the year ended December 31, 2017, the Company issued 8,851,264 common shares in connection with its transaction with CNL Lifestyle and OZRE. See Note 3 for further information.

Subsequent to December 31, 2018, the Company issued an aggregate of 490,310 common shares under its DSPP for net proceeds of $35.6 million.

Series C Convertible Preferred Shares

The Company has outstanding 5.4 million 5.75% Series C cumulative convertible preferred shares (Series C preferred shares). The Company will pay cumulative dividends on the Series C preferred shares from the date of original issuance in the amount of $1.4375 per share each year, which is equivalent to 5.75% of the $25 liquidation preference per share. Dividends on the Series C preferred shares are payable quarterly in arrears. The Company does not have the right to redeem the Series C preferred shares except in limited circumstances to preserve the Company’s REIT status. The Series C preferred shares have no stated maturity and will not be subject to any sinking fund or mandatory redemption. As of December 31, 2018, the Series C preferred shares are convertible, at the holder’s option, into the Company’s common shares at a conversion rate of 0.3954 common shares per Series C preferred share, which is equivalent to a conversion price of $63.23 per common share. This conversion ratio may increase over time upon certain specified triggering events including if the Company’s common dividends per share exceeds a quarterly threshold of $0.6875.

Upon the occurrence of certain fundamental changes, the Company will under certain circumstances increase the conversion rate by a number of additional common shares or, in lieu thereof, may in certain circumstances elect to adjust the conversion rate upon the Series C preferred shares becoming convertible into shares of the public acquiring or surviving company.

The Company may, at its option, cause the Series C preferred shares to be automatically converted into that number of common shares that are issuable at the then prevailing conversion rate. The Company may exercise its conversion right only if, at certain times, the closing price of the Company’s common shares equals or exceeds 135% of the then prevailing conversion price of the Series C preferred shares.

Owners of the Series C preferred shares generally have no voting rights, except under certain dividend defaults. Upon conversion, the Company may choose to deliver the conversion value to the owners in cash, common shares, or a combination of cash and common shares.

The Board of Trustees declared cash dividends totaling $1.4375 per Series C preferred share for each of the years ended December 31, 2018 and 2017, respectively. There were non-cash distributions associated with conversion adjustments of $0.6205 and $0.4918 per Series C preferred share for the years ended December 31, 2018 and 2017, respectively. The conversion adjustment provision entitles the shareholders of the Series C preferred shares, upon certain quarterly common share dividend thresholds being met, to receive additional common shares of the Company upon a conversion of the preferred shares into common shares. The increase in common shares to be received upon a conversion is a deemed distribution for federal income tax purposes.

For tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for cash distributions paid and non-cash deemed distributions per Series C preferred share for the years ended December 31, 2018 and 2017 are as follows:



	Cash Distributions per Share
	2018		2017
Taxable ordinary income (1)	$	1.3791	$	1.3462
Return of capital	—		—
Long-term capital gain (2)	0.0584		0.0913
Totals	$	1.4375	$	1.4375

(1) Of the taxable ordinary income, $1.3791 qualified as 199A distributions for the year ended December 31, 2018 and none qualified as 199A distributions for the year ended December 31, 2017.

(2) Of the long-term capital gain, $0.0034 and $0.0352 were unrecaptured section 1250 gains for the years ended December 31, 2018 and 2017, respectively.



	Non-cash Distributions per Share
	2018		2017
Taxable ordinary income (3)	$	0.5953	$	0.3527
Return of capital	—		0.1152
Long-term capital gain (4)	0.0252		0.0239
Totals	$	0.6205	$	0.4918

(3) Of the taxable ordinary income, $0.5953 qualified as 199A distributions for the year ended December 31, 2018 and none qualified as 199A distributions for the year ended December 31, 2017.

(4) Of the long-term capital gain, $0.0015 and $0.0092 were unrecaptured section 1250 gains for the years ended December 31, 2018 and 2017, respectively.

Series E Convertible Preferred Shares

The Company has outstanding 3.4 million 9.00% Series E cumulative convertible preferred shares (Series E preferred shares). The Company will pay cumulative dividends on the Series E preferred shares from the date of original issuance in the amount of $2.25 per share each year, which is equivalent to 9.00% of the $25 liquidation preference per share. Dividends on the Series E preferred shares are payable quarterly in arrears. The Company does not have the right to redeem the Series E preferred shares except in limited circumstances to preserve the Company’s REIT status. The Series E preferred shares have no stated maturity and will not be subject to any sinking fund or mandatory redemption. As of December 31, 2018, the Series E preferred shares are convertible, at the holder’s option, into the Company’s common shares at a conversion rate of 0.4686 common shares per Series E preferred share, which is equivalent to a conversion price of $53.35 per common share. This conversion ratio may increase over time upon certain specified triggering events including if the Company’s common dividends per share exceeds a quarterly threshold of $0.84.

Upon the occurrence of certain fundamental changes, the Company will under certain circumstances increase the conversion rate by a number of additional common shares or, in lieu thereof, may in certain circumstances elect to adjust the conversion rate upon the Series E preferred shares becoming convertible into shares of the public acquiring or surviving company.

The Company may, at its option, cause the Series E preferred shares to be automatically converted into that number of common shares that are issuable at the then prevailing conversion rate. The Company may exercise its conversion right only if, at certain times, the closing price of the Company’s common shares equals or exceeds 150% of the then prevailing conversion price of the Series E preferred shares.

Owners of the Series E preferred shares generally have no voting rights, except under certain dividend defaults. Upon conversion, the Company may choose to deliver the conversion value to the owners in cash, common shares, or a combination of cash and common shares.

The Board of Trustees declared cash dividends totaling $2.25 per Series E preferred share for the years ended December 31, 2018 and 2017. There were non-cash distributions associated with conversion adjustments of $0.5308 and $0.2619 per Series E preferred share for the years ended December 31, 2018 and 2017, respectively. The conversion adjustment provision entitles the shareholders of the Series E preferred shares, upon certain quarterly common share dividend thresholds being met, to receive additional common shares of the Company upon a conversion of the preferred shares into common shares. The increase in common shares to be received upon a conversion is a deemed distribution for federal income tax purposes.

For tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for cash distributions paid and non-cash deemed distributions per Series E preferred share for the years ended December 31, 2018 and 2017 are as follows:



	Cash Distributions per Share
	2018		2017
Taxable ordinary income (1)	$	2.1586	$	2.1070
Return of capital	—		—
Long-term capital gain (2)	0.0914		0.1430
Totals	$	2.2500	$	2.2500

(1) Of the taxable ordinary income, $2.1586 qualified as 199A distributions for the year ended December 31, 2018 and none qualified as 199A distributions for the year ended December 31, 2017.

(2) Of the long-term capital gain, $0.0053 and $0.0551 were unrecaptured section 1250 gains for the years ended December 31, 2018 and 2017, respectively.



	Non-cash Distributions per Share
	2018		2017
Taxable ordinary income (3)	$	0.5092	$	0.1428
Return of capital	—		0.1094
Long-term capital gain (4)	0.0216		0.0097
Totals	$	0.5308	$	0.2619

(3) Of the taxable ordinary income, $0.5092 qualified as 199A distributions for the year ended December 31, 2018 and none qualified as 199A distributions for the year ended December 31, 2017.

(4) Of the long-term capital gain, $0.0013 and $0.0037 were unrecaptured section 1250 gains for the years ended December 31, 2018 and 2017, respectively.

Series F Preferred Shares

On December 21, 2017, the Company completed the redemption of all 5.0 million of its outstanding 6.625% Series F cumulative redeemable preferred shares (Series F preferred shares). The shares were redeemed at a redemption price of $25.299045 per share. The price is the sum of the $25.00 per share liquidation preference and a dividend per share of $0.299045 which equals the quarterly dividend prorated up to, but not including the redemption date for a total aggregate redemption price of approximately $126.5 million. In conjunction with the redemption, the Company recognized a charge representing the original issuance costs that were paid in 2012 and other redemption related expenses. The Series F preferred share redemption costs, which reduced net income available to common shareholders for the year ended December 31, 2017, were $4.5 million.

The Board of Trustees declared cash dividends totaling $1.54123 per Series F preferred share for the year ended December 31, 2017. For tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for cash distributions paid per Series F preferred share for the year ended December 31, 2017 are as follows:



	Cash Distributions per Share
	2017
Taxable ordinary income (1)	$	1.8310
Return of capital	—
Long-term capital gain (2)	0.1243
Totals	$	1.9553

(1) Of the taxable ordinary income, none qualified as 199A distributions for the year ended December 31, 2017.

(2) Of the long-term capital gain, $0.04792 was unrecaptured section 1250 gains for the years ended December 31, 2017.

Series G Preferred Shares

On November 30, 2017, the Company issued 6.0 million 5.75% Series G cumulative redeemable preferred shares (Series G preferred shares) in a registered public offering for net proceeds of approximately $144.5 million, after underwriting discounts and expenses. The Company will pay cumulative dividends on the Series G preferred shares from the date of original issuance in the amount of $1.4375 per share each year, which is equivalent to 5.75% of the $25.00 liquidation preference per share. Dividends on the Series G preferred shares are payable quarterly in arrears. The Company may not redeem the Series G preferred shares before November 30, 2022, except in limited circumstances to preserve the Company's REIT status. On or after November 30, 2022, the Company may, at its option, redeem the Series G preferred shares in whole at any time or in part from time to time by paying $25.00 per share, plus any accrued and unpaid dividends up to, but not including the date of redemption. The Series G preferred shares have no stated maturity and will not be subject to any sinking fund or mandatory redemption. The Series G preferred shares are not convertible into any of the Company's securities, except under certain circumstances in connection with a change of control. Owners of the Series G preferred shares generally have no voting rights except under certain dividend defaults.

The Board of Trustees declared cash dividends totaling $1.4375 and $0.183681 per Series G preferred share for the years ended December 31, 2018 and 2017, respectively. For tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for cash distributions paid per Series G preferred share for the year ended December 31, 2018 are as follows:



	Cash Distributions per Share
	2018
Taxable ordinary income (1)	$	1.2105
Return of capital	—
Long-term capital gain (2)	0.0513
Totals	$	1.2618

(1) Of the taxable ordinary income, $1.2105 qualified as 199A distributions for the year ended December 31, 2018 and none qualified as 199A distributions for the year ended December 31, 2017.

(2) Of the long-term capital gain, $0.00298 was unrecaptured section 1250 gains for the year ended December 31, 2018.